Economy, Business And Markets

French SMEs Scour Tehran for Business Opportunities

Business & Markets Desk
French SMEs Scour Tehran for Business Opportunities
French SMEs Scour Tehran for Business Opportunities

Ever since the lifting of sanctions imposed on Iran over its nuclear energy program and the reopening of the country to the international community, Tehran has been buzzing with representatives of foreign companies eager to tap into the lucrative Iranian market.

Tehran’s Homa Hotel was filled with foreign and domestic players on Wednesday afternoon, as a French delegation of reps from over 25 small- and medium-sized enterprises were making the most of the last leg of their three-day visit, finalizing business deals in various sectors with their Iranian counterparts.

“Growth is not in France anymore. It is in other markets, such as Iran,” Pierre-Jean Baillot, the International Mission director of the General Confederation of Small- and Medium-Sized Enterprises (known by its French acronym CGPME), told the Financial Tribune.

CGPME is the French federation for SMEs and a representative of the European country’s private sector. Established over 60 years ago, it strives to represent the interest of its 100,000 members by offering services such as exploration of frontier markets.

“The main objective of this delegation was first to discover the country and get to know the business environment,” Baillot said, adding that French companies found Iran’s business climate to be warm and accepting, which only backed up their initial enthusiasm for entering Iran.

“For only three days, it has been very short and very fruitful.”

The visiting delegation comprised of representatives of companies operating in the food industry, manufacture of industrial equipment, biotechnology, infrastructure development, economic information and analysis, petrochemicals, agriculture and industrial services and solutions.

“We are not only focusing on exports to the Iranian market, as some of the companies present here are looking forward to co-invest in Iran and transfer technologies to the country,” he said.

Baillot emphasized that a number of firms are also willing to set up shops in Iran and start production.

The French official described concluding talks on joint investment in the field of services for food industry as one of the delegation’s biggest achievements.

He also said CGL, a company active in the production and rental of equipment for construction and transportation industry, has toured Bandar Abbas Port, located in Hormozgan Province, to survey the port’s infrastructure.

CGL is interested in facilitating transportation and offering services for exports and imports of Iranian and French goods.

He noted that the visiting companies will be back before the yearend to finalize their deals.

> Potential in Construction Sector

The potential in Iran’s construction sector was brought into the spotlight by Georges Jacob, vice president in charge of international relations of Pole Innovations Constructives.

According to Jacob, despite the prevailing recession in Iran’s construction sector, demand for construction material, technology and design is going to pick up in a few years, which will provide French companies with ample opportunities to operate in Iran.

“I saw a lot of buildings and projects here that were left unfinished, which is a great opportunity for cooperation between Iranian and French companies. I hope to soon bring some of our architects here to see what they are able to propose,” Jacob said.

PIC is a cluster of CGPME, made up of about 110 companies. The organization’s aim, according to Jacob, is to provide Iran’s construction sector with technological innovations.

The organization was established about eight years ago, when big names in the French construction sector, such as the world-class Lafarge and several other SMEs came together. It brought about a synthesis among the construction giants, SMEs and France’s leading schools of architecture to zoom ahead with technological advancements.  

“I believe Iran can do the same, as you have very good schools of architecture here and you also have big companies on board. Your big companies can help the SMEs grow, which is the real way to move towards new innovations in construction,” Jacob said.

Sernin Marichal, the president of SCMR Export Company, also underscored Iran’s post-sanctions potential for trade in an interview with Financial Tribune.

“When we first got here, unbelievably, we saw an Iran that was a new Europe. This is while we had tried for many years to discover and enter the Iranian market but had always faced obstructions due to the sanctions,” he said.

SCMR is a provider of raw materials in various industrial sectors. The company, with 47,000 workforce and a turnover of €1 billion operates in France, Italy, Belgium, Luxembourg, the Netherlands, Poland, Romania and Algeria, according to Marichal.

He added that the agreements they had reached with their Iranian counterparts during the three-day visit was a testament to the French companies’ optimism about the Iranian market.

Marichal named Shazand and Jam petrochemical companies, MABNA Group, Yazdpoolica Industries Company and Supplying Petrochemical Industries Parts, Equipment and Chemicals Company as some of the Iranian firms SCMR had reached preliminary agreements with.

France has been active in trying to resume ties with Iran in the post-sanction era, with French businesspeople regularly traveling back and forth. Even before sanctions were officially lifted in January 2016, the European country sent a large delegation of some 150 enterprises, including big names like Total, Airbus, Peugeot Adepta and Veolia, to Iran, led by Foreign Trade Minister Matthias Fekl and Agriculture Minister Stephane Le Foll late September.

The Business France office was opened in Tehran during that visit with the aim of promoting and facilitating bilateral trade.

Tehran, too, has been eagerly seeking to establish closer ties with Paris, as evident in President Hassan Rouhani's France visit a few days after the removal of sanctions. An agreement worth over $25 billion with Airbus to purchase 118 passenger jets was signed there.

Apparently, the two countries are set on reviving mutual economic exchanges that fell from $4.5 billion in 2004 to $565 million in 2013, courtesy of anti-Iran western sanctions.