MIX IT UP

Saudi Arabia 2014 | REAL ESTATE & CONSTRUCTION | B2B: CEMENT

With a number of megaprojects underway, and more in the pipeline, demand for cement has a steady future.

Gasem Al-Maimani
GASEM AL-MAIMANI
President & CEO
Arabian Cement
Dr. Ahmed Zugail
DR. AHMED ZUGAIL
Director General
Yanbu Cement Company

How is your company taking advantage of the booming construction industry?

AHMED ZUGAIL We are very lucky to be positioned in the Western Region of Saudi Arabia because it includes the two holy cities, the commercial hub of Saudi Arabia, Jeddah, as well as the Royal Commission's Industrial City in Yanbu. This area amounts to almost 35% of the consumption of cement in Saudi Arabia, which is expected to grow over the medium term. With the projects that are expected in this area, especially in Jeddah, Mecca, and Medina, we are planning to expand by adding another line of 6,000 tons per day, and we are only waiting on the government for the fuel allocation of this line. However, we are also thinking of introducing new, energy-efficient production methods as wells as means to help us in the energy consumption of this line, either through waste heat recovery systems or alternative fuels. The 6,000 tons per day would equate to an additional 33% of our current new capacity. That will hopefully come online in two years time once fuel is allocated by the government. That will be supplying the Western Region only. The cement industry here is sectorial in its market because cement is a heavy material to transport. Therefore, this will be directed toward the Western Region. Even with the announced expansions from other companies, we expect that it will be easily taken up by the market.

GASEM ABDULGHANI AL-MAIMANI We have a few advantages as Arabian Cement Company (ACC). First of all, we are the oldest cement company in the region, established in 1955; therefore, we have a long history and rich experience with quality assurance. We are the preferred supplier in the industry for consumers and for major customers and companies with whom we work. Our growth has been parallel with that of Saudi Arabia, and we have contributed to some of the huge projects going on in the country. For example, of the 500,000 ready-made residential units that will be distributed through the Ministry of Housing, we estimate that 40% of these will be in the Western Region. The minister recently signed a three-year contract solely for infrastructure projects. There are also new projects in the holy cities, including one in the new central area of Medina, which was announced in mid-2013, as well as new projects in the central areas of Mecca. All of these will translate into huge growth in demand, and a minimum yearly growth of 4.5% in cement demand is estimated.

What unique, high-tech products do you offer?

AZ The location of the plant is blessed with being close to a deposit of a material called pozzolana. It is a volcanic material that improves the characteristics of cement. Pozzolana cement is required in areas where you have so-called “salt attacks" in the soil, and it is also required in mega structures, such as dams, where you have huge quantities of cement that are being poured at one time. In the dams that we are building in Jeddah over the last couple of years, our pozzolana was the first choice of the consultants of these clients, meaning we will keep that edge of Yanbu Cement in the future. Others are also producing different cements, but not niche products. The niche product for Yanbu Cement is pozzolana cement. We are the largest pozzolana cement producer in the Kingdom.

GAA Unfortunately, people are only concentrating on ordinary Portland cement. However, there are opportunities for introducing new kinds of cement, such as pozzolana, and other specialty materials that will improve energy efficiency and quality. We are working with government regulators in order to coordinate ahead of time how we can be pro-active in providing complete solutions that incorporate technical know-how, support, and after-sales service. When it comes to specialty cement, it is not just ordinary selling and buying; you have to coordinate, guide, and provide more technical support. You also have to coordinate with the regulators and the government in regard to building codes. If you have the right building code, you can push people to use the right specialty materials that will improve energy efficiency, durability, and quality.