JEDDAH, 15 June 2005 — The Commerce and Industry Ministry has issued new permits for 27 new projects to produce cement in the Kingdom. The aim is to limit the cement shortage that has plagued the Kingdom lately. The new projects will guarantee a good supply of cement in the Saudi market.
A report issued by the ministry last Sunday revealed the production capacity of the new projects will exceed 45 million tons per year with a total investment of SR21.6 billion. Investors in the new projects will prepare a market study to make sure of economic needs. The report pointed out that the ministry would not ban the issue of industrial permits for any industrial activity that affects the national economy.
At the same time, the Commerce Ministry revealed that the cement importing fee would be reduced from 20 percent to 5 percent in 6 months. The ministry said that most Saudi cement companies are increasing their production capacities while the others are trying to increase capacity in an effort to end the crisis.
Currently there are eight cement companies producing 22.7 million tons a year with a total investment of SR16.3 billion. Abdul Aziz Al-Onaizi, cement businessman, said that cement was abundant in the market and the prices should drop to SR14 per bag from SR20. He blames distributors and transporters for the price increase.