How Economic Pressure Is Affecting Building Products Prices in Egypt
Over the past three years, Egypt’s building-products industry has been affected by a weakening currency, followed by a gradual stabilisation. This has resulted in a continuous recalculation of costs for both manufacturers and consumers in the bathroom, kitchen, and HVAC categories, from imported compressors and copper to industrial gas used in ceramic firing. The products that rely most largely on imported parts and energy-intensive processes continue to face the greatest price pressure, even as local production has increased to lessen some of this impact. This article discusses where those pressures are easing, where they still exist, and what providers and purchasers should be aware of heading into 2027.
The Currency Story Behind Rising Costs
Since 2022, the Egyptian building products business has been basically a currency story. The government had let the pound float freely after several devaluations between 2022 and 2024 in response to the shockwaves from the Russia-Ukraine war. In this time the pound lost most of its value in relation to the dollar. Early in 2024, an investment deal with the UAE at Ras El Hekma and a larger IMF bailout package proved to be a turning point, helping to replenish funds and prevent a deeper crisis. By mid-2026, headline inflation had eased from its 2023 peak to the low double digits, while the central bank had paused interest rates after a prolonged tightening cycle, signalling a shift from acute economic pressure toward greater stability.
However, due to sharp increases in rent, electricity, gas, and fuel, the housing and utilities component of inflation has continued to run much hotter than the headline rate. For manufacturers and retailers of building products, this "disinflation" simply means that prices are increasing more slowly than they were previously.
Bathroom and Kitchen Products: Energy Is the Swing Factor
Egypt has a strong ceramic manufacturing industry, which has helped mitigate the impact of currency fluctuations. The availability of locally sourced kaolin, feldspar, and quartz enables domestic manufacturers to produce sanitaryware such as toilets, basins, and bathtubs using predominantly local raw materials, giving them a cost advantage over import-dependent players. For many years, sanitaryware and mixers have been produced domestically by companies like Ideal Standard, Lecico, and Sobek.
Manufacturers still have to contend with two significant cost constraints even when macroeconomic conditions are improving. First, imported technology - German printers, Spanish glazing lines, Italian presses is much more expensive to upgrade or replace because it is priced in foreign currency. Second, and perhaps more importantly, energy prices have soared as the government has gradually removed fuel and industrial gas subsidies under the IMF program. Industrial gas price increases in 2025 and 2026 have greatly increased manufacturing costs as natural gas is used in kilns for sanitaryware and ceramics. Industry leaders warned of further price hikes impacting consumers.
For faucets, the pattern is a little different. The brass, copper and chrome-plating inputs are imported and dollar-linked, but brass taps and mixers are made in the country. By the end of 2025, copper prices had soared to new record highs, which immediately affected the price of mixers and faucets. Similar trends have been noticed in kitchen sinks, which are mostly made of imported stainless steel. Domestic steelmakers had to raise their own prices through late 2025 due to rising steel costs and safeguard duties on imported steel products.
The net effect for the B&K segment is a split market: domestically sourced ceramic sanitaryware has been relatively insulated by local raw materials, while anything metal-intensive - faucets, mixers, stainless sinks remain far more exposed to currency and commodity swings.
HVAC: Locally Assembled, Globally Exposed
The paradox of Egypt's building-products industry is captured by air conditioning. The country has one of the biggest AC manufacturing bases in the region, with major brands such as El Araby, Tornado, Sharp, Carrier (through Miraco), Unionaire, Fresh and Midea all doing local assembly there. But with the most crucial parts - compressors, printed circuit boards and refrigerant is still imported and priced in dollars, retail prices have continued to climb.
The retail prices of air conditioners were raised in several waves during the summer of 2025 and into 2026, driven by currency effects, the cost of copper, and higher freight and insurance expenses. The surge in copper prices in late 2025 further increased manufacturing costs for air conditioners, adding upward pressure on retail prices. The added cost of inverter and energy-efficiency technology, as advanced compressors and control units are still imported, placed further upward pressure on prices. This was compounded by steel safeguard tariffs introduced in September 2025, as much of the sheet metal used in appliance manufacturing is not produced domestically, while industrial gas price increases during the same period raised energy costs across the manufacturing chain.
Localisation has been the most visible response in the industry. El-Araby's 2022 partnership with Taiwan's Rechi Precision to build a domestic compressor factory in Beni Suef was a direct attempt to bring one of the most import-dependent components onshore, and the plant is now operational as part of the group's wider manufacturing complex in the region. Unionaire followed in December 2024 by announcing a multi-year expansion plan, including a new EGP 6 billion factory expected to become the largest home appliances manufacturing plant in the MENA region, supported by an investment of USD 200–300 million through 2028. Across the sector, manufacturers are also gradually adopting lower-impact refrigerants in line with energy efficiency targets and evolving regulatory requirements.
Traditional gas or electric units and solar water heaters are at an interesting crossroads. Like the rest of the HVAC category, traditional heaters are subject to the same steel and energy cost pressures. Components dependent on imports, such as controls and heating elements, follow currency swings closely. Meanwhile, solar water heaters have been riding a very real tailwind. Electricity and gas tariffs are on the rise as part of subsidy reform, and the case for payback on solar becomes increasingly attractive for households and developers alike. Solar heating is one of the very few categories where economic pressure is expanding rather than contracting demand.
Looking Ahead: Stability Is Near, but Not Here Yet
Egypt’s building-products market is transitioning from a crisis to a more stable, though still elevated, cost environment. A relatively stable Egyptian pound is expected to ease currency-related cost pressures, while energy costs for ceramics and sanitaryware are likely to continue rising as subsidy reforms progress. Buyers and suppliers should favour local production, incorporate escalation clauses when imports are unavoidable and watch the exchange rate and energy policy closely: the two levers that will decide whether this period of adjustment finally brings lasting stability.
Kajal
Source: BRG Research
To purchase the detailed reports, go to our online shop: BRG Heating and Cooling Report Find out more in our latest edition Egypt report:
ng
For more information, please contact us at:
Email: europe@brggroup.com
Tel: + 44 (0) 20 8832 7860
