Underpinned by high oil prices, cement demand in the Gulf Cooperation Council (GCC) countries looks set for better times. However, cement capacities in the member countries remain ahead of market requirements and it remains to be seen how much profit can be clawed back by the region’s cement producers after the COVID-19 pandemic affected demand. By Hettish Karmani, Ubhar Capital SAOC, Oman.
The Gulf Cooperation Council (GCC) cement sector has been facing troubling times, starting off with the oversupply that was built up between 2008-12. That was followed by the oil price crash in late 2014 that reduced the fortunes of the region and was further aggravated by contractionary budgets until 2017, and finally last year’s COVID-19 and lockdown-led challenges. Post-2017 geopolitical conflicts within the GCC, real estate sector slowdown and expungement of various unnecessary projects have put the sector into hibernation. Such was the situation at one time that clinker inventories in the region’s powerhouse Saudi Arabia surpassed the local sales of cement in the kingdom.
