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I I r r a a n n E E c c o o n n o o m m y y U U p p d d a a t t e e
Issue 118/2016 – Monday November 7th Content
IranConMin2016 (5-8 Nov) inaugurated in Tehran on Saturday
Swedish ambassador to Tehran says her country is to restore pre-sanctions’ level of trade with Iran
PMO negotiates with 9 foreign companies for development Bandar Abbas
What are the main challenges facing Iran’s capital inflow post-sanctions?
Korean oil imports from Iran more than doubled in nine months
Iran’s export of petrochemicals to Europe has started but still faces banking problems
IranConMin2016 (5-8 Nov) inaugurated in Tehran on Saturday
The 12th International Trade Fair for Construction Machinery &
Vehicles, Mining, Building Material Machines and Natural Stone Industry, IranConMin2016 (5-8 Nov) was inaugurated on Saturday and Minister of Industry, Mine &
Trade Mohammadreza Nematzadeh attended the
inauguration ceremony. The daily Jahan-e Sanat wrote that the exhibition wasn’t successful in meeting expectations of the participants as almost Chinese companies accounted for almost one third of the participants and the remainders were just few European and Asian firms from Germany, Korea and the like. The daily argues that the participation of Chinese companies was
confined to distributing catalogues and there were no showcasing of mining machineries and mineral equipment by them.
Presence of Chinese firms were dominant at
IranConMin2016
“Most of the foreign participants seem to have attended the event just for the purpose of exporting their products and not for technology transfer, and the dominance of the Chinese
companies at the exhibition was so much that caused complaint of European firms who in reaction, just shook their heads with dissatisfaction,” wrote Jahan-e Sanat on Sunday.
Industry minister encourages formation of consortium domestically and then partnership with foreign firms
In an address to the exhibition, Minister of Industry, Mine & Trade Mohammadreza Nematzadeh said the country has 5,000 to 6,000 mines, which is not a matter of honor per se as many of them are small mines which are not
economically viable and need to
be aggregated with each other.
The minister suggested formation of consortiums comprising all relevant industries to reduce costs and increase efficiencies. To this end, he said, I encourage
exploration consortiums to partner with foreign companies if necessary. Nematzadeh said when he was administering the
coutnry’s petrochemical sector some years ago, he personally experienced how fruitful is establishing partnership with foreign companies and how such partnership could enhance efficiency. Nematzadeh called for making an overhaul post-sanctions in plans for exporting raw ore. He said that last week, he issued a letter to the exporters of raw ore and asked them stop exporting unprocessed materials.
Nematzadeh says he is against exporting raw ore
This is not the first time
Nematzadeh calls for imposing export ban on raw materials and minerals. In a letter he sent to Vice
2 President Eshagh Jahangiri in July
2014, he had suggested a ban on minerals and said the ministry is determined to facilitate launching pelletizing plants.
Nematzadeh said Iran is home to 47 billion tons of mineral reserves 60 percent of which are
construction materials.
Swedish ambassador to Tehran says her country is to restore pre-sanctions’ level of trade with Iran
In an exclusive interview with Tasnim News Agency published on Sunday, Swedish Ambassador to Tehran Ms. Helena Sångeland said when she was presenting her credentials to President Rouhani, she underscored that her mission is improving political dialogue and emboldening mutual cooperation in trade, economic, culture, training, research and sustainable economic development areas.
She boasted that “one of the advantages specifically related to the Swedish companies is that they usually enter in partnership with their Iranian counterparts,
increase local efficiency, and with the investment they make, help Iran’s economy to develop. Such investments are incorporated with technology transfer and exchange of ideas,” she said. Erickson, Scania, and Volvo, were the
examples the Swedish ambassador gave as some “successful Swedish companies” in this regard.
“Swedish companies are well-
known for their long-lasting presence in the export markets, and this is something Iran needs at this stage,” added the Swedish ambassador. She said for every part of the Iranian industry, there are some Swedish companies that can provide positive aid.
Sångeland said the value of her country’s exports to Iran from the start of 2016 till now has reached 125 million euros, and added that she wants bilateral trade volume goes back to the pre-sanctions level and beyond. “The Swedish Trade & Invest Council has predicted that the country’s exports to Iran in the next 5-10 years will significantly grow. This certainly depends on [the
progress] in banking and financial relations. The Swedish business society believes that Iran should be one of our very important trade partners in the next years,” added the Swedish ambassador.
More Swedish business delegations are scheduled to visit Iran
She said that Annika Söder, deputy Foreign Minister of Sweden will visit Tehran next week, and that a Swedish minister accompanied by a business delegation is scheduled to travel to Iran in December. In the beginning of 2017, said Ms.
Sångeland, we will witness a high- level meeting in Tehran with a focus on developing business relations. She didn’t provide more
details about the upcoming event that will take place in 2017.
PMO negotiates with 9 foreign companies for development Bandar Abbas
The managing director of Iran’s Port & Marine Organization (PMO) told Tasnim News Agency on Sunday that nine major foreign investors have declared interest for developing the Port of Shahid- Rajaie (Bandar Abbas) and their bids are currently being examined.
