JV cements Fujairah deal

23 September 2005
A joint venture of the Fujairah government, Dubai Investment Group (DIG), a subsidiary of Dubai Holding,and Egypt's Orascom Construction Industries (OCI)announced on 12 September plans to build a new grassroots cement plant in Fujairah. The project is the latest planned in the local cement sector as producers look to meet rising demand (MEED 2:9:05).

The integrated facility will have capacity of 3,000 tonnes a day (t/d). The project company will be known as Emirates Cement Companyand will be managed and operated by OCI. Denmark's FL Smidth has been selected for equipment supply and process design, while OCI will act as the main contractor. On-site work has begun, with the facility expected to be operational by the third quarter of 2007.

Located in the Hast al-Bana area, total investment in the plant is estimated at about $360 million. The project is likely to be financed through a 60:40 debt/equity split.

Elsewhere, Star Cement, a subsidiary of Dubai-based ETA-Ascon, has shortlisted three contractors for the estimated $120 million lump-sum turnkey (LSTK) contract to build a greenfield integrated cement plant in Ras al-Khaimah (RAK). The three firms in the running are the Indian offices of FL Smidth, KHD Humboldt Wedagand Polysius. An award is expected by the end of September.

The proposed facility will see the installation of a 5,500-t/d clinker line and new crushing facilities. India's Holtecis the consultant on the 21-month contract.

Work has also started on a new plant in the Al-Ghail area of Ras al-Khaimah. Pioneer Cement Industries (PCI), a joint venture of the RAK Gas Commission and India's Penna Cement Industries, has selected FL Smidth India to supply equipment for the plant and provide technical services. Penna's construction arm is carrying out the civil works. Total project costs are estimated at about $120 million, to be financed through a combination of debt and equity.

The plants are the latest in a bid to increase the federation's cement capacity. Expansion plans are under way at Union Cement Company (UCC)to build a new clinker plant in Ras al-Khaimah's Khor Khuwair industrial area, while Jebel Ali Cement Factoryis also close to finalising a location for an estimated AED 710 million ($193 million) scheme to build new cement and clinker facilities.

Capacity across the federation is set to increase by 3 million-4 million tonnes a year (t/y) by 2007 from the current 11 million t/y.

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