UAE cement demand remains buoyant
Dubai, March 26, 2008
The United Arab Emirates will likely see demand for cement touch 26.2 million tonnes by 2011, even as supply worries remain, says a report
The UAE, the world's fifth-largest oil exporter, has been striving to diversify its economy away from a dependence on energy exports by pouring windfall oil revenues into real estate, financial services and infrastructure.
"With real estate as one of the key positioning statements for the UAE today, cement demand continues to be buoyant," The National Investor said in its coverage of five UAE cement companies.
Between 2003 and 2006, cement consumption in the UAE grew at a compound annual growth rate of 24.7 percent and this is expected to be sustained in the future as the smaller emirates join "the real estate frenzy," TNI added.
In Abu Dhabi alone, planned real estate projects are valued at more than $150 billion, the investment bank said. However, there are definite supply worries, TNI wrote.
Nearly all major UAE-listed companies have undertaken expansion, but not all of this new capacity has come on line yet, TNI said.
The investment bank, which has a "neutral" outlook on the cement sector, said it expected the bulk of new capacity to hit the market between 2008 and 2010.
It began coverage of Gulf Cement Co, Arkan Building Materials Co, Union Cement Co, Ras Al Khaimah Cement and RAK White Cement and Construction with a "fairly priced" rating. - Reuters