Riyadh – Mubasher: Najran Cement Company has announced a strategic partnership with the Industrial Sector Competitiveness Program aimed at enhancing operational efficiency and reducing the financial burden of recent fuel price adjustments.
Following a previous disclosure regarding increased energy costs, the company confirmed that the new agreement will provide technical and financial solutions to optimize energy consumption.
These measures are expected to reduce the projected increase in production costs from 11% down to 8%, with the positive financial impact anticipated to materialize in the second quarter of the 2026 fiscal year.
The announcement serves as an addendum to the company’s earlier disclosure on 5 January, which informed shareholders that the company had received official notification regarding changes to the prices of fuel products used in its manufacturing operations.
In response to these rising input costs, Najran Cement has entered into a formal agreement with the Industrial Sector Competitiveness Program.
This national initiative is designed to support industrial entities by providing a framework for adopting energy-efficient solutions and diversifying energy sources used in production.
According to the company’s statement, the primary objective of the program is to lower production costs while simultaneously improving operational and energy consumption efficiency.
By integrating the solutions provided by the program, Najran Cement expects to achieve a significant reduction in the overhead costs associated with the fuel price hike.
Specifically, the company has revised its estimates for the increase in production costs, noting that the impact will be mitigated by 3 percent. This brings the total expected increase in production expenses down to 8%, compared to the initial estimate of 11% provided in the previous announcement.
Beyond the immediate support from the competitiveness program, Najran Cement emphasized that it is actively executing internal strategic plans to further contain the effects of rising fuel prices.
These initiatives focus on cost reduction and the enhancement of production and operational capacities to ensure the company remains aligned with its long-term financial targets and the broader goals of the industrial support program.
Regarding the timeline for these developments, the company expects the financial results for the second quarter of 2026 to reflect the positive adjustments stemming from this agreement. The reduction in the cost-of-production growth rate is viewed as a critical step in stabilizing the company's profit margins amid a changing energy landscape.
In the January-March 2026 period, the company’s net profits shrank by 64.46% year-on-year (YoY) to SAR 6.10 million from SAR 17.19 million.
