Lebanon demand falls, brighter times anticipated

Lebanon demand falls, brighter times anticipated
22 June 2012

Despite a slowdown in current market activity, a bright future lies ahead for Lebanon’s cement industry, according to the chief of one the country's leading producers.

Speaking, to The Daily Star, Pierre Doumet, CEO of Cimenterie National, admitted that domestic consumption has been falling as well as demand from export markets due to regional instability and eurozone economic concerns.

“We expect the demand on the local market to recede by at least 15 per cent,” he said, noting that exports have fallen drastically in 2012. Exports to Spain and Portugal, for instance, have been completely halted, he added.

The summer season, traditionally a peak time for cement demand, has begun slowly this year, Doumet noted. Cement prices, he added, were expected to fall by as much as 20 per cent last year. Doumet noted that a key reason for the downturn was that real estate investors have been reluctant to kick-start projects due to a slowing economy.

Furthermore, the Syrian crisis has had a negative impact on the Lebanese cement market. “Besides falling demand, cement deliveries to Syria have become much harder to make and more expensive. We are forced to send some shipments by sea, but this has not been very successful so far,” he said.

“Instead of the hundreds of thousands of tons we usually export to Syria every year, we will export less than 100,000t this year,” he added.

However, faced with what he described as a “cyclical slowdown,” Doumet said the sector had the capacity to prevail. A key to passing the difficult times is to tap booming markets where demand for cement is growing. “We are seeking markets in many places including Algeria, Libya, Nigeria and elsewhere,” he said. “But longer export routes mean less profitability for the sector.”

Published under Cement News