The Business Year

Dariush Hamidi

IRAN - Energy & Mining

Finding potential export markets in Kenya, Sudan, and other African nations

CEO & Member of the Board, Iran Chemical Industries Investment Co. (ICIIC)

Bio

Dariush Hamidi was Born in June, 1944 in Tehran, and went on to receive an MSc degree in chemical and petrochemical engineering from Amirkabir University of Technology in Tehran. With more than 45 years of experience in the cement industry as well as linear alkyl benzene (LAB) production, he has served as CEO and Board member of Gharb Cement Co., Urmia Cement Co., Sarooj Bushehr International Corp. (Kangan Cement Plant), and Iran Chemical Industries Investment Co. (I.C.I.I.C). He was also executive manager and founder of Gharb Cement Plant in Kermanshah — Urmia Cement Plant in West Azerbaijan — Kangan Cement Plant in Bushehr, and an LAB-producing complex in Isfahan. In addition, he is a member of the Business Excellence Elites Club (Bees Club).

"During the last few years we sold around 75,000 tons of linear alkyl benzene to the domestic market, with which we fulfill 90% of domestic demand."

How do assess the contribution of ICIIC to the development of the chemical and petrochemical industry in Iran?

Iran Chemical Industries Investment Company (I.C.I.I.C.) established by Bank of Industry and Mine. Our company produces linear alkyl benzene, which is the main raw material for powder and liquid detergent. To produce this product we use a technology that we originally received from an American company named Universal Oil Products (UOP). We signed our contract 25 years ago with the London branch of UOP because of the limitations of dealing with the US. Our original capacity was around 50,000 tons per year and we started our production around 22 years ago. The yearly demand in the domestic market at that time was around 38,000 tons. The remainder of our capacity was exported to countries like India and countries in the Persian Gulf such as Kuwait, Qatar, and sometimes Oman. Around 12-15 years ago, we did our first expansion project and increased our capacity from 50,000 to 75,000 tons per year. To produce linear alkyl benzene we used kerosene as the main raw material, which we received from Esfahan Refinery via a pipeline to our factory. In the process of producing linear alkyl benzene, normal paraffin is produced. Also at that time we increased the capacity to produce normal paraffin from 43,000 per year to 140,000 tons in our first expansion project. After that we also exported normal paraffin and not only linear alkyl benzene. In some countries like India, which do not have oil, normal paraffin is used to produce linear alkyl benzene instead of kerosene, which is a product from the oil refinery. When we completed our first expansion project we had already exported annually around 75,000 tons of normal paraffin.

What is your strategy for staying ahead of the competition here?

During the last few years we sold around 75,000 tons of linear alkyl benzene to the domestic market, with which we fulfill 90% of domestic demand. The consumption of detergent in the country has increased from 2kg per capita annually 22 years ago to over 15kg now. In some European countries consumption is even at 35kg. Before ICIIC was founded, all the linear alkyl benzene that was needed in Iran was imported, mainly from Spain, Italy, and Germany. After we started our production nearly the full domestic demand was delivered by us and the average consumption of detergent increased. In the process of producing linear alkyl benzene we use a dangerous hydrofluoric acid (HF acid) as a catalyst. The boiling point of this acid is 18 degrees centigrade and breathing air polluted by HF acid (Gas form) will absorb body calcium and would lead to certain death. Because using the HF acid as a catalyst is so dangerous, UOP improved its technology and changed the catalyst from liquid HF acid to another catalyst called DETAL. During the last 2-3 years we negotiated with UOP London to receive this latest technology. Because of the sanctions, every time it said it was ready, something happened and we had to wait. After the signing of the nuclear deal, UOP accepted to start negotiations about providing us with this new technology. This resulted in a contract that was signed in late 2016. We are now in the process of paying an advance to it and we have done a kick-off meeting with UOP people in Istanbul. We have arranged an appointment to have technical meetings with UOP London soon to train our technical staff and receive the new technology. We are now conducting our second expansion project, which involves the removal of the dangerous HF acid from our production process while increasing the capacity by around 100,000 tons per year. Once completed, we will be able to produce around 200,000 tons of linear alkyl benzene per year.

What is the export strategy of your subsidiary Commercial Port Services?

This company fully belongs to ICIIC and is located at Bushehr Port, on the Persian Gulf. It operates around 10 storage tanks. We send our product by truck from Esfahan to Bushehr. From there it goes to its final destination by vessel. We export to countries like India, China, Indonesia, and sometimes Turkey and Pakistan. We have some exports to Turkey by road as well, but mainly it goes by vessel from the port.

Are there new export markets which you are targeting?

We have some plans to develop our export markets and are looking for some African countries. When you go through the Persian Gulf to the Red Sea there are some African countries like Kenya and Sudan and we are looking for markets in those countries to develop our export market. We want to focus on the eastern part of Africa because it is important to be careful with the transportation costs. Our competitor is a Spanish company that also produces linear alkyl benzene. From Spain they use the Mediterranean Sea to transport their products so when we are going to transport our product we need to be able to compete. This is why we are looking to export to countries where we can compete on transportation costs. We have agreements with some experienced consultants to assist us in opening new markets.

What is your outlook for the year ahead?

I am positive. Especially for petrochemical companies, the future will provide good market circumstances. Our product sales and exports increase every year and we believe that our second expansion project and the application of the new catalyst technology will allow us to increase our revenues.

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