CBM-CI International Workshop, Karachi, Pakistan

Dr. M.N. Darwish

EGYPT CONCRETE CONSTRUCTION INDUSTRY - CEMENT BASED MATERIALS AND CIVIL INFRASTRUCTURE (CBM & CI)
Dr. Mohammad Nasser Darwish Professor of Civil Engineering, Faculty of Engineering Alexandria University, Alexandria EGYPT

ABSTRACT: This paper presents a summary of major trends in the concrete construction industry in Egypt in the last decade (1997-2007). These include trends in use of materials, quality assurance, construction practices, and maintenance of existing facilities. The issues facing cement and reinforcing bars production in the construction industry are discussed. In addition, the potential trends and advances that are expected in the concrete industry in Egypt in the next decade (2008-2018) and their effect on the construction industry are mentioned. Egypt is expected to be one of the top five global exporters of cement in the next few years. The concrete construction sector is one of the most dynamic sectors of the economy in Egypt; it is growing rapidly and coping with the latest developments worldwide.

INTRODUCTION
1.1 Demographics

Egypt is the most populous country in the Middle East and the second most populous in Africa. A large portion of the countrys 78 million people lives in specific major regions of the country: Cairo, Alexandria, and elsewhere along the banks of the Nile; throughout the Nile delta; and along the Suez Canal. The greater Cairo (capital) area hosts about 20% of the population. This area is densely populated. Egyptian public education is free through university and compulsory from ages 6 through 15. Private schools and universities offer education at costs ranging from moderate to high. There are thousands of primary and secondary schools with more than 14 million students, 17 major public universities with more than 700,000 students, and 15 private universities. Major universities include Cairo University (approx. 200,000 students), Alexandria University (approx. 150,000 students), Ein Shams, and the more than 1000-year-old Al-Azhar University, which is also one of the world's major centers of Islamic learning. 225

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1.2

Unique Materials and Environmental Conditions

Construction materials are in abundance is Egypt, e.g. large aggregates (gravel and pink limestone), small aggregates (sand), and cement constituent materials (limestone, sand, silt, ores). Admixtures are locally produced under license. Steel constituents are imported, locally manufactured, used, and sometimes exported. Egypt has several diverse environmental regions including coastal areas (Alexandria, North coast, Red Sea areas), deserts (Siwa), urban (Cairo) and rural areas, and dry areas (Aswan and Upper Egypt). The temperatures in the summer are high, and it is humid in coastal areas, and hot and dry in Upper Egypt. The environmental conditions are relatively harsh for concrete materials and structures, with aggressive exposure to salt, moisture, and sulphate attack in coastal areas. Many buildings in such areas suffer distress at a relatively early age in their service life and need periodic maintenance and repair.

2.
2.1

Overview of THE Last DECADE (1997-2007)

Materials

There has been a shift towards using pink limestone in concrete mixing instead of conventional gravel, due to economic reasons and quality control, but certain tests are required before using it. Admixtures became more commonly used in concrete to improve workability, and thus lower w/cm ratios were and are being used. Cement Type II (Modified PC) has been produced recently and has been used in place of Type V Cement (Sulphate Resistant Cement (SRC), or Sea Water, as it is locally called in Egypt). New cement productions will follow the Euro-Code and the CEM series. High tensile steels are more commonly used instead of mild steel. There has been a trend toward abandoning the use of bent up bars in reinforced concrete construction.

2.2

Quality Assurance Practices

In the last 10 years, significant advances have taken place in the quality control and quality assurance of concrete materials and structures. Revisions of structural designs by selected independent official consulting offices prior to issuing building permits and insurance is compulsory, to ensure adherence with building codes. In addition, periodical inspections of construction works are carried out thereafter. Testing concrete materials before and after mixing is required to check appropriateness and concrete strength. The typical 28 day equivalent cylinder (in Egypt, 150 mm (6 in.) cube strength is used) strength of concrete has risen and ranges between 2800 psi (20 MPa) and 7000 psi (50 MPa). Moderate high strength concrete is being used in some big projects (e.g., the Alexandrina Bibliotheca, some bridges, and high-rise buildings). The trend toward producing moderate (HSC) and high performance concrete (HPC) is growing. It somewhat difficult to produce concretes 226

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with strength in excess of 10,000 psi (70 MPa) because of the type of aggregates available in Egypt. There are also some practical and economical limitations. In spite of this, HSC is being used in pre-stressed bridges.

