Economy, Business And Markets

Cement Industry in Strong Position

Cement Industry in Strong Position
Cement Industry in Strong Position

With an annual production of 78 million metric tons, Iran’s cement industry ranks third in the world after China and India and first in the Middle East, IRNA reported on Tuesday citing an industry official.

In the last year ending March 20, 2014 as many as 70 factories produced a total of 78 million tons of cement, of which 18 million was exported, said Mohammad Fatemian, the general manager of bureau of mineral industries at the ministry of industry, mine, and trade.

Cement export is expected to increase this year to 24 million tons because of a possible 20-million-ton surplus in total domestic production, he added.

In 2008, cement prices were liberalized in the country. The industry however was hit hard in 2010 when the first phase of the controversial Subsidy Reform Plan started to be implemented nationwide, as the plan partially removed energy subsidies, causing energy costs to soar in cement factories, which are among most inefficient industrial plants in Iran in terms of energy consumption.

Despite many challenges the industry faces, Iranian officials still expect the cement production to reach a target capacity of 150 million tons per year by 2020.

Neighboring countries like CIS nations are among the major customers of Iran’s cement, since the low transportation costs, as a key factor in the pricing process, make the Iranian product competitive in those markets.

As the government is encouraging exports, it has also urged domestic investors to replace steel structure with concrete structures, arguing that concrete buildings are much safer.

The cement industry currently relies by almost 80% on domestic know-how. The government has vowed to support the investors who further import modern technology into the sector.