CAIRO: The National Cement Company (NCC) announced Tuesday plans to invest LE 500 million to raise its annual production capacity by 30 percent to 3.9 million tons per year.
The 95 percent government-owned company is the largest remaining public sector producer. In a statement, the company said it plans to upgrade two of its production lines to maintain its market share now standing at 9 percent.
Egypt is the largest cement producer and exporter in the Middle East with local production reaching 38 million tons in 2006 and is expected to grow beyond the 40 million ton mark in 2007.
NCC has, for the most part, stayed within the government-imposed price cap of 2006, selling its products well below the market average. As ex-factory prices have now climbed close to the LE 350 mark since January, NCC has held its price around the LE 320 mark. According to company officials, the company s expansion is essential to stay competitive while keeping its prices down. About 60 percent of the local market is controlled by Suez Cement and Orascom Construction Industries.
In late February, NCC released its H2, 2006 results Wednesday showing net income reached LE 151.2 million. The figure represented a 36 percent increase over the LE 111 million in net income recorded in H2, 2005, after deducting LE 97 million in extraordinary revenues. The company has undergone intensive restructuring since 2004, interpreted by some analysts as leading up to its privatization.
Minister of Investment Mahmoud Moheiddin denied on several occasions in 2006 the restructuring of NCC was intended to prepare the company for privatization but Chemical Industries Holding Company officials have reported otherwise. CIHC owns NCC and is a direct affiliate of the Ministry of Investment.