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Iraq cement factory contract awarded

Iraq has awarded UK investment and private equity company, MerchantBridge, a contract to upgrade a large cement factory as the government seeks to rebuild the country. According to The National newspaper after winning the contract from the Iraqi ministry of industry and minerals, MerchantBridge will spend US$200mn on renovating and operating the plant under a 15-year lease.

MerchantBridge is one of the largest private investors in Iraq and the company said financing would come from a combination of debt, the company?s own cash, outside investors and money generated from the factory. MerchantBridge has formed a partnership with France?s Lafarge to operate the plant, which aims to produce 1.8mn tonnes of cement a year by 2013. Lafarge already has a significant share of Iraq?s cement market and owns two plants in the country. Abdullah Lahoud, a partner at MerchantBridge, said Iraq produced seven million tonnes of cement a year, but demand was about double that amount.

?Over the next three years there?s going to be a major supply-demand gap,? said Mr Lahoud said. ?We?re getting to the point where the government needs to do something. We expect the new government to focus very much on reconstruction and the economy. It wasn?t a priority before.?