Qatar quarry relocation not to affect cement sector

Qatar’s reported moves to relocate as many as 14 quarries will not affect the country's cement production base, according to a report by Global Investment House (GIH).

"At the end of February 2012, the Qatari government announced closure of 14 quarries due to environmental reasons,” Global said in a ‘GCC Cement Quarterly’ report.

“Global Research had discussion over this topic with one of the listed companies, which was of the view that it would not affect the local cement manufacturers,” it said.

The estimates of cement demand in 2012 provided by government authorities are higher than the current demand of 3.5-4Mt. Global estimates that the average demand in Qatar during the 2012-17 period is expected to be 4.8Mta.

Highlighting that Qatar National Cement had announced that it was increasing its capacity by 0.93Mta to 5.36Mta owing to expectations of increase in demand in the coming years, Global said however the company had “mixed” views of either going for expansion or raising output by 10-20%. “Both the options are under study and none of them have been finalised yet,” it said.

The report said Qatar witnessed a 3.6% drop in cement sector’s profitability because of a 5.2% drop in the top line in 2011. However, in the fourth quarter of 2011, the sector witnessed a 16.9% jump in profitability as they had curtailed their clinker imports, which used to cost them “heavily” in the previous quarters.