Misr Beni Suef Cement Company has postponed the installation of a coal mill at their Beni Suef factory to the third quarter (Q3) of 2017. The coal mill is expected to cost EGP 18m.
Managing director of the company, Farouk Mostafa, told Daily News Egypt that the company intended to install the mill in December 2016, but was forced to postpone to Q3 of 2017.
He attributed the decision to the shortage in US dollars needed to import the mill and its spare parts, as well as the fallout from the decision to float the Egyptian pound, which caused prices to hike.
He explained that the decision called for re-evaluating the investment costs and reallocations of funds.
Misr Beni Suef Cement had earlier stated to the Egyptian Exchange its intention to sign a EGP 100m deal with an Egyptian bank to finance part of the cost.
Moreover, Mostafa said that the mill will play a big role in boosting the company’s operational capacity, which had dropped by 50% last year due to blackouts.
The company estimated production stands at 1.5m tonnes of cement per year.
The downfall of the company’s capacity was one of the examples that reflect the problems faced by cement companies since 2011. The lack of natural gas and fuel oil supply necessary to run the clinker ovens led production to drop.
In 2013, however, the government granted approval to cement companies to use coal in energy production.
In a different context, Mostafa said that there are fears of more supply of cement in 2017 as companies turn to coal for fuel, which would maximise production capacities and may fall victim to a recession in demand.
Reports show that all cement factories in Egypt can produce up to 70m tonnes, while only 57m tonnes were sold in 2016. Most companies had to reduce their production.
Misr Beni Suef Cement Company produces cement and cement products as well as packaging materials. The company’s paid-up capital stands at EGP 750m, distributed over 75 million shares with a nominal value of EGP 10 per share.
The company achieved net profits of EGP 115.47m in the first nine months of 2016, up from EGP 81.1m in the same period of 2015.
The company’s sales rose by 16% to reach EGP 1.17bn, up from EGP 1.01bn in the same period of 2015.