Major factories are idle in the economic capital of Iraq

by **Rocky** Sat 08 May 2021, 8:28 am

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Major factories are idle in the economic capital of Iraq

by Rocky Sat 08 May 2021, 8:28 am

Major factories are idle in the economic capital of Iraq

It was the newest and largest in the region, but most of it is now disrupted and attempts to rehabilitate it seem slow and faltering

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Saturday 8 May 2021 5:46
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In 1974, the Iraqi government contracted with a French company to build an iron and steel plant (The Independent Arabia)[/size]

During the seventies, Iraq witnessed an industrial renaissance, which was embodied in the construction of many government factories, including chemical fertilizers, paper, petrochemical, and iron and steel factories in Basra Governorate, which overlooks the Gulf. These factories were the newest and largest of their kind at the level of the region, but most of them today are idle, their machines are rusted and covered in dust of neglect, and attempts to rehabilitate them seem slow and faltering in light of the withdrawal of government attention from them for 18 years, despite its importance in establishing an industrial base that breaks the stereotype. A rentier economy dependent almost exclusively on oil wealth.

Paper mill

The paper factory is one of the most important governmental factories in Basra, and it was established in 1970, and it consists of five production lines that used to produce thousands of tons annually of various types of paper. While retaining its engineering and technical administrative cadres.

Factory director Ramadan Abbas Salman recounts that “our attempt to partially operate the factory by contracting with a French company to rehabilitate a hygienic paper production machine was not successful, as the company withdrew from work in 2014 before the rehabilitation project was completed due to its concern about the conditions that prevailed during the war against ISIS. ", Adding that" the completion rate of the machine is 85 percent, and it is designed to produce 16 tons per hour, and the Iraqi market needs three times more than this amount to cover domestic consumption. "

Salman believes that "the best solution to revive the factory is its offer to invest so that the private sector can rehabilitate and operate it, and a decision has been taken in this regard," revealing that "feasibility studies are ready, and soon we will announce the project in the hope of receiving offers and conducting negotiations with foreign or Iraqi companies wishing to invest in." the factory".

The factory relied on the reed plant as a raw material for the production of paper, which is why it was surrounded by vast areas of reed farms adjacent to the marshes, but these lands were drained by cutting off the water, leaving no reeds. According to the assistant director of the factory, Ahmed Sharif Al-Mansouri, "If the factory is restarted, we will resort to recycling used paper. State departments are obligated to deliver us their paper waste in accordance with a government decision, and our stock of consumed paper is not less than four thousand tons."

Petrochemical plant

When the petrochemical plant was opened in the late seventies, it was one of the largest factories of its class in the Middle East, and surplus production was exported through ports to several countries. Similar to the paper factory, the factory was subjected to sabotage during 2003, which caused the disruption of its production lines, and the factory has remained unproductive since then, and in early 2018 the government began steps to restart it at half its design capacity.

Aqeel Al-Mudhaffar, Director of the State Company for Petrochemical Industries, stated that “the factory is about to resume production of plastic pellets with a capacity of 60,000 tons annually,” adding that “before resuming production, the factory received prior commercial requests to supply quantities of pellets because they would be of higher quality and lower prices than imported pellets ".

Al-Muzaffar points out that "the Iraqi government has been planning for years to establish a new industrial complex for petrochemicals in Basra, and our factory will be the cornerstone of this project in light of the engineering and technical expertise available to us," considering that "if the project comes to light, it will put Iraq on the path of the leading countries in the industry." Petrochemicals, and could open doors for Iraq to develop other strategic industries. "

The Ministry of Industry signed an agreement with the global "Shell" company in 2012 to build the "Al-Nebras" industrial complex for petrochemicals with a production capacity of one million and 800 thousand tons annually. According to previous official statements, the investment complex will be the fourth largest petrochemical plant in the world, and the first in the Middle East. The investment cost of the project is not less than 11 billion dollars, and it is expected that it will achieve annual profits of more than one billion dollars and provide more than ten thousand direct job opportunities. However, the project, which is planned to take five years to implement, has not yet entered into force.

