Iran’s cement sector entrepreneurs not optimistic

Business Materials 18 April 2018 17:31 (UTC +04:00)

Baku, Azerbaijan, April 18

By Gazenfer Hamidov – Trend:

A recent interview of the Iran's Cement Industry Employers Association’s secretary indicates that the sector still suffering stagnation and the entrepreneurs are not optimist about conditions’ improvement in current fiscal year (started March 20).

Iran's cement sector, is suffering various problems including deep recession in construction activities and an inadequate provision of natural gas to industrial users, as well as a considerable export fall due to some regional issues, which has resulted in losing markets such as Iraq and Afghanistan.

Abdolreza Sheikhan, secretary of Iran's Cement Industry Employers Association, told ISNA that the Islamic Republic has produced 54.5 million tons of cement as well as 57.9 million tons of clinker during the last fiscal year, which indicates no growth compared to the preceding year.

Iran produced 54.1 million tons of cement in the fiscal year to March 2017, 6.6 percent less year-on-year.

Iranian cement producers supplied over 49 million tons of cement to domestic market in last fiscal year, which is 3 percent more compared to the preceding year, Sheikhan said.

The Islamic Republic exported six million tons of cement and 5.8 million tons of clinker in the 12-month period, 9 percent less year-on-year, he added.

There was an agreement with the Islamic Republic of Iran Shipping Lines to implement a 30-percent discount for cement cargos to Persian Gulf States, however it remains unimplemented yet, Sheikhan said.

Iraq is destination for about 50 percent of Iran’s cement. The Islamic Republic also exports cement to Russia, Azerbaijan, Armenia and Persian Gulf states.

In early 2015, Iraq banned cement import from Iran due to low quality, which deprived Iranian producers of their most lucrative market. However the ban was removed later, after extensive negotiations but the volume of shipments decreased significantly.

There were also reports that Russia has returned Iran’s cement shipment due to quality problems.

Last year, Sheikhan warned that Iran is gradually losing its domestic and foreign cement markets.

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 72 in the same time span.