Kuwait Construction Equipment Market - Strategic Assessment & Forecast 2023-2029

MARKET OUTLOOK

The Kuwait construction equipment market was valued at 5,465 units in 2022 and is expected to reach 7,263 units by 2029, growing at a CAGR of 4.15% during the forecast period. Kuwait's government is investing in infrastructure development projects, including expanding airports, railway lines, roadways, and highways across the country. Under Kuwait’s National Development Plan, the government focuses on economic reform and implementing various mega projects, with several large infrastructure projects estimated at USD 124 billion. It includes several infrastructure upgrades, such as a new airport terminal valued at USD 4 billion; the development of the Mubarak Al-Kabeer Port on Boubyan Island; and many mega oil projects, including a new refinery. The surge in infrastructure development projects is expected to drive the demand for construction equipment during the forecast period.

KEY HIGHLIGHTS

• Earthmoving equipment accounted for the largest Kuwait construction equipment market share in 2022. Excavators in the earthmoving segment accounted for the largest share in 2022. Rising investment in housing, warehouse expansion, and public infrastructure projects is expected to drive the demand for excavators in the market.
• In Dec 2022, the Kuwaiti government planned to construct eight bridges on the Al-Nawaseeb Road. In Kuwait, Al-Nawaseeb Road is one of the country’s main roads from the Kuwaiti capital to Saudi Arabia. The total length of the bridges will be 1,736 meters. The construction of this superstructure started in 2020.
• In 2022, Kuwait’s Council of Ministers General Secretariat (CMGS) awarded the license for developing four sites on the 36 km Sheikh Jaber Al Ahmad Al-Sabah Causeway. The commercial aspects of the project will include retail, hospitality, health, wellness, food and beverage, and serviced apartments. The project is estimated to be completed by the end of 2026 and is estimated to contribute to the Kuwait construction equipment market growth.
• According to a recent government report, the country has clean energy projects worth USD 6.3 billion under implementation, with only 0.5% of the installed clean energy capacity. Moreover, the Ministry of Electricity, Water, and Renewable Energy stressed the importance of speeding up the national plans to produce no less than 15% of the grid’s renewable energy consumption by 2023.
• Kuwait is also constructing USD 6.5 billion Mubarak Al Khabeer Port. The ongoing construction of various ports across the country expects to propel the sale of cranes in the Kuwait construction equipment market during the forecast period.
• A 2,500-square-meter warehouse project is under construction. The project includes the construction of a Workshop and Warehouse facility (PEM Building). Moreover, Aramex has selected the Agility Logistics Park (ALP) in Sulaibiya as the location for its new 16,000 sq m e-fulfillment center in the country. The project is a modern facility that will help the company to expand and grow its e-commerce business.

Increased Investment in Public Infrastructure Projects

• In February 2023, Kuwait approved nearly USD 2.76 billion for 110 projects planned during fiscal year 2023-2024. The projects mainly include the airport's expansion, the Silk City's development, and the railway network across the country.
• Construction of the Jaber Al Ahmad New City is in progress, which, once completed, will respond to the needs of Kuwait’s rapidly growing population. The city is located 25 km west of Kuwait City. It is designed to include a new self-supporting community and accommodate around 80,000 people on a plot of over 12.4 million square meters.
• Another mega project is located 80 km south of Kuwait City. The project will have the capacity to house 280,000 people and will generate around 145,000 jobs. The project will be spread across 61.5 square km and include ten neighborhood clusters. The master plan also includes various housing typologies, including apartments and patio houses, encouraging high-density living with equally high standards of luxury.
• Public Authority for Housing Welfare (PAHW) works on the Al Mutlaa City Development megaproject. It is a large housing infrastructure project located 38.3 km Northwest of Kuwait. It occupies an area of 104 square km and aims to encompass 400,000 people. The project will include residential, social, commercial, and light industrial areas and is projected to support the Kuwait construction equipment market.
• Terminal 2 (T2) at the Kuwait International Airport (KIA) is being developed by the Directorate General of Civil Aviation to transform it into a new regional air hub in the Gulf. The project is designed to be completed in three phases. The first phase aims to add a capacity of 13 million passengers a year, and the second and third phases will enhance the capacity to between 25 million and 50 million passengers a year.
• OPEC producer Kuwait has approved 239 projects with around 955 million USD 3.15 billion for the new fiscal year 2023-2024. Moreover, the country will soon commence an enormous road maintenance program that has attracted 36 companies from the US, China, and other countries.

MARKET TRENDS & DRIVERS

Kuwait’s National Development Plan and Investments in Public Infrastructure to Propel the Kuwait Construction Equipment Market

• The Vision has established high importance to Kuwait’s national infrastructure, with investments hitting as high as USD 27 billion in the bidding stage. New Kuwait will build on the recent urban development and housing momentum by introducing new master plan developments and cities.
• Plan also aims to develop the country’s tourism sector to yield surplus revenue and create a new employment pool and plans to further enhance the country’s transportation and power sectors by building on the recent success in Independent Water and Power Plant (IWPP) and Public-Private Partnership (PPP) projects.
• In Feb 2022, SMEC (Australian consultancy) was granted the contract to upgrade Shuwaikh Port, the largest of Kuwait’s three commercial ports just west of Kuwait City and its surrounding infrastructure. 

