Saudi cement plant to be delayed by six months

09 March 2010

The $250m Al-Bayan facility in Riyadh is yet to get the go-ahead

A $250m cement plant planned for Saudi Arabia will be delayed for at least another six months, a source close to the project tells MEED.

The source says the 1.8 million tonnes-a-year plant, due to be built by Al-Bayan Cement in Riyadh, had still not received the go ahead due to a number of factors currently affecting the cement market in the kingdom (MEED 26:6:09)     

“The project is still delayed and I think it will be that way for another six months at least,” says the source. “Demand is not the same [in Saudi Arabia] as it was two or three years ago and that is affecting the decision.”

The source adds the cement market in the kingdom was oversupplied due to two or three major manufacturers entering the market. “These companies have entered the market recently and the extra competition has also affected the decision.”

New competition in the cement market could also affect any future plans to build the facility. “It may do, but it will mostly be down to demand in the market and the export ban on cement being lifted,” says the source.

The decision by Saudi Arabia to ban cement exports has eaten into the profits of local cement companies. Cement suppliers from the kingdom have seen their bottom lines hit due to lost revenues on exporting cement to neighbouring countries in the Gulf.

Rival firms from India and Pakistan have been the major beneficiaries of the ban as they have stepped in to fill the gap in supply.  

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