QNCC expects local demand surge in ’11

Qatar National Cement Company (QNCC) yesterday said the domestic cement demand is expected to surge to 25,000 tonnes per day by next year due to large projects coming up in the country.

Khatib and al-Sulaiti outlining
the QNCC growth strategy 

QNCC, whose major business include the government projects, is also setting up a calcium carbonate plant at an estimated cost of QR40mn, according to senior officials.

Right now the (daily) cement demand is 15,000 tonnes. Globally there has been a 30% drop in demand due to real estate slump and other reasons brought about by the global financial contagion, according to QNCC production manager Kamal Khatib.

In 2008, Qatar had the highest per capita cement usage of 7 tonnes, he said, adding the cement industry is expected to get a major fillip by next year.

“It (cement demand) will get back to 25,000 tonnes per day after December (2010) because of the major projects announced by the government,” Khatib said on the sidelines of a function to analyse the first-half results, which showed a marginal 1% rise in net profit to QR256.79mn.

Khatib said QNCC is diversifying production to hedge the risk of concentration.

On the new carbonate plant, which comes as part of its diversification plan, QNCC general manager Mohamed Ali al-Sulaiti said the production capacity would be 250 tonnes per day and is expected to be operational by June next year. 

In May this year, the company had entered into agreement with Stream Industrial Engineering Company to construct the plant at Umm Bab.

The plant would meet the demand of calcium carbonate from Qatar Electricity and Water Company in accordance with the supply agreement between the two parties made in 2009 for 25 years.

Asked about the 33% drop in revenues during January-June this year, Khatib said it was due to fall in the sales.

To a query whether QNCC would be tapping the debt market, Khatib said the company’s financial position was good and hence there was no need for funds. 

In May this year, QNCC informed the Qatari bourse that it had entered into an agreement with Singapore-based Islamic Bank of Asia for a QR164mn Murabaha facility, repayable in quarterly installments within three years.