Saudi cement sector poised for global lead through digital maturity and circular economy practice

Special Saudi cement sector poised for global lead through digital maturity and circular economy practice
Saudi Arabia’s white cement market is anticipated to grow at a compounded annual growth rate of 11.93 percent during the forecast period spanning from 2024 to 2028. Shutterstock
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Updated 18 May 2024
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Saudi cement sector poised for global lead through digital maturity and circular economy practice

Saudi cement sector poised for global lead through digital maturity and circular economy practice

RIYADH: Saudi Arabia’s cement industry is poised to maintain its position as a key player in the global market, by harnessing circular economy principles and navigating challenges using digital innovation, according to an industry expert.

Amr Nader, CEO and co-founder of cement consultancy A3&Co, told Arab News that most of the Kingdom’s plants in the sector boast state-of-the-art technologies, which will enable them to reach digital maturity for achieving operational excellence and de-carbonization goals.

While some plants are initiating proper strategic initiatives in this area, others are still in the early stages of trials. 

However, Nader believes that the transition to digital maturity is on the priority list of most plants and is expected to materialize within the next 2 to 5 years.

According to TechSCI Research, Saudi Arabia’s white cement market reached a value of $165.11 million in 2022, and is anticipated to grow at a compounded annual growth rate of 11.93 percent during the forecast period spanning from 2024 to 2028.

Key projects like NEOM and Qiddiya, along with the expansion of transportation networks and entertainment centers, have spurred a notable increase in the demand for high-quality cement in the Kingdom.

Nader believes this growth will come alongside major shifts in the sector, and said: “We anticipate a cost reduction and improved value addition, leveraging circular economy and even for net-zero transition if the right technologies at the efficient sizes are adopted.”

The CEO elaborated on the significance of adopting oxy-fuel technology at suitable scales, emphasizing its use of oxygen and recirculated flue gasses for burning fuels instead of air.

This approach, combined with increased reliance on renewable energy sources and the anticipated integration of low-carbon hydrogen as a fuel source, indicates the potential for Saudi Arabia’s cement industry to sustain its competitive advantage beyond 2030 according to Nader.

These initiatives form part of a comprehensive de-carbonization strategy aimed at lessening the sector’s ecological impact while preserving its market standing.

Nader further highlighted that the Saudi competitive pricing edge is driven by lower production costs even after factoring in carbon adjustment border taxes, potentially increasing exports to regions with stringent carbon regulations.

“In regard to the carbon boundary tax of Europe and other carbon boundary taxes in the world, we see that as an opportunity for further export from Middle East plants that will early adopt near-zero transitions in a time frame between 2024 and 2028,” he said.

Carbon boundary taxes, also known as carbon border adjustment mechanisms, are policies implemented by governments to address carbon leakage.

They ensure that industries subject to carbon pricing within their jurisdictions remain competitive with foreign industries that may not face similar levies..

These taxes aim to prevent the relocation of industries to countries with weaker climate policies while also encouraging other nations to adopt similar carbon pricing measures.




Projects like OXAGON at NEOM have been fueling the cement sector. File

Nader highlighted challenges affecting demand in the cement sector, such as heightened sea freight costs, reduced vessel availability due to geopolitical tensions, and increased pricing by Saudi plants to counter higher energy costs from Aramco.

“Despite the increase in fuel prices by average 100 percent for all fuels, the production cost in efficient Saudi plants is still lower than the global average by approximately 15 percent and there is still room to improve that by adopting operational excellence,” he added.

He explained that large companies in the Kingdom, with capacities exceeding 8,000 tonnes per day, have significant opportunities for improvement by implementing Operational Excellence Strategies and early adoption of near-zero science-based targets initiative verified strategies.

This will not only reduce costs further but also enables them to remain below the global cost average by the same 15 percent, even with the anticipated increase in energy prices next year, he added.

Reduced government investment has posed another challenge according to Nader, causing a slowdown in large-scale projects and consequently diminishing the demand for cement.

This trend translated into a 4 percent decline in domestic sales and a 30 percent drop in exports for Saudi Arabia’s 17 cement firms during the first quarter of 2024 compared to the same period last year, as reported by Al-Yamama Cement. 

Notably 97 percent of cement sales were domestic, with only 3 percent being exported.

Despite this drop in sales, the Kingdom stands as the largest cement producer in the region, housing several of the most significant cement-manufacturing firms in the area, according to Global Cement.

