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Update on cement industry of Oman
Written by Global Cement staff
07 September 2016
Update on Oman
It’s been an interesting month for the cement industry in Oman with the announcement of various producer projects and a recent market report predicting steady growth in the country.
A late August 2016 sector report from Al Maha Financial Services concluded that government-backed infrastructure projects in the country have pushed cement demand over the production capacity of the two leading local cement producers, Oman Cement and Raysut Cement. The report tempered the good news though with fears that excess production capacity from neighbouring producers in nearby countries would continue to lower prices in Oman. This matches the situation Global Cement found when it visited Oman Cement’s plant in early 2015. Such was the demand-production gap that this producer sometimes imported clinker to keep its supply constant when it shutdown its kiln for maintenance.
Cement production capacity in Oman currently stands at 8.81Mt/yr according to Global Cement Directory 2016 data. The major cement producers hold most of the local market with Oman Cement’s 4.2Mt/yr plant at Rusayl and Raysut Cement’s 3Mt/yr plant at Salalah.
Raysut Cement has announced progress on a number of local projects throughout 2016 including launching a new 20,000t silo at Salalah in May 2016, building a new terminal at the Port of Duqm due to open by the end of the third quarter of 2016, installing a new 150t/hr rotary packing plant with auto truck loader for expected commissioning by the end of October 2016 and it is currently upgrading its gas supply station at Salalah, also to give cement production a boost.
This last project is of particular interest because when Global Cement visited Oman Cement the staff at the Rusayl plant were concerned about the rapidly rising price of natural gas. The plant used gas as its primary fuel and at the time of the interview in January 2015 they were considering diversifying into alternative fuels such as a tyres or using local coal instead. The issue also received a mention in the company’s first quarter report, where it attributed the rise in gas prices to a 26.8% hit in its operational profit taking it down to US$15.6m in the first quarter of 2015.
Meanwhile, both Raysut Cement and Oman Cement are in the process of building a cement plant together at Al Duqm. The latest news on this joint venture emerged in mid-August 2016 when the companies announced that they had registered Al Wusta Cement as the company designated to carry out the project. So far the plant is at the feasibility study stage with further progress to be released at a later date.
Operating in a full-capacity environment will be a dream to many cement producers around the world. However, it is not without its pitfalls from input issues such as gas supply or fighting off external competition who may want a piece of the pie. Oman's construction industry is expected to see growth of 3.4% to US$5.74bn in 2016 backed by government spending. It is there for the taking for the local producers.
Vietnam/Germany: Loesche GmbH has won an order for a new cement grinding plant in Ha Nam. The customer is Xuan Thanh Cement Joint Stock Company, a private company group (est. 1976) in Vietnam with more than 30,000 employees. In December 2015, Xuan Thanh Cement decided to invest in a new cement line from FLSmidth. Germany's Loesche GmbH, however, was chosen for the delivery of the cement mills.
After Loesche had already supplied a vertical roller mill for the first cement line in the same plant, Xuan Thanh JSC placed the order for the construction of the new grinding plants with two cement mills with Loesche once again.
During the signing ceremony, Mr Nguyen Xuan Thuy, General Director of Xuan Thanh Cement JSC, thanked Dr Thomas Loesche on behalf of the Xuanh Thanh Group. The contracting partners discussed future developments and confirmed their interest in continuing to work together on a long term basis.
The challenge of this project for Loesche lies in the integration of the new grinding plants into a cement line which is presently under construction.
The key elements of the scope of supply are two cement mills type LM 56.3+3 CS. In addition to the two cement mills, Loesche is also supplying further plant components, from the fresh material supply, the product filter and the mill fan to the finished material transport to the product silos. Loesche Automatisierungstechnik GmbH will be the supplier for the electric part and the automation of the grinding plants. Two hot gas generators type LF 20 L are designed to provide the product moisture guaranteed in case of kiln standstill. An extensive engineering package provided by Loesche will conclude the scope of supply.
Xuan Thanh cement plant will thus be fitted with state-of-the-art equipment for low energy consumption and for reduction of emission values to European standards. The lead time for the entire package is eleven months. Commissioning is forecasted for the second quarter of 2017.
Lucky Cement wins environmental award 07 September 2016
Pakistan: Lucky Cement Limited has received the 13th Annual Environment Excellence Award 2016. The awards ceremony took place on the occasion of a conference titled 'Making our cities sustainable' organised by The National Forum for Environment and Health. Provincial ministers, the Secretary of the Environment, representative of United Nations and other notables were also present on the occasion.
Pakistan records strong cement sales growth in mid-2016 despite Afghan export drop 07 September 2016
Pakistan: Total cement despatches in Pakistand during the first two months of the current fiscal year clocked up at 4.9Mt, a 14% increase from 4.3Mt recorded in same period of 2015-16. However, according to data released by the All Pakistan Cement Manufacturers Association (APCMA), overall export despatches have decreased: Exports in July-August were down almost 1% on a year-on-year basis to 1.022Mt. Overall domestic sales in August rose 21% to 3.02Mt from 2.5Mt in August 2015. Cement sales in the north zone were 2.495Mt in August, up 22.6% from a year ago. In the south zone sales recorded an increase of 13.2% at 0.532Mt from the same month of 2015.
Exports to Afghanistan dropped 12% to 346,928t in July-August on an annual basis, APCMA data shows. Exports by sea suffered even more. As opposed to 537,120t exported during the first two months of the preceding fiscal year, exports by sea in July-August 2016 were 407,120t, showing 24% decline on an annual basis.
However, increased exports to India made up for these shortfalls to some extent. Exports to India during the first two months of the current fiscal year grew 167% year on year to 268,230t.
A spokesman for the APCMA said the industry has been doubling its production capacity every seven to eight years. The buoyancy in the sector on the back of healthy domestic consumption during the last 20 months has encouraged the industry players to go for further capacity expansion. He said growth in the sector during the first two months of the fiscal year was in spite of Eid holidays. Growth of domestic consumption in August was also 'impressive,' as consistent rains failed to hurt construction activities, he added. He said upcoming projects along the China-Pakistan Economic Corridor (CPEC) will further boost cement consumption.
The industry has yet to realise its export potential due to the lack of support from the government. The loss of the Afghanistan market is a matter of concern for the industry, which has been marginalised there because of subsidised Iranian exports.
MD of Malabar Cements denied bail over irregularities but receives diagnosis and treatment 07 September 2016
India: Kerala Inquiry Commissioner and Special Vigilance Judge P. Jayachandran has denied bail to K. Padmakumar, managing director of Malabar Cements Limited, who was arrested in Palakkad on Monday 5 September by the Vigilance and Anti-Corruption Bureau (VACB) on charges of corruption and irregularity. Mr. Padmakumar is accused of irregularities in fixing dealers for the products of the cement company located at Walayar in Palakkad.
The judge also remanded him in judicial custody till Friday 9 September on the condition that he must be subjected to expert treatment at Government Medical College Hospital here for acute diabetes, after he was diagnosed with acute diabetes during medical examination at the district hospital. The doctors there also recommended his admission to the medical college hospital for specialised treatment and observed that he was not physically fit for custodial interrogation, at least for the time being.
In his bail plea, Mr. Padmakumar had contended that whatever actions he had taken as the managing director of the company were in accordance with collective decision and approval of the director board.