QATAR: QNCC to raise production by 12 percent

Qatar's main cement maker, which claims catering to over 70 percent of the local demand, is gearing up to meet the growing appetite for this primary building material fuelled by the infrastructure projects.

With the operation of two new mills by the end of this year, the total cement production capacity of Qatar National Cement Company (QNCC) will be increased to over four million tonnes per annum, which will witness a nearly 12 percent jump from the existing capacity of the company.

The company's total production (in all categories of cement) increased to 3.5 million tonnes in 2014, up nearly three percent compared to 3.4 million tonnes produced during the previous year.

"Our two new mills are scheduled to begin operation this year. The first will commence production from October 15, 2015, while, the second one is expected to start by the year-end," said Salem Butti Al Naimi, Chairman and Managing Director of QNCC , adding, "the whole plant will start running at full capacity by early next year producing about 23,000 tonnes per day."

Al Naimi, speaking to this newspaper on the sidelines of QNCC 's Annual General Meeting (AGM) yesterday, said: "We are expecting the demand for cement in Qatar will continue to grow in the coming years, and we at QNCC are ready to meet any surge in demand. If the market needs more than our full capacity, we are ready to import from outside."

However, he restrained from giving any estimated peak demand for cent in the run-up-to 2022, saying: "We are not the only supplier in the market. The quantum of demand and growth rate will largely depend on the number of new projects awarded and the progress of the ongoing projects." 

He added that the demand for cement in Qatar is also influenced by many other factors, such as the weather conditions, Ramadan and summer working timings, when the demand for cement drops significantly. 

Keeping in view the rising demand for cement, the company, last year, had signed a letter of intent with a French company to further boost its production capacity. The contract was signed for the construction of QNCC 's Cement Plant Line 5.

Meanwhile, earlier in the AGM, shareholders approved all the agenda of the meeting, including the Board's recommendation to distribute dividends of QR4 per share (40 percent of the nominal value of the share) and a distribution of 10 percent bonus shares.

The shareholders of QNCC also gave the nod for the extension of the Company's duration, which is expiring on October 8, 2015, for additional 50 years. 

The company had reported a net profit of QR420.3m for the year ended December 31, 2014, which was down by nearly 3 percent compared to QR433.3m in 2013. The Earnings per Share (EPS) amounted to QR8.56 in 2014 compared to QR8.82 in 2013.

QATAR: Qatar National Cement Co. signs contract with Fcb Ciment for US$219.71 mn plant

Qatar National Cement Company has signed an agreement with Fcb Ciment of France for the construction of a QR 800 million (US$ 219.71 million) plant with a production capacity of 5,000 tonnes of clinker per day, media reports.

The new plant, the forth for the company, will allow Qatar National Cement Company (QNCC) to increase its output to 11,900 tonnes of clinker per day and 15,500 tonnes of cement per day, according to news reports in Gulf News.com.

Salem Butti Al Nuaimi, Chairman and Managing Director, QNCC, and Alain Cordonier, CEO, for Fcb Ciment, signed the deal on Sunday. QNCC also signed a consulting agreement for the project with Basse Sambre-ERI from Belgium, which is also the consulting firm for plant 3.

Al Nuaimi told reporters that once the plants reach their projected capacity, QNCC will be able to fully meet the cement requirement of the local market with prospects for export of the surplus to neighbouring countries. He said that the new plant will be established in two stages with one of the cement grinders to be commissioned in 17 months and the other in 22 months.

QATAR: Cement prices not set for ‘unreasonable hikes’ on govt control

Though the demand for cement products is expected to almost double by 2017, any unreasonable price hike for the vital building material is unlikely due to the government’s tight control and monitoring of the market, a leading technocrat has said.

Engineer Khalid Kassas, general manager of Al Sarh Trading & Contracting Company, said current consumption of cement in the country is estimated at 5.5mn metric tonne per annum (mtpa). However, in the run-up to the Fifa World Cup 2022, this is likely to double to 10mn mtpa in the coming years.

