Sarmand Group: Presentation of Sarmand Group and its Activities

Let us start with the Sarmand company, a little bit of the history, how the things started, and about its activities.

Our two companies Sarmand and Fataka started a long time ago. Sarmand Company had been established since 1979 as contracting, industrial, construction, and trade bureau owned by Fataka family in Erbil (the Kurdistan Region of Iraq). Fataka is involved in food industry, particularly in providing flour, poultry and animal feed.

What about the most important activities of Sarmand Group?

We have performed different types of constructional, industrial projects as well as many trading and transportation. We have an animal feed factory along with poultry farms. From there, we started getting involved in construction projects with the government. We built schools, telecommunication projects, government buildings, housing projects and we took the contract of building and construction streets and roads all over the Region. Then we built a factory to produce flour in Erbil, and recently, one of Sarmand’s branches handled transportation of goods between Turkey, China and UAE. Sarmand’s company handles the operations of delivering food supplies like milk, tea etc. The latest project we, in Sarmand Company, got involved with is related to the Oil industry and its services.

What are the most important projects your company is involved in, and what are the international groups the company is cooperating with in the field of Oil and Gas services?

Sarmand Company has opened a new branch in oil and gas sector, thanks to which we can provide, purchase and transport oil upon request from one province to another. We have a great ability to work and provide very good services in this field. We also get involved in biddings in order to provide diesel for power plants in Erbil, Sulaymaniyah, Duhok since we are capable of providing their needs. Therefore, we take part in those biddings in order to provide oil services.

What are your contracting projects related to the Oil sector in the region? And what are the future strategies for the newly developed oil division?

We are still focusing on our main strategy which is serving our Region in every ways that we have and we are capable to do, which is to be active in many areas. Of course all these countries pump a lot of money in the oil sector despite the global crisis. Many nations depend on oil to survive. Our idea and goal of Sarmand Group is to have a family-owned oil refinery to serve our Region and our people in Kurdistan. For that reason, we are considering the economical benefit of this project to our Region in the future.

Why did you decide to enter this new area (field) for you? What are the market potentials for Oil and Gas Contracting in Kurdistan?

We got involved in many sectors before, like food industry, transportation, trading and construction – moving from one stage to another. In order to build the name of our company and make our family known in the world of business, we had to move up the ladder and to grow up more and more. We made our way one step after the other. As we know, there are main businesses in the world one of them is oil in the first place, then weapons and then wheat etc. So the main reason to be involved in this sector is to make our family proud. We also have the financial and moral motives for that.

What about the asphalt production?

We do have a factory that produces asphalt. We did many such projects. We finished a project where we built a 75 km street in Barzan area in Erbil city, and our company owns all the equipment used in that project. Then we had several projects in the Al Najaf province in southern Iraq. One of them involved a highway, and many other streets and roads projects.

Can you speak about the market potential for the asphalt? I imagine that all asphalt production is now being imported from Turkey and Iran; what amount of this product is actually being imported?

We used to import the equipment from Germany to produce asphalt. As for the raw materials, it is known that the Iraqi asphalt is far better in quality compared to the Iranian or the Turkish asphalt. In addition, the Turkish product is expensive so we do not deal with it until if it is necessary. So, we buy the raw materials from Iraqi sources like Beijee and Dorah in Baghdad. As for the difference in price, the materials from Iran are always more expensive than the ones from Iraq due to transportation expenses; buying it from local sources means shorter distance and beneficial for internal economy. In addition, their product is not liquid like ours, so we need to provide safety and processing measures for it, which means more expenses since we use liquid asphalt.

Same question for the oil and gas sector: what is the market potential, what is the growth expected, and how the Kurdistan region benefit from this?

The future for Kurdistan’s oil and gas production industry also looks bright. We noticed in the recent years, when it comes to the oil and gas sector, that our region is considered a place for those two resources. Also, the government encourages us to go into that sector. Now the companies involved in this field are few, so we decided to venture into the sector because we have the financial and moral capabilities. We also have the experiences needed, along with the local and international connections to work with. Because of all of these factors, we think that there is big potential in the future, since also, we will be working along with the government. In addition, there are many great companies in this field working now in our Region. Therefore, we decided to venture into this sector since the results that we will harvest are guaranteed.

Now, regarding construction, is your construction work civil or governmental? Is it related to properties or housing? Maybe you can tell us a bit about the market potential.

We have worked on different types of constructional projects. When it comes to construction, the government used to handle those projects before. If your price is good and goes along with the regulations of the state, then you would sign a contract with them. We started by building schools and housing projects. We also built government buildings. Then by 2006, the government issued the “investment regulation” so we went into investing which caused a decline in the contracting system. With investment, it is up to you and how much cash you can invest, while the government offers its support or a piece of land with a set of conditions.