Despite being one of the top producers of cement in the world, Iran still is unable to produce the necessary machinery as well as some raw materials. Besides, the country spends money every year on importing processed cement and some articles of cement.
Due to the economic recession in recent years and a decrease in the demand side, cement supply has surpassed the demand in Iran. To prevent from a reduction in value, producers have decided on expanding their foreign markets including Iraq and Afghanistan.
However, since cement is too heavy to transport easily, high transportation cost is one of the critical factors in choosing export destinations. That is why export destinations are mostly neighbor countries.
As a result of costly transportation, cement is mainly a local industry. However, so many of cement factories in Iran with large production capacities have been located where the market is not adequate to absorb the total output. And that is another reason for supply surplus in the market.
Regardless of how big the industry is in Iran, it faces with weaknesses that threaten its growth and development in the future. Difficulty in fueling factories especially in the winter, polluting, feeble research and development, and being capital intensive are some of the main problems in the industry. Hence, Iran can be an untapped and exciting market for those who can invest in these categories as well as those suppliers who want to participate in the market by providing modern machinery and production systems, raw materials, and processed cement.