Steel & Railway in Iran
Challenges in Iranian Steel Industry
Iran plans to increase its steel production from 17 million tons in 2015 to 55 million tons in 2025.
Although the country is proud of cheap energy and a plentiful workforce, these alone won’t lead to the goal.
Out-of-date equipment, lack of modern ports and unsuitable location of many recently built plants and manufacturers, causes the final price of steel produced in Iran to be high and non-competitive.
Extremely low efficiency of the labour force is another negative point: Fulad Mobarake, the largest Steel maker in MENA, has 15000 employees, whereas its production last year was only 5.5 million tonnes, says its CEO, Dr. Sobhani.
Every challenge is an opportunity
Iranian railway transports 20 million tons of steel and minerals annually. If steel production is to reach 55 million tons, railway transportation should be about 200 million tons per annum, far more than the current capacity.
“We need about $5billion to develop railways in steel and minerals only”, reckons Dr. Seyed Aghaei, Vice Minister Road and Urban Developments in the 6th Iranian Steel Market Conference.
To encourage investors for participating, he announces on behalf of the Government, that the investment in this sector will be treated as investment in “rural areas” and will enjoy the same facilities: such as 10-year loans at 4% interest from “National Development Fund of Iran” and tax-exemption for 10 years.
Prices at Governmental Exchange Rate
