Saudi cement sales are projected to drop between 25 percent and 30 percent year-on-year in 2017, due to lower government spending on new projects, Jihad Al-Rashid, general manager at Yamama Cement and also the chairman of the National Committee of Cement Producers, told Argaam in an exclusive interview.
“The outlook for the future is not clear due to the lack of new project announcements. There is uncertainty even over the housing sector, which was expected to stimulate construction activities, as new housing projects have not materialized,” Al-Rashid said.
In December 2016, Saudi authorities announced a new pricing mechanism, under which cement and steel exporters would have to pay the difference in fuel costs between the local and international market. This led to a fee of SAR 85-133 per ton being placed on exported cement. Local producers are urging the authorities to revisit the export fee structure which they claim is making Saudi exports uncompetitive.
Al-Rashid said that if the government wants to raise energy prices in line with the world’s tariffs, it should have implemented this move gradually rather than imposing charges on cement exports.
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