Saudi cement producers to cut output on market oversupply
Saudi cement producers are set to reduce production levels by 12 percent and lay off staff, AlJazeera newspaper reported, citing Jihad Al-Rashid, head of the National Committee of Cement Producers.
The move is aimed at increasing efficiency and improving quality, as the market is currently saturated with oversupply, he said.
Aggregated sales of 17 listed Saudi cement companies dropped 25 percent to 4.09 million tons in February 2017, from 5.44 million tons in February 2016, data compiled by Argaam showed.
Fiscal austerity measures and a slowdown in construction activity have weighed on the sector, with cement dispatches declining 25 percent year-on-year in and 15.7 percent month-on-month in February, according to a recent report by Aljazira Capital.
“We believe downtrend in dispatches will continue for the coming quarters on [the] back of current austerity driven economic environment,” the brokerage said.