Refinancing of projects boosts demand for plastics pipes in the Middle East

04-Aug-09

The construction industry in some sectors of the Gulf has taken a hit from the current recession, however as projects are refinanced building is resuming and demand is expected to rise again for plastics pipe. This was the conclusion at the recent AMI conference, Middle East Plastic Pipes 2009 held in Dubai in June. PVC dominates the world pipe market and according to Neproplast around 40% of all PVC produced is used in pipe and fittings. PVC demand in the Middle East and Africa is expected to outstrip production in the near future. A recent study suggested a pipe lifetime of up to 100 years. The Saudi economy showed a record surplus of US$150.6 bln in 2008, a rise of 59% compared to 2007. The 2009 budget for the country predicts revenue of US$109.3 bln with government spending of US$126.7 bln: construction projects are expected to grow by 4% and US$9.4 bln has been allocated for water, agriculture and infrastructure projects. The population of Saudi Arabia is 60% young people, so demand is expected to grow for schools and housing. On average the local market for PVC pipe has grown by 10% annually since 2000 and is expected to grow by 4% in 2009. The current issues in Saudi Arabia are the limited availability of raw materials, the need to produce lead-free pipes, competition with other pipe materials and some poor quality pipe in the marketplace.