Gazan Agricultural Development said it plans to build a SR1.1bn ($293m) cement plant, the latest in a series of such projects amid a surge in demand in Saudi Arabia. Shares in the company soared by nearly the 10 per cent daily limit to SR53.50 after the announcement.
The company said the trade and industry ministry gave its approval to the plant which will have a production capacity of 1.5Mta.
’The firm will finalise procedures for other approvals with the oil and mining ministry and will discuss the financing plan (of the project) in the upcoming meeting of its board,’ Gazan said in a statement.
Saudi Arabia is pressed to raise cement production to cope with a real estate boom and huge infrastructure projects. Authorities are licensing new firms to invest SR21.6bn to treble annual production to up to 70 million tonnes.
Last month saw the announcement of plans for two new cement firms that will invest more than SR2 billion in two plants projected to produce 3 million tonnes each.
Some of the eight existing cement firms, producing an annual 23Mt, are seeking to raise their output to defend their turf against new comers.
Yanbu Cement said this month it plans to raise its annual output by 75 per cent to 7Mt by next year.