Peninsula - 12/6/2006
Gazan Agricultural Development said yesterday it plans to build a 1.1bn riyals ($293m) cement plant, the latest in a series of such projects amid a surge in demand in Saudi Arabia.
Shares in the company soared by nearly the 10 per cent daily limit to 53.50 riyals after the announcement.
The company said the trade and industry ministry gave its approval to the plant which will have a production capacity of 1.5 million tonnes per year. "The firm will finalise procedures for other approvals with the oil and mining ministry and will discuss the financing plan (of the project) in the upcoming meeting of its board," Gazan said in a statement posted on the bourse website.
Saudi Arabia is pressed to raise cement production to cope with a real estate boom and huge infrastructure projects. Authorities are licensing new firms to invest 21.6bn riyals to treble annual production to up to 70 million tonnes.
Last month saw the announcement of plans for two new cement firms that will invest more than 2bn riyals in two plants projected to produce 3 million tonnes each.
Some of the eight existing cement firms, producing an annual 23 million tonnes, are seeking to raise their output to defend their turf against new comers.
Yanbu Cement said this month it plans to raise its annual output by 75 per cent to 7 million tonnes by 2007.