Cement plants hope to offset losses with exports to Iraq

Leading cement companies are expected to increase their exports to the promising Iraqi market this year despite the security deterioration in some parts of the country. Lebanon exported 600,000t of cement to Iraq in 2003 and in 2004 this figure is expected to jump to more than 1.5Mt.

"Iraq is a promising market for cement companies that have seen a drop in business over the past few years," the Chairman of Cimenterie Nationale, Pierre Doumet, told The Daily Star on Thursday.

According to Tripoli’s Chamber of Commerce, cement ranked number one in the list of exports to Iraq. Dozens of Lebanese firms are vying for contracts in Iraq despite the cold political relations between the two countries.

The US administration in Iraq has invited Arab firms to take part in the reconstruction. The Iraqi government invited companies to submit offers for more than 700 major projects in Iraq during the economic forum that took place in Beirut in mid-March of this year.

The four cement producers have seen a drop in output from 1980 to 2003 due to the economic slowdown and the sharp rise in production costs.

Cimenterie Nationale, Holcim, Sibline and Seament delivered 2.6Mt of cement to the Lebanese market in 2003, compared to its peak output of 4Mt in 1995.

"From 1992 to 1998, Lebanese cement plants saw a considerable growth in profits due to the construction drive in the country. But since 1999, the entire picture changed as construction slowed down drastically," Doumet said. He added that the cement plants have managed to export the excess output to Iraq and Syria.

"But exporting the excess output to Iraq is a temporary measure and will not solve the problem of the cement companies in the long run," he said.