Mergers and acquisitions might be one of the options for Saudi Arabia’s cement sector in the future, Matar Al Zahrani, chief executive officer of Hail Cement Co. (HCC) told CNBC Arabia in an interview.
Saudi Arabia’s cement sector is likely to see lower earnings this year due to lower demand and over supply, he said.
According to data available to Argaam, the total sales of 17 Saudi cement companies dropped by 25 percent year-on-year (YoY) in February to 4.09 million tons from 5.44 million tons.
HCC has short-term and long-term plans to counter the effect of lower demand, such as cutting operating costs by 5 percent and diversifying income through investments in other sectors, he said.
However, it has no intention to increase capital or lay off employees, Al Zahrani said, adding that the company is in the process of obtaining an export license.
Al Zahrani has said in January that export was not suitable for the company due to its distant location from the ports and export zones. The ministerial committee has previously set the export fees at SAR 85 to SAR 133 per ton, Argaam reported earlier.
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