Iran to Use Turkmenistan-Bound Wagons for Exporting Cement to Central Asia

EghtesadOnline: Iran plans to use Turkmenistan-bound wagons to facilitate cement exports to Central Asia, especially Uzbekistan, an official with the Islamic Republic of Iran Railways said.

News ID: ۷۸۳۴۲۰

28 July 2018

“Based on bilateral discussions we had at Sarakhs (located at Khorasan Razavi Province) with Turkmenistan’s railroad officials, we reached an agreement to use their high-sided wagons to export cement,” said Shahram Jafari, IRIR’s head of commercial operations.

“The northeastern neighbor predominantly uses the wagons for sulfur transit through Iran, which will utilize the empty wagons on their return to Turkmenistan.

The official described Uzbekistan’s cement demand as high and said six cement producers located at the province’s northern border are set to reach an agreement and select a representative to IRIR, according to Financial Tribune.

“The representative will have 600 wagons at their disposal for shipments. Uzbekistan’s cement demand is expected to reach 1-1.5 million tons in the next few years,” he said.

Over 1.9 million tons of goods were transported in the last fiscal year (March 2017-18) using 33,085 wagons via Iran-Turkmenistan railroad that crosses through Sarakhs corridor.

Iran-Turkmenistan trade usually takes place through either Sarakhs or Incheh Borun in Golestan Province. The former is more prominent, according to the Ministry of Roads and Urban Development, as is it closer to Central Asian countries and enjoys better infrastructure, in addition to being connected to Iran’s southern transit hub of Bandar Abbas.

The Iranian cement industry boasts an output capacity of about 90 million tons, only 56% of which are consumed in the local market and the rest is left unused. Exports stand at a maximum of 7-8 million tons per year and in the best-case scenario at 10 million tons this year,” Morteza Lotfi, a member of Cement Employers Association’s board of directors, said.

Focusing on exports is the only way out of the stagnated local market for cement producers. With their traditional markets such as Iraq and Afghanistan lost to competitors, exporters are on the hunt for alternative markets such as Africa and Central Asia.

Khorasan Razavi is home to numerous cement plants, with one of the largest being the Iran Fara Bourse-listed Sabzevar Cement Company. Latest statistics released by the company on Codal.ir show that its output and sales are down for the first quarter (March 21-July 21) while the plant’s retained losses reach 867 billion rials ($20.6 million).