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Investment in infrastructure will drive cement demand in Qatar

Published by
World Cement,

Qatar's domestic cement demand is projected to double from the current levels over the next three years due to increased government spending on infrastructure, according to a recent report released by Dubai-based financial services company Arqaam Capital.

Qatar's domestic construction expenditure amounted to 6.5% of GDP in 2013 and is predicted to reach 6.9% of real GDP in 2014. Qatar is expected to spend around QR182 billion on construction projects this year, a 15% y/y increase compared to the year 2013. According to the report, the country will invest approximately QR757 billion on infrastructure developments from 2013 to 2018, largely due to projects linked to the 2022 World Cup.

The report states that the government expenditure implies a doubling in cement demand within the next three years, as current projects under execution are worth around US$70 billion and reflect an average churn rate of 3 – 4 years. Arqaam Capital expects cement demand growth to accelerate, with consumption reaching 9.4 million tpa by FY17. Production capacity and demand levels are expected to reach equilibrium by FY18.

The report notes that the forecasts are on the conservative side, as it takes into account the most recent survey published by Qatar's Ministry of Development and Planning. The survey suggests that demand for limestone is set to increase by 131% in 2014 and 127% in 2015. Demand for washed sand is also expected to increase by 108% in 2014 and 106% in 2015.

Edited from various sources by Rosalie Starling

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