Domestic Economy

Singapore’s Largest Business Mission to Middle East in Iran

Singapore’s Largest Business Mission to Middle East in IranSingapore’s Largest Business Mission to Middle East in Iran

A 57-member delegation, including representatives of 48 companies from Singapore, arrived in Tehran on Friday in what is billed as "Singapore's largest business delegation to the Middle East".

The visit is jointly organized by business chamber Singapore Business Federation and the city-state’s trade promotion agency International Enterprise Singapore, and is led by the Minister for Trade and Industry S. Iswaran and Chairman of SBF Teo Siong Seng.

Companies represented are from the offshore oil and gas, petrochemicals, maritime, ports and logistics, real estate, infrastructure and tourism, info-communications technology, professional services and general trade sectors, SBF news portal reported.

Besides meetings with Iranian officials, the delegates are scheduled to visit Iran's major shipping and regional transshipment hub Bandar Abbas during their stay from February 26 to March 3.

“The reintegration of Iran into the world economy is a bright spark amid the uncertain global outlook, especially during a period where some economies are experiencing drastic contractions,” said the SBF chairman in a statement released prior to his Iran visit.

“In contrast, some of Iran’s key industries such as oil and gas, aerospace and maritime logistics, are expanding significantly as Iran increases its capital investments in oil, gas and petrochemicals, and expands its fleet of airplanes and vessels. Iran is also expected to make substantial investments in its existing infrastructure in anticipation of growth,” the statement continued.

“SBF has identified the key sectors of oil and gas, transport and logistics, tourism (including hospitality, hotel construction and development), urban solutions, financial services, general trade and fast-moving consumer goods as areas of focus for Singapore companies, given that these are not only areas of strength for us, but also where complementary needs can be met."

It is also heartening to note that 43 out of the 48 companies on the business delegation are small and medium enterprises. These companies have set their sights further ashore to explore new opportunities in new markets, while also suggesting that emerging markets are not limited to the bigger players.

A representative from the business mission, Zhennan Low, deputy managing director of S.J. Low Bros & Co Pte Ltd, said, “With many markets in the world already opened, Iran is one of the few countries left that offers a myriad of opportunities as compared to other exposed markets. Iran will be an extension of the region we cover under Central Asia. We hope to find long-term partners and suppliers whom we can work with on food distribution in Iran during this trip. Since this is our first experience in Iran, we are keeping an open mind, but so far we have heard positive comments about the people and doing business there.”

The last SBF business mission to Iran took place in January last year, which witnessed the renewal of its decade-old memorandum of understanding with its counterpart, the Iran Chamber of Commerce, Industry, Mines and Agriculture.

Last month, Singapore reversed its prohibition on transactions with the Iranian government and financial institutions, following the announcement by international inspectors that Tehran had complied with the terms of last July’s landmark deal to scale down its nuclear program.

The ban had been in force since June 2012 and was applied to all financial institutions and individuals, effectively preventing them from doing business with the Iranian government, Central Bank of Iran, financial institutions and their affiliates, reported.

Sanctions had stopped financial institutions in Singapore from, directly or otherwise, entering into, continue to participate in, arrange or facilitate any transaction or business relationship with Iran.

In January 2012, Singapore's Foreign Ministry encouraged local firms to take note of the United States' tight sanctions against individuals and companies dealing with Iran, although the US sanctions went beyond United Nations rulings and are not enforceable within the city state itself.

Singapore is a major oil trading and refining hub with about 1.3 million b/d of refining capacity and the oil industry makes up 5% of its GDP. It is also the world's top bunker fuel market by volume and relied on Iran for 6% of its total fuel oil imports between 2007 and 2011.

After more than a year of no reported imports from Iran, fuel oil began flowing again into Singapore in April 2012. Before that, Singapore imported 362,448 tons of fuel oil from Iran in the week ended February 9, 2011.

The 10 months ending January 20 saw Iran’s exports to and imports from Singapore stand at more than $8 million and $452.5 million respectively. Main non-oil imports from Singapore were livestock feed, palm oil, soybeans, wheat for animal feed and soybean meal. Pistachio, zinc and bitumen were Iran’s top exports to Singapore.