Arabian Cement firms up its Jordanian factory plans

The new plant, which is expected to come on stream some time in 2009, will generate around two million tonnes of cement per annum, or more than 5,000 tonnes per day. The cement will primarily supply Jordan's domestic market but it is likely some will be sold to support the needs of other neighbouring countries in the region.

Local raw materials and labour

The decision to locate the cement plant in Al Qatranah, around 90km south of Amman in the Karak Governorate, enables Arabian Cement to tap into the sizeable local deposits of limestone - a key basic raw material in cement production. Al Qatranah has limestone beds that are up to 40 metres deep in places, while in Sultani, just 15km south of Al Qatranah, and in Siwaqa Damekhi, to the north east of the city, the beds can be even deeper.

For the population of Al Qatranah, the use of local limestone sources will clearly provide a welcome boost to employment levels, as will the plant itself which is expected to hire at least 300 people when it opens. Arabian Cement has also carried out a detailed environmental impact assessment of the construction, and subsequent operation, of the facility and will make sure it abides by Jordanian regulations, which should also be positive news for Al Qatranah's residents.

Arabian Cement is also looking beyond its new venture in Jordan and is eyeing up further factories in the Middle East and Africa. It is also ploughing $900m into cranking up production back in Saudi Arabia. Speaking in May, the company's President and CEO Mohammed Taher Uthman described the Middle East's real estate development sector as 'witnessing unprecedented growth' and, if his home market, as well as those in the likes of the UAE and Qatar, are anything to go by, he isn't far wrong, although a few worrying signs are beginning to manifest themselves in Jordan.

Sales slowdown

Figures released recently by Jordan's Lands and Survey Department, and cited by the Jordan Times, have shown that the sale of apartments has fallen by 14 per cent in the first six month of the year, when compared to the same period in 2006, with sales in Aqaba down a disturbing 20 per cent. By the end of June, around 1,500 fewer apartments had been sold than at the same time last year.

Another interesting statistic, which will undoubtedly be of note to Arabian Cement, is that over the past two years the construction of new apartments in the kingdom has decreased significantly, with 22,000 units being built in 2005 and just 16,000 expected to be completed this year.

The main problem has been that too many top-end developments have been built and there are simply not enough Jordanians who can afford the steep asking prices. Dr Khalid Wazani, General Manager of Jordanian real estate firm Taameer, recently admitted to the Jordan Times that sales of luxury apartments in west Amman, where one square metre now costs $1,400, had slowed and he pointed the finger at the 'haphazard planning of residential projects'.

Low income requirements

But such a downturn doesn't mean Jordan's property sector is slipping into a full-blown decline - which is good news for developers and cement producers alike. Wazani said that Jordan does in fact have an urgent need for new housing and around 100,000 units will be required over the next five years to accommodate low income groups who, until recently, had been pretty much ignored by developers.

Wazani's own firm Taameer is involved in the $900m Al Jiza Residential City, 37km south of Amman, which will offer 16,000 units to low and middle income earners, while, at the end of July, King Abdullah himself stressed the need for a residential city project in Zarqa to be delivered as quickly as possible to provide another 70,000 affordable housing units.

But for firms like Arabian Cement, the particulars of Jordan's real estate industry are not an over-riding concern. The bottom line for providers of cement and other building supplies is that construction continues to move on apace, whether that be in the form of high-end penthouses or functional apartment blocks.

See also:
KHD Humboldt awarded $110m contract by Arabian Cement
Hydra Properties acquires 20 per cent of RAK Cement
Tameer offers Silver Tower
Jordan's real estate sector just keeps on running