Abhar Steel Factory

From selling 230 tones daily to 3450 tones and more

Why a factory with good quality of products does not succeed in selling and having loyal customers?

Is quality good enough? What brings success? what is the advantages and disadvantages withe the company?

1. Product:Rebar (All the sizes from 8 to 32, the grades from A1 and A3, quality is on the top of international standard rate.
2. National need for product: 14 milion tones, 9.9 milion tones made before Abhar, Abhar made 1.3 milion per year which is still needed
3. Place: The main point to consider is the site of the factory:
   1. Electricity from wind turbin: Abhar is known as a windy city in Iran, a reputation it owes to its geographical position in the mountain range at a small cleft that funnels the wind through the whole area. therefore a wind farm is located near the factory that provides the electricity which a metal factory needs a great range of them. It means factory uses low-cost sustainable energy.
   2. Water from river: There is a river beside the factory that can provide the water needed for the factory that lower the costs enormously.
   3. Logistic: The factory is far from any civilisation which means it is far from main roads of the country. Truck trailers prefer not to get any orders from somewhere out of nowhere and customers realised that any product delivery from the factory takes a long time so they try it once and give up and prefer other factories because on construction projects time is money.
4. Problem: Factory has good quality products, reduce the cost impressively by choosing a location near sustainable energies. and the production is needed nationally but no transportation firma is willing to deliver the products to the customers. The company has logistic issues.
5. Solution: the solution has two part which are equally supportive to achieve the success.
   1. A marketing company: a contract with a marketing company that is expert in metal and have enormous amount of clients for rebar. the marketing company suggested the capacity of selling at least 3450 tones (load of 150 trailer) to 4600 tones (200 trailers) daily but the factory is responsible to deliver the products on time.
   2. Transportation firmas: Contract with two big transportation firmas in a way that the factory guaranties the need of 80-100 truck trailers from each of them everyday so trailers need to be there before noon and be ready to loaded. that is a great offer that has a remarkable profit for the transportation firmas. and as far as the factory books the trailers in advance, It is a lot easier to arrange the need.
6. The Result: As a result company goes from selling 230 tones daily to around 4000 tones daily which means more than 17 times rise in profit and less stored product day by day until not even there is no remain product on storage but the factory need to stop the sell in the midle of working hours due to keep the delivery schedule on time.