Economy, Business And Markets

German Firms Interact With Iran’s Machine Tools Industry

Energy Desk
German Firms Interact With Iran’s Machine Tools Industry
German Firms Interact With Iran’s Machine Tools Industry

Germany is taking steps to reassert its stamp on Iran’s sanctions-hit economy through the first-ever edition of AMB—a specialized exhibition for the machine tools and metalworking sector—which opened in Tehran on Monday.

The two-day “AMB Iran 2016” has been organized by the German Machine Tool Builders’ Association (VDW) and Messe Stuttgart International, a leading German trade fair organizer.

Bernhard Muller, vice president and member of the board of Messe Stuttgart, described AMB Iran as a key event to bring Iran up to speed with advanced European knowhow.

“Messe Stuttgart has invited the Iranian metalworking community for business-to-business meetings with European companies offering the products they need,” Muller told Financial Tribune.

“A big demand of Iranian firms is transfer of knowhow. We have brought international experts to introduce state-of-the-art technologies in the metalworking industry.”

The company’s chief added that Iran has suffered from a lack of technology under the sanctions regime, but the market is now open and ready for business.

“Initially, we are delivering the content and hopefully orders will follow,” he said.

Muller said Iran has yet to fully recover from western sanctions, partly blaming the slowdown in the economy on bans against certain equipment and technology.

“Metalworking industry, especially machine tools, is a crucial sector. However, some machines are still under the shadow of sanctions because the so-called dual-use problem is still in place. But we are hoping for progress,” he said.

Despite the easing of sanctions in January, Iran is still barred from gaining access to an array of commodities due to their purported use in the nuclear sector.

Muller underlined impediments to Iran’s full integration into the global financial system as the biggest stumbling block for Messe Stuttgart and other international exhibitors keen on operating in Iran.

AMB is a biennial trade exhibition traditionally held in Stuttgart—Germany’s manufacturing hub and home to the headquarters of Mercedes-Benz and Porsche, among other giants.

Europe’s largest economy has jumped at the opportunity of Iran’s rapprochement with the West to reinforce its position in Iran’s burgeoning industry.

“We see the opportunity to hold a large-scale metalworking show next year,” Muller said.

AMB Iran 2016 marks a turning point for Iranian companies exploring grounds for trade and cooperation with Europeans and getting a taste of advanced technologies in the metalworking industry in a symposium held on the sidelines of the main event.

  Proven Track Record

Klaus-Peter Kuhnmunch, director of general affairs for VDW, said Germany is taking preliminary steps to regain its foothold in Iran, which was once a hugely rewarding market for German businesses.

“Iran is basically a great market. Back in the 1990s, Iran was a huge market for the German machine tools industry, but our business stopped after sanctions were imposed. But we are very optimistic … That’s why VDW is organizing AMB … We have so many German firms lining up for the Iranian marketplace,” Kuhnmunch told FT.

“They [German firms] mean business, but the show is a very first step to reenter the market. It’s a very good opportunity to get up close and personal with Iranian companies, study the market and explore potential customers.”

The official also touched on Germany’s proven track record in Iran’s industry.

“Many companies already know the Iranian market, but due to sanctions, they had no chance to get into business. They know the market and want to move on. But we are moving step by step,” he said.

  Bridging the Gap

Fadi Kaddoura, managing director of Nojan Pooyan, who coordinated the organization of AMB Iran as a local partner, underscored the potential for business between Iran and Europe.

“We saw the opportunity that we could act as a link between a slew of Iranian shows and international businesses looking to break into Iran’s business sector,” he said.

“A lot of international players are vying to be part of Iran’s booming industry and marketplace in the post-sanctions period.”

Nojan Pooyan was established following the July 2015 signing of the historic nuclear accord between Iran and world powers to bridge the gap between international businesses and the Middle East’s second-largest economy.

Preparations for AMB Iran started before sanctions against the country were lifted.

“They knew that sanctions would be lifted shortly and that it was only a matter of time and small details. They got in touch with us and said they wanted to do this show in Iran,” Kaddoura said.

“Over the past few months, we reached out to Iranian machine manufacturers’ associations, including those in Tehran, Mashhad, Isfahan, Qom, Qazvin, Karaj and Yazd. Everyone’s so excited.”

This is the first edition of AMB in Iran. The organizers expect a much more successful show next year by forging interactions with industrial players from Europe, Middle East and North Africa.