Domestic Economy

Building on Shared History

Building on Shared HistoryBuilding on Shared History

Denmark is here to show that it is ready to do business, Danish foreign minister said.

Kristian Jensen, who is also the deputy prime minister, was speaking at the Iran-Denmark Trade Promotion Conference, which opened in Tehran on Tuesday.

Jensen was in Iran for a two-day visit, heading a 120-strong business delegation made up of representatives of 58 top Danish companies active in the fields of energy and clean technology, transportation, health, agriculture, food, banking, and maritime and port infrastructure.

This is one of the largest foreign trade delegations to visit Iran following the historic July 14 nuclear deal reached between Iran and world powers, as part of which sanctions against Iran are soon to be lifted in exchange for the country limiting its nuclear program.

According to Jensen, cooperation between Iran and Denmark dates back to the 1930s, when the Danish Kampsax Company built the Trans-Iranian Railroad, laying down 1,000 kilometers of tracks from the Persian Gulf to the Caspian Sea.

The company also established Iran’s very first dairy factory 40 years ago. Now, with domestic factories equipped with Danish dairy machinery and equipment in more than 80 cities, Iran has not only stopped cheese imports for years, but it is also a major exporter of this dairy product to regional countries.

The Copenhagen-based FLSmidth Company, a provider of global cement and mineral machinery and services, has also undertaken development projects in Iran worth billions of dollars over the past decade.

Annual bilateral trade rose from $70 million in 2000 to more than $230 million in 2005. The implementation of western sanctions against Iran, however, slid the figure back to less than $180 million, with Danish exports to Iran accounting for more than 80% of the mutual trade.

Denmark’s main exports to Iran are industrial machinery, chemicals, medical devices, pharmaceuticals and electronics. Iran's exports to the European country are hand-woven carpets, handicrafts, agricultural products, minerals and chemicals, construction materials, petrochemicals and caviar.

“Our countries currently face similar challenges. We must ensure continued economic growth and prosperity for our people. And the only solution to that is establishing a strong partnership and strong trade ties between our two countries, which is by nature a truly win-win process,” Jensen said.

“Iran is a very attractive market and a significant player in the Middle East. With a 78-million population, it is already the second-largest market in the Middle East and a regional powerhouse. With the expected lifting of the sanctions, Iran’s economy is set to grow in global levels. Even with the sanctions in place today, Iran is the 18th largest economy in terms of purchasing power,” he added.

Addressing the same conference, Chairman of Tehran Chamber of Commerce, Industries, Mining and Agriculture Masoud Khansari said the current Iran-Denmark trade value does not reflect the two countries’ enormous potentials.

“Iran has a large population, abundant energy and mineral reserves, low energy costs, strategic location in the region and skilled and educated workforce are some of the advantages for investment and trade in the country,” he said.

"Iran can benefit from Denmark’s developed and advanced infrastructure and its powerful economy in the post-sanctions era."

Oil, gas and petrochemical industries, modernization of cement industry, manufacture of medical equipment for treatment of special diseases, academic cooperation, construction of wind turbines and sea transportation are some of the potential fields for Iranian-Danish tie-up.

Noting that Iran shifted to East Asian countries during the sanctions years as its main trade partners, Khansari said Iran is now ready to turn to the West.

“TCCIMA, as Iran’s largest private sector organization, is ready to provide Danish firms with any services they may require, ranging from hosting business meetings to consultations,” he said.

Late in 2015, Danish pharmaceutical giant Novo Nordisk signed a memorandum of understanding with Iran’s Health Ministry to build a €70 million ($78 million) manufacturing plant in Iran.

Novo Nordisk has been manufacturing in Iran through a local partner since 2002, serving about 700,000 Iranian diabetics through its manufacturing partnership. However, the latest plan would see the first among giant pharmaceutical firms to set up its own factory in Iran.