According to a Frost & Sullivan analysis, Qatar, which
is hosting 2022 FIFA World Cup and its neighbour Saudi Arabia, would consume about
50 % of the GCC’s building materials over the next decade to put their
infrastructure in place before the start of the mega event.
A report from Arabian
Business quoting F&S as saying that
due to the perceived risk of
economic slump post Qatar’s 2022 FIFA World Cup could see the country importing
20% to 25% of the necessary steel for construction projects from neighboring
GCC nations such as Saudi Arabia, UAE and also India.
A recent in depth report by the research firm stated that
both countries have ramped up construction activities due to the growth in
economic cities in the Kingdom and the run up towards the world’s most
prominent football tournament in Qatar. Earlier this year, Frost & Sullivan
labeled the liquefied natural gas rich emirate a boom in the making.
Kumar Ramesh, Frost
& Sullivan’s industry manager, environmental and building technologies
practice for MENA and South Asia saidt, “Driven by the ambition of hedging
from an oil and gas-based economy towards a hub for tourism and finance, the
GCC region is expected to spend USD 452 billion on infrastructure projects.
Based on the current and ongoing projects, the conservative market estimates
for building construction materials is pegged at USD 145 billion. At an
aggregate level, the growing infrastructure investment is expected to drive the
demand and growth of the building construction material industries in the GCC
region.”
He said, “To illustrate, if the investment in infrastructure
projects is growing at a rate of 10% a year the demand for building
construction materials and growth of the related industries would always be on
a positive trajectory at 1.5 to three times magnitude. The need to buy steel
and other associated materials will be one of Qatar’s key priorities. A quick
estimate of the installed capacity shows the country to have eight to ten
million tons with Qatar Steel being the leading market player.”
The annual demand for steel products in the GCC region
stands at over 40 million tonnes and is expected to grow at 5% to 6% over the
next five years. With some 67 steel plants currently in the Middle East region
with an investment valued at USD 2.8 billion the steel industry in the GCC
region has attracted a staggering USD 6.5 billion worth of investment to aid
growth.
Ramesh said that increasing demand, strong competition
increasing cost of raw materials and labor will lead to an increase in the
price by 5% to 7% in the medium term of three to 4 year. Steel manufacturers in
the GCC are exerting efforts to integrate and consolidate their position
through mergers and acquisitions. The GCC is expected to be one of the biggest
in the global steel market with by products such as pipes and tubes. Also the
change will help the region to diversify its oil and gas based income.
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