The Industrial Development Authority (IDA) has filed a memorandum to the Minister of Industry and Foreign Trade Mounir Fakhry Abdelnour requesting the removal of rebar manufacture from the list of energy-intensive industries.
Removing it would enable the IDA to approve demands of investors to directly expand rebar rolling mills without approval from the Supreme Council of Energy (SCE).
Ismail Jaber, head of the IDA, said the technical studies conducted by the authority concluded that rebar is not a high-energy consumption industry, and thus there should be no need for requests to be presented to the SCE for approval in order to establish rolling rebar mills.
“There are requests from investors to expand and establish projects for the production of rebar and the market needs this production,” said Jaber.
Jaber pointed out that IDA studies on the steel and cement market in Egypt showed the market needs 3 m tons of rebar and nearly 20 m tons of cement from now to 2020 to meet the growing demand. This is expected to increase with government plans for expansion in infrastructure projects.
“Removing rebar from the list of energy-intensive consumption industries means moving it to list (A), or those the IDA approves directly,” said Jaber.
The IDA has two lists encompassing all industries, divided into list (A),which are approved directly by the IDA, and list (B), which include intensive-energy consumption industries such as glass, ceramics, chemicals, steel, cement, fertilizer and aluminum and copper. These industries must get approval by the SCE.
Jaber said the IDA sees a need to offer licences to establish new factories to produce steel and cement to meet the expected increase in demand. The IDA has prepared studies and booklets for the issuing of licences, but it will not begin the process until the government provides the mechanism for providing energy to these factories. Jaber said that “in the coming period the direction is to oblige the factories to organise their energy needs themselves.”
Jaber said that the rest of the steel factories, which require large quantities of energy to operate furnaces, will remain on the list of high-energy consumption industries.
According to Muhammad Hanafi, Director of the Chamber of Metallurgical Industries at the Federation of Egyptian Industries, the chamber has long requested tat the IDA reclassify the steel industry and distinguish between industries that need large amounts of energy and those that do not, such as rolling rebar, angles, and beams, instead of using the blanket label of “steel.”
Ismail said a decision had already been issued by the former Minister of Industry Hatem Saleh (Resolution 119/2013) to determine which steel industries should be considered energy-intensive.
“Adding rebar to the list in the industry minister’s decision was a mistake, because rolling rebar does not require large amounts of energy, like angles and beams, which the decision allowed to remain off the list, “ said Hanafi. “So the IDA demanded that rebar be removed from the lists to correct this mistake.”