Displaying items by tag: Oman Cement

Oman: Oman Cement recorded sales of US$95.6m during the first half of 2023, Reuters has reported. The figure corresponds to a year-on-year rise of 5.1% from US$90.9m in the first half of 2022. The producer’s net profit after tax also rose, by 31% year-on-year to US$10.9m from US$8.31m.

Oman: Huaxin Cement informed the Muscat Stock Exchange of its intent to buy a further 5.1% stake in Oman Cement on 3 July 2023. Zawya News has reported that this would increase the China-based group's stake in Oman Cement to 64.7%. It acquired its existing 59.6% in the producer for US$193m earlier in 2023, but subsequently revised the price to US$200m.

Oman: Abra Holdings has submitted an offer to acquire a 15% stake in Oman Cement. Reuters has reported that the board of Oman Cement confirmed that it is not seeking competing offers.

Oman: Oman Cement has appointed Zhu Yaping as its chief executive officer. The appointment follows the retirement of Salim Abdullah Al Hajri in the post.

Zhu Yaping holds over 30 years of experience in the cement sector working for Huaxin Cement. His roles for the cement producer included that of plant manager in Hubei, maintenance manager in Wuhan and the company’s Head of Cement Industrial Performance. He holds a master’s degree in control theories and engineering from the Wuhan University of Technology and a bachelor’s degree in electrical engineering from the Nanjing University of Aeronautics and Astronautics.

Oman: Oman Cement, which is undergoing a change of ownership to China-based Huaxin Cement, reported a revenue of US$50.7m in the first quarter of 2023. This represented a 15% rise year-on-year compared to the first quarter of 2022, when its revenue was US$43.2m.

The company reported net profit of US$5.2m, a 126% year-on-year jump due to one-off earnings, as total expenses increased by 7% year-on-year US$44.2m.

Huaxin Cement completed its acquisition of a majority stake in Oman Cement this week. The China-based company estimated that the purchase price was around US$193m. Following the transaction with a subsidiary of the Oman Investment Authority, the country’s sovereign wealth fund, the cement producer now controls just under a 60% share in Oman Cement.

A key part of the deal includes Oman Cement’s integrated plant at Ruwi in the north of the country. The three-line unit has clinker and cement production capacities of 2.6Mt/yr and 3.6Mt/yr respectively. With the partial ownership share of 60% taken into account, this places the capacity purchase price at around US$124/t, a lower figure for capacity compared to other international acquisitions.

Oman Cement has a couple of new projects in the pipeline that have been mentioned on and off previously over the last year or so. These include the construction of a new 10,000t/day fourth production line, an upgrade to line 3 to 4000t/day from 3000t/day at present and plans for a new plant at the Special Economic Zone (SEZ) at Duqm. The company said it was looking for a contractor to carry out the upgrades at the Ruwi plant. However, Rashid bin Sultan al Hashmi, the chair of Oman Cement, said in the company’s annual results for 2022 that the Duqm project, operating under the name Al Sahawa Cement, had run into problems with the supply of gas for the proposed unit. Another recent development was the signing of a deal between Omani Environment Services Holding Company (Be’ah) and Oman Cement for the supply of refuse-derived fuel (RDF). As an aside, that last one may also have received a boost this week with the news that the local Environment Authority has suspended licenses for the export of used tyres from the country.

How these existing projects will fare under the new ownership remains to be seen, but Huaxin Cement has a track record for developing new cement production capacity outside of China. The cement producer describes itself as de-facto controlled by Switzerland-based Holcim although Holcim said in its annual report for 2022 that Huaxin Cement is a joint-venture. It currently operates plants in Cambodia, Kyrgyzstan, Malawi, Nepal, Tajikistan, Tanzania, Uzbekistan and Zambia and says that it has 10 additional projects in Africa, the Middle East and elsewhere in preparation for future business expansion. In 2022 it started operating a 3000t/day production line at Nepal Narayani and commenced the second stage of a project to build a 4000t/day clinker line at Maweni in Tanzania. Plus, as mentioned in our recent roundup of China-based producers, 13% of the group’s operating revenue derived from business outside of China in 2022 compared to 8% in 2021.

Other producers from outside of Oman have also been active locally in 2023. In late January 2023 India-based UltraTech Cement agreed a deal to buy a 70% stake in Duqm Cement Project International from Seven Seas for US$2.25m. The agreement covered a limestone mining lease that UltraTech Cement said was important for “raw material security.”

The other big development in the Oman cement market since we last covered the country in September 2021 was an intervention by the Capital Market Authority (CMA) on Raysut Cement. The chief financial officer resigned in November 2022 before the CMA questioned the company’s financial results for the second quarter of 2022. The CMA then replaced the board of Raysut Cement in December 2022 saying it had detected ‘material misrepresentation’ in the company’s third quarter results.

