Jotun Saudi has been performing extremely well in the last few years despite the changes in market dynamics. We have been operating in Saudi for more than 30 years with three manufacture units, five hubs, and more than 500 dealer networks. As one of the leading paint manufacturers globally with solid foundations locally, Jotun will benefit from this market transformation, which will improve products, service quality levels, and overall market standards. Our company strategy in Saudi is long term, on which Vision 2030 will enable high-quality companies such as ours to compete fairly to provide the best products and service for the benefit of end users. Construction and industrial projects contribute a substantial amount to our revenues, while our retail segments still account for the major part. Since the projects sector has witnessed a slowdown in the past few years, the government has announced new megaprojects in addition to many new infrastructure and oil and gas projects. The market is picking up gradually, with more activity all around, which means more money in the economy.
Managing Director, Bakheet
Construction is one of the largest sectors here, and large construction projects are the fuel of the economy. The Saudi economy is heavily dependent on revenues from oil, and those revenues are redeployed into the economy in the shape of construction projects. The new government regulations have contributed positively, albeit indirectly, to the overall status of the sector. The whole value cycle of the supply chain leads to a high quality of work, controlled by high-quality equipment and tools. The pre-qualification of equipment is also important, since the government demands certain specifications and models. This has created great demand for new, top-of-the-line road equipment with specs that Bakheet is able to provide. We have various levels of innovation and technology; the most important are telematics, which are sensors that provide an overview of the condition of one’s equipment. We can also install a simpler 1D or 2D system in excavators to save time or money. The third level of innovation has to do with sustainability, namely providing solutions that have greener applications.
General Manager, Dr. Jamal Amrhar
For 2019, we have made the decision to diversify, and almost three years ago we negotiated new business lines with European and American companies, which will keep developing into a niche high-value market where we can be a leader of new technologies in our business. Tough competition on prices leads companies to develop either a broader export strategy or niche products with high value. As the Saudi government is making inroads in playing an active role in the reconstruction process of Iraq, we are targeting this market and looking for a local distributor, though the market still lacks some attractiveness, as construction projects are few. In East Africa, we are looking for opportunities in Kenya, Rwanda, and Ethiopia, which are growing faster than their neighbors. We also target West Africa. Later, we want to introduce our construction material to North Africa and possibly Morocco and Senegal. Our typical markets are the UAE, Oman, Jordan, Bahrain, and Yemen. In the long term, we are looking at Syria and Yemen. Our core market is the GCC, with Kuwait our top market today.
Board Member & CEO, Saudi White Cement Company
We produce 3,000 tons of white cement per day and 11,000 tons of gray cement. In July, we finished our latest project to transfer one production line from gray cement to white. We can produce 2,000 tons of white cement per day or as much as 5,500 tons of gray per day. It is a dual production, and to my knowledge, it is one of the largest lines producing white cement in the world. We expect to see growth in 4Q2019 or 1Q2020 as megaprojects are expected to start then, and we will see demand for gray and white cement as early as 2020; however, we are still importing white cement from abroad. Our plan is to satisfy all the local demand for white cement. As we currently have more than double the capacity for local demand for gray cement, we plan to also have almost double the capacity of local demand for white cement. For the latter, we hope to have at least 60-70% of market share after we localize our production. For gray cement, we are at 5.5% and hope to reach as much as 6%.
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