The newly established Riyadh Cement Company (RCC) has awarded a major turnkey contract to China's Sinomafor the construction of a greenfield cement plant near the capital. It is Sinoma's second turnkey contract award in the kingdom (MEED 29:4:05).

Under the $170 million deal, Sinoma will build a cement plant with capacity of 1.6 million tonnes a year (t/y) of clinker and 1.7 million t/y of cement. Sinoma will also build packaging and other related facilities. Some key equipment for the cement and clinker lines will be sourced by Sinoma from European and Japanese manufacturers.

'We will produce the first clinker in March 2007, 24 months after we signed the contract with Sinoma,' says RCC project manager Naseer Uddin Siddiqui. 'Commercial production will begin two months later.'

The new cement plant will receive energy from a crude oil-fired, 50-MW power plant to be built at the RCC site, which will be located about 75 kilometres southwest of Riyadh in Muzahimiya. Evaluation of bids from several international firms for the construction of the power plant is ongoing, with an award expected in May. Completion is due by the end of 2006. A separate of the unit contractor will be appointed to build housing facilities for the 300 employees. The total value of the project is SR 1,100 million ($293 million).

Raw material for clinker and cement production such as limestone, shale, iron ore, gypsum and sand will be sourced locally.

RCC was formed in late March and has three major shareholders - Prince Faisal bin Abdul Majeed Group,the local Al-Yamama Groupand the local Rashed al-Rashed & Sons Group. The consultant on the project is Holtec of India.

The project is the latest in a series to be tendered by local producers as they attempt to meet a surge in cement demand. The kingdom's domestic cement consumption rose by 8 per cent to 25.1 million t/y last year; the existing eight cement companies produced more than 24 million tonnes of cement, and the remainder was imported (MEED 28:1:05).