Opportunities & Challenges in

Iraqi Cement Industry

Presentation by:

Muhammad Asadullah

Manager Export Marketing

Lucky Cement Limited

Pakistan

Baghdad - Iraq

Haifa Street, as seen from the Medical City Hospital across the Tigris River

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

Summary Statistics for Iraq and its Cement Industry

GDP (2013 est.) US$150 bn

GDP/capita (2013 est.) US$4,272

Population (July 2012) 31.1m

Official Oil Reserves 143bn barrels

Area 438,317km2

Cement produced (2012) 7.5 Million Tons (Mt)

Cement imported (2012) 10.5 Mt

Per Capita Cement

Consumption489 kg (Global Cement Report)

Sources:

Wikipedia

& Global Cement Report

Strategic Location of Iraq

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:

Northern State Cement (Mosul)

Iraqi State Cement Co. (Baghdad)

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

Cement Consumption in Iraq

Source:

International Cement Review & Global Cement Report

Salient Features of Iraqi Cement Market

Approx. 18 million tons of cement consumed in 2012:

Locally manufactured 7.5 Mt (42%)

Imported cement 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

Eighteen Governorates/Provinces in Iraq

GovernorateTotal area

km2

Population

Jan 7, 2011Capital

Al Anbar 138,501 1,561,400Ramadi

Arbil 15,074 1,612,700Erbil

Babil 5,119 1,820,700Hillah

Baghdad 4,555 7,055,200Baghdad

Basra 19,070 2,532,000Basra

Dhi Qar 12,900 1,836,200Nasiriyah

Diyala 17,685 1,443,200Baqubah

Dohuk 6,553 1,128,700Dohuk

Karbala 5,034 1,066,600Karbala

Kirkuk 9,679 1,395,600Kirkuk

Misan 16,072 971,400Amarah

Muthanna 51,740 719,100Samawah

Najaf 28,824 1,285,500Najaf

Nineveh 37,323 3,270,400Mosul

Al-Qādisiyyah 8,153 1,134,300Al Diwaniyah

Saladin 24,751 1,408,200Tikrit

Sulaymaniyah 17,023 1,878,800Sulaymaniyah

Wasit 17,153 1,210,600Kut

Saudi Arabia

Syria

Turkey

Iran

Kuwait

Source:

Exane BNP Paribas

Players-wise Location of Cement Plants in Iraq

Al Rawi Group

Iraqi Cement State Co.

Northern Cement State Co.

Lafarge

Southern Cement State Co.

Capacity addition

MASS Global.

Sinjar plant

ASEC

0.9mt plant to be commissioned in 2014. Asec Cement

Independents*

MASS Global

3rd kiln of 1.8mt planned for 2013. Total

plant capacity at Sulaimaniya 5mt.

Independent Iraqi Firm

An Iraqi firm intends to build a plant

together with an Italian firm. Capacity &

commissioning details not yet disclosed.

Lafarge

1.2mt Kerbala plant expansion to be

commissioned in 2014.

Al Doh company

2mt grinding plant is planned in Sarnawa

for 2013.

Sinjar plant

+0.9mt improvement taking place. To be

commissioned in mid-2013 to 1.8mt

capacity.

Grinding plant

Capacity addition but

no confirmed date of

commissioning

> 2.5mt1.5 – 2.5 mt0.5 – 1.5 mt< 0.5 mt

Lucky Cement

Lucky Cement, Pakistan / Al

Mabrouka Company

0.9mt grinding plant is planned in

Basra for 2013.

Capacity Additions by New Cement Plants

Source:

Holtec Consulting Pvt Ltd,

www.holtecnet.com

Company/Group Location

Cement

Capacity,

Mio t

Most Likely

Commissioning

Year

Mabrooka (LCL) Basrah (GU) 1.00 2013

LafargeTasluja and

Bazian1.42 2013

Al Douh Muthanna 1.50 2013

MASS Global Sulaymaniah 2.06 2014

Qemmat Iraq Muthanna 1.62 2015

Lafarge Karbala 2.00 2016

MASS Global Najaf 1.50 2016

Limak Harir, Arbil 1.50 2016

CCI: Lebanese

GroupArbil 1.50 2016

TOTAL 14.10

Source:

Holtec Consulting Pvt Ltd,

www.holtecnet.com

Group LocationCement Capacity,

Mio t

Likely

Commissioning

Year

Qaim Cement Plant Al Anbar 0.36 2013

Kirkuk Cement Plant Tamim 0.12 2013

Hammam Cement Plant Ninawa 0.10 2013

Southern Cement State’s PlantNajaf, Babil,

Muthanna, Basrah0.50 2013

Badoosh Cement Plant Ninawa 0.68 2014

Sinjar Cement Plant Ninawa 1.27 2014

Kubaisa Cement Plant Al Anbar 1.00 2015

TOTAL 4.03

Capacity Addition by means of Rehabilitation

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

World’s Leading Cement & Clinker Importers in 2012

Source:

The Global Cement Report, 10th Edition

S. No. Country Million Tons

1 Iraq 10.50

2 Bangladesh 8.71

3 USA 7.04

4 Afghanistan 5.60

5 Myanmar 4.80

6 Singapore 4.75

7 Sri Lanka 4.18

8 Russia 4.00

9 Ghana 3.77

10 France 3.75

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World's Leading Cement & Clinker Importers

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

Al-Mabrooka Cement

Al-Mabrooka Cement

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

Own Transportation Fleet for bagged and bulk cement

24,000 M. Tons Storage Capacity at Karachi Port

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

Company-wise Production Capacities in Pakistan

Sr. No. Name Of UnitCement Capacity

(Metric Tons)

1 Lucky Cement 7,512,000

2 Bestway Cement 5,915,250

3 D.G. Khan Cement 4,221,000

4 Fauji Cement 3,433,500

5 Maple Leaf Cement 3,370,500

6 Askari Cement 2,677,500

7 Kohat Cement 2,677,500

8 GharibWal Cement 2,110,500

9 Lafarge Pakistan 2,047,500

10 Pioneer Cement 2,030,250

11 Dewan Cement 1,921,500

12 Attock Cement 1,795,500

13 Flying Cement 1,197,000

14 Cherat Cement 1,102,500

15 Al-Abbas Cement 945,000

16 Fecto Cement 819,000

17 Dandot Cement 504,000

18 Thatta Cement 488,250

Total 44,768,250

Source:

All Pakistan Cement Manufacturers Association

(www.apcma.com)

Leading Export Markets of Pakistan in 2012

S. No.Markets Tons (000)

World 9,011

1 Afghanistan 5,158

2 South Africa 813

3 Sri Lanka 777

4 India 562

5 Iraq 498

6 Tanzania 395

7 Djibouti 207

8 Madagascar 203

9 Mozambique 146

10 Comoros 143

Others 110

Statistics as per ITC

www.trademap.org

HS Code 2523 (Cements) -

100

200

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World’s Leading Cement & Clinker Exporters in 2012

Source:

Global Cement Report 10th Edition

S. No. Country Million Tons

1 Iran 13.80

2 Turkey 13.30

3 China 11.50

4 Thailand 11.47

5 Japan 11.40

6 South Korea 10.05

7 UAE 9.00

8 Pakistan 8.37

9 Germany 8.25

10 Vietnam 7.70

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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

Thanks