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Smiling at a day’s work: Managing Director Seyed Abdolkarim Najafi Shooshtari and Board Chairman Mohsen Bakhtiari

Reward of Independence: Khawar Spring Mfg. (KSM) is an affiliate of Iran Khodro Diesel company. Two years following the separation of KSM from Iran Khodro Diesel as an independent company, KSM suffered a low level of production and, because of its dependence on the holding company, every problem there used to spread out quickly to KSM. Thus we started new measures including independent marketing, and registered the company with Springs Producers Guild as a spare part manufacturing group.
After a while we were able to find a satisfactory position in the spare part market, signing contracts with Shahab Khodro and Iran Kaveh companies. As KSM made springs for Iran Khodro Diesel which is a manufacturer of light, semi-heavy and heavy trucks, we used to specialize only in producing leaf springs. However, we later were successful to make technical modifications in our molds in a bid to produce other types of springs for light vehicles.
By reduction in the number of human resources on a “voluntary” basis, we managed to reach the number of workers from 364 to 108 people in order to match our work force with the production capability. This was the number recommended by Japan’s NHK when it designed the company’s production line.
A notable success that KSM could achieve was to get the approval of Daimler Benz Company for the quality of the springs it produces for Iran Diesel Company; this was despite the fact that NHK cut its relations with KSM after the Islamic Revolution in Iran.

Evolution: The first giant stride of KSM was in 1994 when the company could increase the production from 1024 tons to 1253 tons. Then we balanced the production level with the company’s stock. We focused on the marketing and endeavored to keep the said balance throughout the years.
At the same juncture, Mercedes Benz company insisted that in addition to leaf springs, they needed parabolic springs. In 1994, KSM defined a new strategy with regard to the competition which existed in the country, and started to act in a global context. The first step was that we managed to receive ISO 9002 certificate for our springs. KSM proposed two projects to IDRO for production of stabilizer bars and torsion bars as well as coil springs, following which we received an agreement in principle for the production of 2000 tons/year of torsion and stabilizer bars and 2500 tons/year for coil springs. At the same time, we totally renovated the leaf springs production line. Afterwards, KSM could receive a permit to enter into stock exchange and after that we received the national standard and ISO 9001 certificates.
In order to catch up with the advanced technology in the world, we obtained the membership of IST by which we could receive up-to-date information on technology. Many issues with respect to leaf spring production line were solved through the assistance of IST.

International Partnership: At a time when Korea was facing an economic decline, we could reach Daewon, one of the world’s largest spring manufacturing companies, and started negotiations with them for purchasing the production line of other types of springs, mainly torsion and stabilizer bars. We have now established two factories with the investment of $2.1 million for torsion stabilizer machinery and $2.5 million for the production line of coil springs.
In this line, KSM signed a technology transfer contract with Daewon last year through which we can have an effective cooperation with them regarding torsion stabilizer and coil spring technology. Based on the agreement, KSM can use the Daewon Company’s trademark on ITS products.
In the first step to expand activities, we look at the domestic market. A contract was signed with Sazeh Gostar Co. on supplying the said products for Pride passenger cars; another contract with Sapco for Paykan vehicles; and a contract with Kerman Khodro that previously had a contract with Daewon company.

Exports: In the past 2-3 years, we have also looked at the regional markets. At least 20 tons of KSM products per month are exported to the Persian Gulf states, including the U.A.E. An agreement has also been reached with Saudi Arabia for exporting KSM products. Recently, KSM signed contracts with Ethiopia and Egypt for exporting springs. Spare parts have a wide range in the global market which is quite difficult to enter. We now try to employ various means to introduce our products to the world.
There are no worries regarding the spring production, as far as joining WTO is concerned. We can compete with foreign rivals both in terms of quality and price, and thus we welcome WTO accession by Iran. At the moment, 5-10% of the company’s products are exported, and we are endeavoring to increase this figure to 20% by next year.
Due to three basic reasons, KSM has been, and will be, successful in the export field: product quality, delivery time and price. Skilled work force and the company’s culture have also been very effective in the progress of the company.

Accomplishment: The latest achievement of KSM is launching the production of parabolic springs — which are used to modify leaf springs and since they are not heavy, they will help the reduction of the car weight. Parabolic springs are of lower price while enjoying a higher technology.
Very recently, KSM won an international tender by the Railway Company for the maintenance of rail tension clips. We will supply 1,500,000 of such products to the Railway Company, 650,000 to the Sugar Cane Company and 220,000 to Mashhad Wagon Company. We have been able to define a production line specifically for those items. All machinery used in the four said production lines is made domestically.
As the company’s statistics and figures show, KSM has been quite successful on the domestic market and is confident about its success on the international scene as well. In 1993, KSM sales value stood at 1.292 billion rials, the figure today is 37 billion rials. KSM has been successful at the stock exchange, based on the fact that the company’s shares can be easily turned into cash.
KMS has been invited to launch the production of springs for light vehicles in Malaysia. This offer is under study at the moment.