Government Bans Cement Imports for 6 Months

The government decided at its meeting today, January 5, to implement a temporary restriction on cement imports into Armenia for a period of 6 months, as well as established the licensing procedures and format for imports.

The justification for the decision states that on June 9, 2022, the government had already imposed restrictions on the import of cement and clinker for a period of 6 months. As a result of these measures, favorable conditions have been created for local cement producers to compete in the domestic market against imported cement from third countries. Specifically, during the first 10 months of 2022, Armenia produced 803.5 thousand tons of cement, which exceeded the previous year's figures by 14.5%.

The Ministry of Economy of the Republic of Armenia has studied the domestic cement market, and taking into account the recent changes in the market (particularly the increase in costs of cement imported from Iran leading to a rise in prices of imported cement in the local market, as well as the insufficient supply of cement by local producers despite increased production costs, which did not meet the demand in the domestic market), and aiming to create a level competitive playing field for both imported and locally produced cement, adjustments have been made to state fee amounts. Consequently, the state fee for the issuance of import licenses for up to 100 tons of cement from third countries has been reduced to 200 times the base fee (as opposed to previously being 14,000 times), while the requirement for obtaining a license and paying the state fee for importing clinker has been abolished.

The proposed legislation establishes the relevant regulations in accordance with the law, and we believe that the current regulation meets the needs of the cement market. At the same time, considering that imports are also taking place from Georgia (previously, imports were only from Iran), changes have also been made in the application completed by importers for obtaining a license, allowing operators to specify multiple countries of import.

In light of the aforementioned, it is proposed to set the process for issuing licenses under the proposed regulations for a period of 6 months. The adoption of this project will contribute to ensuring healthy competition between local cement producers and importers.