Issue No. 603
Economy
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12 - 18 September 2002 Issue No. 603 Economy |
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| Published in Cairo by AL-AHRAM established in 1875 | Recommend this page | ||
Glass struggle
A government decision to protect local industry has put producers of glass and raw materials at odds with each other. Eman Youssef reports
Misr Chemical Industries monopolises the production of soda ash in Egypt. However, it satisfies only 30 per cent of local demand. In addition, tariffs on imported soda ash are a prohibitive 30 per cent. Ahmed Hamza, a representative for Al-Watania, a glass and crystals company, and member of the chamber of chemical industries, explained that demand for soda ash is outstripping supply. Soda ash is the main component in the manufacture of various kinds of glass, it is also used in other industries such as detergents.
Click to view caption"Local soda ash is sold at higher prices than the imported alternative," said Hamza. He added that locally produced soda ash is being sold for LE900 per ton this year, compared with last year's price of LE630. Soda ash costs almost $118 per ton when imported.
Indeed, glass producers have lodged a complaint with the chamber of chemical industries which, subsequently, held a meeting to develop long-term solutions to the current problems. Hamza emphasised that all glass industry producers try to support local industry.
The Central Agency for Public Mobilisation and Statistics has revealed that glass factories' annual production capabilities were LE706 million in 2001, whereas production was only LE598 million.
However, Mahmoud Fahmi, president of a company for sodium carbonate, which is a branch of Misr Chemical Industries, said that production had increased from 37,000 tons in 1974 to 93,000 tons in 2001. He emphasised that 42,000 tons of production are delivered to the glass factories.
Fahmi also asserted that his company will increase production of soda ash and sodium carbonate over the next two years, to 130,000 tons, in order to fulfil all the factories needs.
He also confirmed that prices will remain stable for the next year.
Meanwhile, glass imports in 2001 amounted to LE295 million, while exports stood at a mere LE57 million over the same period. Egypt imports glass from many countries such as Turkey, Indonesia, China, Saudi Arabia, Italy and Malaysia.
The 1992 reduction of customs tariffs from 80 to 40 per cent (with the possibility of a further reduction to 25 per cent) has led to the market being dumped with cheap foreign products, according to Younis Darwish, chairman of the Chemicals Sector at the Federation of Industry.
Sales taxes on local production still stand at about 10 per cent.
"Competition between local and imported glass products is not fair," said Mohamed Ismail, chairman of a glass manufacturing company. He also suggested that any decision to reduce tariffs should be cancelled. Local production and present import levels should satisfy the needs of consumers for at least 3 years, he added.
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