Tabuk Cement seeks to achieve target profitability in 2019: chairman

Tabuk Cement Co. has recorded better performance in Q4 2018 as compared to the previous quarter, chairman Saeed Obaid told CNBC Arabia.

“We are looking forward to reach the target profitability in 2019,” Obaid said.

Cement prices improved in Q4 2018 after they had reached unreasonable levels due to fierce competition, he noted.

“Cement producers can perform better in 2019 if they could overcome high prices and market competition,” Obaid further said.

“Tabuk Cement will likely capitalize on the Kingdom’s mega projects including the $500 billion NEOM mega-city, Saudi-Egypt Causeway and the Red Sea project, thanks to the company’s expertise,” he continued.

The company will seek to boost its exports to offset the local projects slowdown, Obaid added.

“All the cement producers may go for exports, especially after eliminating the export tariffs,” he added.

Obaid also indicated that Yemen exports require some regulatory approvals, adding that the company had already obtained the UN approval on exporting 150,000 tons of clinker. Also, the company is in the process of finalizing measures related to Africa exports.

“The company’s fuel talks with Saudi Aramco are still pending,” Obaid said, adding that “Saudi Aramco may enhance the sector upon the market conditions improvement.”

Tabuk Cement has a market share of 4.5 percent, Obaid stated, ruling out that the company may secure debt to pay dividend.

Expat fees may relatively weigh on the company, which has a Saudization rate of 44 percent, he said.