Don’t Become their Next Victim
Recently reports of upsetting outcomes of Road Construction Work which used Mixed Bitumen in countries such as Indonesia, Iraq, and Africa have been emerging. This event has consequently exposed the methods being used by the rising rings of unethical suppliers to bring their costs down to below all other genuine suppliers. Their main victims are Chinese and Korean Road and Bridge Construction Companies. Due to demand for very low Bitumen prices from Chinese buyers there are many counterfeit groups emerging in today’s Bitumen market who create Bitumen like products to meet the market’s target price demands. This is why the older and legitimate suppliers are having complications contending with them in prices. For this we have chosen to fight them through education. It is unfortunate and unfortunate in order to avoid bankruptcy older companies have also taken this measure and have started to Mix impurities in their Bitumen as well.
ISFAHAN BITUMEN PRODUCTION aims to inform you on what these hand full of smugglers are doing in order to save majorly on their costs while generating a handsome benefit for their circle. Aside from pouring Sand inside of their drums to make their drums heavier they are placing up to 50% Fuel Oil (Mazut) in the base of their drums and then packaging the rest with 100% pure NIOC Bitumen.
Some say where is SGS inspection in all of this? SGS takes samples from the top portion of the drum, and gives them the SGS certification based on the results and because they fill the base with Fuel Oil and Sand it is undetectable until the road contractor uses it. , Buyers purchase the lower priced Bitumen not knowing the true mixture inside of their drums and the effects it will have which are not limited to patches across the entire paved road and shrinkage. In fact, what they have sold the end user is not Petroleum Based Bitumen and has little binding power left after the Mixing which takes places. This means the asphalt will not hold together as it should and will break off piece by piece. It is noteworthy to mention that the equipment Road Contractors use to apply the impure bitumen are complaining of clogs in their equipment’s channel.
Because, the cost of Fuel Oil (Mazut) is far less in price than Bitumen in Iran by mixing even 10% to their Bitumen they are actually saving a minimum of 46.00 USD per MT based on today’s market rates (January 18, 2010). Imagine them mixing 50% of the drums with Fuel Oil. This will equal an incredible figure from which they will offer a handsome discount to all of their clients in the aims of creating confusion and mistrust in genuine suppliers to obtain your order.
Naturally, those who Mix for profit can outbid any true supplier at any time they wish. Our estimates in the past had been 20% impurities which would save them 92.00 USD per MT based on the present market rates of 406 to 410.00 USD per MT in Bulk Ex work refinery. However; today we are learning that these hand full of suppliers are getting braver and braver each day, and know that their day in court is coming and intend to gather as many sales as possible in the shortest period of time before they are fully exposed.
We are obtaining more pictures of disaster jobs as we speak of them in order to reveal them to our clients and Agents worldwide. Our aim is not to create fear without basis but to establish a common awareness and protect our clients and the name of Iranian Bitumen which is known for its high quality and standards.
If anyone is offering Bitumen at 10.00 USD more or less than a reliable supplier, we can declare it is expected, but when someone offers 30.00 USD, 50.00, or 100.00 USD per MT less than a reliable supplier or more, then they without doubt are doing something else to bring their costs down considerably.
An average profit margin of a Bitumen supplier is no more than 20.00 USD per MT inclusive of 5.00 USD per MT for unforeseen costs or we add this to the profit margin or deduct it in discounts. This all depends on the market trends and demand, therefore do not be deceived by very large discounts.
We ask that buyers through the many logical, available facts and the bitumen prices posted on the IME Exchange, help educate other buyers calculate the true levels which they are at today. We would like to state that the people selling Bitumen at incredible rates are very questionable. The projects which the false bitumen is prepared do not last and after a short period of time fall apart.
Presently our union is gathering more information on such suppliers and confronts them where possible.
Unfortunately, SGS inspection will not break open a new steel drum from the bottom unless there is previous suspicion. With these companies functioning with multiple names even that will be a small deterrent.
January 18, 2010
September 18, 2010
The information stated above gathered by Isfahan Bitumen Production Analysts are based on Victim and Witness Declarations which may be in oral or written form, intelligence provided by experts in this field and an overall study of the market and customer feedback. These views do not apply to every Bitumen supplier but those which use unethical tactics.
If you have been taken advantage of by a Bitumen Supplier from any part of the World share your story with us so that we may warn others. Your identity will be kept confidential.