Prices in the country are “very, very low”, Baumgartner says in Cairo. If that doesn’t change, cement production in Egypt is “a losing proposition.”
In July, the country’s competition authority approved a request by cement makers to impose output cuts. The production quotas came into effect on July 15 for a one-year period. Lafarge has been losing about 20% of its sales in volume terms due to the quotas, and Baumgartner wants prices to rise by 30% to 35% between end of September and mid-October.
Lafarge, alongside others in the industry, will consider pulling out of the quota system and looking for other solutions if prices don’t increase, Baumgartner says. There are no other obvious ideas available, he adds. “It has to work, full stop.”