Economy, Business And Markets

Industry Minister Names Leading Industries

Industry Minister Names Leading Industries  Industry Minister Names Leading Industries

The minister of industry, mine and trade has described the auto, home appliance, steel, cement and food sectors as the country's leading industries.

The auto industry registered an average of 65% growth during the 11 months of the past Iranian calendar year (ended March 20) compared to the similar period a year earlier, Mohammad-Reza Nematzadeh told Eghtesad News, adding that during the first few months of last year, the auto sector grew between 90% and 95%.

"Since the auto sector has the largest share in the economy (around 19%) among different industries and considering the fact that it mobilizes a multitude of downstream industries, we have decided to introduce measures to boost the auto manufacturing sector in order to further increase the share and prop up the downstream industries," the minister remarked.

Other leading industries, according to Nematzadeh, include cement and steel, each recording 7.2% growth over the same 11-month period. The minister said both sectors could have experienced higher growth had they not been faced with two main obstacles.

"Due to insecurity in Iraq, many projects there were left unfinished, which dramatically decreased cement and steel exports to the neighboring country. This is while Iraq used to be a prime export market for Iran," the minister pointed out as the main reason behind lower-than-expected growth in the two sectors.

Yet another reason was the government's policies towards the unfinished development projects. After the incumbent administration came to power in August of 2013, it inherited a series of economic ills including budget deficit and skyrocketing inflation. Therefore, the cabinet decided to allocate development budgets only to the projects with physical progresses of above 80%. Naturally, such projects neither needed cement nor steel as they were in finishing stages and the domestic consumption of steel and cement subsequently decreased, Nematzadeh explained. He also referred to the global decline in oil prices as another contributing factor to the downturn in the steel sector.

The minister said that the home appliance sector experienced at least 25% growth during the 10 months of the past Iranian calendar year, adding that the steady growth in the sector could both fulfill the households' needs and reduce imports.

"The volume of home appliance imports suggests that domestic demand is high. Increasing production and diversifying the products can work to meet domestic demand while at the same time boost exports," he noted.

According to Nematzadeh, the food sector is also among the industries with good domestic and export markets. The sector employs approximately 328,000 people or 16.1% of the entire industrial sector workforce. Iraq, Afghanistan, Turkmenistan, Tajikistan, Russia, Ukraine, Belarus, Pakistan, Saudi Arabia, Kuwait, and the United Arab Emirates are among the regional countries with huge demand for Iranian agricultural and food products.

Finally, the industry minister referred to the construction materials and petrochemical industries and said: "Despite the western sanctions, export of tile and ceramics grew by 20% last year, while the production of polymers experienced the same growth," noting that petrochemical companies have the potential to help boost downstream industries.