Southern Province Cement Company

Redefining Industrial Leadership Across Three Plants in Saudi Arabia’s South

A Multi-Site Transformation at Regional Scale

Southern Province Cement Company (SPCC) operates at a scale and geographic complexity that distinguishes it from most producers in the Kingdom. With three production facilities spanning Jazan on the Red Sea coast, Bisha in the heart of the Asir highlands, and Tihama in the coastal lowlands, the company manages one of the most geographically dispersed cement operations in Saudi Arabia. Combined clinker production capacity across the three plants exceeds 8.7 million tons per year. In 2024, total clinker production reached approximately 6.3 million tons, delivered against a backdrop of sector-wide demand softness and intensifying competition.

What makes SPCC’s story significant for the sector is not scale alone. It is the coherence and ambition of the transformation agenda being executed across all three facilities simultaneously: a five-year strategy approved in August 2023 covering operational excellence, digital transformation, decarbonization, and local content development, structured around the requirements of Saudi Vision 2030 and the Kingdom’s net-zero commitment by 2060.

The Decarbonization Agenda

From Product to Process

SPCC’s approach to carbon reduction addresses the problem at both the product and process levels, which is the right sequencing for a company at this stage of transition.

On the product side, the company has commenced production of Green Cement (GU Cement and PPC), both of which carry the Saudi Quality Mark and reduce carbon intensity through lower clinker ratios. More significantly, the company has developed a low-carbon cement variant (3LC) by reducing clinker content to 61.5 percent, one of the most aggressive clinker substitution ratios currently being produced at commercial scale in the Kingdom. The company has also set a specific and time-bound target: a 25 percent reduction in CO2 emissions by 2028, aligned with international environmental benchmarks and Saudi Arabia’s Vision 2030 carbon commitments.

Supporting the transition on the product side is the establishment of a Green Footprint Committee, chaired by the Executive Vice President of Operations. This committee oversees a comprehensive afforestation strategy with a plan to plant 500,000 trees between 2025 and 2030, beginning in 2025 as part of the company’s commitment to carbon offsetting and environmental rehabilitation across its operational regions.

On the process side, SPCC is executing a structured program to replace liquid fuel with natural gas across the Jazan and Tihama facilities by 2028, eliminating heavy fuel oil from those plants entirely. This is not an incremental adjustment. It is a fundamental shift in the thermal energy model of two major production facilities. The company has also initiated studies on alternative fuel utilization including refuse-derived fuel (RDF) and complementary solutions, and has commissioned a Product Life Cycle Assessment to measure carbon emissions at every production stage, which will underpin the company’s planned Environmental Product Declaration (EPD) certification program.

The Waste Heat Recovery (WHR) system at the Jazan plant is already operational, capturing thermal energy from kiln exhaust and converting it into usable electricity, with capacity of 15 MW. Studies are underway to extend WHR implementation to the Bisha and Tihama plants, which would deliver significant energy cost and emissions reductions across the full operational footprint. The company is also developing solar energy projects at its facilities and is exploring concentrated solar power (CSP) solutions in collaboration with King Abdulaziz City for Science and Technology, with the long-term objective of reducing fossil fuel dependency across all three sites.

Digital Transformation

The SIRI Second Assessment

SPCC’s digital transformation journey is documented through two formal SIRI assessments, conducted under the Smart Industry Readiness Index framework. The second assessment, completed in 2025, evaluated all three plants independently and found that each had achieved digital performance results above the first assessment baseline, reflecting genuine progress across the transformation dimensions rather than isolated gains at a single facility.

The digital roadmap is structured around six priority dimensions: vertical integration, horizontal integration, shop floor automation, shop floor intelligence, enterprise intelligence, and facility intelligence. Each dimension has defined transformation initiatives with specific expected use cases, and together they constitute a comprehensive upgrade of how the three plants operate, communicate, and make decisions.

The most significant technology implementation is the deployment of SAP S/4HANA as the enterprise resource planning backbone, replacing the legacy SAP ECC6 system. This is more than a software upgrade. SAP S/4HANA enables real-time operational data visibility, automated production confirmation, live inventory tracking for semi-finished and finished products, actual production cost calculation, and maintenance alerts triggered automatically when process deviations are detected. The integration of the plant control system (FLS ECS) directly with SAP S/4HANA means that production data flows seamlessly from the kiln floor to the enterprise management layer without manual intervention, creating the information infrastructure required for data-driven operations management.

Vertical integration extends further through SAP Analytics Cloud for interactive management dashboards, SAP Ariba for digital procurement and invoice management with direct bank integration, and a digital document management system with QR code-enabled electronic document tracking. These components collectively transform the company’s administrative and commercial operations alongside the plant-level improvements.

On the shop floor, the automation roadmap targets the expansion of the Autopilot system, including machine learning-based process optimization and AI-powered predictive maintenance. Condition monitoring sensors are being installed across critical assets at all three facilities to enable predictive maintenance strategies that catch equipment degradation before it translates into unplanned stoppages. Root Cause Analysis systems are being deployed to build a centralized database of recurring problems and their verified root causes, enabling pattern recognition and faster resolution over time. The horizontal integration workstream is connecting the company’s systems digitally with key suppliers and customers, reducing manual paperwork, improving order processing speed, and enabling real-time supply chain visibility.

