Arabian Cement says clinker production line 'shelved' over market conditions

Arabian Cement Co.'s board of directors decided to shelve the second phase of the clinker production line due to the current market conditions, the company said in a bourse filing.

The cement producer had previously announced that cement mills in Rabigh were 99.51% complete.

According to the contractor, China National Building Material Co. (CNBM), the project completion is expected to require 150 additional days upon resuming work, after the end of the COVID-19 lockdown and lifting of international travel bans.

The delay was driven by the project contractor, which missed the work schedule due to the negative impact of the COVID-19 outbreak and travel bans, Arabian Cement explained.

Nevertheless, the company confirmed that this delay would not cause any change in cost, and that any impact on its financial results will be revealed in due course.

In December, the cement producer expected construction works to be fully finalized by Q2 2020, and commercial operations to commence in Q3 2020.

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