The Business Year

Dr. Bahram Sobhani

IRAN - Industry

Steely Resolve

CEO & Managing Director, Mobarakeh Steel Company


Dr. Bahram Sobhani is the CEO & Managing Director of Mobarakeh Steel Company. Sobhani has 35 years’ experience in engineering, construction, and operating steel industries. He was previously the Managing Director of Sirjan Steel Co., Esfahan Steel Co., and Khorasan Steel Co., as well as the Chairman of Hormozgan Steel Co. and the Iranian Steel Producers Association. Dr. Sobhani holds a bachelor of sciences in mechanical engineering, as well as an MBA and a DBA.

TBY talks to Dr. Bahram Sobhani, CEO & Managing Director of Mobarakeh Steel Company, on the appeal of Iranian steel overseas, doing business in the international market, and Iran's plan to be a global steel hub.

What is the appeal of your products for the automotive industry in light of recent agreements between European and Iranian car manufacturers?

Europe and other international markets certainly welcome Mobarakeh’s products because our products comply with international standards. Representatives from Citroí«n and Peugeot recently came to the factory to assess our production line and confirmed our quality for manufacturing cars. We are a permanent supplier of steel to both Saipa and Iran Khodro, Iran’s largest car manufacturers. In addition, we supply our products for the manufacture of all household appliances, the oil and gas industry, as well as flat products for pipe mills. The government has set up a plan to reach 55 million tons of steel production by 2025. In this regard, our intention is to retain half of the market share, which will mean increasing our production capacity to 22 million tons per annum by that time. To reach that goal, we have set up a plan to expand our existing facilities and establish new plants in different areas of the country. Regarding our basket of products, we want to continue with flat steel products and also diversify into other qualities and product shapes. We invest in equipment to manufacture cleaner steel, which the automobile industry is calling for, as well as gas pipelines and other industries.

Iran is opening up to the world. How is Mobarakeh leading this new era with its activities abroad?

We did not have problems exporting during the sanctions because our products were not subject to sanctions and there was a big demand by European, Middle East, and Southeast Asian customers. In fact, we were limited on our side, because we also had to supply the local market and could not allocate all our production for exports. Currently, around 35% of our production is exported, and 65% is dedicated to meeting domestic demand. During the sanctions, we faced some difficulties conducting transactions and sending and receiving funds but have overcome these problems now. Today, after the P5+1 agreement, we are free to do our business without an intermediate party. We can talk face-to-face to international clients and look for new markets. Competition is determined by quality and by the price. In 2015, steel producers all over the world had the worst conditions in the history of the steel industry, as prices fell by 50% and still have not recovered completely. Nevertheless, we remain in a good position in the world market, competing with European and Asian producers.

What role will Iran play in the international arena by becoming a steel hub in the world?

The target of the government for 2025 is to become a hub for producing steel in the region. There are only a few countries in the world like Iran that have all the resources available. We have iron ore and energy, and as we produce our steel with traditional blast furnace or arc furnace, we also have the electricity, natural gas, and coal needed for the furnaces. In addition, we have a young, educated workforce and the know-how and technology to develop steel plants. Iran is a great nation with a huge population and great potential

What are your expectations for the year ahead?

The government has plans to reach around 8% growth within a few years. I am optimistic that with the opening of business to world markets, a great deal of new investment will come to Iran. Reaching the 8% growth goal is not an ambitious target; it is something that will happen. Mobarakeh will try to continue to grow with our own resources and expand our internal income. If we need to attract financing for our projects, we prefer to use foreign funds because the rates are cheaper and it is more economically convenient. However, if there are foreign investors interested in investing in our production plants, they could join us as partners in existing plants or to develop new plants.



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