The recent skirmish between Saudi cement buyers and sellers over price suggest that even before the new real estate projects come on line, cement prices are rising. Can Saudi cement producers deliver without letting prices run away to ensure the King's social agenda is met?
The Saudi cement sector is going to be a vital building block in Saudi King Abdullah bin Abdulaziz Al Saud's massive plan to build 500,000 houses for Saudi citizens. Already under pressure from robust demand from the $700-billion worth of projects taking place in the country, the new set of extra-budgetary plans means the cement producers are facing a 'nice problem' of meeting rising demand.
Cement Sector Poised For Solid Performance
The cement sector will be one of the key elements of the Saudi King Abdullah bin Abdulaziz Al Saud's $130-billion investment. The royal decree sees commitment to spend SR250 billion on building 500,000 new houses over an unstated period.
"This will stimulate strong growth in the construction sector and related industries (such as suppliers of construction materials machinery and utilities) and services (architects, plumbers, etcetera)," says Jadwa Investment.
While the King's decrees had given impetus to all sectors of the economy, the cement industry will be a crucial cog in ensuring that all the orders are fulfilled.
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