2.3

Design Practices

The modern concrete building industry using Egyptian codes of practice is about 90 years old. The Egyptian Code of Practice (ECP) for design and execution of concrete structures [1] was established more than 75 years ago. The first version was released in 1930 and then updated in 1962 and 1969. A new version was released in 1989 and updated in 1995. Subsequent updates were published in 2001, 2003 and 2006. The last version includes the most recent international developments in concrete design and practice. The ECP is updated periodically, and the content is influenced by the ACI, Euro-Code, and British standards. The ECP is appropriately modified to accommodate the effects of local environmental conditions and to take into account Egyptian design practices.

2.4

Construction Practices

Reinforced concrete skeleton structures of the beam and slab type with brick in-fills (concrete, masonry) are the common building systems in Egypt. Flat slabs are generally used in nonresidential buildings. Brick (masonry, concrete, limestone) wall load-bearing elements are sometimes used for low-rise one or two floor buildings. Concrete is generally placed on site mechanically in common projects, but in recent years the use of ready mix concrete and concrete pumps for placement has increased steadily.

2.5

Maintenance of Existing Facilities

The fixed rent policy and the shortage of sufficient funds have led to a lack of maintenance of existing facilities. This has resulted in the architectural and structural deterioration of many residential and commercial buildings. Unfortunately, these include many old and historical structures and those with special features. There is some recognition of the importance of preserving and maintaining historical buildings, and efforts are underway to develop programs for the maintenance of these types of structures.

3.
3.1

ISSUES - CONCRETE INDUSTRY

Cement Production

Egypt is the Arab regions largest cement producer, and it exports cement at almost half the price charged in most parts of the world. It is the fourth largest market in the Mediterranean rim in terms of grey cement and white cement consumption. Egypt is also expected be one of the top five global exporters of cement in the next few years. The cement production 227

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developed from a wet process to a dry process in the existing factories with the large increase in the production lines. The Egyptian standard specifications of produced cement are generally related to the European (British) specifications. From 2001 to 2005, Egyptian cement production capacity increased by almost 21 percent. The worlds demand for cement is estimated to increase by 3.6 percent between 2003 and 2020. In 2000 cement consumption in Egypt was around 27 million tons with the total production lagging at approximately 21 million tons. The gap was covered by imports. Since then, the supply has exceeded demand, with new entrants in the market adding 10 million tons per annum in addition to the increased capacity of the already existing companies that have upgraded their capacities by an additional 6 million tons. In 2004, the actual production was estimated as 29 million tons (production capacity was about 35 million tons of normal grey cement and 700,000 tons of white cement). With the construction and real estate boom in the country, the cement sector has experienced its own boom as market demand has grown rapidly. Producers could sell all they could manufacture, demand is even larger, and prices are going up [2]. Cement exports increased by 100% in 2004 compared to 2003. Over the past 20 years cement consumption increased by about 10% annually, rising from a per capita cement consumption level of 95 kg in 1979 to an estimated 396 kg in 1998 and about 400 kg in 2005 (which is close to that per capita in the U.S. in 2005). There are currently 14 large cement production companies (compared to nine in 2000), of which eight companies produce more than 2 million metric tons (4.4 M. lbs) yearly. The amount of cement produced (Figure 3.1) in 2005 was approximately 36 million tons (capacity 38.5 M tons), out of which 7 M tons (15.4 M lbs) were exported [3, 4]. Local consumption increased by about 14% in 2006, and is expected to increase by about 10% in 2007; these figures are higher than previous forecasts of 9% in both years because of big projects [2]. Fourteen new cement projects with an estimated total production capacity of 18.5 million tons a year were given license recently (July 2007) [4], and more permits are pending.

