Qatar Construction Equipment Market - Strategic Assessment & Forecast 2022-2028

MARKET ANALYSIS

Qatar construction equipment market is projected to grow at a CAGR of over 4% from 2022 to 2028 and is expected to cross $310 million by 2028 from $228 million in 2021. Qatar's government's national development plan 2030 is expected to drive investments in the Construction industry. The government is investing majorly in transport infrastructures for smooth transit. Qatar integrated railways projects cost $40 billion, including the development of urban metro, high-speed passenger railways, and freight lines are under progress in 2022. Qatar construction equipment rental market growth is driven by FIFA world cup 2022. The growth is driven by Government investment under National Development Plan 2030, an increase in the Oil & gas Industry & investment in solar energy projects. 

National Vision 2030 & World Cup 2022 Triggers the Infrastructure Investments

Qatar is hosting FIFA WORLD CUP 2022 in the last quarter of 2022. The event's hosting prompts investment in infrastructure developments across the country. The projects for development have been in progress since 2018. Therefore, most stadium construction projects are in the last phase in 2022.

So far, in 2022, the government has invested $8 billion to upgrade infrastructure to host the FIFA event. The investments primarily focus on constructing stadiums in the Lusail, Al Rayyan, Al Wakrah, and Al Khor regions.

Ashghal Expressways are another major transport development project whose estimated cost is ~ 20 billion and are under progress in 2022. The project's objective is to develop a motorway to relieve traffic congestion. The project includes the construction of Al Bustan Highways, Orbital Expressway, Al Rayyan- Dukhan road, and Al Khor Coastal Road.

Government's National Vision 2030 & Shift Towards Sustainable Source of Energy

In 2020, Qatar's GDP declined by 5% due to the poor performance of the construction and hydrocarbon industries. The construction and hydrocarbon industries declined by 3.5% and 16.7%, respectively. The contraction of the hydrocarbon industry severely impacted the country's economy as the industry accounts for ~30% of GDP in 2020. However, Qatar's natural gas production increased by 5% in 2020. The government planned to increase natural gas production to double by 2027. Due to political stress and the war between Russia & Ukraine, Qatar's natural gas industry benefited due to a spike in demand for gas in European countries that were earlier main customers of Russia.

In 2022, the government planned an increase in infrastructure investment to develop roads, airports, highways, and stadiums for the upcoming FIFA World cup event later in 2022. The government planned to invest $7 billion in the national vision 2030. The aggressive investment in the development of roadways & highways is planned in Qatar's Doha, Lusail, & Al Wirrah cities in 2022.

According to the world bank, Qatar's economy is expected to grow by 3-4% in 2022. The country's growth can be hampered in the long run due to over-dependency on the oil & gas industry since oil prices are highly volatile, directly impacting the industry's performance.

Qatar ranked 68 out of 190 countries in Ease of doing business in 2020. Qatar is one leading exporter of natural gas in the world. In 2022, the government is focusing on increasing natural gas production facilities. The rise in crude oil prices in the global market supports the growth of the oil & gas industry. Qatar's foreign direct investment has been declining over the last three years. The poor FDI inflow was due to a diplomatic crisis with Saudi Arabia, UAE, and Kuwait. The situation got worse due to the global economic crisis triggered by the COVID-19 pandemic. However, the Government's Ease of FDI norms in various sectors, including real estate, healthcare, education, and telecommunication, is expected to attract the FDI inflow in 2022.

Qatar's government invests in infrastructure, road, and highway projects. The major projects are the Sharq crossing project in Doha ($12 billion), New Doha Port ($7.4 million), Qatar long-distance Railways Project ($3,456 million), Siraj Al Kharsaah Solar Power Project Al- Sahaniya ($462 million), Al Rayyan Stadium ($600 million), Al Bayt Stadium ($192.3 million) & North Field Extension ($500 million).

Strong Growth in Oil & Gas Industry & Surge in Investment in Solar energy projects

Qatar's oil & gas industry strongly rebounded in 2021; a surge in crude oil prices in the global market supported the industry's growth. Qatar is one of the leading producers and exporters of oil in the middle eastern region; therefore, a surge in oil prices in the global market is beneficial for a robust economic recovery in 2021.

Qatar has the third-largest natural gas reserve in the world. Qatar's Emir Sheikh Tamin bin Hamad Al-Thani states that country's natural gas production capacity is expected to increase from 77 million tons in 2022 to 126 million tons by 2027.

In 2022, the country's natural gas industry is expected to be benefitted due to the ongoing war between Russia & Ukraine. The political tension between Russia and other European countries such as the US, Canada, UK, Poland & others is expected to have a benefic impact on the growth of the natural gas industry in Qatar. Qatar has an excellent opportunity to grow its presence in a European country in 2022 due to the ongoing political dispute between Russia & European countries. Presently the country has a long-term contract to supply natural gas to Asian countries. However, the present political condition is expected to increase the gas export to the European country in the short term.

