Danieli Steel Machinery Production in Iran

The first major foreign investment project in the Iranian steel industry has come on stream.

The Italian Danieli Group’s steel machinery production plant was inaugurated on Tuesday by Industries, Mining and Trade Minister Mohammad Reza Nematzadeh and the head of Iranian Mines and Mining Industries Development and Renovation Organization, Mehdi Karbasian.

Established with a €40 million investment made entirely by the Italian firm, Danieli Persia is located in Eshtehard Industrial Park in Alborz Province.

“Most of Iranian steel [industry’s] required equipment and production machinery will now be manufactured by Danieli here in Iran,” Karbasian was quoted as saying by IMIDRO’s public relations office.

The plant’s primary purpose is to boost the competitiveness of Iranian steel and non-ferrous metal producers by improving domestic industrial services and making Iran more self-sufficient in machinery manufacture.

According to the project’s manager, Ahmadreza Andalib, Danieli aims to manufacture the machinery for its projects and clients in Iran, including oil, gas, petrochemical and steel sectors.

“We have the technology to produce any equipment and machinery,” Andalib told Financial Tribune on phone.

The establishment of production facilities in Iran is also advantageous for the Italian firm in that Iranian energy costs are considerably cheaper compared to Europe.

According to Iranian Steel Producers Association, Danieli Persia has the capacity to annually manufacture two induction furnaces, two electric arc furnaces, one lime kiln, two vacuum heat treatment furnaces and two heat treatment furnaces.

Danieli has 16 steel plants in Asia. Danieli Persia has yet to be listed on the company’s official list of operations in the continent.

The plant-making division of the Danieli Group, based in Buttrio, employs nearly 10,000 people and consists of various production lines active in the design, construction and startup of plants for the manufacture of steel and non-ferrous metals.

Its services range from the treatment of ore and scrap to the melting, casting, rolling and finishing of a wide variety of finished, flat, long, forged and tubular products.

With its design centers located in the most important industrial hubs of Europe, the US and Japan, Danieli produces quality machinery at its own manufacturing plants in Italy, Germany, China, Thailand and India, according to the group’s website.

As one of the three largest suppliers of metal industry’s equipment and plants in the world, Danieli is no stranger to Iran, as the company has undertaken various development projects in the country over the past 25 years, including the sanctions period.

The company’s official post-sanctions' return to Iran, however, took place after President Hassan Rouhani’s visit to Italy in January 2016 when Danieli Group signed deals worth $6.2 billion with IMIDRO for cooperation in the steel and aluminum sectors.

Danieli has supplied production machinery to most Iranian steel mills, with the most recent cooperation being with Mobarakeh and Khorasan steel companies.

With KSCO, the Italian group signed a deal to supply the latest electric arc furnace technology to boost output capacity. And with MSC, Danieli is set to establish a new production line to manufacture steel sheets with special aesthetic effects.

According to Nematzadeh, $5.5 billion of foreign investment have been made in the Iranian mining industry, following the removal of sanctions in Jan. 2016.

Iran plans to become the world’s sixth largest steelmaker as per the 20-Year Vision Plan (2005-25). The plan envisions the production of 55 million tons of crude steel and 20-25 million tons of exports per year by the deadline. Iranian mills have so far materialized about 60% of the target.