12 June 2013
Muscat: One of the cement grinding mills of Oman Cement Company (OCC) with a production capacity of 150 tonnes per hour has developed a major technical problem and has been shut down for repairs.
An inspection by the technical expert from the manufacturer has indicated that the required spare parts for carrying out the repairs will be available in about 14 weeks time, said a company release posted on Muscat Securities Market (MSM) website.
"The company has also approached alternate sources for carrying out repairs at a shorter period and their response is awaited." While Oman Cement is taking all possible steps to maximise its available production capacity from other cement mills and look for possible ways to reduce the down time required for maintenance, it is expected that the company's production will be lower by about 360,000 tonnes during the period of June to September 2013, if it has to go as per time estimate of the manufacturer.
However, Oman Cement will make efforts to compensate this shortfall by better utilisation of grinding facility during this period and the period subsequent to the repair along with other measures to improve its profitability. "We expect OCC to import cement to make up the shortfall, and management is also planning to raise utilisation level of the company's other three cement grinding facilities, which would further reduce the impact of losses from the breakdown. Nevertheless, management will also approach its insurance provider for compensation for the breakdown," said EFG Hermes in a note.
"Overall, we expect the cement mill downtime to have a negative impact on our 2013 estimates (we were expecting cement production of 2.49 million tonnees in 2013) and to have a marginal impact on our valuation."
Muscat: One of the cement grinding mills of Oman Cement Company (OCC) with a production capacity of 150 tonnes per hour has developed a major technical problem and has been shut down for repairs.
An inspection by the technical expert from the manufacturer has indicated that the required spare parts for carrying out the repairs will be available in about 14 weeks time, said a company release posted on Muscat Securities Market (MSM) website.
"The company has also approached alternate sources for carrying out repairs at a shorter period and their response is awaited." While Oman Cement is taking all possible steps to maximise its available production capacity from other cement mills and look for possible ways to reduce the down time required for maintenance, it is expected that the company's production will be lower by about 360,000 tonnes during the period of June to September 2013, if it has to go as per time estimate of the manufacturer.
However, Oman Cement will make efforts to compensate this shortfall by better utilisation of grinding facility during this period and the period subsequent to the repair along with other measures to improve its profitability. "We expect OCC to import cement to make up the shortfall, and management is also planning to raise utilisation level of the company's other three cement grinding facilities, which would further reduce the impact of losses from the breakdown. Nevertheless, management will also approach its insurance provider for compensation for the breakdown," said EFG Hermes in a note.
"Overall, we expect the cement mill downtime to have a negative impact on our 2013 estimates (we were expecting cement production of 2.49 million tonnees in 2013) and to have a marginal impact on our valuation."
© Times of Oman 2013
