Syria to add 25 million tons in cement production within years

This figure could be reached should all 10 cement projects licensed by the Syrian Investment Authority start operations and add 25 million tonnes in planned capacity. This production would come in addition to the 5.7 million tonnes currently produced by state plants.

For decades, the production of cement was a state monopoly. In 2004, private investors were allowed in but it is only early 2006 that a specific set of rules and incentives regulating investment in the sector were issued by the Government.

These rules set a number of requirements on investors before they can obtain a license to open a cement plant, including a deposit of USD 1 million at the Central Bank of Syria, the completion of the technical and engineering studies as well as the environmental impact study, and a previous experience in the cement industry.

On the other hand, the Government allocates to investors a plot of land at specific sites in the country and at a discounted rent price of SYP 100 (USD 2) per dunum. The Government also undertakes to provide the sites with basic infrastructure such as electricity and water on condition that the private sector will bear the expenses; meanwhile the price of cement is also liberalized.

So far, ten out of twenty projects listed by the SIA have met the requirements.

In parallel to the projected increase in production, the demand for cement is expected to grow drastically from 7m tons to around 18m tons by 2011. The boom in real estate, construction and tourism development is the main factor behind the surge.

According to Ahmad Rousan, the Secretary General of the Arab Union for Cement and Building Materials (AUCBM), Arab states' cement production will reach 290m tons by 2011, while consumption will not exceed 200m tons. This will lead to a large surplus which will force Arab countries to find new export markets for their products. 'It will be tough for Arab firms to compete with the leading international cement firms, which are currently unifying efforts to protect themselves against the coming surplus pressure,' Rousan said.

Currently, Syria is one of only three Arab countries that import cement, along with Yemen and Sudan. On the basis of planned production quantity, statistics from the AUCBM show that Syria will be the third largest country in the Arab World within four years, following Saudi Arabia and the UAE.