In the spring of 1962 the temper of economic development in Saudi Arabia was decidedly optimistic. Day after day explosives boomed in the stone-ribbed mountains not far from the Holy City of Mecca. Almost as soon as the air cleared, big grading machines moved through the debris followed by asphalt spreaders laying down a black ribbon of new highway in the nation's growing transport network.
About 50 miles to the west, in the heart of Jiddah, the ancient Red Sea trading center, bulldozers drove two broad swathes through the labyrinthine "old city" to make way for new intersecting thoroughfares.
In a quiet office, out of hearing of the crunching demolition, a banker stirred his tea and told a visitor: "One of the outstanding new industrial projects now being planned here is a detergents manufacturing plant. It is being financed in part by a group of Saudi Arab merchants. It seems to me that this project demonstrates a growing trend in which successful merchants are reinvesting their profits in new Saudi Arab enterprises."
Driving through the streets of Jiddah, the visitor was impressed—as he had already been in al-Khobar on the Persian Gulf and in Riyadh, the national capital—by the great number of buildings under construction. Tons of concrete flowed daily into sturdy construction forms made of weathered planking.
Eight hundred miles across the country in the Eastern Province, Arabia's "oil country," Saudi importers were encouraged to build up warehouse inventories and to expand into new fields of goods and materials by the continued growth of the Arabian American Oil Company's local purchases. In 1961 Aramco spent $11,277,000 for supplies through Saudi Arabian sources, twice the amount spent during the previous year.
In the mountains of 'Asir preliminary survey work was being carried forward for an unusual system of dams. United Nations experts in co-operation with the Saudi Arabian Government have drawn up a scheme for capturing the sizeable volume of runoff water that cascades away after a rainfall in the high coastal range.
Planning was in the air, not only for the 'Asir dam project but also for broad-gauge industrial expansion. In a report touching on the country's economic potentialities, The New York Times stated that the Saudi Arabian Government had retained Oliver H. Folk, formerly loan officer of the International Bank for Reconstruction and Development, as a special adviser to its Supreme Planning Board.
"On the industrial side," the Times added, "Robert L. Gamer, former head of the International Finance Corporation, an affiliate of the World Bank, has been invited to see what he can do to bring enterprises with established markets and technical 'know-how' to Saudi Arabia."
The general air of optimism, however, was not confined only to those men with their eyes on the future. Early in the spring the board of directors of the Saudi Cement Company took a hard look at the country's booming construction program and voted to double the capacity of the company's brand-new plant. What gave the decision a slightly unusual twist was the fact that the plant was so new it hadn't even completed its break-in phase of operations.
This ultramodern facility was designed by British civil engineers so that an increase from 300 to 600-tons-per-day production could be accomplished with minimum new construction to accommodate added German processing units. The Saudi directors found straws aplenty in the wind to guide this proposed expansion. For instance, national imports of cement were averaging 1,200 tons per day at the beginning of the second quarter of 1962. In April alone, a record month, 80,000 tons of cement were unloaded at Dammam, Saudi Arabia's second largest port. An already substantial market for "Saudi Cement" (the company's brand name) was expanding rapidly.
The quick success of the Saudi Cement Company is the result of careful planning and sound economic strategy. The company appears to be a model of economic fitness. Everything about the operation seems "right." It would be hard to find a better example of the right raw material (native limestone that tests 98 per cent calcium carbonate), at the right place (close to an abundant supply of energy and to growing cities and industries), in the right quantity (a minimum 500-year supply), and one that is being developed at the right time (coincident with the Saudi building boom). Limestone, iron ore and clay are used in manufacturing cement. Gypsum is added as a control agent. The company quarries its limestone on its own property about 500 meters from the plant fence. The clay is quarried 14 kilometers from the plant on a rail spur. The iron ore comes 400 kilometers by truck, the gypsum 200 kilometers. Thus the raw materials are fairly close at hand—the principal raw material, limestone (about 84 per cent of the cement), is practically in the plant yard.
There is still another aspect of the plant's self-sufficiency that has caused the Saudi Cement Company to be of considerable interest to the country's economic strategists. The fuel for its huge kiln is piped in from a mere 11 kilometers away. The fuel is clean, requires no investment in storage facilities and is readily available. Further, it costs little and there is no danger of a shortage. This ideal energy source is natural gas.
