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.


IMF extends visit to crisis-hit Lebanon: sources

Updated 24 February 2020

IMF extends visit to crisis-hit Lebanon: sources

  • The IMF began meetings with Lebanese authorities on February 20 to provide broad technical advice
  • Lebanon is grappling with an acute liquidity crunch that has prompted banks fearing capital flight to impose strict controls

BEIRUT: The International Monetary Fund (IMF) will continue meetings with Lebanese authorities on Monday, sources familiar with the process said, extending a visit to provide technical advice that was expected to end on Sunday.
The IMF began meetings with Lebanese authorities on Feb. 20 to provide broad technical advice on how to tackle the country’s crippling financial and economic crisis. The fund had said its team would stay until Feb. 23.
Lebanon has not requested financial assistance from the IMF as it draws up a rescue plan to tackle a long-brewing financial crisis that spiraled last year as capital inflows slowed and protests erupted against the ruling elite.

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The sources familiar with the meetings said talks would continue until the Lebanese government made a decision on issues related to the technical assistance. The results of the meetings were “positive,” they added, without specifying further.
Lebanon is grappling with an acute liquidity crunch that has prompted banks fearing capital flight to impose strict controls. The Lebanese pound has slumped by about 60 percent on a parallel market, hiking inflation.
Saddled with one of the highest public debt burdens in the world, Beirut must decide quickly what to do about fast-approaching debt payments including a $1.2 billion Eurobond maturing on March 9.
Global credit ratings agencies Standard & Poor’s (S&P) and Moody’s downgraded Lebanon’s credit rating deeper into junk territory on Friday, citing anticipated losses to creditors from what they said was a likely debt restructuring.