Economy, Business And Markets
0

Turkish Firm to Invest €70m in Qazvin Venture

Business & Markets Desk
This is the second largest foreign investment made in Qazvin in 2017 and the first investment made by AGT in a foreign country
Iran mostly imports core boards from Thailand and Malaysia, and the covers from South Korea and assembles them in domestic factories.Iran mostly imports core boards from Thailand and Malaysia, and the covers from South Korea and assembles them in domestic factories.
The Turkish investment will be accompanied by technology transfer

As per a memorandum of understanding signed by director general of Turkish company AGT, Sirzat Subasi, and that of Qazvin Industrial Parks Company, Hamidreza Khanpour, the Turkish side will invest €70 million in building a factory producing engineered wood, including MDF, MF-MDF, panels, profiles, parquets and different types of floorings in the Iranian province's Caspian Industrial Zone.

"The project will be carried out in three phases. About €45 million worth of investments will go into the completion of the first phase. The second and third phases will be completed within the next three years," Khanpour told Financial Tribune in an interview.

The first phase, the official explained, will create 70 jobs and when completed, the project's generated employment opportunities are estimated to rise to 300.

"The MoU was signed on June 22 and last Wednesday, the Turkish side paid a visit to the industrial zone, during which the 11-hectare plot of land chosen for the project was handed over to them," he said.

Khanpour noted that the MoU is significant for both sides.  

"This is the second largest foreign investment made in Qazvin in 2017 and that's why it's important to us. Moreover, it is the first investment made by AGT in a foreign country, making it significant for them," he added.

Established in 1984 in Antalya, AGT is active in the construction industry with its production of flooring, door, wall panels and baseboard, and in the furniture and decoration sector with its production of MDF, MDF-LAM Panel, and Profile. It has more than 1,000 employees and over 1,000 sales outlets in five continents.

The official noted that the investment will be accompanied by technology transfer.

"The Turkish company has a 60% share in the Iranian market for these products (engineered wood). Therefore, in order to keep their market in Iran and reduce their costs, they have decided to construct a factory in the country. Qazvin was chosen due to its strategic location and its proximity with the capital, Tehran. Moreover, the availability of required infrastructure was taken into account in selecting the factory's location."

> Domestic Industry Perceives Threat

Hassan Mohammadi, the head of Iran's Employer's Guild Union of Synthetic Covers, Particle Board and MDF, does not seem very happy with AGT's project in Iran.

Noting that the Turkish company has a 40% share of the Iranian market at most, he said, "There are over 1,000 firms active in the cellulose industries in Iran. The activity of AGT in Iran can interfere with the domestic MDF and particle board business."

The official added that some 25 companies produce MDF and particle board in Iran, the productions of which are not of high quality, and therefore, they are not very popular in the market.

"What we mainly do in Iran is to import the core boards from Thailand and Malaysia, and the covers from South Korea and assemble them in our factories. Last Iranian year (ended March 20, 2017), we imported 1.1 million cubic meters of MDF worth around $275 million," he said.

Mohammadi said the machinery for the industry are mostly imported from Germany and China, and domestic machinery production is at a very small scale.

Add new comment

Read our comment policy before posting your viewpoints

Financialtribune.com