Economy, Business And Markets

Dutch Firm Makes 1st Post-Sanctions Investment

Dutch Firm Makes 1st Post-Sanctions Investment Dutch Firm Makes 1st Post-Sanctions Investment

Dutch firm Barentz International is the first foreign company to actually invest in Iran after the lifting of western sanctions against the Islamic Republic.

The International Atomic Energy Agency confirmed last Saturday that Iran has been complying with its side of the deal to limit its nuclear program as per the July 14 deal between Tehran and the world powers. The UN agency’s announcement officially marked the end of sanctions regime.

Barentz International–active in the production and distribution of raw materials for food, animal nutrition, pharmaceuticals, cosmetics and healthcare–has already established its Middle East branch called Barentz Middle East in Iran’s Alborz Province in the form of a 50:50 joint venture with a private Iranian firm Future Way Holding.

The company, according to the governor general of Alborz Province, Seyyed Hamid Tahaei, will act as a bridge for the supply of goods between Iran and other countries.

“In the first cooperation stage, the company will supply raw materials to Iranian pharmaceutical, food, health and fodder companies. It will also help with the export of Iranian food and herbs such as saffron and licorice,” Tahaei was quoted as saying by our sister publication, the Persian weekly Tejarat-e Farda.

“Iran will act as a distributor of Barentz products in the Middle East, paving the way for the transfer of commercial, management and manufacturing expertise in the next stages of cooperation.”

Transfer of knowhow, according to Ali Sabetian, the owner of Future Way Holding, is one of the most important benefits of his company’s collaboration with the Dutch firm.

“This is a partnership in the fields of commerce, research and manufacturing,” he wrote in Tejarat-e Farda. “Therefore, this joint investment, besides the inflow of capital into the country, will lead to transfer of expertise in those fields.”

Sabetian noted that the partnership will also stabilize the supply of raw materials to domestic industries, which will in turn lead to the manufacture of high-quality domestic products.

“The Netherlands is a transit and transportation hub in Europe,” he said. The Dutch port of Rotterdam is the biggest port in Europe and Amsterdam’s airport is one of the largest in the continent.

In 2014, Dutch businesses made $35 billion worth of foreign direct investments overseas. Now they are set to promote foreign investments in Iran as well.

Early October, a 14-member delegation from the European country led by Jan Simoness, the head of the country’s Trade Development Council, visited Iran and met with the head of Iran Chamber of Commerce, Industries, Mines and Agriculture, Mohsen Jalalpour.

At the meeting, the Dutch official highlighted the advantages of the Iranian market, including the country’s proximity to key regional countries, including Russia, the great potential of its workforce and low production costs.

The two sides signed a memorandum of understanding on easing interaction between their private companies and exchange of economic information.

Tehran and Amsterdam also signed an MoU on cooperation in the agricultural sector in late November, which included development of greenhouse cultivation, genetic modification of crops, high-efficiency irrigation, food processing, marketing and distribution.  

The MoU was signed in a meeting between Iran’s Minister of Agricultural Jihad Mahmoud Hojjati and Dutch Minister of Economic Affairs Henk Kamp in Tehran.

“We are ready to cooperate in the production, export and import of vegetables, potatoes, flower seeds, dairy products, poultry and seafood,” Kamp said during the meeting.

The Netherlands is the second-largest exporter of agricultural products in the world after the United States. Agriculture accounts for 20% of the country’s €400 billion annual trade.

Last Iranian year (ended March 20, 2015) saw trade between the two countries reach $1.57 billion. Iran’s imports from and exports to the European country constituted $1.51 billion and $69 million respectively.