By Rhys Jones
Lebanese cement companies will increase their exports to the Iraqi market this year despite the security situation in some parts of the country.
Lebanese cement companies are expected to increase their exports to the promising Iraqi market this year despite the security situation in some parts of the country. Lebanon exported 600 000 tonnes of cement to Iraq in 2003 and in 2004 this figure is expected to jump to more than 1.5 million tonnes.
“Iraq is a promising market for cement companies that have seen a drop in business over the past few years,” said Pierre Doumet, chairman of Cimenterie Nationale.
The four major Lebanese 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 2.6 million tonnes of cement to the Lebanese market in 2003, compared to its peak output of 4 million tonnes 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.
“However, 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 added.
The cement companies sell a tonne of cement to Iraq at US $85 and in Lebanon at $65 but transporting cement to Iraq costs $35 per tonne, which means that the companies barely make any profit.
“In reality, we are paying a lot of money to transport the cement to Iraq via Syria and we end up paying additional costs in the end anyway,” said Doumet.