Seoul has done its best to lay a strong foundation for a prospective increase in trade and investment projects with Iran. It has convinced Tehran about its intention of being a reliable trade partner that does not willingly participate in the aggressive foreign policy of western states. Indeed, it was only after intense US pressure that Seoul succumbed and imposed sanctions on 126 Iranian companies, as part of the UN Security Council’s resolution against Iran’s nuclear energy program.
A series of recent events indicates that Seoul has one of the strongest business connections with Tehran from which they stand to profit from when the sanction are lifted.
Iran is currently South Korea’s third biggest export partner in the Middle East and over 20 South Korean companies operate in the country.
Car production and exports are some of the most outstanding areas where South Korea wants to play a more prominent role. Seoul has always remained active in Iran, even during the Iran-Iraq War when many other car producers left the country, giving it a prized advantage over European and American car manufacturers. Not only have Hyundai cars increasingly populated Iran’s affluent neighborhoods, SAIPA’s assembled KIA car, the Pride, is one of the most ubiquitous cars in the entire country and has been produced since 1993. Recently, Hyundai expressed its interest in opening a manufacturing belt in the Caspian Sea port city of Anzali, with the aim of using the facility to export easily to former Soviet states.
Another market that Koreans are eager to enter is Iran’s infrastructure and construction industries. Before the enactment of sanctions, Iran was Korea’s sixth largest market in terms of orders won by South Korean builders.
Last week, the Korean Minister of Land, Infrastructure and Transport Yoo Il-ho arrived in Tehran at the head of a 30-member business delegation.
“South Korea can cooperate with Iran through financing infrastructure projects and providing services for development of road and transport projects,” Yoo’s Iranian counterpart Abbas Akhoundi told a press conference after the meeting.
DOHWA Engineer Company is in advance talks to build a new residential complex in the southeast of Tehran, which will house thousands.
South Korea also wants to play a crucial role in Iran’s steel industry, the largest in the Middle East, as shown by the extensive talks between Korean steelmaker POSCO and several Iranian firms on possible cooperation.
Yoo’s trip also laid the basis for Korean firms to enter Iran’s household appliances market.
“As Iranians are one of the main customers of Korean household appliance brands, Korean companies can launch production lines of these products in Iran,” said deputy minister of industries, mining and trade, Valiollah Afkhamirad.
Korea’s export credit agency Eximbank pledged in July to increase its financial support to firms entering Iran’s market. In a recent high-level meeting with Iran, Korea has also discussed insurance coverage for Iranian projects by South Korea’s state insurance companies.
According to Iranian official, insecurities in Iraq and other regional countries on the one hand and the success of the nuclear deal on the other have resulted in the return of Koreans as Iran’s old foreign partner in the areas of transport and infrastructural projects.
