Kuwait: Gulf Cooperation Council (GCC) cement companies have emerged from two years of decline following the credit crisis with a strong 14.2% increase in revenue, according to a report by Global Investment House. Sector profits, however, increased by 2.7% in 2011. Revenues reached US$4.6bn in 2011 compared to US$4bn in 2010. Net profits increased from US$1.44bn in 2010 to US$1.48bn in 2011.
By country, Saudi Arabia, Oman, United Arab Emirates (UAE) and Kuwait overturned declining revenues in 2010 and all four countries reported increasing sales for 2011 except Qatar. UAE, which witnessed declining sales revenue since 2008, enjoyed a 5.9% increase in sales to reach US$940m. Yet net profit was negative for the first time since the researchers started to compile UAE cement data.
Oman witnessed a 12.8% increase in sales revenue reaching US$342.3m in 2011, the second highest revenue in Oman's cement history. However Oman reported a 39.4% decrease in profits in 2011. Kuwait reported a 5.4% increase in revenue reaching US$66.9m in 2011, but it posted a 47.1% decrease in net profits compared to 2010. Qatar was the only GCC country reporting declining sales and profits. Saudi Arabia posted a healthy 22.6% increase in sales revenue and a 25.2% increase in net profits in 2011.
According to Saudi government officials, Saudi Arabia will spend an estimated US$400bn on large infrastructure projects from 2012 until 2017. Ever since the country banked upon diversification, the cement sector witnessed a tremendous pick up in demand from less than 20Mt in 2005 to 49Mt in 2011. In the wake of increasing demand locally, the government imposed a conditional ban on cement exports in 2010 that further pushed demand. Saudi Arabia lifted a ban on cement imports in March 2012 and neighbouring exporter nations, Oman and the UAE, are expected to benefit greatly from the change.
