Oman Cement Company discuss expected impact of expansion project

Further to published news regarding the signing on Monday 29 October 2007 of an agreement between Oman Cement Co. and M/s CBMEC, China, an agreement to put up OCC third production line, at the cost of $162m.

The clinker production capacity of the new line is 4,000 tons/day and it will take the contractor 25 months to complete this project and hopefully it will be ready by the end of 2009, expected impact in the company's profitability and financial position as follows:

• As and when the project is completed the clinkerisation as per design capacity will double.

• On completion of the project a sales value of about RO65m is estimated with a corresponding increase in the profit before taxation, which may be likely in the region of RO33m.

• The above figures are estimated based on the current sales realisation per ton. If the sales realisation per ton undergoes a change in future due to market conditions, the profitability will be impacted.

• Any increase in variable cost of production will also have negative impact in the profitability.

• There is no impact in the profitability and financial position for the current year.

• The project cost is estimated at $162m. The funds required for the project will be met out of the internal accruals and borrowings.