Oman Cables Industry (OCI), the leading manufacturer of electric cables and wires in the Middle East, posted a 53 per cent growth in net profit for the first half of this year. The company, in a disclosure to the Muscat Securities Market (MSM) on Tuesday, added that it has drawn up a RO7mn expansion plan for 2012.
In the directors' report to shareholders, OCI said it will invest RO7mn towards capital expansion and upgradation which includes setting up a new manufacturing facility and a 'world class' product reliability test centre in Rusayl.
The report said, "The new manufacturing facility will be for a broader range of products to complete OCI's full range of low-voltage power cables.
"The construction of the factory will commence shortly and will be completed by the end of this year.
"The reliability test centre facility, to be completed in the fourth quarter this year, is the first of its kind in the GCC and MENA to facilitate enhanced testing capabilities."
Although first-half net profit grew to RO4.6mn, falling copper prices meant sales turnover of OCI dropped 16.1 per cent to RO112.1mn for the six-month period ended June 30, 2012.
However, the company expects improved sales growth in the second half of the year as demand for OCI products remains in line with long-term growth in infrastructure-project executions, and the inflow of orders for deliveries in the second half will ensure better capacity utilisation.
"The decreasing trend of sales witnessed during the end of 2011, continued in the first half of 2012, due to the slowdown in off-take related to the utility segment as well as delays on infrastructure-project executions. However, there was a positive shift in product mix and healthy orders were captured from major EPC customers that enhanced profitability."
Production at company subsidiary Oman Aluminium Processing Industries LLC (OAPIL), a joint venture between OCI and Takamul Investment, is also set to grow 'substantially' after shareholders 'in principle approved the expansion of production capacity substantially,' according to the report.
"This expansion is subject to a feasibility study which is in progress and will allow OAPIL to capture a larger share of the global aluminium rod demand which is currently buoyant being driven by closures of similar plants in first world countries," it added.
© Muscat Daily 2012
