Oman's Raysut Cement Company (RCC) has closed a $60m (OMR23m) deal to buy UAE firm Fujairah Cement Industries’ stake in Sohar Cement Co, with the Omani building materials giant targeting local production of four million tonnes following the agreement.
The news was announced by Fujairah Cement Industries in a 23 May filing on Abu Dhabi Securities Exchange (ADX), with the firm adding that its withdrawal from Sohar Cement Factory would be reflected in its financial statement for the period ending 31 June, 2019.
RCC, listed on Oman’s Muscat Securities Market (MSM), is one of the sultanate’s largest cement suppliers, and said it had signed the deal at an official ceremony in May 2019.
“The [board] has decided that during the coming period, qualitative processes should be achieved to enhance [RCC’s] position on one hand, and to increase our shareholders benefits on the other hand,” said Shaikh Ahmed bin Yousuf bin Alawi Al-Ibrahim, chairman of RCC’s board of directors.
He added that Sohar Cement Factory’s average annual production was 1.7 million tonnes, noting that this number would increase following the deal.
RCC’s parent company operates terminals in Sohar, Muscat, and Duqm, and has an associated firm in Yemen.
The company also runs an integrated plant in Salalah, and fully owns subsidiaries Pioneer Cement Industries in Ras Al Khaimah; Raysea Navigation SA; and Raybulk Navigation, in addition to a 51% stake in subsidiary Raysuit Burwaqoo Cement Co.
Its latest agreement with Fujairah Cement Industries comes nearly three months after RCC announced a “fierce marketing strategy” for 2019, driven by market challenges such as over-supply from the UAE, oil price changes across the world, and “socio-political disturbances in Yemen”.
RCC said revenues grew by 26.6% last year, as reported in its 2018 financial disclosures.