Ministry of Industry strives to fill gaps between supply and demand in Saudi cement sector
RIYADH: Saudi Arabia’s cement sector is suffering from declining revenues and high production costs, as well as a wide gap between supply and demand, according to Chairman of the National Cement Committee, Badr Johar .
Despite the upheaval facing the sector, its market value stands at SR50 billion ($13 billion) and it continues to contribute significantly to the economic development of the Kingdom and the goals of Vision 2030, Johar said. , according to Argaam.
The Ministry of Industry and Mineral Resources is working to ensure coherence in the sector by stepping up its efforts in response to the many changes taking place in the sector, said Khalid Al-Mudaifer, deputy minister of mining affairs at the ministry after a meeting with Johar.
The ministry aims to increase the profitability of the industry as well as its social, environmental and economic contributions to the Saudi economy.
Cement plays a crucial role in the development and implementation of mega-projects and housing estates in the Kingdom, and its financial stability is also essential for the success of businesses surrounding these projects, Al-Mudaifer added.
Last year, many cement projects experienced a drop in demand due to disruptions caused by the COVID-19 pandemic. This year, as Saudi Arabia sees a resurgence in construction activity due to mammoth projects including The Red Sea Development Co., NEOM and Qiddiya, the sector looks poised to turn around.
“The industry will be positively affected by the resumption of construction in the north, with the Red Sea project, and residential developments. The effect will not be immediate but will be reflected in the long term, until 2030” , Omar Hatoum, managing director of Saudi concrete products manufacturers, SACEP, said in an interview with Arab News in April.
Mazen Al-Sudairi, head of research at Al Rajhi Capital, expects construction activity to boom due to rising commodity prices which have risen significantly this year, according to a cement report released. by the asset management company at the end of March.
“We also expect the inflationary trend to cap cement demand, as we expect cement sales to be flat to negative in 2022, compared to 2021, and limit an increase in cement prices,” he said. -he declares.
Although Al-Sudairi sees the financial performance of the cement sector improving, he expects the improvement to be limited by weak demand and pricing conditions.