When sovereignty was restored to the Iraqi people in June 2004, a functioning government and establishing security were of utmost concern. However, much of Iraq’s industrial capability, including cement production, was destroyed or neglected during the US-led war against Saddam Hussein’s regime. Although Iraq had been a net exporter to the region from the 1970s to 1990s, years of looting, sporadic and insufficient energy supplies and a lack of spare parts led to industry decline.
After years of neglect, the cement industry in Iraq and its 21 cement plants recently boasted only a 30 percent utilization rate, while electricity shortages, security concerns and unstable distribution routes plus pollution at outdated facilities are contributing to high production costs.
For the last six years, however, foreign companies have been investing in Iraq’s recovery, funding construction of power and water facilities, roads, schools and hospitals. Fueled by infrastructure investments and improved production, apparent cement consumption in Iraq rose 18 percent annually from 2005 to 2010 to over, according to CW Group research, an estimated 18 million tons.
Lafarge Iraq, through the Orascom acquisition, has captured the largest market share—nearly 60 percent through its two cement plants —of Iraq’s recovering cement industry, while three state-owned companies—Southern State Cement Company, Iraq Cement Company and the Northern Cement Company—control the balance of sales. The still emerging cement market largely operates through the retail channel and the vast majority of the product is still in bag form.
In response to rising domestic demand, cement manufacturers and equipment vendors are working across the industry to restore and build new plants. In total, seven million tons of capacity will be added, including new production lines from KHD Wedag and Sinoma, in the next few years, with an additional potential four million tons announced. However, to date Iraq continues to import more than 11 million tons of cement, largely from Turkey, although new capacity sees the country turning towards exports in the future.
As the nation rebuilds, Iraq’s economy is forecast to improve as well, albeit with uncertainty around the government’s ability to execute on its plans and funding concerns. Last year, the Iraqi government released a five-year National Development Plan that outlines nearly 3,000 recovery projects meant to restore and rebuild crumbling infrastructure and cities and move Iraq into the future.
Consequently, the construction sector is predicted to rise 17 percent annually over the next five years to 2.5 billion Iraqi Dinars in real terms. As such, cement demand outlook is fueled by strong fundamentals, including low per capita consumption, a supply constrained market and intense public construction spending. Demand growth is therefore projected to nearly double by 2015. Iraq promises to be one of the most dynamic cement markets globally in the next few years, though not without its challenges.
The 53-page CW Group Research report on the cement industry in Iraq presents a comprehensive and data-rich review of the industry, competitive dynamics, key enterprises, cement plant construction projects, market drivers, trade tonnage flows, production capacity and manufacturing performance, and demand volume and manufacturing capacity trends forecasted through 2015 and more. The “Iraq cement industry (2010 update)” research report is a valuable tool for any stakeholder that needs to understand Iraq’s cement market in depth, including cement manufacturers, equipment vendors, investors and public organizations.
Data sources include CW Group research and analysis, governmental statistics organizations, market research (monitoring)
More information about this and other CW Group research reports on cement markets can be found at www.cwgrp.com/
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About the CW Group
The CW Group's Research unit provides market and corporate intelligence for the global sectors covered by the CW Group’s platforms. Our research team covers local economic and material market conditions globally and unites these to produce actionable research, market reports, competitive benchmarking analyses and custom research. The CW Group's research clients span the globe and include major cement groups, investors, asset managers, consultants and users. More information can be found at www.cwgrp.com/
The CW Group operates a materials-oriented market research platform that includes www.CemWeek.com, www.BmWeek.com and www.CoalWeek.com. The industry verticals focus on the global cement industry, building material and coal sectors, respectively, and offer daily news updates, market data and intelligence. www.cwgrp.com