RAK Ceramics targets Saudi Arabia amid regional slowdown

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A strong dollar, to which some Gulf currencies are pegged, is making exports more expensive in key construction markets, such as Europe. (Supplied)
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RAK Ceramics is looking for business in the Kingdom amid a slump elsewhere in the region. (Supplied)
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The strong US dollar has increased construction costs in the UAE. (Supplied)
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Updated 13 February 2020

RAK Ceramics targets Saudi Arabia amid regional slowdown

  • A recent pickup in construction in the Kingdom has given confidence to a beleaguered building sector

LONDON: RAK Ceramics, the UAE-based tile-maker, wants to boost its Saudi business amid a tough market elsewhere in the Gulf.

The Kingdom emerged as a rare regional bright spot as it reported earnings on Wednesday that were defined by “challenging market conditions and increased competition in export markets,” it said in a statement. 

“Saudi Arabia has been a strong market for us predominantly in tiles, where we witnessed a substantial growth in the fourth quarter which reflected positively on the year-on-year growth,” said RAK Ceramics CEO Abdallah Massaad. 

“Looking ahead, our priorities for 2020 are to maintain our market share in the United Arab Emirates, Bangladesh and India; further grow our market in Saudi Arabia; and strengthen the overall performance of distribution entities in Europe.”

Building materials exporters have been hit by the triple whammy of a sharp slowdown in the regional housing market, a weaker oil price which has affected government project spending and a strong dollar to which some Gulf currencies are pegged — making their exports more expensive in key construction markets such as Europe.

However a recent pickup in construction activity in Saudi Arabia, the largest economy in the Gulf, has been a confidence boost for the beleaguered building sector.

Overall sales slumped 5.6 percent to 2.57 billion dirhams ($684 million) on a year earlier however Saudi Arabia showed strong growth with revenues jumping more than 9 percent to 271.9 million dirhams.

The projects segment in the Kingdom was stable and tiles revenue grew by 6.9 percent to 248.7 million dirhams. Meanwhile sanitaryware revenues surged by 41.6 percent to 23.2 million dirhams.


Saudi minister: OPEC+ will take responsible approach to virus

Updated 26 February 2020

Saudi minister: OPEC+ will take responsible approach to virus

  • Saudi Arabia supports the further oil production cut, but Russia is yet to announce its final position on the matter

RIYADH: Saudi Arabia’s energy minister said on Tuesday he was confident that OPEC and its partner oil-producing nations, the so-called OPEC+ group, would respond responsibly to the spread of the coronavirus.

He also said Saudi Arabia and Russia would continue to engage regarding oil policy.

“Everything serious requires being attended to,” the minister, Prince Abdul Aziz bin Salman, told reporters at an industry conference in Riyadh.

An OPEC+ committee this month recommended the group deepen its output cuts by an additional 600,000 barrels per day.

Saudi Arabia supports the further oil production cut, but Russia is yet to announce its final position on the matter.

The minister said he was still talking with Moscow and that he was confident of Riyadh’s partnership with the rest of the OPEC+ group.

“We did not run out of ideas, we have not closed our phones. There is always a good way of communicating through conference calls,” he said.

Regarding the coronavirus, which has impacted OPEC member Iran, he said OPEC+ members should not be complacent about the virus but added he was confident every OPEC+ member was a responsible and responsive producer.

The flu-like SARS-CoV-2 virus, which first broke out in China, has now spread to more than 20 countries.

“Of course there is an impact and we are assessing, but we’ll do whatever we can in our next meeting and we’ll address that issue,” UAE Energy Minister Suhail Al-Mazrouei said at the same industry conference.

Saudi Aramco CEO Amin Nasser on Monday said he expected a short-lived impact on oil demand.

“We think this is short term and I am confident that in the second half of the year there is going to be an improvement on the demand side, especially from China,” he said.

Oil climbed on Tuesday as investors sought bargains after crude benchmarks slumped almost 4 percent in the previous session, although concerns about the global spread of the virus capped gains.