Displaying items by tag: Saudi Arabia
Najran Cement launches trial operations at WHR power plant
13 January 2014Saudi Arabia: Saudi cement producer Najran Cement said that it launched trial operations of the first phase of its waste heat recovery (WHR) on 11 January 2014. The trial will take 10 days to complete and the commercial launch is yet to be announced. The US$45m WHR project is being installed by China's Sinoma Energy Conservation on a turnkey basis.
Al Jouf Cement launches trial operations of new production line
18 December 2013Saudi Arabia: Al Jouf Cement has said in a bourse statement it has launched trial operations of a second production line. The new production line will have a clinker production capacity of 5000t/day. The trial period will take three months.
Al Jouf announced in October 2013 that it had signed an agreement with Al Rajhi Bank for a US$107m loan to partially finance the construction of the new production line. The loan is to be repaid by June 2019.
Saudi labour crackdown pushes cement sales down by 30%
18 December 2013Saudi Arabia: Cement sales have dropped by 30% since the beginning of 'correction campaigns' against illegal foreign workers in early November 2013, according to Zamil Al-Miqrin, head of the National Committee for Cement Companies.
Speaking to local media, Al-Miqrin said the rate of sales reduction varies from one region to another adding that supplies currently surpass demand in the cement companies. The first week of the campaign saw a sharp fall in sales, as high as 50% for some companies, but Al-Miqrin expected an improvement in prices by the beginning of January 2014. He added that sales growth in cement had fallen by 10% in 2012 to 3% in 2013.
Saud Al-Araifi, CEO of the Northern Province Cement, said that cement producers in Saudi Arabia are unable to react to the crisis because exporting cement to foreign countries is banned by the Ministry of Commerce. He added that the crisis will be temporary until the current labour shortage in the construction market corrects itself. Other commentators have noted that the rate of stalled construction projects has been much higher in the private sector than in the government sector.
Arabian cement sales fell by 17% to 3.65Mt in November 2013
11 December 2013Saudi Arabia: Cement sales dropped by 17% year-on-year to 3.65Mt in November 2013 from 4.37Mt in November 2012, according to local media. The decline in sales was blamed on a campaign against migrant workers following the end of an amnesty period on 3 November 2013.
Sales of all of the cement companies fell during November 2013 with the exception of Northern Province Cement Company, Arabian Cement Company and Madinah Cement Company, whose sales increased by 58%, 24% and 20% respectively, according to data from Yamamah Cement Company. Riyadh Cement Company and Jouf Cement Company posted the biggest drop in November 2013 at 45% and 44% respectively. Sales by Saudi Cement Company and Yamamah fell by 21% and 32% respectively.
Sales of clinker for the country's fifteen cement companies rose by 9% year-on-year to 4.75Mt in November 2013 from 4.35Mt in November 2012.
Saudi Arabia: Saudi cement producer Southern Province Cement (SPC) has signed a US$190.1m contract for the installation of a second production line at its plant in Bisha.
The contract will be executed over a period of 20 months. SPC said it will use a combination of Islamic financing and its own funds to finance the project.
In May 2012 the Saudi firm signed a US$188.5m turnkey contract with China's Sinoma for a third production line at SPC's plant in Tuhama. The project is expected to take 24 months to complete.
Update on Saudi Arabia
06 November 2013Demand for cement is so intense in Saudi Arabia that certain producers have reported production line shutdowns in dedicated stock market statements. Notably, industry newcomer Hail Cement reported a scheduled shutdown for late October/early November 2013, Al Jouf Cement reported unscheduled shutdowns in October and June 2013 and Najran Cement reported scheduled maintenance in July 2013. Even a short delay to cement production is a newsworthy event for both investors and analysts.
Saudi cement producers have risen to the infrastructure challenges of the country's Ninth Development Plan, increasing cement production by 6% year-on-year to 42.7Mt for the first nine months of 2013. In this febrile environment, the king ordered 10Mt of cement imports in April 2013 followed by government demands for producers to build up a two-month 'strategic' inventory reserve. Unsurprisingly, as we report this week, exports of cement from Saudi Arabia have fallen by 55% for the first nine months of 2013.
