Introduction
Kuwait has one of the most liberalized economies in the Middle East (Abotalaf 2011, p. 7). Kuwait’s economy is mainly dependent on oil production. The country has the fifth-largest proven crude oil reserves in the world (Zbib & Farran 2011, p. 5). Kuwait also derives its wealth from other non-oil industries such as manufacturing, retail trade, financial institutions, construction, and real estate (Abotalaf 2011, p. 7). Kuwait’s construction industry has witnessed a significant expansion over the years due to the development of the country’s cement industry (Abotalaf 2011, p. 8). This paper aims to delineate the cement industry in Kuwait and to provide an analysis of the strengths, weaknesses, opportunities, and threats for the Kuwait Cement Industry.
The Cement Industry in Kuwait
The cement industry in Kuwait evolved out of the expansion of construction and industrial activities. Initially, buildings in Kuwait were mainly constructed using clay, gypsum, sea rocks, and wooden ceilings (Zbib & Farran 2011, pp. 6-7). In 1912, the American Mission introduced cement in Kuwait. They used cement in the construction of the American hospital (Zbib & Farran 2011, pp. 6-7). Consequently, Kuwait adopted the use of cement after realizing its soundness and strength. It is against this background that the Kuwait Cement Company was established in 1968; hence, marking the cement industry take-off (Abotalaf 2011, p. 8).
Over the years, the cement industry in Kuwait has expanded greatly and remained stable. For instance, in 2006-2008 the country manufactured 2.2 million tons of cement per annum (Zbib & Farran 2011, pp. 7-8). As of 2010, cement production rates stood at 1.8 million tons per annum, which equals 2.2 million tons of cement per annum due to the addition of gypsum at the end of the production process (Zbib & Farran 2011, pp. 7-8). Kuwait also anticipated a major increase in the total quantity of cement produced following the completion of the Kuwait Cement Company plant at Shuaiba.
The major players in the Kuwait cement industry include the Kuwait Cement Company, Hilal Cement Company, and Kuwait Portland Cement Company (Zbib & Farran 2011, pp. 8). The Kuwait Cement Company is “a listed public shareholding company engaged primarily in the production, supply, and transportation of cement, as well as, the investment and construction of cement manufacturing factories and laboratories” (Zbib & Farran 2011, pp. 9-10). The Kuwait Cement Company is the major manufacturer of cement for sale in Kuwait (Zbib & Farran 2011, pp. 10-11). The Hilal Cement Company is specialized in the sale of construction materials. Some of its activities include; import, storage, and distribution of bulk construction materials (Zbib & Farran 2011, p. 10). On the other hand, the Kuwait Portland Cement Company focuses on the import and export of construction materials like cement. The company also leases and rents stores, as well as, silos necessary for the supply and distribution of cement (Zbib & Farran 2011, pp. 10-11). Other players in the Kuwait Cement industry include the following: the ACICO Industries which focuses on the production of autoclaved aerated concrete; the National Industries, which is involved in the selling ceramics, pipes, tiles, and ready to mix concrete; whereas the Kuwaiti British Ready-Mix Company has specialized in providing ready –mix concrete (Zbib & Farran 2011, pp. 10-11).
SWOT Analysis for Kuwait Cement Company
Strengths
One of the major strengths of Kuwait Cement Company is that it is the main manufacturer and producer of cement in Kuwait. This implies that the Kuwait Cement Company has a major dominance in the cement market in the country. Second, the Kuwait Cement Company has had operations in the cement industry for the longest period; therefore, the company has a large base of customers. Additionally, the company has a strong financial base, which gives it a competitive advantage over its competitors.
Weaknesses
The Kuwait Cement Company sources limestone, which is the main raw material used in cement production through other companies that import limestone. Therefore, the company incurs more expenses as opposed to if it was directly importing the raw materials.
Opportunities
Kuwait Cement Company stands a chance to reap massive gains due to the construction boom and development projects in Kuwait. Due to its long-time reputation in the cement industry, the company is able to secure credit facilities from financial institutions with ease; hence, enabling it to expand further.
Threats
One of the major threats for Kuwait Cement Company is that other companies such as the ACICO Industries have also joined in the manufacture of cement in Kuwait. Therefore, even though the company is still producing cement for its own use, it stands a chance to expand and engage in commercial cement production.
Conclusion
The cement industry in Kuwait has witnessed a major expansion since its inception. Kuwait Cement Company is one of the major cement manufacturing companies in Kuwait. Therefore, the company has several opportunities and strengths in both market share and financial base.
References
Abotalaf, 2011, Kuwait Economic Report, Capital Standards, Kuwait City.
Zbib, S & Farran, R 2011, Kuwait Cement Industry, Kuwait and Middle East Financial Investment Company, Kuwait City.