Cement mill productivity has already improved toward 8 to 10 percent above previous levels at the Jazan plant, and production line improvements at the Bisha and Tihama facilities are contributing to enhanced energy efficiency and reduced emissions intensity. The Jazan plant’s actual production in 2024 represented 106.77 percent of its design capacity, a clear indicator of the operational gains being achieved through this combined technology and process improvement program.

Circular Economy and Industrial Partnership

One of the most strategically forward-looking initiatives in SPCC’s 2024 program is the tripartite industrial partnership signed with the Royal Commission for Jubail and Yanbu, represented by Jazan City for Primary and Downstream Industries, and Solb Steel Company. The agreement was signed under the patronage of the Chairman of the Royal Commission, with senior representation from the Ministry of Industry and Mineral Resources.

The partnership is designed to transform industrial by-products from Solb Steel, specifically steel slag, into supplementary cementitious materials that can be incorporated into SPCC’s cement products. This is a textbook circular economy application: a material that was previously a waste cost for the steel plant becomes a carbon-reducing input for the cement plant, lowering the clinker factor in SPCC’s products while simultaneously reducing industrial waste disposal volumes in the Jazan industrial zone.

The collaboration areas extend beyond slag utilization to include data and analytics exchange for production efficiency, joint development of eco-friendly production solutions, and coordination of logistical and storage services within the industrial city through the port. For SPCC, this partnership is strategically significant on two dimensions. First, it provides a locally sourced, cost-competitive supplementary cementitious material to support the clinker ratio reduction targets embedded in the green cement roadmap. Second, it positions SPCC as a collaborative industrial partner within the Jazan industrial ecosystem, reinforcing the company’s regional leadership role beyond the cement sector.

Governance and Local Content

Building the Institutional Base

SPCC’s transformation is supported by a governance infrastructure that is being strengthened in parallel with the operational and digital agenda. In 2024, the company obtained ISO 37000 certification for corporate governance and ISO 31000 certification for risk management, placing it among a small number of Saudi industrial companies to hold formal accreditation against both governance and risk management international standards. These certifications are not procedural achievements. They reflect the implementation of an integrated framework covering internal policies, codes of conduct, anti-corruption and whistleblowing mechanisms, authority matrices, and risk registers that are reviewed quarterly and linked to strategic performance indicators.

The risk management program is comprehensive and structured. The company deploys Risk Matrix analysis, Failure Mode and Effects Analysis (FMEA), and Bowtie Analysis for preventive scenario planning. A phased Cybersecurity Executive Program is underway through 2027, covering infrastructure hardening, business continuity systems, SCADA security, and ultimately a Zero Trust architecture supported by AI-based digital forensics tools.

On local content, SPCC holds a Local Content Certificate at 48.87 percent as its first-phase achievement, with a strategic target of 60 percent set in alignment with Public Investment Fund objectives. In 2024, 125 of 159 newly registered suppliers were local, and the SAP Ariba system has been activated for digital procurement management, improving transparency and processing speed across the supply chain.

The Saudization rate reached 59.69 percent in 2024, with 657 employees completing specialized training programs totaling 14,627.5 hours, averaging 22 hours per employee. In occupational health and safety, the company recorded a dramatic improvement in performance: the Lost Time Injury Frequency Rate fell from 7.4 in 2023 to 1.9 in 2024, and actual incidents at all factories dropped from 10 to 5. Emergency and evacuation plans achieved 100 percent implementation in collaboration with Civil Defense, and an advanced electronic incident reporting system was activated, reducing risk handling response time and near-miss incident rates.

The New Jazan Production Line

Investing in the Next Generation

The Board of Directors has approved a new production line at the Jazan facility, with a design capacity of 5,000 tons of clinker per day, incorporating the latest cement manufacturing technologies with a specific focus on energy efficiency and carbon emission reduction. Commercial operation is targeted for Q1 2026. This investment reflects SPCC’s confidence in the long-term demand trajectory of the Jazan and southern Red Sea region market, supported by Vision 2030 infrastructure programs and the expanding industrial base in the Jazan Economic City. Financed through a ten-year Islamic financing facility from the National Commercial Bank at SAR 649 million, the new line will position SPCC’s Jazan plant as the most modern and energy-efficient facility in its operational portfolio.

What This Means for the Sector

From FCI’s perspective, SPCC represents the challenge and the opportunity of executing a multi-plant transformation at regional scale. The company does not have the luxury of concentrating its transformation investment in a single showcase facility. Everything it does must work across three plants, in three different geographic contexts, with three different production profiles and infrastructure starting points.

The fact that all three plants achieved improved digital maturity scores in the second SIRI assessment, rather than a single plant pulling ahead of the others, is the most important signal in SPCC’s transformation story. It means the program is being implemented as a system rather than as a pilot. Combined with the governance certifications, the industrial partnership model with Solb Steel, the green cement product development, and the fuel transition roadmap, SPCC is building the foundation for a genuinely low-carbon, digitally capable multi-plant operation that will serve the southern and southwestern regions of Saudi Arabia for the next generation.

The scale of what is being attempted is matched by the clarity of the roadmap being used to attempt it.