Increased Renewable Energy Projects in the Country Will Propel the Demand for Material Handling Equipment

• As of February 2022, a 30 MW solar PV plant was planned in Al Jahra, Kuwait, named Subiya Water Storage Solar PV Plant. The plant is expected to be built in one step. Construction is expected to start in 2023, and the plant should be ready for business in 2025.
• The government planned to build a 5GW solar power complex in the country's north. In addition, solar capacity is planned installed capacity at Shagaya by 2030 with an investment of USD 20 million.
• Moreover, in Nov 2022, OPWP initiated the development of the second utility-scale solar PV project, which will be connected to the main interconnected system in Oman. The project will have a capacity ranging between 500 MW-1,000 MW.

Robust Growth in the Development of Ports to Boost the Sales of Overhead Cranes in the Kuwait Construction Equipment Market

• Kout Food Group (KGF), in 2021, inaugurated its 16,000-square-metre warehouse for a storage, distribution center, and truck park at the Agility Logistics Park (ALP) in Sulaibiya. Moreover, in March 2023, Ad Ports Group announced the launch of a new shipping service that will improve commercial and logistic connectivity to Qatar and Kuwait.
• In addition to it, Kuwait also planned to launch a global auction for the development and operation of a brand-new cargo village next to the Kuwait International Airport (KWI). The new cargo village set to be built west of KWI is part of a three-stage long-term master plan stretching to 2050 to expand air traffic and shipping operations in the Gulf state.

Development of Eco-Cities to Boost the Sales of Electric Construction Machinery

• The project aims to provide a net-zero carbon lifestyle for approximately 100,000 residents and will be built by UAE-based global sustainable developer URB. More than 65% of the project's land area will be set aside for open spaces. The project's estimated cost is around USD 14 billion and will commence in 2024.
• XZERO will also include 1,600-hectare development providing residential units, jobs, and amenities. Therefore, this masterplan for the smart city is designed to optimize density and amenities distribution to create a walkable city while also optimizing the green space ratio.

Government’s Increasing Focus on Water Management Activities to Boost the Demand for Crawler Excavators

In 2022, Kuwait’s Ministry of Public Works (MPW) awarded an Engineering, Procurement, and Construction contract for its wastewater treatment plant (WWTP) in the South of Al Mutlaa, Al-Jahra Governorate. The project's scope included the development of a 400,000 cubic meters per day WWTP expandable to 600,000 m3/day,  a renewable energy system (solar, wind, or biogas) to provide 40% of the power required by the WWTP, and reduce grid consumption.

MARKET RESTRAINTS

Housing Crises in the Region Hamper the Sales of Construction Equipment in the Region

• The lack of available housing has increased housing costs, making privately owned homes less affordable. One of the government’s reports also mentioned that the price-to-income ratio of affording a house in Kuwait is the worst among GCC countries. Therefore, the residential price-to-income ratio in Kuwait is higher than that of cities such as London or New York and approximately three times that of Dubai and Abu Dhabi.
• Another reason that can be mapped out that stimulated the crises is that the government owns 90% of the land in Kuwait and regulates residential real estate development through parceling and allocation of land plots.

The Skilled Labour Shortage in the Country Hampers the Pace of Construction Projects

• Many Kuwaitis prefer to work in the public sector, leading to a shortage of skilled workers in the construction, healthcare, and IT industries. The lack of government projects also prompted many Kuwaiti companies to flee to more active and lively neighboring markets, which harmed the Kuwait construction equipment market.
• Around 205,000 expatriates working in the private sector left Kuwait in 2021, which has also hampered local businesses. One of the government reports pointed out that in 2021, about 41,200 domestic workers left Kuwait permanently. Domestic workers currently constitute around 22.8% of the workforce in Kuwait, of 2.7 million.

VENDOR LANDSCAPE

• Caterpillar, Volvo CE, Komatsu, Liebherr, Hitachi Construction Equipment, XCMG, and Zoomlion are leaders in the Kuwait construction equipment market. These companies have a strong market share and offer diverse sets of equipment.
• In 2020, Kuwait International Airport received eight cranes (T285-120V) from Zoomlion. These cranes marked the highest tonnage tower cranes exported by China.
• Liugong & CNH Industrial are niche market players in the market. These companies offer low product diversification and have a strong presence in Kuwait's local market.
• SANY, Kobelco, HD Hyundai Construction Equipment & JCB are emerging in the Kuwait construction equipment industry. These companies are introducing new technologically advanced products to challenge Kuwait's market leaders' share.
• Tadano, Terex, SDLG & Merlo Spa have low product diversification; these companies are lagging in adopting new technologies used in construction equipment.