KEEP ON RISING

Iran 2013 | REAL ESTATE & CONSTRUCTION | INTERVIEW

TBY talks to Mohammad Sadr Hashemi, Chairman of Stratus Group Holding, on the cornerstones of the group's growth, international priorities, and foreign partners.

Mohammad Sadr Hashemi Nejad
BIOGRAPHY
Mohammad Sadr Hashemi Nejad is currently Chairman of Stratus Group Holding Iran.

Stratus Group is one of the top companies in Iran with a diversified line of business. What have been the cornerstones of your group's evolution?

Since we were first established 34 years ago, we have undertaken many projects both in Iran and abroad. We were pioneers in exporting engineering services to neighboring countries, and that is why we are recognized all around the world. Stratus Group is now the biggest contracting company in the private sector. Iran has many large companies that belong to the government, but we are a purely private-sector company. In Iran, there is a very small private sector and, in the past, we had a small stock market as well. Recently, the stock market has been enlarging very quickly, but it is still very difficult for the private sector to compete against state-owned enterprises.

How would you assess Stratus Group's performance in 2011?

Our financial and contracting companies, EN Bank and Stratus International Contracting, both grew very aggressively in 2011. Stratus International is working on projects worth $2 billion right now, and we will soon be taking on a few other construction projects in Venezuela worth a further $700 million. We are also planning a very large project toward the end of 2013 worth about $4 billion. EN Bank, our financial company, is worth more than $20 billion, and we are expecting a turnover of $30 billion by 2013. These sectors of our business have been very successful, but I feel strongly that for further private sector growth to take place in Iran, we need to re-examine the basics of how our economy is structured.

Where do you see the most growth potential among the sectors in which Stratus Group is involved?

The sector with the most potential is absolutely the financial sector. It has more growth potential than any other business. I also see a lot of growth potential in mass-housing production. After four years of downturn, the market has started to grow again, and we are working to develop our housing business in Iran and Iraq. I think we are going to see strong growth in this sector because people need mass housing and the market is flourishing again. We are considering doing more business in Istanbul because we have a lot friends and partners in Turkey. In terms of non-residential construction, we are currently working on the parliament building in Djibouti, and we are also planning to work in Kazakhstan.

“On one project, we made 7,000 houses in 18 months. What other company has the ability to do that?"

Which of the countries you are involved in is Stratus Group's top priority?

There are two things to take into consideration here. One is profit and the other is risk. Turkey is one of the lowest-risk markets we are exploring. However, it also has the least potential for profit. On the other hand, Tehran and Baghdad are both much higher-risk environments, but both have huge profit potential. We have more than 10,000 employees and it is hard to train all of them with respect to international best practices. We started the business in 1991 on the international market, and we have now been on the international market for 19 years. This has given us the chance to build experience and learn from our mistakes to develop the international expertise we need to succeed.

What role can foreign partners and competitors play in the Iranian construction sector?

Anyone can build a road or a bridge, but few countries have the experience and expertise to undertake more complicated projects like dams. The only two countries that have that kind of expertise are Turkey and Iran. We are building two dams right now because we have the technology that other countries do not. On one project, we built 20 14-story buildings in 195 days. On another project, we made 7,000 houses in 18 months. What other company has the ability to do that? This is the unique potential of our country and you cannot find it anywhere else. In both Turkey and Iran, our population is growing fast, and it represents a big opportunity for investors in the construction sector. On our side, we already have the technology and the expertise. We just need the money, which is the role that foreign investors can play here. If you are brave, you can invest in the oil sector, but not many investors see the real Iran. If you dig deep, you can see the whole potential of this country.