China to build cement factory in western Iran

China to build cement factory in western Iran
Published: 09 June 2005

Chinese firm CNEEC signed a contact here Wednesday to build a cement production factory in the Western city of Hamedan.

The contract was signed between an official of the Chinese company and Hamedan Mayor Khosrow Sameri.

Sameri said that the plant will be totally financed by the CNEEC. It has the capacity of producing 3000t of cement daily, he added.

The financing was secured by a 7m loan from China Import-Exports Bank. Of the sum US$ 33m will be allocated to cquisition of machinery, 25 million for construction of facilities and the rest to be earmarked for miscellaneous equipment and mining machinery, Sameri said.

Per contract over 40 per cent of the factory will be run by Chinese and 60 per cent by Iranian firms under the supervision of the Chinese, the mayor added.

"Also, the agreement stipulates purchase of over four per cent of the facilities to be bought from the Europeans companies." The Chinese side is under the obligation to complete the plant’s construction is 30 months and deliver it fully to Hamedan municipality.

The loan interest rate is 2.5 per cent and the principal will be paid out, after the start of the operation, in 15 years.

The value of Tehran-Beijing trade exchange will reach US$10bn annually in the coming years. Iran-China joint economic meeting and the exhibition of Chinese spare parts and machinery will be held in Iran in the coming months.

The exchange of oil and gas is among key areas of cooperation between Iran and China and necessary agreements have been signed for exchange of fuels.

Also, FLSmidth of Denmark announced in May that it had won a further two new cement contracts in Iran worth Danish Krone 267m (US$ 46m).

In a message to Copenhagen’s Stock Exchange, the Danish firm said it had signed a contract to supply a new cement production line to Karoon Cement Company based 500 km southwest of the Iranian capital of Tehran.

It said the new 3500tpd production line, which is expected to be operational by early 2008, has a contractual value of some €24m or slightly more than Danish Krone 178m.

The contract, which includes key machinery, is the first time FLSmidth is to supply production equipment to Karoon and was achieved with the assistance of Iran Industrial Design consultancy, which has experience with the Danish company from previous projects.

A second order, worth approximately Danish Krone 89m, was from Bojnourd Cement Company, part of Iran’s leading cement producer, Fars & Khuzestan Group.

It included the supply of key equipment for a new 3,500tpd production line, which is due to be delivered next year.

Smidth said that the new orders would contribute beneficially to its earnings until the plants are commissioned in 2007 and 2008, respectively.

Last year, it announced the signing of a Danish Kroner 520 m contract with Iran’s partly state-owned Saveh White Cement for two production lines with a total capacity of 7200tpd of grey cement.

The contract, which was won against competition from China, Japan, Germany and France, for two 3600tpd production lines represents the largest single cement project ever in Iran and the Middle East in terms of production capacity.

The Danish company, which has focused heavily on the prospects of the Iranian cement market, has also contracts with Shahroud Cement Company in the eastern province of Semnan province.