Cement sales to rise 12% in Q3, says Aljazira Capital

Cement sales are set to increase 11.8 percent year-on-year (YoY) to 12.74 million tons in the third quarter of this year from 11.39 million tons in Q3-2014, Aljazira Capital said in an earnings outlook for the cement sector.

Huge spending by the Saudi government on infrastructure at the start of 2015 and improving labor supply have helped cement sales recover after a slowdown in H1-2014.

Going forward, Saudi Arabia’s record budgeted expenditure of SAR 860 billion would boost overall infrastructure spending. In addition, a strong pipeline of projects – including affordable housing, Riyadh Metro, Makkah and Madinah expansion, and airports— will lead to continued growth in cement demand.

A new land taxation law is also expected to fuel the housing sector, thereby leading to higher cement demand, Aljazira Capital said.

Strong sales were reported year-to-date (YTD) until August 2015. Cement sales increased 12.4 percent y-o-y) to 39.5 million tons, indicating strong growth, Aljazira added.