| Only Through International
Cooperation
The Iranian
aluminum industry can be mainly summarized to two plants: IRALCO and its affiliate,
Almahdi. IRALCO currently produces 120,000 tons of aluminum ingots per year while this
figure stands at 30,000 tons for Almahdi Smelter. Meanwhile, the installed capacity of
Iran for the consumption of aluminum ingots stands around 500,000 tons which includes
11,000 industrial units of different sizes.
While some vital metals such as steel and copper are being led by their own national
companies NISCO and NICICO, aluminum or ‘the future metal’ is yet to be led by
such a head coordinator.
But H. Aqaie, chairman of IRALCO, has his plans to achieve optimum output, efficiency and
profitability in aluminum production.
Issuing
local and international participation bonds, and foreign direct investment are two of the
major investment methods that the Iranian aluminum industry currently prefers
Targeting 500,000 Tons: The third
millennium poses inevitable and uncontrollable developments such as flexibility in the
international trade which necessitates the establishment of an industrial production
network. These aspects have their unavoidable effects on the developing countries
including Iran.
Considering the annual world production
capacity of approximately 24.7 million tons, our country has only 145,000 tons of usual
production which is produced by IRALCO and Almahdi plants and a quantity of 46,600 tons as
secondary products which makes a low percentage compared to the world production.
In order to keep pace with the country’s policies and strategies to approach the
targets of the Third Economic Development Plan, increase in non-oil exports, continuous
presence in the world market, expansion of research plants, increase of production with
higher surplus values, IRALCO as a principal company is on its way to achieve 500,000 tons
of annual production.
Local Resources Not Enough: For
economic progress, we require the possibilities of today’s world and we have to
prepare the necessary grounds for local and foreign investors for their safe and
profitable investments. Therefore the security for investment is a major precondition for
this purpose. We have come to a conclusion that relying on local sources with traditional
methods will not be efficient. Absorbing foreign investment from developing countries for
passing behind economic underdevelopment is a principle and if not realized, issues like
know-how, management and economical output which are the main pillars of development will
not be achieved.
Absorbing investments of Iranians abroad
requires amendments to and stability in the relevant regulations in order to make motives
and interests in the investment.
It is a fact that Iran’s share in the annual aluminum production of the world is
insignificant. This is while production of aluminum ingot in countries blessed with
abundant energy resources and extensive coasts is completely economical and feasible. To
this end, Iran is in a perfect position to take a leap since it enjoys vast oil and gas
reserves, inexpensive facilities for establishment of power plants and skilled work force.
Such a demanding market for aluminum ingots is itself a potential for growth.
Development Plans: There are two
five-year development plans in for the development of the Iranian aluminum industry.
First, Almahdi Aluminum Complex has to reach the planned production capacity of 330,000
tons. Then, the second five-year plan of the Ministry starts to expand the aluminum
production capacity by an additional 200,000 tons. Iran’s total production capacity
of aluminum ingot should reach about 600,000 tons in ten years including IRALCO’s
production. This figure is 100,000 tons above the estimated demands.
This ten-year plan particularly provides an
outlook for investment in the development of Iranian aluminum industry. I believe the
opportunity is unique for investment in this ambitious plan for both local and
international investors. As a result, we are witnessing the enthusiastic response of
potential investors for closing finance and buy-back deals especially on the development
of Almahdi Complex.
International Partnership: All
around the world, aluminum industry basically develops through international cooperation.
This cooperation exists from the early stages of production up to the final stages of
distribution and downstream activities. International partnership has been practiced in
both Almahdi and IRALCO. Moreover, production of aluminum ingots is a normal process that
will benefit all parties at the end. Investment in aluminum industry is a highly
profitable one. The normal amount of investment required for production of one ton of
aluminum is about $7,000. But in Iran, this figure comes down to $5,000 since many
facilities are already provided. The Iranian aluminum industry continues to welcome
international partnership especially with those partners who are willing to bring in their
expertise. Here, transfer of technology is an advantage. Issuing local and international
participation bonds, and foreign direct investment are two of the major investment methods
that the Iranian aluminum industry currently prefers. |
