Baghdad’s Al-Faris Company faces uncertain future despite recent profitability, director warns

BAGHDAD — Al-Faris Company, a state-owned enterprise specializing in heavy engineering equipment, has recently achieved profitability, but its future is in jeopardy, warned its director, Saif Al-Din Ali. Speaking with journalist Mohammed Qais in an interview on Iraq24 TV channel, Ali projected that the company’s eight factories could cease operations within a year and a half due to a lack of experienced mid-level personnel to replace retiring workers.

“New hires lack experience, and some cannot even read or write,” Ali stated. “Without specialized workers, there’s no one to lead the factories, operate the machinery, or manage modern equipment.”.

Ali highlighted the critical issue of an ageing workforce across Iraq’s Ministry of Industry and Minerals. “Most of the staff today are nearing retirement, and the new hires transitioned from wage-based to contract positions lack professional qualifications. Their low educational levels make them ineligible for training abroad,” he said.

This challenge is exacerbated by broader inefficiencies in Iraq’s industrial sector. “Work at the Ministry of Industry is linked to other ministries, and while coordination exists, bureaucratic delays can stall projects for one or two years, resulting in significant losses,” Ali noted.

Power cuts further hinder Al-Faris’s operations. “Electricity is cut two to three times daily, causing us to lose hours restarting factory operations,” Ali explained. With only eight working hours in the official schedule, such disruptions significantly impact productivity.

Ali argued that privatization is essential for the survival of Iraq’s public sector industries. “Neighboring countries have no state-owned factories, yet Iraq clings to a rentier economy. The global economy has shifted to capitalism, and we must transfer these factories to the private sector,” he said. He emphasized the efficiency of private ownership. “The private sector is more invested in preserving assets because they are spending their own money, unlike the public sector, which often neglects maintenance due to the perception that everything belongs to the state.”.

Ali pointed out that Iraq had recognized the need for privatization before 2003. “The former regime enacted the Companies Law No. 22 of 1997, which allowed public companies to operate independently of government control. However, the post-2003 changes disrupted this shift, and voices demanding government control began to dominate,” he said.

He cited examples of inefficiency, noting that 25% of Ministry of Industry employees work in just two companies—one focused on food production and another on textiles. “For instance, we have staff allocated for milk collection, but where is the milk?” Ali quipped.

Despite these challenges, Al-Faris has managed to turn a profit and begin repaying its debts. Ali attributed this success to better management, though he criticized the lingering presence of ineffective leadership in other state-owned companies. “Many public factories could be revived, but mismanagement remains a barrier,” he said.