01 March 2011
MUSCAT: Raysut Cement is commissioning a new cement grinding unit with an annual capacity of 750,000 tonnes per annum, which will take the total production capacity of Raysut plant to three million tonnes, a senior company official told Times of Oman from Salalah.
"We have already started commissioning the plant (trial run). This will take our total capacity to three million tonnes per annum," said Mohammed Ahmed Al Dheeb, chief executive of Raysut Cement.
If the installed capacity of Pioneer Cement is included, the group has a total capacity of over 4.7 million tonnes per annum, making it one the largest cement producers in the Gulf region. The UAE-based Pioneer Cement was recently acquired by Raysut for $172 million.
Raysut Cement expects the demand for cement in the country to increase by another 1.5 million tonnes this year, thanks to huge investment in infrastructure projects announced by the government.
"The multi-speed recovery of the construction sector in Oman is expected to continue on the background of the improving economic environment, thanks to sound fiscal and monetary policies, low inflation, reduced systemic risk in the financial system and the RO6 billion investment in infrastructure projects for 2011 just announced by the government," stated Mohammed bin Alawi bin Ali Muqaibal, chairman of the company stated in his director's report.
Export market
Strengthening of market base in the export market along with the surge in demands in certain East African markets are also expected aid the growth in demand.
The cement demand last year grew 7.5 per cent, supported by the government initiatives on infrastructure projects and as business confidence continued to improve. "However, these brightening prospects in Oman have been overshadowed by the plummeting sales in the neighbouring UAE, on the back of the worst economic contraction witnessed in decades. The consequence of this was an over supply situation of about six million tonnes of cement in 2010 in that country. As a last resort, the main UAE suppliers started off loading their product into Oman," he added.
This resulted in a severe deterioration of cement prices in Oman in the order of magnitude of 25 per cent compared to previous year. Further, cement sales in Yemen slumped by a full 8.8 per cent in 2010, in the background of slow economic recovery.
In spite of severe competition in the local markets as well as in export markets, the company managed to sell 2.49 million tonnes of cement and clinker last year, against 2.92 million tonnes in the previous year.
Severe competition driven lower volume and lower realization resulted in lowering the revenue of the company, which went down to RO64.98 million from RO89.35 million in the previous year.
Raysut last year formed a 100 per cent subsidiary -- Raybulk Navigation -- which has procured a new ship to bring in more synergy in distribution of cement of the company. The ship will become operational this year.
In alignment with its long-term strategy to expand beyond the local limit and be a regional player by catering to the larger domestic and export demands, the company has acquired Pioneer Cement Industries, located at Ras Al Khaima in the UAE. This will enable the company to have a foothold in UAE with additional capacity of 1.7 million tonnes of cement catering to the needs of export markets and local markets. This will also help in releasing larger volume of cement from the company's plant in Salalah to markets in the south and in the central part of Oman as well to various exports markets.
MUSCAT: Raysut Cement is commissioning a new cement grinding unit with an annual capacity of 750,000 tonnes per annum, which will take the total production capacity of Raysut plant to three million tonnes, a senior company official told Times of Oman from Salalah.
"We have already started commissioning the plant (trial run). This will take our total capacity to three million tonnes per annum," said Mohammed Ahmed Al Dheeb, chief executive of Raysut Cement.
If the installed capacity of Pioneer Cement is included, the group has a total capacity of over 4.7 million tonnes per annum, making it one the largest cement producers in the Gulf region. The UAE-based Pioneer Cement was recently acquired by Raysut for $172 million.
Raysut Cement expects the demand for cement in the country to increase by another 1.5 million tonnes this year, thanks to huge investment in infrastructure projects announced by the government.
"The multi-speed recovery of the construction sector in Oman is expected to continue on the background of the improving economic environment, thanks to sound fiscal and monetary policies, low inflation, reduced systemic risk in the financial system and the RO6 billion investment in infrastructure projects for 2011 just announced by the government," stated Mohammed bin Alawi bin Ali Muqaibal, chairman of the company stated in his director's report.
Export market
Strengthening of market base in the export market along with the surge in demands in certain East African markets are also expected aid the growth in demand.
The cement demand last year grew 7.5 per cent, supported by the government initiatives on infrastructure projects and as business confidence continued to improve. "However, these brightening prospects in Oman have been overshadowed by the plummeting sales in the neighbouring UAE, on the back of the worst economic contraction witnessed in decades. The consequence of this was an over supply situation of about six million tonnes of cement in 2010 in that country. As a last resort, the main UAE suppliers started off loading their product into Oman," he added.
This resulted in a severe deterioration of cement prices in Oman in the order of magnitude of 25 per cent compared to previous year. Further, cement sales in Yemen slumped by a full 8.8 per cent in 2010, in the background of slow economic recovery.
In spite of severe competition in the local markets as well as in export markets, the company managed to sell 2.49 million tonnes of cement and clinker last year, against 2.92 million tonnes in the previous year.
Severe competition driven lower volume and lower realization resulted in lowering the revenue of the company, which went down to RO64.98 million from RO89.35 million in the previous year.
Raysut last year formed a 100 per cent subsidiary -- Raybulk Navigation -- which has procured a new ship to bring in more synergy in distribution of cement of the company. The ship will become operational this year.
In alignment with its long-term strategy to expand beyond the local limit and be a regional player by catering to the larger domestic and export demands, the company has acquired Pioneer Cement Industries, located at Ras Al Khaima in the UAE. This will enable the company to have a foothold in UAE with additional capacity of 1.7 million tonnes of cement catering to the needs of export markets and local markets. This will also help in releasing larger volume of cement from the company's plant in Salalah to markets in the south and in the central part of Oman as well to various exports markets.
© Times of Oman 2011
