Al Jouf Cement maintains supportive average prices, expects stronger demand in early 2024: CEO

Abdul Karim Al Nuhair, Managing Director and CEO of Al Jouf Cement Co.

Abdul Karim Al Nuhair, Managing Director and CEO of Al Jouf Cement Co., said the company maintained supportive average cement prices and managed to opt out of the harmful price war.

The rise in Al Jouf Cement’s profit was driven by higher sales as a result of increasing the company’s market share and securing a solid share in exports. This is in addition to reducing costs by launching initiatives to improve operational efficiency, boost production, and build long-term relationships with suppliers, he told Argaam in an interview.

The top executive also expected demand for cement to pick up in early 2024, fueled by strategic projects in close proximity to the company’s plant, such as the NEOM, AlUla, and Madinah projects, as well as those in the Northern Province and Al Jouf. He pointed to the company’s aspirations for improved demand in the housing sector by year-end, given the expected decrease in interest rates in H2 2024.

The cement producer stated in its Q3 2023 report a SAR 81 million reservation related to the cost of inventory. It generated an accurate inventory of clinker, cement, and raw materials stocks during the quarter through a third party. A detailed report has been submitted to the auditor to be studied and factored in Al Jouf Cement’s quarterly report. The auditor expects this one-off item to not impact on the company’s Q4 2023 financial statements, according to the CEO.

“The company’s management is still negotiating with lenders to reschedule existing loans to commercial banks and the Saudi Industrial Development Fund (SIDF). We believe that we will reach a good result, especially with the significant improvement in the company’s financial performance and its quarterly profit of no less than SAR 20 million,” Al Nuhair was quoted saying.

Al Jouf Cement's profits surged to SAR 72.6 million in the first nine months of 2023 from SAR 7.8 million a year earlier. The third-quarter profit amounted to SAR 29 million, according to Argaam's data.