At the time of Global Cement's feature on Saudi Arabia in December 2012 only two of the country's cement producers had an inventory of joint clinker and cement stock meeting the government's stockpiling request. For the first nine months of 2013 the situation remains the same although the overall inventory has increased by 18% year-on-year to 10.3Mt. This compares to the end of 2012 where inventories fell year-on-year by 14% to 7Mt.
Unsurprisingly again, the Kingdom's major cement producers have seen balance sheets bulge so far in 2013. Yamama Cement reported a 12% year-on-year rise in net profit to US$145m for the first half of 2013 on the back of local demand. Saudi Cement Company reported a 5% year-on-year rise in its net profits to US$173m and Southern Province Cement saw a 4% year-on-year rise in its net profits to US$150m for the same period. Yanbu Cement saw its net profit rise by 29% year-on-year to US$176m for the first nine months of 2013.
With more large government infrastructure contracts pending, analysts expect the Saudi cement market to remain heated. Although as NCB Capital pointed out in September 2013, uncertainties over fuel supplies for coming cement plant expansions provide uncertainty to the situation. Nobody wants a repeat of the Yanbu - Aramco spat over fuel supplies that occurred in 2011. Irony would barely describe the situation if a Saudi Arabian cement boom was dented by a lack of fuel in one of the countries with the biggest oil reserves in the world.
Global Cement will be at stand T9 at the 18th Arab-International Cement Conference and Exhibition in Jordan from 11 – 13 November 2013
Saudi Arabia: MAN Diesel & Turbo has received an order from the United Cement Industrial Company to build a 54.5MW captive power plant for a new 5000t/day cement plant located in the south of the country.
MAN Diesel & Turbo is building the power plant under an Engineering, procurement and construction (EPC) agreement covering delivery of the engines and the erection of all essential ancillary equipment. A consortium partner is responsible for local deliveries and services. Construction of the plant is set to begin in late 2013, with delivery of the engines due to take place in mid-2014.
"We believe there is tremendous potential in the domain of local power plant solutions for independent energy generation in particular, for example for cement or steel works. The United Cement Industrial Company is a new client for us and one we have convinced with our technical concept," said Dr Rene Umlauft, CEO of MAN Diesel & Turbo.
Saudi Arabia cement exports down 55% to 245,000t in nine months
04 November 2013Saudi Arabia: The volume of cement exports fell by 55% to 245,000t in the first nine months of 2013, compared to 547,000t of exports in the same period of 2012. The Saudi cement firms imported around 39,000t of cement and 1,925,000t of clinker in the same period. During the first nine months of 2012, 399,000t of clinker was imported.
In April 2013 King Abdullah ordered 10Mt of cement imported to meet the growing demand due to the expansion of development projects and government-led infrastructure projects. Cement was exclusively exported by Saudi Cement Co. (SCC), the Eastern Province Cement Co. (EPCC) and Riyadh Cement Co. (RCC), whose exports reached 123,000t, 82,000t and 40,000t, respectively.
Saudi Arabia: Hail Cement Company has announced that a scheduled shutdown for its production line for kiln and raw mill maintenance will run from 26 October 2013 to 11 November 2013. The cement mills and packing plant will remain operational throughout this period. The financial impact this shutdown will be reflected in the income statement for the fourth quarter of 2013. The company's commitments to its customers are not expected to be effected.
Al Jouf Cement takes US$107m loan for second production line
02 October 2013Saudi Arabia: Al Jouf Cement has announced in a bourse filing it had signed an agreement with Saudi Arabia's largest Islamic bank, Al Rajhi Bank, for a US$107m loan to partially finance the construction of a second production line. The loan is to be repaid by June 2019.
Al Jouf Cement has a cement production capacity of 1.75Mt/yr or 5000t/day. The company's products include Ordinary Portland Cement and sulphate resisting cement.