Cement sales by the Sultanate’s two principal cement manufacturers grew by significant margins during the first half of this year, underscoring the construction sector’s pivotal role in sustaining the economy through the current global downturn. Half yearly financial results released by Oman Cement Company and Raysut Cement Company in recent days show increases averaging 17.5 per cent in cement sales during the first half of this year, compared to figures for the corresponding period last year.
"It has been business as usual where cement sales are concerned this past six months," an industry executive commented to the Observer. "Demand has been growing by 10-12 per cent, with all segments of the building construction sector continuing to perform well. In particular, ongoing infrastructure projects of the government have helped maintain the momentum of cement consumption."
Oman Cement and Raysut Cement account for almost all of the Sultanate’s domestic cement requirements, although small quantities of bagged cement are imported by road from the United Arab Emirates or via Oman’s commercial ports.
Releasing its financial results for the half year ended June 30, 2009, Oman Cement announced a 17.35 per cent increase in cement sales, which jumped to 1.133 million metric tonnes during this period from 0.9966Mt during the same period last year. This year’s volumes also included 89,794t of cement that was imported to meet the domestic demand. The growth in cement sales boosted revenues by 32.1 per cent to RO 35.549m during the first half of this year, from RO 26.902m during the same period last year.
Net profit after tax jumped a hefty 46 per cent to RO 11.178m this year, as against RO 7.642 million during the corresponding period last year. "The demand for cement in Oman continues to remain at a high level. This situation is expected to continue in the near future. In order to meet the demand for cement, the company is continuing to procure clinker to produce additional cement. The average price of imported clinker is expected to be lower in 2009 as against the 2008 prices," Qahtan bin Yarub al Busaidy, Chairman of Oman Cement imported 242,696 tonnes of clinker to supplement its own production of 602,220 tonnes during the first half of 2009. Total cement produced rose seven per cent to 1,028,808 tonnes this year, as against 961,563 tonnes during the first half of 2008. Raysut CementRaysut CementLoading... too posted similarly upbeat sales results for the first half of 2009. Domestic cement sales climbed 18.3 per cent to reach 1.581Mt. Exports during this period amounted to 352,654t, taking the company’s total deliveries of cement to 1.581 million tonnes this year, as against 1.395 million tonnes during the corresponding period of 2008.
While clinker production fell slightly on account of kiln maintenance shutdowns, cement production was lower by 30.6 per cent to 1.026Mt this year because of planned maintenance and rehabilitation works on some of the plant’s cement grinding cements. The shortfall was made good through imports amounting to 724,368t of cement. "Going forward, despite the negative factors affecting the economy, we expect that the measures taken by the Sultanate to inject more liquidity through the banking system will ease the impact of the crisis and achieve sustained economic development over the whole year.
We therefore project demand for cement to continue growing albeit at a slower rate of 6-8 per cent for the financial year, and Raysut Cement will continue its efforts to meet the demand of the market," Mohammed bin Alawi Ali Muqaibal, Chairman of Raysut Cement stated.