A soon-to-be established Saudi cement firm plans to build a new multimillion dollar factory to help feed the Kingdom's oil-driven construction boom, one of the company's founding directors told Reuters.
The Riyadh Cement Company (RCC) is due on Monday to sign a $170 million turnkey contract with China's Sinoma to construct a 1.6 million ton per year clinker in the capital - Riyadh - RCC executive committee member Nasser Akeel said. The total cost of the project will be SR1.1 billion ($293.3 million), and the plant is due to start production within 26 months.
Demand for cement is now high in Saudi Arabia. Buoyed by record oil revenues, the Government is spending heavily on new infrastructure projects including roads, schools and other buildings.
Saudi Arabia's National Commercial Bank (NCB) said domestic consumption of Portland cement has grown by 11.6 percent a year since 2000, reaching around 25 million tons in 2004. But the Kingdom's eight listed cement firms currently only produce 23 million tons a year. "We set up the company because we saw demand for cement is higher than the supply. It's as simple as that," said Akeel. "Our projection is there will be a shortage of supply until maybe 2008." He said RCC is due to be officially registered within 10 days and will have no problem finding customers.
