Opportunities & Challenges in Iraqi Cement Market

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Opportunities & Challenges in Iraqi Cement Market

  1. 1. Opportunities & Challenges in Iraqi Cement Industry Presentation by: Muhammad Asadullah Manager Export Marketing Lucky Cement Limited Pakistan
  2. 2. Baghdad - Iraq Haifa Street, as seen from the Medical City Hospital across the Tigris River
  3. 3. Agenda  Summary Statistics & Strategic Location of Iraq  Brief History of Iraqi Cement Industry  Cement Consumption in Iraqi Cement Market  Players-wise Location of Cement Plants in Iraq  Capacity Additions: Greenfield Plants & Rehabilitation  Challenges and Issues in Iraqi Cement Market  Iraq as World’s Largest Cement Importer  Brief intro of Al-Mabrooka Cement (Basra – Iraq)  Lucky Cement’s as Market Leader in Pakistan  World’s Leading Cement & Clinker Exporters in 2012
  4. 4. Summary Statistics for Iraq and its Cement Industry GDP (2013 est.) US$150 bn Area 438,317km2 GDP/capita (2013 est.) US$4,272 Cement produced (2012) 7.5 Million Tons (Mt) Population (July 2012) 31.1m Cement imported (2012) 10.5 Mt Official Oil Reserves 143bn barrels Per Capita Cement Consumption 489 kg (Global Cement Report) Sources: Wikipedia & Global Cement Report
  5. 5. Strategic Location of Iraq
  6. 6. History of Iraqi Cement Industry: 1955 - 2003  Badoosh Cement Plant established in 1955  Many plants added over the decades especially in the 1970s and 1980s  Iraq briefly exported cement in the mid 1980s  Until 2003 all of the plants were run by the state:   Iraqi State Cement Co. (Baghdad)   Northern State Cement (Mosul) Southern State Cement (Kufa) In 2003, the cement sector split into:    Former State-run Plants And New Private Operators In 2005, Ministry of Industry and Minerals promulgated an ambitious licensing program
  7. 7. Cement Consumption in Iraq Source: International Cement Review & Global Cement Report
  8. 8. Salient Features of Iraqi Cement Market  Approx. 18 million tons of cement consumed in 2012:   Locally manufactured Imported cement 7.5 Mt (42%) 10.5 Mt (58%)  Iraq is worlds largest cement importer and will remain net importer in near future.  Iraq has got natural limestone that is of high quality (high percentage of CaCO3).  Iraq's limestone is close to the surface, allowing low-cost mining.  Evenly distributed Cement Plants reflecting the wide availability of raw material.  Neighboring Turkey and Iran are leading suppliers to Iraq  An anticipated 15Mt/yr of cement capacity to be added in next few years
  9. 9. Eighteen Governorates/Provinces in Iraq Turkey Governorate Al Anbar Arbil Total area km2 138,501 15,074 Population Jan 7, 2011 Capital 1,561,400 Ramadi 1,612,700 Erbil Babil Syria Iran 5,119 1,820,700 Hillah Baghdad 4,555 7,055,200 Baghdad Basra 19,070 2,532,000 Basra Dhi Qar 12,900 1,836,200 Nasiriyah Diyala 17,685 1,443,200 Baqubah Dohuk 6,553 1,128,700 Dohuk Karbala 5,034 1,066,600 Karbala Kirkuk 9,679 1,395,600 Kirkuk Misan Muthanna Najaf 16,072 51,740 28,824 971,400 Amarah 719,100 Samawah 1,285,500 Najaf Nineveh 37,323 3,270,400 Mosul Al-Qādisiyyah 8,153 1,134,300 Al Diwaniyah Saladin 17,023 1,878,800 Sulaymaniyah Wasit Kuwait 1,408,200 Tikrit Sulaymaniyah Saudi Arabia 24,751 17,153 1,210,600 Kut
  10. 10. Players-wise Location of Cement Plants in Iraq Lucky Cement Asec Cement Al Rawi Group Sinjar plant +0.9mt improvement taking place. To be commissioned in mid-2013 to 1.8mt capacity. ASEC 0.9mt plant to be commissioned in 2014. Iraqi Cement State Co. MASS Global 3rd kiln of 1.8mt planned for 2013. Total plant capacity at Sulaimaniya 5mt. Northern Cement State Co. Lafarge Southern Cement State Co. Lafarge 1.2mt Kerbala plant expansion to be commissioned in 2014. MASS Global. Sinjar plant Independent Iraqi Firm An Iraqi firm intends to build a plant together with an Italian firm. Capacity & commissioning details not yet disclosed. Independents* Capacity addition Capacity addition but no confirmed date of commissioning Al Doh company 2mt grinding plant is planned in Sarnawa for 2013. Grinding plant < 0.5 mt 0.5 – 1.5 mt 1.5 – 2.5 mt Lucky Cement, Pakistan / Al Mabrouka Company 0.9mt grinding plant is planned in Basra for 2013. > 2.5mt Source: Exane BNP Paribas
