While Saudi Arabia is going through an unprecedented construction boom, fears are that there will be an oversupply in cement production in the kingdom. 

Leading producers are considering setting up joint ventures in markets where the supply is most needed.
Fifty-year-old Arabian Cement Company Ltd (ACC), the oldest cement manufacturer in the Gulf region, has announced it will set up a factory in neighbouring Jordan in a joint venture with Italcementi, a step it sees as the first among several ventures overseas.
ACC president and CEO Muhammad Uthman said recently that production would reach 60 million tonnes per year (tpy) in Saudi Arabia within the next four years, leaving a surplus of not less than 10 million tonnes. He said ACC was eyeing acquisitions in Africa and the Middle East and saw countries such as Sudan and Zimbabwe as particularly attractive.
ACC will more than double capacity to 7 million tonnes annually in Saudi Arabia by 2010, for which it is investing more than $1 billion. The expansions include the new 3.6 million tpy Line 6 at Rabigh.
The company’s plants at Labuna and Rabigh are close to King Abdullah Economic City where huge multi-billion-dollar infrastructure projects are underway. As well as supply to the economic city, the two plants have access to the Red Sea ports, facilitating exports to Sudan and East Africa.
ACC’s Jordan plant will produce 2 million tpy of cement which could be expanded to 4 million tpy as demand grows. The plant is located 90 km south of the capital Amman in a place called Katrana which has large deposits of limestone, the basic material for cement production. Exports from the plant will go to Iraq, Syria and Palestine.
“The Katrana plant will produce top-quality products using the latest technologies in this field of time when Jordan’s and the Middle East’s real estate development sectors are witnessing unprecedented growth and heightening demand,” Uthman said. German industrial equipment group KHD Humboldt Wedag has been selected to design and supply equipment to the Katrana plant, which will be completed in two years.
A leading supplier of cement production technology, KHD Humboldt has developed from a mechanical engineering workshop established in 1856 to a globally operating engineering company with its own manufacturing capacities for core equipment. It has carried out projects in the Middle East, China, India and the US.
ACC made a net profit of SR195.4 million ($52.1 million) for the first half of this year, an increase of 1.7 per cent over the same period in 2006. The net profit for the whole of 2006 was SR333.5 million, up 0.8 per cent over 2005.