Iran constructed this facility to produce the zirconium cladding necessary for the production of fuel pellets for the IR-40 heavy water reactor at Arak. [1] The metals and alloys produced in this facility are further processed at the Fuel Manufacturing Plant. The facility, reportedly constructed with Chinese assistance [2], has a capacity to produce 10 tons of zirconium tubing annually. [3] However, the plant's operational status remains uncertain.

Sources:
[1] "Update on the Arak Reactor in Iran," Institute for Science and International Security Report, 25 August 2009, www.isisnucleariran.org.
[2] Gary Samore, Iran's Strategic Weapons Programmes: A Net Assessment (London: The International Institute for Strategic Studies, 2005), p. 101.
[3] Institute for Science and International Security, "Nuclear Sites, Uranium Conversion and Fuel Fabrication," www.isisnucleariran.org.