Corruption blamed for cement factory closure

Published on 30 November -1 in News
Imad Al-Sakkaf (author)

Imad Al-Sakkaf

The document revealing how Al-Barh Cement Plant in Taiz had to shut down after funds were taken by two other state-owned cement plants and not returned.

The document revealing how Al-Barh Cement Plant in Taiz had to shut down after funds were taken by two other state-owned cement plants and not returned.

TAIZ, Jan. 15 — Officials from two cement plants in Hodeida and Amran took money from a cement plant in Taiz to cover their companies’ financial obligations to the Tax Authority and the Ministry of Finance, according to an official document released by the Al-Barh Cement factory in Taiz.

The document was created last April by Al-Barh manager Hussein Al-Mala’asi, and reveals that the resulting loss of revenues led to the plant’s shutdown earlier this month.

“This confirms that the National Cement Department’s inclination was to weaken Al-Barh’s status and to prevent it from fulfilling commitments both to its workers and with the payment of foreign loans,” reads a portion of the document.

According to the document, around YR eleven billion ($50 million) was taken from revenues of the Al-Barh factory by two cement national companies, with about YR seven billion ($32 million) going to the Amran Cement Plant and about YR four billion ($18 million) going to the Bajil Factory. The money was reportedly used to cover financial obligations to the Tax Authority and Ministry of Finance.

The Al-Barh cement plant was a prominent state-owned national company, which made significant contributions to the national budget.

“Regulations for national state-run companies allow any state-run firm to take revenues from other firms for their accounts on condition that the amount be paid back with interest to the firm, and this is what didn’t happen,” a lawyer from the Al-Barh factory told the Yemen Times.

“This is corruption, as the delay in paying back the money caused the plant’s shutdown,” he said.

Another document, from December 26 and issued by the manager of Al-Barh Cement Plant, criticized the department’s control of factory assets, with salaries being the only exception. He accused the corporation of violating the law and said, “This is a serious development that may lead to chaos and a suspension of work at the factory.”

It turned out to be an accurate forecast, as the factory completely shut down on January 4 after it was unable to meet its financial obligations, including being unable to pay employee salaries and make payments for fuel necessary to run the plant.

The plant, established in 1990 and located 25km west of Taiz, was one of Yemen’s largest public factories and had an annual output of 500,000 tons of cement and employed over 700 individuals.

In early January, about 350 workers, some of whom performed a sit-in in front the Industry and Commerce Office, went on strike to demand the removal of factory management at the Yemen Public Cement Corporation, the government department responsible for managing national cement plants nationwide.

The demonstrating workers claimed that management had prevented them from receiving the same benefits as other workers in public factories.

They also claimed that management had intentionally pushed the factory towards failure.

Their demands included the provision of crude materials, a lack of which caused the suspension of operations at the factory several times last year.

Engineer Jalal Abu Nwaiser, head of the recently-started workers’ union committee, told the Yemen Times that the factory’s closure came as a result of their strike and the shortage of crude materials, which were unavailable for a period of ten months.

“The workers are also protesting the interventions of influential persons running the factory,” explained Nwaiser. “The manager for National Transportation and a sheikh in the area, both impacted by the strike, cut off electricity to the laborers’ town, thereby exploiting the absence of factory management,” Abu Nwaiser claimed.

Another source at the factory said that previous suspensions of factory operations came as a result of shortages of gas, oil and diesel, only compounded by increases in prices.

“As for the present demands of the workers, they are requesting that extra allowances be granted to their peers in other cement factories. The workers prevented the deputy manager from carrying out his own duties and thus escalated the problem,” said the factory source.

He concluded by asking: “How can these workers request that the plant resume operations when they are on strike, obstructing vehicles and preventing clients from entering the place?”