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Saudi Arabian cement companies expanding to meet huge demand

Saudi Arabia?s plan to invest more than US$208 billion on infrastructure and transportation projects is set to benefit cement companies across the kingdom

According to a NCB Capital report, the government spending on projects such as railways and airports will continue to be the main driver for the cement industry in the medium term.

Several companies have announced plans to build new production lines at their facilities, with Narjan Cement's new 1.98 million tonne line expected to be operational in the second quarter of 2013.

Jouf Cement has started to build 1.65 million tonne line, which is expected to be operational in 2014, while Southern Cement will be completing a new 1.65 million tonne line within two years.

The Saudi Arabian government's recent intervention of reducing the price cap and providing fuel to new expansions has aided the production of cement.

The country's production capacity is expected to jump from 47 million tonnes this year to more than 66 million tonnes by 2015, as the country gears up to meet demand for big infrastructure projects, a report from Al Rajhi Capital said.

The kingdom is the cheapest cement producer in the GCC.