The growing capacities within Saudi Arabia's cement industry has propelled Saudi Cement Company (SCC) into looking more vigorously at exports - to the neighbouring GCC countries and abroad.

SCC is also continuing its efforts to penetrate new market territories, since exports to the nearer South-East Asian countries has stopped due to the economic conditions in those countries.

In its bid to increase exports, SCC is building an export terminal at the King Abdul Aziz Port in Dammam.

The main contractor, Dome Technology, has started work on the land leased by SCC at berth 36 in the port. The terminal is planned to be completed and handed over to SCC within 54 weeks from January 2000, the commencement of work.

Work is progressing smoothly on the detailed site plans and civil works on the two dome silos (with a capacity of 30,000 tonnes each) are expected to be completed by May 2000. After that installation of all mechanical, electrical and electronic equipment will commence.

Parallel to the work on the terminal, SCC will also work on the facilities for transportation of cement and clinker by railway wagons. Contractual matters are being finalised with the Saudi Government Railway Organisation, and the official contract is expected to be signed shortly. All railway lines and necessary transportation equipment will be ready by the time the terminal is put into operation. The total contract value for the turnkey job of the terminal is $20 million. Additional costs will be incurred for capital purchases of equipment for transportation by railway wagons.

SCC has submitted a request to the Saudi Industrial Development Fund (SIDF) for funding of the terminal project.

The construction of the terminal will improve SCC's export capabilities (increase ship loading rate to around 800 tonnes/hour, i.e. around 16,000-18,000 tonnes/day) and result in a significant saving in transport costs.

Also, the terminal will promote SCC's export activities and help in attracting new sophisticated customers and in penetrating new markets.

SCC produced 4,403,499 tonnes of clinker in 1999 compared to 4,363,725 tonnes during 1998. The overall clinker production at both plants of SCC exceeded the rated capacities (of 4,147,500 tonnes) by approximately 6.2 per cent.

Cement production for 1999 amounted to 3,393,968 tonnes compared to 3,565,803 tonnes for 1998, a decrease of approximately 4.8 per cent.

Total sales for last year amounted to 3,388,455 tonnes compared with 3,549,868 tonnes the previous year.

The above decrease is the net of an increase of 237,505 tonnes of Portland cement sold in the local market, an increase of 1,744 tonnes in oil well cement sold and a decrease of (400,662 tonnes) in exports of Portland cement.

Total quantity of oil well cement sold during 1999 amounted to 90,872 tonnes compared to a total quantity of 89,128 tonnes of 1998, i.e. an increase of 1,744 tonnes or approximately 2 per cent.

Commenting on the cement market in the Kingdom, a spokesman for the company says: "The demand for cement in Saudi Arabia improved during 1999 and amounted to 14.4 million tonnes compared to a total demand for 1998 of 13.6 million tonnes. The increase, however, occurred mainly in the Western area, while demand in the areas of distribution of SCC's products remained at the previous year's levels.

"The minor increase in demand was, however, offset by the high production in Saudi Arabia which reached approximately 19.4 million tonnes of clinker (equivalent to around 20.4 million tonnes of cement). This resulted in an overall surplus of 6 million tonnes.

"Since such surplus could not be exported in full due to very fierce competition from other exporting countries, clinker stocks at the Saudi plants has hit a new record high of 8.8 million tonnes by end of 1999 compared to 5.7 million tonnes by end of 1998."

SCC continued its exports of cement and clinker to Bahrain during 1999. The total quantity of cement exported amounted to 224,748 tonnes compared to total exports in 1998 of 202,350 tonnes, an increase of 11.1 per cent.

The total quantity of clinker exported to Bahrain amounted to 156,499 tonnes compared to a total quantity of exports during 1998 of 144,178 tonnes, an increase of 8.5 per cent.

"As of the end of 1999, some major changes have taken place in the Bahrain market and SCC has faced competition from other cement exporters. SCC is, however, determined to sustain its share in that market and at the same time keep prices stable," the spokesman says.

The total quantities of cement exported during 1999 (other than exports to Bahrain) were 590,411 tonnes compared to 1,013,471 tonnes in 1998, a decrease of (423,060 tonnes) or approximately 41.7 per cent.