Saudi could send Bahrain into crisis

Contractors in Bahrain could face bankruptcy if Saudi Arabia does not increase its cement exports, an industry group has predicted.
Saudi could send Bahrain into crisis
By Benjamin Millington
Sat 30 Aug 2008 04:00 AM

Contractors in Bahrain could face bankruptcy if Saudi Arabia does not increase its cement exports, an industry group has predicted.

In June, Saudi Arabia halved its weekly export of cement to Bahrain from 50,000 tonnes to 25,000 tonnes, and banned cement exports to all other countries.

Samir Nass, chairman of the Bahrain Chamber of Commerce and Industry's (BCCI) contractors committee, told Construction Week the industry is being strangled by the current restriction.

"The construction sector is losing around 3 to 4 million dinars a day as workers on-site remain idle," he said. "It has  upset the whole operation with a domino effect that's being passed all the way down to the contractors. Projects are being severely delayed and construction costs are dramatically increasing."

He said that evn though the government was looking to alternative suppliers it could be years before Bahrain acquired the facilities to handle bulk cement imports from outside the Gulf.

"The huge losses are being incurred right now and the only solution is the reversal of Saudi Arabia's decision," he said. "We believe in the common market and this completely contradicts the spirit of the signed agreement by the leaders of the GCC."

Saudi Arabian government officials were unavailable for comment, but the ban is reportedly in place to prevent cement shortages in the domestic market.

But a spokesperson for Saudi Cement Company said it will soon have a surplus on its hands.

"It's not good for the cement business in Saudi Arabia because there is extra capacity coming soon and then there will be a surplus for which we will have to find a market," said the spokesperson, who wished to remain unnamed.

"We are in contact with the government and we expect we will succeed in overturning the ban as soon as possible."

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