Syria Sees Shortfall in Cement and Steel Local Market

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Researched by Industrial Info Resources (Sugar Land, Texas)--The last three years have seen a high development rate in Syria's construction sector, at about 12% per year. Consequently, steel and cement consumption is growing rapidly in the local market. Economic reports indicate that the rate of cement consumption in Syria increased 5.2% annually and steel prices increased 8% when compared to the same time last year. Syria relied on Gulf investors to boost the cement industry, but steel production is being developed from the existing base.

Last month, it was announced that construction had begun on the Badia cement factory, which will have total production capacity of 3.2 million tons annually and a capital of $264 million. It is expected to begin the first phase of production at the beginning of 2011, with a capacity of 1.6 million tons per year. Badia Cement LLC was established by three main shareholders: Al-Muhaidib Holding Company (Saudi Arabia), Italcementi SpA (BIT:IT) (Bergamo, Italy), and Al Fouzan Trading & General Construction Company (Saudi Arabia), with an investment capital of $600 million. It is one of the first private-sector companies to have obtained a license to establish a cement plant in Syria.

CEMENA is the first holding company in the Kingdom of Bahrain that focuses on developing cement plants in the Middle East and North Africa. In the first week of December, it signed a contract with Sinoma CBMI Construction Company Limited (Tangshan, China) to launch the establishment of a cement factory in Syria. Sinoma CBMI is a subsidiary of Sinoma International Engineering Company Limited, a listed company of China National Materials Group Corporation.

The contract has value of $106 million and its scope covers raw material grinding to cement delivery, including a coal mill system. The first phase, with capacity of 3,200 tons per day, will be on stream in 18 months, with the first clinker in issued 24 months and a provisional certificate issued in 26 months, as stated by CBMI. It is scheduled to commence construction in January 2011.

Syria seeks to secure the billet requirements to support the stability of the steel market and maintain prices through the development of a scrap plant in Hama, Syria, that is affiliated with the General Company for Iron and Steel Products (Hama) and the only lab of its kind in Syria. Badi Shannan, the general director of the company, said that the company contracted with the Apollo (India) for the development of smelting plant, to raise the production capacity of the scrap melting plant from 70,000 tons of iron ore to 300,000 tons per year at a cost of $34 million, with a project schedule of about 24 months. The project began in July 2009, and the plant construction and the installation of sophisticated systems to filter the gases emitted from the furnace are expected to be completed in July 2011.

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