By: Trends Editorial Team
Shahin Nourbakhsh, born in February 1982 in Tehran, has been involved in economic activity and business management with a variety of firms since his return to Iran from Beirut, Lebanon in 2015, including with companies like “Deerpa,” “Ronika Group,” “Tasmim Company”, and “Aran” and “Krich” which are all enterprises active in trade of goods and services and in the manufacturing industry. He originally studied political science because of his interest in politics and international relations. He then continued his education in executive and business management and began his doctorate in advanced business management in 2018, while simultaneously pursuing his career in management. Currently Nourbakhsh’s area of primary concentration is the manufacture and assembly of household appliances through Rah-e Sabz Aran Company, of which he is the CEO and Member of the Board. This conglomerate includes Pekol electrical household appliance goods and Crich household furnishings and furniture products.
Given that highly recognized and influential individuals in a society play an important part in a variety of domains of a country’s flourishing of ideas, advancement of trends, and development of benchmarks in today’s world, how well do you, as a top entrepreneurial and economic figure, fit in that capacity in this country?
When we talk about development and modernization, we imply a series of political, economic, and social processes that eventually lead to societal transformation and an analogous modernization. As a result, development is more than just economic progress. According to Wilbert Moore, a well-known American sociologist, modernization refers to the entire change of a traditional or pre-modern civilization into one that is equipped with a range of technology and civic institutions; a society that has a sophisticated and prosperous economy and is politically stable. Now, I don’t want to comment theoretically, but in response to your question, I believe you are referring to the concept of economic growth which is preferable to the word “development”, as it is a fundamental concept in the development process but is not synonymous with it! To put it another way, the function of entrepreneurs and capitalists in an economic expansion is comparable to the role of gasoline in an engine: a primary role. As a result, if a country wishes to grow its economy properly, it must foster entrepreneurship. Because, in brief, recognizing relevant chances to expand output leads to job creation and, consequently, income for all and an overall wellbeing on a national level.
In addition to creating jobs, you have facilitated the introduction of numerous technologies into the country by starting a factory for the manufacturing of household appliances. Where did the concept for the production come from, and where is it now? What items do you make, and how do you plan the future of your business enterprise? What are your brand’s competitive advantages in the Iranian market?
Home appliances have assumed a growing importance in the family consumption basket over the last 50 years. Although housing, food, healthcare, and transportation take a lion’s share of this basket, advancing technologies in the home appliance sector have made these household items an essential part of any family’s home as they have become more streamlined, energy efficient and more user friendly. With the availability of appropriate technology, raw materials, and labor, Iran as a country has significant comparative advantages in this industry, as evidenced by the presence of old factories and brands in this field. However, industrial production in this sector, as in others, was severely harmed in the 1980s as a result of unrealistically low exchange rates and indirect government subsidies for imports. Currently, despite significant barriers to investment, particularly due to political reasons and sanctions, we have chosen to focus on this field of manufacturing within Iran and to prioritize technology transfer after carefully considering all elements of the situation.
Our approach is to pursue higher-quality items, better equipped facilities, and above standard after-sales service with reduced return of sold products. Overall, I can assert that our aims are in the upper echelons. Why this is a focus of ours stems from our appraisal of the country’s economic conditions. The reality is that the Iranian economy’s severe slump has left no opportunity for intense rivalry among economic operators. We must either relocate to new, less competitive markets or combine the efforts of entrepreneurs and investors in order to address domestic requirements while also creating circumstances for exporting. As a result, our home appliance products, which will be sold under the PEKOL brand, will appeal to a more sophisticated and demanding audience. Such products and services will comprise a significant portion of our portfolio, if not all of it.
Where does Iran stand in terms of human resources and trained labor? Given the importance of human resources in various vocations and businesses, what kind and amount of training do you plan to offer to your employees?
Human resource management and its macro policies are inextricably linked to the issue of human resource quality. Understanding how to employ existing human resources is more vital than having them, which is unfortunately an oversight in our society. I’m talking about ignoring the old topic of meritocracy where effort, talent, and achievement are prioritized over wealth or social class… It’s a long discussion and I don’t want to get into it now. But in terms of our businesses, our people resources are perhaps our most valuable asset and advantage. This is a reality that neither our ideas nor our riches can replace. With this fact in mind, we have attempted to make two directives. First: Abide by the idea of decision-making based on group acumen, which is absolutely sincere and without pretense in our business. Second: Giving employees the opportunity to take training courses for technical or middle management positions in line with the company requirements. Employees get paid not only during the training period, but also for costs associated with the courses as we recognize that the company is the beneficiary of the expertise that these trained employees gain as they continue working with us .
As an economist, how do you evaluate the impact of the restriction on large Korean and other international companies entering the local home appliance market? How far has Iran progressed in the manufacture of household appliances? How close are we to meeting global standards currently?
