Oman's Cement & Gypsum Products sees 2010 declines

The company says it is in preparation for new projects.

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Cement and Gypsum Products posted a OR377,992 loss in first nine months, reversing a OR 404,298 profit from the same period last year as the company awaits big projects to begin.

“Due to global melt down, the company is facing difficulty in generating cash from operations and depending clients advances for operation,” the company’s chairman, Ali Bin Hamel Al Ghaith, has said in a statement, adding that the company could not meet the repayment of a government soft loan due in May nor pay down its bank overdraft.

“The activity was a smaller amount during the period due to completion of major projects started in last year and has been on preparation of the new projects,” he added. The company’s inventory has fallen 29%, with more than double allowance for the “obsolete and slow-moving” work.

The company, which produces hollow wall panels and flooring which will accommodate air conditioning, is in the process of changing the legal entity to SAOC as a replacement for to SAOG.

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Total turnover - measured by reference to the contract costs incurred up to the statement of financial position date as a percentage of total estimated costs for each contract - fell by more than 53% to OR857,326 against the OR1,856,073 posted for the equivalent nine months in 2009. Other income stood at less than half that of last year.

The company values its running projects at around OR2 million; with another OR1 million “signed or in hand from various clients and not started yet”.

The domestic market for Omani materials suppliers has slowed in the last year. In 2009 there was an expectation of a growth in building eactivity, leading the government to order companies such as Oman Cement Company to import more materials to meet perceived demand. It has since repaid the extra cost to the company.

An analyst at Securities & Investment Company in Bahrain, talking to CW in July, called the Oman cement boom “over”.