Arabian Cement says contractor unable to complete cement mills in Rabigh

Arabian Cement factory

Arabian Cement Co. (ACC) received a statement from the contracting firm, China National Building Materials Co. (CNBM), indicating its inability to complete the cement grinding mills project at Rabigh plant, according to a bourse filing.

Arabian Cement is currently evaluating the situation technically and contractually to find the optimal way to finalize the project’s remaining works, after assessing the technical as well as commercial offers from the equipment manufacturer.

The project is 99.53% complete, the cement producer said, adding that it will maintain all contractual financial guarantees until the project is finalized.

The contractor did not adhere to the project schedule and requested to authorize a third party subcontractor to finalize the project.

ACC confirmed the delay would have no material impact on the project's cost or the company's financial statements.

In November 2020, the company announced the possible start of commercial operations at Rabigh clinker line in Q3 2021.

According to data compiled by Argaam, ACC inked in April 2015 a SAR 362 million contract with CNBM to construct the cement mills in Rabigh.

In December 2021, the cement producer said the commercial operations at Rabigh mills project were delayed until the fourth quarter of 2022.