Qatar consumption forecast to double by FY17

Qatar consumption forecast to double by FY17
18 April 2014

Cement consumption in Qatar is expected to double from current levels within the next three years, a new report has forecast.

Dubai-based financial services firm Arqaam Capital said in its report on Qatar’s cement sector released this week that consumption will be driven by heavy government infrastructure spending.

Citing various official data, the report said Qatar is expected to open up to QAR182bn (US$50bn) construction projects this year, up 15 per cent compared to last year. The move follows the state's plan to invest QAR757bn on infrastructure developments in 2013-2018, largely linked to the 2022 FIFA World Cup.

Given that current projects under execution are worth US$70bn, and reflect an average output rate of 3-4 years, the expenditure implies a doubling in cement demand within the next three year, the report states. Factoring in execution delays, Arqaam expects cement demand growth to accelerate to 9.4Mt by FY17.

"We expect production capacity and demand levels to reach equilibrium by FY18. Our forecasts are on the conservative side as Qatar's Ministry of development and planning's most recently published survey suggests demand for limestone is set to increase by 131 per cent in 2014 and 127 per cent in 2015, with demand for washed sand growing by 108 per cent in 2014 and 106 per cent in 2015," it said.

Qatar National Cement Co (QNCC) is country’s largest cement producer with a capacity of 4.4Mta. The company is planning on boosting capacity with the addition of a new 5000tpd kiln line, a letter of intent for which has reportedly been signed with Fives FCB of France. 

The country’s second largest player, Al Khalij Cement with a clinker and cement capacity of 1.8Mta and 2.7Mta, respectively.

Arqaam Capital puts QNCC’s market share at 62 per cent but says captured market share from the market leader in FY13.

Published under Cement News