Mobarakeh Steel Company

Realization of a modern industrial Holding

The Group led by the Mobarakeh Steel Company (MSC) of Isfahan, Iran, was gradually agglomerated around the MSC since the early 90s and is today one of the Country’s largest industrial realities, with over 60 subsidiaries and activities , that even if diversified are nevertheless all referable to the common steel matrix..

MSC alone produces each year more than 7 million tons of steel, while the Group currently exceeds 10 Mtpy and is implementing an ambitious development plan to bring production to more than 18 Mtpy by 2025.

So tumultuous an evolution could not fail to create inhomogeneity’s within the Group and problems of planning, management and control, possible causes of economic and operational inefficiencies.

In order to show up at the appointment with the future with the papers in order, from the beginning of 2013 MSC asked Iso Sistemi an advisory intervention to help changing the Group organizational and management structure to a Holding structure focused on its main objectives and led according to the latest international practices, as part of a project with even institutional implications, since due to the importance of the Group in the Country’s economy, its results are expected to constitute a reference for the consolidation of the local legislation concerning the management of large industrial groups.

We want to play a pivotal role in the Iranian industrial, economic and social development, upgrade of the steel making technology as a world class organization.

Mobarakeh

Steel Company

esfahan

The project

Line A

The aim of a first line of the project was to change the structural organization of the Group in order to increase operational efficiency, through:

  • the identification of the optimal structure of the Group in a mixed-type Holding, in which the Parent MSC would have the functions of both Holding and of operating company;
  • the reorganization of the MSC functional structure to add to its operational functions those related to its new role as Holding;
  • the centralization in the holding of some appropriately selected activities, such as Treasury, Sales and strategic Purchasing, General Ledger, Engineering and Information Systems; ;
  • the reorganization of the entire structure of the Group, through the identification and application of criteria for inclusion into, and/or exclusion from the Group of subsidiaries, for the possible acquisition of new subsidiaries and a new managerial organization of the whole subsidiary system.

Line B

A second line was aimed at providing the support tools to the new structural organization, in particular:

  • new Chart of Accounts valid for all Group companies and for budget consolidation, designed to achieve, at a later stage of the project, the integration between General Ledger and Cost Accounting;
  • new Planning and Control System to allow the Holding to manage the planning activities within the Group in an effective and uniform way, also providing the means to check its gradual implementation over time;
  • set of Business Intelligence tools to facilitate the management of both the Holding and the individual subsidiaries;
  • a new software tool to support accounting, planning, control and Business Intelligence, for use by all Group subsidiaries and identified in the Board Suite ™ actually acquired by the Group in 2014;
  • finally, a new Unified Management Information System, to be used by both the Group and the individual subsidiaries, to allow wider and timely exchange of data and information within the Group.

ISO Sistemi in the industrial organization

Iso Sistemi has been identified as an ideal partner in the enterprise thanks to its varied experience in large projects and to its specific experience in the manufacturing sector , with particular reference to the steel industry.

With a consolidated operating methodology, Iso Sistemi uses for this type of projects the experience gained by the Company’s founders, by high-level experts that as permanent partners take on roles as Project Leader and Senior Consultant and by teams of specialists and experts selected from the best professionals in the fields of interest found as necessary in Italy or abroad.
All activities are also supported by advanced project management tools, and also by the access to a wide network of relationships with international leaders of the various sectors involved and with Universities and Research Centers.

Achievements and future activities

The project allowed to identify the main problems and prepare the general design of the proposed solutions.

On the basis of priorities, some activities are already in progress; for others the Detail Design Phase is under implementation.

One of the main aspects of the Project planning is flexibility, identified as the ability to avoid traumatic transitions and to allow, if necessary, second thoughts and redesigns with reference to the solutions initially adopted.