ESCO Launches Online Sales

EghtesadOnline: While the range of steel producers, especially in Europe, is actively developing their distribution chains through the Internet, Iran is taking first steps on its way to digitalization.

News ID: ۷۷۳۹۹۷

17 February 2017

Esfahan Steel Company has become a pioneer in this field among other Iranian companies as it has recently opened its online sales platform, Metal Expert reported.

This week ESCO launched online sales, having finished the development process that lasted for almost a year, thus becoming Iran’s first steel market participant that uses digital system for the distribution of steel products.

“The initiative is aimed at eliminating intermediaries and providing easier access for all buyers to our products,” Ahmad Sadeghi, a company CEO, commented on the launch of the new platform, according to Financial Tribune.

Currently, billet is excluded from the option and only finished steel products are available for purchasing, while the minimal order is 24 tons (one truckload). At present, only domestic sales are possible through the online system. However, ESCO relies on strengthening relations with foreign partners as well.

“Now the site is only in Farsi. However, we are planning to launch overseas online sales in the future,” a company source told Metal Expert.

Other Iranian companies’ digital strategies are yet to be worked out. Earlier, traders from Isfahan and Tehran tried to fulfill online sales, but they did not manage to accomplish the initiatives due to a number of problems.

Banking and taxation issues, difficulties in getting governmental permissions as well as customers’ poor acquaintance with suppliers created obstacles for digital sales implementation. At the same time, ESCO managed to advance in this field, taking into consideration its long history in providing steel products in Iran.

Esfahan Steel Company was Iran’s third largest steel exporter during the 10 months to January 19 by exporting 465,544 tons of beams, rebar, coils and ingots, indicating a 4% rise year-on-year.

ESCO’s export volume dropped for all products during the period.

Nonetheless, Isfahan-based producer exported 6,563 and 2,868 tons of rebar and beam during the 10th Iranian month of Dey (Dec. 21-Jan. 19), which shows a 68% and 77% rise respectively.

Founded in 1971, ESCO is Iran’s third biggest steelmaker and largest long steel producer directly controlled by the Ministry of Industries, Mining and Trade.

The company, which is affiliated to the Ministry of Industries, Mining and Trade, was struggling for the most part of 2016 to clear billions of dollars of debts and find new export destinations as an alternative to the glutted local market.

ESCO’s good performance in the month of Dey, however, is a positive sign the company is getting back on track.