Several steel manufacturers in Egypt have been compelled to halt or reduce production and even shut down their factories due to a shortage of foreign currency required for importing raw materials, according to a local news report.
Ashraf El Garhy, Vice Chairman of long steel producer, El Garhy Steel, stated that their production has come to a halt since the beginning of the year due to the unavailability of necessary materials.
Public steel companies have also been affected by the current economic situation, with one factory within the Egyptian Steel Group suspending production in February, March, and for two weeks after the Eid Al-Fitr vacation, according to the report.
However, steel companies that export a portion of their production have fared relatively better, as they were able to partially mitigate the situation by securing materials through export revenues. Hassan Elmarakby, Chairman of Elmarakby Steel, mentioned that their production capacity ranges between 30pct and 40pct. The company produces billet, rebar and wire rod.
Similarly, AlGioshy Steel, under the leadership of Chairman Tarek AlGioshy, has been operating below full capacity due to the scarcity of foreign currency and raw materials.
Egypt is currently focused on stabilizing its economy, which has been significantly impacted by the aftermath of the Russian invasion of Ukraine. The invasion has had far-reaching effects, including disruptions in the country’s tourism industry and a notable increase in commodity prices. As a result, Egypt has experienced a sharp rise in inflation over the past year.
The economic challenges faced by Egypt can be attributed to various factors. Currency devaluations have been implemented as a response to the situation, contributing to the overall economic volatility. Moreover, Egypt has grappled with a prolonged scarcity of foreign currency, making it increasingly difficult to meet import demands. The delays in importing essential goods have further strained the country’s economy, exacerbating the challenges faced by businesses across different sectors.
