Tabuk Cement Company is to buy another cement mill from Germany to boost its output by 75%.
The Saudi manufacturer, which produces the material from the northern city of Tabuk, signed a SAR218.73m (US$58.3m) contract with an as-yet unnamed supplier for mechanical and electrical works, design of civil works, metal structures and fixtures, and test operations to increase operations to 4000tpd.
The duration of the contract is 20 months, the company told investors through the stock exchange yesterday, and will be self-financed. The financial impact of the purchase will appear in third-quarter results, it added.
Tabuk Cement, one of nine publicly-listed cement companies, saw net profit rise 21% to SAR41.2m in the first quarter from SAR34m the previous year on the back of stronger sales. Revenue increased 13.2% to SAR87m from SAR77.11m in last year’s first quarter.
Listed cement companies have seen strong rises in sales on the back of a construction boom in Saudi Arabia, spurred by high government spending on building, infrastructure and airports.
The country has put strict export criteria on its cement companies in an effort to maintain local supply, although Tabuk Cement is one of a few main Saudi exporters to Iraq.
Tabuk Cement shares remained static yesterday at SAR24.2.