Top concrete producer Saudi Readymix plans to set up factories for the first time outside Saudi Arabia, a senior official says.

“In 2010 we plan to have operations outside the kingdom. We have been considering both Abu Dhabi and Qatar as potential markets with Qatar favoured for our first overseas expansion,” said marketing and business development manager Fadi Mujahed.

“Within Saudi Arabia, we seek to maintain our market share, integrate our operations and target mega projects that require high-quality concrete and strict supply specifications,” said Mujahed.

According to him, Saudi Readymix’s market share in the kingdom is around 10 per cent.

The company grew slightly in 2009 in terms of revenue and volume.  “After signs of the global economic downturn started to emerge during the last quarter of 2008, we were expecting 2009 to be a year of negative growth, but it turned out that the construction sector grew much better than expected.  We had invested in new equipment and were ready for the demand that followed,” Mujahed said.

“Cement sales in Saudi Arabia reached record levels in 2009, and construction activity, in general, was brisk, although it was sluggish in some sectors such as oil and gas and petrochemicals compared with 2008 as several projects in those sectors were retendered or put on hold. This changed, however, towards the second half of the year as Saudi Aramco announced that it would go ahead with its planned projects.

“The first quarter of 2010 is also encouraging; cement sales have reached new highs during the first two months of the year, consequently demand for concrete has increased. Nonetheless, we expect an oversupply of concrete as all major concrete companies have expanded to meet the increasing demand. We, for instance, have expanded our capacities in all the major cities in the kingdom and are building two new factories which will be operational very soon.”

There has been a strong push from the government to maintain strong growth in the construction sector and this is reflected in spending on institutions and infrastructure projects. Private sector projects have slowed down, though, mainly due to difficulties in receiving funding at the beginning of 2009, but some banks have started to finance private projects which in turn started moving forward again.

Of 31 factories Saudi Readymix operates, 10 are on-site factories. Two more will be set up in Riyadh, taking the total to 33. The company’s actual mobile capacity to deliver and pump concrete is 7.5 to 8 million cu m per year. Stationary mixing capacity is over 20 million cu m. The company has over 550 truck mixers, 170 mobile and stationary pumps and 30 placing booms that are used on high-rise buildings which will be increased by another 10 soon.

Integrated supply chain

Meanwhile, the company is poised to take on new contracts and has acquired a new quarry near Riyadh, located in the north of the city along the Qassim Road and its fourth to date. Another quarry is being set up in the Makkah area and operations are expected to begin within a few months.

“It is important we have a solid supply chain to service our customers. Our strategy is to ensure that a portion of our requirements for aggregates is produced by us. This will prove useful in times of supply constraints. We’re locating quarries in areas where demand is quite strong and where we find, on the basis of our research, that there might be a tight supply in raw materials. We took into account the strong growth in Riyadh’s construction market and the strong construction activity in Makkah. These quarries would ensure that we have a relatively integrated supply chain that can absorb the impacts of sudden shortages,” said Mujahed in his comment.

Introducing special concretes

One of its energetic initiatives is promoting concrete solutions and spreading awareness among developers, builders, architects, consultants. designers and engineers about the efficacy of superior concrete products. Several seminars, for example, were held on self-compacting concrete in 2009. Saudi Readymix in fact constructed one its own group buildings using this type of concrete in Al Khobar to serve as reference.  The company expects to host several more.

“We are seeing interest. Self-compacting concrete overcomes the problems of honeycombing due to poor compaction or in heavily reinforced concrete sections. The concrete flow easily, is self-levelling and the placing process saves times and labour,” said Mujahed.

Saudi Readymix is also pitching for high-strength concrete and has been supplying grades of 60 and 70 MPa.

“We have done tests on many high grades of concrete and are getting ourselves ready for the demand,” says Mujahed. “In certain regions, we have reached over 100 MPa concrete. We are also designing our high strength concretes to be pumpable for high-rise buildings. We have set up two high-rise pumping simulation areas for this purpose and can test concrete pumping for heights exceeding 350 m.”

The company is also propagating the advantages of green concrete.

“The idea is to use different kinds of cementitious additives to replace cement,” he says. “Once you replace cement, concrete becomes greener. The production of cement contributes to the emission of carbon dioxide; one ton of cement produces around one ton of CO2, thus by reducing cement in concrete, CO2 emissions are reduced, thereby lowering the carbon footprint.”

Ongoing projects

Saudi Readymix, meanwhile, has more than a handful of major ongoing megaprojects. These include Jabal Omar in Makkah, where the requirement is more than 1 million cu m of concrete, and the King Abdullah University of Science and Technology in Thuwal, north of Jeddah, where already more than 1 million cu m has been supplied.

Among other major projects it is supplying its products to are King Abdullah Financial District, Information Technology and Communication Complex (ITCC), Olayya Towers and Princess Noura University, all in Riyadh.

Of the two new Riyadh factories one will come up on the ITCC site and the other on the site of King Abdullah Financial District to enable the two projects to be supplied conveniently.