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Mexico-headquartered building materials giant Cemex is planning to cut back its investments in Egypt and the UAE, a top company official said.
Cemex owns the Assiut Cement Company in Egypt and ready-mix concrete and cement production plants in the UAE.
Carlos Emilio Gonzalez, CEO of Cemex Egypt and UAE told Zawya Projects that the company has scaled down its 2022 investment plans for the two countries to $12 million.
He said the company was initially scheduled to invest a total of $20 million but due to the coronavirus pandemic and the impact of the Russian-Ukrainian conflict on global markets, it decided to cut the investment outlay to $10 million in Egypt and $2 million in the UAE noting that "despite the availability of liquidity, we believe there will be difficulties in providing resources in terms of equipment and raw materials in light of the continuing supply chain crisis."
Gonzalez said the Russian-Ukrainian conflict has thrown up two key challenges for the cement industry in Egypt, the first of which is linked to energy prices, especially the surge in the coal prices in the past weeks, and the second is the persisting supply chain disruptions, which makes it difficult to import raw materials needed for the manufacture of cement bags, as well as spare parts for factories.
“The maximum production capacity of Assiut Cement Company is about 5.8 million tonnes of cement, but our factories are currently operating at only 3.7 million tonnes, which we aim to increase by the coming period,” he said.
He also added the company has invested $1.5 billion in Egypt since it has started operations in the country in 1999.
Gonzalez noted that the UAE market has been going through challenges in terms of fall in demand for cement amid the COVID-19 pandemic, but even after pandemic’s impact has lessened, demand remains at low levels compared to pre-pandemic levels.
In February 2022, Reuters reported that Cemex would invest $900 million on growth starting this year, quoting Chief Executive Fernando Gonzalez. The report said the company fourth quarter net profit rose 179 percent year-on-year to $195 million while revenues rose to $3.62 billion from $3.5 billion a year earlier.
(Reporting by Marwa Abo Almajd; Editing by Anoop Menon)
