A senior economic official saidthat a major portion of the US$5bn worth of funds the government allocated for private enterprises in the year to March 2005 has been invested in cement industry.
Mohsen Safaei-Farahani, deputy Minister of Economic Affairs and Finance, told Fars News Aagency that the cement industry has improved greatly over the past one and a half years due to state financial support.
He said the fall in indices of cement companies has come in the wake of the government’s move to issue participation bonds.
"People are willing to purchase participation bonds which are exempt from taxes and their profits are guaranteed by the government," he said, adding that the stock market is down merely because of imbalances between supply and demand.
Some 38 factories nationwide have produced 26.7Mt of cement since March 2004, registering an eight-per cent increase against the figure for the corresponding period the previous year.
Cement exports reached 1.2Mt in the same period, recording a 190 per cent growth.
Cement production is expected to reach 31.5Mt by March, when production capacity would also hit 32.5Mt. Iran accounts for some 1.7 per cent of the total world cement production.
Funds have been allocated from the Foreign Exchange Reserve Fund to raise cement production capacity to 40Mta. The fourth five-year development plan (2005-2010) has set a target of 70Mt for cement production until 2010.