The country's environmental condition supports power generation through solar energy. In 2020, Al Kharsaah photovoltaic power project was planned by the government. The project's estimated cost was $462.3 million, with a production capacity of 800MW in Doha city. The project is in progress in 2022 and is expected to complete in the second half of 2022. 

Economic Overreliance on Hydrocarbon Industry & Low FDI inflow Due to Scams & Bureaucracy are the major challenges in Qatar Market.

Qatar's economy is heavily dependent on its hydrocarbon industry. The oil & gas sector has consistently contributed to 80% of the government revenue since 2014 and 90% of Qatar's total exports. Despite government efforts to promote non-hydrocarbon sectors, the country's economy highly relies on the oil & gas industry. In 2020 oil prices decline in the global market adversely impacted the country's oil & gas industry export for the same year.

According to data from Planning & Statistics Authority Qatar, there has been a continuous decline in FDI inflow in Qatar even before the pandemic in 2019. Net FDI inflows to Qatar fell from $986 million to -$2.8 billion by 2019. The disinvestment in Qatar weighs on new investment by foreign investors, which has resulted in negative FDI inflow in the last three years. The divestment trend was accelerated in 2020; the Net FDI inflow declined to -$2.4 billion. The FDI inflows are decreasing in the Qatar market, forcing the government to take various initiatives to allow 100% foreign ownership in most sectors, including health & education.

However, these initiatives did not have a positive impact on FDI inflow. High in scams and bureaucracy, poor government regulation to control unlawful activities hamper FDI inflow. The US commercial service & US Embassy revealed reports of scams directed at US firms in Qatar in 2021.

A surge in Demand for Luffing Jib crane & Carbon Neutral Equipment

Qatar has witnessed strong crane demand in 2021. The demand for cranes is expected to grow sharply due to ongoing infrastructure and development projects for World Cup 2022. High demand was witnessed for luffing jib cranes in 2021. A similar trend in demand is expected due to various mega projects in the pipeline under the national development plan 2030. The luffing jib crane has a large carrying capacity and provides operational flexibility; these are majorly used to construct tall building structures and stadiums in the Qatar market. For instance, Zoomlion sold eight luffing jib cranes to build Lusail National stadium in 2021.

Similarly, JASO sold Luffing tower crane for construction in the Qatar market in 2021.

Adopting carbon-neutral and sustainable processes is expected to trigger the demand for electric and carbon-neutral construction equipment. For instance, in 2022, three of the country's major projects- Doha Metro, Msheireb Downtown, and Lusail City- incorporated sustainable development processes.

KEY HIGHLIGHTS IN THE REPORT

The material handling equipment has the largest share in the Qatar market compared to earthmoving & road construction equipment. Large luffing cranes are the most popular equipment in the market. The demand for large luffing cranes increased in recent times, especially after 2019, due to the development of infrastructure and stadiums for the World cup 2022 event.

Chinese companies such as Zoomlion and XCMG are gaining good market share as these companies are providing large, high-capacity cranes in Qatar. Qatar is import oriented market that imports a significant quantity of equipment from South Korea & China. China is the largest exporter of large cranes in the Qatar market.

The South Korean companies Hyundai Doosan Infracore and Hyundai Construction Equipment recently won the contract to sell excavators in the Qatar market. Earthmoving held the second-largest share in 2021, and demand for hydraulic excavators is growing.

Government's national vision plan 2030 and shift in focus towards renewable energy resources are expected to drive the demand for cranes and mini excavators in the Qatar market.

The manufacturing segment accounted for a 16% of Qatar's GDP in 2020. In 2021, a rise in economic activities and FDI investment positively impacted the industry. The manufacturing industry is expected to have moderate growth. The rise in building material prices and a labor shortage are major issues that can hamper the industry's growth. According to national statistics, Qatar's manufacturing industry is expected to grow by 0.7% and 0.8% in 2022 and 2023. The growth in the manufacturing industry is expected to support the demand for Jib cranes and forklifts in the Qatar market.

VENDOR LANDSCAPE

• Hyundai Doosan Infracore, Hyundai Construction Equipment, XCMG, Zoomlion & SANY are the market leader and accounts for 42% of the market share.
• Hyundai Doosan Infracore claims the highest market share of 23% in Qatar. The Chinese manufacturers are gaining market share due to the high demand for large cranes to construct the country's stadium for FIFA World Cup 2022.
• The prominent vendor is Hyundai Doosan Infracore, Hyundai Construction Equipment, XCMG, SANY, Zoomlion, JCB, Caterpillar, Komatsu, Volvo & Liebherr.
• Other prominent vendors are Kobelco, Yanmar, Tadano, & Liu Gong.