Contractors in Qatar are being forced to import raw materials as local suppliers are unable to keep up with the demands of the local construction industry.
A lack of locally developed resources mean that aggregates used in the country have to be brought in from other countries in the region, which is pushing up the price of concrete and placing massive demand on the country’s supply chain.
“There are significant problems with raw materials with many contractors having to adopt the extraordinary measure of importing their own raw materials such as cement and aggregates,” said Tom Sawers, country manager – Qatar, Systech International.
UAE gabbro, which is exported to Qatar, is currently fetching US $22.5 (QR75) to $25 per tonne. The local price of readymix in Qatar is between $67 and $75 per tonne and the import price is currently topping $100.
Until last year, cement had to be supplied by locally approved suppliers but in a recent diversification of resources, firms are now allowed to import their own stocks to bolster supplies.
“While contractors have had a free reign for the past year to import cement, procedural problems can result in the necessary approval taking many months and effectively negating any benefit of this relaxation in the government rulings,” added Sawers.
“The difficulties in clearing goods imported through Doha International Airport and Doha Port during the lead up to the Asian Games are well recorded. These problems still exist, and some four months after the event, contractors are still experiencing delays due to slow clearance of the required goods and materials.”
As well as these delays, which are directly affecting contractors, local suppliers have compounded the issue by not carrying enough stock.
“The main difference [between the UAE and Qatar] is logistics, and the Doha market does not offer the same ease of procurement and mobilising of required resources,” said Maher Merehbi, director, ACC.
“It is a relatively small market and relies on Dubai for supplies, and local suppliers do not see the necessity for keeping a lot of stock.”
He added that with the current construction boom, this policy has become more obvious, as local suppliers struggle to meet the demand.
“I believe economics will prevail and it will make much more sense for suppliers to keep more stock,” said Merehbi.
“For now we rely heavily on the UAE office to assist in the procurement of materials. In the short term we will follow the same strategy. In the long term, you will see more suppliers based in Doha offering the same facilities to contractors as those in the UAE,” he concluded.
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