Aussie Firm Signs Up for Healthy Iranian Deal

Australian natural health company Blackmores has become one of the first businesses to secure a deal to gain access to a new Iranian market of 80 million people after the lifting of sanctions on the Islamic Republic.

The company, on Wednesday, took its chance to gain access to the potentially lucrative Middle East market by partnering local firm Tasnim Pharma as part of a high-profile delegation to Tehran led by Trade Minister Steven Ciobo aimed at reestablishing commercial ties in several sectors, Aussie newspaper The Australian reported.

The delegation also includes representatives of Qantas, Cochlear, GrainCorp, LiveCorp, WorleyParsons and the universities of Melbourne and Sydney.

> "Substantial Step Forward for Exporters"

Ciobo, on Tuesday, met his Iranian counterpart, Mohammad Reza Nematzadeh, and they witnessed the signing of a memorandum of understanding to help improve transparency for Australian businesses looking for opportunities in the Iranian market.

The MoU between Australia’s Export Finance and Insurance Corporation and the Export Guarantee Fund of Iran is aimed at helping businesses navigate challenges in Iran arising from sanctions that still apply to its finance sector.

“There remain challenges around banking facilitation in dealing with Iran … I would just stress this is not a line of credit between the two agencies, so it won’t in that respect mean that commercial export finance is easier to obtain,” Ciobo said.

“It works so that you’ve got a situation where businesses can share information about, for example, an upcoming deal, so if you have an Australian exporter looking at exporting to Iran, then they would be in a situation where they are able to receive assistance in verifying, as part of a due diligence process, what circumstances are on the other side.”

Ciobo said the MoU, coupled with the Wednesday reopening of the Austrade office in Tehran, represented a “substantial step forward for exporters”.

For exporters, the Austrade office is important because it shows Australia is serious about doing business in Iran. It also helps companies feel more comfortable in an economically sensitive environment, since Iran is gradually opening for business, The Australian wrote earlier this week.

Tasnim Pharma will sell 10 Blackmores products over the coming year before ramping up to 25 products, with the Iranian company setting up a new division to manage the brand and distribution.

By signing the partnership agreement on Wednesday, Blackmores will enter the previously unavailable market for vitamins and dietary supplements in Iran that is estimated by industry to be worth at least $585 million a year.

The move will see the Australian company further expanding on its recent growth in Asia, with Blackmores CEO Christine Holgate saying Iran was considered the “largest untapped market globally” with growth “well into double digits”.

“Working with Austrade and having a strong local partner in Tasnim Pharma is a low-risk entry into a market considered very complex,” Holgate said.

Blackmores Managing Director in Asia Peter Osborne said the company would bring the benefits of its research and education arm to Iran through the Blackmores Institute, which is aimed at improving the use of natural medicine.

Ciobo said the deal was “a wonderful example of Australia exporting to the world”.

"Blackmores is Australia’s leading natural health company. Based on the vision of naturopath and founder, Maurice Blackmore (1906-77), we are passionate about natural health and inspiring people to take control of and invest in their wellbeing. We develop products and services that deliver a more natural approach to health, based on our expertise in vitamins, minerals, herbs and nutrients," reads an introduction on the website of the Australian company.

> Bilateral Trade Target: $10b p.a.

Iran is targeting to increase its bilateral trade with Australia to $10 billion, said the newly-elected president of Iran Chamber of Commerce, Industries, Mines and Agriculture, Gholamhossein Shafei, during the Iran-Australia Trade Forum on Wednesday.

At its peak, Iran-Australia trade hovered around $1 billion before nuclear sanctions slashed transactions to below $350 million.

“Such forums could be a starting point for the relations of the two countries and their business owners’ determination to make up for the past,” Shafei added.

According to the Islamic Republic of Iran Customs Administration, Iran exported $30.3 million worth of goods to Australia in the last Iranian year (March 2015-16), registering a 16% increase compared with the previous year. Imports stood at over $39.8 million, down 74%.

IRICA’s latest stats on bilateral trade pertain to the first four months of the current Iranian year (started March 20), during which period Iran exported more than 12,000 tons of non-oil goods worth $20 million to Australia, registering a 184% upsurge in value and imported  4,100 tons worth $9.7 million to record a 111% jump year-on-year.

Copper, paraffin wax, stone, carpet, dates, pistachio, raisins and saffron were among the main exports. Imports mainly included pharmaceuticals, medical equipment, ceramics, wood, machinery and paper.