Istanbul-based Partner Teknik has reportedly been awarded a contract to renovate a cement plant in Iraq, as part of larger government-led industry rehabilitation plans after years of wars and sanctions.
Adel Karim, a deputy minister of industry and minerals, said the 2 million tpa cement plant in Samawa, 230 km (140 miles) south of Baghdad, was set up in the 1980s and is currently only operating at 20% of its full capacity.
According to ministry officials, it is estimated that the Turkish company, which has an Iraqi partner, will need to spend around US$110 million to reach 90% of the plant’s designed capacity in 36 months.
Karim told local news reporters that the plant "has been awarded and the signing of the contract with the investor will be within days."
Iraq is trying to shake off the legacy of years of violence, sanctions and economic decline by opening up its financial and industrial sectors and luring foreign investment and expertise to help it rebuild.
According to Karim, the 15-year contract to be signed will ensure the company has a 73% share of production at the plant, with the remainder going to the ministry. Additionally, the ministry has placed a condition on the Samawa contract that the Turkish and Iraqi partners keep all Iraqi staff currently employed at the state-owned factory.
In an attempt to protect Iraqi state employees at its plants and saving them from dismissal, the ministry is currently seeking joint ventures with foreign companies. There are reportedly 200 000 employees working Iraq's state-owned plants and companies, of which only 30% are needed, Karim noted.
So far seven local and foreign investors have been roped into the rehabilitation process. Lafarge, a pioneer of investment in Iraq, already has cement plants in semi-autonomous Iraqi Kurdistan. In 2010, it began a US$200 million renovation of a Kerbala cement plant.