Central Asia. The Cement Industry of Tajikistan
With over 8.2 million people and less than $2.7 thousand of GDP per capita, the country is definitely struggling in terms of economy. Amongst the most impactful economy limiting factors are the corruption, scattered reformation process, insufficient power supply, and a large external debt. All factors severely limit the economy of Tajikistan. However, the country is trying to recover and demonstrate a steady growth of GDP with 6.7% in 2014, roughly 3% in 2015, and expected 3.4% in 2016. The main income sources for the economy are aluminum and cotton.
The Cement Industry of Tajikistan
Tajikistan has the lowest annual cement production and the least amount of active cement facilities. 2 cement plants manufacture about 2.1Mt per year. There is also a large grinding facility situated near Vahdat with the capacity of 1.2Mt per year. The grinding facility belongs to Toj-China. The country plans to expand the domain by installing 7 additional plants in the nearest future.
In 2014, the country managed to produce 1.15 million tons of cement which is nearly triple of the amount reached in 2013. The biggest contributor is undeniably Huaxin Gayur Cement with nearly 870 thousand tons of cement produced in 2014. This company also increased its production compared to 2013 by ~74%. The abundance of the material in the market significantly dropped the prices of cement in the country. However, the demand is still here and the company will continue to increase the output since Huaxin Gayur was announced as the main contractor for the Roghun hydroplant. The company will also supply other construction sites in Tajikistan.
Tajikistan plans to steadily grow the industry and prepare it for export by 2020. As of 2016, 6 new cement manufacturing facilities are either operational or under construction. When all announced projects are operational, the domestic demand will be fully covered and the country will be ready to export cement elsewhere. Note that for a long period of time, Tajikistan has been importing cement from other huge manufacturers like China, Pakistan, and Iran. Now, the country is ready to start contributing to the global cement market as a manufacturer.
The Future of the Cement Industry in Tajikistan
As of 2015, cement plants in Dangara, Bokobon, Istikol, and Isfara were under construction. Later that year, 5 additional facilities were announced. The overall capacity of the industry is estimated at nearly 8Mt per year byu the time these facilities are operational.
Tajikistan welcomes international investors and recently has started to collaborate with Chinese companies on a larger scale than ever before. For example, Huaxin Cement will construct two facilities with the overall capacity of 2.2Mt per year. The plants will be situated in Ghafurov and Dangara. Tajikistan will have a 30% and a 45% stake in those facilities respectively.
At the same time, Shangfeng Cement is also trying to make their presence impactful and announced their plans to gather over $240 million in order to expand their operations in Central Asia. Shangfeng plans to spend over $130 million to build a facility capable of producing over 1.2Mt per year. The facility is said to be ready in 2017. This plant will be exporting cement to Uzbekistan and northern regions of Afghanistan.
Another big plant was opened in Chormaghzak Pass in the vicinity of Vahdat in 2015. The Toj-China facility is producing 1.2Mt per year with two separate manufacturing lines. Note that Tajikistan is more than cooperating when it comes to attracting foreign capital. The Chinese part of this collaboration is free from both VAT taxation and customs duties for the equipment that will be necessary to make the plant operational. This makes administrative costs much less impactful.
In 2015, the country started another collaboration with local and foreign business. A new facility with the capacity of 1.2Mt per year will not only produce cement, but packaging and gypsum. The plant will be situated in Yovon and costs over $145 million.
In the beginning of 2016, Tajikistan started bargaining with foreign investors for a new project. A 1Mt per year cement facility in Shaartuz is situated right next to a huge limestone deposit. The project costs over $350 million and needs heavy investments from external sources.
While many foreign capital holders expressed their interest in the project, many companies found it overly expensive and lacking a supportive infrastructure around. As of right now, Tajikistan is still searching for an investor and makes all necessary preparation for the project on the infrastructural level.
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