Oman Cement aims to bring a new clinker line into operation in the second quarter of this year. The project, involving an investment of OMR62.7m, will boost the company’s clinker production capacity by 4000tpd. Last week, the company announced a 93.2 per cent jump in profit before tax of OMR27.363m during fiscal 2009, against earnings of OMR14.109m a year earlier.
Qahtan bin Yarub al Busaidy, Chairman of the Board of Directors, attributed to increased earnings to higher price realisations during 2009, as well as lower procurement costs of imported clinker, discontinuation of cement imports, and increased investment income. Cement production during 2009 rose 3.6 per cent to 2.075 million metric tons, as against output of 2.003 million tons in 2008. The company produced 1.161 million tons of clinker during the year, as against 1.182 million tons produced in 2008.
Clinker imports however slumped 28.8 per cent to 656,887t last year, from 922,343t in 2008. Cement sales during 2009 increased slightly to 2.178Mt in 2009 from 2.153Mt a year earlier. In value terms, 2009 sales yielded revenues of OMR68.284m, which was 7.5 per cent higher than earnings of OMR63.522m in 2008. "This increase is due to the increase in the volume of sales and improvements in the average selling price of cement, as compared to the average selling price during the year 2008," the Chairman stated.
Strong domestic demand for cement allowed prices to remain stable throughout 2009. But increasing cement supplies at low prices from neighbouring countries threatens to put prices under stain, said Al Busaidy. Commenting on the outlook for this year, the Chairman stated: "The demand for cement in Oman for the year 2010 as part the report of a study done for the company indicated a marginal decline over the 2009 level.
The new production line, which is expected to be in operation in the second quarter of 2010, will help the company reduce the procurement level of imported clinker, thereby resulting in a major cost reduction."
Source: Oman Daily Observer