Today Picture
MSC managing director hails 11th government for policies that completed steel production chain


In a period of four years Iran’s crude steel production registered a 28 percent increase to rise from 14.361 million tons in the 12 months to March 20, 2013 to 18.466 million in the 12 months to March 20, 2017, Managing Director of Mobarakeh Steel Company Dr. Bahram Sobhani said, adding with the national steel capacity hitting the 30 million ton capacity Iran climbed to 14th place in the global steel ranking.
As for the role of the government in promoting the steel industry, he said government support for steelmakers can help activate the idle capacities of the industry; over the past few years, such support has resulted in remarkable success in completing the country’s steel production chain.
Recalling the success the steel industry has scored in supplying the domestic need and making its presence felt on global markets, he said adoption of successful strategies in recent years has helped Iranian steelmakers register an acceptable increase in the volume of exports on top of meeting the local need for steel products. “For instance, MSC exported a record 1.8 million tons of products. What is remarkable is that a large portion of the exports in question went to Europe, a fact that underlines the attention our company pays to production of quality products.”  
The managing director of the largest steelmaker in the Middle East and North Africa (MENA) region went on to say as part of efforts to back domestic production the government supported the steel industry by introducing tariffs on imports which led to a decrease in imports, adding an increase in steel exports generated revenues and stopped the outflow of foreign exchange. “All this has helped the steel industry, especially Mobarakeh Steel Company (MSC), lead the way when it comes to efforts to materialize the Resistance-based Economy.”
As for the status of the steel industry, Dr. Sobhani said Iran’s steel market fared relatively well last year, but most international markets, including Iran’s, experienced one of their worst years two years ago. “Thanks to sound policies the government adopted on steel imports and exports, the market rebounded last year. Due to the market recovery, steelmakers gained considerable achievements when it came to international sales and exports,” he said.
MSC priorities
The head of the steel giant said the status of domestic market and conditions of local steelmakers largely hinge on market demand. “When the country needs steel, the company’s priority is to meet domestic need. We also need to expand the company’s capacities, improve quality and make economical products, so that we can break into export markets.   
“We should bear in mind that some local companies are still grappling with instability due to the conditions of global steel industry and some domestic problems. We hope things change for the better as a result of the prudent measures the government takes and thanks to a boom in the construction sector and development projects.”
The local steel industry can grow more and tap into more capacities, he said, adding because of Iran’s advantages – including energy, raw materials such as iron ore and talented workforce – the stage is set for the country to survive in the current market conditions and maintain its presence in the competitive market. “Iran’s advantages stand out when prices of steel products drastically fall in international markets, and in some cases companies start to make losses and the market experiences dumping [predatory pricing]. Courtesy of the advantages in question, Iranian steelmakers will be able to be more resistant as compared with their foreign rivals.”   
Dr. Sobhani pointed to government support for the steel industry and said the steel industry in China became powerful because Beijing took protective measures to develop this industry. “Iranian steelmakers expect the government to follow the example of China. When steel production exceeds demand, the stage should be set for producers to export their goods. As I already said, in some cases the cost price of a product does not conform to global prices; in other words, export of that item would certainly result in losses for the producer.     
“In countries such as China, the product and export costs are reduced for exporters and exports become economically justifiable because of export-oriented incentives in the energy, transportation, and tax sectors. Local steelmakers in Iran expect similar incentives and hope to see the materialization of their expectations thanks to the support the 11th government has lent to the industry.
“In light of the fact that the government’s oil-based revenues have shrunk in recent years, the government seems to have pursued its support for the industry by formulating and implementing principled policies.
“Imposition of tariffs was the major measure the 11th government took to support the steel industry, something which improved domestic production and raised the competitive power of local producers. On top of that, the government put on its agenda efforts to raise exports and offer some incentives.
“It should be noted that Iran produced about 18 million tons of steel last year. We hope that continuation of government support and principled policymaking could see the materialization of the objectives envisaged in the 2025 Outlook Plan. The objectives envisioned in the Outlook Plan are overriding, but it takes tireless efforts by the government and private hands in the industry and economy sectors to make them a reality.     
“For instance, the country can be more steadfast in achieving its goals if local steelmakers become motivated by being given various incentives for making new investments and realizing the existing untapped potential of the steel industry.
“It is worth mentioning that currently the country has the capacity of producing more than 30 million tons of steel. Sound policies can set the stage for the country to fully tap into its capacity. To reach the production capacity envisioned in the Outlook Plan (55 million tons) from the current capacity, there is not a long way to go for the country.”
Dr. Sobhani said last year was an unforgettable year for the country as far as the finalization of mega development projects in Mobarakeh Steel is concerned. “MSC became a company with an annual production capacity of over 10 million tons by raising its output, employing a new 2 million-ton casting machine which became operational with First Vice-President Dr. Eshagh Jahangiri in attendance, and increasing the output capacity of Saba Steel Company to over 1.6 million tons from the previous 750,000 tons which is set to be inaugurated by senior state officials.     
“The company seriously carried out a plan to construct a concentrate plant and pelleting factory in Sangan District, Khorasan Razavi Province, by building on domestic potential and capital as well as its own managerial skills and knowhow. The plan aimed to complete the production chain and strike a balance in the production capacity of the chain in question. The company’s pelleting plant in Sangan is ready to be inaugurated.”    
“In line with its mission, Mobarakeh Steel has managed to play an instrumental role in the country’s industrial development. These measures together with increasing the production capacity and continuously setting new production records in different sectors are all proof of the fact that MSC staff members have pursued dynamic activities. I would like to thank all of them. I would also like to offer congratulations on Industry and Mine Day to all those who are actively involved in this sector,” Dr. Sobhani concluded.
 


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