Economy, Business And Markets

New Vistas for Construction Material Producers

New Vistas for Construction Material Producers
New Vistas for Construction Material Producers

As the construction projects ahead of 2022 World Cup in Qatar have already affected the construction material market in the Middle East, Iran is seeking to increase its export of steel, cement and stone to the Persian Gulf country.

In a meeting with Qatar’s Minister of Economy and Trade Ahmed bin Jassim Al Thani in October last year, Minister of Industries, Mines, and Trade, Iran’s Mohammad Reza Nematzadeh expressed the country’s willingness to supply construction materials to Qatar for the World Cup projects.

Nematzadeh also suggested that Iranian contractors and companies provide engineering services to the Arab country, Eghtesad News reported.

But despite the strong will to increase Iran’s presence in Qatar, and in a broader context in the Middle East markets, there are obstacles to increasing exports to the regional countries.

Industrial analysts believe Iran should increase the competitiveness of its mineral and industrial products to successfully enter the regional markets. They argue that domestic steelmakers cannot play a key role in export markets, as long as they rely on imports for their raw material supply.

An unprecedented slump in the domestic housing and construction sectors has resulted in steel and cement products piling up in storehouses. The cement sector is currently facing an annual oversupply of about 20 million tons, according to industry sources.

“Increasing exports to the regional countries is not far-fetched considering Iran’s numerous advantages in the mining and mineral industries, including huge mineral reserves, abundant energy sources and educated workforce,” says Mohammad Ebka, an advisor at the Industries Ministry.

However, a full exploitation of these capacities requires the enhancement of economic and political relations with other countries, he added, anticipating that the removal of sanctions (imposed by the West over Iran’s nuclear energy program) could help Iran substantially increase steel and cement exports to neighboring countries.

Apart from Qatar’s high demand for construction materials, other Middle Eastern countries are also considered ideal markets for mineral products such as decorative stones, cement and steel.

Over the past decade, Iranian producers have exported steel products mainly to Afghanistan, Pakistan and Iraq. The new opportunity in Qatar has attracted many regional countries such as Saudi Arabia, the UAE and Turkey to supply the country with steel sections required to build football stadiums and infrastructure for the 2022 tournament.

While the 2022 World Cup provides a temporary but attractive market in Qatar for the next six years, the Arab country risks being stripped of its World Cup hosting right due to allegations of corruption and bribery in FIFA’s bidding process.