Cement supply stabilises as govt eases import rules, Qatar

Cement supply stabilises as govt eases import rules, Qatar
24 September 2007

The relaxation in import procedures and the “production boost” in Saudi Arabia has stabilised cement supply in Qatar.

Cement price which had scaled up considerably due to chronic shortage has also fallen, industry sources said yesterday.

The shortage of cement as well as sand had hit the local construction sector hard, forcing many contractors to import these materials at higher costs and slow pedal on new work bids, till recently.

Industry sources yesterday said the cement price had fallen to about QR17 per bag from QR35 a few months ago. However, Qatar National Cement Company (QNCC), the state’s current largest producer, sells cement at QR14.50/bag.

Even during shortage, QNCC had maintained the price though it was clearly unable to meet the entire local requirements.

The local production is still way below the actual needs.

But with Gulf Cement Company, a new firm listed on the DSM, soon coming online and other local producers including QNCC planning a production boost the situation may improve in the coming months.

Sources said though the local production did not meet the demand yet, the relaxation in import procedures had come as a big relief to the local construction sector.

Hitherto, local importers required a clearance from QNCC to import cement. Now that is not required. Any authorised construction firm can now import cement.

“In the last few weeks several consignments of cement have come in from Saudi Arabia, China and India. Saudi Arabia recently stepped up cement production and this has come as a boon for Qatar’s construction sector,” sources said.

Cement shortage in Qatar was triggered by the construction boom and the first major shortage was in 2004. Besides the heightened demand, the lack of import facilities at the Qatari ports was a disincentive then. The situation, however, has improved in the last couple of years.

The construction manager of a large Doha-based building firm said the availability of sand had also improved though its price had not come down due to higher freight charges.

Although Qatar’s Sand Plant, the only producer of treated sand in the state, has not increased the price, treated sand price shot up due to higher transportation costs.
The official price tag of washed sand is QR22 per tonne.

“But one end up paying much more due to the mounting transportation expenses,” he said.
Published under Cement News