PRIDE OF OMAN

Oman 2019 | INDUSTRY & MINING | INTERVIEW

The first producer of cement in the country, Oman Cement Company's strength lies in its high-quality products and strategic initiatives in social responsibility.

Salem Abdullah Al Hajry
BIOGRAPHY
Salem Abdullah Al Hajry has over 30 years of diversified industrial experience in major organizations in the oil and gas, wastewater management, and cement sectors. He holds a degree in mechanical engineering from the UK and an MBA from Hall University. He started as a mechanical engineer in one of the major oil companies in the UAE and later joined the cement industry with Oman Cement Company and Haya water. Al Hajry is a board member in the Arab Union for Cement and Building Material (AUCBM) representing Oman. He is also a member of Tanfeedh Manufacturing Steering Committee and a board member of Mondi Oman.

How has Oman Cement Company expanded its capacity and product offering?

Our first cement production was in 1983, and at that time we were only producing two types of cement—ordinary Portland cement and sulfate-resistant cement (SRC). In 1995, we added another line to increase our daily production by 2,000 tons, production for which started in 1998. In 2010, we expanded again by commissioning our third line with a daily capacity of 4,000 tons. Today, our total capacity is 8,700 tons of clinker per day. On the cement side, we have added another cement mill, bringing our total cement capacity to 10,000-plus tons per day. Annually, we have production capacity of around 2.6 million tons of clinker and a grinding capacity of 3.6 million tons. Our main cement product type is ordinary Portland cement, SRC, and oil well cement types one and two. Almost all our OPC and SRC are sold in the local market. Part of our oil well cement, however, is sold in Oman, and the rest is exported to various countries like GCC countries, Iraq, Kazakhstan, certain African countries, and recently Venezuela, though in small quantities.

Is domestic cement production adequate to meet the demand?

There is a gap between the demand for cement in Oman and cement supply from the local cement producers. Local producers only meet around 50-55% of Oman's demand for cement, while the rest is imported. There are only two companies in Oman that have fully integrated facilities for production of clinker and cement: Oman Cement Company and Raysut Cement Company. The remaining few local cement producers only have cement grinding units and rely mainly on imported clinker to grind and produce cement. Therefore, there is a potential opportunity in Oman to expand and set up new cement plants. This opportunity to grow the cement manufacturing industry is not only to cover local demand. Because of its geographical location and availability of inland raw material for producing cement, Oman can have a competitive price advantage in exporting clinker and cement to the African continent and other countries.

How does Oman Cement Company differentiate itself from its competitors, both locally and internationally, to make its products more attractive?

Our high quality and consistency in all our cement types and focus on customer service have been two main key drivers of our proposition in the local as well the international markets. Oman Cement Company was the first producer of cement in the country. Having started in the 1970s, we have been providing cement for building Oman over the years. This is a matter of pride for us. Today, Oman Cement Company's strength in the local market is not based only on high quality products, but also on building its image through strategic initiatives in social responsibility and in-country value (ICV). However, as known, cement is a price-sensitive commodity, and we cannot attract customers based purely on quality. The main challenge we face is being competitive in terms of both quality and price. In 2017-2018, we faced extremely aggressive price competition from imported cement as well as from the local producers; however, we were still able to maintain our market share by restructuring our price and reducing our production cost while maintaining our product quality to its high standards.

What are your objectives for the next 12 months?

Our objective is to retain our position as a leading cement producer in Oman and remain competitive in the local market and open new markets abroad, especially for oil well cement. Besides, our objectives for the coming year, which are part of our long-term strategy, will focus on building a strong knowledge team, reduce production costs through applying lean management, and improving efficiency of our processes and plant performance. As we also work on growth in our business, our project for setting up a new cement plant in Duqum will be one of the major objectives next year.