Bahrainis urged to invest in Saudi cement firms
Manama , June 30, 2008
Bahraini businessmen have been urged to invest in cement companies in Saudi Arabia to solve, "once and for all", the cement import crisis.
Nass Corporation vice-chairman Sameer Nass said that businessmen should look at investing in particular in the Saudi Cement Company, which is closest to Bahrain and supplies 70 per cent of the cement requirement here.
Nass said there are dedicated "lines" in cement companies in Saudi Arabia which produce cement only for Bahrain since it needed a particular quality.
"We have the toughest quality control and regulations in the GCC and the cement we require is of a very high quality," he said.
Nass said if the companies were owned even partly by Bahrainis, there would be no chance of such a crisis repeating itself.
"Both governments should agree on such an arrangement in our mutual interest. This is the need of the hour," he said.
Bahrain ran out of its 25,000 tonne weekly quota of cement last Tuesday and contractors had to wait till Saturday for the new weekly supplies to begin.
Cement supply from Saudi Arabia to Bahrain was stopped in the first week of this month.
New rules put in place by the authorities there made it mandatory for Bahrain importers to complete complicated paperwork in Riyadh before their cement-laden trucks were allowed to cross the border.
The restrictions, which were initially to be in place from June 16, were suddenly brought forward, throwing the Bahrain contracting industry into a state of frenzy, with construction projects coming to a halt and ready-mix concrete plants shutting down operations.
Hectic negotiations and intervention by authorities in Bahrain resulted in the restrictions being lifted on June 8, but they were quickly re-imposed 24 hours later.
It was only on June 14 that they were finally lifted, on the condition that only 25,000 tonnes would be allowed into the country every week.
While the 25,000 tonnes lasted nearly a week the first time, it was exhausted the following week on June 24 and supplies stopped again until it resumed on Saturday.
"Obviously, this cannot go on forever," said Mr Nass.
"A shortfall of nearly 15,000 tonnes every week is not going to help and several projects will be indefinitely delayed.
He said a 40,000 tonnes per week supply is realistic at the moment but demand is expected to increase. "Even 40,000 tonnes might not be sufficient in the months to come," said Nass.
Sources said that setting up cement plants in Bahrain was also not the answer since these would have to depend on raw material from overseas, making the cost factor high.
They said if raw material is imported, the cost would be at least 40 per cent to 50 per cent more than the Saudi cement, which is available in Bahrain at around BD38 ($101) per tonne.
The first requirement of a cement plant is that it should be located near the source of raw material, said the sources.-TradeArabia News Service