THE MAIN INGREDIENT

Oman 2014 | REAL ESTATE & CONSTRUCTION | INTERVIEW

TBY talks to Jamal Shamis Al Hooti, CEO of Oman Cement Company, on local demand, new possibilities, and the Duqm project.

Jamal Shamis Al Hooti
BIOGRAPHY
Jamal Shamis Al Hooti studied in the US and Japan and joined Oman Cement Company (SAOG) in 1992 as General Manager. In 1998, he became CEO. He had previously served at the Ministry of Commerce and Industry as Assistant Director General of Industry.

How have you been affected in recent years by demand in Oman for construction materials?

Geologically, the Sultanate of Oman has a large, advantageous reserve of limestone, which is the main ingredient and raw material in the process of cement manufacturing. The Muscat area is surrounded by mountains and rocks with different types of minerals, especially limestone. Our plant is surrounded mainly by limestone, but also by the other necessary raw materials and additives required for cement production, such as iron, silica, kaolin, and gypsum. These raw materials are all available in Oman, and more than 95% of them are found in this area. This is the main reason why the government decided to construct the cement plant here. Though this area is a little far away from the capital, it will be connected to the city by easily accessible highways. Another advantage is the uninterrupted supply of natural gas from the Ministry of Oil and Gas required for the operation of the plant. This was a very important factor for us when we decided to double the capacity of the plant during 1998 and then again in 2011. The company's total capacity is now 8,000 tons, and there is strong demand in Oman for cement. There are also other manufacturers in the Sultanate like Raysut Cement Company and Al Madina Cement. Raysut Cement Company is larger than Oman Cement Company now after acquiring a cement plant in the UAE. Still, the demand remains larger than the total production of all manufacturers combined, and, therefore, we continue to import cement/clinker from neighboring countries in order to meet local demand. We are working with Raysut Cement Company to develop marketing strategies in other regions of the country. We are also in the process of establishing a new cement factory in the Duqm area in association with Raysut Cement Company, expecting the availability of natural gas by 2017. Also, a consultant has been appointed for a pre-feasibility study for this project.

What is your market share within Oman?

We occupy around one-third of the market. In export terms, we only export oil well cement, which is the kind used for drilling oil wells. Other than this, our major market is Muscat and its neighboring wilayats. The largest demand in the Sultanate is for ordinary Portland cement. About 20% of the demand is for sulfate-resistant cement, which is usually used for grounding and designed to counter sulfates seeping up from the soil. Another 10% of the demand is for oil well cement, which is being sold both locally and internationally.

Do you see infrastructure and real estate development continuing to drive the high demand for Oman Cement in the future?

We don't see many ups and downs in Oman and there is steady growth in the construction sector, as well as in the private sector. There is a proposed project for a railway network in the Sultanate, and that will necessitate a large quantity of cement for concrete. Hence, the demand will further increase to the point where we're going to need a new production line in Oman. It is a big country with rough terrain that will require a lot of bridges since railways lines cannot be laid through valleys. Because of this, we believe it's the right time to build an additional cement plant to meet local demand. We're also considering modifying our old plants and increasing the existing capacity. As for the location, we believe that any new plant should have a port base, so that we can easily export any surplus, if available. This is where Duqm comes in, and the good thing about Duqm is the availability of limestone reserves just 25-30 kilometers away from the port. Therefore, the plant can be built anywhere between the port and the reserve area, making it easy and inexpensive for raw material transport.