Kassas said local producers are in a good position to meet increasing demand. If the need for importing cement arises in the future, neighbouring countries such as the UAE and Saudi Arabia could meet Qatar’s demands.

“It is a highly competitive market and local companies should come up with innovative solutions to cater to its various and varying needs. It could be considered a healthy sign in the market to encourage expansion and productivity, which is highly supported by the government,” he stressed.

Kassas said local companies in this field need to invest more to increase their production capacity and this is the proper time to make major upgrades for their facilities, including partnership with international players in the market.

“To keep our position, we have fully upgraded our new asphalt batching plant in Mesaieed Industrial City and fielding plant in Doha Industrial Area for concrete products. Also, our fleet of equipment and crushers has been completely enhanced and upgraded.”

Local producers should look ahead and adopt long-term investment strategies in terms of industrial assets such as machinery and equipment. They should also engage global experts to train their staff on how to operate these assets in a sustainable manner, Kassas said.

He pointed out that Qatar provides abundant contracting opportunities due to various mega projects, whether private or public, and to undertake these, local companies have to completely restructure their operations and be ready for constant upgrading.

Accompanying the construction boom is a very ambitious plan by Ashghal, the public works authority, to develop all the roads of the country and introduce more highways. Accordingly, Ashghal demands the integration of standard polymer asphalt blending system in most of the new projects that they are being implemented. The system is designed for fixed installations at facilities such as asphalt terminals. It blends poly (styrene-butadiene-styrene) or SBS, a hard rubber that is used where durability is important, with virgin asphalt cement, or bitumen, to make polymer-modified asphalt cement (PMAC).

“We are currently upgrading our system in our asphalt plant, incorporating the polymer modified bitumen system to cope with the demand from our clients,” Kassas said.

He said developing the human factor and workforce in such a process is essential.

“Maintaining a highly trained and qualified staff is key to success. We also do our best to care for our workers and labourers’ welfare, in particular providing them with adequate salaries, accommodation and related services,” he said.

Al Sarh Trading & Contracting Company was established in 1975 in Qatar. Currently it is a member of Mohamed Hayil Group of Companies.

QATAR: Qatar Cement signs consultancy services deal to set up plant 5

Qatar National Cement Company announced signing a consultancy services’ contract with Basse Sambre of Belgium to set up cement plant No. 5.

The contract involves the preparation of global tender documents for the establishment of a plant with a capacity of 5,000 or 7,500 tonnes of clinker per day on turn-key basis parallel to the cement production lines (2, 3 and 4) at Umm-Bab.

Last June, Qatar National Cement Co decided to set up a cement plant with a capacity of not less than 5,000 tonnes of clinker per day, in a way to increase its production capacity of clinker and cement to meet the needs of the market in the future.

The company is now producing 14,000 tonnes of cement per day and meet the needs of the market, but it works to intensify its production during the coming period in light of the increased demand for cement.

QATAR: Qatar National Cement Company

Winning the bid to host the 2022 FIFA World Cup has generated a construction boom in Qatar that is attracting interest from all over the world. One company that will be helping to ensure that demand for construction materials is met is Qatar National Cement Company.

Investment in infrastructure in Qatar is set to boom over the next few years as the Middle Eastern state prepares to welcome the world onto its soil for the FIFA 2022 World Cup. The event might yet be a decade away, but Qatar has already announced it expects to complete its first stadium by 2015—just three short years from now.

The state’s $4 billion stadium building programme will see the construction of nine new eco-friendly football stadiums in total, as well as the expansion of three existing stadiums. Add to this projects such as the creation of the $3 billion Doha Metro, and it is clear that no time is being wasted in getting infrastructure programmes off the ground.

