Displaying items by tag: Oman
Middle Eastern cement industry improves in 2012
08 August 2012Middle 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.
Raysut Cement to take fresh loan of US$166m
18 April 2012Oman: 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.
GCC cement sector revenue jumps 14.2%
27 March 2012Kuwait: Gulf Cooperation Council (GCC) cement companies have emerged from two years of decline following the credit crisis with a strong 14.2% increase in revenue, according to a report by Global Investment House. Sector profits, however, increased by 2.7% in 2011. Revenues reached US$4.6bn in 2011 compared to US$4bn in 2010. Net profits increased from US$1.44bn in 2010 to US$1.48bn in 2011.
By country, Saudi Arabia, Oman, United Arab Emirates (UAE) and Kuwait overturned declining revenues in 2010 and all four countries reported increasing sales for 2011 except Qatar. UAE, which witnessed declining sales revenue since 2008, enjoyed a 5.9% increase in sales to reach US$940m. Yet net profit was negative for the first time since the researchers started to compile UAE cement data.
Oman witnessed a 12.8% increase in sales revenue reaching US$342.3m in 2011, the second highest revenue in Oman's cement history. However Oman reported a 39.4% decrease in profits in 2011. Kuwait reported a 5.4% increase in revenue reaching US$66.9m in 2011, but it posted a 47.1% decrease in net profits compared to 2010. Qatar was the only GCC country reporting declining sales and profits. Saudi Arabia posted a healthy 22.6% increase in sales revenue and a 25.2% increase in net profits in 2011.
According to Saudi government officials, Saudi Arabia will spend an estimated US$400bn on large infrastructure projects from 2012 until 2017. Ever since the country banked upon diversification, the cement sector witnessed a tremendous pick up in demand from less than 20Mt in 2005 to 49Mt in 2011. In the wake of increasing demand locally, the government imposed a conditional ban on cement exports in 2010 that further pushed demand. Saudi Arabia lifted a ban on cement imports in March 2012 and neighbouring exporter nations, Oman and the UAE, are expected to benefit greatly from the change.
Raysut profit suffers
31 October 2011Oman: Raysut Cement, Oman's biggest cement producer, has announced a 47% fall in profit before tax at USD26.4m for the first nine months of 2011, against USD49.4m posted for the same period of 2010. The drop is not as dramatic as it appears, however, because its profit before tax in 2010 included a government price subsidy of USD4.1m.
The company said that the decline in profit was attributable to severe competition faced by the company both in the domestic and the export markets that had impacted both volumes and selling prices.
The company has sold 1.54Mt of cement and 0.33Mt of clinker during the period against 1.56Mt of cement and 0.32Mt of clinker in the corresponding period of 2010. This represents a decline of about 1% in terms of volume for cement and an increase of 3% in terms of volume for clinker.
Oman Cement Co secures USD68m loan for upgrades
20 October 2011Oman: BankMuscat has signed an agreement with Oman Cement Company (OCC) for term loans totalling USD68m to refinance and modernise OCC plants.
The loan will be invested in funding the project for upgrading the OCC furnace efficiency and improving equipment of combating pollution, in addition to benefiting from the loan in the recovery of another funding loan.
Jamal bin Shamis al-Hooti, CEO of OCC said that the agreement would help the OCC factory to meet requirements of the Omani market.
Oman Cement upgrades with USD67m loans
28 September 2011Oman: Oman Cement Company has obtained two loans totalling more than USD67m from BankMuscat to finance a series of upcoming modernisation projects.
The first loan of USD38m will be used to finance its kiln upgrade project and pollution control equipment improvements. The company announced in March 2011 that this would be carried out by two Chinese companies. The second loan of USD30m will pay off an existing loan of the same amount the company currently has with Bank Sohar. A statement released to the Muscat Securities Market (MSM) explains that these loans would 'hopefully reduce the cost of financing its projects.'
Outlining the reasons behind the loans the company's chief financial officer, Deepak Dikshit, stated that the loan to pay off the Bank Sohar loan will be paid back in semi-annual instalments over five years. Dikshit said that the loan for the modernisation works has a two-year moratorium and is also payable in semi-annual instalments over a period of 'effectively seven years.'
Anticipating completion by February 2012, the company will be employing CNBM International Engineering to carry out a USD30m contract to modernise the 29 year old plant, extending its life by another 25 years and increasing its capacity from 2000t/day to 2700t/day.
Oman Cement Company also signed a USD8.5m deal with Sino Environment Engineering Company to modernise the company's pollution control systems to ensure that emissions fall below 10mg/nm3, with work expected to be completed by the end of January 2012.
Indian firm ERCOM Consulting Engineers has been appointed the consultants to the projects.
Raysut sees decline in profit in first half of 2011
06 August 2011Oman: Raysut Cement's Chairman, Alawi Ali Muqaibal, has announced that the company's pre-tax profit declined by 44% in the second half of 2011, falling to USD19.6m from the USD35m that was earnt in the same period of 2010. For the first six months of 2011 Raysut's production cement production was 1.62Mt and its clinker production was 1.71Mt.
Muqaibal added that during the period under review, total sales reached USD77.6m, a decline of 17% from the USD93m taken in 2010. Despite competition in the UAE, the company's subsidiary, Pioneer Cement, earned USD3m.