A partnership agreement for setting up Khuzestan Green Paper Mill was signed between Setad, the office for executing the decrees of Imam Khomeini in helping the underprivileged, and a bank consortium, including Parsian Bank, Bank Sepah, Bank Melli Iran and the Bank of Industry and Mine, in Tehran on Tuesday.
“The factory, scheduled to be completed in three years in Shadegan, Khuzestan Province, will have the capacity to produce 240,000 tons of paper per year, which is sufficient to meet 38% of the country’s demand for paper,” Mohammad Mokhber, the president of Setad, told IRIB News.
“With an investment of $467 million, a total of $285 million of the country’s foreign currency reserves will be saved once the factory becomes fully operational. A total of 1,700 jobs will be created for locals of the underdeveloped city of Shadegan.”
Latest data show a total of 233,300 tons of paper were produced in Iran during the first quarter of the current year (March 21-June 21), registering a 1.8% decline compared with the same period of last year, ISNA reported citing figures released by the Ministry of Industries, Mining and Trade.
The output of cardboard, particle board and cellulose fibers saw a year-on-year increase of 55.7%, 29.1% and 3.8%, respectively.
Cardboard production reached 189,100 tons from 121,400 tons in the same quarter of last year, particle board production grew to 174,800 cubic meters from 135,400 cubic meters and cellulose fiber output hit 266,000 cubic meters from 256,200 cubic meters.
A total of 40,853 tons of print paper worth $34 million were imported into Iran during the last Iranian year (March 2018-19), data released by the Islamic Republic of Iran Customs Administration show.
China, South Korea, Germany, Austria, Norway, Russia, India, Hungary and the UAE were the main exporters of print paper to Iran during the period under review, Mizan Online reported.
The government allocates subsidized currency to import paper at a rate of 4,200 rials per dollar as it considers paper among "essential and strategic goods", according to Minister of Culture and Islamic Guidance Abbas Salehi.
Publishers have seen an astonishing increase in the prices of coated paper used in printing and packaging industry over the past year.
Many publishers and print media companies have been pushed out of the market ever since it experienced recurrent paper price surges.
The meaningful difference between the two rates of subsidized currencies and market rates has resulted in widespread corruption in the paper market, just like other market players that have received subsidized dollars.
According to Mohammad Reza Modoudi, former caretaker of Trade Promotion Organization, there is no telling whether subsidized foreign currencies are spent on importing essential goods.
"Pricing goods, a hallmark of command economy, is known to beget corruption and rent-seeking behavior," he told the Persian daily Iran.
Investigative reporting by local journalists, including those with the Persian daily Shargh, has revealed that if only €22 million of subsidized currency received by two front companies had been rightfully spent on importing newsprint, the ongoing paper crisis facing newspaper and magazine owners would have been resolved.
Referring to different types of paper in Iran’s market, including tissue paper, packaging paper and printing paper, Deputy Industries Minister Farshad Moqimi said, “The country produced about 50,000 tons and imported 78,000 tons of tissue paper in the year ending March 2014. Currently, Iran produces 153,000 tons, imports 6,000 tons and exports 10,000 tons of tissue paper. Iran’s packaging paper production and imports stood at 55,000 tons and 189,000 tons in the year to March 2014. Last [fiscal] year [March 2018-19], we produced 725,000 tons, imported 22,000 tons of packaging paper and exported around 188,000 tons.”
Moqimi noted that the country is now exporting the same volume it used to import five years ago.
“The main problem in the printing and writing paper market is its 95% dependency on imports. The country needs about 320,000 tons of printing paper annually. The ministry registered orders for importing 442,000 tons of printing paper last year,” he said.
“Imports and production stood at 270,000 and 22,000 tons, respectively, which show that the country has stopped short of importing 28,000 tons of paper than needed late last year.”
