Truce in Lebanon
makes cement shares attractive
By Robert Ditcham, Staff Reporter -
Dubai: Shares in UAE cement companies reacted strongly to the
Lebanese ceasefire this week as prospects increase of infrastructure
and property reconstruction in the war-torn country.
Although UAE companies such as Union Cement, Gulf Cement and Ras Al
Kaimah Cement focus mainly on the domestic market, experts say
resources pulled from other parts of the Gulf will create gaps in
demand which could be filled by local companies.
possible trend saw a recent rally on the Abu Dhabi market, with
cement companies alone accounting for Dh31 million worth of
follows soaring cement prices earlier this year, followed by fears
of over-supply and a price crash, encouraging suppliers to offload
Richardson, general manager of Ras Al Khaimah Cement, said any
benefit to the company from a possible re-construction of Lebanon
would be "extremely indirect".
not envisage our cement going to Lebanon. We supply to the UAE
market and to Iraq on a small scale and we are already at full
production," he said.
Richardson said increased supply pulled from Saudi Arabia and
Jordan, Lebanon's traditional sources of cement, could create a
supply deficit in areas closer to home, such as Kuwait.
Officials at Ras Al Khai-mah Company for White Cement and
Construction Materials also said logistical barriers prevented them
from exporting their products to Lebanon, while countries including
Iraq provide better opportunities.
Khalid Maniar, managing partner of Dubai-based chartered certified
accountants Agn Mak, said stock market gains for cement companies
were more a result of market hearsay and speculation rather than a
direct link between UAE companies providing construction materials
for the Lebanese market.
"There is a lot of speculation among analysts that companies such as
cement manufacturers will have the potential to see increased demand
and profit in the future, even though in reality this may not always
be possible," he said.
Maniar argued instead that local companies could benefit from
Lebanon's future re-building by supplying skilled construction
labour needed to work on complex infrastructure projects.