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Mobarakeh Steel to meet strong demand with new investment projects

Monday, 10 December 2007 11:14:11 (GMT+3)   |  
       

Mobarakeh Steel Company, based in the central Iranian city of Esfahan, is the largest flats producer in Iran and in the Gulf region with a nominal production capacity of 4.2 million metric tons of steel a year. In the last Iranian year 1385 (21.03-2006-20.03.2007) Mobarakeh exceeded its nominal capacity, producing 4.6 million metric tons of crude steel and also 4.6 million metric tons of finished steel products. In the first seven months of the current Iranian year 1386 (21.03.2007-20.10.2007), Mobarakeh produced 1.86 million metric tons of HRC and 660,000 metric tons of CRC.

Although Mobarakeh's sales policy depends on both domestic and global market conditions, the company is primarily preoccupied with sales to the domestic market and to the Persian Gulf.

Since Mobarakeh's products face no significant competition in the Iranian market (there are no important flats producers in Iran while imports from the CIS are usually of lower quality), the company can be considered the main producer in the market at least for now. During the last Iranian year, Iran produced 10 million metric tons of crude steel products, of which about half was produced by Mobarakeh. However, with increasing demand for flats in Iran, the Iranian government and the Iranian private sector are planning to launch a number of new flats producing steel plants, which are expected to increase local production substantially. 

Meanwhile, during the last Iranian year Mobarakeh exported about one million metric tons, while the volume planned for export in the current Iranian year is 0.7 million metric tons.  Mobarakeh exports to the Persian Gulf, UAE, India, China and European countries. Meanwhile, the neighboring market of Turkey, which has a shortage of domestic flat production, is almost neglected by Mobarakeh due to high freight rates and also due to the presence of cheaper CIS-origin products in the Turkish market.

Currently, Mobarakeh is implementing ongoing investment projects, which are set to increase its production capacity to nine million metric tons a year in the next two to three years. There are three development projects. The first of these projects is directed at increasing Mobarakeh's main steel facility's capacity from the current 4.2 million metric tons to 5.4 million metric tons. In addition to this, a new plant, to be named Shahid Kharrazi and which will be situated at Mobarakeh's existing facility, will give the company an additional 2.1 million metric tons a year. Last but not least, Mobarakeh is also investing in the development of its subsidiary Saba plant with the aim of doubling the existing production capacity of 700,000 metric tons. Furthermore, Mobarakeh is also currently investing in another mill for the production of special sheets for auto bodies. The new mill will have a production capacity of 400,000 metric tons and is expected to start production within one year. The products from the new line will be supplied to local car makers, whose demand for steel recently saw a substantial increase.

Overall, Mobarakeh sees a very bright future for its development, as demand for flat steel is growing in both the local Iranian market and the Gulf region, whereas supplies are relatively scarce.


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