Iron and steel factory

The beginning of the iron and steel factory goes back to 1974 when the Iraqi government contracted with a French company to build it, and its plants were gradually put into operation. In 1978 the steel plant was operational, a year later the rolling mill, and the beginning of 1980 the sponge iron plant. The factory, upon its inauguration, was one of the most important pillars of the Iraqi industry, and covered the Iraqi market’s need for structural iron, sponge iron and iron pipes, but the atmosphere of the First Gulf War resulted in the disruption of the factory from 1980 to 1987, and then production resumed at less than its design capacity, and continued to work until 2003 It was subjected to acts of sabotage that led to its failure.

In a late attempt to restart the plant, the Ministry of Industry and Minerals contracted in 2012 with a Turkish company to supply and install melting furnaces, equipment and new machines at a cost of $ 700 million. The project was to be completed within three years, but the project on the ground is going very slowly for reasons related to financing. The factory management is expecting a loan from the local government in Basra to finance the last phase of the rehabilitation project. In the event that it obtains the loan, the factory will resume production at the end of the current year, with a capacity of 600,000 tons annually.

In the absence of the government factory from the competition arena, the iron and steel sector is witnessing an abundance of investments, as a civil factory was built in 2013 next to the disabled government factory in the Khor Al-Zubair area, and the Investment Authority in Basra in late 2020 granted a license to an Iraqi company to build a factory in the same area at a cost of 53 million With a capacity of 127 thousand tons per year, and it intends to issue another license to build a larger factory with a capacity of one million tons per year, but the old government factory has a competitive advantage, which is the possession of a warehouse of scrap iron of up to one million tons, and it can, by virtue of its government revenue, obtain relatively easily regular supplies from Scrap iron, while local non-governmental factories face challenges in securing their need for scrap iron.

Chemical fertilizer plant

The chemical fertilizer plant is the best government factory in Basra, despite the fact that most of its machinery and production facilities have been worn out. The factory was established by the Japanese company "Mitsubishi" in 1977, and it entered the trial operation phase in 1980, and in the same year the first Gulf War broke out, which resulted in it ceasing to operate. Then production resumed after the war in 1988, and it consists of four basic production lines with a design capacity of one million tons annually.

The director of the investment department at the General Chemical Fertilizers Company, Badi 'Abdullah Ahmad, said, “The factory rehabilitated some of its production lines in 2015 with funding from a Japanese soft loan, and is currently producing 60 percent of its design capacity,” explaining that “the quantities produced from urea fertilizer are exclusively prepared. To the Ministry of Agriculture, but during 2016 we faced a problem caused by the ministry not withdrawing the product, which led to the accumulation of 64 thousand tons of fertilizers in warehouses, and we suffered from marketing them for three years.

Ahmed pointed out that "the company is in the process of operating another production line that is currently suspended, and when it is operational, Iraq will achieve self-sufficiency in urea fertilizer," adding that "during the year 2019 we signed a partnership contract with a British company to establish a plant attached to our plant for the production of phosphate fertilizer (DAP) for the first time in Iraq, with a capacity of 500 thousand tons annually, and these quantities are sufficient to meet the need of the agricultural sector of this type of fertilizer, and it is hoped that the new factory will be opened before the end of this year.

Iraqi economists believe that the broken government factories in Basra, in the event of operating their lines, developing their facilities, and updating their technological systems, can play a pivotal role in dispelling the phenomenon of unemployment and improving the economic situation, and it can also limit the drain of hard currency abroad. Iraq depends on imports to cover its needs from most of Types of goods, and that is why the Iraqi government’s decision finally to reduce the value of the dinar exchange rate against the dollar has led to an increase in the prices of all types of goods in the market, including local products because their manufacture depends on imported machinery and raw materials. Its enormous oil wealth and active commercial ports, although it was an agricultural city par excellence, and its idle factories testify to its lost industrial importance 18 years ago.

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Established in 2006 as a Community of Reality

Established in 2006 as a Community of Reality

Major factories are idle in the economic capital of Iraq

Major factories are idle in the economic capital of Iraq

It was the newest and largest in the region, but most of it is now disrupted and attempts to rehabilitate it seem slow and faltering

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