If you’re falling short of porcelain tiles for your bathroom floor, you’re in luck. Saudi Ceramic Company has announced the intention to build a new factory at an investment of $66.5m. The completion date is set for 2023 (so you'll have to wait a bit for those tiles) but the construction should commence by the end of the year. Upon completion, the factory will be able to produce 8.25 million square meters of porcelain tiles per year. As stated by the company, the construction will be financed through borrowing and self-financing.
Saudi Ceramic’s new project is backed by strong results in the second quarter of 2021. The company’s gross profit increased 33.7% year-on-year to $36.5m, while the net income increased nine-fold to $16.7m. A combination of debt reduction, lower finance cost, and lower provisions were responsible for the solid quarter. Saudi Ceramic’s shares were up 2.78% after the new factory was announced.
Why it matters
GCC’s ceramic tiles industry is fairly fragmented, with a significant number of key players splitting up the market share. With this move, Saudi Ceramic is looking to consolidate the market, which has an estimated CAGR of 7% over the next several years.
