UMI share listing ‘promising step’ in expansion strategy: CEO

Hamad H. Alsourayia, CEO of United Mining Industries Co. (UMI)

United Mining Industries Co. (UMI) is set to establish a new gypsum board production line with 21.6 million square meters in capacity, CEO Hamad H. Alsourayia told Argaam in an interview.

The move falls within the company’s expansion strategy, which includes raising production to over 55 million square meters of high-quality boards, Alsourayia said.

UMI reported a 39% profit increase year-on-year (YoY) in H1 2023.

The CEO also noted that listing company shares on Nomu-Parallel Market would help UMI ensure efficient corporate governance and bolster its financial position.

The below are the details of the interview:

Q: How is Saudi Arabia’s gypsum market in terms of demand, production and selling prices?

A: The industry saw some development in the last three years, and we expect this trend to continue over the coming 10 years thanks to Vision 2023 projects, including NEOM, Red Sea and Qiddiya entertainment megaproject.

Q: What are UMI’s main products, production lines and capacities?

A: UMI currently operates three plants featuring four production lines with over 40 million square meters in capacity to produce gypsum and cement boards, ceiling tiles and gypsum powder at a capacity of 300,000 tons per annum.

Q: What is the company’s market share for production and sale of gypsum powder as well as gypsum and cement boards in Saudi Arabia?

A: UMI is one of the Kingdom’s leading firms in the industry. It comes among the top five producers of gypsum and cement products, accounting for a market share of 30%.

Q: What are the company’s sales volumes in the local market, compared to the foreign markets? What are the target export markets?

A: UMI is selling products locally and is exporting to over 20 countries. Over the last five years, local sales accounted for 55% on average while exports dominated 45% of the company’s total sales.

Q: How did the company fare in 2023 compared to the previous year?

A: UMI reported 39% profit growth YoY in H1 2023.

Q: What dividends were distributed over the past years and what is the company’s dividend payment policy?

A: UMI paid dividends for 2020-2022 at ascending rates, with SAR 1.03 a share in 2020, SAR 1.16 a share in 2021, and SAR 1.20 a share in 2022. It seeks to pay annual dividends, subject to market conditions and cash flows.

Q: What do you expect for business growth amid mega city projects and other housing developments?

A: UMI’s revenue and selling prices are forecast to see increasing growth on the expected rise in demand for gypsum and building materials. The company fully focuses on the project sales, and we expect this growth trend to continue in the medium and long term, thanks to Vision 2023 projects including NEOM, Red Sea and Qiddiya entertainment megaproject.

Q: What about UMI’s last developments, projects in 2023?

A: We are constantly seeking to develop the production lines. The board of directors approved the development of a new gypsum board production line with a capacity of 21.6 million square meters per annum to fulfil the growing demand for the company’s products. Commercial operations are estimated to commence in Q4 2024, and this will reflect positively on UMI revenue.

Q: What is the upside to listing shares on Nomu?

A: The Nomu share listing will remarkably impact the company’s strategy as it will help growth and expansions, ensure efficient corporate governance and bolster UMI’s financial position.

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