CBMI Construction Co., Ltd. provides $31.9 million supplier credit for Al Badia Cement Plant Project

On June 9, 2008, CBMI Construction Co., Ltd and the Al Badia Cement Company (or Al Badia Cement JSC) — a private company — signed an agreement regarding a $31,947,204 supplier credit (loan) for the Al Badia Cement Plant Project. The loan carried a 6.5% interest rate and a maturity length of 6 years. However, its grace period is unknown. The payment of the loan and the accumulated interest was scheduled to take place over thirty equal monthly payments, starting on June 1, 2011 and ending on November 1, 2013. The proceeds of the loan were to be used by the borrower for the construction and operation of the Al Badia Cement Plant in Abu Al Shamat — 80 km east of the city of Damascus — as well as the training of staff at the plant. Upon completion, the plant was expected to generate 3.2 millions of cement each year. Construction began in September 2008 and a formal groundbreaking ceremony took place on May 25, 2009. Plant ignition took place on December 23, 2010, 40 days ahead of schedule. Al Badia Cement Company signed a PAC (Provisional Acceptance Certificate) on June 7, 2011, certifying that CBMI Construction Co., Ltd had completed the works at Al Badia Cement Production line #1 and the installations were ready for handover to the project owner (Al Badia Cement Company). Chinese personnel were still involved in the construction process as late as November 6, 2011, when the Chinese Ambassador to Syria visited the construction site. However, due to the deteriorating security situation in Syria, CBMI Construction Co., Ltd abandoned the project in 2011/2012 and it reportedly failed to honor some of its contractual obligations. CBMI Construction Co., Ltd and the Al Badia Cement Company later negotiated a settlement whereby Al Badia Cement Company would repay CBMI Construction Co., Ltd only $15 million. As of December 31, 2018, the plant was operational despite various obstacles over several years. According to an 2015 Annual Report published by the Al Badia Cement Company, as of December 31, 2015, it had paid CBMI and a second contractor (ASEC) 232,867,983 SYP in exchange for the contracts to build and operate the factory. In 2016, ISIS militants kidnapped 300 workers from the Al Badia Cement Plant.

Additional details

This project is also known as the Al-Badia Cement Plant Project or the ABC Project. The Chinese project title is 巴迪亚水泥厂or 叙利亚阿尔巴迪亚水泥厂 or 阿尔巴迪亚水泥厂 (ABC). The Arabic project title is مصنع إسمنت البادية or شركة اسمنت البادية. CBMI Construction Co., Ltd is an affiliate of Sinoma International Engineering Co., Ltd , which is a central government-administered enterprise directly under the administration of the State-owned Assets Supervision and Administration Commission of the State Council of the People's Republic of China. Al Badia Cement Company is a Public Joint Stock Company established by Decree No.2465 dated June 1, 2006 in accordance with the Syrian Investment Law No. 10 of the year 1991 and its amendments, which exempts the Company from income tax for a period of five years commencing from the date of production or investment, which is earlier. The Company was registered under Damascus Countryside Commercial Registry No.8593 on September 3, 2008. AidData has estimated the maturity length of the supplier’s credit (loan) counting the number of years between the loan signature date (2008) and the loan maturity date (2013).

Number of official sources

26

Number of total sources

31