PRESENTATION IS EVERYTHING

Iran 2013 | INDUSTRY & MINING | INTERVIEW

TBY talks to Mehdi Rahimi, Managing Director of MM Print & Packaging Tehran, on the cigarette packaging industry and moving into general packaging.

Mehdi Rahimi
BIOGRAPHY
Mehdi Rahimi was born in 1964 and obtained his Master’s degree in Management. He has more than 20 years of experience in the printing and packaging industry, and is currently Managing Director of MM Print and Packaging Tehran. Since 2006 he has lectured at the University of Applied Science in Tehran.

When did MM start operations in Iran?

MM is the biggest producer of recycled carton board in the world, and the largest print and packaging group in Europe. We are going to expand our network all over the world, and we are trying to spot new areas where we can continue our business. The market is saturated in Europe and there's no room anymore to improve, expand, or make new investments. Therefore, we are looking for a new market. MM came to Iran in 2008 and started studying the market. Iran has big potential as a country and the consumption rate of all kinds of packaging is high. In 2009, the company was registered in Tehran, and by mid-2010 we were done with the bureaucracy and the construction of the plant. At the beginning of 2011, we received our first order.

How would you list the characteristics of the packaging industry in Iran?

The market is large and the different lines of packaging are as well. Each subsector has its own demands and levels of consumption, and so we divided our business into two areas: general packaging and tobacco packaging. We have studied the tobacco industry for a long time, and we established here to work with tobacco companies. There are some international tobacco companies present here and MM, as an international company, is a natural partner for these firms. We started with tobacco firms, but have also widened our range of companies, and also include the Iranian Tobacco Company (ITC) among our clients. Will be there expansion? Most probably in the future, and eventually we will move more into general packaging as well.

How does the tobacco packaging sector differ from general packaging?

If you compare it with other packaging, tobacco is very delicate and sensitive because we have to respect general laws; one is hygiene, because the cigarette directly touches your lips, so we have to strictly respect hygienic laws, such as ISO quality. And also, there are many processes a tobacco pack has to go through in our workflow. That is why we have to obey the law and, for this reason, we have invested highly in training our people. Training is not something that will finish at the end of the day or week. Every month we dedicate time to training our staff, and I think this is very important and the main difference between our kind of packaging and the others. Cigarettes are very sensitive, and there are many differences from one pack to another; if you buy a pack of cigarettes the brand and the color of the box must remain the same no matter what. If colors change, for example, the customer will notice it and he may not buy the product, incurring a loss of market share for the cigarette company. Even with one damaged pack, the company can lose its market share. It is a huge responsibility.

“We have the big international brands on our side, and that counts for 60% of the Iranian market."

How strong is the main competition?

We actually don't have any strong competitors in the market. We have the big international brands on our side, and that counts for 60% of the Iranian market. I think we are going to expand our production line soon, and we are getting some new machinery that will boost our output by up to three fold. We are mainly looking for international brands and, in this sense, we have no strong competitors. MM has the biggest market share and the company is producing 20 tons of tobacco packaging per day. I don't think anyone around here can do the same. What we bring to the market that other companies don't have is our level of management. It's not a matter of managers, but a matter of systems. If I'm not here for two weeks, nothing will change or happen and our customers know that we always deliver on time.

Where do you source your raw materials?

We import them 100% and they come from various locations, according to the orders we have. Sometimes we import from Europe, mostly from Germany, Sweden, Finland, and from countries like China.

How are you planning to diversify your line of production in the next few years?

We have different phases. The next one is still going in the tobacco packaging direction, but we have projects for the next couple of years in order to develop some general packaging facilities, too. We have just bought 45,000 sqm of new land around our plant to make this possibility come true. The cigarette market is still big and we can still grow, but general packaging is something we had a look at and it was an interesting and growing market, too. For example, in Iran there's an average purchase of detergent of 5 million packs per day. If you consider the packaging, that's a big number. Plus, the detergent may be Unilever's, Nestlé's, or Henkel's, and all of these brands are affiliated and work together with MM all over the world.

The market, I think, is big enough and we just have to work to get our general packaging plant up and running in a couple of years. What we will do, though, will not be just packaging. We want to produce quality packaging because if you go to the supermarket to buy tissues, you will buy the ones with the most attractive packet. Around 10 years ago this was unconceivable, but now everybody is aware of the power of packaging, which is a thing that speaks about the quality of the brand. In this regard, I have a very positive view for the next couple of years. Demand is high and we are investing.