Wednesday 27 January 2021

Saudi construction equipment market set to grow 4.79pc by 2025

RIYADH, July 5, 2020

The Saudi construction equipment market is poised for solid growth over the next five years thus   registering a CAGR of 4.79 per cent during the forecast period of 2020-2025, according to a new survey by 
Saudi Arabia is one of the fastest-growing nations in the GCC region. The low and middle-income groups of people in the country and the government’s significant efforts in constructing new residential buildings are the factors driving the demand for construction machinery.
 The construction sector had experienced a strong rebound in 2019. However, the outbreak of Covid-19 has negatively affected the growth of the construction sector. Also, the construction sector is labour intensive..
Currently, prevention of the spread of Covid-19 is of paramount concern. This concern, along with the global economic slowdown, has led to a decline in the demand for construction machinery, said the report.
However, things are slowly looking up, thanks to the key government housing projects in the pipeline.
Under the ministry of housing’s Eskan project, the government has plans to build 500,000 homes. Additionally, the government has also allocated a budget for the construction of 15 million residential units over the next five years, stated the report.
Saudi Arabia is in the midst of Vision 2030, a major transformation agenda that includes many megaprojects, such as the tourist destination of the Neom super-city; the 334-sq-km entertainment city of Qiddiya; the development at the Unesco World Heritage site of Al-Ula; and the luxury, sustainable tourism-focused Red Sea Project.
In 2019, the Saudi government had announced various giga projects, such as the Red Sea Development Project, Qiddiya, Amaala, Riyadh Metro, and Diriyah worth $56.2 billion.
The tourism sector also witnessed significant growth in the last few years. The country has also taken up large hotel projects to accommodate the increasing number of tourists to Makkah, Madinah, Riyadh, and Jeddah, it added.
The Ministry of Housing initiated ‘The Sakani program’ in 2017 as part of Vision 2030, and it was launched to provide more than 500,000 residential units across the kingdom, at an estimated cost of $133 billion. 
By the end of the decade, Sakani aims to achieve home ownership for 70 per cent of Saudi nationals. In Riyadh, a total of 7,500 units had been delivered in the first three months, while in Jeddah, the number reached 1,800. pointed out that with ongoing projects since 2017, Saudi Arabia had been showing a potential demand for tower cranes compared to that of other crane types, owing to the increasing new and redevelopment of cities, airports and other infrastructure in the country in the coming years.
Various crane types such as tower, crawler, rough-terrain, all terrain cranes, port and offshore cranes have been considered in the market studied.
Crawler cranes have been the next major crane types in demand in the country owing to the increasing projects in energy and infrastructure sectors. 
XCMG, Liebherr and Mammoet have been the key players in suppling crawler cranes with heavy lifting capabilities. 
For instance:  In 2018, XCMG with its 4,000 ton crawler crane XGC88000 made its overseas debut of hoisting a 1,926-ton washing tower in Saudi Arabia and went on to complete a hoisting operation of 15 parts for Duqm Oil Refinery project of Oman Oil.
Similarly, in 2018, Mammoet had expanded its presence in Saudi Arabia with the opening of a new operational hub in the city of Al Jubail.
The new facility comprises an office building and a 20,000 -q-m yard which enables in-house maintenance and repair of fleet equipment.
In late 2016, Liebherr opened a newly erected facility in Dammam to strengthen the sales and service staff of its cranes, foundation work and concrete technology product divisions in the east of the country. 
The company has also developed a number of boom systems especially for this purpose to meet the steadily growing demand from commercial wind farm operations in the country. pointed out that due to the outbreak of Covid-19 pandemic, many construction sectors have cut the spending in the ongoing projects in 2020. 
However, post 2020, the cranes specially tower and crawler cranes are likely to see an increase in demand from crane rental operators and as well as from construction contractors in the country.
The building segment includes various construction activities in areas, like residential, commercial, mixed-use, airports, and sports facilities, which have been considered in the market studied.
The Saudi Arabia construction machinery market is mostly characterised by the presence of numerous international companies, resulting in a highly competitive market environment.
The top seven players in the market account for around 67 per cent of the market share, and the remaining 33 per cent of the market share is dominated by other players, such as Sumitomo construction machinery, Doosan, and XCMG.
Major players are investing considerably in their R&D department in order to integrate innovation with excellence in performance. The demand for high performance, efficient, and safe handling equipment from the end market is expected to make the market more competitive over the forecast period.-TradeArabia News Service


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