Economy, Business And Markets

Iran’s Cake Business Delectable Despite Challenges

Iran’s Cake Business Delectable Despite ChallengesIran’s Cake Business Delectable Despite Challenges

Supermarket and chain store shelves are nowadays filled with a variety of cakes and cookies, and this is an indication of the diversity of production.

More than 100 industrialized and semi-industrialized production units of all shapes and sizes are active in Iran, yet the number of renowned brands does not exceed 10, the Persian daily Forsat-e Emrooz reported.

“Investments in the cake and cookie industry can significantly contribute to creating jobs and added value, and increasing money circulation in the country,” said Jamshid Maghazei of Iran’s Association of Confectionary, Chocolate and Biscuit Industries.

He added that the raw material for the business is widely found in the country.

“If the basic grounds for export, including proper transportation system and suitable and facilitating regulations are provided, we can become a production hub in the region and help increase the country’s non-oil exports,” he said.

The official said producers in the field make use of the latest technology and machinery to produce goods, and produced about 1.4 million tons of confectionary, biscuits and chocolates.

“Consumption of these goods in Iran is high and therefore, investments will produce lucrative results. In the past few years, we managed to enhance the quality of our products. Some five years ago, cakes produced in the country had a maximum shelf life of 45 days. Now, however, the shelf life of our products is almost 5 months, which indicates that the technology used is up-to-date,” said Maghazei.

  Trade Obstacles

According to the official, business owners in the field face many problems, including restrictive regulations and smuggling.

“Many have invested in the industry and have created jobs, yet they are worried about the future of their business. This, in the long run, will damage the industry,” he said.

The amount of goods smuggled into the country, especially from Turkey, is increasing. This has caused a lot of problems for producers and some have failed to rise up to the challenge and therefore, closed their business.

“Close to 60,000 people are directly employed in the industry and if smuggling is not dealt with, their jobs would be at risk,” he said.

Maghazei noted that there is a variety of high quality raw material in the country and the industry is almost self-sufficient in this respect.

“The high added value of such products can work to the benefit of the country’s economy. The region’s $1 billion market is for us to conquer provided support is granted to production and exports. At present, high quality Iranian cakes and cookies are exported to 65 countries,” he said.

Farrokh Dariyan, CEO of Namnik Company that produces cakes and cookies, said the industry is more than 90% dependent on imported machinery and equipment.

Dariyan believes that a big problem in the way of exports is the bad reputation of some Iranian products brought on by the unprofessional products of unlicensed businesses.

“These producers take advantage of the legal loopholes, produce low quality goods and export them to the regional markets. Some 500 containers of such goods, for instance, are exported to Afghanistan every month with no supervision over the process. This would not reflect well on us,” he said.

Another issue making exports difficult, he said, is lack of a reliable transport system via land, rail or sea.

“These products have production and expiry dates, which make proper transport vital,” he said.

Dariyan criticized the unsatisfactory conditions of commercial contracts Iran signs with other countries. He added that Iran’s Chamber of Commerce, Industries, Mines and Agriculture and government officials are unable to work to the advantage of domestic producers while signing contracts.

“For example if we want to export goods to Iraq, the Iranian truck has to be unloaded at the border and the goods must be transferred to an Iraqi vehicle since Iranian trucks are not allowed in that country. This damages foodstuff and imposes extra expenses on the exporter,” he said.

“This is while Turkish trucks can enter Iraq and do their business, which shows the Turkish government supports its producers in the destination markets.”