Hormoz Pasargad Bitumen Products Co. , Iran’s biggest producer of the asphalt material used to pave roads, plans to boost output almost 15 percent in the next two years, with all of the increased supply going to overseas buyers led by India and the United Arab Emirates.
Hormoz’s bitumen production will grow to 4 million metric tons a year, from 3.5 million tons currently, with exports climbing to 2 million from 1.5 million tons, Managing Director Keyvan Alaei said in an interview on the sidelines of a conference in Tehran. Hormoz is in talks to ship on vessels of the the state-run National Iranian Tanker Co. and European lines, he said.
Iran is boosting oil production a year after the easing of sanctions on its economy, and this allows for greater output of byproducts such as bitumen or Raw materials used in buildings and roads are set to benefit as infrastructure investment in the U.S., China, India and Europe is expected to rise 7.8 percent a year on average over the next 10 years, or by at least $26 trillion spent in those regions by 2027, according to a Bloomberg Intelligence report in March.
“The future of the Iranian bitumen industry is bright, with a good outlook for imports and growth possibilities,” Alaei said.
The curtailment of sanctions in January 2016 allowed Hormuz to reach out to international buyers, and banking isn’t “much of a problem” because of assistance from companies based in Dubai in the neighboring U.A.E., Alaei said. Hormoz is the biggest bitumen producer in Iran, which makes about 6 million tons a year and exports 5 million tons annually. Privately-owned Hormoz is a subsidiary of Pasargad Oil Co.
“In the post-sanctions era, we are trying to negotiate with major global and European shipping lines as they can help us in our marketing efforts given our potential in this product,” Alaei said.
India accounts for about a third of Iran’s bitumen exports, followed by the U.A.E., countries in East Africa, Oman, and nations of the former Soviet Union, Alaei said. Producers in South Korea, China, Saudi Arabia and Bahrain are Hormoz’s biggest competitors, he said.