Beirut (APD) - A long term trend of a growing demand for residential units driven by demographic changes in the country whose young people represent 50% of the total population, coupled with the Saudi government engagement in numerous developmental projects, is pushing up the demand for cement in Saudi Arabia to unprecedented highs, especially so when the local cement industry exports parts of its production to equally cement-hungry GCC countries.
The Saudi government which expects that demand for cement will increase to 26 million tons in the next period decided to exempt cement imports from customs duties until the end of 2005, the pan-Arab daily ASHARQ AL-AWSAT reported Tuesday.
A senior official at the Ministry of Industry and Trade said that after 2005 customs duties on cement will be reduced to 5% from the previous rate of 20%.
He further revealed that 27 licensing requests were submitted to the Ministry for the construction of new cement factories in the country adding that demand for cement reached 25 million tons last year compared with a supply of 22 million tons only. The official expected that demand for cement will increase by 8,000 tons per day in the future.
Only eight cement factories are operating now in Saudi Arabi running at full capacity trying to fill the deficit in the cement market, he said.
He affirmed that the Ministry of Industry and Trade is not putting pressures on these factories to stop exports, indicating that they sell cement to dealers at a price of SR 13 while it is sold by "others" (as he put it) at SR 20.
In its efforts to meet bigger demand the Saudi government called last April on cement producers to increase cement production in the country. Last week it agreed with the governments of Jordan and Egypt to pump $6 billion in the cement industry in a bid to boost cement production. [SN-FC]
© APD (Arab Press Digest) 2005
