Gulf Construction Online - OCC cashes in on booming business

Cement & Concrete

OCC cashes in on booming business

01 March 2004

Muscat-based Oman Cement Company (OCC), which reports a boom in business following a flurry of activity in the region’s construction sector, is contemplating a much-needed expansion, says Amitava Saha, marketing manager of OCC.

“The management is considering an expansion, but we are also cautious about the fact that the plant will take over six years to be ready, by which time the markets may not remain so buoyant,” says Saha.
Expansion of the plant was first envisaged in 1995, based on a forecast that predicted the demand to reach 1.5 million tonnes by 2000. A new production line was supplied and erected by mid-1998 and the upward trend has continued, he says.
Several projects including the Oman India fertiliser plant, Sohar Port expansion (with additional berthing facilities), Sohar refinery and the forthcoming Sohar aluminium smelter and petrochemical complex, have fuelled a demand for cement, Saha says.
“Low interest rates on housing loans and the surplus liquidity with banks, has created a boom in the construction of villas in Oman. This coupled with Oman’s desire to improve its infrastructure and the situation in Iraq after the war, has resulted in an all-time-high demand for cement in the region,” he explains.
Last year, OCC sold 1.6 million tonnes of cement, which is 30 per cent more than its annual manufacturing capacity of 1.2 million tonnes and the prospects for this year are bright as the construction sector has become active both within the Sultanate and outside.
Exports to the UAE are likely to rise as most of the cement units in the emirate have locked their supplies to the local fast-track projects.
Established in 1978 as part of the renaissance in Oman initiated by Sultan Qaboos bin Said, the plant manufactured 1.523 million tonnes of cement in 2002. The company started with a capacity of 600,000 tonnes of clinker per annum and has over the years doubled its capacity.
With three cement mills, OCC currently manufactures four types of cement:
• Ordinary Portland cement conforming to Omani, British and American standards;
• Sulphate-resistant cement in accordance with British and American standards;
• Portland blast furnace slag cement; and
• Oil well cement conforming to American Petroleum Institute specifications for (class A&G) cement.
The oil well cement was introduced recently and is used for cementing oil wells. The entire cement production process is controlled by a state-of-the-art Advant distribution system and is fully computerised, says Saha.
Sophisticated machinery and the strict attention given to producing cement of the highest standard conforming to international specifications, has won laurels for the plant. The company has won ‘His Majesty’s Cup’ for the best five factories in Oman many times and has an ISO 14001 certification for its environment management system, effective from September 2001. It is also accredited with ISO 9001 certification and other international quality awards.
“With its commitment to nation-building, OCC – which holds a 60 per cent share of the Oman market (the rest of the demand is met by Raysut Cement Company, Salalah with 10 cent and imports, 30 per cent) – exports 420,000 tonnes of its production to neighbouring UAE countries and East Africa.
“As a strategy,” says Saha, “we deliberately diversified part of our exports to East Africa, and now, although the local demand is high, we are maintaining a presence there.
“The strategy has paid off, and although OCC raised its prices by 50 per cent last year, the demand continued to be strong. We have built-up a good brand and our quality is better than cement from Jordan, Egypt, Sudan, Somalia and other countries,” he says confidently.