According to local reports, Saudi Cement Company will keep two kilns at its Hofuf plant, located in the Al-Ahsa Oasis in Saudi Arabia’s Eastern Province, closed following refurbishment work due to weak demand and high inventory levels. Saudi Cement has suffered from sluggish domestic demand throughout this year, recording a decline in y/y profit in both 1Q14 and 2Q14.
A statement released by the company noted that, up until August, its sales had fallen by around 14% y/y as a result of increased production volumes from Saudi cement manufacturers and sluggish demand. “The feasibility of operating these two kilns shall be reconsidered whenever market conditions warrant that,” the statement continued.
Saudi Cement Company will remove kilns 1, 2 and 3 from its Holuf plant. After initially restarting the kilns in late 2012 to meet demand levels, these older kilns are no longer needed.
Saudi cement demand took a hit in 2013 due to a government crackdown on visas and the departure of hundreds of thousands of expatriate workers from the country.