Cement market to recoil

Local demand expected to drop

Cement production is expected to drop this year in line with the slowdown in the economy, and the recession in the real estate sector, according to Cimenterie Nationale.

Some 5.7 million tons of cement was produced in 2011. “The production this year is expected to be around 5.2 million tons,” said Adib Hashem, sales manager at Cimenterie Nationale.

Cement deliveries fell by around three percent in the first half year to 2.5 million tons. Construction permits, an indicator of future demand for cement, were down by 14 percent.
The local cement market is supplied by three plants: Cimenterie Nationale, Holcim (Liban), and Ciment de Sibline.

Cimenterie Nationale accounted for 42 percent of cement sales in 2011producing some 2.8 million tons. Hashem said the factory is expected to produce 2.2 million tons this year. The company’s sales for the first nine months reached 2.1 million tons, of which 540,000 tons were exports. “Our exports reached 600,000 tons last year, a similar amount is excepted this year,” said Hashem. The production cost of one ton of cement is around $100.

Holcim Liban was the second producer in terms of output in 2011 with a market share of 38 percent. Holcim’s aggregate sales, combined with its subsidiary Société Libanaise des Ciments Blancs (SLCB), totaled $97 million in the first half of this year, down from $104 million a year ago.

“An additional decline in cement production is expected in 2013,” Hashem said. He said production could drop by some ten percent. However, Hashem said exports will likely grow to one million tons. Lebanon exports cement to a number of Arab states, namely Syria and Iraq.

Demand on the commodity is projected to rise, along with the expected reconstruction campaign in the aftermath of confrontations in Syria.