This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 4/17/2016
Demand for all types of materials is booming and will remain strong through the next several years given the magnitude of the reconstruction process, a growing population, and rising income.  Projects range from large-scale reconstruction of transportation, power, and water infrastructure to small-scale retail and residential construction. International donor demands for high quality and quantity represent opportunities for both the export market and local investment.  This sector offers perhaps the highest potential for both U.S. investment and exports.
 
Most available construction materials are currently imported and are of poor quality. Cement, for example, is primarily imported from Pakistan and Iran and is reportedly of such poor quality that it is considered not saleable in those countries.  Afghanistan has high-quality limestone deposits, but just one active cement plant, and production does not begin to meet domestic demand.
 
High transportation costs, an abundance of raw materials, and a supply of local workers with adequate skills in this sector combine to offer promising opportunities for investment in local production that could underprice foreign rivals.  The national market for materials is well integrated, with competitive wholesaling and retailing and established distribution channels.  There is medium-term potential for local production for export as well, particularly in the marble and marble cutting industry, as Afghanistan’s wealth of natural resources offers it a comparative advantage over neighboring countries.  Profitable investment opportunities also exist in the manufacture of final construction inputs, such as doors or windows.  Often these activities are carried out on a small scale, but many opportunities exist to expand to mass production.
 
Cement and Concrete Block
Afghanistan is in an earthquake prone region.  Demand for quality cement is high and is forecasted to remain strong, both in Afghanistan and in regional countries where industries are operating at capacity levels.  Local conditions for the production of cement (i.e. adequate limestone) exist. Given the high transportation costs for this product, investment in locally produced cement has potential.
 
Concrete blocks are a popular local construction material.  Upgrading and expanding existing production facilities or establishing new facilities offers good investment potential.
 
Bricks
Baked and unbaked bricks are used for construction in Afghanistan.  Both are produced by small, local enterprises. Given high transportation costs, there are business opportunities in the expansion and upgrade of local production facilities.
 
Doors and Windows
Current local production of doors and windows uses obsolete technology and does not meet local demand.  Investment opportunities exist in the improvement and expansion of this process.
 
Marble and Natural Stone
There are substantial marble deposits within Afghanistan.  Only a small fraction of what is mined is processed locally for construction or handicrafts.  Most is exported to Pakistan, where it is cut into blocks and slabs.  Investment in the local cutting process has high profit potential.  The abundance of natural stone also offers potential in mining and processing. Some of Afghanistan’s natural marble deposits are damaged by mining techniques such as blasting, which creates micro-cracks throughout the deposit.  Extraction of marble by diamond blade cutting, the best practice, has begun, but it is still extremely limited.
 
Tiles
The raw materials for the production of ceramic tiles and other ceramic products can be found in Afghanistan.  High demand and prohibitive transportation costs represent great potential for investment in local production facilities.
 
Sand, Gravel and Aggregate
Many production sites for sand, gravel, and aggregate are present.  However, quality is mixed. Investment and U.S. export opportunities exist in upgrading the quality of production, equipment sales, and exploitation of new mining sites.
 
Asphalt
Local asphalt production capacity does not meet the booming demand from large scale road construction and reconstruction activities.  High profit potential exists in expansion of local production.

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Afghanistan Design and Construction Trade Development and Promotion