Domestic Economy

Europeans Will Benefit From Joint Ventures

Europeans Will Benefit From  Joint VenturesEuropeans Will Benefit From  Joint Ventures

Iran’s market is not the one-way street for import of goods and machinery from Europe it used to be a decade ago and Iranians are interested in bilateral trade, said Minister of Industries, Mining and Trade Mohammadreza Nematzadeh in an address to Vienna’s two-day Iran-EU Economic Conference on Thursday. Joint investment in Iran would not only have the benefit of access to the 80-million-strong Iranian market but also the 300-million market of Iran’s neighboring countries, IRNA quoted him as saying.

"Iranian companies are capable of expanding activities in many countries. Iran would also serve as a regional platform for joint production and technical cooperation of its neighbors as well as Commonwealth of Independent States," the minister noted.

Addressing top officials and traders from Austria, France, the UK, Germany and other European countries, Nematzadeh said: “We believe that once the political turmoil of the region is resolved, it would need mega economic projects, so we invite you to tap the investment opportunities in the region.”

> Privatization

He went on to say that the campaign for privatization in Iran was slowed by the sanctions (imposed against Iran over its nuclear energy program) but it is the country’s aim to advance in many fields by steering clear of governmental ownership and control. Privatization would provide opportunities for foreign and native investors in different sectors of automobile, steel, electricity and many more, Nematzadeh added.

"The rules and regulations associated with foreign investment and ownership in Iran have been reformed," he noted.

The economy had a 6.7% growth in the industry sector and 9.8% in the mining sector in the last Iranian year (ended March 20), according to Nematzadeh.

A 10-year strategy for industries, mining and trade has been drafted in recent months, which includes goals, policies and the priorities. It is mostly focused on oil, gas, machinery manufacturing and designing industries as well as mining particularly steel, copper, chromium, gold and silver.

“One of our main goals is to design and manufacture both passenger cars and commercial vehicles which comply with international standards. We seek joint ventures for auto parts manufacturers with the aim of producing 3 million vehicles by 2025, of which a third will be exported,” he added.

Iran’s industry has made great strides in research and development of various technology sectors and welcomes investment in nanotechnology, medical equipment and telecommunications, the minister noted.

“By and large, our industrial strategic planning intends to put Iran among the emerging economies based on our natural resources, an educated young workforce, universities, research centers, domestic and regional markets. I recommend European companies to view this as a golden opportunity and initiate cooperation with Iran with a strategic, long-term perspective,” Nematzadeh said.

Iran is readying itself to join the World Trade Organization once political obstacles are removed and is keen on trade deals with the EU and other countries, he added.

Deputy economy minister Mohammad Khazaei, another keynote speaker at the conference, said Iran has already completed negotiations with some European companies wanting to invest in the country.

"We are recently witnessing the return of European investors to the country. Some of these negotiations have concluded, and we have granted them the foreign investment licenses and protection," Khazaei said.

"In the past couple of weeks we have approved more than $2 billion projects in Iran by European companies," he told the conference without naming the firms or providing further details.

> New Oil, Gas Projects

Deputy oil minister for commerce and international affairs, Hossein Zamaninia said Tehran has identified nearly 50 oil and gas projects worth $185 billion that it hoped to sign by 2020. OPEC-member Iran has the world's largest gas reserves and is fourth on the global list of top oil reserves holders, Reuters reported.

In preparation for negotiations with possible foreign partners, Zamaninia said Iran had defined a new model contract which it calls 'Integrated Petroleum Contract'.

"This model contract addresses some of the deficiencies of the old buyback contract and it further aligns the short- and long-term interests of parties involved," he said.

He said the deals would last 20-25 years – much longer than the previously less popular buybacks, which effectively were fee paying deals with global oil majors such as France's Total for services they performed on Iranian oil fields.

He said Iran would introduce the projects it has identified and the new contract model within 2-3 months.

The conference was sponsored by the Austrian Federal Economic Chamber and Iran’s Trade Promotion Organization and joint chambers of commerce of Iran, France, Germany and Britain and held on July 23,24.