Figure 3.1

Cement production versus consumption [5]. 228

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Relatively low labor and energy costs and an abundance of raw materials have led to very high profit margins. Currently, international cement companies partially or wholly own more than 75% of Egypts cement industry [2]. They are attracted to Egypt due to the large and growing market with healthy margins and low energy and labor costs. Some of the world's biggest cement companies, such as Italcementi, Cemex, Cembor, and Lafarge, have been attracted by the booming construction industry in Egypt and the government's grand infrastructure ambitions. These companies entered the local market through state sell-offs in the mid to late 1990s. In 2005, the Egyptian Cement Company (Holcem) was the largest cement producer, followed by Suez Cement (Italcementi) and Assuit Cement (Cemex). The cement production sector is one of Egypts most active and profitable industries. It has seen significant growth over the past several years, with demand (consumption) growing by more than 11% per annum [2]. There surge in cement demand in the last few years is expected to last and even to increase in the future. This is largely attributed to the increase in population and the subsequent need for further establishments in addition to the construction boom and new projects from foreign investment, e.g., from incoming gulf companies. The cost of cement production in Egypt remains one of the lowest in the world due to the relatively low cost of labor, strategic location, abundant raw material (mainly limestone), and modern production facilities. Moreover, strong local technical and engineering capabilities have allowed most cement companies to exceed their production capacities without difficulty [2]. In the first quarter of 2007, one ton of bagged from factories (20 bags each 50 Kg (110 lb)), sold for about LE 330 (approx. 58US$); the retail price in July 2007 wasabout LE 390 (approx. 70US$). The price has gone up from about ($48) per ton in 2005 and early 2006. Cement for export is selling at about $80 a ton [2]. Cement market consolidation in Egypt has led to accusations of anti-competitive price practices, and in March 2007, the government urged the country's competition watchdog to investigate. Limiting the profits of the cement companies would provide a boost to the construction industry and lower the construction costs, which are already surging high along with the price of land.

3.2

Steel Production

The local demand for steel is expected to increase during the coming years. Egypts steel industry relies heavily on the re-bar sector, which is estimated to account for 80% of the steel market. A surge in construction activities and increased private sector participation in the economy have helped the sector experience a high growth rate. Dominating the steel re-bar market are Alexandria National Iron and Steel and El Ezz Steel Re-bars, which account for a big share of the total market capacity and market share (Figure 3.2). Other private sector companies account for 30% of the market, while public sector companies account for only 10%. Local producers not only compete with each other but with international markets. Several years ago the foreign competition included imported steel bars from Libya, 229

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Saudi Arabia, Turkey, Eastern Europe and former USSR countries; these threatened local production, especially since some were selling below the local market price. In 1998, Egyptian authorities enacted a five-year anti-dumping duty plan against the dumping activities of steel foreign suppliers, imposing anti-dumping fees on steel re-bar imported from Eastern Europe and Turkey to protect the local market against these countries, most of whom were not members of the WTO [2,3]. The anti-dumping duties coupled with an effective customs duty provided local producers with relative stability and flexibility in pricing their products. This also created an environment of fair competition. Currently, local producers have increased the price to 3700 LE per ton (654US$ per ton) from 2200LE (388 US$ per ton) in 2004. This has led to accusations of anti-competitive price practices, and in March 2007, the government asked the country's competition watchdog to investigate. A tax was imposed on steel and cement exports to limit export quantities and to fulfill local markets demand first and at lower local prices. In the Egyptian steel industry, raw materials, mainly scrap and billet, which represent around 45-85% of total production costs, are being imported [2]. The Egyptian steel industry is dominated by the private sector, which supplies more than 95% of the market. There are about 18 steel producers in Egypt, with the privately held EZDK Dikheila controlling almost 60% of local demand [6, 7]. Steel consumption per capita in 2005 was estimated at approximately 80 Kg. (which is near to that in South Africa).

Figure 3.2 3.3

Egyptian steel production (million metric tons) [7].

Construction in Egypt

The construction sector, of the most dynamic sectors of the Egyptian economy, has been growing rapidly since the 1980s. The demand for construction materials has been high since 1995 for to several reasons, including extensive private sector construction of resorts on the Red Sea, Sinai, and Mediterranean coasts. The demand for building materials is expected to increase further at an annual rate of 25% [2] during the coming years, largely because 230

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of the passage of the mortgage law, which will make it easier for low income to low-middle income people to own property. Growth in the sector took place with the progress of land reclamation projects in the New Valley (Toshka) as well as the construction of new infrastructure, bridges, airports, touristic villages, and residential compounds. Egypt will soon complete 15 new cities presently under construction. The majority of the construction material used in Egypt is manufactured locally; only a small quantity is imported. Private sector investment in construction contracting, equipment and materials is thought to be about 40% of the total market. Foreign participation is mainly by the U.S., France, Germany, and Spain. The supply of foreign expertise in design, engineering, construction, and construction management services [2] has enhanced the sector. Concrete structures constitute 40% of the total cost that uses 100% locally produced steel and cement. Plastering (finishing) accounts for 20% of the total cost. Of this cost, 100% of the labor is locally provided, 70% marble used in flooring is produced locally, and almost 100% of the porcelain and 90% of the bathroom fixtures are manufactured under license in Egypt. Some double-glazed high standard aluminum is imported. The timber used in wood flooring is imported but is processed locally [2].

