The textile sector was mentioned in the first part of this series because it is poised for an impressive take off next year. However, there are many other areas that are in the queue.
For instance, there is the cement production.
Turkmenistan has four cement plants with total annual capacity of 4 million tons:
Beherden (Ahal) cement plant – 1 million tons
Kelata (Ahal) cement plant – 1 million tons
Lebap cement plant – 1 million tons
Jebal (Balkan) cement plant – 1 million tons
However, as President Berdymuhamedov pointed on 20 November 2019, the Kelata plant is operating at just 8.1% of its capacity, Lebap plant at 88% of capacity, Beherden plant at 64% of capacity, and Balkan plant at slightly more than 40% of capacity.
It means that the average current production is at about 50% of the design capacity i.e. around 2 million tons.
There are several reasons for this downfall in production:
- The first wave of the construction boom is over, and the second construction boom, with realigned focus, will perhaps start next year or the year after that. Currently the demand in Turkmenistan for cement is not very high.
- Some plants are purposely holding back on production because of the need for technology upgrade, mainly the conformation with the environmental guidelines.
- Some plants have assessed the local and export markets and want to branch out into the production of specialized cements.
Despite the shortfall in the production, there is enough cement for export. For example, the Lebap plant exported 240000 tons of cement to Uzbekistan and Afghanistan in the first half of 2019.
While cutting down on production, the plants are already experimenting with the improvement of cement quality. The Lebap plant has produced test batches of cement using basalt instead of the usual iron ore. It has led to increase in durability, density and frost resistance, as well as lower costs and positive financial impact. The substitution of the locally-sourced ferrous rock for imported haematite is doubly helpful: On one hand it reduces the production cost, and on the other hand it improves the quality.
The construction materials using cement as the basic raw materials are also finding export markets.
The case in point here is the private enterprise Ukyply Kärdeşler. It exported 8621.4 tons of aerated concrete bricks to Uzbekistan and 3517.2 tons to Kazakhstan in 2019.
In addition to aerated concrete bricks, this company produces autoclaved aerated concrete, which is also available for export.
The other products of this company include tiles, ceramic, and porcelain adhesive, façade plaster, interior filler, grouts for joints, tile grout, finish filler, etc.
In short, the capacity is rising for the targeted export of cement and cement products.
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In a special session with the leadership of the industrial and communications sectors, President Berdymuhamedov said that three more cement plants should be built in the country.
Quite possibly, after going through the tender and vetting processes, the contracts could be awarded sometime next year.
The obvious question here is: why should Turkmenistan increase its production capacity of cement when there is surplus cement for export already?
First, Turkmenistan is at the threshold of the second wave of the construction boom. This time it would be led by the local construction companies and would mainly cover the construction of housing and social facilities.
Second, the Turkmen companies, after having gained some experience in moderate construction projects in Afghanistan, Uzbekistan, Russia and Moldova, are preparing to take their construction skills to the foreign markets.
Some local companies such as Buysanchly Toprak, Turkmen Enjam, Keletdag, Arassa Senagat, Nurana, Arassa-Maidan, Ed Yer, Ussat Engineer, Khudayar, Gural, etc. have impressive record of completed projects.
It is expected that when competing for projects, particularly in the neighbouring countries, they will base their calculations on the cement and construction materials produced in Turkmenistan to the extent that is possible without bruising the competitiveness.
In addition, because of the flexibility of Turkmenistan to cater for the specifications of the buyer when producing cement, the export demand could also rise fairly well.
The Turkmen embassies and the representatives of the Union of Industrialists and Entrepreneurs of Turkmenistan (UIET) will speed up their marketing campaign next year to position the Turkmen construction companies to compete on sure footing for the projects that are in their capacity. /// nCa, 26 November 2019
To be continued . . .