Displaying items by tag: Oman

Oman: The Oman Cement Company has reported that a dispute with a contractor has been settled. The company has received a settlement of US$7.81m from an unnamed contractor who was implementing a new clinker production line.

The compensation included US$110,000 towards another contract for an alternate belt conveyor. The clinker plant has been commissioned and commenced commercial production in 2011. The company had raised a compensation claim on the contractor for certain project-related issues. Similarly, the contractor had also raised claim for additional payment for some of the project activities. Oman Cement stated that further details will be disclosed in its next financial statement.

Oman: Raysut Cement Company, the Sultanate's biggest cement producer, has announced a 64.1% growth in net profit to US$63.7m for 2012, compared to US$38.8m for 2011. The company said its revenue also moved up to US$241m from US$216m, while cost of sales was edged up to US$163m from US$161m.

"A net profit of US$20m for the fourth quarter was higher than our estimate of US$15.3m, as Raysut booked an investment gain of US$3.53m. Excluding this investment gain, the recurring net profit was only 8% above our estimate," said EFG Hermes in a research note. The note added that Raysut expects stable to moderate increases in cement prices and solid year-on-year volume growth to be sustained, backed by infrastructure developments in Oman.

Oman: Oman Cement Co has recorded a 36.7% rise in its net profit from US$33.2m in 2011 to US$45.5m in 2012. It reported that its total revenue rose by 17% to US$154m in 2012 from US$131.7m in 2011. However, total expenditure also rose in 2012 by 9.4% to US$102.8m from US$94m in 2011.

It is expected that Oman will see good demand for cement in 2013 due to government spending on infrastructure projects and increased construction activity. Analysts expect no increase in imports. Cement producers in the sultanate have faced tough competition over the last few years from UAE suppliers who sell cement in large quantities at lower prices in Oman.

Sameer Kattiparambil of EFG-Hermes, said, "The growth in net profit is mostly volume driven with some recovery in local cement prices. Owing to the fact that no major extra cement is being imported, prices have stabilised in the market over the last quarters."

"Since export prices have gone up, there has not been much addition to the profits of UAE exporters. Imports will continue to a limited extent but there will be no major increase. Oman Cement is working up to 96% of its capacity, so in the future, there is not much room for volume-driven growth," Kattiparambil added.

Oman: Mohammed Ahmed Al Dheeb has agreed to go back on his resignation and continue working for Raysut Cement Company as the Group CEO following an unanimous decision by the company's board of directors to ask him to remain in his position.

Oman: Plans to build a cement plant in Oman's northern city of Al Duqm are progressing, with the promoters starting to identify limestone mines in the area. The project, which will have a production capacity of 3-4Mt/yr, is aimed at enhancing the availability of cement in the country to meet additional demand arising from major government-supported infrastructure projects and other construction activities.

Sources said that the Duqm cement project will be promoted by a well established 100% Omani firm, which will carry out exports through Duqm port. "It is going to be a very big project. The cement plant will be set up in coordination with the port," said a source.

Presently, the two cement producers in the country, Raysut Cement and Oman Cement, have a combined capacity of 4.7Mt/yr. However, if the capacity of Raysut's Ras Al Khaimah, UAE-based Pioneer Cement Industries is included, the total installed capacity is much higher at 6.4Mt/yr. An important advantage for the proposed cement plant is the rich deposits of limestone in the region.

In a recent forecast Raysut predicted that the construction industry in Oman would grow to US$5bn by 2016 at an average rate of 6%/yr. It supported this assertion with the news that a number of formerly suspended programmes in the United Arab Emirates (UAE) have been reinstated. However, the group added that cement supplies in Oman remain under 'significant' pressure from imports from UAE. It is estimated that UAE has an overcapacity of cement of around 65%. Raysut also expects that demand in Yemen and east Africa will aid the company.

Oman: Raysut Cement has reported that its profit before tax rose by 62% to US$49.4m for the first nine months of 2012. This compares to US$30.7m for the same period in 2011. Oman's biggest cement producer has attributed the increase to higher sales volumes of cement and better price 'realisation'.

Raysut Cement's revenue for the first nine months of 2012 rose by 12% to US$183m, compared to US$163m in 2011. The group's subsidiary Pioneer Cement reported a profit of US$9.79m in 2012 compared to US$3.87m in 2011.

The group produced 2.83Mt of cement in the first nine months of 2012, an increase of 21% year-on-year compared to 2.33Mt in 2011. It produced 2.63Mt of clinker, an increase of 4% year-on-year compared to 2.53Mt in 2011. The group sold 2.84Mt of cement during the first nine months of 2012, compared to 2.40Mt in 2011.

In its forecast Raysut predicted that the construction industry in Oman would grow to US$5bn by 2016 at an average rate of 6%. It supported this assertion with the news that a number of formerly suspended programmes in the United Arab Emirates (UAE) have been reinstated. Yet the group added that cement supplies in Oman remain under 'significant' pressure from imports from UAE. It is estimated that UAE has an overcapacity of cement of around 65%. Raysut also expects that demand in Yemen and east Africa will aid the company.

