INVESTMENT

Iran 2017 | ECONOMY | B2B

The government's privatization policies have led to a blossoming of firms that have done well for themselves and their domestic shareholders.

Abbas Samimi
ABBAS SAMIMI
Managing Director & Member of the Board
Iran Investment Company
Ahmad Kargahi
AHMAD KARGAHI
Managing Director & Member of the Board
Tuka Foolad Investment Co.

How did you develop as a company?

Abbas Samimi Around 11 years ago, the government launched several privatization policies to boost the share of the private sector in Iran's economy, which had been rather limited at the time. This resulted in the establishment of several holding groups, Iran Investment Company being one of them. Although we have been operating for only 11 years, our shareholders have a lot of experience in industrial projects, manufacturing activities, and the management of large enterprises. This helps our company enter into investments in large projects. We are always looking for positions in the country that suit our name; we are not looking to take part in every sector of the economy, solely the domains in which we see competitive advantages, such as power plants and the petrochemical industry. We would like to enter areas that can create additional value compared to the production of raw materials. We provide a good opportunity for investors and distribute the returns of these investments back to our shareholders and investors.

Ahmad Kargahi Tuka Foolad Investment is a subsidiary of Mobarakeh Steel Complex and was established in 1989. At that time, Mobarakeh and its personnel were the only shareholders. Later, when Tuka entered the stock exchange in 2002, the shares became available to Iranians. Currently, about 30% of the shares belong to Mobarakeh, our major shareholder. The second-largest shareholder is SATA Investment Company, the investment arm of the Social Security Organization of the Armed Forces, which owns about 14%. Saba Tamin Company, a subsidiary of the Social Security Organization of Iran, owns about 11%. Furthermore, about 21,000 individuals own shares of Tuka through the stock exchange. Also, Saman Bank and Ansar Bank both have considerable stakes.

What are your main activities?

AS Petrochemical Commercial Company (PCC) was established 27 years ago and got its start when almost all the petrochemical companies were owned and supervised by the government-owned National Petrochemical Company (NPC). Upon privatization, there was no commitment by newly privatized companies to market their products through PPC. It has an extensive sales network which petrochemical producing companies are not in a position to compete with at the moment. We are trying to find a way to interact with the producers to export higher value-added products. We are focusing on this company with a long-term plan: to diversify its activities and produce petrochemical products alongside marketing of such products. We are trying to avoid selling raw materials, and our focus is on exporting higher value-added products. In the short term our strategy is to increase our market share and expand our sales network.

AK Tuka Foolad Investment Co. is a holding company engaged in several businesses, but rail transportation is our main one. We have a few companies in charge of transporting all the ore and raw material from the mines to the Mobarakeh Steel Complex site. We transport about 10 million tons of iron ore per year by wagons through railways. We have another company in rail transportation that carries the products of Mobarakeh Steel Complex by rail to customers in different provinces of Iran. Through this business, we own about 5,000 railway wagons. We also carry copper for the Iran National Copper Industries Company. Besides rail transportation, we are involved in road transportation and have a company in charge of carrying trailers. We also manage contracting companies that are mainly involved in construction, EPC projects, or operating industrial plants. They are also in charge of environmental projects. Another important activity of Tuka is production, for which we have 10 factories. One of these galvanizes coil from Mobarakeh or overseas. Another of our companies, Tuka Paint, produces industrial paint for the coating factory of Mobarakeh and is one of our best-performing firms. We recently took it public. We also have a production company that manufactures industrial rubber and rubber parts. Tuka also has a finance division, though it is limited to buying and selling stocks on the stock exchange.