Al-Ahsa scheme joins list of delayed cement plants in Saudi Arabia

16 March 2010

Hofuf facility due to be built in the Eastern Province will delayed until late 2010

A cement plant due to be built by Al-Ahsa Development Company at Hofuf in the Eastern Province of Saudi Arabia is still on hold until at least the third quarter of 2010.

Ali Abdullah Al-Hasoun, chief executive officer, Al-Ahsa, tells MEED the proposed $320m, 1.8 million tonnes-a-year (t/y) facility will still be built, but the company wants to wait until the cement market improves in the kingdom.

“The project is on hold, but we are hoping to resurrect it by the third or fourth quarter of 2010,” Al-Hasoun says. “We are looking at the [financial] situation and at the moment it is not as good as we hoped for. It’s a lot of money so we need to make the right decision.”

The construction period for the plant will be 30 months. No tenders will be issued until the project is awarded a licence and land is allocated by the Ministry of Petroleum and Minerals.

Several cement projects across the kingdom are currently on hold due to reasons ranging from a lack of land allocation, over-supply in the market and restricted export opportunities.

The Labuna Cement Plant, a joint venture between the local manufacturer Arabian Cement Company and the Italian giant Italcementi is also on hold. The 2.75 million t/y plant, due to be built in the Western Province of the kingdom, still shows no signs of progress.

“The agreement [between the joint venture partners] is still in place and studies are being carried out,” a source says.

Both the $250m, 1.8 million t/y plant, due to be built by Al-Bayan Cement in Riyadh and the 1.2 million t/y Jizan facility being built by the Gazan Agricultural Development in the south west of the kingdom are also on hold (MEED 10:3:10).

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