RIYADH, 18 September 2005 — With the construction boom in full swing, an SR1.1 billion cement project will come up in the Central Province by 2007, bringing the total to nine cement factories in the Kingdom and also opening up job opportunities for Saudis in the private sector.

It will be one of the 27 cement factories to be established all over the Kingdom, for which licenses have been issued by the Ministry of Commerce and Industry at a cumulative cost of SR21.6 billion and a combined production capacity of 45.2 million tons per annum.

A team of select journalists was invited by the Riyadh Cement Co. (RCC) management to the factory site for the ribbon-cutting ceremony marking the formal launch of the project at Muzahimiya, 80 km from the capital. Sinoma, a major Chinese construction firm from Beijing, is the prime contractor for the project.

Speaking to Arab News, Mukhtar A. Shaikh, finance manager of RCC, said the factory, when it comes on stream, will have a production capacity of over two million tons of clinker annually. It is expected to be commissioned one month ahead of schedule in early 2007.

The total cost of the project is SR1.1 billion. The amount will be raised through RCC’s paid-up capital of SR550 million in addition to an IPO of SR250 million, while the Saudi Industrial Development Fund has pitched in with a loan facility of SR400 million, bringing the total amount to SR1.2 billion. The company has set aside SR100 million as capital reserve.

He said shares would be floated to the public either in December this year or early next year. The Consulting Center for Finance and Investment (CCFI), headed by Dr. Abdulaziz Al-Dukheil, has been named the consultant for the project.

“We are going ahead with an IPO (initial public offering) for SR250 million for floating shares to the public either in December this year or early next year,” Mukhtar said.

Though it is a new project, the management is the same, with Prince Faisal ibn Abdulmajeed, doubling up as the chairman of Saudi White Cement Co. and RCC simultaneously. Similarly, Salah Al-Rashed, director of Saudi White Cement Co., will be the managing director of RCC. There are eight cement companies currently operating in the Kingdom.

A spokesman of Sinoma International said the duration of the contract is 26 months. The accord was signed recently by the chairman of the Riyadh Cement Company, Prince Faisal ibn Abdul Majeed, and the chief executive officer of Sinoma, Wang Wei, in the presence of Saudi businessmen and Chinese diplomats.

Riyadh Cement Company will be the ninth cement company in the Kingdom. The Kingdom currently produces 22 million tons of cement out of the 25 million needed to cater to the burgeoning needs of the construction industry. Domestic consumption of Portland cement has surged by 11.6 percent a year since 2000, reaching around 25 million tons in 2004.

The new project will provide employment opportunities for more than 300 people. “ We will try our best to stick to the Saudization program of the country and we will provide technical training for Saudi youths to take up positions in the new factory, “ Shaikh said.