Nature abhors a vacuum and one certainty at the end of the Syrian civil war in December 2024 was that the new era of (comparative) peace would draw would-be investors keen to capitalise on the country's need to rebuild. That's certainly proving true of the Syrian cement sector with a host of suitors, from neighbouring Arab countries and beyond, keen to ingratiate themselves to the country's decision-makers following the lifting of sanctions.
It goes without saying that Syria's reconstruction demands a lot of cement, with some estimates suggesting around 80-100Mt will be needed over the next decade, while essential distribution infrastructure, such as Syria’s ports, require their own ambitious rebuilding projects. In early June the Syrian Ministry of Economy and Industry suspended cement taxes to boost competitiveness and support reconstruction efforts, but there is no disguising that behind the veneer of stability the country remains highly volatile.
Last week, the General Company for the Manufacture and Marketing of Cement and Building Materials (Al-Omran), the government enterprise tasked with boosting the capacity of the country’s state-owned cement plants, hosted a session at Adra Cement's headquarters in Damascus, outlining the terms investing in the Tartous Cement Factory. The event was attended by representatives from more the 15 companies who have submitted proposals and come from a range of countries including Syria, Saudi Arabia, Jordan, Lebanon, Iraq, Turkey and Germany. At 1.8Mta, Tartous is Syria's largest plant, but Al-Omran is keen to seek investment in the other facilities under its control.
Recent weeks have seen spate of similar developments in the Syrian cement sector. Local media has reported visits from Turkish and Saudi delegations. In April, the Syrian Ministry of Industry also undertook a trip to Jordan in April, with the fostering of greater cooperation in cement manufacturing being a specific focus.
Even during the civil war Turkey continued to export around 1Mta of cement to Syria and some estimates suggest that number could treble during reconstruction. Speaking to Reuters earlier in the month, Volkan Bozay, CEO of the Turkish Cement Manufacturers' Association, reflected that much of Syria’s reconstruction would depend on which lenders finance that rebuilding, although he was confident Turkish companies would be at the forefront. "It is out of the question that we will not take advantage of the opportunities," he commented.
But it is Saudi Arabia's commitment to Syria that particularly catches the eye. Late July saw the launch of Saudi producer Northern Region Cement Co's 0.15Mta Fayhaa white cement factory in the Adra Industrial City, located in the countryside near Damascus. The US$20m project, reckoned to provide 130 direct job opportunities and more than 1000 indirect jobs, is part of Saudi Arabia’s support for Syria's renascent industrial sector, with cement being a particular focus with the aim of expanding the local production base and reducing foreign imports.
Days later, a delegation of more than 130 Saudi businessmen and investors attended the Syrian-Saudi Investment Forum in Damascus, where Al-Omran signed a joint co-ooperation agreement with the Saudi Northern Group for Cement Manufacturing. The agreement aims to raise the technical efficiency of Syrian cadres working in the cement industry, as well as enhancing technical cooperation and transferring expertise. It also includes the development of a comprehensive equipment repair mechanism and support for Al Omran with a maintenance file, in addition to supervising the production of types of cement not available locally. Plans include the construction of three cement factories in Syria as part of a SAR11bn (US$2.9bn) investment package.
Elsewhere, the Hamah Cement Co has announced it was undertaking comprehensive maintenance and modernisation of its 1.5Mta plant, with the aim of resuming production shortly. In addition to improving efficiency, improving quality and reducing costs, the entire production line is being overhauled. This includes a new packaging machine from German manufacturer Haver & Boecker, which will join three existing packaging machines. The company also plans to launch its higher-quality Pozzolanic Cement 42 shortly.
Meanwhile the privately-owned Al-Badia Cement Co, whose major shareholders include Saudi firm Al Muhaidib Holding, has announced more than US$200m of investment to expand the grinding and packaging lines as well as build a second production line, which will eventually increase production capacity to more than 5Mta.
Rebuilding Syria will need many more stakeholders, locally-produced and imported cement alike, but the Saudi commitment in particular will be key to reinvigorating the Syrian cement industry. As a cash-rich nation with a penchant for soft capitalism it is evidently comfortable with any risk. The more intriguing question may be whether European or even Chinese investors could be tempted to play a role. It is not so many years since Lafarge (now part of Holcim) saw its reputation irrevocably damaged when it paid millions of dollars to various armed factions, including Islamic State, to keep its Syrian plant operational during the war, only for the plant to subsequently be abandoned and destroyed. Altruism notwithstanding, there are safer opportunities to be found elsewhere.
