The promising prospect of Iran’s nuclear negotiations with the world powers as well as recent efforts by different European countries to prepare the ground for their return to Iran as a hugely untapped market has created a new momentum among many foreign companies mostly Asians, who strive to solidify their position among the Iranian clients before a final nuclear agreement is reached.
In this respect, on the sidelines of Korea Expo 2014 in Tehran, Jin Woong Jang, LG senior brand and channel manager told Financial Tribune reporter that they have started a variety of “corporate social responsibility (CSR) activities”, “promotions”, and “customer relations programs” in Iran in order to establish stronger ties and network with Iranian market players. Jin says LG believes that, upon the removal of US-led sanctions, European brands that enjoy a historical popularity among the Iranians would flock the Iranian market.
“Iran is currently a closed market but in the near future it will join the global market and unleash its huge potentials”, Jang added. For a long-term cooperation, “there are discussion going on between the two countries to set up a factory, not directly by LG, but through some sort of partnership or joint venture”, he said.
Korea Expo 2014 opened on Monday morning in Hall No. 7 of Tehran’s Permanent International Fairground in a ceremony attended by Valiollah Afkhami Raad, president of Iran Trade Promotion Organization (ITPO). Speaking at the opening ceremony, Afkhami repeated the remarks he made earlier this month in Iran-Korea Business Forum, calling on Korean companies to start considering a migration from mere trade to long-term investment in Iran. He also invited South Korean businesses and producers to export their products and services to Iran via Iranian shipping companies as well as the Iranian banks that are not restricted by international sanctions.
Also attending the ceremony, Afkhami’s South Korean counterpart, Young Ho Oh promised to take into account the concerns and requests raised during the recent joint events while making future plans for cooperation with Iran.
In the past few years, South Korean carmakers and home appliance manufacturers have gained a good share of the Iranian market. The bilateral trade volume, however, has declined significantly in the past year.
According to Reuters, South Korea’s imports of Iranian crude in the first nine months were below last year’s average, as required under international anti-Iran sanctions.
Preliminary customs data from the world’s fifth-largest crude importer showed that Seoul bought 558,357 tons of crude oil from Tehran last month, or 136,425 barrels per day (bpd), compared with 571,909 tons a year before.
Under a preliminary nuclear deal between Iran and the P5+1 group of major world powers agreed in November 2013, Iran suspended some parts of its nuclear program and big Asian buyers including South Korea should hold their crude imports from Iran at end-2013 levels, between a total 1 million and 1.1 million bpd.
Only two of South Korea’s four refiners, SK Energy and Hyundai Oilbank, import Iranian oil, and imports fluctuate as one of the pair buys the crude only every second month.
