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QNCC bucking the trend

World Cement,

Qatar National Cement Company saw a 1.3% rise in profits from QR253.3 million to QR256.7 million for the period January to June 2010. This was achieved despite a 32.6% fall in revenue, which was cushioned by a fall in the cost of sales. As reported in this is an unusual result compared with the other cement players in the region. QNCC opened a fourth plant last year and this ensured that the company no longer needed to import cement to meet local demand. The company, which is the dominant supplier in the country as the other manufacturer is quite small, tends to take the majority of the construction business. It has a good, local supply of raw materials and its margins are good.

QNCC’s results are totally opposite to the results of the other major regional suppliers. Oman’s Raysut Cement Company experienced a fall in half-year net profits by more than a fifth, with sales slipping more than a quarter compared to last year even though production levels increased. Abu Dhabi listed Gulf Cement Company has seen its profits reduced by almost a half during the first half of this year and by three-quarters for Q2 compared with the same period last year. Southern Province Cement Company in Saudi Arabia posted a 13% fall in net profits for the second quarter, while Qassim Cement fell 8.3%.

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