Cement shortage becoming increasingly serious

Cement shortage becoming increasingly serious
Published: 13 June 2005

Speaker of Parliament Sheikh Abdullah bin Hussein revealed on Saturday a presidential order to end cement price escalations resulting from high demand.

Yemen has been suffering a cement shortage as demand has increased dramatically due to an augmentation in the building industry, particularly in the major cities, since last year.

The cement shortage peaked at the beginning of this year when the price of a 50kg bag rose to YR1, 200 on the black market. Government-run cement corporations raised the official price from YR700 to YR750.

The shortage is widely attributed to an increase in demand for cement from the black market. Official sources say that the price rise could have been caused by the demand brought about by construction projects to celebrate the 15th anniversary of Unification Day. Other official sources, however, blame it on traders exploiting the opportunity and raising prices to sell on the black market.

Opposition party newspapers accused the General Corporation of Cement Marketing of increasing the prices, an accusation denied by the chairman of the corporation board who said that the marketing policy of the corporation remains as it was.

Yemen is set to increase its cement production to 6Mt by 2007, announced the Ministry of Industry and Trade ministry last month. The ministry, with other authorities, is also currently planning to increase cement production to four times its current level. The ministry said that current cement production covers only 45 per cent of the local market need.

The Military Economic Corporation is working with the Ministry of Industry and Trade to import cement to meet local market needs. The General Corporation of Cement Marketing has a field committee reviewing the state of the cement market and monitoring prices. The Corporation is taking a hard stance on those behind the shortage and is determined to see them brought to justice. Official statements said the shortage of cement would soon resolved.

The total production of the Cement Manufacturing and Marketing Co. during 2004 reached 572,577t, far above the 302,577t that it produced the year before.  The Amran and Al- Burh cement factories also reported an increase in production.

The Bajil Cement Factory produced 360,000t of cement last year, an increase of 110,000t from its previous year. The factory is about to finalize setting up a third production line raising its annual production capacity to 400,000t. 

Amran Cement factory production reached 611,715t, 111,000t beyond the projected quantity. Factory revenues during the first quarter of the current year were YR 9.7bn.

The Arab-Yemeni Cement Company has signed a contract in Riyadh, Saudi Arabia to make initial designs for a new cement factory in the Mukalla area of the Governorate of Hadhramaut. The US$200m project will have a production capacity of around 1Mta The contract was signed by the company president and a representative of the Indian Holtake Engineering Designs Company.