KARACHI: Lucky Cement started production in Iraq from February this year through its joint venture grinding plant, becoming Pakistan’s first multinational cement company with operational production facility abroad.

Total investment in the plant based in Basrah is $40 million with 50 per cent contribution by each partner, Lucky Cement CEO Muhammad Ali Tabba told Dawn, adding that Iraqi partner is Al-Shawy family.

The production facility in Iraq is a grinding mill. He said it was challenging as getting human as well as material resources on site proved complicated due to various reasons including government regulations, market structure and support infrastructure weakness, etc. Though electricity cost is relatively better in Iraq, the cost of human resources is much higher, he added.

“It’s the first phase of development and if we succeed in our projections, we may go for a full cement production line of 1.25m tonnes which may cost around $125m,” he said.

Mr Tabba said Basrah is safer and politically more stable than the rest of Iraq in general, and Baghdad in particular.

This grinding mill has a production capacity of 3,000 tonnes per day, around 800,000 tonnes a year. It is meant to service the Southern Iraq market primarily which has a very high demand for sulphate resistant cement (SRC), CEO Lucky Cement said.

He said that Iraq is currently producing around 16m tonnes of cement and its consumption is 24m tonnes. The country is meeting around 80 per cent of its remaining cement needs from Iran.

Lafarge Cement is market leader in Iraq with 50 per cent market share and there are three to four Chinese cement manufacturers, apart from three to four government-owned cement plants.

He said that due to weak infrastructure support it would be difficult to export cement from Iraq under current scenario. However, he hoped the situation would improve with time.

“Lucky Cement is also working on constructing a $240m plant in Democratic Republic of Congo (DRC),” he said. “We have a 50-50 agreement with the Rawji Group, a local company, to start production via a company called Nyumba Ya Akiba (NYA).”When operational, the plant in DRC would produce 1.2m tonnes of cement, more than double the current total production in Congo, he added.