Saveh White Cement Co., a partly state-owned Iranian enterprise, has placed an order with F.L.Smidth for two production lines with a total capacity of 7,200 tonnes grey cement per day. The value of the contract is 70 million euro or 520 million Danish kroner.
The contract with Saveh White Cement Co. (SWCC) for two 3,600 tonnes per day production lines is the largest single cement project ever in Iran and the Middle East in terms of production capacity.
The machinery and equipment will be shipped during the next 12 to 18 months to the plant site at Saveh, a city located in northern Iran 160 km southwest of the capital, Tehran. The first line is expected to be operational in about 30 months' time, followed by the second line six months later.
This is the first time that F.L.Smidth is to supply equipment to SWCC. The company was formed in the early 1980s, partly through government funding. The cement plant is the country's leading producer of white cement, and once the two new grey lines are finished in 2006, SWCC will be among Iran's largest providers of cement both for domestic consumption and for export.
The contract, which will not affect the 2003 earnings prospects of the FLS Industries parent company, was signed on 12 June in Tehran. This marked the culmination of a highly efficient negotiation process starting with invitations to tender in May 2002 and involving contenders from China, Japan, Germany and France. F.L.Smidth faced particularly tough competition from the French company, which originally supplied SWCC's two existing white cement production lines.
-We are happy and proud to have won this order in an otherwise squeezed market. The contract reflects our successful relationship with the Iranian cement industry which dates back to 1933. At this point it should be mentioned that around 1970 F.L.Smidth supplied a plant to Tehran Cement which has been operating perfectly ever since. SWCC's choice of F.L.Smidth as a supplier partly reflects the success of that project which was implemented under the leadership of the management executives Nils Foss and Ib Worning. It is highly gratifying to see the strong relationship with the Iranian cement industry in general being maintained over the years by our staff and now materialising in another major contract, says Frank Gad, Chief Executive Officer of F.L.Smidth A/S.
The Iranian cement market offers good prospects for F.L.Smidth. The industry's present production capacity is estimated at some 28m tonnes per year. According to government sources there are plans to double this capacity over the next 15 to 20 years, both in order to keep up with population growth and to meet the increasing demand for cement, currently at 350 kg per capita, in a country inhabited by 66 million people. In addition, a large part of the industry is to be upgraded and modernised.
The machinery and equipment covered by the contract with SWCC features the latest FLS technology, ensuring not only maximum efficiency but also compliance with the most exacting European emission standards. The scope of the contract includes a raw material storage facility to be supplied by F.L.Smidth Materials Handling A/S, two vertical ATOX raw mills, two pyroprocessing systems consisting of preheater, kiln and cooler, four electrostatic precipitators to be supplied by F.L.Smidth Airtech A/S, three cement mills, five MAAG Gear AG gear units, and a complete electrical package including control system and laboratory equipment to be provided by F.L.Smidth Automation. Also included in the order are spare parts and supervision of erection and commissioning.
FLS Industries A/S
Corporate Public Relations