Oman: Oman Cement is in the process of increasing its cement grinding capacity by installing an additional 15t/hr cement mill. The tender process has been initiated for building the plant, according to the company's chairman Dr Abdullah Abbas Ahmed.

Oman Cement is also planning to improve the pollution control equipment on its line 2 to control dust emission levels. It is in the process of identifying a consultant for this project.

Meanwhile, the company said that its net profit increased by 32.5% to US$30.4m for the first nine months of 2012, from US$25.2m for the same period of 2011. Its sales revenue also increased, to US$108.5m, compared to US$94.2m during the period.

The company has achieved sales of 1.69Mt for the first nine months of 2012 compared to 1.40Mt for the same period of 2011.

Middle East: Cement companies in the Middle East witnessed a 24.3% increase in revenues in the first quarter of 2012 to US$1.26bn as construction picked up in certain parts of the region.

The industry's profits rose to US$435.6m in the second quarter of the 2012 financial year, compared to US$359.5m in 2011, a growth of 21.2%. However, according to Global Investment House's report, net margins suffered a fall during the period.

UAE and Oman reported higher revenues due to the better operating environments in both countries. The sales revenue of UAE firms increased by 7.7% to US$258.1m, bringing gross margin back to double digits at 10.5%.

Rizwan Sajan, chairman of Danube Building Materials, said that the UAE construction industry had started to pick up. "The second quarter of this year was much better than the first quarter on positive signs in the UAE," Sajan said. Omani companies witnessed a 16.7% increase in revenue to US$100.3m.

Meanwhile, Saudi Arabia achieved strong growth of 34.7% in revenue during the quarter, outperforming the UAE, Qatar and Oman. Saudi Arabia is witnessing a significant rise in demand because of its development plan. In March 2011 King Abdullah Bin Abdul Aziz ordered the construction of 500,000 housing units, as well as the building and expansion of hospitals. He also ordered the injection of capital into specialised credit institutions to facilitate debt write-offs and increase mortgage lending.

It is expected that Saudi Arabia's cement demand will strengthen in 2013, with US$24bn of transport projects under way or in the pipeline. The Haramain High Speed Railway has taken centre stage, with the final contract for the project, worth US$1.4bn, awarded in July 2011. Attention should now turn to the US$7bn Saudi Landbridge project, an east-west rail line that will link Jeddah and Dammam.

Oman: Cement sector players in Oman are scaling up their production capacity to meet the ever-rising local demand and also from export markets such as Yemen and various East African nations. Until recently, the Omani cement manufacturers were ‘victims’ of a cheap influx of cement from the UAE. 

In 2011, imports met 25% of cement demand in Oman, mainly from the UAE where the weak construction sector had resulted in a excess of cement. Now with rising operational costs, producers in the UAE are no longer in a position to offer cement at lower prices, boosting the prospects of Omani producers. 

In the first quarter of 2012 Oman Cement has seen its cement sales increase by 13.8% on a year-on-year basis, driven by lower prices and an increase in domestic construction activity.

Meanwhile, Raysut Cement group's net profit before tax soared by 37% to US$17.7m in the first three months of 2012, from US$12.9m in the same period of 2011. The profit before tax of Raysut Cement Company (RCC) soared by 26% to US$14.5m, from US$11.6m during the same periods. The group as a whole sold 0.06Mt of clinker and 1Mt of cement during the quarter that ended on 31 March 2012 against 0.03Mt and 0.83Mt respectively in the same period of 2011.

Raysut attributed its increase in profit to higher sales volume and better price realisation in spite of competition, both in the domestic and in the export markets. Construction activity in Oman is expected to continue its upswing during the current year.

Oman: Oman's biggest cement producer Raysut Cement Company (RCC) has decided to take a fresh term loan of US$166m from BankDhofar, BankMuscat and Oman Arab Bank. The loan has been taken to refinance existing borrowing.

RCC Chief Executive Officer Mohammed Ahmed Al Dheeb stated that extending the tenure of the loan from five to 10 years would reduce the instalment and interest rate, which require an outgoing of about US$16 – 18m during the first three years. RCC also said it had taken the new loan in order to protect itself and its subsidiaries from pressure by the existing consortium of bankers to mortgage all of its properties.

In 2011 RCC acquired United Arab Emirates' Pioneer Cement for US$172m, making it one of the largest cement producers in the Gulf region. The acquisition was financed by long-term borrowing from the consortium of bankers led by BankDhofar. The move added 1.7 – 1.8Mt/yr capacity to RCC bringing its total to about 4.7Mt/yr.

RCC posted a net profit of US$38.8m in 2011, a fall of compared to US$53.8m in 2010. It attributed the decline in profit to severe competition in the domestic and the export markets impacting both volume and the price. The company's revenue rose to US$218m in 2011 from US$169m in 2010.