Azerbaijan, Baku, Dec.21 /Trend, A.Yusifzade /
Iran, the largest steel importer 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, a conference heard on Wednesday, Trade Arabia reported.
Roughly $32 billion of investments were required for the country's long-term goal to reach a steel capacity worth 55 million tons from the current 11 million tons, an executive from state-owned Esfahan Steel Company told the Metal Bulletin's steel and iron ore conference.
'(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 that obtaining financing for Iran's steel expansion projects looked difficult as US-led international sanctions had prompted many firms to halt business with Tehran.
'Roughly $14 billion worth of steel projects are currently underway but some people 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.
Pressed 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 this week's steel conference in Dubai, Iranian producers echoed the official line, saying that Iran did not have problems with 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 he did not say which companies were involved.
Iranian National Steel Industrial Group (INSIG), which was privatized more than a year ago, also plans to double its production capacity in the next three years. Its managing director, Abdolreza Rasouli, said that the expansion will cost about $500 million 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 that the projects would bring the company's capacity to more than 3.1 million tons a year, from the current 1.5 million tons. He added that INSIG was in talks with Chinese and Italian companies to cooperate in technology.
Rising population and growing housing needs estimated at 1 million 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 percent in 2008, before the crisis,' Hami said.
'It will grow by 3 percent in 2010, after expanding 1.5 percent in 2009,' he added