Nigeria Content Online

Egypt opened
bidding for two cement production licences on Monday but will not allow
existing cement firms in Egypt to bid in an effort to boost competition
and bring down prices, the industrial authority said.

Egypt’s
construction industry has grown even as it stalled elsewhere in the
region due to the global economic downturn. Cement demand rose 25
percent last year, driven largely by housing needs of a growing
population and a cash-fuelled economy.

The two licences
will replace ones that had been held by El Wadi Cement and North Sinai
Cement but which were cancelled late last year over start-up delays and
financing shortfalls. Both firms were granted their licences in 2007.

“Companies that
were given licences in 2007 or are currently producing cement will not
be allowed to enter the game for these two licences,” Amr Assal, head
of the Industrial Development Authority, told Reuters. “We want new
competitors.”

The licences will
be for projects in North Sinai, east of Cairo, and El Wadi to the
southwest. The authorities earlier said the two firms which lost
licences might be allowed to submit a new bid, but Mr. Assal has since
said they would be excluded.

Egypt would welcome
participation from industrial firms that might have operations
elsewhere or in other building materials, but no existing cement firms
in Egypt would be allowed to participate. The bidding will close in
early July.

El Wadi Cement and
North Sinai Cement were granted two of the six greenfield cement
factory licences offered in late 2007, in a bid to boost production
after rising local prices drove the government to impose an export duty
in February.

A regulatory
committee that cancelled their licences had previously extended the
licences of three firms, al-Arabiya al-Wataniya, indirectly owned by
private equity firm Citadel Capital, El-Nahda Industries and Assiut
Cement, a local unit of Mexico’s Cemex.

“We want to create
and strengthen competition, to move away from five or six firms that
control the market, because we want better competition on prices,” Mr.
Assal said.

Separately, Egypt
is planning to issue eight additional new cement licences this year, as
it aims to boost production capacity to 80 million tonnes a year by
2015 from 50 million.

Bidding for the eight new licences is due to start by the middle of the year.

Those who have expressed an interest in bidding for the eight new
licences include the Egyptian unit of Lafarge and Egypt’s largest
listed cement firm Suez Cement, which controls Helwan Cement and Torah
Cement. Suez is a subsidiary of Italcementi.