Average Demand for Cement in Qatar Is Estimated at 4.8mn Tonnes Per Annum

The average demand for cement in Qatar is estimated at 4.8mn tonnes per annum (mta) in 2012-17, which is higher than the current level, according to a Global Investment House report. Estimates of the demand for 2012 provided by government authorities to the companies in Qatar are higher than the current demand of 3.5-4mta, the investment house said in its latest quarterly report on the GCC (Gulf Co-operation Council) cement sector. Estimating the average demand for cement at 4.8mta in 2012-17, it said as a result, Qatar National Cement had announced that it was increasing its capacity by 0.93mta to 5.36mta and also revealed plans for another special mill for grinding slag, which is used in the production of blended cement. The company has not yet given the go-ahead to any of the equipment supplier or contractor for the new mill but once assigned it would not take more than 15-18 months to raise the capacity to desired levels, the report said. Cement prices in Qatar have remained mostly constant for the past couple of years. In the first half of this year, the average cement prices remained around the same at $68.7 per tonne although there were pressures for upward movement in view of the projected 4.8mta demand. believe cement prices to remain flat in Qatar because of lesser local players and government control over prices, it added. The consolidated profit of the sector was down 14.5% to $67.7mn in the first half of 2011 mainly because of a 5% drop in top line, it said. The investment house said the consolidated revenues of Qatar's cement sector fell 5% to $171.7mn because of the decline in cement sales volume as well as slight fall in cement prices. The gross margins of Qatar's cement sector fell to 39.4% in the first half of 2011 against 41.6% in the previous year period. The non-core income continued to add to the bottom line but it was significantly lesser than the contribution in January-June of 2010, it said, adding the non-core income contributed 17.5% of total (profit after tax) in H1 2011 compared to 22.8% in the year-ago period. The non-core income contribution in Qatar was substantially higher than the GCC weighted average of 7.6% in H1 2011 (14.8% in H1 2010). The debt levels of the cement sector increased by 6.5% to $312mn in the first half of this year against $293.1mn in the previous year period. However, the amount was significantly lesser than $472.6mn in the first quarter of this year. The assets of cement sector in Qatar rose 4.4% to $1.48bn in the first half of this year. In Qatar, the cement sector's debt was 21% of assets in the first six months compared to 20.6% in the year-ago period. The weighted average of GCC was 15.7% and 16.5% respectively. The return on assets slid to 4.6% in the first half of this year against 5.6% in the comparable period of 2010. The weighted average of GCC was 5.6% and 6.1% respectively. The return on equity of Qatar's cement sector also fell to 6.2% in January-June this year compared to 7.6% in the previous year period. The weighted average of GCC was 7.6% and 8.1% respectively. Source: uaecement.com