Foundations to build on: Major construction projects are supporting demand for locally manufactured building materials


Industry and manufacturing is one of the key sectors expected to contribute to the country’s economic diversification strategy. In order to support the development of the sector, the government has unveiled a range of initiatives to attract investment. Industrial activities registered growth of 1.5% in 2018, contributing OR5.53bn ($14.4bn) to GDP, compared to OR5.44bn ($14.1bn) in 2017. However, according to preliminary figures from the National Centre for Statistics and Information, industrial activities declined by 9.6% in the first half of 2019. The industrial sector is one of the active areas trading on the Muscat Securities Market, comprising 39 out of 110 listed companies.

The market capitalisation of the industrial sector reached OR836m ($2.17bn) in September 2019, compared to OR866m ($2.25bn) at the end of 2018, representing a decline of 3.5%. The total income of listed industrial companies reached OR1.4bn ($3.6bn) in 2018, an increase of 5.6%, while net profits reached OR67.5m ($175.3m). Meanwhile, the total traded value of the sector was OR125.6m ($326.2m) in 2018. One of the key driving forces of the sector is construction, which is boosting demand for manufactured building materials. In the 2019 budget the country allocated OR12.9bn ($33.5bn) for public investment, particularly in the transport network, as well as in social housing.


Public and private investment in construction supports demand for around 9m tonnes of cement per year, 60% of which is produced by two local firms, Raysut Cement and Oman Cement. The former is the largest cement producer in the country and has a presence across the region. During the first half of 2019 the company recorded revenue of OR41.7m ($108.3m), against OR42.8m ($111.2m) for the same period in 2018. Meanwhile, net profits declined during the period by 27% to OR500,000 ($1.3m) due to lower sales, along with higher raw material and finance costs. Raysut Cement owns 100% of a subsidiary company in the UAE called Pioneer Cement and acquired a 99% stake in rival firm Sohar Cement Factory in May 2019. The company has agreed to establish a cement grinding unit in Somalia, and Pioneer Cement is in the process of setting up a cement plant in Georgia. The market capitalisation of Raysut Cement stood at OR68m ($176.6m) at the end of September 2019, although the total return of the stock price was down by 4.2% year-to-date (YTD).

Meanwhile, Oman Cement reported OR25m ($64.9m) in sales during the first half of 2019, down 1.4% year-onyear (y-o-y) from OR25.4m ($66m). Net profits declined during the period by 51.5% to OR2.3m ($6m), impacted by competition from neighbouring countries, which led to lower prices. The company decided to set up a new cement plant in the Duqm area as a joint venture with Raysut Cement. The total return of the Oman Cement stock price was down 18.5% YTD by the end of September 2019, while the market capitalisation of the company stood at OR72.8m ($189.1m).

Construction Materials

Al Anwar Ceramic is a leading domestic manufacturer and supplier of glazed ceramic wall, floor and decorative tiles, with regional and international supply chains. Company revenues for the first half 2019 stood at OR10.3m ($26.7m). Meanwhile, net profits increased 124% y-o-y to OR1.05m ($2.7m), supported by the company’s cost-saving measures. The market capitalisation of the company stood at OR30.5m ($79.2m) in late September 2019, and the total return on the stock price was 57. (Zolpidem) 9% YTD.

Oman Cables Industry was established in 1984, and has wide distribution channels and networks across the GCC, Asia and the EU. However, pressure on market prices and lower volumes due to a slowdown in the macroeconomic environment has impacted company performance. Company sales during the first half of 2019 fell by 14.9% y-o-y to OR107.1m ($278.1m), while net profits declined by 7.5% to OR3.7m ($9.6m). Meanwhile, the company’s market capitalisation stood at OR68.5m ($177.9m) in September 2019, while the total return on the stock price was down by 12.8% YTD.