JEDDAH, 16 March 2006 — The El-Khayyat Cement, a new Greenfield cement project, is being launched and it will add one million tons to the Saudi cement sector. The move is made at a time when the Kingdom is gearing up for massive construction projects including the SR100 billion King Abdullah Economic City in Rabigh.

An agreement was signed yesterday to appoint Riyad Bank as a financial adviser to structure private placement and project financing for the cement project.

Riyad Bank President and CEO Talal Al-Qudaibi and El-Khayyat Red Bricks Manufacturing General Manager Mazen Ahmed Khayyat signed the deal at El-Khayyat Commercial Center.

Abdul Majeed Mobarak, executive vice president and head of corporate bank, Riyad Bank, Ghazali Inam, vice president and senior corporate finance officer of Riyad Bank and senior officials of El-Khayyat group and Riyad Bank were among those present.

The new cement project will be based on the latest technology and is scheduled to come on stream in late 2008. Internationally renowned consulting firm, PEG, S.A. has been retained as consultant and project manager for the design and construction of the cement plant, which will also include a dedicated inside-the-fence electric power plant as part of the project.

“The El-Khayyat cement project is viable and bodes well for capacity short cement sector in the Kingdom,” Ghazali told Arab News. “The project economics is strong as the plant’s cement output will cater to a captive demand in the Western Region, with proximity to the proposed King Abdullah Economic City. The plant site is also close to the source of raw material,” he added.

At present, according to him, there is a strategic push for increasing cement capacity as the Gulf Cooperation Council (GCC) countries, including Saudi Arabia, seek to achieve self-sufficiency in cement production.

“The El-Khayyat Cement Project is well placed on the new capacity expansion cycle,” Ghazali added. “This project will help to construct and develop our country to utilize treasures and raw material. This project is the vision of our father (Ahmed Taha Khayyat) who laid the foundation to help develop our country,” Mazen Ahmed said.

“We’ve already received necessary permission from the Ministry of Petroleum and Mineral Resources to commission this project,” he said, adding that the construction of this project will start in June this year and initially 400 people, including a large number of Saudis, will be employed.”

“We expect huge demand for bricks due to the King Abdullah Economic City project,” Ibrahim A. Khayyat, deputy general manager of El-Khayyat for Trading & Engineering, said. “We’ve already factories in Bahra, near Jeddah, Jizan and Khalais, which will be closer to the economic city and enable to meet the demand,” he added.