The Czech Republic will invest US$70 million in a cement plant in west Afghanistan. According to local press reports, an agreement will be signed within the next two months to agree the project.
The Czech investment will be matched by local private investors.
The new factory is to have an estimated capacity of 1600 tpd of clinker and will “transform the future of Afghanistan, especially [the] southwestern zone,” Sirus Alaf, an Afghan Presidential Advisor, is quoted as saying.
Afghanistan currently imports around 4 million tpy from neighbouring countries, including Pakistan, which is the countries biggest importer, and Iran. Between July 2016 and February 2017, Pakistan exports 1.409 million t to Afghanistan.
Pakistani imports are slowing, however, as a boom in cement demand in the country on the back of Chinese infrastructure investment has taken up much of the country’s cement construction. Between July 2016 – the start of the Pakistan’s financial year – and February 2017, total exports fell 8.54%.
This decline may also be speeding up: in February 2017, Pakistan exports of cement totalled 0.254 million t, down from 0.467 million t in February 2015 – a 45.69% fall.
The new cement plant will thus bring some stability to Afghan cement supply – and lower prices. According to local officials, the price of cement in Herat, Afghanistan’s third largest city, could drop by half when the new plant comes online.
Currently, Afghanistan has only one major cement producer, the Ghori cement plant, in the northern Baglan province. The future of that plant was recently thrown into doubt, however, after the Afghan government cancelled its contract, citing a failure to notify it of a change in ownership, as well as millions of dollars of unpaid taxes and fees.