Growing potential of Iran’s cement investments

A new Shariah investment sector is poised to expand out of Iran, capitalizing on its cement export industry that has been a significant foreign revenue earner for this Persian nation hit by economic sanctions. 

Regulatory changes after the Iranian government’s July 2025 ruling to have all cement trade to be conducted only through the Iran Merchantile Exchange (IME) – cutting out the long-standing middlemen practice – anticipates new fund launches to optimize gains from this development. 

There are significant price differentials to be tapped via such funds, without the middlemen’s slices – where about 30 intermediaries who control the market are buying bags for IRR22,000 (US$0.52) from factories and selling them for IRR60,000 (US$1.42), noted Reza Jamaranian, head of the Cement Employers Association.  

Furthermore, another critical issue needs addressing – to facilitate growth of the only two funds currently within Iran focused on the cement industry, said Reza.  

The Daya Industry Sector Fund – Cement, Limeand Gypsum Industry (Simana) by Mobin Asset Management began operating in July 2024 and its AuM was at IRR71.91 billion (US$1.71 million) on the 28^th November 2025.  

The Servat Pouya Sector Equity Investment Fund – Cement (Seman) also by Mobin Asset Management began operating in September 2024, and its AuM was IRR159.83 billion (US$3.8 million) at the last November 2025 trading date. 

The weak performance of these funds currently reflect a main challenge for the domestic Iran cement production sector – where energy prices have been kept artificially low, compounded by irregular power supply. 

“When prices are set administratively, manufacturers’ profit margins are forcibly reduced, discouraging existing investors and deterring new investments. This leads to long-term shortages, as seen in electricity and cement.   

“Providing cheap energy to the cement industry while expecting artificially low cement prices is counterproductive. The government should allow free-market pricing while ensuring fair energy costs.” 

Once the energy issue is addressed, Reza anticipates cement production and prices will find new momentum.   

“Globally, cement is priced relative to steel, at roughly one-eighth the price of steel per tonne. In Iran, steel costs 50 times more than cement despite similar energy costs.”  

Combined with forex gains from cement exports, these new funds could become a tool for domestic investors to hedge against Iran’s inflationary pressures and for foreigners to tap an emerging Shariah asset class.  

Data from S&P Global and shipbroking house Howe Robinson Partners on global seaborne cement trade in H1 2025 show Iran to be among the top 10 global exporters. Producing over 80 million tonnes annually, Iran exports mainly to neighboring nations like Afghanistan and Qatar, plus some across Africa.