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Saudi cement firms to slash production- newspaper

Saudi cement firms to slash production- newspaper Photo Credit:lstock
Stocks exceed one million tonnes due to low demand.
20 February 2017

Saudi cement companies have decided to reduce production to minimise inventories because of low domestic demand and huge stocks, a newspaper said on Monday.

“A number of cement factories are planning to stop some production lines to reduce output after domestic stocks exceeded one million tonnes,” Arabic daily Aleqtisadiah said, quoting Shuail Al-Ayed, CEO of Riyadh Cement Company.

The stoppage could last for more three months in order to “trim stockpiles,” Ayed said, adding that the increase in output costs due to production cuts could inflict losses on cement firms already suffering from shrinking consumption.

“There are no big projects that could spur demand for cement, particularly the housing projects, and the cement industry in the Kingdom is passing through a state of stagnation,” he said.

Zawya Projects reported last month that competition among the Kingdom’s 12 major cement companies has escalated after prices plunged to one of their lowest levels and projections that local consumption will shrink by nearly 20 per cent in 2017.

© Zawya Projects News 2017