The last four months or so have marked a turning point for the local cement sector with a change in leadership for the two largest producers. Oman Cement reported strong growth in 2022 although it warned of “low priced cement being supplied by competitors.” Raysut Cement, unsurprisingly, recorded a loss in 2022. The construction market in the country is expected to grow as the economy leaves the coronavirus period behind, mounting energy prices boost national revenue and potentially some of this heads into infrastructure development. This puts the new management at both producers in a good position going forward.

Oman: Oman Cement has appointed Xu Gang, Chen Qian, Ian Riley and Li Yeqing as temporary board members following its acquisition by China-based Huaxin Cement. The new personnel will remain in place until the company’s next ordinary general meeting. Former chair Rashid Sultan Al Hashmi and board members Mohammed Sulaiman Al Salmi, Mohammed Abdullah Al Harthi and Sami Abdullah Al Sinani have also resigned.

Li Yeqing is the chief executive officer (CEO), secretary of the party committee and senior engineer at Huaxin Group. He holds a bachelor degree in engineering, a master’s degree in engineering and a Ph.D in business administration. He joined Huaxin Cement in 1987. He also works as the vice chair of the China Building Materials Federation and China Cement Association, and chair of the Hubei Building Materials Federation. He previously held the post of executive vice chair of the Sixth Council of China Building Materials Federation.

Xu Gang is the vice president of the Huaxin Cement. He has worked in various management roles for cement companies such as safety engineer and technical manager. He has also worked as a director for Lafarge and Huaxin Cement. Xu Gang holds a master’s degree in business administration (MBA) from Tsinghua University, a bachelor’s degree in safety engineering from the China University of Geosciences and a bachelor's degree in financial management from the Huazhong University of Science and Technology.

Ian Riley is the head of the World Cement Association. Prior to this, he held various positions such as an executive director of Tianqiao International (Shanghai) Consulting Company, the president of Asilinko Information Technology (Shanghai), the general manager of SIP (Shanghai), Information Director and the assistant and the vice president to the Xeroc. He also served as the head of Holcim Group's China region. Riley holds a bachelor’s and a master’s degree in engineering from the University of Cambridge.

Chen Qian is the vice president and chief financial officer (CFO) of Huaxin Group. Previously he held positions in various financial positions including senior auditor, senior consultant and CFO for several companies. Chan Qian is a Chinese Certified Public Accountant and a fellow member of the Chartered Global Management Accountant. He holds a bachelor's degree in world economics from Fudan University and a master's degree in business administration from the Anderson School of Business in the US.

Oman: China-based Huaxin Cement completed its acquisition of a 60% stake in Oman Cement on 5 April 2023. That the group completed the transaction via a Abra Holdings, a wholly-owned subsidiary incorporated in Mauritius. In a submission to the Hong Kong Exchange, Huaxin Cement stated the estimated purchase price for the stake as US$193m.

Oman Cement operates the 4.2Mt/yr Rusayl cement plant in Muscat Governorate. The producer was in talks with possible contractors for an upgrade to the plant’s existing production lines and the construction of a new 10,000t/day Line 4 in March 2023.

Oman: China-based Huaxin Cement has concluded a share purchase agreement with Omani sovereign wealth fund Oman Investment Authority (OIA) for the acquisition of a 60% stake in Oman Cement. ASDQ Financial News has reported the value of the deal as US$193m.

OIA director general of private ownership Ibrahim bin Said al Eisari said "This exit comes in accordance with a plan pursued by OIA aimed at achieving a number of goals, including attracting foreign investment to the sultanate. This will contribute to the development of operations at Oman Cement, increase the efficiency of its production lines and enhance its competitiveness locally and regionally, in addition to enhancing the positive image of the Omani industrial sector in general."

Oman: Oman Cement Company recorded cement sales worth US$173m in 2022. This corresponds to year-on-year growth of 42% from US$122m in 2021. Its cement sales volumes were 3.46Mt, up by 45% from 2.39Mt.

Chair Rashid bin Sultan al Hashmi said "The company has produced and sold record quantities of cement during the period to help the nation and the consumers in overcoming a scarcity created by various challenges faced by consumers due to short supply of cement from other manufacturers and prevailing global macroeconomic trends."

CEO Salim Abdullah al Hajri added a note of caution, saying "Though the demand for cement in Oman continues to remain reasonably stable and is expected to remain at 2022 levels, unreasonably low priced cement being supplied by competitors remains a major challenge, and the company will continue to monitor the market situation."

The Oman Daily Observer newspaper has reported that Oman Cement Company is in the process of selecting a contractor for an expansion to its Misfah cement plant. The project will increase the plant's capacity by 25% to 5000t/day from 4000t/day across its three production lines. The producer subsequently plans to build an additional line at the plant, which will triple its capacity to 15,000t/day. Meanwhile, plans for a new 5000t/day cement plant at Duqm are currently under review. The company is in discussions with the Public Authority for Special Economic Zones and Free Zones (OPAZ) to 'explore alternatives,' including possible relocation of the site of the plant, due to 'issues in the supply of gas.'