Improved outlook for Omani cement companies

Oman cement companies are set for brighter times ahead as inflows of cheap cement from the UAE decline and demand picks up both in the UAE and the sultanate, according to a report by Global Investment House (GIH).

In its GCC cement sector report released on Tuesday, GIH said that Omani cement firms are set for steady growth in the coming quarters as growth in the construction sector leads to a higher cement demand. 

“The inflow of cheap cement from UAE, which earlier roughly catered to 25 per cent of Omani demand, has witnessed a diversion as other regional countries have opened their market for cement imports along with recovery in demand in UAE.

"Omani cement companies did well in the first half of this year due to increases in cement demand and the diversion of UAE exports to other markets,” the report said.

In the first half of 2012, the Omani cement sector reported a 13.8 per cent growth in revenue at US$201.7m and was the second-best performer in the GCC after Saudi Arabia which posted 20 per cent growth, the report said.

GIH noted: "Oman will tend to benefit by exporting cement to Saudi Arabia as the prices in Oman are relatively lower than in KSA and as the ban on cement imports to Saudi Arabia has been removed.”

“UAE cement firms would be further tempted towards the bigger Saudi market, which in turn may result in reduction of cement exports to Oman, thereby improving the sales volume of Omani firms,” the report added.