Cement demand to hit 26m tonnes by 2011 in the UAE

Saturday, Mar 29, 2008

Gulf News

Dubai: The demand for cement in the UAE is expected to hit 26.2 million tonnes by 2011, according to a local investment bank.

"The most important driver for cement consumption anywhere in the world is infrastructure and real estate development. Real estate development is at its historical peak in the UAE and with extravagant projects in the pipeline, the demand is expected to be very strong in the future," said Hassan Awan, investment research associate at The National Investor (TNI).

Cement is a 2.5 billion metric tonne global business, according to TNI.

Consumption of cement across the world is expected to be about 3,130 million tonnes by 2015 and 3,560 million tonnes by 2020. In 2006, cement accounted for 27.3 per cent of the construction materials market globally.

Large developments in Abu Dhabi like Yas Island, Reem Island and Sadiyaat Island together with projects in other emirates all mean the demand for construction materials in the region will continue to grow, TNI said.

The report says as construction increases on a massive scale in China, India, the Middle East and Africa, these emerging markets are expected to account for 85 per cent of the global demand for cement by 2020.

They accounted for 75 per cent in 2005.

Chinese cement consumption accounted for 47 per cent of the world cement market in 2006, standing at 1.2 billion tonnes. In 2006, India produced 145 million tonnes of cement.

Awan said the UAE stands out in terms of cement usage because of its rapid property development.

"If the government does not intervene in 2008, prices could shoot up in periods when cement plants shut down for their annual maintenance. This would be especially true if two or more plants shut down simultaneously. Due to the boom in real estate, construction companies cannot afford to wait for cement," he said.

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