Building materials hammering prices, expected to remain relatively constant

Tamer Fouad, Business Development Manager for MENA Region at Consolis Group – ECPC:

Consolis/ ECPC total investments in Egypt exceed EGP 500 million,

Consolis/ ECPC to launch 10 million Euros as new production lines to be employed in prospective projects,

Consolis Business Development Manager for the MENA Region, Tamer Fouad, is facing up to the current market slow down echoing the ongoing political unrest. Investors are reluctant to pump further investments. While many companies in conservative mood, Consolis Confirms its confidence in Egypt even in the most challenging times. Fouad confirmed that his company is going to inject more investments in Egypt over the coming period, to achieve its plans and ambition for growth. Consolis is anticipating a strong economic recovery in the future. The anticipated economic rebound is on the account of the Ministry of housing ongoing efforts to auction around 150 land plots for various investment activities during the current phase, added Tamer.

Present sector’s slow down is attributed to the dropping of many public projects excluding infrastructure sector, which is considered relatively secured. The overall local construction sector operations volume has been decreased by around 50% due to the witnessed instabilities in the political and economic arenas. Only less than twenty percent of Consolis overall local operations have been affected by the economic slowdown. The sectors slow down is mainly attributed to the dropping of many public projects excluding infrastructure sector, which is considered relatively secured, fouad stated.

Fouad condemned the sharp increase in building materials prices. He called the prices unjustified not taking into account the overall decline in the volume of business. He also anticipates that the prices will remain relatively constant for the rest of 2013. It is imperative that the government should play a vital role to control this rise. The ministry should publish a list of price tags as a guideline for the building material sector. Also, the government should supervise the overall building material supply chain starting from factories to distributers. Cement supply chain has enormous economic influence, yet it is mostly ignored in management discussions.

Furthermore, Fouad pointed out that the postponement of public private partnerships (PPP) real estate tenders might waste many feasible opportunities in developing the real estate industry. He also called the new Urban Communities Authority to take solid steps in auctioning off 171 acres of land to develop a project in the 6thOctober, which has been delayed due to legal reasons.

Though Egypt’s Urban Communities Authority concluded a number of its legal disputes with a group of real estate developers including AFRED and Damac Properties, the number of settled disputes along the past 3 years is perceived to be insignificant when looking to the bigger picture. The infinite cabinet reshuffles, which are unlikely to achieve an economic breakthrough or resolve investors’ problems.

Consolis Business Development Manger stated that the new interim ministry is working at its full capacity to fulfill the growing demand for social affordable residential units. Currently, Consolis is discussing with the government the construction for a model for the social housing buildings. Consolis offered the government a cost effective durable residential solution that will take shorter construction time- less than half of conventional cast onsite with optimum use of materials, recycling of waste products, less noise and dust, safer, higher quality.., etc. The company proposed highly engineered model to provide rugged, durable surfaces for walls and floors, which are sustainable for long-term operation and maintenance.

Besides, Consolis is interested in the government’s efforts to expand river transportation capabilities. The company offers durable floating ready-made concrete pontoon and station solutions. The delivered French technology quality and site-specific engineering delivers proven durability of more than 20 years. The devised solutions don’t rot corrode, loosen, or rattle from the moist, windy, and marine environment. Thus, reducing total project costs by 30% when compared to conventional concrete. It is also worth mentioning that Consolis proposed to offer precast concrete solutions for many prestigious projects in Egypt and MENA area such as; the new Grand Egyptian Museum located in archeologically prestigious area near the pyramids.

Consolis total investments in Egypt exceed EGP 500 million. The company is striving to create value and focus on delivering 500 different concrete solutions to suit each customer’s distinctive needs.

The company capacity can pump about 300 000 tons of concrete on annual basis. The company is amending its wheat silos designs proposed to the government to decrease constructions costs and time during the current year. As part of expanding the company’s cliental database, the company is registered in the armed forces engineering authority to participate in its projects. Also, the company is currently is planning working with a local and a multinational contractors to participate in the container terminal located in East Port Said port.

Furthermore, the company is working with local investor to develop 500 acres mixed-use project. Fouad revealed that Consolis is going to launch new production lines entailing 10 million Euros of investments to be utilized in the implementation of the for the coming projects. Tamer is anticipating the success of Euromoney’s Egypt conference in 2013, as it is one of the biggest and most important financial events. This year, the conference will provide a platform for urgent discussions about Egypt’s economic, financial and investment future.