Egypt’s Orascom Construction Industries said on Tuesday it had agreed to a joint venture with the Saudi Khayyat Group to construct a greenfield cement plant in the kingdom for up to $360m.
OCI said in a statement that the plant, to be built in western Saudi Arabia about 140km (85 miles) from Jeddah, would initially have capacity of 1.4Mt, with an option to upgrade production capacity to 2Mta.
The firm said the plant would raise OCI’s total annual cement capacity to 36Mt by early 2009. It said the partnership was a 50-50 joint venture with Khayyat, an industrial investor with interests in building materials and real estate.
OCI said the plant was expected to begin operations during the first quarter of 2009, and site preparation work was already under way.
"Saudi Arabia is a fast growing market which fits our target market profile. We expect the Saudi market to consume approximately 34 million tonnes during 2007 driven by sizable infrastructure investments, favourable demographic trends and noticeable energy advantages," OCI’s chief executive Nassef Sawiris said in a statement. "We expect healthy cement consumption growth in the western region markets that will be primarily served by the new plant, bolstered by such large-scale projects as the King Abdullah City which offer promise of sustainable growth," he added.
King Abdullah Economic City is the single largest private investment ever made in the world’s top oil exporting nation.