The import ban will undoubtedly have a disastrous effect on the market, causing significant challenges in the industrial and manufacturing sectors, and will erode consumer trust. In general, we have not seen the emergence of a monopoly manufacturing industry anywhere globally or during any single period. Perhaps it is because only through competition can growth and advancement be achieved. With respect to our own country, one obvious example that comes to mind over and over is the unfortunate fate of Iran’s automobile sector. The result of the ban on import of foreign cars was the advent of little competition to fuel product improvement and growth in our domestic auto manufacturing sector which lead to a deterioration of the quality of its cars, which in turn caused the sector to suffer losses in the tens of thousands of billions of Tomans. And I should note that as investors and participants in the home appliance manufacturing sector, we are no exception to this rule about banning of foreign goods. I also believe that a tiny number of our colleagues have a misunderstanding and perhaps a short-term mindset if they believe that this monopoly in certain industries would provide them with long-term benefits. Because it both undermines this growing but fragile business of domestic manufacturing, and it is also ethically problematic since we cannot regard lop-sided opportunity and lack of competition as “help” for ourselves while creating a monopoly for others. We shall all suffer as a result of it in the end. At our company, we focus on our advantages in terms of workforce, energy prices, and raw resources in this business, and try to disregard import limitations. Moreover, in a competitive climate and hopefully with fewer political tensions, we can extend our relationships with better and higher-quality suppliers worldwide and import more advanced technologies. As someone who sees the industry’s progress in terms of competitiveness and advantages of quality rather than the amount of output, I don’t subscribe to the notion of self-sufficiency. Therefore, I talk openly and without apologies about the necessity for superior technology to enter the country to provide higher manufacturing benchmarks and move the dial toward international standards. In contrast, any import ban violates this concept.
One of the main worries that customers have while purchasing domestic items is after-sales support. How do we compare against other nations in terms of aftersales service? What plans do you have for improving these services?
This issue may be assessed from both a short-term and a long-term standpoint. Concerning its long-term dimensions, I would want to address the matter of competition and its significance in the industry’s evolution, as I did in the previous question. You must demonstrate to your consumer that you have a more plentiful supply and variety than your opponent, in a competitive market. Then, price, quality, and service become its three key pillars. As a result, one of the cornerstones of one’s entrance into the competition is the service one gives (particularly aftersales service). Due to market’s competitiveness, extremely excellent steps have been implemented in the sector of household appliances in recent years along with high standardization. In the near term, an increase in the exchange rate, which would automatically limit imports and raise costs, will naturally lead to more efficient use of household appliances and an increase in the desire to repair rather than replace, putting pressure on the after-sales service industry. In this regard, we are doing our part, and have a huge strategy in place to provide suitable services and to maximize customer satisfaction, which involves both the supply of components and the provision of broad services. Furthermore, we were one of the first companies to cover costs associated with repairs of components beyond warranty terms for clients, and to do maintenance under insurance policies whose premiums were paid for by our company. As such, our clients pay for no repair charges or else accept a very tiny fraction of probable damage losses, even when a product sustains physical damage which may not be covered by the original product guarantee.
Do you believe Iran has the capability of exporting home electronics to other nations in the region? What are the country’s difficulties and opportunities? What elements will influence the event’s execution?
In the right political environment, we may become a true exporter in the large-scale manufactured goods sector, and Iranian home appliances are one of the businesses with the potential to have the essential competencies in this sector, given the country’s competitive advantages at a previous point in time. However, achievement of this goal has prerequisites that must be considered from both an intersectoral and macroeconomic standpoint. Essentially, while it has its own position and benefits, the assembly sector is not synonymous with industrial production. Real manufacturing, in my opinion, has nothing to do with volume or even technological depth. Real production occurs only when I, as a producer, can export my product.
From my perspective, the actual production indicator is the export capacity of a product. Because, in the worldwide market, you will face genuine competition, and you must answer the issue of why the consumer should pick your product or service over the many other options available to him, and furthermore to pay for it. Do you have superior quality or a lower price than your rival, and what else can you offer that your competition doesn’t? The following topic falls into macroeconomic and political domains. Exports of goods are the foundation of international relations, and this fact cannot be isolated from the sphere of foreign policy and international diplomacy and viewed as an island on its own. Foreign relations, financial relations, transportation, insurance, and all of these political and logistical requirements must be discussed and resolved before a producer is able to market his goods in a competitive atmosphere internationally. We will not be able to expand and export unless we are a part of the global economy, even if we make adequate and competitive goods. There is no distinction between regional and global markets or between east and west. Economics has its own utilitarian and accounting logic and, thankfully or sadly, it is not founded on politicians’ fantasies.