Economy, Domestic Economy

S. Korean Firms Revving Up to Enter Iran Market

S. Korean Firms Revving Up to Enter Iran MarketS. Korean Firms Revving Up to Enter Iran Market

In preparation for the end of economic sanctions on Iran in the first half of next year, South Korean firms are shifting their focus to the huge Iranian market. This is because the country will commission many projects to build massive infrastructure when the sanctions are lifted and its consumption market recovers.

According to KOTRA, South Korea’s state-funded trade and investment promotion organization on October 19, Korean companies, mainly construction and general trading firms, are actively reestablishing their branch offices in Tehran. Some of them are also increasing the workforce in the headquarters for business in Iran, according to Business Korea.

Construction and engineering companies, which have the ability for design engineering, procurement and construction, are most enthusiastic. Once the sanctions are lifted, the Iranian government will place orders worth $160 billion for the construction of gas refinery plants and power plants.

Hyundai Engineering & Construction has started its activities to win orders after reopening its office in Tehran this month. The company, which carried out the South Pars Gas Field development project in Iran in the past, closed down its subsidiary after the imposition of sanctions against the country. However, it has recently increased the workforce related to orders in Iran.

An official from Hyundai E&C said, “We are planning to send out more workers to Iran, including the regional director.”

Trading firms have also got busy. They are expecting to see more business opportunities not only in trading raw materials, but also project organizing.

GS Global, which closed down its local office in 2006, is currently going through the licensing procedure for branch establishment in Iran, and expecting to receive approval within the year. The company is aiming at the plant construction business, along with its subsidiaries, GS Engineering & Construction and GS Entec.

SK Networks, which used to trade raw materials in Iran, has also increased the number of workers at the branch office, while Daewoo International and LG International are strengthening the monitoring systems.

Iran-South Korea trade reached $17.4 billion in 2011, but it fell sharply after the imposition of sanctions. Accordingly, the figure stood at $8.7 billion last year.