Qatar cement demand is seen surging on construction boom

Bya897204973

Updated Wed, 10 Dec 2014 10:24:22 GMT

The demand for cement is set to surge on the back of Qatar’s construction industry’s rapid growth, a new report has shown.

Driven by the construction sector, the cement use is set to peak at 57mn tonnes over a four-year period up to 2017, said Oxford Business Group in its latest Qatar report citing the Ministry of Development Planning & Statistics data.

The country has two domestic producers of the material – Qatar National Cement Company and Al Khalij.

QNCC, the larger among the two players with a domestic market share of around 70%, issued a tender for a new factory in April 2013. Following the completion of the new facility in 2015, the company expects its production capacity to rise to around 6.6mn tonnes a year. In November 2013, the firm announced a fifth cement plant that could produce between 5,000 and 7,500 tonnes of clicker a day.

The second local player, Al Khalij, also has plans to expand capacity. In December 2013, the firm signed a deal with a Denmark-based FLSmidth to build a cement production line at its plant at Umm Bab, duplicating a line the Danish company built in 2007.

The Qatar Primary Materials Company (QPMC) is also taking steps to facilitate imports and is working on a cement silo near its Mesaieed gabbro berths. Upon completion, this would be able to store and distribute more than 2mn tonnes of cement a year.

The report said the consumption of other construction staples like gabbro- a rock aggregate used to make concrete is also set to rise. Over the next few years, the state’s construction sector is set to use 265mn tonnes of the aggregate, according to MDPS data.

The government is taking steps that would mitigate upward price pressures. In 2006, it created the Qatar Primary Materials Company in order to boost efficiency in raw materials management and ensure that strategic stockpiles are available. The firm works on the storage, import and domestic production of the raw materials needed to fuel the country’s construction boom.

In August last year, QPMC signed an agreement to enlarge its gabbro processing facilities in Mesaieed. In February, the gabbro port terminal managed in excess of 100,000 tonnes of the aggregate two days in a row, a record high for the company.

The Gabbro Terminal Expansion Project will allow importers of the aggregate to import large volumes directly, reducing truck traffic around the port and allowing for smoother offloading.

“We expect to increase the discharge capacity at the gabbro berths in Mesaieed to 30mn tonnes a year from its existing 20mn tonnes,” said QPMC chairman Khalid al-Rabban.

QPMC estimates the project will take just under 30 months to complete. The additional capacity will likely be welcome, given the anticipated rise in demand. Between 2014 and 2016, gabbro berths are expected to handle between 60mn and 80mn tonnes of gabbro a year, Oxford Business Group said citing MDPS figures.

The strong demand has already begun to push up prices, which rose by as much as 20% during the first half of the year. The consumption of other aggregates is set to increase as well. Between 2012 and 2022, for example, the ministry’s survey estimates the country will use more than 500mn tonnes of limestone, the report said.

Qatar plans chicken farm IPO to resolve poultry meat shortage

Bloomberg

Doha

Qatar’s government plans to lease 5.7mn square metres of land to private investors to develop a chicken farm for investors to buy into next year.

The farm backed by Qatari investors will have capacity to produce 45mn kilograms (99mn pounds) of chicken meat by 2018, according to Hashem Aqeel al-Aqeel, chief executive officer of Investment House, a Doha-based bank that is adviser on the project. Institutional investors committed QR750mn ($206mn), and an initial public offering is possible as early as next year, he said.

Qatar doesn’t produce enough chicken meat to feed its population, with imports set to rise 11% next year to 100,000 metric tonnes, outstripping domestic production of 11,000 tonnes, according to US Department of Agriculture data. Qatar’s domestic consumption is forecast to grow 9.9% next year to a record 111,000 tonnes, the data show.

“We will start by producing eggs and feed to generate revenue before we begin selling chickens,” Aqeel said in an interview in Doha on Monday.

Qatar’s only existing poultry producer, the Arab Qatari Co is 40% owned by Hassad Food, the agricultural investment arm of the Qatar Investment Authority, the country’s sovereign wealth fund.