IHI in pole position for Amran cement

05 April 2002

The cabinet was expected to select in the first week of April its preferred bidder for the contract to expand a cement plant in Amran for state-owned Yemen Cement Manufacturing & Marketing Company. Japan's Ishikawajima-Harima Heavy Industries (IHI) is understood to be well placed to win the contract after quoting a price of $140 million, some $20 million less than its only rival for the project, Krupp Polysius of Germany. Another prospective bidder, a consortium of Germany's KHD Humboldt Wedagand South Korea's LG Engineering, pulled out earlier this year. The contract is scheduled to be signed in May (MEED 31:8:01).

Sources close to the project say the two companies submitted bids of equivalent technical levels, although the price discrepancy does hide some minor differences in the scope of works. The project involves the construction of a new plant of 1 million tonnes a year (t/y) of clinker, and the doubling of capacity at the existing line to about 600,000 t/y. The contract is for 29 months, and will also entail the construction of a small power plant for the factory. Yemen Cement is to finance the project itself, but the government has guaranteed to cover any shortfalls in funding. The consultant is Belgium's BS Engineering.

Amran, northwest of Sanaa, is the largest of Yemen Cement's three factories. The other two are situated in Bajil, on the Red Sea Tihama plains, and Taiz, in Yemen's southern highlands. Yemen Cement is a candidate for privatisation under the government's drive for economic reform. But privatisation is unlikely before the expansion of the Amran plant and of the Bajil plant, which has been suggested for 2004. The clinker is to supply the local market, where demand has been growing.

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