Tabuk Cement Co. aims to export nearly 500,000 tons of clinker and 150,000 tons of cement by the end of this year, Ali Al-Qahtani Chief Executive Officer told Argaam in an exclusive interview on Monday.
The company has already exported more than 202,000 tons of clinker and 60,000 tons of cement.
“There are still major challenges to exports, on the level of pricing and logistics services across the regions and markets targeted by the company,” Al-Qahtani said, adding that Tabuk is working on finding solutions to these obstacles.
The company exports clinker and cement to Yemen, Kenya and Ethiopia. Tapping those markets was a great breakthrough for Tabuk Cement, which is located at the far end of the northwestern region of Saudi Arabia.
Far markets were also reached by Tabuk through sea shipping at affordable prices.
Tabuk’s clinker and cement daily production capacity stood at 5,300 tons and 8,000 tons, respectively. The utilization rate hit nearly 79 percent of clinker and 60 percent of cement from one plant only.
“The company is looking to increasing utilization rates next month to over 90 percent,” Al-Qahtani added.
He also noted that Tabuk Cement owns another plant, but operations are suspended due to insufficient fuel supplies.
Saudi Arabia’s cement output stands at 78 million tons annually, accounting for 7 percent of the Kingdom’s gross domestic product (GDP).
The local companies’ cement sales are less than 40 million tons, with profit margins ranging between 14 percent and 17 percent. The firms also pay the costs of debt-ridden assets.
Al-Qahtani added that the executive management teams of cement firms have played a vital role in exploring new export markets to alleviate their expenses and debts.
This year, the cement producers have largely rationalized consumption and cut expenditure depending on the value rather than the volume of sales, he noted, adding that these measures were taken by the firms to eliminate price wars and restore the market balance.
In addition, Saudi Arabia’s mega projects, like NEOM, Qiddiya and the Red Sea Project along with new investments will help balance cement supply and demand going forward, Al-Qahtani concluded.
Tabuk Cement posted a net profit after zakat and tax of SAR 17.63 million for the first nine months of 2019, compared to a net loss of SAR 66.5 million a year earlier.
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