Lafarge sees Morocco cement market growing in 2009

* Lafarge sees state housing supporting Morocco cement mkt

* Says has capacity to meet any pick up in demand

By Zakia Abdennebi

CASABLANCA, March 26 (Reuters) - Morocco's cement market is likely to grow slightly this year as state-backed social housing projects offset delays and cancellations in commercial real estate, the local subsidiary of Lafarge (LAFP.PA) said.

Morocco experienced a construction boom in recent years as the government built new roads, rails and ports and drew record foreign investment in hotels and resorts to cater for growing numbers of tourists.

Inward investment has tumbled since mid 2008, clouding the outlook for cement companies like Lafarge Ciments (LAC.CS) as well as its rivals Ciments du Maroc (SCM.CS) and Holcim Maroc (HOL.CS), which all invested heavily to keep pace with demand.

"We think ... there will be a small rise in cement demand in 2009 because the fundamentals of the Moroccan economy are solid and there is a strong need for housing," Lafarge Ciments Managing Director Jean-Marie Schmitz said late on Wednesday.

He said the company would always invest if demand grows, but the company already had the capacity to respond to any pick-up in the market thanks to a new production line due to open in the northern city of Tetouan in May.

Schmitz said Morocco's fastest-growing regional cement market was once the north but was now the area around Casablanca, after some major public works projects in the north ended and real estate projects had not yet found buyers.

Morocco's cement market grew 15.7 percent from January to July 2008 and then by only 1.5 percent for the rest of the year, giving annual growth of 9.9 percent, Lafarge Ciments said.

The company's sales by volume grew 6.2 percent over the full year on a market share of 40.6 percent. Net profit was up 16 percent at 1.69 billion dirhams ($205.5 million).

Turnover grew 13 percent to 4.91 billion dirhams, while operating profit was up 20 percent to 2.29 billion as the company took better control of fixed costs and maintenance.

It dealt with high fuel costs -- coke prices soared to $147 a tonne from $102 in 2007 -- by burning more alternative fuels such as used tyres and producing more power from wind turbines.

French company Lafarge and SNI (SNI.CS) -- an investment company controlled by Morocco's royal family -- each own 50 percent of Lafarge Maroc, which in turn controls 69 percent of Lafarge Ciments, part of which is listed in Casablanca.

The shares were up 0.35 percent at 1,395 dirhams on Thursday, bringing their gain this year to 2.3 percent. (Writing by Tom Pfeiffer; Editing by Andrew Macdonald) ($1=8.223 Moroccan Dirham)