This will be the result of a significant hike in capacity and the downturn in regional projects, the report says.

The regional industry has proven to be more resilient than first thought but MEED Insight says it is inevitable demand will fall, with more than $400bn worth of projects in the region cancelled or postponed

Cement capacity has jumped by an estimated 70 per cent to 85 million tonnes a year in early 2009, mainly due to substantial capacity expansions in Saudi Arabia and the UAE.

With a grim projects and contracting environment in the UAE, especially Dubai, cement producers will have to look to other, more robust markets for new business, the report says. In the first quarter of 2009, UAE construction awards slumped by 85 per cent with little sign of a significant upturn in the rest of the year.

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Other markets with less exposure to real estate are expected to be more resilient. In particular, Saudi Arabia is set to push ahead with significant investment in infrastructure and housing.

The kingdom now has production capacity of more than 45 million tones a year (t/y), and is set to exceed 50 million t/y by 2010. Demand is still high; March 2009 witnessed the highest ever demand for clinker.

TABLE: GCC per capita cement consumption, 2008 (kg)

Country Average
Bahrain 300
Kuwait 659
Oman 1,678
Qatar 4,710
Saudi Arabia 1,625
UAE 5,098
GCC average 2,345
Source: MEED

This information is taken from the MEED Insight report GCC Cement 2009: The drive for capacity. Gain exclusive insight on GCC market size and potential new opportunities, risk and key industry data from this report. To order your report today, download the order form (PDF) or email MEED Insight for more information, quoting reference CEM2.

Perhaps a more pertinent question facing producers is how to handle this fall in demand. For some, it will be a case of carefully managing their inventories; for others it may be a good time to consolidate. For a fortunate few, in states such as Bahrain and Qatar, where the market remains substantially under-served, a drop in demand will make little discernible difference.

The slowdown in construction is also placing a greater emphasis on exports. Having been a net importer since the 1950s, the region may soon find itself becoming a net exporter for the first time. Saudi officials complain that an export ban imposed in 2008 has prevented the kingdom from establishing a viable GCC and African market.

Cement prices in the GCC have risen from around $3.00 per 50kg bag in 2003 to $7.00 a bag in 2008. In early 2009, contractors forecast that cement prices in the UAE would fall 20 per cent by the end of the year.

Cement prices have proven more resilient than steel prices, which have fallen by around 75 per cent from the mid-2008 highs. Prices outside the UAE are likely to fall less because of tighter supply and continuing activity in the construction sector.

Report table of contents

Chapter Page number
Preface 3
Executive summary 4
Introduction 6
Cement in the GCC 8
Financial performance 11
Drivers of demand 14
Cement prices 17
Investment 19
Cement by country 21
Bahrain 21
Kuwait 21
Oman 22
Qatar 22
Saudi Arabia 23
UAE 25
International players 27
Imports and exports 29
Environment 31

Report tables and charts

Table/ chart Page number
World cement production and capacity 6
GCC per capita cement consumption 7
GCC primary cement production companies 9
GCC cement production companies with state ownership 10
GCC cement sector: financial performance 11
Revenues and net income for 23 leading GCC publicly listed cement companies 12
Revenues and profits of the core eight listed Saudi cement companies 12
Core eight Saudi cement companies’ sales revenues 12
Revenues and profits of public UAE cement companies 13
Revenues and profits of Kuwaiti, Qatari and Omani listed cement companies 13
Value of construction contract awards in the UAE and Saudi Arabia 14
Middle East nominal GDP and current account surpluses 15
GCC population forecasts 15
CC GDP, 2003-10 16
The GCC projects market, May 2008 16
GCC cement prices 17
GCC cement and ready-mix concrete prices 18
GCC cement supply and demand 18
Cement investment by country and status 19
Selected cement projects 20
Saudi installed cement capacity by region 23
Saudi cement company production capacities 23
New Saudi cement players 24
Saudi cement data 25
UAE confirmed capacity expansions 26
GCC cement and clinker imports 29

This information is taken from the MEED Insight report GCC Cement 2009: The drive for capacity. Gain exclusive insight on GCC market size and potential new opportunities, risk and key industry data from this report. To order your report today, download the order form (PDF) or email MEED Insight for more information, quoting reference CEM2.

About MEED Insight:

Thanks to its own projects tracker, MEED Projects, MEED Insight has access to unparalleled, up-to-date information on the region’s projects market. We can provide companies with:

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MEED Insight has access to a wealth of regional data ranging from broad macroeconomic statistics to sector-specific information. We can obtain and analyse data on a specific market or industry to help companies gain an insight on market size and potential

Off-the-shelf reports

MEED Insight also offers a series of off-the-shelf reports on a range of different sectors and industries. The information compiled for these reports comes from a variety of sources, including MEED magazine, MEED.com, MEED Events and MEED Projects, as well as primary and secondary research.

Our current off-the-shelf reports include:

  • GCC ICT Projects Outlook & Review
  • GCC Projects Forecast & Review 2010
  • Power & Water in the GCC 2010
  • Libya Power & Desalination
  • Middle East Steel 2009
  • Wastewater in the GCC
  • MENA Mining 2009
  • MENA Aluminium 2009
  • GCC District Cooling
  • GCC Economic Outlook

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