The government is planning to sell off two state-owned cement plants in a bid to attract foreign investors to the country, Industry & Minerals Minister Usama al-Najafi has announced. The privatisation, which includes the Sinjar cement plant currently owned by Northern Cement State Company and the Kufa cement plant owned by Southern Cement State Company, aims to raise about $200 million (MEED 21:10:05).
Foreign investors will be able to purchase 45 per cent of each plant, 25 per cent has been earmarked for an initial public offering (IPO), 15 per cent will be offered to company employees and the ministry plans to hold the remainder. Iraq has 18 state-owned cement plants with design capacity of about 20 million tonnes a year (t/y). Sabotage and years of underinvestment have left the state's facilities operating at below 50 per cent of installed capacity. With production not meeting the requirements of the reconstruction effort, Baghdad has been importing cement from neighbouring Iran. In 2005, the government issued licences to the private sector for the construction of 20 grassroots cement plants. However, very few have so far moved into the implementation stage. The most advanced is the Bazyan cement plant in the north, which is being promoted by United Cement Corporation (UCC), a consortium of Egypt's Orascom Construction Industries (OCI) and Faruk Rasool Group and Blair Sayed Magid, both local. The International Finance Corporation (IFC), the private sector lending arm of the World Bank, completed an environmental impact review on 8 December for the proposed 2.9 million-t/y plant and is expected to agree a $210 million loan for the project soon. www.meed.com/industry
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