Brick factories seek financial support from KRG to build on Iraq market
PM:10:41:22/09/2019
Red brick factories are criticizing the Kurdistan Regional Government (KRG) for its failure to financially support the brickmaking industry and capitalize on demand for the building material in the rest of Iraq.
 
According to data from the Planning and Follow-Up Department of the Trade and Industry Ministry, the Kurdistan Region has 11 advanced brickworks, with the capacity to produce some 860 million bricks annually. Only five of these plants are currently in operation.

Hilal Bricks is one of the biggest producers of the material in the Middle East. Established in 2015, it has the capacity to produce 250 million bricks annually, works head Saif Sanqrat told Rudaw on Monday.

"The main problem for our plant and others in the Kurdistan Region is the abundant production costs that make us unable to compete with other Iraqi plants in terms of price," Sanqrat said.

He strongly criticized the KRG for their failure to subsidize power supply for the plants.

"The Iraqi government charges their plants 100,000 dinars for one ton of crude oil and 60,000 dinars for one kilowatt electricity, while the Kurdistan Region government sells one ton of crude for 360,000 dinars and one kilowatt of power for 120,000 dinars."

Most of the Kurdistan Region’s brickworks are located in Erbil. Of seven existing factories, four are in operation.

Engineer Mustafa Zubair says Erbil’s earth is of the best quality for the production of bricks.

"According to our research and lab examinations, the soil of the Kurdistan Region in general and that of Erbil in particular is of the best quality … for the production of red bricks," Zubair said.

Despite their high quality, bricks are not a desired building material in the Kurdistan Region, where the use of materials that are cheaper and quicker to work with is preferred.

"What really drives our people to prefer blocks over bricks is that the price of the former is cheaper and makes building quicker," Sarkawt Ibrahim, engineer and owner of Kurdistan Estate Consultancy office told Rudaw.

"Our people believe that brick is not practical to use," he says.

Demand for red bricks in other parts of Iraq has proved a lifeline to the industry in the Kurdistan Region.

"Due to the high quality of our bricks, our output is in high demand across Iraq," Sanqrat says. "Around 95 percent of bricks are sold in Baghdad, Anbar, Saladin, Najaf and Karbala markets."

The sale of red bricks to the rest of Iraq has been made easier with the attainment of a long fought customs deal between Erbil and Baghdad in February.

Kurdistan Region authorities control the length of Iraq’s border with Turkey and a large stretch of the frontier with Iran, where they imposed their own customs on trade.

After the Kurdistan Region’s independence referendum in September 2017, Baghdad sought to bring the borders under federal control and take a share of trade custom revenue. It set up internal customs points on roads linking the Region with the rest of Iraq, effectively charging a second duty on all foreign products and taxing Kurdistan-made goods.

But under this year’s agreement, the two governments agreed to a single tariff system at Iraqi borders and the removal of all internal customs points. 

Taeb Kazho Ali, in charge of Industry Development at the trade ministry, says the boost provided by the single tariff system ought to propel senior government into offering revitalizing financial support to the Region’s brick plants, but nothing has happened. 

"We have asked [superiors] plenty of times for the resumption of the government support for brickworks, yet there has been no response," he said.

Ali says the government has not been able to offer Kurdish brick factories previous levels of support as the Region is still reeling from the shock of economic crisis.

The Kurdistan Region became gripped by economic crisis in 2014 after the outbreak of a costly war with ISIS which led to the arrival of tens of thousands of refugees seeking safety in the Region, as well as Baghdad cutting the KRG’s share of the federal budget.

"We used to supply crude to the brickworks at a subsidized price. We would even charge them cheaper electricity fees. But the ec.

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