Hard assets: Region relies on cement

Mega construction projects are popping up everywhere in the Middle East: towers, hotels, shopping malls, artificial islands and space age luxury dwellings are appearing, not only the GCC countries, but in the Levant and North Africa as well. This boom in real estate comes hand in hand with a cost explosion for construction materials from steel and cement to bathroom fixtures and ceramic tiles. The huge cost increases, which have tripled or quadrupled expenditure projections for some major industrial construction projects in the region, are partly related to international price pressures stemming from demand in China and elsewhere. But they are also linked to local supply bottlenecks and insufficient production capacities that have led to a region-wide race for building new state-of-the-art construction material factories to service the demand. “Shortage of material is why construction prices have increased dramatically for the last couple years,” Elie Kfoury, the managing director for