BAGHDAD: Iraq’s investment climate is getting better but foreign investors are awaiting the passage of national industry and consumer protection laws to further improve the environment, the Iraq chief of French cement maker Lafarge said.
"I think the investment environment, and generally the business environment, is in an improvement trend," Marcel Cobuz told Reuters in an interview.
"The investment law of 2006 is a good step forward. It is guaranteeing basic industrial rights, it is paving the road with tax and capital incentives. So it’s a rather modern legal framework," Cobuz said by telephone from his base in Sulaimaniya in northern Iraq.
"One extra step now would be to adopt by the parliament and to enforce a national industry protection law," he added.
Lafarge, the world’s largest cement maker, was one of the early movers into Iraq, taking on renovation of cement factories as the government tries to rehabilitate failing industries after years of war, international sanctions and neglect.
The company is building capacity in Iraq and controls about 30 percent of the local cement market, Cobuz said.
The construction of Iraq’s legal framework has been stalled as politicians jockey for position in a new government more than seven months after an election that produced no clear winner.
Yet Cobuz said Lafarge was still confident about its operations in Iraq.
"Iraq for Lafarge is a country in which we can do business," Cobuz said, adding: "I think the fact that we have operated in the north for few years made us comfortable to move more and more to the south."
Lafarge has invested in three cement factories and Cobuz said the company has annual capacity of 6 million tons. It hopes to add another 2 million tons in three years, when the refurbishment of a plant in the southern city of Kerbala is completed.
Lafarge also operates two plants in Iraq’s semi-autonomous northern Kurdish region. It employs about 3,000 people in Iraq, of which less than 5 percent are foreign nationals.
Violence has ebbed from the bloody conflict of 2006-07 but bombings and other attacks still occur daily. The Kurdish region has better security and has had success attracting investment.
Iraq "is somehow immune to the financial crisis affecting the rest of the world. Low interest rates, low inflation rate and there is a huge development expected in infrastructure, both in oil and non-oil," Cobuz said.
Iraq has signed a raft of deals with foreign oil companies that could take its crude output capacity up to 12 million barrels per day from about 2.5 million now.
Cobuz said the government’s long-term planning is improving. He cited as an example a memorandum of understanding Lafarge signed with the Ministry of Water Resources to provide a specific kind of cement for the sewage and irrigation channels.
"It (the ministry) has a master development plan for 10 years," he said. "This is remarkable."
