By John Lee.
ICR reports that a consortium of ASEC Cement and Iraq's Qemmet El-Iraq has won a contract to rehabilitate and manage the Muthanna Cement plant for 14 years.
Attending a signing ceremony in Baghdad with Southern Cement, the state holding company that controls Muthanna Cement, ASEC Cement Chairman and CEO Giorgio Bodo said:
"We are delighted to be entering this new market with a high-profile project that is economically vital to Iraq ... Iraq has embarked on a robust plan to rebuild and modernise its infrastructure and has launched major housing, industrial, and community projects. The rehabilitation of Muthanna is an important part of Iraq's investment in bridging the supply gap, particularly in the south."
Muthanna Cement is one of seven plants controlled by Southern Cement Company. Built in the 1980s, the plant has a total clinker and cement design capacity of 1.92Mta and 2Mta, respectively. As a result of economic sanctions on Iraq in the 1990s, the company's current production is around 20 per cent of its design capacity.
The consortium won the Muthanna contract following an international tender; work will begin in 2Q14, with a view to reaching the full 2Mta production capacity by August 2016.
Qemmet El-Iraq, ASEC Cement's consortium partner, is based in Erbil. Established in 1989, it has a primary focus on manufacturing packaged food products with a national focus, among other activities. Qemmet El-Iraq's shareholders have been active in the country's construction and contracting industry since the late 1970s.
ASEC was created in November 2005 by Citadel Capital, whose Chairman and Founder Ahmed Heikal commented:
"ASEC Cement's entry into the into the regionally important Iraqi market is part of Citadel Capital's strategy of judiciously pursuing complimentary growth opportunities within our five core industries, including energy, agrifoods, transportation, mining and cement."