Oman cement firm revenues fall by 22% due to UAE competition
Heavy competition from cement producers in the UAE and higher energy costs have affected sales revenues and net earnings of Oman's largest cement producer, Raysut Cement Company
Heavy competition from cement producers in the UAE and higher energy costs have affected sales revenues and net earnings of Oman's largest cement producer, Raysut Cement Company.According to the company’s annual report: “There has been severe competition across markets, coupled with socio-political disturbances in Yemen. Unabated supply of cement from the UAE due to surplus capacity and price decline has caused a dent in prices and volume of sales in the northern markets of Oman.”
Additionally, Raysut Cement stated that the demand for cement in Oman fell due to lesser construction activities.
In the UAE, excess capacity is leading to severe competition and UAE-based Pioneer Cement is continuing sales at a competitive price.
The revenue of Raysut Cement group fell by 22% to $187m (OMR71.87m) in 2017, from $240m (OMR92.59m) the previous year, Times of Oman reported.
The report further stated: “This is because of lower volume of sales, both in local and export markets. A declining market (21%), lower price realisation, lower production, higher costs resulting from higher energy prices, raw material cost, and maintenance costs have impacted the group’s bottom line.”
The board of directors of Raysut Cement has proposed a cash dividend of 29% of the paid up capital, subject to the approval of shareholders at the annual general meeting.
In addition, Raysut Cement’s new packaging plant is expected to be completed in the first quarter of 2018.