The most prominent firms in Saudi Arabia, based on market capitalization according to Bloomberg data, include Al Yamama Cement, with a market cap of SR6.95 billion, followed by Saudi Cement at SR6.82 billion, Southern Province Cement at SR5.5 billion, then Qassim Cement, and Yanbu Cement.

Nader linked the recent decline in domestic sales to certain giga-projects in the Kingdom that demand green cement, a product not commonly manufactured in most of Saudi Arabia’s plants.

“Nevertheless it must be noted that Saudi Arabia consumption per capita is still one of the highest in the world at approximately 1.3 tonnes per capita yet the utilization of the sector is less than 60 percent due to high installed capacity in the period between 2013 and 2017,” Nader added.

In its April report, Al-Jazira Capital also associated the decline with the increased influence of Ramadan on sales, noting that the holy month spanned 21 days in March 2024, compared to just 9 days in the previous year.

Nader had emphasized in a February interview with Aggregates Business that the Middle East’s cement plants, characterized by their large size, enjoy advantages in economies of scale and operational efficiency. With most plants equipped with modern technology and automated processes, they outperform their European counterparts, some of which date back to the 1950s.

Additionally, the region’s abundant solar, wind, and land resources present opportunities for the adoption of green energy, positioning the Middle East cement sector to lead in sustainability initiatives globally.

Looking ahead, Nader foresees a growing emphasis on sustainability and de-carbonization in the region, leading to increased production of green products.

Furthermore, he predicts a doubling of cement exports from the Middle East within the next two to three years, with Saudi Arabia, the UAE, and Algeria currently leading as the largest exporters.


Over 1,300 Saudi industrial licenses awarded in 2024, attracting $13.3bn investment, latest figures show

Over 1,300 Saudi industrial licenses awarded in 2024, attracting $13.3bn investment, latest figures show
Updated 27 February 2025
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Over 1,300 Saudi industrial licenses awarded in 2024, attracting $13.3bn investment, latest figures show

Over 1,300 Saudi industrial licenses awarded in 2024, attracting $13.3bn investment, latest figures show

JEDDAH: More than 44,000 new jobs are expected in Saudi Arabia after the Kingdom issued 1,346 industry licenses in 2024, an official report has revealed.

The Ministry of Industry and Mineral Resources announced that the permits have also helped attract investments worth over SR50 billion ($13.3 billion), driving economic growth and diversification.

The ministry added that the jobs figure is based on a report by its National Industrial and Mining Information Center, which analyzes key sector changes.

The issuance of the permits aligns with Saudi Arabia’s National Industrial Strategy, launched by Crown Prince Mohammed bin Salman in October 2022, that aims to drive sector growth and increase the number of factories in the Kingdom to about 36,000 by 2035.

The strategy focuses on 12 sub-sectors, targeting more than 800 investment opportunities worth SR1 trillion, striving toward tripling the industrial gross domestic product.

The analysis by the ministry also shows that 1,075 factories began production in 2024, with investments exceeding SR48 billion and a workforce of about 39,000 employees.

The issuance of permits aligns with the Kingdom’s National Industrial Development and Logistics Program, which was launched in 2019 to support the industrial sector and drive sustainable development. 

It also furthers the ministry’s goal of strengthening the industry and diversifying the economy under Vision 2030.

NIDLP aims to position Saudi Arabia as an international leader in energy, mining, logistics, and industry. Key components include improving regulations, investing in renewable energy, and boosting local content through initiatives like “Made in Saudi,” all supporting the goal of enhancing industrial capacity and global competitiveness.

In February 2024, the Ministry of Industry reported a 10 percent year-on-year increase in operational factories for 2023, totaling an investment of approximately SR1.5 trillion.

The body also revealed that 1,379 industrial licenses were issued in 2023, attracting investments exceeding SR81 billion. Additionally, production commenced in 1,058 factories during the same period, with total financial commitments reaching SR45 billion.


Closing Bell: Saudi main index ends week in red; Nomu gains

Closing Bell: Saudi main index ends week in red; Nomu gains
Updated 27 February 2025
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Closing Bell: Saudi main index ends week in red; Nomu gains

Closing Bell: Saudi main index ends week in red; Nomu gains

RIYADH: Saudi Arabia’s Tadawul All Share Index ended the week in the red, as it shed 120.75 points or 0.99 percent to close at 12,111.90 on Thursday.

