Raysut Cement targets east African expansion
Oman's Raysut Cement plans a five-fold increase in its cement production capacity, says Joey Ghose, Raysut Cement's CEO. The expansion would see Raysut Cement increase production from 5Mta to 26Mta in the next few years.
The expansion would be accomplished through a mixture of joint ventures, acquisitions and greenfield cement projects, added Ghose. Expenditure would amount to US$65-78m in the next two years. The main area for growth would be in east Africa where the company plans to add 16Mta of capacity and 1Mta in Yemen, while the Pioneer subsidiary is already building a 1.2Mta plant in Tbilisi, Georgia.
East Africa is seen as an emerging market that Raysut Cement could soon increase its presence. "East Africa is a booming market for the next 50 years, and we expect to become a strong player there. Last year, we sold 1.2Mta in east Africa. We have a market share of 90 per cent in Zanzibar and 45 per cent in Madagascar. The margins in new markets are nearly twice that of Oman. The percentage... is 50 per cent per tonne compared to 12 per cent in Oman. We have a cost advantage of nearly 30 per cent over all other players in the east African market.
"Exports to Madagascar, Reunion islands, Seychelles, Mauritius, Maldives, Mayotte, Comoros and Zanzibar will provide us with the volume that we need for our Salalah plant as the demand now is less than half a million tonnes," he said.
These sales will be added to growth potential in Somalia. "In Somalia, we are the largest suppliers in north and south Somalia. We supply 80,000t of bulk cement to Somalia each month, and we hope to convert that into locally manufactured cement by using clinker from Salalah and adding 35-40 per cent local content," added Ghose. "We are planning a grinding facility in Somalia with an option to convert it to an integrated unit."
Domestically, the new Duqm grinding plant is expected to become operational by the year-end, while sales would be driven by the new projects awarded in the Dhofar region and the upcoming projects in Duqm to drive sales.
