Falluja Cement factory to be rehabilitated, Iraq

Iraq’s Ministry of Industry and Minerals has signed a 20-year investment contract to rehabilitate the Fulluja Cement Factory, as the country emerges seeks to attract inward investment to accelerate the rehabilitation of the economy.

A statement by the ministry said it has “signed a contract with an Iraqi company, backed by Arab and foreign companies, to rehabilitate and operate the Falluja Cement Factory, which ceased its production since 1986 due to technical and economic problems," said the statement, quoting Hassan Fayyad, an expert of the ministry, as saying.

"The 20-year contract includes the rehabilitation and operation of the factory and the increase of its production capacity from 600,000t to 1.5-2Mta," he added.

Iraq’s production base has a nominal capacity of 19.6Mta (pre-2007 capacity), though actual production only peaked at 11.4Mt in 1989, and has since operated at even lower levels of utilisation, due to war damage and the difficult operating environment. However, the government is now actively promoting the rehabilitation of the existing production base via joint venture partnerships with local and foreign investors.

Iraq’s consumption is estimated to rise to 25Mta, according to Hussain Obaid, chairman of Southern State Cement Co, although others have estimated higher. The 25Mta forecast is realistic given the country’s resources and reconstruction needs. This figure translates into per capita consumption of 833kg.