Northern Region Cement announced this week that it is planning to build a new cement production line in Iraq. It has signed an engineering, procurement, and construction deal with Germany-based KHD and its parent company AVIC for the supply of a 1.3Mt/yr production line. The contract has been valued at US$139m with a duration of 16 months, suggesting that the earliest the new plant might be commissioned would be from early 2025.
The Saudi Arabia-based company operates an integrated cement plant at Arar in Northern Borders Province and an integrated plant at Muwaqar, near Amman, in Jordan. It also took over a grinding plant in Basra, Iraq, in 2017 and runs this via its Um-Qasr Northern Cement subsidiary. It has not been disclosed so far where the new production line in Iraq will actually be or what type of equipment is being supplied. However, the price suggests a clinker pyro-processing line.
The timing of this project is noteworthy as it follows a number of other such announcements so far in 2023. In mid-August 2023 China-based Sinoma International Engineering said that it had signed a US$219m deal with Al-Diyar Company for Cement Industry and Industrial Investment to build a 6000t/day clinker production line with a 50MW captive power plant. The project is located in the Samawah area of Al Muthanna Province. First clinker production is scheduled from mid-2025. This followed the start of construction at another project in the Erbil province in the Kurdistan region of the country in June 2023. Kurdistan Region Prime Minister Masrour Barzani laid the foundation stone for a new 6000t/day cement plant. The DCCP Cement and Power plant is being built by local partner Dabin Group and China-based China Power Investment Corporation (PowerChina).
In May 2023 Pakistan-based Lucky Cement revealed that it was preparing to build a second production line at its integrated plant at Samawah. It runs the plant under the Najmat Al Samawah joint venture together with UAE-based Al Shumookh Group. The first 1.31Mt/yr line at the plant was started up in 2021. It said that the new proposed 1.82Mt/yr production line was intended to take advantage of renewed economic activity in Iraq, benefit from increasing numbers of construction projects and further supply clinker to Lucky Cement’s grinding plant joint-venture at Basra. Construction work on the new line was expected to start by September 2023 with a completion date scheduled by mid-2025. Earlier still in March 2023 the Iraqi General Cement Company signed a deal with Turkey-based Zodiac for the latter to build a new 1.8Mt/yr plant at the Hammam Al-Alil Complex in Nineveh Governorate.
The Cement Manufacturers Association in Iraq (CPA) has reported various meetings in 2023 it has held with the Minister of Industry and Minerals with the aim of supporting the sector. In March 2023 it was discussing developing a five year plan to increase cement production with the aim of surpassing a capacity of 40Mt/yr. For reference the Global Cement Directory 2023 placed local capacity at just under 10Mt/yr. Then, in June 2023, the conversation had moved on to talking about awarding new licences to build plants on a regional basis, warnings that capacity is growing too fast and setting standards.
All of this is positive news 20 years on from the US-led invasion of Iraq in 2003 and the insurgency that followed. The local economy has benefited from high oil prices and a period of political stability, followed by infrastructure investment. Holcim runs two cement plants in Iraq via its Lafarge Iraq subsidiary and it noted “strong domestic cement demand” in the country in 2022. The number of new cement plant projects so far in 2023 underlines a new confidence in the market. Unfortunately the war between Israel and Hamas in the Gaza Strip threatens to undermine the previous period of calm should hostilities spread. However, the news from Northern Region Cement about its proposed new plant suggests that some level of business confidence remains for now.
