Saudi investment bank NCB Capital said that the kingdom's production of clinker fell by 12 per cent year-on-year to May 2015. Fayez Nureldine / AFP
Saudi investment bank NCB Capital said that the kingdom's production of clinker fell by 12 per cent year-on-year to May 2015. Fayez Nureldine / AFP

Saudi cement firms begin to cut production to shore up prices



Cement production in Saudi Arabia declined by the steepest levels on record last month as producers sought to run down stocks in a bid to shore up ­prices.

In a report on the country’s cement market, the Saudi investment bank NCB Capital said that production of clinker (a raw form of cement) fell by 12 per cent year-on-year in May.

It said the country’s biggest producer, Saudi Cement, had started to cut production in a bid to support prices that had been falling in recent months, as companies in more remote regions began undercutting in busy cities such as Riyadh and Mecca.

The NCB Capital analyst Mohamed Tomalieh said the decline in production was a deliberate attempt to shore up prices rather than a response to current market conditions.

“We believe cutting production aims to control supply and price discounts,” he said.

The cut helped to bring clinker inventory levels down to 19.4 million tonnes – down from a record high of 21.4 million tonnes in December.

The kingdom’s cement mountain has been built up partly as a result of decrees issued by the late King Abdullah to make sure the country did not run out of supplies. A cement shortage in Mecca in 2012, where the redevelopment of the Grand Mosque was taking place, led to a black market trade and soaring ­prices.

In April 2013, the king set aside US$800 million to be spent on importing supplies and building kilns to boost capacity.

However, an amnesty and subsequent crackdown on illegal migrants later that year led to hundreds of thousands of workers leaving the kingdom, causing widespread project delays.

Demand has not kept pace with supply since.

Although cement sales increased by 6.9 per cent year-on-year, this was from a low base as last year’s figures were affected by the labour shortage.

Moreover, Samba Financial Group said in its latest Saudi country report that there are “signs of a slowdown in activity” in the kingdom, as it reins in capital investment in response to lower oil prices.

“This fits with our view that the government will contain capital spending this year and next, before relaxing its stance somewhat in the 2017-20 period as oil prices begin a more sustained recovery,” it said.

“Regulatory issues are also having an influence: any ­government project with a value over 100m Saudi riyals (Dh97.9m) now needs approval from the new economic and development council before ­proceeding.”

The property market has also slowed following the introduction of a 70 per cent loan-to-value lending limit on home loans late last year.

mfahy@thenational.ae

Follow The National's Business section on Twitter

COMPANY PROFILE

Name: Haltia.ai
Started: 2023
Co-founders: Arto Bendiken and Talal Thabet
Based: Dubai, UAE
Industry: AI
Number of employees: 41
Funding: About $1.7 million
Investors: Self, family and friends

Company profile

Name: Yodawy
Based: Egypt
Founders: Karim Khashaba, Sherief El-Feky and Yasser AbdelGawad
Sector:
HealthTech
Total funding: $24.5 million
Investors: Algebra Ventures, Global Ventures, MEVP and Delivery Hero Ventures, among others
Number of employees:
500

THE SPECS

Battery: 60kW lithium-ion phosphate
Power: Up to 201bhp
0 to 100kph: 7.3 seconds
Range: 418km
Price: From Dh149,900
Available: Now

Sweet Tooth

Creator: Jim Mickle
Starring: Christian Convery, Nonso Anozie, Adeel Akhtar, Stefania LaVie Owen
Rating: 2.5/5

Company profile

Name: Elggo
Started: August 2022
Founders: Luma Makari and Mirna Mneimneh
Based: Dubai, UAE
Sector: Education technology / health technology
Size: Four employees
Investment stage: Pre-seed

Mia Man’s tips for fermentation

- Start with a simple recipe such as yogurt or sauerkraut

- Keep your hands and kitchen tools clean. Sanitize knives, cutting boards, tongs and storage jars with boiling water before you start.

- Mold is bad: the colour pink is a sign of mold. If yogurt turns pink as it ferments, you need to discard it and start again. For kraut, if you remove the top leaves and see any sign of mold, you should discard the batch.

- Always use clean, closed, airtight lids and containers such as mason jars when fermenting yogurt and kraut. Keep the lid closed to prevent insects and contaminants from getting in.

 

Our legal consultants

Name: Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

The five pillars of Islam
The specs

Engine: Single front-axle electric motor
Power: 218hp
Torque: 330Nm
Transmission: Single-speed automatic
Max touring range: 402km (claimed)
Price: From Dh215,000 (estimate)
On sale: September

Company Profile

Company name: Namara
Started: June 2022
Founder: Mohammed Alnamara
Based: Dubai
Sector: Microfinance
Current number of staff: 16
Investment stage: Series A
Investors: Family offices

How to improve Arabic reading in early years

One 45-minute class per week in Standard Arabic is not sufficient

The goal should be for grade 1 and 2 students to become fluent readers

Subjects like technology, social studies, science can be taught in later grades

Grade 1 curricula should include oral instruction in Standard Arabic

First graders must regularly practice individual letters and combinations

Time should be slotted in class to read longer passages in early grades

Improve the appearance of textbooks

Revision of curriculum should be undertaken as per research findings

Conjugations of most common verb forms should be taught

Systematic learning of Standard Arabic grammar

The specs

Engine: 6-cylinder, 4.8-litre
Transmission: 5-speed automatic and manual
Power: 280 brake horsepower
Torque: 451Nm
Price: from Dh153,00
On sale: now

Sui Dhaaga: Made in India

Director: Sharat Katariya

Starring: Varun Dhawan, Anushka Sharma, Raghubir Yadav

3.5/5

Votes

Total votes: 1.8 million

Ashraf Ghani: 923,592 votes

Abdullah Abdullah: 720,841 votes 

COMPANY PROFILE

Name: Kinetic 7
Started: 2018
Founder: Rick Parish
Based: Abu Dhabi, UAE
Industry: Clean cooking
Funding: $10 million
Investors: Self-funded

Company profile

Company name: Fasset
Started: 2019
Founders: Mohammad Raafi Hossain, Daniel Ahmed
Based: Dubai
Sector: FinTech
Initial investment: $2.45 million
Current number of staff: 86
Investment stage: Pre-series B
Investors: Investcorp, Liberty City Ventures, Fatima Gobi Ventures, Primal Capital, Wealthwell Ventures, FHS Capital, VN2 Capital, local family offices

'Skin'

Dir: Guy Nattiv

Starring: Jamie Bell, Danielle McDonald, Bill Camp, Vera Farmiga

Rating: 3.5/5 stars