Displaying items by tag: Yamama Cement

Saudi Arabia: China-based Sinoma has signed a contract with Yamama Cement for the construction of a new 10,000t/day clinker production line at its new plant site. The announcement of the engineering, procurement and construction (EPC) contract at the Arab-International Cement Conference in Amman, Jordan, came shortly after the news that Sinoma had been contracted to dismantle, move and rebuild one of Yamama Cement’s existing cement production lines in a strategic move between the producer’s old and new plant sites.

Saudi Arabia: Yamama Cement has announced the signing of a contract to transfer its seventh cement line from its old factory to its new plant location. The project, which follows similar moves for other lines, will start in the first quarter of 2023 and cost an estimated US$220m. The company expects the project to be completed during the second half of 2025.

The project, to be overseen by China-based Sinoma Overseas Development, will include dismantling, transporting and reinstalling the equipment, in line with Saudi Arabia’s 2030 vision to keep pace with its many development projects. After the trial run period is completed, it is expected to have a positive impact on the company's financial results.

Saudi Arabia: Yamama Cement has commissioned its second cement plant, with 20,000t/day in capacity across two clinker lines. The producer invested US$1.25bn in the plant's construction, which was carried out by Germany-based ThyssenKrupp. The facility is equipped with seven raw materials crushers, a 3.7km-long limestone conveyor belt, 110,000t of storage capacity, four Quadropol roller mills, two Dopol preheater towers, two Polro rotary kilns, two Polytrack clinker coolers, three 100,000t clinker silos, four Polycom high-pressure roller mills, six 22,590t and 25,000t cement silos and 22,000m³
in water storage basins. The new plant is situated in the eastern Arabian Desert, 80km from Riyadh.

Yamama Cement also operates the 6.4Mt/yr Al Karj Cement plant, 70km from Riyadh.

Saudi Arabia: Yamama Cement has signed a US$443m financing agreement with Saudi National Bank (SNB). The company plans to invest the funds in its relocation of a 10,000t/day kiln line to its Northern Halal, Al Kharj, plant from the site of its former plant in Riyadh. This will help towards its aim of increasing the Northern Halal plant’s capacity to 30,000t/day by 2025. The loan consists of US$213m in long-term financing for a period of eight years, US$150m in refinancing of the long-term funding for a duration of four years and US$80m in short-term financing for one year.

Saudi Arabia: Yamama Cement plans to transfer and install the seventh production line from its old plant in the south of Riyadh to the new plant’s location in Northern Halal in Al-Kharj governorate of the Riyadh region. The line has a clinker production capacity of 10,000t/day. Following the completion of the move by the end of 2024 the new plant will have a capacity of 30,000t/day. The cement producer said that cost of the move would be funded from the available company's resources.

Saudi Arabia: Yamama Cement’s sales rose by 10% year-on-year to US$235m in 2020 from US$214m in 2019. Its net profit after zakat and tax grew by 42% to US$96.9m from US$68.3m.

Saudi Arabia: Yamama Cement’s sales grew by 64% year-on-year to US$214m in 2019 from US$139m in 2018. Its net profit after zakat and tax was US$68.3 following a loss of US$13.8m.

Saudi Arabia: In a report on 17 Saudi cement companies including itself, Yamama Cement recorded a year-on-year increase of 24% in sales volumes to 4.27Mt in November 2019 from 3.45Mt the previous November. The volume produced was 4.30Mt, up by 22% from 3.54Mt in November 2018. Mubasher has reported that the country has 1.22Mt of cement in inventory, 3.8% more than the 1.18Mt it held at the end of November 2018. Southern Province Cement Company (SPCC) led the month’s sales, with 0.61Mt.

Saudi Arabia: Yamama Cement achieved a US$12.2m third quarter net profit in 2019. This compares with losses of US$12.3m in the corresponding three months of 2018. The company reported a 73% leap in revenues year-on-year to US$49.7m from US$28.7m.

No overarching theme this week but rather four changes of note in different markets. The first is Lehigh Hanson’s agreement to buy the integrated Bath plant in Pennsylvania, US, from Giant Cement, a subsidiary of Mexico’s Elementia. Lehigh Hanson, a subsidiary of Germany’s HeidelbergCement, plans to pay US$151m for the 1.1Mt/yr unit giving it a cost of US$137/t of cement capacity. That’s a similar price that Elementia paid when it acquired Giant Cement in 2016. The Mexican conglomerate paid US$220m for a 55% stake in 2016 for three cement plants with a combined production capacity of 2.8Mt/yr or US$143/t.

The purchase by HeidelbergCement draws a line following problems selling its business activities in Ukraine. The group blamed a drop in profit in the first half of 2019 on this. Since then though it has been linked to a takeover of UltraTech’s stake in Emirates Cement, the owner of the 0.5Mt/yr Emirates grinding plant in Dhaka, Bangladesh. Buying a cement plant in North America, its second most lucrative region after Western and Southern Europe, looks set to be a wise investment.

The timing here is interesting given that Elementia, the building materials company partly-owned by ‘Mexico’s richest man,’ Carlos Slim, has been steadily expanding in recent years. As stated above it only acquired Giant Cement in 2016. However, its net sales and earnings fell in the second quarter of 2019 caused by a market contraction in Mexico affecting all of its businesses. Sales from its cement businesses in the US and Central America grew but they fell by 6% at home in Mexico. Elementia said that proceeds from the sale of the Bath plant will be used for debt repayment and ‘general’ corporate purposes. Notably, Ricardo Naya Barba, the president of Cemex Mexico, has also described the local market as ‘difficult’ this week, in comments reported upon by local media.

Meanwhile in Africa, China’s Huaxin Cement purchased Maweni Limestone from Athi River Mining (ARM) Cement in Tanzania as part of the latter’s on-going administration process. Local press reported the transaction as costing US$116m and subject to regulatory approval. This one’s interesting because it shows a major Chinese cement producer buying related assets outside of China. This is likely part of the country’s Belt and Road Initiative to develop industry and infrastructure around the world and to give its overproducing industries new markets. Perhaps the surprise here is that Huaxin Cement hasn’t gone after the rest of Kenya’s ARM Cement… yet.

The other African news story of note this week was the confirmation that Singapore’s International Cement Group (ICG)’s intended purchase of Schwenk Namibia had failed. This deal was announced in March 2019 but it later ran into trouble when the Singapore Exchange blocked the proposed acquisition in June 2019 on the grounds that ICG didn’t appear to have the money to pay for it.

Lastly, Yamama Cement announced that it wants to sell its Production Lines 1-5, which have a daily clinker production capacity of 5600t/day. The producer previously temporarily shut down the lines in 2017 and it has been planning to build a new cement plant. Since then though it has faced shrinking sales and profits in the tough Saudi Arabian market.

The takeaway from all of this is that, despite the doom and gloom of a world producing too much clinker, some cement companies are targeting growth in specific territories. Sometimes these schemes succeed, as in the case of HeidelbergCement and Huaxin Cement, and sometimes they don’t, as ICG has found out. Heavy building materials like cement are costly to move around so a plant or assets in the right place at the right time can make a fortune.