With its presence firmly established in the Iraqi market, Lafarge looks set to benefit as the country prepares for a building boom.
The Iraqi authorities want to build on a massive scale -- 1 million new housing units in three years. In a single project, plans call for 75,000 units in Baghdad’s Sadr City slum. Gulf companies are bidding for many of the projects.
"The local production of construction materials will not be enough for such big projects," said Abdul Rahman al-Mashhadani, an economist at al-Mustansiriya University, who believes a government estimate that Iraq needs more than 3 million housing units is too low.
Iraq’s infrastructure needs are daunting, more than seven years after the U.S.-led invasion that toppled Saddam Hussein. Roads, railways, the electricity grid, ports, housing and factories must be rebuilt.
The National Investment Commission has put together a wish list of 750 projects that alone require US$600bn.
That could be good news for early foreign investors such as Lafarge. It already has cement plants in northern Iraq’s semi-autonomous and relatively stable Kurdish region and recently launched a US$200m renovation of an Iraqi cement plant near Kerbala in the south to boost production.
Imports will likely be needed nonetheless to meet demand. In terms of imports, Abu Baqir, a Baghdad supplier said: "Our cement factories don’t cover a quarter of the market’s needs.”