INTERVIEW: Egypt ceramic industry on cusp of recovery after challenging decade: EFI's El Sallab - Economy

Al-Ahram Weekly

06-02-2025

Although the Egyptian ceramic industry has been facing significant challenges in recent years, including reduced production capacity and declining exports, it is now on the cusp of recovery, Hossam El Sallab, head of the Ceramic Division at the Egyptian Federation of Industries (EFI), said during an interview with Ahram Online.
The government is introducing innovative initiatives and support programmes to pave the way for revitalizing this strategic sector.
It is also addressing factory debts and enhancing production capabilities at a time when the construction sector is experiencing notable improvement.
A report by market research provider Mordor Intelligence indicated that Egypt's construction market is projected to reach $55 billion by 2025 and $82.34 billion by 2030, reflecting a compound annual growth rate (CAGR) of 8.4 percent.
According to the report, Egypt is a key player in the Middle East and North Africa (MENA) construction sector. It is the third-largest project market in the region, following Saudi Arabia and the UAE.
Key challenges of Egypt's ceramic industry
The Egyptian ceramic industry, one of the nation's oldest and most vital sectors, has faced considerable difficulties over the past decade.
Rising natural gas costs, disruptions in the construction sector, and increased expenses have adversely affected overall industry performance.
Hossam El Sallab, co-chairman of Mostafa El Sallab Group, one of the key players in the Egyptian ceramic industry, highlighted several factors contributing to the industry's challenges. These include soaring gas prices and halted construction activities.
'As a result, operational capacity has dropped to approximately 50-55 percent of full production capacity, with exports plummeting from $350 million to just $90 million annually,' El Sallab clarified.
Before this crisis, the ceramic industry in Egypt enjoyed significant growth.
'From the early 1990s until 2011, the industry experienced remarkable production growth rates of 10-12 percent annually. At its peak in 2013, exports accounted for about 30 percent of total production, reaching approximately 100 million square metres," he explained.
However, he added, the landscape shifted dramatically after 2011 due to economic and political factors.
He also emphasized that over 39 companies operate in this sector, with investments totalling around EGP 1 trillion, and that the production capacity of ceramic factories in Egypt is roughly 420 million square metres annually.
Government initiatives: A step forward
The government has launched several initiatives to support the ceramic and porcelain sectors and restore the industry's vitality
One notable initiative involves collaboration with the finance ministry to implement a compensation system that allows factories to supply their products to various ministries and government bodies, such as the housing and transport ministries, in exchange for settling outstanding debts.
According to Minister of Finance Ahmed Kouchouk, a specialized technical team is developing an effective plan to implement this system, addressing financial entitlements while considering the needs of investors in the sector.
Low-interest loans to support manufacturers
The government measures include introducing a 15 percent interest loan initiative under President Abdel-Fattah El-Sisi's directives.
This programme allocates loans to factories at a 15 percent interest rate to purchase necessary equipment and machinery to restart production lines, aiming to boost the ceramic industry's production capacity and stimulate the sector.
The General Authority for Industrial Development and the EFI are coordinating to prioritize which sectors should receive these loans.
'The past seven months have witnessed the launch of a robust programme under the guidance of President El-Sisi and the supervision of Minister of Industry and Transport Kamel El-Wazir,' El Sallab revealed.
'This programme aims to revive halted production capacities in the ceramic industry in anticipation of expected demand from neighbouring countries and to meet construction needs in Egypt's new cities, especially following the resumption of construction activities as per the 2008 Building Law,' he added.
Construction sector's role in stimulating ceramic industry
El Sallab asserted that the construction sector has always been a driving force behind the ceramic industry in Egypt.
'Ceramic manufacturing has never been a catalyst for construction; it has always reacted to the developments within this sector,' he noted.
Preparing for market recovery
Thanks to the collaborative efforts of the government and private sector manufacturers to enhance production and increase exports, the Egyptian ceramic industry is poised for a new revival phase.
With these combined efforts and a favourable economic environment, the Egyptian ceramic industry is poised for a significant recovery in the coming years, which will positively impact the national economy as a whole.
The Egyptian ceramic tiles market is experiencing significant growth due to the expanding construction sector. This expansion is primarily supported by the Egyptian government's urban development initiatives, which focus on creating new cities and urban areas.
Reflecting its diverse and culturally rich heritage, Egypt has a strong aesthetic appeal that fosters a high demand for premium ceramic tiles in both residential and commercial spaces.
The Egyptian ceramic tiles market is projected to grow at a compound annual growth rate (CAGR) of 6.9 percent in the next seven years, according to a report by the India-based market intelligence and advisory company 6Wresearch.
Per the report, key factors fueling this growth include increased housing projects, infrastructure investments, and a growing consumer preference for high-quality, visually appealing finishes in homes and workplaces.
Additionally, the rise in tourism has spurred the development of hospitality facilities, such as hotels and resorts, which heavily utilize ceramic tiles.
The report also points out that the current trends in the Egyptian ceramic tiles market show a notable shift toward sustainable and eco-friendly options, reflecting global environmental concerns.
Innovations in digital printing technology have also allowed manufacturers to offer a broader range of designs and textures, catering to customers' personalized preferences.
Furthermore, adopting 3D printing technology is expected to transform the tile manufacturing process, enabling greater customization and intricate designs. Thus, the growth in the Egyptian ceramic tile market will be further enhanced.
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