Economy, Business And Markets

Cement Export to Iraq Not Viable

Cement Export to Iraq Not ViableCement Export to Iraq Not Viable

Cement exports to Iraq in the first six months of the current Iranian year (started March 21) declined by 20% compared to the same period of last year, said chairman of the board of directors of Iran’s Cement Employers Association.

Abdolreza Sheikhan added that in the face of challenges such as the assault of IS militants, waning demand for construction and reduced government spending, Baghdad recently increased import tariffs on commodities such as cement to find cheaper ways of meeting its domestic demand and supporting its own industries.

“This is grim news for domestic cement industry, as cement exports to Iraq account for 65% of Iran’s total cement exports. The exports will drop even further if the rise in import tariffs continues,” Forsat-e Emrooz daily quoted Sheikhan as saying.

“Baghdad has increased import tariffs on cement to $20 per ton to support its domestic producers, effectively reducing our total cement exports. This is while our cement industry has to increase the volume and value of its exports by about 15% to compensate for the rising production costs.”

According to Seyyed Sadeq Savaedi, deputy chairman of Cement Exporters Association of Khuzestan Province, clinker, which is used in the first stage of cement manufacturing, is currently being exported to Iraq.

“Instead of importing our cement, Baghdad is importing raw materials at cheap prices and uses them to bolster its own cement industry,” he said, adding that Iran’s clinker is currently used by Basra Cement Plant located in southern Iraq.

“The sale of raw materials should stop if we are to stay competitive in cement exports.”

The UAE, Azerbaijan and Saudi Arabia are other major export destinations for Iranian cement.

Iran’s cement exports ranked first worldwide with 19 million tons last year. In terms of production, Iran ranks first in the Middle East and fourth in the world. Last year’s output stood at 75 million tons.