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Displaying items by tag: Saudi Arabia
Saudi cement industry projects
03 January 2012Saudi Arabia: On 2 January 2012 Saudi cement producer and trader Al Jouf Cement announced that it is set to invest US$236m on the construction and commissioning of a second production line in addition to a dedicated power plant. The new production line will have a capacity of 5000t/day. The project, to be financed with a combination of own funds and debt, will take 25 months to complete.
Meanwhile, Hail Cement Company has obtained a large single order for its cement, having signed a US$31.2m joint-venture housing contract with Teberak Trading and Contracting Company and Mo B. Co. for Civil Construction. The 80,000m2, four-phase project will be built around 220km north of the northern city of Hail and will be completed within 18 months.
Arabian Cement Company results
16 December 2011Saudi Arabia: Saudi Arabian cement producer Arabian Cement Company (ACC) has seen its net profit for the first nine months of 2011 surge by 36% year-on-year to US$88.7m.The company attributed the increase in bottom-line figures to rising production and sales volumes but did not give exact figures.
ACC's operating profit jumped by 48.2% to US$96.9m in the first nine months of 2011. For the third quarter of 2011, the company registered a net profit of US$27.9m, an increase of 28.4% year-on-year.
United Cement wins cement exploitation licence
21 November 2011Saudi Arabia: United Cement Company has won the first of three new licenses to set up new cement plants in Saudi Arabia. United Cement's director general, Fahd bin Abdullah Al-Harbi, signed the deal on behalf of his company.The total annual production capacity of the completed plant is not expected to be more than 2Mt/yr.
Sultan bin Jamal Shawly, undersecretary at the ministry for mineral resources, said, "This license is issued as part of the first phase during which two more licenses will be issued to exploit limestone used for Portland and white cement." Shawly added that the license relatedo Hurrat Hadhen in Taif. "We will announce the winners of the second and third licenses on 26 November 2011 at the beginning of the new Hijrah year 1433H," he added. A number of local producers are in the running to secure the two other new licences.
Shawly said that the licenses are being issued with certain conditions that should be strictly followed by the winning company. "One condition is that the (plant operators) should employ and train Saudi workers and the percentage of Saudi workers should be not less than 40% by the end of the first year after starting production," he said. "We have also insisted that the number of Saudi workers in the company should reach 80% after the completion of four years of production."
Saudi fuel row heats up
01 November 2011Saudi Arabia: Saudi Aramco has said that it continues to supply all of the fuel contracted by Saudi Yanbu Cement Co, to accusations from the cement producer about a lack of fuel.
As reported in Global Cement Weekly #16 Yanbu Cement was forced to delay the launch of a production line that was scheduled to open by the end of September 2011. Yanbu Cement has now announced in a stock market statement that Aramco had not responded to its requests for additional fuel.
"Saudi Aramco confirms it is currently supplying Yanbu Cement with all the allocated volumes of fuel oil as per the signed agreement," Aramco said in a statement. "Yanbu Cement Co should have secured the needed fuel ahead of a commitment to expand and build the fifth production line. The fact that no agreement was concluded in advance absolves Aramco from responsibility that may result from any fuel shortage," Aramco added.
However other cement companies have also reported that shortages of subsidised fuel is threatening growth. Safar Dhufayer, the chief executive of Southern Province Cement Co (SPCC), raised the issue at the Reuters Middle East Investment Summit in Riyadh. He said that his firm, the Gulf country's biggest cement producer by market value, may delay the launch of a new line that is expected to raise its production capacity due to the fuel shortage.
"Our new line under construction should be commissioned by the end of 2011, but if there is not enough fuel we will not run it and that will create more pressure from rising demand which we cannot meet," Dhufayer said. "We only receive 80% of the fuel we need."
Demand for cement in the largest Arab economy is seen at 48Mt in 2011, increasing to up to 52Mt by 2013, while supply is 55Mt/yr in 2011 and plans for growth are uncertain, Dhufayer said. Cement companies in Saudi Arabia have a competitive advantage over global rivals as they benefit from subsidised fuel, supplied by government-owned Saudi Aramco.
Cement firms in Saudi Arabia, which is spending over USD400bn on infrastructure projects and is planning to build 500,000 new homes, faced a cement shortage in the market in 2008 that led to a ban on exports. The ban is still in effect.
Saudi Cement posts 39% Q3 2011 profit rise
13 October 2011Saudi Arabia: Saudi Cement Co has reported a 39% rise in its third quarter net profit. The rise was attributed to increased efficiency and higher local demand. The firm made a net profit of USD52m in the three months ending 30 September 2011, compared with USD37m in the same period in 2010. The company said it had raised efficiency by using new production lines and that local demand had grown. It attributed the fall in profits from the second quarter to a seasonal decline in sales. The company posted a second quarter net profit of USD57m.
Saudi Arabia: Southern Province Cement Co., which is Saudi Arabia's biggest cement firm by market value, has announced that its second-quarter net operating profit rose by 29.2% compared with the year-earlier period, to USD63.7m. It attributed the increase to higher demand driving sales.
The result was marginally above the USD63.2m predicted earlier by the firm. First-half earnings per share were USD0.88, compared with USD0.71 in 2010.
Saudi cement firms make large year-on-year gain
10 June 2011Saudi Arabia: Cement companies in Saudi Arabia recorded a 16% increase in sales in April 2011, the highest in more than a year. Domestic cement sales grew to 4.2Mt in April 2011, compared with 3.6Mt in the same period of 2010. Private projects, notably those for housing and schools boosted demand for the material.
"In 2010 people were very wary. The last thing they wanted to do was commit money, but now the outlook is looking brighter," said Farouk Miah, an analyst at NCB Capital in Riyadh. "There is also a lot of activity for plans to develop the rest of the country, in Makkah, Madina and Jeddah," he added.
Saudi Arabia is expected to need two million more homes by 2014 to keep up with the demands of a population that has quadrupled in 40 years. Shares of cement companies have already had a decent run in 2011, up an average of 24% over the same period of 2010.
It is expected that Saudi Cement, Southern Province Cement and Yamama Cement should benefit from the demand because they have the largest volume. Smaller cement companies, which are already running at full capacity, will be less well positioned to benefit.