Two leading cement producers in Oman have knocked off prices in order to neutralise intensifying competition from the neighbouring UAE market.

The sultanate’s biggest cement producer Raysut Cement Company (RCC) said its rates would vary according to the quantity of cement purchased. RCC’s announcement follows a similar move by its domestic competitor, Oman Cement.

The companies are facing increased inflows of cement from rival UAE firms.

Raysut Cement’s net profit for the first nine months of this year was RO19.03 million ($49.04 million), down 21 per cent over the same period of last year. Profit had also declined in the first half of this year. Mohammed bin Alawi Ali Muqaibal, chairman of the company’s board of directors, had attributed the decline in profit to competition from overseas suppliers - a trend that had begun in the second half of last year.

“The inflow of cement from the UAE, the price competition in the northern market in Oman, as well as the demand recession in the export segment, have impacted the volume of sales and revenue,” the chairman had said.

Net profit for the whole of 2009 was RO28.68 million, an increase of 5 per cent.

Production up
Clinker production rose 4.6 per cent to 1,073,730 tonnes during the first half of this year, against 1,026,983 tonnes produced during the same period last year.

Cement production also climbed 20 per cent to 1,050,564 tonnes, against 875,606 tonnes during the corresponding period of last year.

The company said at the end of the first half that the government had accepted its claim for RO6.12 million as compensation for the higher cost of imported materials it was requested to provide to meet local demand during 2007 and 2008.

Oman Cement Company, which had also increased production capacity, was successful in its claim for RO7.34 million for the same period.

The company made a net profit of RO22.8 million for the first nine months of 2010, up 35 per cent. The 2009 profit was RO24.2 million against RO12.5 million.

RCC is holding acquisition talks with several companies and expects to reach an agreement soon, news reports said. The company had made an unsuccessful attempt earlier to buy the Star Cement Group.