Saudi Arabia’s cement sector recorded sales growth of 16 per cent in April, the highest in more than a year.
Domestic cement sales grew to 4.2Mt in April, compared with 3.61Mt in the same period last year, said analysts from NCB Capital. Private projects, notably those for housing and schools, are boosting demand for the basic material. "Last year, people were very wary. The last thing they wanted to do was commit money, but now the outlook is looking brighter," said Farouk Miah, an analyst at NCB Capital in Riyadh.
The directives follow the decree by King Abdullah in March ordering authorities to build 500,000 low-cost houses in different parts of the kingdom. King Abdullah has allocated SAR250bn to implement the project. Saudi Arabia is expected to need two million homes by 2014 to keep up with the demands of a population that has quadrupled in 40 years.
"There is also a lot of activity for plans to develop the rest of the region, in Mecca, Madina and Jeddah," he added. Officials in Riyadh last week instructed the municipality to allocate 19.52Mm2 of land for housing projects in the city and 18 others and townships in the Riyadh province.
"Saudi Cement, Southern Province Cement and Yamama Cement should benefit from the demand because they are the ones who have the biggest spare capacity, an average of 20 per cent," Mr Miah said.