Syria launches two Iranian-led ventures

The first project is a new production line at the state-owned Hama Cement Plant, with an annual capacity of 1.1 million tons. The added capacity will increase the total annual production of the plant to 1.4 million tons.

The new production line was built by Ehdasse Sanat Corporation, an Iranian state-owned company, on a turnkey basis. The total value of the project stands at around USD 200 million, financed fully by the General Organization for Cement and Building Materials (GOCBM).

The beginning of works faced numerous delays because of a dispute over payment terms between the client (GOCBM) and the contractor. GOCBM, a state-owned body, owns six cement plants that produce a total annual volume of 4.8 million tons. Following the launch of Hama’s new production line, it will now produce almost 6 million tons, below a market demand of between 7 and 8 million tons.

The second project, SIVECO, is a car assembly plant built by Saipa Corporation, an Iranian car manufacturer. SIVECO is a partnership between Saipa (80 percent of the shares) and Hamisho Trading, a local firm (20 percent).

SIVECO is registered under Investment law N°10 and has a paid-up capital of USD 50 million. The plant is located in the industrial city of Hessia, near Homs, on a total area of 207 000 square metres.

SIVECO will initially produce 5 000 cars a year of the SABA model, a small sedan car, modelled on the Pride model built by KIA, the Korean manufacturer. Capacity should increase at a later stage to 15 000 cars a year. Production has started but the date for the beginning of the sales operations has not yet been announced.
The Iranian state has a stake of 48 percent in Saipa.

The launch of the two plants was widely lauded by the local press as a confirmation of the strong economic links between the two countries. In practice, Iran is involved as a contractor in the first project and as an investor in the second.

Iranian investments in Syria remain very limited. Besides SIVECO, there is one other Iranian car assembly plant, SIAMCO, which was inaugurated earlier this year with a capital of USD 60 million and one mineral oils refinery plant, the Damascus Petrochemical Refinery, a USD 14 million venture by Iranian private investors.