قطاع الأسمنت المصري.. إلى أين وصل في معادلة العرض والطلب؟
Transcript
00:00 The Egyptian cement sector has improved its sales in Egypt during the first half of this year.
00:09 Five companies have recorded sales of 8.5 billion pounds, a 50% increase.
00:16 Let's look at the details.
00:18 With sales of 8.5 billion pounds,
00:22 the operating performance of five Egyptian companies in the cement sector during the first half of the year was as follows.
00:30 With a growth of 50% compared to sales in the first half of last year.
00:35 A growth that came as a result of national projects in the infrastructure and expansion of real estate companies in new cities.
00:41 Despite working under a decision that has been reducing production capacity for more than two years
00:47 due to the desire of the companies to work and the decline in demand by individuals due to the construction shutdown.
00:54 The amount of sales has increased.
00:56 The main reason is that when the price of spending was moved,
00:59 there was a great demand from real estate companies to stop their work
01:03 to avoid increasing the following prices in the production entrances in real estate.
01:10 This helped to increase production significantly.
01:13 The third reason is the increase in export sales.
01:17 This was very clear in some companies whose profits were very high.
01:20 There is a clear increase in export sales.
01:23 The sales boom for cement came in agreement with most of the financial results of the five companies.
01:28 Although some things were negotiated.
01:31 Three companies achieved net profits of 500 million pounds in six months.
01:36 The Arabian cement acquired more than 67% of it.
01:41 While the loss rate of the other two companies was averaged over 29% for each of them.
01:48 The analysts described the results as good,
01:51 despite many challenges, including the increase in energy prices and operating costs.
01:57 The more money is spent, the more negative its impact is,
02:01 not only on the local market, but also on the export market.
02:06 This is compensated by the difference in the currency exchange rate.
02:15 The whole situation will depend on how to secure sufficient export opportunities
02:22 that will allow the industry to work with more energy than the local consumption.
02:30 About 23 companies in Egypt work in the cement sector, with investments exceeding 200 billion pounds.
02:36 The production volume exceeded 45 million tons in 2022,
02:41 and sold about 42 million tons.
02:44 The growth of cement sales contributed to the rapid improvement of the profits of the leading companies,
02:49 some of which doubled their profits, and some of which lost their profits.
02:54 Under pressure that is still in the way of the sector, the cost of financing and energy prices will increase.
03:01 Farouk Youssef, CNBC, Al-Qahira.
03:04 The cement companies' sales have increased, the top five companies.
03:10 But does this necessarily mean that the local market will be deprived of a huge amount of cement for export?
03:17 We go to Al-Qahira with Mr. Kamal Al-Dosouqi,
03:20 Deputy President of the Construction Materials Committee of the Egyptian Industrial Union.
03:24 Welcome, Mr. Kamal.
03:25 It is a good thing that the national projects for the construction of the cement sector
03:29 are the reason and the main reason for the increase in sales, about 50%.
03:33 But does this necessarily mean that the demand for cement or construction will be weak,
03:39 or will continue to be weak, as it was two years ago?
03:42 Welcome.
03:46 Of course, this is a very important question.
03:50 No, of course, the market of the people of the cement sector is limited to a part,
04:02 which is the part outside the new urban regions.
04:07 It is limited to the old places where the cement is sold or the cement is sold.
04:12 But it is still working in the new cities, and as you know,
04:17 we are almost doing more than 17 new cities, so the construction movement is going well.
04:24 But the idea is that the cement industry sector in Egypt
04:30 has production capacity exceeding 82 million tons.
04:36 19 companies in the field can exceed this capacity.
04:41 Therefore, the production volume is much larger than the consumption volume,
04:47 even in the case of the major crisis that the Arab Egyptian Republic is witnessing.
04:52 Therefore, we should have gone to export and open larger markets.
04:57 In fact, the cement companies this year, despite the decision of the CEF,
05:02 but the growth in exports, for example, has decreased by 40%.
05:07 So, the balance between supply and demand is very important
05:14 for this large and promising sector, and there should be a balance
05:19 so that the companies can carry out their operations.
05:22 Excuse me, Mr. Yasser, if we look at the reality, data and figures
05:26 regarding high inflation rates, we see that 70% of the production costs
05:32 in the cement sector are for fuel.
05:35 To what extent will this main band be a pressure
05:39 on the productivity of cement companies in the coming period?
05:43 Indeed, fuel represents 70% of the cost, but do not forget that
05:50 as a result of the inflation, in the export process, there is a chance
05:55 or a relative advantage for the Egyptian companies to be able to increase
06:00 their exports with the hard currency.
06:03 This means that there is a difference here and a challenge on the other hand,
06:08 but both have a balance between them, and therefore, I believe that
06:12 the export volume of Egyptian cement this year, in 2023,
06:17 will exceed 50% more than in 2022.
06:21 Yes, let's talk according to the theory of supply and demand.
06:25 You know that there is a rise in building materials in Egypt.
06:30 To what extent will these prices continue to rise
06:35 compared to the sales of cement companies?
06:41 As you know, Egypt has a very, very large development and industrial movement
06:50 that Egypt has not witnessed for many years.
06:54 Therefore, I expect that the process of continuing the construction
07:00 and development of the real estate industry will move very fast,
07:05 and I think it will continue for more than 10 to 15 years
07:09 because Egypt is rebuilding everything and has a plan of 2030
07:14 to develop it in a sustainable way, and therefore, the demand will be
07:19 very high, and the cost is related to several things,
07:25 such as global warming, spending, energy prices.
07:30 I always say that the problem is not the cost, but the balance between
07:35 supply and demand, cost and prices, and the fair profits between
07:40 the sale and production.
07:43 Mr. Kamal, does this mean that the contractor can buy cement
07:49 from the local market with the approval of the price difference
07:53 and inflation?
07:54 We will hear about two prices, local price and export price,
07:58 and export will certainly be more expensive, especially since
08:01 the importer will be profitable with the return on the price of
08:04 the GDP.
08:06 On the contrary, the export prices in Egypt are due to the global competition
08:12 and free competition and prices.
08:16 On the contrary, we sell at prices that are still high in cement
08:21 prices compared to any other product.
08:25 And from here, after the compensation processes, there is an opportunity
08:30 for more export operations.
08:33 But no, of course, the local market takes reasonable prices,
08:38 and there is no problem in the local market.
08:42 This is the only product that we say is 100% Egyptian product,
08:46 and an Egyptian industry that meets the needs of the Egyptian market
08:49 by 100%.
08:51 Thank you very much, Kamal Dessouky.
08:53 You are the Vice President of the Construction Materials People's Union
08:56 of the Egyptian Industry Union.
08:58 You were with us from Cairo.