Saudi Arabian cement maker, Najran Cement, has secured a cement export license, as the company tries to reduce its significant cement inventory.
Saudi Arabian cement maker, Najran Cement, has secured a cement export license from the Ministry of Commerce and Investment. According to a company announcement, the license will run for a year from the date of issuance.
Saudi cement producers have been hit by a downturn in demand in recent months, leading to a build up of inventory in the sector. According financial news site, Argaam, Najran’s stockpile stands at 3 million t – equal to a full year’s sales.
The license comes despite company CEO Badr Al Johar saying last month that high export prices would make it difficult to compete abroad. Saudi cement exporters have to pay the difference in fuel costs between the local and international market, a policy that adds SAR85 to SAR133 per tonne to the cost of exports.
Growth in the Saudi construction sector looks set to remain in the doldrums with BMI Research recently saying 2017 growth would be “slow and painful”. In this context, any relief that cement producers can find from exports would be welcome.
Najran recently announces a 51.17% fall in net profits in 2016 to SAR124.8 million. In addition to the slowdown in construction activity, the company was also hit by higher energy prices.
Read the article online at: https://www.worldcement.com/africa-middle-east/17022017/najran-to-tap-export-market-to-reduce-stockpile/