The total trading turnover of the benchmark index was SR8.32 billion ($2.22 billion), with 69 stocks advancing and 172 retreating. 

Nomu, Saudi Arabia’s parallel market, gained 118.24 points to close at 31,404.47. 

The MSCI Tadawul Index, however, shed 17.71 points to 1,514.81. 

The best-performing stock on the main index was Alkhorayef Water and Power Technologies Co. The firm’s share price increased by 4.48 percent to SR163.20. 

The share price of Saudi Paper Manufacturing Co. rose by 2.65 percent to SR65.90.

Banan Real Estate Co. also saw its share price increasing by 2.56 percent to SR6.82. 

Conversely, the share price of Mobile Telecommunication Co. Saudi Arabia, also known as Zain KSA declined by 4.57 percent to SR10.86. 

On the announcements front, Arabian Pipes Co. reported a net profit of SR168.18 million in 2024, representing a rise of 27.3 percent compared to the previous year. 

In a Tadawul statement, the firm attributed the rise in profit to improved sales volumes and new project awards to support the company’s production levels.

The share price of Arabian Pipes Co. declined by 2.51 percent to SR11.64. 

The Company for Cooperative Insurance, also known as Tawuniya, said that it witnessed a net profit of SR1.02 billion in 2024, marking a 65.8 percent rise compared to 2023. 

According to a Tadawul statement, insurance revenues of the company rose by 19.7 percent year on year in 2024 reaching SR18.27 billion. 

Tawuniya’s share price increased by 1.83 percent to SR144.60. 

National Gas and Industrialization Co. revealed that its net profit for 2024 reached SR248.7 million, representing a rise of 9.41 percent compared to 2023. 

According to a Tadawul statement, the increase in net profits was driven by growth on higher gas sales which went up by SR365 million due to the rise in gas prices and volume.

National Gas and Industrialization Co.’s share price decreased by 1.52 percent to SR103.40. 

Conversely, the net profit of Gulf Insurance Group fell to SR98.19 million in 2024, representing a decline of 23.6 percent compared to the previous year. 

The group’s share price dropped by 1.54 percent to SR28.85.


Saudi Arabia strengthens halal leadership with 13 new deals at Makkah forum 

Saudi Arabia strengthens halal leadership with 13 new deals at Makkah forum 
Updated 27 February 2025
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Saudi Arabia strengthens halal leadership with 13 new deals at Makkah forum 

Saudi Arabia strengthens halal leadership with 13 new deals at Makkah forum 

JEDDAH: Saudi Arabia saw the signing of 13 agreements at a special event in Makkah, boosting its halal industry leadership by expanding investment, strengthening certification standards, and enhancing food production.

Announced during the second edition of the Makkah Halal Forum, held from Feb. 25 to 27, the deals included partnerships between the Halal Products Development Co., a subsidiary of the Public Investment Fund, and Al-Watania Poultry, Golden Chicken Farms Co., and Ajlan & Bros Holding Group.

The Islamic Chamber of Commerce and Development also signed agreements with Brazil’s Fambras Halal, Thailand’s Halal Science Center, and Slovenia’s KulinWorld to enhance global certification and research in the industry.

Additionally, the Saudi Authority for Industrial Cities and Technology Zones, or MODON, secured deals with First Milling Co. and Ghitha Alzad Food Industries to strengthen halal food production infrastructure. 

Held under the theme “Sustainable Development through Halal” and inaugurated by Saudi Commerce Minister Majid Al-Kassabi, the forum aligns with the Kingdom’s Vision 2030 goals of economic diversification and private sector expansion. 

As the birthplace of Islam, the Kingdom has long been a trusted source of halal products and is leveraging its influence to lead the $7 trillion global halal market, which is projected to reach $10 trillion by 2030. 

Muslim consumer spending on halal-certified products is estimated at $207 billion, according to the American Halal Foundation, underscoring the sector’s economic potential. 

With participation from over 150 companies across 15 countries, the forum has become a key platform for driving innovation, enhancing standards, and reinforcing Saudi Arabia’s role as a central hub in the international halal economy. 

The agreements signed during the forum support business development and economic growth across various sectors. They establish a framework for halal sciences, contribute to the advancement of scientific and educational materials, and reinforce the forum’s global standing. 

