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Iran 2013 | REAL ESTATE & CONSTRUCTION | B2B: SERVICES

Joint ventures and domestic interest have given services companies a key position in the construction sector in terms of building roads and engineering consultancy.

Aliakbar Hafezi Manshadi
ALIAKBAR HAFEZI MANSHADI
Managing Director & Member of the Board of Directors
Sazeh Pardazi Iran
Behzad Mehdipour
BEHZAD MEHDIPOUR
Managing Director
Pournam

How would you characterize your company's services over the past few years?

ALIAKBAR HAFEZI MANSHADI During the last two or three years, our government has succeeded in bringing many oil and gas projects to domestic companies. With this policy, we have been busy with our new projects, especially in the South Pars gas field. We provide our clients with consultancy services, mainly for EPC projects, and we separate our company from our joint-venture partners. Normally, we provide the engineering part of the project. Based on the new government policy, we have been offered some big new projects. Around 7% or 8% of our projects are international, and we worked with French companies and players from the Netherlands, which supported us in specific areas of our projects. Our market has been growing during these years and we are very happy about it.

BEHZAD MEHDIPOUR We are strong in the construction of dams and roads. We record a high demand in Iran for these services. We would like to work more on road construction, pipelines, and hydropower plants. Pournam is currently carrying out a construction project in the Kurdish region of Iraq, which will feature 80 kilometers of roads. In Iran, we have implemented projects in three main areas. Currently, we have two dam projects, three ongoing tunnel projects, and three irrigation and water channeling projects, covering areas of up to 7,000 hectares. We classify these three projects into two different categories; two of them involve pumped irrigation, but water channeling does not. In terms of construction, we are building 162 houses in Tehran for members of government so they can stay very close to the parliament building. Each unit has four floors; they are first-class apartments. As in most countries, we are obligated to build high-standard apartments for members of the parliament, largely for security reasons. The complex will have 185 units, designed to host members of various commissions and offers a common parking lot. This is a very special project—we prefer to focus on earth and concrete dams and hydro power plants, which is what our company was established to do. We have gained significant expertise and experience over the years in this particular field, and in the years to come we aim to expand and focus on water projects even more.

Among your 479 employees, 31% of them are engineers in the oil and gas engineering department. How do they represent a source of value-added for your company?

AHM We have many experts in all the engineering fields and experience shows that we are capable of doing our job well compared to our competitors. It's not easy to compete with international engineers, but in our market we have no problem, and during these years we have been collaborating with many good companies all over the world. We have a very good base in absorbing technical personnel; we have many university professors as advisors that review the work of our employees. They have studied and worked abroad so they are aware of the latest technical matters. The high quality of the technical proposals we provide to clients is a very good source of value-added for our company; the technical matters we normally provide support them and meet their requests. This is where our employees make the difference; when they were reviewing projects for Phase II of South Pars, they found that Sazeh Pardazi Iran had more capabilities than technicians from France. Our capabilities go beyond technical matters, though. Other than having a reliable project, our costs are half those of our main competitors. For our projects, we always buy the latest software and technology, too, as we want the best for our clients.

Which markets are you interested in?

BM We are working diligently to enter the African market, especially Senegal, which is one of the most stable countries on the continent. I believe that the political relations between Iran and African countries are stable, but it is fairly complicated to transfer money there. We would like to enter these markets, but we have to consider the profitability of our projects. In Iraq and Afghanistan, it is quite simple to carry out projects, but African markets can be complicated. We usually work alone, but in new markets we prefer to create partnerships with local construction players in order to ease the process of entering a foreign market. These local partners are more accustomed to the culture and understand the mechanics of a specific market. In the Kurdish region of Iraq, we partnered with a local company. However, we prefer to work independently because we have the strength and the expertise to do so efficiently.

What are the major projects you are involved in right now and which ones do you consider the most important?

AHM We recently started a maritime and coastal project on the Caspian Sea in conjunction with the development of Ramsar city. By the end of May 2012, they had started construction work, and we are going to have three islands connected to each other by roads and bridges. In about seven years, it is going to be a touristic area with hotels and residential areas similar to the Palm of Dubai. The value of the project is about $2.5 billion, and this is very important because it's on the waterfront and the water part is a priority. This is the project I feel the most attached to because the city is one of the most beautiful in the world, and the project is extremely gracious.

You have a joint venture with HEPCO. What are the terms of this partnership?

BM We have a joint venture with HEPCO exclusively for machinery supply; it is an excellent producer and its machinery and equipment are extremely reliable for our type of construction projects. In addition, our company is the only Komatsu agent in the country. HEPCO is adding value to our projects with the machinery it supplies. Since we need significant investments, HEPCO is investing in a way by providing valuable machinery that allows us to accomplish our goals. As long as a company is adding value to one of our projects, we are happy to engage in a joint venture. Currently, we are seeking partners in the large market of Turkey, and I believe we can easily find a suitable company.