Arabian Cement holds 7% market share; fierce competition weighs on average selling prices: CEO

Badr bin Osama Johar, CEO of Arabian Cement Co.

Badr bin Osama Johar, CEO of Arabian Cement Co., said that intense competition among producers and cement from other regions sold at reduced prices in the Western Region are the main factors behind the overall decline in average selling prices.

In a phone call with Argaam, Johar explained that the decline in profits in Q4 2023 was a result of lower average selling prices in the Western Region.

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The company did not export any products during the fourth quarter due to unattractive global prices. The volume of clinker exports amounted to 329,000 tons in 2023, a drop of about 55% compared to the previous year.

The clinker inventory reached about 2.7 million tons by the end of Q4 2023, equivalent to 10 months of sales, based on the average monthly sales volume over the last 12 months.

The company’s local market share reached 7% by the end of the fourth quarter of 2023, he added.

Further, the new cement mills project at Rabigh plant commenced commercial operations after being handed over by the general contractor on Feb. 21, 2024. The project will contribute to additional grinding capacities for the company to meet the cement demand going forward.

Johar explained that modern technology significantly contributed to reducing the electricity consumption per ton of cement produced and helped produce new types of cement with high fineness.

Johar expected 2024 to see stable demand and improved average selling prices of cement products. This will cope with the increase in the cost of some production inputs, such as energy product selling prices, which have increased since last January, and exploitation fees of mining materials.

Arabian Cement’s 2023 net profit dropped 23% year-on-year to SAR 139.6 million. The fourth-quarter net earnings stood at SAR 32.8 million, Argaam earlier reported.