US$110m contract awarded to renovate cement factory, Iraq

US$110m contract awarded to renovate cement factory, Iraq
Published: 21 June 2011

Iraq has awarded Turkey’s Partner Teknik a contract to renovate a cement factory as part of plans to rehabilitate its dilapidated state industries after years of wars and sanctions, the government said on Monday.

Adel Karim, a deputy minister of industry and minerals, said the factory in Samawa, 230km south of Baghdad, was set up in the 1980s and designed to produce 2Mta of cement. It currently only produces 20 per cent of that.

The Turkish company, which has an Iraqi partner, needs to spend around US$110m to reach 90 per cent of its designed capacity in 36 months, another official in the ministry said.

Karim told Reuters, the factory "has been awarded and the signing of the contract with the investor will be within days."

Karim said the company will have a 73 per cent share of production at the plant with the remainder going to the ministry in the 15-year contract.

The ministry has placed a condition on the Samawa contract that the Turkish and Iraqi partners keep all Iraqi staff currently employed at the state-owned factory, Karim said.

The ministry has so far managed to attract seven local and foreign investors into the rehabilitation process. Lafarge already has cement plants in semi-autonomous Iraqi Kurdistan. In 2010, it began a US$200m renovation of a Kerbala cement plant.