Last edited 12 Aug 2016

Cement in Saudi Arabia

Demand for cement in the Saudi Arabia region was valued at USD 3.90 billion in 2014 and is expected to reach USD 5.27 billion in 2020, growing at a CAGR of slightly above 5.1% between 2014 and 2020. In terms of volume, the cement market in the Saudi Arabia stood at 61,000 kilo tons in 2014.

Cement is one of the key binding materials used in construction industry. Cements acts as a binding agent for mortar, concrete, non-specialty grouts, stucco and so on. It is manufactured from raw materials such as limestone, sand and clay. These materials are widely available in Saudi Arabia. Additionally, cheap and widely-available petroleum fuel has means that manufacturing of cement is cost effective in the region. The physical and chemical properties of cement, such as high durability, high dependability, cost-effectiveness and versatility make it very useful for construction applications.

The key factor driving the demand for cement market in Saudi Arabia is the increasing construction activity in different segments such as commercial, residential, industrial and infrastructure. Rapidly growing population has been resulted into growing demand for residential and commercial buildings as well as infrastructure. The residential application market for cement in Saudi Arabia is expected to experience strong growth during the forecast period. Infrastructure is one of the largest segments, accounting for around 50% share of the total market in 2014. This includes the construction of roads, bridges, canals, dams and so on. The increasing number of airports and road construction projects is anticipated to boost the cement market in Saudi Arabia. Commercial application was the second largest application segment of the market in 2014, which included construction of walls, floors, exterior walkways, pavements and so on.

The cement market was dominated by the Central region of Saudi Arabia, which accounted for a 32% share of the Saudi Arabia market in 2014. This was followed by the Western, Eastern, Southern and Northern regions respectively. The cement market in the Central region is expected to witness rapid growth compared to other regions.

Over the past few years, there has been an increase in construction activities in the Saudi Arabia, especially in the Eastern and Central provinces. Various cities in the Kingdom have initiated infrastructure projects, fuelling demand. Strong economic growth in Saudi Arabia is expected to fuel continued growth.

The manufacturing companies have a significant impact on the value chain through a higher degree of vertical integration. These companies manufacture raw materials as well as the final product. Some of the key players operating in the Saudi Arabia cement market include Saudi Cement Company, Riyadh Cement Company, Yamama.