22 April 2013
Muscat: The board of directors of Al Anwar Ceramic Tiles (AACT) has approved a proposal to set up its sixth production line, subject to allotment of natural gas by Oman government. The proposed expansion, with an envisaged capital expenditure of OMR6 million, is close on the heels of an ongoing work for fifth production line with a capacity of four million square metres per annum.
Fifth production line
The fifth production line is expected to come on stream in the first quarter of 2014, taking the total capacity to about 18 million square metres per annum. A Shamsuddin, Managing Director of AACT, said the sixth production line will have an installed capacity of 3.5 million square metres per annum. "We need around 25,000 cubic meters of gas per day for proceeding with the expansion," added Shamsuddin. An application for natural gas has already been submitted with the government. Shamsuddin also said that for the fifth production line, which is under construction, the company would divert natural gas currently used for body preparations by applying dry-grinding technology -- an energy efficient body preparation process.
The capital expenditure for the fifth production line is envisaged at OMR5 million, which will be met through internal accruals. "We have already finalised the major machinery contracts (for the fifth production line. We expect this line to come on stream in March, 2014," according to Hussain Ali Habib Sajwani, chairman of the company in the quarterly financial statement.
With all the four production lines operating at full capacity, the company expects its production to be about 14.5 million square meters this year and remains very optimistic about the prospects for the financial year 2013. "We remain focused on improving out cost competitiveness, which remains the cornerstone of our strategy," he added further.
The capital expenditures for proposed expansion projects can be funded through internal accruals and the company believes that these, when completed and fully utilised in the next five years, will have the potential to double profit.
The company has achieved a pre-tax profit of OMR2.50 million in the first quarter of 2013, signifying a 38 per cent growth over the previous year. The net profit after tax stands at OMR2.20 million.
During the first quarter, Al Anwar produced 3.64 million square meters of tiles. "All four production lines are operating at peak capacity. Through better asset utilisation and continuous improvement programmes we have been able to enhance throughput and yield," added Sajwani.
Gross sales revenue during the first quarter increased by 35 per cent to OMR6.95 million. "We are very satisfied with our sales performance in Oman, where Al Shams has established itself as the leading brand of ceramic tiles."
Additional brands planned
The company is in the process of launching additional brands Al Najim, Al Qamr and Al Shams Gold with a view to address different price points in the Gulf Cooperation Council (GCC) market. "We believe that this will enable greater market penetration and help us to grow at a rate faster than the organic market growth," noted the chairman.
Al Anwar is also in the process of forming the joint venture company for manufacturing frits. "We expect the company formation to be completed by end of April, after which we will approach the government for the natural gas allocation," Sajwani added.
Muscat: The board of directors of Al Anwar Ceramic Tiles (AACT) has approved a proposal to set up its sixth production line, subject to allotment of natural gas by Oman government. The proposed expansion, with an envisaged capital expenditure of OMR6 million, is close on the heels of an ongoing work for fifth production line with a capacity of four million square metres per annum.
Fifth production line
The fifth production line is expected to come on stream in the first quarter of 2014, taking the total capacity to about 18 million square metres per annum. A Shamsuddin, Managing Director of AACT, said the sixth production line will have an installed capacity of 3.5 million square metres per annum. "We need around 25,000 cubic meters of gas per day for proceeding with the expansion," added Shamsuddin. An application for natural gas has already been submitted with the government. Shamsuddin also said that for the fifth production line, which is under construction, the company would divert natural gas currently used for body preparations by applying dry-grinding technology -- an energy efficient body preparation process.
The capital expenditure for the fifth production line is envisaged at OMR5 million, which will be met through internal accruals. "We have already finalised the major machinery contracts (for the fifth production line. We expect this line to come on stream in March, 2014," according to Hussain Ali Habib Sajwani, chairman of the company in the quarterly financial statement.
With all the four production lines operating at full capacity, the company expects its production to be about 14.5 million square meters this year and remains very optimistic about the prospects for the financial year 2013. "We remain focused on improving out cost competitiveness, which remains the cornerstone of our strategy," he added further.
The capital expenditures for proposed expansion projects can be funded through internal accruals and the company believes that these, when completed and fully utilised in the next five years, will have the potential to double profit.
The company has achieved a pre-tax profit of OMR2.50 million in the first quarter of 2013, signifying a 38 per cent growth over the previous year. The net profit after tax stands at OMR2.20 million.
During the first quarter, Al Anwar produced 3.64 million square meters of tiles. "All four production lines are operating at peak capacity. Through better asset utilisation and continuous improvement programmes we have been able to enhance throughput and yield," added Sajwani.
Gross sales revenue during the first quarter increased by 35 per cent to OMR6.95 million. "We are very satisfied with our sales performance in Oman, where Al Shams has established itself as the leading brand of ceramic tiles."
Additional brands planned
The company is in the process of launching additional brands Al Najim, Al Qamr and Al Shams Gold with a view to address different price points in the Gulf Cooperation Council (GCC) market. "We believe that this will enable greater market penetration and help us to grow at a rate faster than the organic market growth," noted the chairman.
Al Anwar is also in the process of forming the joint venture company for manufacturing frits. "We expect the company formation to be completed by end of April, after which we will approach the government for the natural gas allocation," Sajwani added.
© Times of Oman 2013
