Essay --

ANALYSIS OF YANBU CEMENT COMPANY AND IS PRODUCT Name Institution History of YANBU Cement Company YANBU Cement Company is a joint stock Saudi company formed in the year 1977. It produces different kinds of cement such as the Portland cement and the Portland Pozzolan Cement. The company owns about 60% of Yanbu Saudi Kuwait for Paper Products Co. Limited. The company currently has a capacity of 22,500 tpd per day. The company sells most of its products in Makka and Madina and other Western regions of the Kingdom of Saudi Arabia. The company operates in the rapidly growing Saudi cement industry. Saudi Arabia is the third largest producer of cement after Iran and Egypt. Product, features and history Cement is a finely ground compound of limestone and clay or marl (Chandigarh, 2001). It is used in hydraulic binding since it hardens and binds together aggregates and becomes waterproof thereafter. The most popular use of sand is in building and construction where it is used to bind sand and gravel to obtain concrete used in constructing houses, roads, water channels, among others. Yanbu Cement company produces different types of cement such as Portland cement types I, II, III and IV. Effects of changing prices and other factors Changing prices Yanbu operates in a highly competitive industry with several well-established cement manufacturers. Its main competitors include Saudi Cement, Yanama Cement, Arabian Cement, Qassim Cement, Al Safwa cement, among other cement companies. By the year 2010, Yanbu had the second largest cement production capacity after Saudi Cement. The price charged for each bag of cement is a major determinant of demand for a company’s cement in the market. According to the law of demand, m... ... has contributed to higher volumes of production. Saudi Arabia is endowed with large deposits of limestone making it a suitable location for cement manufacturing. Proximity to the source of raw materials also reduces the transport cost. Finally, government policy influences the supply of cement. A price ceiling on cement leads to a reduction in cement supplied in the domestic market and an increase in the quantity exported. An export ban restricts cement manufacturers to supply their products to the domestic market. In addition, government control is effected through issuance of licenses to cement manufacturers. The cement industry had been dominated by eight companies but this has changed with the issuance of licenses to additional seven companies. An increase in the number of firms licensed to manufacture cement leads to an increase in the supply of cement.