Iran plans to boost cement output capacity amid market stagnation

Business Materials 6 November 2017 14:39 (UTC +04:00)

Baku, Azerbaijan, Nov. 6

By Fatih Karimov – Trend:

The latest statistics released by Ministry of Industries, Mining and Trade of Iran revealed that the country’s cement industry has failed to live up to expectations.

The country’s cement industry witnessed a decline in its performance as the industrial material’s output over the first five months of the current fiscal year (started March 20) registered a fall by 2.6 percent, year-on-year.

Iran’s cement output reached 23.62 million tons in the 5-month period, compared to 24.25 million tons in the same period of the preceding year.

However, on a monthly basis 4.972 million tons of cement were produced in the fifth Iranian calendar month (July 23-Aug. 22, 2017), 9.9 percent more compared to the preceding month.

Cement production capacity of Iran soared from 29.5 million tons in 2001 to 83 million tons in 2017. The number of cement producing factories also increased from 30 to 74 in the same time span.

The country’s cement industry over the past several years has seen fluctuations, soaring at times and spiraling downwards at others. While the Islamic Republic was boosting its cement production capacity, establishing more and more factories, the industry’s market both inside and outside the country was facing stagnation.

Iran’s cement production in 2015 shrank by 1 percent to 58.6 million tons, following a 33 percent fall in 2014, blamed on weak domestic consumption.

Iran’s cement production over the past years has faced various challenges, including deep recession in the construction activities as well as an inadequate provision of natural gas to industrial users.

In the meantime, due to global slump in oil prices and regional issues, Iran’s cement export to neighboring countries has witnessed a considerable fall as well.

While the country ranked first in the Middle East and fourth in the world in terms of cement production in 2014 with 75 million tons of output, its global ranking fell to sixth in 2016. Iran also lost its 2014 position as the second cement exporter in the world. The Islamic Republic was the third cement exporter in the world in 2016 and is predicted to stand at eighth place among top cement exporters in 2018.

Iran produced 54.1 million tons of cement in last fiscal year (ended March 2017), 6.6 percent less year-on-year.

Amid these conditions the Iranian administration plans to increase the country’s cement output capacity to 120 million tons per year by 2025.