Northern Cement State Company Makes 13 Billion Iraqi Dinar Gains in First Half of 2011
Iraq's state cement makers profited from the post-war construction boom. Their story shows both the potential and the problems of Iraq's state-owned industry.
In 2011 Iraq's Northern Cement State Company, one of the state-owned enterprises under the Ministry of Industry and Minerals, reported gains of about 13 billion Iraqi dinars in the first six months of the year. The results reflected strong demand for building materials as reconstruction and housing construction picked up.
A construction boom
After years of war and sanctions, Iraq faced a huge housing shortage and a backlog of public infrastructure. Cement demand rose sharply, and domestic plants, many of them decades old, struggled to keep up. Imports, particularly from Iran and Turkey, filled much of the gap.
The state-owned model
Iraq's state companies employ hundreds of thousands of people but many have operated at a loss for years, kept afloat by budget transfers. Cement was an exception: because demand was high, several state plants could turn a profit. Governments also brought in private investors through rehabilitation and partnership contracts to upgrade ageing kilns and raise capacity.
Since then
Iraq's cement sector has grown substantially since 2011, with private plants in the Kurdistan Region and elsewhere. At times the government has restricted cement imports to protect local producers. Cement companies are also among the industrial stocks traded on the Iraq Stock Exchange, which lets investors follow the sector's fortunes.
The broader question the 2011 figures raised remains open: whether Iraq's state enterprises can be reformed into competitive businesses, or whether the country's industrial future lies with the private sector.