Long-Term Prospects for The UAE Cement Industry Are Bright Due to Growth in Investment

Long-term prospects for the UAE cement industry are bright due to growth in investment in infrastructure in the UAE, GCC and key foreign markets, the latest study by Dubai Chamber of Commerce and Industry finds. The UAE has the potential to become the major provider of cement to the MENA region and beyond when taking into account the lucrative opportunities that exist. The study, which is based on the Business Monitor International (BMI) UAE Infrastructure report for Q1 2012, finds that, given the historic importance of construction projects in the UAE and the GCC, the cement industry has acquired increased prominence as an important industry with growing demand. Furthermore, this is also an industry that can be expected to become more important in the future as demand for building materials increases in line with plans for infrastructure spending in the UAE and the rest of the GCC region. The study provides data on the number of companies engaged in different activities related to cement production and trading in Dubai. A healthy trend is shown because, while the number of companies engaged in cement manufacturing remains stable from 2008 to 2012, a significant increase is seen in the number of companies engaged in cement products trading and manufacturing of products using cement. This information conforms with other data which shows UAE cement-related exports growing from 2008 to 2010. Dubai’s position as a trading hub has helped the local cement industry grow to meet the construction needs of the GCC region and beyond. The study also highlights different trends in historical prices of various cement-related construction materials in Dubai in 2011. For example, the price of white cement remained generally stable and then increased later in the year, while the prices of Portland cement fluctuated more during the same time. The recovery in prices in Q4 2011 could indicate market strength, and could also help the profitability of the UAE cement industry, according to the study. Since cement is such a widely-used and important material for construction of real estate and infrastructure projects, this industry has potentially lucrative prospects both within the UAE, and also in export markets. The study reveals the potential growth of the domestic UAE market. The value of the UAE construction industry is forecast to see substantial growth from 2012 onwards, partly due to investment in infrastructure projects. Some important projects include the key growth areas of logistics and tourism. Investment in these and other infrastructure projects in the UAE could generate demand for more cement, aiding the growth of the country’s cement industry. Meanwhile, other growth drivers should be exploited, notes the Dubai Chamber, given projections of long-term economic growth in regions such as the GCC, South Asia, Central Asia, East Asia, Africa and Turkey. These growing economies need construction materials to build vital infrastructure projects, like roads, railways and bridges, in order to enable more economic growth. While lower global demand may have impacted the global cement trade in 2009, causing a temporary decrease for some sub-product categories, UAE exports have shown strong growth between 2008 and 2010. Source: uaecement.com