Riyadh-based Umm al-Qura Cement Company has received regulatory approval for an initial public offering (IPO) on the Saudi Stock Exchange (Tadawul).

The firm plans to raise SR275m ($73.3m) by selling 50 per cent of its share capital at SR10 a share. Subscription will start on 29 April and end on 5 May.

The cement supplier was established in 2013 in order to address the kingdom’s growing cement needs, which led to a shortage in April 2013, when the kingdom had to import 10 million tonnes of cement.

A subsequent slowdown in the kingdom’s construction sector led to a drop in cement companies’ sales volumes at the end of 2013 and allowed them to build up their inventories again. Sales slowed to 3 per cent in 2013, the lowest growth in seven years, as the strong enforcement of Saudisation led to many construction projects being put on hold.

Activity is expected to pick up again in the second quarter of 2014, once the labor minister implements a new system that will allow construction firms to hire new foreign labourers.

With a huge pipeline of infrastructure schemes, local cement demand is predicted to grow 9.4 per cent to top 80 million tonnes a year (t/y) by 2017, according to US-based CW Group, a global cement industry consultancy.