One company that will benefit hugely from all the construction activity is Qatar National Cement Company (QNCC). Established in 1965 by the Qatari government to produce sufficient ordinary Portland cement to meet demand, QNCC is now a major producer of ordinary cement, washed sand and lime. It manufactures and distributes ordinary Portland cement (OPC), sulfate resistant Portland cement (SRC), Portland pulverised fuel ash cement and hydrated and calcined lime.

If production figures are impressive now, they can only improve as 2022 approaches. The company’s production in both OPC and SRC reached 3.8 million tons during 2010, with production of washed sand reaching 5.6 million tons. Both calcined and hydrated lime production reached 18.6 thousand tons.

Sales of all types of cement (OPC, SRC, slag blended cement and fly ash blended cement) reached 3.8 million tons during 2010. Sales of washed sand amounted to 4.7 million tons and sales of lime in both categories amounted to 17.2 thousand tons. QNCC has said it now wishes in particular to improve its sales of washed sand to maximise profitability within that particular segment.

QNCC’s manufacturing facility is situated at Umm Bab, 82 kilometres from Doha—an ideal location when you consider the rich raw material deposits on the Western coast of Qatar. The facility is equipped with raw materials testing laboratories and water desalination plants processing 3,000 cubic metres of water per day to cater for the water needs of the cement plant and the residential employee compound. Other QNCC sites include a sand plant at Al-Rakiya, a gypsum quarry at Abu-Samra and a head office in Doha.

In 2011, QNCC began trial operations of its QR22 million calcium carbonate plant at the Umm Bab facility. Specialising in the production of calcium carbonate for use in water treatment operations, the plant has a production capacity of 250 tonnes per day, with operations to be supported in part by the Ras Girtas power station at Ras Laffan.

QNCC general manager Mohamed Ali al-Sulaiti said the company had entered into an agreement with Kahramaa, who will buy the calcium carbonate for a period of 25 years. “QNCC is carefully growing and expanding to play its national role in supporting the infrastructure development in the state, especially after Qatar won the bid for hosting the 2022 FIFA World Cup,” he commented.

The company has now started taking primary steps to increase cement production capacity by replacing the old cement mills of plant 1 with a new cement mill, in order to meet the expected requirement of cement for the development of infrastructure needed for the hosting of the World Cup. Cement plant 4, completed in 2010, already has a capacity of 5,000 tons of clinker and around 5,500 tons of cement per day, with the company’s total production remaining at around 12,000 tons of clinker per day and around 15,500 tons of cement per day. QNCC may yet further expand its cement production capacity, having declared its intention to focus all its efforts on enabling Qatar to become self-dependent in cement production in the near future.

QNCC has a firm reputation in the local area for its competent management, dedicated and professional staff and its support of the Qatari government and associated infrastructure plans. QNCC employees are well looked after, taking part in the various social upliftment activities of the Qatari government and regularly attending training and seminars to ensure they remain at the cutting edge of their industry. Excellent working conditions are maintained in plants, and sport facilities are provided to ensure employees remain in optimum health, along with a clinic and canteen facilities for use by all workers.

QNCC is also focused on encouraging Qatari nationals to join the company, in line with the state's policy of targeting nationals for employment in the workforce. QNCC contributes towards and supports national activities as part of its commitment towards the community, commensurate with the state policy, by contributing 2.5 per cent of its annual net profits towards social upliftment programmes.

However the company wishes to maximize its position as a supplier of construction materials during the construction boom, at the heart of QNCC’s activities will always remain the principle of providing good quality products at reasonable prices. Its fleet of tankers will continue to provide prompt and efficient delivery and distribution of products to its customers—and the crucial role the company will ultimately play in the country’s biggest ever sporting occasion will be clear for the world to see.

QATAR: Qatar National Cement six-month net falls 16%

Qatar National Cement Company said net profits for the first half of 2011 fell 16.5% to QAR 521m and by 13.6% in the second quarter against the same periods last year as sales declined in the gas-rich state.