With every barrel of crude oil produced in the country, some associated natural gas is produced. Once it has come to the surface, the gas has to be separated from the oil. Thus there is a substantial supply of oil-associated natural gas available for industrial energy or for use in making vital petrochemicals.
If one stands at the top of the Saudi Cement Company's "raw materials storage hall," one can see a slender pipeline stretch away from the plant across the desert and disappear in a rise of limestone hills. This eight-inch-diameter line is assured a permanent place in the economic history of Saudi Arabia, for it carries the first natural gas purchased by a major Saudi Arabian industrial enterprise. The slender pipe marks a threshold beyond which lies great potential use of this copious, low-cost energy source.
The line extends from Aramco's Shedgum Gas-Oil Separator Plant Number 1 to the cement plant, where the gas is used principally in the kiln. At present the Saudi Cement Company consumes about 1.5 million cubic feet of gas a day, a figure that will be doubled when a second kiln is added next year as part of the expansion program.
The kiln is the heart of the cement-making process. It is 90 meters long and 3.2 meters in diameter. Looking like a great toppled smokestack, it rotates on its side on a 13-degree incline. Its steel shell is lined with firebrick which refracts the heat generated by the burning gas. In the "sintering zone," where the finely milled mixture of limestone, iron ore and clay is subject to chemical reactions, the temperature reaches 2,700 degrees F. The aim of the sintering procedure is to create a "clinker"—tricalcium silicate. This is cement. The clinkers are cooled and milled, and gypsum is added to control the rate at which the cement will set when it is used.
The company imports the bags in which the finished cement is packed, a practice it plans to continue until such time as the local manufacture of bags becomes economical. That time will come when the Saudi Cement Company and another cement company in Riyadh can, between them, use the minimum economic production of a Saudi Arabian bag factory.
In the spring of 1962 the Saudi Cement Company became, along with the Saudi Arab Government Railroad, several independent contractors and, of course, the Arabian American Oil Company, one of the largest employers in Arabian industry. It had 320 people on its payroll, 85 per cent of whom were Saudi Arabs. The shops, quarries and work shifts are supervised by Germans.
Across the highway from the plant there is a company compound where employee housing is provided: ten houses for the married senior staff, 30 rooms for bachelor intermediate staff and quarters for 80 general staff laborers. Most of the shift employees live 35 kilometers away in Hofuf. Expansion plans call for more housing to be built to bring a greater number of shift workers close to the plant and cut down the time they now spend in transit. A canteen-dining hall is provided for the senior and intermediate staff residents, and a separate menu is available for curry-loving Pakistani employees.
Shaikh Ahmad Juffali, one of the country's best-known businessmen, is the managing director of the company. The first discussions toward forming the company were held by the investor group about nine years ago. In 1954 German consultants were brought to Saudi Arabia to determine an ideal location for a cement plant. Their nine-month study led them to the site near Hofuf.
During the next several years the plant was engineered and the processing units were fabricated in Germany. In July 1958 the civil construction started, and on the first day of 1960 initial equipment was moved into place. Test production began in October 1961.
In the spring of 1962 it would have been difficult to find a Saudi Arabian industrial enterprise more in keeping with the temper of the times than the Saudi Cement Company. The break-in phase of production was nearing its close, and the German engineering representatives of the equipment manufacturer were nearly ready to turn the plant over to its owners.
Every day there was a slight haze of fine white dust in the air behind the three kilometers of fencing that encloses the plant yard. The haze saluted the fact that the railway dump cars and trucks were arriving on schedule with clay, gypsum and iron ore deliveries; the compressed air drills were getting the explosive shot holes ready at the nearby limestone quarry; the big Mercedes dump trucks were moving almost six hundred tons of blasted limestone into the plant daily; the conveyor system was running at capacity; the huge milling drums, loosening a steady thunder of tumbling steel balls, were pulverizing, drying and mixing the kiln feed at full production levels; and the bag-filling equipment was delivering a growing curve of shipments to trucks and railway freight cars.
The haze in the air could be seen—and just as easily apparent was an aura of optimism, the invisible imperative of economic development.