Saudi Ceramic secures $9.75m loan for plant

Sausdi Ceramic is diversifying.

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Saudi Ceramic Company said it has secured SAR 36.6m in a loan agreement with Saudi Industrial Development Fund to help fund the expansion to its tile factory amid other areas of production growth.

The Riyadh company is planning a new factory with the capacity to produce 9,000,000 square metres per annum, an asset it estimates will raise sales by SAR 150m. A pilot has already been conducted. It will repay the loan in biannual instalments, it told investors through the stock exchange.

Saudi Ceramic is one of the kingdom’s biggest manufacturers of ceramic and porcelain tiles and bathroom fixtures, with a separate business line in water heaters. This year the company has launched and test-run a number of new facilities as it seeks to meet the growing demand for interior fixtures and diversify into new products.

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In January the company launched the production test for a plant making ceramic tubes. It will have an annual capacity of 60,000 tonnes of clay pipes, with annual revenue estimated at $30m.

The new facility has been funded 50-50 by Saudi Ceramic Company and a subsidiary, Ceramic Pipe Company.

The company is also aiming to double its capacity of sanitary ware in 2013.

Analysts at Al Rajhi Capital credited the company’s expansion plans and “robust bottom line growth”, which rose 17% year-on-year based on third quarter results. Net profit for the period rose 17.3% to SAR 54.16m for the period, against SAR 46.2m last year.

Meanwhile, civil contractor Mohammad Al-Mojil said it has cancelled a joint venture planned with a petroleum investment company for constructing storage tanks for the petroleum industry.

The Saudi contractor, which has a particular focus on civil work in oil and gas projects along with infrastructure, said it and Al Rushaid Petroleum Investment Company had jointly agreed to halt a plan to procure and build storage tanks.