The country’s only listed cement supplier’s results compared to a QAR 256.79m net profit last year. Revenues since the start of the year up to 30 June declined 11% to QAR 521m from QAR 586.6m last year, according to its financial statement for the period, published this week.

The company holds a near monopoly in the domestic construction market as its production of ordinary Portland cement and other types is part subsidised by the government, analysts say.

The company has been a key beneficiary from the surge in Qatar’s construction market, particularly in the infrastructure sector. NBK Capital says the company was able to capitalise from the absence of cement imports last year.

QATAR: Qatar National Cement Q1 net rises 2% as costs dip

Qatar National Cement Company, the country’s only listed manufacturer, said net profit for the first quarter rose 2% against the same period last year despite a fall in pre-tax revenue.

Sales fell from QR 301.3 million in 2010 to QR 275.3 million in the last three months, down 8.6%. But a fall in manufacturing and distribution costs, along with income from associated companies, allowed the supplier to post after-tax gains of QR 113.7 million, up from the QR 111.4 million a year before.

The adjustment in the company’s net value of its investment in associated in line with fair value, or mark-to-market’, accounting yielded QR 1.78 million - representing a new source of income against last year. Earnings per share edged up for QR 2.27 last year to QR 2.32.

QATAR: Qatar National Cement gross rises 25% on cost cuts

Gross profit at Qatar National Cement Company rose by nearly a quarter last year against 2009 as a steep fall in sales cost compensated for a 28% fall in revenue.

The country’s biggest manufacturer of the building product saw pre-tax gains leap from QR421.6million to QR509.5million between the two years, according to its latest financial statement.

The cost of sales fell by almost half from QR1.09billion to QR580.5million to make up for the slide in revenue from QR1.5billion to QR1.09billion. A fall in finance charges and a smaller loss from available-for-sale assets saw net profits rise almost 12% from QR417million in 2009 to QR466.9million.

Despite a decline in the value of its non-current assets – which includes its property, plant and equipment and investment in property and securities – the company’s level of inventories rose 48% against the previous year, from QR296.8million to QR439.5million.

QNCC expects local demand surge in ’11

Qatar National Cement Company (QNCC) yesterday said the domestic cement demand is expected to surge to 25,000 tonnes per day by next year due to large projects coming up in the country.

Khatib and al-Sulaiti outlining
the QNCC growth strategy 

QNCC, whose major business include the government projects, is also setting up a calcium carbonate plant at an estimated cost of QR40mn, according to senior officials.

Right now the (daily) cement demand is 15,000 tonnes. Globally there has been a 30% drop in demand due to real estate slump and other reasons brought about by the global financial contagion, according to QNCC production manager Kamal Khatib.

In 2008, Qatar had the highest per capita cement usage of 7 tonnes, he said, adding the cement industry is expected to get a major fillip by next year.

“It (cement demand) will get back to 25,000 tonnes per day after December (2010) because of the major projects announced by the government,” Khatib said on the sidelines of a function to analyse the first-half results, which showed a marginal 1% rise in net profit to QR256.79mn.

Khatib said QNCC is diversifying production to hedge the risk of concentration.

On the new carbonate plant, which comes as part of its diversification plan, QNCC general manager Mohamed Ali al-Sulaiti said the production capacity would be 250 tonnes per day and is expected to be operational by June next year. 

In May this year, the company had entered into agreement with Stream Industrial Engineering Company to construct the plant at Umm Bab.

The plant would meet the demand of calcium carbonate from Qatar Electricity and Water Company in accordance with the supply agreement between the two parties made in 2009 for 25 years.

Asked about the 33% drop in revenues during January-June this year, Khatib said it was due to fall in the sales.

To a query whether QNCC would be tapping the debt market, Khatib said the company’s financial position was good and hence there was no need for funds. 

In May this year, QNCC informed the Qatari bourse that it had entered into an agreement with Singapore-based Islamic Bank of Asia for a QR164mn Murabaha facility, repayable in quarterly installments within three years.