Structure

After Saudi Arabia became the first cement producer in the region in 1955, it took another 23 years before Oman’s Commerce & Industry Ministry established a cement plant in 1978.

This venture, Oman Cement Company, was established as part of Omani ruler Sultan Qaboos bin Said al-Said’s efforts to create a domestic cement production capacity to supply Oman’s ongoing infrastructure modernisation and economic development.

Originally 100 per cent state-owned, the government reduced its share holding in Oman Cement to 63 per cent in 1993 through a public offering of shares on the Muscat Securities Market.

In 2003, the government divested a further 12 per cent of its holding, reducing its share to 51 per cent. This is split between the Commerce & Industry Ministry, which holds 30.43 per cent, and the Finance Ministry, with a holding of 20.57 per cent. Private individuals and companies hold a combined 20.64 per cent stake in the company.

Operations

Oman Cement employs about 700 staff at its production facilities at Rusayl, 60 per cent of whom are Omani.

The company produces ordinary Portland cement and sulphate-resistant cement. New markets for oil well cement classes A and G, used in the construction of deep oil wells, have also been developed. These products are sold locally and exported to other GCC countries, as well as Yemen, Sudan, Pakistan, Syria, Iraq, India and Turkmenistan.

The Rusayl plant was commissioned in 1983 with an initial clinker capacity of 600,000 tonnes a year (t/y). Clinker is the solid material formed into lumps at the kiln stage of the cement manufacturing process. It is then ground and gypsum is added to produce Portland cement. With the excep-tion of bauxite, all the raw materials required for the production of clinker are available locally. Gypsum is mined at Ghaba, in Oman’s Wusta region. Other feedstocks, such as limestone deposits, are mined in the vicinity of the plant.

In 1998, clinker production capacity was doubled to 1.2 million t/y with the construction of a new plant at the same site at a cost of $100m. In the same year, a 30MW power station was built to supply the new plant and the existing one.

In 2006, Oman Cement installed a 3,000 tonne-a-day (t/d), cement-grinding mill at Rusayl. Ongoing work on an expansion project to double clinker production capacity to 2.4 million t/y is expected to be completed in the first quarter of 2010.

Clinker production in 2009 is running at 97 per cent capacity, with Oman Cement producing 873,285 tonnes by the end of September.

With 1,578,081 tonnes of cement produced in the first nine months of 2009, the company is well on its way to exceeding its 2008 production figure of 1,735,272 tonnes.

In 2008, local demand was such that Oman Cement had to import additional clinker and 264,728 tonnes of cement. The imports were purchased under directions from the government and the company says it will be making a claim against the government in the current financial year for reimbursement for the shortfall in profits due to import costs below a base level of OR16.1m ($41m) after tax.

Ambitions

An upgrading and modernisation project at the company’s packing plant at Rusayl is expected to be completed by the end of 2009. The contract, worth $162m, was awarded at the end of 2007 to China National Building Material Equipment Corporation, a subsidiary of China National Material Industry Group.

Oman Cement will expand its operations again next year, when it brings on line a new clinker production line with a capacity of 4,000 t/d, or 2.4 million t/y. Construction is under way and the project is expected to be completed by the end of April 2010.

Oman Cement is using loans to partially finance the installation of the new production line. Loans provided by an unnamed local bank constitute OR20m of the project cost, while the balance is financed by the company’s available surpluses.

On the feedstock side, Oman Cement is developing a new limestone quarry, with estimated reserves of 50 million tonnes.