Yanbu Cement Faces Market Challenges Amid Declining Demand

Yanbu Cement Co. experiences intensified competition and a reduction in average selling prices due to a decrease in cement demand in Saudi Arabia, despite holding an 8% market share.

Yanbu Cement Faces Market Challenges Amid Declining Demand
Photo by Hala AlGhanim / Unsplash

Ali Al-Ayed, CEO of Yanbu Cement Co., has highlighted the challenges faced by the company in the wake of declining cement demand in Saudi Arabia. The decreased demand has led to heightened competition among industry players and a subsequent drop in average selling prices. Al-Ayed noted that large projects could potentially mitigate these pricing pressures. The company observed a 3.9% decrease in cement demand within the Western Region in 2023 compared to the previous year, with average sales for large projects reaching 2,100 tons per day in the last quarter of 2023.

Despite these challenges, Al-Ayed remains optimistic about maintaining stable sales in the first quarter of 2024. Yanbu Cement's market share stood at approximately 8% by the end of 2023, with clinker stock reaching 5.8 million tons. The company strategically adjusts production in response to market conditions, avoiding stockline inventory and opting to sell directly.

However, Yanbu Cement's profit saw a 44% decline, dropping to SAR 119.9 million by the end of 2023 from SAR 215.4 million a year earlier. This financial downturn reflects the broader challenges within the cement industry in Saudi Arabia, as companies grapple with fluctuating demand and competitive pressures.


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