Serving as a global gathering for industry leaders, the forum facilitated collaboration on innovations and best practices in the halal sector, with a focus on sustainability and development. As a platform for business partnerships and investment, it reinforced Saudi Arabia’s position in the global halal economy.


Madinah’s economy expands as logistics, tourism, and tech sectors grow 

Madinah’s economy expands as logistics, tourism, and tech sectors grow 
Updated 27 February 2025
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Madinah’s economy expands as logistics, tourism, and tech sectors grow 

Madinah’s economy expands as logistics, tourism, and tech sectors grow 
  • Commercial activity expands as business licenses reached 86,000 in 2024

RIYADH: Saudi Arabia’s Madinah region saw its logistics services sector grow 54 percent year on year in 2024, underscoring the city’s growing role as a transport and trade hub, according to the latest official data. 

Figures from the Ministry of Commerce also revealed that the region’s commercial activity expanded 37 percent from 2018 to 2024, with registered business licenses reaching 86,000 last year.   

Madinah’s rise as a logistics center is fueled by its robust infrastructure, including three airports, an extensive highway network connecting five regions, the Haramain High-Speed Railway, and two major ports — one commercial and one industrial. These facilities supported nearly $1.1 billion in non-oil exports and over $1.4 billion in imports in 2021. 

The region’s broader economy also experienced strong growth, with the hotel sector reporting a 42 percent annual increase in 2024, while tourism-related businesses, including organized trip activities, grew by 33 percent.  

The technology sector also expanded, with computer programming services growing 28 percent, while date drying, packaging, and manufacturing climbed 14 percent year on year.   

This comes as consumer spending in the region continues to rise, with point-of-sale transactions reaching SR536.89 million ($143 million) in the week ending Feb. 22, signaling steady retail growth and stable inflation. 

The Madinah region has maintained strong demand growth from 2020 to 2024, underscoring its investment appeal, the Saudi Press Agency reported. 

The region’s development aligns with Saudi Arabia’s Vision 2030, which aims to transform Madinah into a key investment and cultural hub.  

In February, the Madinah Region Development Authority reported improvements in quality of life, economic growth, and cultural initiatives. The region ranked 88th globally in Euromonitor International’s 2024 Top 100 City Destinations Index and seventh in the Tourism Performance Index, with 3,200 locations registered in the National Urban Heritage Register. 

Saudi Arabia has also eased restrictions on foreign investments in real estate, allowing international investors to buy shares in Saudi-listed firms that own property in Makkah and Madinah, a move expected to drive further capital inflows into the region. 

Madinah’s digital transformation efforts are also gaining traction, with the Al-Madinah Smart City initiative climbing 11 places in the International Institute for Management Development’s Smart City Index, ranking 74th globally, up from 85th in 2023. 


Arab stock markets extend gains, aligning with global rebound: AMF report

Arab stock markets extend gains, aligning with global rebound: AMF report
Updated 27 February 2025
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Arab stock markets extend gains, aligning with global rebound: AMF report

Arab stock markets extend gains, aligning with global rebound: AMF report

RIYADH: Arab stock markets recorded a positive performance in January for the second consecutive month, mirroring the upward trajectory of global exchanges.

According to the latest Arab Monetary Fund report, the gains came after markets worldwide rebounded from the declines observed in December, driven by improving investor sentiment, monetary policy adjustments, and strong corporate earnings in key industries.

In January, the global uptrend was reflected in Arab stock markets, with major indices such as MSCI and the UK’s FTSE posting strong gains.

The report stated that the composite index for Arab financial markets increased by 0.97 percent at the end of January, reflecting broad-based improvements across regional exchanges. 

The positive sentiment was fueled by a combination of factors, including rising corporate profits, enhanced liquidity conditions, and policy measures aimed at strengthening market stability and attracting foreign investment.

Regional market performance

Casablanca’s stock exchange emerged as the top performer among Arab markets in January, with its index surging by 9.98 percent. This was followed by strong performances on the Kuwaiti and Amman bourses, which recorded gains of 5.73 percent and 5.11 percent, respectively. 

The Saudi, Tunisian, and Abu Dhabi markets also posted solid gains, rising by 3.15 percent, 2.69 percent, and 1.77 percent, respectively. 

Meanwhile, Egypt, Qatar, Palestine, and Dubai registered more modest gains of less than 1 percent, respectively.

