Mohammad Reza Nematzadeh, the Iranian minister of industries, mining and trade, officially broke ground on an annual 50,000-ton tire plant in the southeastern Iranian city of Zabol earlier this week.
Located in the eastern Sistan-Baluchestan Province, the Arya Hamoon Tire project is one of the four greenfield tire projects pursued by the Iranian government. It is led by the Industrial Development and Renovation Organization, Rubber News reported.
The plant will be set up in Ramsar Industrial Zone in an area of 50 hectares and is expected to create 1,400 jobs upon completion.
The plant will produce 25 kilotons per year of passenger car and light truck tires and heavy commercial vehicle tires for both local and regional distribution.
Unlike the other three projects, wherein IDRO has a 19% share in the joint venture with the private sector, it is completely owned by IDRO, mainly because of the lack of interest from local investors.
Reza Allahyari, the head of IDRO’s industrial operation projects, said a tender had been held for the project, with 19 companies placing their bids to carry out the engineering, procurement and construction works of the plant.
“Eight of the companies are Iranian, eight are Chinese and three are European,” he said.
Allahyari noted that any winning contractor will have to procure 25-30% of the project from local resources. In addition to that, they will definitely have to procure the main machinery from European sources.
“When we were drawing up the tender documents, the state of Iran in terms of sanctions was not clear and we came up with two provisions. We said each bidding party could place two bids, onewith mainly Chinese suppliers and one with mainly European suppliers,” he added.
The official also said the bidders can give us the best they can provide in two scenarios.
“They will have to provide an international financier, which will provide part of the funding for the project, along with the Iranian Industry and Mine Bank,” he added.
According to Allahyari, among the European companies that have held negotiations with IDRO are VMI and HF, while China’s Mesnac and Double Star have also talked with the company.
“We even had some talks with Pirelli, but it looks like because they are in a transition point with their Chinese buyers, they are not ready to get engaged,” he said.
