Soaring cement demand tests producers

21 June 2002

Qatar National Cement Company (QNCC), the sole Qatar-based cement manufacturer, is now operating its two plants at substantially above capacity to meet soaring demand from the local construction industry, QNCC executives say. The company, which accounts for the bulk of local demand, is also to start specialist building material production in four projects to be operational by the end of 2002.

QNCC operates two cement plants in the Umm Bab area in southwestern Qatar. In total, they have nameplate capacity to produce 1 million tonnes of cement. QNCC executives told MEED on 17 June that Qatar cement demand is expected to rise to 1.5 million tonnes in 2002 and could hit 2 million tonnes in 2003 due to the large number of civil infrastructure projects getting under way across the country. The Municipal Affairs & Agriculture Ministry told QNCC in June that projects it has initiated are now worth $5,000 million in total.

QNCC has been meeting demand by operating its cement units at well above capacity and by importing clinker for grinding. The company is understood to be considering expanding its grinding capacity to meet projected demand levels in 2003, thereby avoiding the need to invest in a complete plant expansion.

QNCC was due to take over a sand-washing facility as this report was being published. This has been bought from the Finance Ministry.

An oil well cement production plant started operating earlier in 2002, and a 70,000-tonne-a-year pulverised fly ash project is due to begin producing in September. QNCC is also buying a slag cement manufacturing unit and this deal is to be completed before the end of the year.

QNCC reported a 17.5 per cent increase in total cement production to 1.2 million tonnes in 2001. This was more than double the figure recorded in 1997. Sales revenues last year rose by more than 20 per cent to QR 207.1 million ($57 million) and net profits by 42 per cent to QR 112.75 million ($31 million). The company declared a dividend for the year of 60 per cent compared with 55 per cent in the previous 12 months.

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