JEDDAH/DAMMAM – Government agencies said the hike in the cement prices was due to some suppliers hoarding large quantities of the commodity as a report issued Saturday by the Global Investment House (GIH) indicated that prices in the Saudi markets were far stable as compared with those in other Gulf markets. This is despite an increase of 6.5 percent last year.
The industry has attracted investors over the past couple of years and has seen an increase in the demand reaching 49 million tons in 2011—a steep climb from 20 million tons in 2005, the report said.
Sources close to “Asharq” Arabic daily say that investors have plans to set up a national cement transportation and distribution company and plan to write to the Ministry of Commerce and Industry in this regard.
The company, the sources said, will bring a lot of benefits such as ending the monopoly of some cement distributors and creating job opportunities for Saudis.
“It will also organize the process of distributing cement and ensure the market does not suffer from any shortage in the future,” they said.
Various government agencies have observed that the shortages happen because many suppliers hoard large quantities of cement to raise prices, sources explained.
Dr. Zamil Al-Muqrin, chairman of National Cement Committee, Council of Saudi Chambers, told the newspaper that setting up of such a company will put an end to suppliers’ manipulation and ensure that consumers get the cement at fixed prices.
“I think every region should have such a company because setting up of one company for Kingdom’s all regions is similar to monopoly of the trade,” he said.
Ahmad Al-Meqbil, member of National Land Transport Committee, said such a company will regulate functioning in the market if it deals in transporting and distributing the cement only excluding other products.
“The study should cover all the regions Kingdom with branches in each region that has cement factories,” he said. “I believe the feasibility study will determine whether investors would be willing to venture into such field.” — SG