Riyadh Cement CEO sees gradual demand rebound, confirms challenging market cycle

Shoeil Al Ayed, CEO of Riyadh Cement Co.

CEO of Riyadh Cement Co., Shoeil Al Ayed, expects the market to see a gradual demand recovery throughout this year, driven by continued government spending, faster project execution, and improved private sector activity.

In an interview with Argaam, he said this should translate into higher sales volumes, relatively more stable prices, and better financial and operational performance in the coming periods, adding that the company’s strategy is focused on full readiness to capture this rebound while maintaining strict cost and operational discipline.

He also noted that the market is currently experiencing a relative oversupply, given higher clinker production levels across several cement companies, which is ultimately pressuring prices. Total sector clinker inventory reached about 43.5 million tons by the end of Q1 2026, down 1% year-on-year (YoY).

At the company level, inventories stood at around 1.4 million tons. This reflects a proactive approach to ensure readiness for expected demand, support operational continuity, and enhance flexibility, while maintaining a calculated balanced between production and stock of both black and white clinker, based on the prevailing market conditions.

He explained that the company’s response to current market realities is rooted in operational and commercial discipline. This involves aligning production with actual demand, managing inventory efficiently, and protecting sustainable profit margins to ensure that profitability is not sacrificed for unplanned volume increases.

Regarding financial results, Al Ayed attributed the company’s Q1 2026 profit decline to higher fuel costs and lower sales volumes due to market conditions, stressing that this reflects a pressured market cycle rather than weak operational fundamentals.

He added that the company responded by focusing on operational efficiency and cost control, which helped maintain healthy profitability despite market headwinds.

He also said that the first-quarter demand decelerated due to seasonal factors linked to Ramadan and Eid al-Fitr holidays, as well as regional variables that affected activity levels. He noted that the market remains volatile and unstable, particularly in the Central Region, driven by ongoing price competition.

He confirmed that the company is managing this environment by balancing its market share protection with profitability preservation, avoiding short-term pricing pressure that could undermine long-term value.

Al Ayed added that the average selling price of black cement in Q1 2026 neared SAR 195 per ton, compared to SAR 177 per ton in Q4 2025. He attributed this to a quarterly recovery in pricing conditions and the company’s ability to capitalize on pricing opportunities despite ongoing market challenges.

Riyadh Cement’s net profit stood at SAR 60 million in Q1 2026, down 21% from SAR 76 million a year earlier, according to Argaam’s data.