“Owing to new products, steel profiles are more competitive”
CEO of Kian Persia in an Interview with ‌FelezatOnline:

“Owing to new products, steel profiles are more competitive”

“The profiles industry should leave old products and embrace new markets and applications. The industry is under threat from new products such as UPVC; it is essential that producers create new markets to boost competitiveness,” said Bijan Malool, CEO of Kian Persia.

In an interview with FelezatOnline, the CEO talked about the current status of the domestic profiles industry: “Owing to the good supply of raw materials and the simple technological requirements of profile production, the industry is entirely domesticated. As a result, new capacities have been developed without proper consideration. Most producers had not considered the market before setting up their plants. A lot of existing factories also expanded their operations to boost their competitiveness by means of production.

“The only way out of the current situation is exports. Owing to the splitting of the Ministry of Trade from the Ministry of Industry and Mine, there might be good news on the way. During the course of last year and early this year, new directives for the steel industry were issued every month, which only further complicated the problems of the industry and the domestic economy. As a result of these directives, borders and customs were occasionally closed to exporters. Some producers are still unable to export. These directives have brought chaos and confusion to buyers, sellers, and producers as well.

Most plants are operating below capacity.

The CEO, also a member of the Syndicate of Steel Pipe and Profile Manufacturers, said: “A factory that has purchased and installed equipment and machinery for its production lines can operate properly and economically only if all three shifts are active, with optimized utilization. Most producers of steel profiles are working with one shift only. Those producers with better access to raw materials have a utilization rate of up to 30-40%, while others are operating below 20% capacity.

“Without a robust market, producers have to keep their products as well as raw materials in warehouses. Moreover, given the current prices of raw materials, producers need a large working capital. Thus, industry participants prefer to utilize a smaller part of their nameplate capacity so that they won’t have to stock their products and raw materials.”

Regarding raw materials, he said: “Thanks to Mobarakeh Steel, Ferro Gilan, and ARPCO, obtaining raw materials is not too difficult, but the real problem is the price and its fluctuations. There are currently no import solutions for raw materials.”

Malul pointed out that only one company offers sheets on the IME: “Buyers have to compete for raw materials. It’s like an auction where the winner pays the most for raw materials. But it’s the exact opposite for our products; the producer has to lower the price to maintain the market. Thus, there is a bad sort of competition among producers both for buying raw materials and selling their products. Given the interval between ordering raw materials and receiving them, the production of profiles is not economically justifiable with the waste of raw materials and the high costs of small-scale production.

“Most producers are not operating with the goal of creating added value or competing. In the current situation, producers can’t develop their operations or create added value.”

Producers must look for new markets.

Pointing out the ubiquitous stagnation in all industries, he said: “If construction, industry, and consumer industries improve, the profiles industry will also improve. For instance, doors, windows, pillars, roofs, etc. are needed in construction as well as industrial structures; profiles are an integral part of these structures. By the resumption of civil projects, the consumption of profiles will also grow.

“UPVC and plastic products are the major rivals of profiles and have taken a large share of the market. In other words, they are replacing profiles in construction. Thus, producers must target new markets.”

Malul said that steel profiles are also used in the frames of furniture: “The production of furniture is one of the best markets for profiles. Trees are being cut to manufacture furniture, which is seriously damaging the environment. The profiles industry must intervene with new products to replace wood and find new markets.”

He explained that competitive products can help in times of recession: “The expansion of exports is the main solution, which requires stability in prices and policies. Raw materials for profiles are produced domestically and the industry does not rely on imports. There are good markets for Iranian profiles, of which producers must take advantage to expand their markets.”

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