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Qatar- Experts caution construction material makers against overcapacity  Join our daily free Newsletter

MENAFN - The Peninsula - 19/01/2011

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(MENAFN - The Peninsula) Local manufacturers of basic construction materials are enthusiastically gearing up to raise production levels to meet the growing needs as projects worth an incredible 100bn await to be launched for the coveted 2022 event. But experts warn and say that such a trend could prove disastrous for them as well as for the national economy as a whole over the long term since the demand would slump considerably once the FIFA fixture is over.

"I think the best way to make sure that construction materials like cement and steel, in the main, are in ample supply for the 2022-event related projects is to make some investment on expansion and largely rely on imports," said an expert not wanting his name in print. They point to the neighbouring UAE where several cement factories sprang up during the historic construction boom but once the boom bust, some of them are struggling to survive.

Therefore, instead of raising production capacities at full blast, it makes sense for the local construction material manufacturers to spend 20 to 25 percent on expansion, for instance, and the remaining supply-demand gap could be met through imports, said the expert. "This is, especially, true of cement and steel since raising production capacities could be a capital-intensive effort," he added. Local cement and steel makers are yet to bare their future production plans in detail, but it is understood that at least the country's largest cement producer, the Qatar National Cement Company, might rely more on imports to meet the growing demand due to the expected launch of mega projects.

Its new plant that was commissioned recently has a capacity of 15,000 tonnes per day but current production is only 5,000 tonnes, the company's general manager, Mohamed Ali Al Sulaiti, told a local Arabic daily recently. Overall production of QNCC is 15,000 tonnes a day. The firm is ready to meet the growing demand (due to the FIFA-linked projects) through local production as well imports from Saudi Arabia and some Asian countries, including India, he said.

The company would soon start up a plant to manufacture special cement that would be used in constructing bridges and flyovers. "It would be a multi-purpose plant," the GM said, adding that its capacity would be to produce 13 tonnes of special cement per hour or 3,100 tonnes a day. The company last year sold five million tons of cement and this year it hopes to sell six million tonnes, he pointed out. Talking of cement prices, he said the company's pricing policy remained stable and a 50kg bag was made available for QR13. The rate per tonne is QR250.

The QNCC's cement is of quality and yet it is one of the cheapest in the region, especially as compared to Saudi Arabia and UAE. A plant to produce carbonates is on the anvil and would be opened up in April this year, but as per a deal the entire production is to be sold out to the Qatar Electricity and Water Company over a 25-year period, said Al Sulaiti.

 






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