Currently only about five percent of Iran's cement industry is in private hands. The rest is owned by the government or public sector entities. Leylaz said the government aimed to gradually transfer more of the shares of these publicly-owned holdings to the private sector in future through share offerings on the Tehran Stock Exchange. The privatisation official said the results of Wednesday's tender reflected a consolidation in Iran's cement sector. "A big merger is happening in the ownership of Iran's cement industry," the official told Reuters.
Abyek, with a daily output capacity of 7500 tonnes, runs the largest single cement plant in Iran.
Construction has been a boom sector in the Iranian economy in recent years and analysts said Iranian companies could also be well-placed to serve growing demand in neighbouring Iraq and Afghanistan where massive post-war reconstruction is under way. The government has set a target of doubling cement capacity over the next decade.
Having now realised 28 percent of its privatisation plans for the current fiscal year, the government hopes to cede around $1 billion worth of shares by March 2004. "Today's tender gives us the confidence to think we can hit the target by that time with more major bids to come in the next four months," the privatisation official said.
