(MENAFN- Muscat Daily) Oman's cement companies, which were hurt by huge inflows of cheap cement from UAE, are now out of trouble as the neighbouring country's firms divert exports to other regional markets and demand picks up in both UAE and the sultanate, according to a report by Global Investment House.
Kuwait-based Global Investment House said in its GCC cement sector report, released on Tuesday, that Omani cement firms are set for steady growth in the coming quarters as growth in the construction segment leads to higher off-take of cement.
''The inflow of cheap cement from UAE, which earlier roughly catered to 25 per cent of Omani demand, has witnessed a diversion as other regional countries have opened their market for cement imports along with recovery in demand in UAE.
"Omani cement companies did well in the first half of this year due to increase in cement demand and diversion of UAE exports to other markets,'' the report said.
The Omani cement sector reported a 13.8 per cent growth in sales revenue, at US$201.7mn, in the first half of this year and was the second best performer in the GCC after Saudi Arabia which reported a 20 per cent growth.
''Saudi Arabia with its huge pipeline of projects is able to generate significant demand of cement which is helping the local and regional companies to post better numbers then last year.
"Oman will tend to benefit by exporting cement to Saudi Arabia as the prices in Oman are relatively lower than in KSA and as the ban on cement imports to Saudi Arabia has been removed.''
''UAE cement firms would be further tempted towards the bigger Saudi market, which in turn may result in reduction of cement exports to Oman, thereby improving the sales volume of Omani firms,'' the report added.
Raysut Cement's first half net profit rose 54 per cent to RO13.7mn, while Oman Cement achieved a 23 per cent growth in net profit at RO9mn from RO7.33mn last yea
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