Oman Cement Sector Update – Oman Cement – Accumulate, Raysut Cement – Hold

Issue Date: 11 September 2023

We review our coverage on the Oman Cement Sector with two companies – Oman Cement Co. (OCOI) and Raysut Cement Co. (RCCI). We expect demand for cement to remain strong in Oman, however, the industry confronts formidable challenges on the supply side primarily due to cheap cement imports from neighboring countries, which is impacting the realization of local cement manufacturers. Lower price realization and escalating input costs are exerting pressure on profit margins across the sector.

Oman Cement – Accumulate | Raysut Cement – Hold

Investment Thesis

  • Economic recovery and improved fiscal balance due to rising oil prices bode well for the construction sector.
  • Strong mega-projects pipeline in Oman will increase the demand for construction materials such as cement.
  • Domestic cement producers have plans for capacity expansion to cater to likely growth in demand. However, they are facing pressure on volumes and margins due to competition and higher raw material costs