Government Merges State-owned Building Materials Companies

On January 6, Syrian President Bashar Al-Assad issued Legislative Decree No. 3, establishing the General Company for the Manufacture and Marketing of Cement and Building Materials – Omran. This company replaces two previous institutions: the General Establishment for Cement and Building Materials, which was affiliated with the Ministry of Industry, and the General Establishment for Domestic Trade of Metals and Building Materials (also known as “Omran”), which was affiliated with the Ministry of Domestic Trade and Consumer Protection. 

Under Decree No. 3 of 2024, these two institutions merged into a single company, enjoying financial and administrative independence. The company, headquartered in Damascus, is affiliated to the Ministry of Industry.

The old systems will continue to apply to the two former institutions for at least the next six months, pending the issuance of the implementing instructions for Decree No. 3 of 2024, according to a statement from the Minister of Industry.

Decree No. 3 consists of 28 articles divided into seven chapters, including the new company’s goals, competencies and tasks, as well as its management, branches and capital. The declared objectives are to achieve integration of the production and marketing chains, to meet market needs and to create development opportunities. The company’s tasks include:

• Securing raw materials for cement production and its development.
• Covering market needs.
• Preparing marketing plans.
• Direct distribution of cement.
• Maintaining a strategic reserve and determining current and future needs.

The company has a general manager accountable to the Board of Directors and the Minister of Industry. The prime minister’s decision forms the Board of Directors, which consists of nine members. Its tasks include signing contracts that exceed the general manager’s authority, increasing the company’s capital and hiring experts as deemed appropriate.

The decree outlines four regional branches for the company: the Southern Region Branch, which includes the governorates of Damascus, Rural Damascus, Daraa, Suweida and Quneitra; the Central Region Branch, comprising the governorates of Homs and Hama; the Coastal Region Branch, encompassing the governorates of Lattakia and Tartous; and the Northern and Eastern Regions Branch, covering the governorates of Aleppo, Idlib, Raqqa, Deir-ez-Zor, and Hassakeh.

The company’s capital is SYP 2 trillion, consisting of the net assets of the two merged institutions and allocations provided by the state. The company’s resources come from its fixed assets and profits from its activities, as well as loans and credit facilities provided to it, state allocations, and the sale of fixed assets. The company uses its revenues to fund its plans and expenses, with any surplus revenues being deposited into the Public Debt Fund under the Ministry of Finance.

It is not expected that the merger of these two institutions will reduce property prices in Syria. Decree No. 3 of 2024 does not stipulate the abolition of the public sector’s monopoly over the distribution and pricing of cement nor the introduction of competition in the cement market. Instead, it transfers this responsibility from one public institution to another. 

It is also not expected that cement will be included in the social support system when the state is reducing other forms of support. Decree No. 3 of 2024 is part of the government’s approach to merging and restructuring institutions with similar functions to achieve greater profitability. 

The Council of Ministers discussed a draft of this legislation at the end of November 2023, primarily because the Omran institution monopolises commercial profits as a marketer of cement, while cement-producing companies suffer from losses, according to the pro-government site Syria Daily News.

Under Decree No. 1300 of 1975, amended by Decree No. 177 of 1979, a productive institution named the General Establishment for Cement and Building Materials was founded. Over time, this establishment oversaw ten production companies that produce cement and building materials. These include Adra Cement and Building Materials Company in Damascus, Rastan Cement and Building Materials Company in Homs, the Syrian Company for Cement and Building Materials in Hama, Shahba Cement and Building Materials Company in Aleppo, the Arab Company for Cement and Building Materials, also in Aleppo, Tartous Cement and Building Materials Company, Aleppo Company for Asbestos Cement Products, the National Company for Cement and Building Materials in Damascus, the Arab Company for Porcelain and Sanitary Ware in Hama, and the Economic Unit for Manufacturing Spare Parts in Aleppo. Many facilities of these companies suffered significant damage during the war from 2012-2018.

Meanwhile, the General Establishment for Domestic Trade in Metals and Building Materials – Omran was established by Decree No. 163 of 1970. This intermediary institution’s role was to market building materials produced in the public sector, including cement, iron, wood, paints, and ceramics. Since its inception, Omran has monopolised the trade of cement in Syria. It is authorised to set cement prices, methods and conditions of distribution, and it earns 10 percent of its sales value as profits.