UAE firms accused of dumping cement in Oman
Cement companies in the UAE have defended their right to export to Oman amid calls for anti-dumping measures to be imposed on their goods.
Raysut Cement, Oman’s largest cement producer, is accusing UAE companies of undercutting local producers by offloading cheap cement. It has asked the Oman government to introduce a ceiling on imports from the Emirates.
“They are offloading a large amount of cement in Oman, which has pushed prices down to a low level, especially in northern Oman. [The country’s] producers are now either selling at a very small profit or below the cost price,” said Samidh Mukhopadhyay, the chief financial officer of Raysut Cement.
“Something should be done as nobody can sell cement in the long term at such a low price. The government needs to take action.”
Mr Mukhopadhyay said an overhang in capacity in the UAE market since the construction market slowdown in 2009 meant many producers in the country had increasingly looked to sell excess cement to Oman over the past three years. He accused UAE producers of dumping as much as 1.5 million tonnes per annum in excess cement in the Oman market, dragging down prices.
As a result, domestic cement prices had fallen from 31 riyals (Dh295) per tonne in 2009 to 26 riyals per tonne now.
Ahmed Yusuf, a Raysut Cement board member, was quoted by Oman Times yesterday as saying the company had requested Muscat to cap UAE cement imports at 30,000 tonnes per month as well as limiting the load on each lorry crossing the border from the UAE to 5,000 tonnes.
But UAE producers deny they are flooding the market.
“There’s a shortage and we are covering that shortage,” said Suliman Ali Abdullah Al Shehi, the sales manager, at the Ras Al Khaimah-based Gulf Cement.
Analysts estimate growth of 5 per cent this year in Oman’s construction market, as a number of projects continue spanning new airport infrastructure to housing.
But the exact scale of the shortage in the market remains open to question. Mr Mukhopadhyay put the total size of the market at 6 million tonnes, with Raysut Cement supplying around 2.6 million tonnes per year and a similar amount provided by Oman Cement, Oman’s other big producer, and smaller local companies. A further 2.5 million tonnes was then exported by UAE players but only 1 million of that was required, he said.
But M K Beary, the marketing manager at Fujairah Cement, estimated demand was closer to 3 million tonnes.
“Oman is a big country and demand is more than they have,” he said. “They rely on UAE cement as their requirement is big and they only have two factories.”
The UAE has around 20 cement factories producing more than 24 million tonnes of material a year, estimates the Ministry of Economy. But as much as 60 per cent of the output is exported, mainly to neighbouring countries.
Still, local companies are starting to benefit from an upswing at home as Dubai’s property market rebound gathers steam and preparations get under way for hosting the World Expo in 2020. Gulf Cement’s share price is up 56.2 per cent so far this year, with Union Cement’s up 97.2 per cent.
“The UAE is in need of cement and we expect the 9 million tonne local market to add 3 or 4 million tonnes in the coming years,” said Mr Beary.
Updated: December 29, 2013 04:00 AM