  11. 11. Capacity Additions by New Cement Plants Company/Group Location Mabrooka (LCL) Basrah (GU) Tasluja and Bazian Muthanna Sulaymaniah Muthanna Karbala Najaf Harir, Arbil Lafarge Al Douh MASS Global Qemmat Iraq Lafarge MASS Global Limak CCI: Lebanese Group Arbil TOTAL Cement Capacity, Mio t 1.00 Most Likely Commissioning Year 2013 1.42 2013 1.50 2.06 1.62 2.00 1.50 1.50 2013 2014 2015 2016 2016 2016 1.50 2016 14.10 Source: Holtec Consulting Pvt Ltd, www.holtecnet.com
  12. 12. Capacity Addition by means of Rehabilitation 0.36 Likely Commissioning Year 2013 Tamim Ninawa Najaf, Babil, Southern Cement State’s Plant Muthanna, Basrah Badoosh Cement Plant Ninawa Sinjar Cement Plant Ninawa 0.12 0.10 2013 2013 0.50 2013 0.68 1.27 2014 2014 Kubaisa Cement Plant 1.00 2015 Group Location Qaim Cement Plant Al Anbar Kirkuk Cement Plant Hammam Cement Plant Al Anbar TOTAL Cement Capacity, Mio t 4.03 Source: Holtec Consulting Pvt Ltd, www.holtecnet.com
  13. 13. Challenges and Issues in Iraqi Cement Market  General Political Environment  Uncertainty surrounding future development of Iraq  Lack of consistent sources of power  Reluctance of Specialists to live in Iraq.  Problems with the Safety of Personnel  Old Technology (Wet Process Plants)  Lack of Servicing and Maintenance
  14. 14. World’s Leading Cement & Clinker Importers in 2012 S. No. Country Million Tons World's Leading Cement & Clinker Importers 10.50 12.00 Bangladesh 8.71 10.00 3 USA 7.04 8.00 4 Afghanistan 5.60 6.00 5 Myanmar 4.80 4.00 6 Singapore 4.75 7 Sri Lanka 4.18 1 Iraq 2 2.00 - 8 Russia 4.00 9 Ghana 3.77 10 France 3.75 Source: The Global Cement Report, 10th Edition
  15. 15. Al-Mabrooka Cement  Al-Mabrooka Cement is jointly owned by M/s Lucky Cement of Pakistan and M/s Al-Shumookh of UAE.  A grinding unit with an annual capacity of 870,000 metric tons  Trial Production is planned to start by end of the year  It is strategically located in Basrah  Al-Mabrooka Cement will cater to local market  Many ongoing & upcoming projects that will require cement
  16. 16. Al-Mabrooka Cement
  17. 17. Al-Mabrooka Cement
  18. 18. Lucky Cement Ltd (LCL) as Market Leader Pakistan  Part of Yunus Brothers Group (A leading business group of Pakistan)  Annual Production capacity 7.5 mtpa i.e. 25,000 M. Tons/day  Two Strategically Located Factories in North & South Zone  Export Licenses from NSBs (KEBS, TBS, SABS, SLSI, BIS)  Cement exported to 37 countries in:   Middle East, Africa and South Asia Efficient Logistics & Supply Chain Management   24,000 M. Tons Storage Capacity at Karachi Port   Own Transportation Fleet for bagged and bulk cement Pneumatic Pumping System at Karachi Port Expansion Plans in Emerging Markets and Diversification  Grinding Unit in Iraq  Integrated Cement Factory being set-up at DR Congo  Acquired 75% shares of ICI Pakistan
  19. 19. Company-wise Production Capacities in Pakistan Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Name Of Unit Lucky Cement Bestway Cement D.G. Khan Cement Fauji Cement Maple Leaf Cement Askari Cement Kohat Cement GharibWal Cement Lafarge Pakistan Pioneer Cement Dewan Cement Attock Cement Flying Cement Cherat Cement Al-Abbas Cement Fecto Cement Dandot Cement Thatta Cement Total Cement Capacity (Metric Tons) 7,512,000 5,915,250 4,221,000 3,433,500 3,370,500 2,677,500 2,677,500 2,110,500 2,047,500 2,030,250 1,921,500 1,795,500 1,197,000 1,102,500 945,000 819,000 504,000 488,250 44,768,250 Source: All Pakistan Cement Manufacturers Association (www.apcma.com)
  20. 20. Leading Export Markets of Pakistan in 2012 S. No. 1 2 3 4 5 6 7 8 9 10 900 800 700 600 500 400 300 200 100 - Markets World Afghanistan South Africa Sri Lanka India Iraq Tanzania Djibouti Madagascar Mozambique Comoros Others Tons (000) 9,011 5,158 813 777 562 498 395 207 203 146 143 110 Statistics as per ITC www.trademap.org HS Code 2523 (Cements)
  21. 21. World’s Leading Cement & Clinker Exporters in 2012 S. No. Country Million Tons 1 Iran 13.80 2 Turkey 13.30 16.00 14.00 12.00 3 China 11.50 4 Thailand 11.47 8.00 5 Japan 11.40 6.00 6 South Korea 10.05 4.00 7 UAE 9.00 8 Pakistan 8.37 9 Germany 8.25 10 Vietnam 7.70 10.00 2.00 - Source: Global Cement Report 10th Edition
  22. 22. Thanks Muhammad Asadullah Manager Export Marketing Lucky Cement Limited 6-A, Mohammad Ali Society A. Aziz Hashim Tabba Street Karachi - 75350, Pakistan Tel: +92 21 111 786 555 Ext: 336 Cell: +92 321 2490859 Email: asadullah@lucky-cement.com Website: www.lucky-cement.com

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