4.
4.1

NEXT DECADE (2008-2018) POTENTIAL ADVANCES

Potential Advances Materials

More high strength and high performance concretes are expected to be used. In addition, more admixtures are expected to be used in concrete production to enhance strength, durability, and workability. The use of advanced composite materials, i.e., Fiber Reinforced Polymers (FRP) (a version of textile reinforced concrete (TRC)), will be more often used in strengthening structures and probably in some special new structures. There is a newly published Egyptian Code for the use of FRP in infrastructure (repair and construction), one of the few codes worldwide.

4.2

Potential Advances - Production

The construction of cement production plants and concrete production facilities is on the rise. The production of concrete is likely to increase by more than 11% over the next 10 years [2]. New licenses were granted to 12 additional cement production factories in July 2007. These are expected to produce 18 million tons of additional cement yearly. Several more permits are expected [4]. More ready mix concrete will be used. There will be an effort to reduce the effects of by products of the cement industry by use of pass dusts, reusing the dusts separated by filters, etc.

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4.3

Potential Advances - Quality Assurance Practices

More strict building, design, and execution rules are being enforced and will continue to be enforced. The awareness of quality assurance practices and their importance will increase. Training programs and courses for engineers, technicians, and field supervisors will be increased and conducted occasionally. New technologies will be taught. Environmental law provisions will be tightened regarding production and manufacturing processes and the building sector, e.g., the permitted limits for the rate of emissions from cement industry.

4.4

Potential Advances - Design Practices

Structural designers will still follow the ECP, which is adequate, up-to-date, appropriate, and updated periodically. More designs will be carried out by computer analysis and design packages, which are available in the local market and among engineers. These will include 3D analysis of whole structures, and include nonlinear effects. More care will be given to earthquake and wind analysis provisions and details. Higher strength concrete is expected to be used more frequently and recommended for buildings. Reinforced steel with higher strengths, improved properties, and improved pre-stressed tendons will be used.

4.5

Potential Advances - Construction Practices

According to some reports, the demand for building materials is expected to increase at an annual rate of 25%. Better and advanced project and construction management procedures will be adapted. The construction market is likely to experience high growth with a focus on affordable housing, infrastructure, new cities, new residential and touristic compounds, port infrastructure, expansion of the electricity and water supply sectors, and the building of airports and hotels. The retail distribution of cement remains the most important component of cement consumption. The pre-cast industry is likely to provide an alternate means of construction, thus allowing for better quality assurance.

4.6

Potential Advances - Maintenance of Existing Facilities

It is expected that the maintenance, repair, and strengthening of buildings and the infrastructure will be increased and mandated. A recent law mandates that the government and localities assume the responsibility for repairing and maintaining old and historical buildings to preserve their special heritage. New building laws will be developed to mandate the maintenance and repair of buildings and to distribute the costs of preserving buildings among the occupants. New companies will be formed to undertake such jobs. Infrastructure will be scheduled for maintenance on a more regular and timely basis. 232

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5.

SUMMARY

This paper presents the major trends in the concrete construction industry in Egypt in the last decade. The issues facing cement production, the concrete construction industry, and reinforcing bars production are discussed. The potential trends and advances that are expected in the concrete industry in Egypt in the next decade and their effect on the concrete construction industry are described. Egypt is expected to be one of the top five global exporters of cement in the next few years. The concrete construction sector is one of the most dynamic sectors of the economy in Egypt, and is growing rapidly and coping with the latest developments worldwide. In the next decade, it is expected that concretes with higher compressive strength and enhanced durability properties will be used for the civil infrastructure. Better quality assurance rules will be developed and implemented. Maintenance and repair provisions will be mandated for buildings. The use of advanced composite materials (FRP) is expected to increase, especially in repair/retrofitting and strengtheningof structures. REFERENCES
[1] [2] [3] [4] [5] [6] [7] Egyptian Code of Practice for Concrete Structues, HBRC, in Arabic, Cairo, Egypt, 2007 Egyptian American Chamber of Commerce Report, Egypt, 2006. Abdel Aziz H., (Construction, Building & Heavy Equipment, Egypt), Int.Market Insight, 2000 Alahram Egyptian Daily Newspaper, in Arabic, Egypt, July 26, 2007 Egyptian Ministry of Foreign Trade and Industry Monthly Bulletin, Feb. 2005. Jan-May data: Egyptian Ministry of Investment, Cement Committee Report, May 2005. Ezz El Dhikheila, Annual Report, Egypt, 2006.

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