Yanbu Cement’s Q3 profit lifted by higher sales volume, demand: CEO

Ali Al-Ayed, CEO of Yanbu Cement Co.

Yanbu Cement Co.’s profit growth in Q3 2024 was driven by an increase in sales volumes on higher demand for the company’s products, thanks to their high quality, especially the high-quality (OPC52.5R) cement and the environmentally-friendly green cement, CEO Ali Al-Ayed told Argaam in an interview.

Prices were heavily pressured by fierce competition in the markets, where the company operates, making it challenging to set a clear pricing rate. As a leading player in its markets, Yanbu Cement strives to maintain balanced selling prices.

He mentioned that the clinker inventory reached 6.1 million tons at the end of the third quarter, noting that cement is usually not stored for long periods.

Al-Ayed added that rising borrowing costs are undoubtedly negative, significantly impacting the housing sector growth, which in turn hurts cement demand.

Among the key challenges being faced by the company in export markets is the geopolitical situation in the Red Sea and Bab Al-Mandab region, which has significantly led to a crisis in global supply chains and maritime shipping.

Al-Ayed noted that new competitors have entered the global clinker market, such as China and Turkey, along with an oversupply from several countries, including the UAE, Egypt, Algeria, Pakistan, and Vietnam. Additionally, some markets that used to regularly import clinker, such as Kenya and Tanzania, have now achieved self-sufficiency.

There are no strong and affirmed signals of a rise in cement demand in the local market, the CEO explained, expecting the high quality of the company’s products and customer interest to spur demand.

He added that the anticipated decline in interest rates is expected to have a positive impact on demand growth.

According to available data on Argaam, Yanbu Cement’s profit rose to SAR 129.2 million in the first nine months of 2024, compared to SAR 101.8 million in the same period of 2023. The third-quarter earnings reached SAR 31.1 million.