$250mln Duqm project on hold: Oman Cement

Oman Cement posted revenues of $29.7mln for the first quarter of 2021

Majority government-owned Oman Cement Company has announced that it has paused plans for the development of a major cement project at the Special Economic Zone (SEZ) in Duqm pending confirmation of fuel supply for the estimated $250 million venture.

The announcement also comes amid moves being weighed by Oman Cement to expand the capacity of its flagship plant at Misfah near Muscat.

“(The) company's decision to set up a new cement plant at Duqm with a capacity of 5,000 TPD (tons per day) of clinker has currently been put on hold pending confirmation of availability of fuel and its strategic decision to expand capacity of the existing plant at Muscat,” said Dr Abdullah Abbas Ahmed, Chairman of the Board of Directors, in the company’s Board of Directors’ report for the quarter ended March 31, 2021.

Last year, the MSX-listed company unveiled plans for the modernisation and expansion of its 3.6 million tons per annum (tpa) capacity plant at Misfah. To this end, the company had commissioned a consultant to study and recommend measures to address production bottlenecks in the existing plant.

“The recommendations are under implementation and company has floated tenders for appointment of an EPC contractor. Evaluation of offers received from EPC contractors is completed. (However), as the company has engaged a consultant to carry out pre-feasibility study for new cement plant within OCC, this project has been kept under hold,” said the Chairman.

Also kept in abeyance is a decision to install a waste heat recovery unit within its existing power plant to help achieve a higher level of energy efficiency in operations. This initiative “has been put on hold pending further confirmation of gas availability for the company's Capacity Expansion Plan”, the Chairman stated.

Nevertheless, a proposal to use waste tyres as an alternative source of fuel for cement production is going ahead, according to Dr Abdullah Abbas. “To promote use of alternative energy, the company had carried out a feasibility study for utilizing waste tyres as an alternate fuel, and the project consultant and the EPC contractor have also been appointed and the project work is expected to commence soon,” he stated.

Oman Cement posted revenues of RO 11.424 million for the first quarter of 2021, which was 16.29 per cent lower than earnings or RO 13.647 million for the corresponding quarter of 2020. Profit after tax declined 33.26 per cent to RO 0.753 million for the quarter, down from RO 1.128 million for Q1 2020.

The government’s 51 per cent stake in Oman Cement, the country’s first cement manufacturer, is held by Oman Investment Authority (OIA), the integrated sovereign wealth fund of the Sultanate.

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