Cement Industry

Bahrain buoyant on Saudi move

March 2018

Bahrain's construction sector is set for a major boost as Saudi Arabia has reportedly lifted export duties on cement.

Companies based in the country traditionally imported more than half of their cement from Saudi Arabia, but had to rely on shipments from the UAE after cement export tariffs were imposed last year by Saudi Arabia, said the Gulf Daily News, Gulf Construction’s sister publication.

However, Saudi National Committee of Cement Producers chairman Jehad Al Rasheed told the news portal Argaam that the cement export duties were cancelled from last month (February).

Bahrain had been the only country allowed to import cement from Saudi Arabia since 2009. However, the price rocketed in March last year after the Saudi government introduced new tariffs and permitted cement exports globally.

Cement export tariffs were initially imposed at between BD8.500 and BD13.300 ($23 to $35) per tonne, which was halved last July to encourage industries and producers and enhance competition.

Commenting on the latest move to lift export tariffs, United Cement Company (UCC) chief executive Faisal Shehab said: “This is definitely good news for the construction sector in Bahrain especially with several multi-million-dollar projects lined up. Bahrain has now two sources of importing cement – from Saudi Arabia and the UAE – which is a big boost in supplies.”

“We were relying heavily on supplies from the UAE after cement export tariffs were announced by Saudi Arabia last year,” said Shehab, whose company is the largest importer and distributor of bulk cement in Bahrain.

“Our company imports 50,000 tonnes of cement per month from the UAE. For example, for us, a round trip from Bahrain to Saudi Arabia takes about 30 hours with each shipment carrying between 3,000 and 5,000 tonnes, while the same shipment from the UAE takes about six days,” he added.

Shehab said the reopening of the Saudi market would ensure the cement price would not fluctuate.

“Cement is the most important and expensive component in the construction industry, and any price fluctuations has major effects on the project,” he said.

“The present price of cement is roughly BD30 per tonne, which I think will remain the same especially with the Saudi markets now opening again for Bahrain to import cement.

“Developers are working on thin margins these days and can’t afford any delays in construction. The construction sector will get a mega boost as we are importing cement from a closer source,” he concluded.

More Stories