Cement sales have dropped by 30 percent since the beginning of the correction campaigns against irregular foreign workers in the early month of November, according to Zamil Al-Miqrin, head of the National Committee for Cement Companies.

Speaking to local media, Al-Miqrin said the rate of sales reduction varies from one region to another adding that supplies currently surpass demand in the cement companies.

The first week of the campaign experienced a sharp fall in sales that reached in some companies 50 percent but, however, an improvement in prices is expected by the beginning of January 2014, he was quoted as saying.

Demand on cement this year is much less than in the last year where sales grew by 10 percent compared to 3 percent in the current year, he said.

Saud Al-Araifi, CEO of the Northern Province Cement Co. (NPCC), said the cement firms are incapable to suggest solutions for the supply crisis and sales fall as the sole solution (export to foreign countries) is not permissible by the Ministry of Commerce.

The crisis will be temporary till the end of the labor crisis in the construction market, he said.

In this context, former Head of the Contracting Committee at Jeddah Chamber of Commerce and Industry (JCCI) Abdulaziz Hanafi attributed sales fall to the suspension of a series of projects in the aftermath of the correction raids.

He called on the labor offices to speedily activate the role of labor hiring companies to furnish the contracting companies with the required labor to implement the on-going developmental projects.

Meanwhile, Bassam Othman, professor at the College of Engineering, Um Al-Qura University, said the volume of stalled projects in the public sector has so far reached 30 percent since the beginning of crackdowns on irregular workers. The rate of faltered projects in the private sector is much higher than in the government sector, he said.

He predicted that the next period will witness more delayed projects for a number of reasons including shortage of laborers, price hikes of building materials unjustifiably, and the increased fees (taxes) imposed on equipment importing companies.

Last week, a report released by Yamamah Cement Company (YCC), said sales of cement companies dropped by 17 percent in November 2013 to 3.65 million tons compared to 4.37 million tons in the same period in 2012.

The sales drop was reportedly attributed to the correction campaigns and raids recently carried out against irregular foreign workers following the expiration of amnesty period on Nov. 3.

In a related development, the Ministry of Petroleum and Mineral Resources, in cooperation with the Ministry of Commerce and Industry, is considering the possibility of giving licenses to new three cement plants in the next two years, local media said.

Experts say Saudi market needs more cement plants on the back of a Ministry of Commerce’s announcement earlier in the year to import six million tons of cement as a precaution to protect the local market from a possible shortfall in cement supplies which would negatively affect the construction market if the shortfall occurred.

Meanwhile, an economic expert told Alsharq Al-Awsat daily that Saudi cement plants are still facing enormous challenges centered on how to get the required fuel for their new production lines.