Oman Cement Company: MEED Assessment

10 November 2009

The firm is growing its profits and expanding capacity despite the downturn and increasing competition

Oman Cement Company in numbers

2.07 million tones - Production in 2008

4.63 million tones - Forecast cement demand in Oman in 2009

OR16.9m - Net profits at the end of the third quarter of 2009

Source: Oman Cement Company

At the end of the third quarter of 2009, Oman Cement’s net profits were OR16.9m, an increase of 56 per cent on the OR10.8m profit made in the same period in 2008. The company attributes the increase to higher cement prices since June 2008, as well as a 10 per cent rise in sales volumes. Oman Cement increased prices by OR4 a 50 kilogramme bag to OR30 a 50kg bag over the period.

Looking ahead, competition is likely to increase for the company as a result of growing investment in the Gulf cement sector. With only one other producer in the country, Oman Cement has focused its attentions on the domestic market, which accounts for more than 96 per cent of its cement sales, at 2,072,178 tonnes in 2008.

Oman’s only other cement producer is the larger Raysut Cement in Dhofar governorate, which undertook a major expansion three years ago, and has a capacity of 2.4 million t/y of clinker and 2.7 million t/y of cement.

“The small size of the Omani project market should ensure the cement sector remains robust”

But supply will be boosted in 2010 with a new cement plant currently under construction in the Governorate of Buraimi. Al-Madina Cement Company will be the sultanate’s third cement company. 

The project has production capacity of about 2,500 tonnes a day, or 912,500 t/y, of cement. The new plant will supplement domestic cement production capacity in a market in which demand for cement continues to grow by 10-12 per cent a year, despite the economic slowdown.

The company’s outlook for cement demand remains positive, and it says it will continue to procure clinker from regional producers to produce additional cement to meet demand.

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