The Clap
A few cement companies listed on the EGX clarified how the decision to raise the price of natural gas affected their businesses.
Background
The government increased the price of natural gas supplied to cement factories by 109%, to $12 dollars per million thermal units.
The Clap
Arabian Cement (ARCC) said that it will not be affected by the decision, as its operations almost solely depend on alternative fuels and coal.
Suez Cement (SUCE) also noted that it uses natural gas in the process of igniting kilns, but almost solely relies on coal for production, meaning the decision will have minimal impact on its profitability.
On the other hand, analysts said that the company most significantly impacted will be South Valley Cement (SVCE), as the company relies on natural gas for its production.
Why this Matters
Although many companies depend on coal for cement production, the decision to increase natural gas prices delayed their switch to using natural gas in production, a cleaner energy source than coal.