Mohammad Saeed-Nejad didn’t announce the name of the would- be foreign investors. Along with foreign companies, he said, negotiations go on with domestic firms and it is expected that some 3,000-billion-toman worth ($830 million) contracts be signed by this (Persian) year’s end *with
domestic contractors].
Saeed-Nejad also said there are no limitations for the return of
shipping and liner companies. He said that before sanctions, 27 foreign shipping lines used to load and unload goods at the Iranian ports and now, 17 liners have resumed their operations. He said that the Maersk container
shipping line will soon come back to Iran. In explaining the
importance of the return of foreign shipping lines to Iran, Saeed-Nejad said “the most
advantage is that they enter into a market competition which ends up with forming a more customer satisfaction (owners of Iranian
3 goods) in terms of costs and
quality of services.”
On October 26th, lloydsloadinside1 website had reported that Maersk Line has joined Mediterranean Shipping Co (MSC) in reinstating services to Iran nearly five years after suspending services to the country. “Following MSC’s move back into Iran at the start of 2016, Maersk Line said that it had met representatives from the Iranian government to discuss possible projects, but any decision on engagement in the transport business in Iran will have to await sanctions repeal,” wrote
lloydsloadinside.
What are the main challenges facing Iran’s capital inflow post-sanctions?
The Majles Research Center (MRC), the research arm of the Iranian parliament has released a report listing the ten top
challenges facing capital inflow in Iran, which include:
(1)the absence of a strategic capital market plan, (2) the absence of a clear, transparent and uniform law for foreign investment in the capital market, (3) the time-consuming nature of the process for acquiring permits for foreign individuals to buy shares, (4) the difficult procedure of authentication of foreign
1 This is a website covering news on multimodal freight community and maritime intelligence services
individuals in line with implementing the Law of confronting money-laundry, (5) the difficulty or impossibility for foreign investors to open bank accounts in Iran, (6) the country’s poor relationship with
international and regional
institutions, (7) non-performance of international financial and auditory standards, (8) absence of risk-hedging instruments, (9) foreign exchange fluctuations, and (10) limitations for foreign
investors’ capital outflow.
The economic daily Donyay-e Eghtesad which has published the MRC’s report on its Sunday edition has concluded that “although Iran’s agreement with the P5+1 Group paved the way for the infusion of foreign investment into the Iranian economy, the country still faces problems in this regard because necessary infrastructures for the entrance of foreign
investment is not prepared yet.”
The daily has interviewed Mansur Moazzami, the managing director of state-owned Industrial
Development & Renovation Organization (IDRO), who believes that feeling tangible results of the JCPOA will take time. He ensures that the problems are gradually being resolved. “Nodes are being removed one after another but the number of nodes are that much that it will take time to have all of the opened,” he said. He believes that the visit of the politico- economic delegations post-
sanctions have brought positive results but underscores: “That we expect all the problems be
removed within a few months after the implementation of the nuclear deal is incorrect.”
Moazzami says the value of the contracts that have been signed by the ministry of Industry, Mine
& Trade2 has been less than $2 billion, including 19 MoUs and 6 contracts. He explained that IDRO has placed four strategies on its agenda, which are in the following areas:
1- transport (air, rail and sea projects);
2- oil & gas (IDRO has invested more than $8 billion in these two sectors);
3- high-tech industries; and 4- management development Korean oil imports from Iran more than doubled in nine months
The Iranian Student News Agency (ISNA) has re-published a news story initially covered by Korean Yonhap, stating that this coutnry’s imports of oil from Iran more than doubled during the first nine months of this year, from a year earlier. According to Yonhap, imports of Iranian crude oil and condensates reached 78 million barrels in the January-September period, compared with 33.63 million barrels a year earlier.
2IDRO is subsidiary of Ministry of Industry
4 Iran’s export of
petrochemicals to Europe has started but still faces banking problems
An official from National Iranian Petrochemical Company (NPC) said the country’s exports of petrochemicals to Europe have doubled post-sanctions and that the products are sent to the western and Eastern Europe including Germany, UK and Hungary, the daily Donyay-e Eghtesad reported on Sunday. Ali- Mohammad Bosagh-Zadeh, NPC production control director said the coutnry’s production of petrochemicals registered a growth of 6% during the first seven months of this year (from 21 March to 21 Oct) compared to the similar period of the last year.
The remarks of Mr. Bosagh-Zadeh on the two-fold increase in Iran’s exports of petrochemicals to Europe should be treated with prudence. On October 31st, Adel Nejad-Salim, managing director of the Persian Gulf Holding had said that the export of petrochemicals to Europe has started but due to the existing money transaction problems, the volume of exports is still small, without giving any figure. A few month earlier and on 12 August, the vice chairman of Iranian Association of
Petrochemical Industry
Corporation (APIC) had told Mehr News that European banks don’t make necessary arrangements for money transactions for Iran’s exports of petrochemicals to this
region. Fariborz Karimaie said that eight months since the lifting of sanctions, banking issues are unresolved and that Iran’s
potential to export 2.5 million tons yearly of petrochemical products to Europe has remained untapped due to such banking issues.
(European markets used to account for about 30% of Iran’s market for exporting
petrochemicals but supplies to these continents were almost suspended during sanctions.)