Three Arab stock exchanges experienced declines. Bahrain Bourse saw a 5.36 percent fall, Iraq Stock Exchange dropped by 1.8 percent, while Muscat Securities Market fell by 0.73 percent.

Key drivers of market gains

One of the primary factors driving the positive performance in Arab stock markets was the robust financial results posted by listed companies, particularly in the banking sector. 

Many financial institutions across the region reported strong earnings for the end of 2024, which significantly boosted investor confidence and contributed to the stock market rally.

Global and regional central banks played a crucial role in supporting financial markets by maintaining accommodative monetary policies. Several central banks in the Arab region, including those in Saudi Arabia, the UAE, and Qatar, reduced interest rates to stimulate economic activity. 

Similarly, major international central banks, such as the US Federal Reserve and the European Central Bank, signaled a shift toward looser monetary policy to counter slowing economic growth and ease inflationary pressures. These moves improved market liquidity and encouraged risk-taking among investors.

In an effort to attract foreign investment, Arab stock exchanges intensified their market development initiatives. Many bourses focused on improving governance, enhancing transparency, and simplifying regulatory processes to facilitate foreign capital inflows. 

Structural reforms, such as digitalization of trading platforms, improved disclosure requirements, and the introduction of new financial instruments, contributed to increasing market attractiveness.

Strong performances in key sectors like banking, real estate, telecommunications, pharmaceuticals, and technology helped drive growth in Arab stock markets.

The surge in these industries contributed to broad-based market gains. Additionally, the insurance and consumer goods sectors saw increased activity, reflecting growing investor confidence in long-term economic stability.

Trading activity and market liquidity

Despite overall market gains, trading values across Arab stock exchanges recorded a mixed performance in January. The total value of traded stocks declined slightly by 2.96 percent compared to December. 

However, some markets showed strong growth in trading activity. The Palestinian market recorded the highest surge in traded value, jumping by 261.4 percent. 

The Kuwaiti and Amman stock exchanges followed with gains of 31.8 percent and 20.6 percent, respectively. 

The Saudi, Qatari, and Abu Dhabi markets also registered healthy increases in trading value, ranging from 12.3 percent to 19.6 percent.

Conversely, markets in Dubai and Egypt experienced declines, with decreases of 2.6 percent and 23.3 percent. The market in Muscat also fell 32.8 percent.

The largest drop was observed in the Tunisian market, which saw a 71.7 percent decline in traded value.

The total market capitalization of Arab financial markets increased by 0.60 percent at the end of January, adding approximately $26.28 billion in value compared to the previous month. 

The biggest contributors to this growth were Bourse de Casablanca, which rose by 10.17 percent, followed by Amman Stock Exchange with a gain of 7.55 percent. 

Kuwait Stock Exchange recorded an increase of 5.73 percent, while Tunis’s stock market and the Egyptian bourse saw growth of 2.93 percent and 2.76 percent, respectively.

On the other hand, Iraq’s market capitalization dropped by 2.42 percent, Beirut’s by 5.01 percent, and Bahrain’s by 5.36 percent.

Arab markets in a global context

Arab stock markets followed the global trend, where major indices posted strong gains in January. 

The MSCI Latin America Index rose by 9.37 percent, while the MSCI Europe Index increased by 8.42 percent. 

In France, the CAC 40 advanced by 7.72 percent, and in the UK, the FTSE 100 gained 6.13 percent. 

The Dow Jones saw gains of 4.70 percent, while Nasdaq rose by 1.64 percent and the S&P 500 increased by 2.70 percent.

In contrast, Japan’s Nikkei index declined by 0.81 percent, while the MSCI Asia Index showed marginal growth of 0.60 percent. 

Additionally, the MSCI Emerging Markets Index for the Arab region increased by 3.21 percent, highlighting the region's resilience in a recovering global economic environment.

Interest rate developments and economic outlook

Central banks worldwide adjusted their monetary policies in response to changing economic conditions. 

The US Federal Reserve held its interest rate steady at 4.50 percent to 4.25 percent following three consecutive cuts in 2024, reflecting a cautious approach to inflation management. 

Meanwhile, the European Central Bank and the Bank of China reduced their rates to support economic growth. 

In the Arab region, interest rate cuts in Saudi Arabia to 5 percent, the UAE to 4.4 percent, and Qatar to 5.1 percent, helped enhance liquidity and investor sentiment.