Domestic boost: Anti-dumping measures came into force in earnest in the first of March this year, but have since been ramped up in conjunction with COVID-19 mitigation efforts
MUSCAT: Cement dumping from across the border – long the bane of Oman’s two main cement producers – has considerably eased in recent weeks in the wake of intensive screening measures adopted by the Sultanate’s authorities.
The action, spearheaded by the Ministry of Commerce and Industry, has been warmly welcomed by Raysut Cement Company (RCC), the Sultanate’s biggest cement manufacturer.
“We are delighted by the action initiated by the government to limit dumping of cement,” said a source at Salalah-based Raysut Cement. “These measures will enable Raysut Cement, as well as our peers Oman Cement, to operate at full capacity and service the needs of the domestic market.”
Anti-dumping measures came into force in earnest in the first of March this year, but have since been ramped up in conjunction with restrictions on the cross-border movement of goods as part of measures adopted by Oman’s authorities to limit the spread of the novel coronavirus (COVID-19).
“We hope the authorities will continue to strictly enforce this measure not only in the interest of fair market competition, but also to prevent the influx of cement that does not comply with Omani quality specifications. Use of substandard cement can have dangerous consequences for builders using such products,” said the source.
In comments to the Observer, he acknowledged that cement demand has dramatically declined in the wake of restrictions imposed by the government to curb the spread of the pandemic. “Demand has dropped by at least 20 – 25 per cent over the past month or so, largely because of the slowdown in construction activity, coupled with the pandemic restrictions. But we are hopeful that the demand will pick up once the restrictions are eased and once the economy recovers.”
The company, he said, is hopeful of government support to offset part of the losses anticipated during the lockdown and the ensuing downturn. “Given that the next 6 – 12 months will be a difficult time for the local cement industry, we will be approaching the government for some form of subsidy, be it in the form of gas or electricity, to enable us to recovery the losses during this period.”
Raysut Cement’s wholly-owned Sohar Cement plant, together its terminal within Sohar Port, have been operating at full capacity to support demand in the northern half of the country. “We have not been impacted very much in the north, but cement demand has declined significantly in Dhofar and Wusta governorates. Nevertheless, both Raysut Cement and Oman Cement are well-positioned to service any requirement of cement nationally. There is no shortage as such at present,” he said.
Notwithstanding the subdued economic environment, Raysut Cement is pressing ahead with its investment in Duqm Special Economic Zone, said the source. The company is investing around $30 million in a new grinding unit at the Port of Duqm with a capacity of around 1 million tons per annum.
“We are aggressively pushing ahead with our Duqm project. It is a good time for countries like Oman to become self-sufficient in the domestic availability of a strategic commodity like cement, and there is a major shortage anticipated in Duqm. Hence the need for us to invest rapidly in Duqm! We are also getting better pricing for the equipment, so we are going ahead full steam with our Duqm project,” he said, adding that the plant is slated to be commissioned in March 2021.