Cement firms ramp up output amid stable prices

29/04/2012 17:15 AST

Cement sector players in Oman are scaling up their production capacity to meet the ever-rising local demand and also from the country’s export markets like Yemen and some East African nations. Till recently, the Omani cement manufacturers were victims of cheap inflow of cement from UAE. In 2011, imports met 25 per cent of cement demand in Oman, mainly from UAE where weak construction sector resulted in excess supply of cement. The UAE companies recently increased their cement prices. Cement prices for local players declined by 19 per cent over last year and now stand at an average of RO 25 per tonne.

Now with the rising operational costs, the UAE players are no longer in a situation to offer cement at lower prices, which gives strong case of market share capitalisation by local players. This is evident from the first quarter results of Oman Cement, a leading producer in Oman. “The higher demand for cement during the current quarter is driven by ongoing infrastructure and construction activities in the local market”, Oman Cement said while releasing its results. For the first quarter of 2012, the cement sales volume increased by 13.8 per cent on year on year basis.

The company achieved revenues of RO 13.965 million, an increase of 9 per cent on year on year and 20 per cent on quarter on quarter. “The revival of demand in the cement sector and improvement in the market share of the local players aided by higher volumes owing to higher infrastructure and construction activities have helped the company achieve this growth”, says Gulf Baader Capital Market.

Oman Cement’s clinker production during the quarter scaled up to 538,000 metric tonnes against 277,000 during the same period in 2011. The current capacity utilisation stands at 90 per cent. The output from new kiln stood at 321,000 metric tonnes out of 538,000 metric tonnes of clinker produced during the quarter.

“The gains in the international oil prices have made the government to continue with its aggressive spending towards the infrastructure and construction activities which has spelled boon for the cement sector. With most of construction projects in Oman in implementation stage, the cement demand in the local market will remain at higher levels. This is clearly evident from Oman Cement’s improvement in its sales volume during the first quarter”, says Gulf Baader.

At the same time, Raysut Cement’s sales revenues in the first quarter fell by 8 per cent to RO14.9 million, compared with RO 16.3 million during the corresponding period last year. Profit before tax dropped 35 per cent to RO 4.45 million during the quarter from RO 6.81 million during the same period of last year. “The decline in profit is attributable mainly to severe competitions faced both in domestic and the export markets impacting both volume and the price, which started from the later quarters of the previous year,” the Chairman of Raysut Cement, Mohammed bin Alawi Ali Muqaibal, says.

For more on this Click Here

Oman Daily Observer
Economic and Business News
2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | News Archive
Most Viewed Companies
Ticker Price Volume
SAGRINSURANCE 23.57 909,553
RIBL 13.93 767,779
BAHRI 42.17 1,748,930
SABIC 85.96 7,935,993
ALMARAI 87.45 246,733
EEC 29.77 9,949,525
JULPHAR 2.52 2,800
Recent News

Robust non-oil sector growth boosts Bahrain
Bahrain’s non-oil sector is on target to grow by 4.6 per cent this year, according to the latest assessment by the Economic Development Board (EDB).

The EDB’s Bahrain Economic Quarterly r

NBAD ranks #1 for GCC bonds
National Bank of Abu Dhabi (NBAD), the Safest Bank in Emerging Markets and the Middle East by Global Finance magazine, is ranked number one bookrunner of Bonds and Sukuk in the GCC for the first 9 mo

Saudi Arabia’s liquidity stands at SAR1.79 trillion
Liquidity in Saudi Arabia expanded by seven per cent or SAR117.5 billion at the end of August to stand at SAR1.797 trillion compared with SAR1.679trn in the same month last year. The annual rise in

Bahrain and UK discuss trade relations
Bahrain’s Minister of Industry and Commerce and Tourism, Zayed R Alzayani, was a guest of honour and Keynote Speaker at the Bahrain British Business Networking Lunch Meeting, Bahrain News Agency repo

Dubai SME supports FinanceME Business Vision Awards 2016
FinanceME is pleased to announce its exclusive partnership with Dubai SME, the agency of the Department of Economic Development in Dubai mandated to develop the small and medium enterprise (SME) sect

GulfBase GCC Index
Search By
  • Company Symbol
  • Company Name
  • Mutual Fund Name
  • News Content
Send this page to a friend


Which of the following do you think is the best long-term investment?