Shortfall in cement supply slows construction in Qatar

Cement prices hiked by up to 60% as industry insiders and the Chamber of Commerce and Industry struggle to come to grips with increased demand

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By  Rhys Jones Published  May 4, 2004

A SHORTFALL in cement supply seems to have put the brakes on Qatar’s booming construction industry with analysts and the Qatar Chamber of Commerce and Industry (QCCI) still unsure what the supply-demand gap actually is. Some cement prices in Qatar have risen by 60% in recent weeks. However, the situation is expected to be eased by Qatar National Cement Company’s (QNCC) decision to start importing cement. QNCC has the lion’s share of local cement production, which is estimated at 1.4 million tonnes/year at full capacity. Over the past few months since the demand for cement started increasing and causing a shortage, the company has imported seven shipments of 17 000 tonnes to keep up with the gap in the supply chain. Imports will continue, say company sources. Furthermore, industry insiders seem unaware of exactly how wide the supply-demand gap is, or what the demand is likely to be in the months to come, so that remedial measures are taken. Not even the contracting committee of the Qatar Chamber of Commerce and Industry (QCCI) could provide any statistics. “The demand is far greater than what is currently being supplied,” said a QCCI panel member who was reluctant to quantify the shortfall. QNCC’s shipments, which come from the Indian west coast are set to continue at the rate of 17000 tonnes/vessel and at an average of two a month despite problems posed by the high demand for cement in the international markets. Supplies to Qatar from neighbouring Saudi Arabia have helped cut down the shortfall, but an increased demand for cement throughout the GCC and the huge Saudi market has made things worse for Qatari contractors. QNCC has about 150 permanent local customers, some 50 of which are large buyers. They include a dozen commercial readymix concrete producers, as well as retail cement suppliers. The largest cement consumers in Qatar are readymix companies themselves, followed by big project promoters and contractors, block-makers and pre-cast material producers. Meanwhile, industry insiders have not ruled out the possibility that hoarding by retailers for quick profiteering may be worsening the crisis caused by a genuinel shortage.

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