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The Saudi cement industry is unlikely to improve before Q4 2018, due to fierce competition, price wars and weak demand, Ahmed Zugail, director general at Yanbu Cement Co. told Argaam.
The company’s average selling price stood at SAR 145 per ton in Q1 2018 as demand continued to soften, dropping by around 13 percent from Q1 2017 and 30 percent from Q1 2016.
“Cement prices steeply declined in the Central Region, so that companies there directed their sales to the Western Region, with a price difference of SAR 30 per ton in both regions”, Zugail noted.
Zugail noted that the Yanbu Cement’s production lines have a combined capacity of 21,000 tons per day.
“Both production lines were subject to a regular maintenance process in Q1 with no material impact on inventory,” he said, adding that the company sold three clinker kilns, in which operations were suspended more than two years ago.
Meanwhile, Yanbu Cement has exported more than 250,000 tons of clinker to East Africa since April, which helped boost liquidity levels as well as working capital efficiency, raise gross profit margin and dispose of cement stockpiles, he noted.
Saudi Arabia cancelled export duties from Feb. 1 this year, Argaam earlier reported.
Last July, the Kingdom halved cement export tariffs and scrapped all export duties on steel for two years and to encourage local industries and producers, and enhance competition.
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