Iranian Cement Industry Poised to Expand in the Wake of Reconstruction in Iraq and Afghanistan

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). The Iranian cement industry is bracing for a new growth spurt, thanks in part, to growth in domestic cement consumption, low energy, fuel and production cost, and to Iran's geographical location. The Islamic nation of Iran in the Middle East is sandwiched between the war torn nations of Afghanistan and Iraq. These countries' need for post war reconstruction and future construction provide a viable long-term export market for Iranian cement. In Iraq alone, the Bush Administration announced plans of beginning the bidding process for $18.6 billion in primary reconstruction contracts before the end of the year. Of that, the cement industry will play a major role in rebuilding infrastructure, and industry in Iraq and Afghanistan.

To meet with current and future demand, the Iranian cement industry is preparing to meet the challenge head on with multi-million dollar investments in eleven upgrades, nine expansions, and nineteen grassroot cement projects. These projects are in various phases of development, ranging from the planning stage to under construction. All are expected to come on stream between 2004 and 2007. When all these projects are implemented, the Iranian cement industry will have doubled its cement production capacity.

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The Iranian cement industry has a very long history that dates as far back as 1933, when the first cement kiln opened in Tehran with an annual throughput of 36,500 metric tons. Since then, Iran has become the leading cement producer in the Middle East. Today, Iran has 35 cement companies (state owned and private), which own 35 cement plants, 59 kilns and have a combined installed annual production capacity of over 34 million metric tons. Approximately, 95 percent is produced by governmental and public sector entities and the rest by privately held companies.

The cement industry in Iran is regulated and falls under the hospices of the Director General of the Mineral Industries Department at Ministry of Industries and Mines. Fars & Khuzestan Cement Company (FKCC) is the biggest cement holding in Iran. It controls over 30 percent of the Iranian cement market followed by Tehran Cement Company (THRN), and Ehdase Sa'at Corporation (ES). Between 2004-2007 these companies will implement several projects; including, FKCC three grassroot and seven upgrade projects, THRN one grassroot, three expansions, and two upgrades, and ES two grassroot, three expansions, and one upgrade.

All of these projects translate to multimillion-dollar opportunities in technology and engineering services. Opportunities which are not going unnoticed by multinational engineering companies such as F.L.Smidth Group, a global supplier of cement making equipment. F.L. Smidth recently won two contracts worth over $30 million. (PEC 95000135 & 95000134).