Oman Cement puts its Duqm project on hold
Oman Cement Company, which is focusing on increasing efficiency and expanding its production capacity, has put its proposed US$250mn Duqm cement plant project and a power plant project on hold pending confirmation of the availability of fuel.
Earlier in March, Oman Cement announced that it had received commercial bids from EPC contractors and appointed a project consultant for the proposed integrated cement plant in Duqm. The company planned to expand its operations by setting up a new integrated cement plant in Duqm area with a capacity of 5,000 tonnes per day (TPD) of clinker and an estimated investment of about US$250mn.
‘The company’s decision to set up a new cement plant at Duqm with a capacity of 5,000 TPD of clinker has currently been put on hold pending confirmation of the availability of fuel and its strategic decision to expand capacity of existing plant in Muscat,’ Oman Cement said in its first quarter directors’ report submitted to the Muscat Stock Exchange on Thursday.
Oman Cement said its earlier decision of achieving higher operational efficiency by installing a new power plant with latest technology has also been put on hold pending further confirmation of the gas availability for the company’s capacity expansion plan.
The company was planning to set up a new power plant with latest technology, which was subsequently amended with the proposed project of installation of Waste Heat Recovery Unit with an existing power pant. The tender for this project has already been floated to appoint an EPC contractor.
Furthermore, Oman Cement is planning to utilise waste tyre as an alternate fuel and the company has completed a feasibility study for this project.
‘To promote the use of alternative energy, the company had carried out a feasibility study for utilising waste tyres as an alternate fuel. The project consultant and the EPC contractor have also been appointed and the project work is expected to commence soon,’ Oman Cement said in the report.
Oman Cement sold 569,920 metric tonnes of cement during the first quarter of 2021, more than 18 per cent lower compared to 699,963 metrictonnes sold in the same period of 2020. Sales revenue dropped by 16.3 per cent to RO11.42mn during the January–March period of this year against RO13.65mn in the corresponding period a year ago.
The cement market in Oman has continued to witness an intense price competition between major suppliers which include local cement companies as well as cement producers from neighbouring countries.
Oman Cement’s first quarter net profit fell by 33.3 per cent to RO0.753mn in 2021 compared to RO1.13mn during the same period of 2020.
Oman Cement said it has continued its efforts to overcome the adverse impact of steep rise in prices of some major elements of cost and extensive efforts have been made in this direction with better cost management and sustained efforts to improve productivity.
‘Though intense competition due to lower cement prices from competitors has continued to be a major challenge, we have taken elaborative measures to minimise the impact. The company’s performance during the period was also impacted by the adverse effects of the COVID-19 pandemic,’ Oman Cement said.