Saudi cement flows to Yemeni market
SANA’A — Huge quantities of Saudi cement are being smuggled to Yemeni markets at competitive prices due to the decline of the local supply and the increase of the demand in the Yemen.
Head of the financial sector of the Public Cement Corp., Abdul-Malik Al-Qirshi, told the Yemen Times that trucks that transfer Al-Saleef salt to the Saudi town of Jazan, return to Hodeida carrying Saudi cement.
He explained that Saudi cement increasingly flows to Yemeni markets due to the suspension of production at some Yemeni factories, including Amran Cement Factory (is this the official name?), which is the main provider of cement to the capital Sana’a and its surrounding areas .
Al-Qirshi made it clear that the Saudi cement is largely purchased in Hodeida and on the Yemeni-Saudi borders, pointing out that quantities of cement have lately been transferred to Sana’a.
He went on to say that Saudi cement is sold at near-double prices in Yemen, pointing out that the 50-kg cement sack that is sold for SR 25 (YR 15,00) is sold in Yemen for YR 2,300 (SR 38). It is expected that the increase of cement prices is due to the increase of the demand and decline in supply.
“Despite the fact that Saudi cement is smuggled to the Yemeni markets, there is impure cement of unknown-origin that is packed in Saudi-made bags” he added. “This occurs due to weak control on the Yemeni market.”
With the exception of Amran and Al-Watania cement factories, all the other five cement factories stopped production. Al-Qirshi says that the production of Al-Watania’s production was suspended due to roadblocks in Lahj.
The Saudi Ministry of Commerce and Industry made decisions in the middle of last February to suspend the export of cement to meet the demands of local markets and to stabilize its prices, after the Saudi markets witnessed a big rise in cement prices due to the increased demand and declining supply.
Cement prices subside, construction work resumes
Five days ago, Muhammad Abdullah Al-Sahmi resumed building his house in Sana’a’s Al-Huthaili district following a week-plus work stoppage in response to cement price hikes.
Al-Sahmi told the Yemen Times that twenty days ago, he had bought ten bags of cement, priced at YR1,200 per bag, but that last week the price for one bag had reached YR 2,500.
He said, “I stopped building my house because I could not afford to buy cement at that price.”
Muhammad was not the only one to stop building his house; meanwhile, construction projects were also halted in response to the cement price increase. Following the 28 percent price decrease two days ago, most such work has recommenced.
Abdul Fatah Ismail, a cement mining engineer at the Amran Cement Factory, stated that the reason for the sudden price hikes was a suspension of production at the plant that lasted for half a month.
He pointed out that the Amran Factory suspended production on March 9 as a result of a shortage of diesel, which is needed to run the factory. However, diesel is currently available, which has allowed the factory to resume operations. The factory is again supplying the domestic market with cement.
He also said that traders have tried to exploit the stoppage. The price of cement was raised despite accumulations of cement bags in stores.
Ismail also explained that the factory has been operating since March 26 and that it then began selling bags of cement to traders for YR1,600. He gave assurances that prices will return to YR1,200 soon.
Al-Sahmi said that cement prices have already began to decline and that he bought five bags on Tuesday, priced at YR1,800 per bag. He added that his concern has disappeared
A side effect of the cement price hikes was an increase in the price of bricks. The price of a single brick reached YR140 last week, while they had previously been sold for YR 90.
Abdullah Al-Nowm, owner of a brick plant in Sana’a’s Al-Huthaili district, says that he had to raise the price of bricks last week because the industry largely depends on cement to produce bricks.
“If I continued selling bricks at the previous price of YR 90, it would cause me great losses,” he said.
He emphasized, though, that the decline in cement prices have translated into lower brick prices, and pointed out that he started selling bricks for YR120 over the last two days.
The cement price hikes have greatly affected Yemen’s workers. Many, particularly in the construction industry, have stopped working because the building of residential structures has been suspended.
Since the beginning of February 2011, Sana’a’s citizens have been entirely dependent on the Amran Cement Factory, it being the only provider for the Sana’a market.
Ismail, the cement mining engineer, said this dependence is the result of factories in the south of Yemen having closed in response to wider states of political and social insecurity.
The demand for cement has declined because several development and construction projects were stopped in 2011, which in turn had a negative impact on cement production and sales.