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Dubai-Kurdistan: Cement trade hurt by transport
woes
20.6.2007
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June 20, 2007
Dubai, UAE, -- High transport costs and
security issues are barriers to potential cement
trade between the UAE and Iraq's most stable region,
according to a minister for the Iraqi Kurdistan
region.
Cement demand in Iraq exceeds supply by 6-7 million
tonnes per year, said Mohammad Baban, senior
economic adviser for strategic investment issues at
the Kurdistan Regional Government of Iraq.
Meanwhile the UAE could be heading towards a
capacity overhang of about 30 million tonnes in the
next 2-3 years if all current expansion plans are
realised.
Source of finance
Despite the potential for trade, the UAE is seen
more as a source of finance for Kurdistan's
significant construction activity and for expansions
to its cement industry, Baban told Gulf News during
the second day of the Middle East Cement Conference.
"We realise that the UAE will be an exporter from
2009 onwards, but its exports to Iraq will most
likely be confined to Basra or the middle of the
country, where the transport distances, and costs,
are much less," he said.
Baban said the long journey from the southern port
of Basra to Kurdistan also brings security concerns
into the equation.
Cement imports into Iraq mostly originate from
India, Turkey, Syria or Iran, which will have
surplus cement capacity of 25 million tonnes by
2012, according to Mohammad Basiri, Iran's deputy
minister of industry.
"We see Dubai and the UAE more as a source of joint
venture partnerships to finance construction and
cement plant projects in Iraq," Baban added,
highlighting a desperate lack of investment as a
major barrier to the country's development.
Outlining the advantages of investing in Kurdistan,
Baban said the region boasts a large pool of skilled
labour, abundant raw materials, high cement
consumption and generous foreign investment laws.
The main disadvantage is a lack of insurance for
large scale projects.
Huge potential
Cement is needed for the construction of new
housing, schools, hospitals, roads and utilities.
Given the choice between importing cement and
relying on domestic production, Iraq would favour
its own supply, which would not be subject to
freight costs, said Baban.
However, Kurdistan currently imports around half of
its total consumption. "Iraq has had 19 plants since
the 1980s and the government wants to make use of
these assets," he said.
gulfnews com
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