A new cement factory with a production capacity of 1.35 million tons will come on stream soon. An official at the Ministry of Industry and Electricity disclosed that a license was issued to set up a new cement factory with an investment of $203 million (SR760 million).
Deputy Minister for Industrial Affairs Mr. Saleh Bin Idul Husaini said the size of expansions and investments, which have been enjoyed by the Iron, and cement sectors in the Kingdom indicate the readiness of the industrial construction sector in meeting the future requirements. This was more evident after issuing of a decree by Crown Prince Abdullah Bin Abdul Aziz recently, appropriating a percentage of the nation's budget surplus to boost the Real-Estate Development Fund which in turn will provide more housing facilities for Saudi citizens. In the cement manufacturing sector, licenses have been issued to 10 cement factories with a production capacity of 16.5 million tons.
The Deputy Minister also revealed that the total number of cement production factories has reached ten in the first quarter of this year, with a total investment of about $4.6 billion (SR17.2 billion).
Meanwhile, four new licenses have been granted to iron factories with a production capacity of 245,000 tons and an investment of $41.6 million (SR156 million) this year. The total number of factories for the production of reinforced iron reached 20.
Referring to the expansion plans for cement and iron factories, Mr. Al-Husaini said that a number of factories applied for permission to expand their business activities. Permission for expansion had been granted last year to four factories with an estimated production capacity of 6 million tons and an investment of $1.3 billion (SR4.5 billion).
This year, licenses were given for expansion of two iron factories with a production capacity of 192 tons with an investment of $61.3 million (SR230 million).
The volume of the real estate market in the Kingdom has reached $240 billion (SR900 billion), an official at Yamama Cement Factory observed, while pointing to studies that indicate that the Kingdom will witness a surge in its population growth in the next few years. This would widen the scope for further expansion of cement factories to cope with the increasing demands for construction of more residential buildings and infrastructure facilities.
Demand for cement, he added, is already high and will remain at this higher level for several years. The increase in the number of cement factories and their expansion will intensify the stiff competition being witnessed in the market, he said.
Mr. Hammad Al Jihani, General Manager of Tabouk Cement Factory, said that expansion works are undergoing at massive level at most of the cement companies.
For the time being, the market can meet the increasing requirements for cement. However, there will be more demand in future, for which expansions of factories and construction of new ones are necessary, he added.
© Saudi Commerce and Economic Review 2004
