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MSC has properly tapped Iran’s economic potential in its march toward development, job creation


A host of Iran’s top economists paid a visit to Mobarakeh Steel Company on Wednesday December 27, to meet with MSC chief Dr. Bahram Sobhani and get a first-hand account of the company’s expansion projects and production lines.
Dr. Sobhani presented a report on his company’s performance in the meeting and provided answers to the questions the participants asked. [The following is an excerpt of the answers he offered]:
Q: Has MSC conducted market research in the exports sector?
A: For a producer who wants to export consumables, the freshness of goods and their packaging play a decisive role in the strong performance of the export item. But the export of industrial and steel products is not that much simple. There are factories in the downstream sector whose operations depend on steel products. Thus, they place orders with MSC and receive their goods in a certain period of time. Some requirements should be met if we seek to successfully produce steel. That’s why we need to get entirely familiar with global markets and rivals. Exporters are also expected to honor their ethical and economic commitments. Fortunately, Mobarakeh Steel Company has a good reputation in the world. Since I took charge of MSC, I have strongly believed that if the company wants to be successful, it should get connected to the world markets which sell 1.6 billion tons of steel products. Thanks to divine blessing, this goal has been materialized and MSC’s vulnerability has decreased drastically.  
Q: Is it economical for the country to build steelmaking and downstream plants?
A: Development of parent industries, including steelmaking, can be profitable only if their output capacities stand above 5 million tons and sufficient geographical studies are carried out beforehand. On the other hand, creation of downstream industries – depending on consumption and market conditions in the region – can be helpful. Such industries turn out to be profitable because they spur economic growth and create jobs, they produce goods on a modest scale, though. We should not forget the fact that the steel industry is like a locomotive that provides the motive power for a train to pull a number of cars. Construction of steel plants will see downstream industries emerge and grow.     
Q: Why has Mobarakeh Steel proposed to acquire Khouzestan Oxin Steel Company?
A: Oxin Steel is a factory which produces rolled sheets. To produce wide sheets which are used in the oil and gas industries, it needs API quality slabs (180*200 cm). Oxin Steel should buy these sheets from Mobarakeh Steel; otherwise it cannot complete its production capacity. MSC worked out a national – and not simply regional or provincial – approach and got involved in the acquisition of Oxin to create more added value in the country’s steel industry.    
During the visit, Mohammad Reza Bahraman, the head of Iran Mine House, said, “The mining industry can be the driver of economic growth and development in the country. Up to now Iran’s economy has been erroneously dependent on oil revenues. The problem is that the mining sector was never seen as a fundamental sector when it came to decision making at a macro level for the country’s economic plans. However, in recent years special attention has been paid to huge potential and capabilities of the mining industry following the emphasis the Supreme Leader placed on this sector. 
“A committee has been formed in the mining sector, bringing together the country’s leading economic figures. During an inspection tour of MSC, a host of talented university students, including those from Sharif University of Technology, accompanied the team of economists to get a first-hand account of the company’s capabilities. The tour helps them connect – through their academic discussions – the economic performance of the mining sector to other parts of the economy and offer accurate information on the potential of the mining sector.”
Vice-President and Secretary General of the Iranian Committee of the International Chamber of Commerce, Dr. Mohammad Mehdi Behkish, told the correspondent of Steel Newsletter, “I was in on the construction and subsequent headway at Mobarakeh Steel Company since it was simply a vast plain [in Isfahan Province]. The noticeable effect MSC has left on the regional and national economy is praiseworthy. Mobarakeh Steel Company has properly utilized the country’s potential to be able to turn minable areas into different types of steel sheets. Basically the steel industry came into existence thanks to such advantages.   
“In different sectors, Iran has to date indigenized the technologies developed by other countries. It is a good practice in itself, but from now on we’d better rely on the knowledge institutionalized in the country and on the valuable experiences of Iranian engineers and experts and believe that we can go so far as to invent modern ways in technology and production. In other words, we should develop technologies ourselves because we enjoy financial potential, technical knowhow and good experiences in this regard. The experience of companies like Mobarakeh Steel should not be underestimated. MSC can even be helped by officials to form a powerful national research center and use its experiences in creating modern technologies and developing a unique style in the global steel industry.”
Somayeh Mardaneh, who holds a PhD in monetary economics and oil and lectures at the School of International Relations in the Ministry of Foreign Affairs, said for her part, “I had visited many companies before, but I should admit that our tour of Mobarakeh Steel Company was a wonderful experience.” 
She further said in the current economic condition Mobarakeh Steel Company deserves praise in different areas such as its mastery of technical and economic issues, its use of up-to-date technologies, dynamism and the significance it attaches to the protection of the environment as well as the company’s efforts to walk down the path toward development, profitability and job creation.
Mardaneh, who also is an adviser at the National Iranian Petrochemical Company, said unlike other entities, MSC which is a knowledge-based company has conducted related studies and posted substantial growth as far as attention to [skillful] human resources is concerned. “During the visit, I felt proud of being Iranian.”
Managerial stability is one of the upsides of Mobarakeh Steel Company, she said, adding the fact that only five people have served as managing director atop the pyramid of management and leadership in the company over the past quarter century shows that the company’s top managers have been equipped with detailed plans to run the company during their tenure and have successfully established contact with different parts of the organizational structure.
Meanwhile, Dr. Jafar Kheirkhahan an economic player affiliated with the Islamic Consultative Assembly’s Research Center and the Ministry of Labor and Social Affairs, said, “We need to use the technical and knowledge-based achievements of companies such as MSC if we seek to make even more progress at a macro level in the country.”  
He said MSC’s implementation in the sanctions-era of expansion projects which proved to be profitable shows that Mobarakeh Steel has a special role to play when it comes to decision making at the managerial level and workforce efficiency. 
For a big organization, failure at a tough economic time would definitely turn out to be irreparable damage, he said. “Fortunately, Mobarakeh Steel has continued its competitive, cost-effective production even in trying times. This comes as other organizations have been caught in a blame game, refusing to take responsibility for solving their own problems. Clinging to hope, MSC’s management and staff have made proper planning, have made exemplary efforts and have always supported their company; thus they have managed to meet the needs of downstream industries and create an appropriate profit margin for the company’s shareholders.  
Meanwhile, Dr. Ali Dini Torkaman, an assistant professor at the Institute for Trade Studies and Research and a university lecturer and researcher, said that it is of great value that Mobarakeh Steel Company alone accounts for more than half of steel production in the country and that the company’s performance has created a good profit margin.
“Unfortunately the industry sector which is run as a private enterprise is grappling with a fundamental problem and it has nothing to do with Mobarakeh Steel. Over the years Iran has lacked a specific industrial policy. That’s why multiple small-sized plants were built in different cities with various geographical conditions. The low production capacity of these plants has caused the country to waste its resources in the real sense of the word,” he added.


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