Iran is aiming for self-sufficiency in steel output by 2014.

Iran is aiming for self-sufficiency in steel output by ’14.
Iran, the largest importer of steel in the Middle East, is pressing ahead with plans to expand output capacity to achieve self-sufficiency by 2014 and then boost it fivefold by 2025.
Around $32bn of investment was needed for the country’s long-term goal to reach a steel capacity of 55mn tonnes from 11mn tonnes now, an executive from state-owned Esfahan Steel Company told. “(Steel) industry is growing fast to fill the growing gap between supply and demand,” Mansour Yazdizadeh, sales and marketing deputy at the company said. “I think our steel industry has to find international allies and new investment.”

But experts said obtaining financing for Iran’s steel expansion projects looked difficult as US-led international sanctions had prompted many firms to halt business with Tehran.

“Around $14bn worth of steel projects are currently under way but some face delays or cancellation due to the US sanctions and increasing manpower costs,” Hadi Hami, Middle East steel specialist in the Alam Steel Group said.

Pressured by international sanctions imposed over its disputed nuclear programme, Iran puts a brave face and has repeatedly said the sanctions have had no negative impact on its industries or trade business.

During a steel conference in Dubai, Iranian producers echoed the official line, saying Iran did not have problems obtaining financing and many foreign firms were still keen to do business with the Islamic Republic.
“Sanctions are not a new matter for Iran,” Yazdizadeh said. “We have been living with the sanctions for the past 30 years.”
“There are many countries like Japan, Korea, Australia, who are currently implementing projects in our country,” he said, but did not say which companies were involved.

Iranian National Steel Industrial Group (INSIG), which was privatised more than a year ago, also plans to double its production capacity in the next three years.

Its managing director, Abdolreza Rasouli, said the expansion will cost about $500mn and the company had already secured the financing needed, partly through loans from local banks.

“We have the habit of continuing our business with local contracts and local banks,” Rasouli said, adding the projects would bring the company’s capacity to more than 3.1mn tonnes a year, from the current 1.5mn tonnes.

He added INSIG was in talks with Chinese and Italian companies to cooperate in technology.

Rising population and growing housing needs estimated at 1mn new homes every year meant Iran’s steel demand was set to grow well above the average rate in the region, experts said.

“Construction sector grew by 11% in 2008, before the crisis,” Hami said. “It will grow by 3% in 2010, after expanding 1.5% in 2009,” he added.