Domestic Economy

Iranian, Belgian Ports Strike Up Trade Alliance

Business & Markets Desk
Iranian, Belgian Ports  Strike Up Trade Alliance
Iranian, Belgian Ports  Strike Up Trade Alliance

Belgium’s Antwerp Port Authority signed a memorandum of understanding on Monday with Shahid Rajaie Port Authority, located in Iran’s southern Hormozgan Province.

The MoU has been agreed to run for five years and was signed by Eddy Bruyninckx, the CEO of Antwerp Port Authority, and Ebrahim Idani, the head of Iran Port and Maritime Organization's Hormozgan Department, in the presence of PMO chief, Mahmoud Saeednejad, in Tehran.

The visiting Belgian delegation accompanying Bruyninckx comprised representatives of 12 companies active in the field of transit and logistics and was joined by Belgian Ambassador to Iran Francois Delhaye.

"Today we are restoring our trade ties with Iran, a country with great economic growth potential that is also a gateway to neighboring countries. Antwerp is perfectly situated to contribute to further trade with this country,” Bruyninckx told a press conference held at PMO’s headquarters in Tehran.

“We are together again and the future is bright,” he added.

Up until 2010 when western sanctions were imposed against Iran over its nuclear program, Antwerp was the most important European port for Iranian cargos.

After a gap of years, the Islamic Republic of Iran Shipping Lines Company returned to Antwerp with the first container ship since sanctions were lifted back in late 2015.

According to Bruyninckx, not only container traffic but also break-bulk and bulk freight are expected to expand rapidly in the next few months.

"The MoU is meant to indicate the potential cooperation areas and the two ports’ mutual interests. It can be followed by sharing knowhow and eventually identifying cargo flows to streamline trade ties. We are going to install an evaluation committee in Shahid Rajaie Port to organize the follow-up of things,” the Belgian official told Financial Tribune.

Bruyninckx added that the impact of the lifting of sanctions can be already felt, as trade volume between Shahid Rajaie Port and Port of Antwerp for the first four months of the current year already equals the two ports’ aggregate performance for last year.

The lifting of sanctions allowed many shipowners to return to normal trade, as the US removed 606 vessels and vessel aliases from the sanctions list, from crude oil tankers and dry bulk carriers to supply vessels.

“Some practical difficulties remain, however, such as banking relations,” he said, noting that these impediments must be overcome for everything to resume sooner.

Under the terms of the MoU, the respective port authorities of Antwerp and Bandar Abbas will join forces so that companies in both ports can collaborate and develop trade between Iran and Belgium.

This involves, among other things, exchanging information and statistics, participating in joint port development projects and collaborating in the field of workforce training.

With its training subsidiary, APEC, the Port of Antwerp has its own institute specialized in giving all kinds of tailor-made training courses.  

Complementary Economies

The Belgian ambassador also described Iran and Belgium’s economies as complementary and said Belgian companies operating in the fields of glassware, auto manufacturing, food, pharmaceuticals, logistics and energy are eager to tap into Iran’s lucrative business opportunities.

According to Francois Delhaye, Iran is facing serious competition from all countries in the region in attracting foreign investors, and that it must do all it can to demonstrate that it is an attractive place for business.

In order to bring a number of Antwerp companies in contact with the Iranian market, Antwerp Port Authority organized a port seminar immediately after the signing of the MoU to highlight the advantages of cooperation between the Port of Antwerp and Shahid Rajaie Port.

In addition to the usual freight categories of containers, dry bulk and break-bulk, the seminar focused on the petrochemical cluster in Antwerp, the largest in Europe.

Antwerp is Europe’s second-largest seaport and ranks among the world’s top 20. The liquid bulk sector for its part accounted for 67 million tons out of the total of more than 208 million tons of freight handled in Antwerp last year.

Due to the high degree of integration in its petrochemical cluster and its advanced supply chain, Antwerp has benefited from a number of important industrial investments in the past few years that have further boosted the position of the cluster.

The port of Bandar Abbas plays an important role in the region for the supply and handling of liquid bulk and crude oil. Other local specialties include handling of steel products and dry bulk such as grain.

Shahid Rajaie Port, established in 1988, handles the bulk of Iran’s imports and exports, and is one of Iran’s most important ports. PMO has so far invested $3 billion in developing the port’s infrastructure.

The port’s container capacity currently stands at 3 million TEU and is set to grow to 6 million TEU by the end of the 20-Year National Vision Plan (2005-25).

Officials from the Port of Antwerp had previously visited Iran back in October on a contact-building mission with officials in the shipping and commercial sectors. The delegation was led by Port Alderman and Port Authority Chairman Marc Van Peel.

The group of petrochemical and shipping experts met in Tehran with various ministries, petrochemical organizations and private companies. The exploratory mission was mainly aimed at making contacts with official bodies, the Belgian port said in a statement.