Cement manufacturers are now free to export their produce, Nesma Nowar reports The Ministry of Trade and Industry has not renewed a ban on cement exports that had been in place for a year and a half. "Supply and demand mechanisms in the market ensure that our domestic needs are secured, and that there is no need to interfere in the market," Minister Rachid Mohamed Rachid has been quoted as saying by Reuters. The ban on cement exports was first applied for six months from 29 March to 1 October 2008 as part of several measures to curb the high prices of cement caused by soaring local demand. The ban was re-imposed from July 2009 until it expired last week. Lifting the ban will allow local cement producers to export cement and clinker again. Clinker is the raw material and the key component for producing cement. According to Ahmed El-Zeini, head of the Building Materials Division at the Cairo Chamber of Commerce, the cement market is currently stagnant due to demand slowdown. This produced an oversupply of the product in the local market causing prices to drop. Thus, it makes it appropriate to export cement. Nonetheless, he believes that this stagnation will not last for a long time. El-Zeini expects the government to issue a decree for renewing the ban on cement exports early 2011 as the demand on cement picks up again. He explains that cement is a strategic sector for Egypt and the demand for it increases year after year. "We import a million and half tonnes of cement every year, and this year we could reach two million." Dina El-Kayali, research consultant at Integrated Market Solutions (IMS), a company that carries out marketing research for cement factories, believes that this is an appropriate time for lifting the ban on cement export due to oversupply. She points out that the demand on the real estate sector has dropped recently which caused demand on cement to fall. She also points to the new 12 cement factories that are set to open soon with a yearly production capacity of 1.5 million tonnes each. The country's cement output currently stands at 47 million tonnes and is expected to hit 61 million tonnes by 2012, according to the London-based daily Asharq Al-Awsat newspaper. With the new factories coming online the supply of cement is expected to reach 77 million tonnes by 2017. El-Kayali expects that exporting cement could stabilise cement prices. She further noted that at this time of the year demand on the real estate market is slow due to families being wrapped up in other obligations such as school fees. But sooner or later the demand will increase as "by default we need to build 250,000 housing units every year," she said.
