In 2012, the uncertain political situation, compounded by the large government budget deficit, contributed to a challenging business environment.
Among the most important challenges faced by the cement industry this year, were the shortages in the gas and power supply, which negatively affected cement production volumes and cost. At the same time, steep increases in the price of natural gas and electricity, weighed heavily on cost structure.
Despite the political transition that the country is going through, demand for building materials has proven resilient. Domestic consumption in 2012, reached 51.2 million tons, up by 5.1% from 2011. Cement imports dropped significantly. Exports, on the other hand, increased to 2 million tons compared to 0.7 million in 2011, as local producers tried to regain their position in foreign markets. Total production of the cement industry in 2012 reached 53.05 million tons.
The increase of demand for building materials facilitated the absorption of new cement capacity that has come on stream over the last two years, bringing the Egyptian market to a near balance of supply and demand. TITAN Cement Egypt, (T.C.E.) local dispatches in 2012 reached 4.3 million tons compared to 4.5 million tons in 2011.
The new ready-mix concrete business in Egypt continued its strong growth. Our new plant, established in western Cairo, started operations in September 2012, successfully addressing local demand.
Against a background of political uncertainty, continuous industrial unrest and numerous labor disputes in the country, T.C.E. employees actively supported the company to achieve its performance targets and overall objectives.