Economy, Domestic Economy

German Companies Hope for Bonanza in Iran

German Companies Hope for Bonanza in IranGerman Companies Hope for Bonanza in Iran

Iran has enormous pent-up demand for the modernization of its infrastructure.

Roads, water and power lines as well as housing badly need to be upgraded, which offer an opportunity for foreign investors, especially from Germany, Germany’s state-run international broadcaster Deutsche Welle reported.

More than a decade of tough western sanctions over Iran’s nuclear energy program has taken their toll on the Iranian economy.

For the Iranian Chamber of Commerce, Industries, Mining and Agriculture, the biggest headache is the outmoded manufacturing plants. That means companies are not able to compete in the global market. But it’s an opportunity for foreign investors.

“Iran faces serious problems with regard to the environment and water, and we must do something about it very fast. Meanwhile, there are a lot of opportunities here, including educated and skilled manpower,” Mohammad Karimipour, an ICCIMA official, said.

At one of Iran’s biggest dairies, German-made machinery pack cheese slices. The plant has been in operation for about 15 years. It has been difficult to keep plants like this going even if they did not come under international embargo.

Due to the sanctions, Iran was cut off from the global funds transfer system. That made it almost impossible to purchase expensive equipment and spare parts.

Amir Sotoudeh, regional director of German manufacturer of packaging solutions Multivac continued to provide Iranian customers with parts for the raging machines despite the sanctions.

Providing this service did not make any money for Multivac, but Sotoudeh thinks his company has good chances to win back its old customers and gain some new ones.

“We believe in the future of the Iranian market. Iran has a big population of more than 75 million, a young generation and so many quality food factories that look for quality equipment,” he said.

Before the sanctions went into effect, Germany was Iran’s biggest trading partner and German products have retained their good reputation there. “Germany is a leader in technology, machinery and industry, and those are the areas that we are in need of. Meanwhile, there is a good and long history of cooperation between the companies of the two nations,” Karimipour said.

But there is tough competition. Shakelli Dairy Company gets plenty of offers from Chinese and Turkish companies. They have been quick to fill the gaps while German suppliers had to bow out due to the sanctions.