Al Ruya industry will set up a cement plant with an initial investment of Dh1.5 billion and a capacity of 3.6Mta at Hamriya Free Zone to capitalise on the huge demand of cement in the buoyant construction sector of the UAE.

This project will be completed within two years and is considered one of the largest projects of its kind in the Middle East.

The agreement was signed yesterday by Prince Talal bin Badr bin Saud bin Abdulaziz, Chairman of Al Ruya industry, based in Saudi Arabia, with Shaikh Khaled bin Abdullah bin Sultan Al Qasimi, Board of Director, Chairman of the Hamriyah Free Zone at a Press conference held in Sharjah.

The UAE currently faces a shortage of cement production by about 5Mta with a current production capacity of 11Mta which is set to increase by 3 to 4MtA by 2007, according to a local report.

Prince Talal, said: “This is the first cement plant we are establishing in the UAE as the boom in the construction industry has paved way to the rise in the demand of cement. The demand may increase by 15 per cent in the next three to five years as more projects will be coming up in Abu Dhabi. The UAE has a huge growth potential and we see more investment opportunities in this country.’’

He also added: “Al Ruya has leased one million square metre of land in the free zone for establishing its new plant. The lease has been signed for a period of 25 years and is renewable thereafter. We have selected Hamriya Free Zone (HFZ) instead of Ras Al Khaimah due to its strategic location on the Arabian Gulf and the excellent infrastructure facilities and services that the free zone provides to its investors.

The limestone for the production of cement will come from Ras Al Khaimah and Fujairah and the cement produced will be for export and local use. The production will also be increased to 5.5Mt annually once the demand increases. Dr Rashid Al Leem, director of Hamriya Free Zone told Khaleej Times.