The government needs to support the domestic textile industry by offering cheap loans to manufacturers.
The statement was made by Ahmad Kimiaei-Asadi, a member of Tehran Chamber of Commerce, Industries, Mines and Agriculture, in an opinion piece published on TCCIMA’s website. The translation of the piece follows:
The textile industry is in shambles. News that many are calling it quits on their factories are coming thick and fast these days, most of which began this downward spiral before the tenure of the incumbent government.
Obviously, we should not downplay the effects of nuclear sanctions, under which textile industry could no longer import industrial machines to keep up with modern technology.
People’s preferences have changed as well. At present, Turkish clothes are good value for the money since they enjoy lower prices and higher quality, thereby outdoing Iranian wares.
On the one hand, Iranian consumers’ tastes do not agree with those of domestic producers. Figures by the Islamic Republic of Iran Customs Administration show that most apparel imports are from China, the UAE and Turkey.
On the other, Iranians are more than willing to buy foreign products thanks to their accordance with latest fashion and low prices. These have led to a recession in local market.
We need to consider all these problems, in addition to banking and social security issues as well as other economic woes afflicting the manufacturing industry.
The lifting of sanctions in January 2016 led to positive events of long-term awards. We need to follow in the footsteps of Turkey in much shorter time and tap into modern technology.
Iran’s banking system has yet to return to pre-sanctions’ normalcy. The developments of 2012, when the value of Iran’s national currency plunged to its lowest against the dollar, also sent machinery prices soaring. Therefore, even those local producers who are eager to import new machines can’t afford to buy them.
The government needs to support textile industry by offering cheap loans.
The textile sector is a labor-intensive industry after all. Closed-down factories can cost a lot of money to reopen, but once petty problems crop up, we can help them get back on their feet quickly and more easily by supporting them.
All in all, if the government fails to help these factories, they would definitely go bust.
Deal With German Firm
In a recent development, Germany’s knitting machine builder Terrot returned from a trade mission to Iran with a deal for providing circular knitting machines to an Iranian fabric manufacturer, the Knitting Trade Journal reported last week.
Terrot’s Managing Director Andreas von Bismarck traveled to Iran together with other representatives from the Saxony region along with Saxony Minister of Economic Affairs, Labor and Transport Martin Dulig, the journal wrote without mentioning a date.
The aim of the delegation was to secure business contacts and explore sales opportunities in Iran.
Among the first contracts signed was a success for Terrot, namely an agreement with an Iranian textile manufacturer, for the delivery of five new circular knitting machines with a value of approximately €220,000.
The machines are to be delivered over the next few months, marking a first foothold in the region for the Saxony region, the report concluded.
Italy Mulls Joint Venture
Italian companies are planning to build a stronger presence in Iran by setting up joint ventures with Tehran’s Garment Union, said the chairman of the National Textiles and Fashion Association Sistema Moda Italia back in April.
“These joint companies will produce clothes of reasonable prices and high quality. Also, their products will be exported to the Middle Eastern market and Caucasus region. In other words, Iran will become our economic hub,” Claudio Marenzi told ILNA in an interview.
Referring to the high production costs in Italy, Marenzi said a worker’s wage in Italy is five times higher and taxes are twice those in Iran, adding that low prices of raw materials and fuel make Iran an ideal place for production.
“Besides that, Italian fashion houses Prada, Giorgio Armani and Dolce & Gabbana will also sell their products in Iran.
Iranians buy an average of €5 billion of designer clothes on a yearly basis, but they mostly make their purchases through a third country,” he said.
“We are willing to provide what they want firsthand. These value-added products and their retailing process would also help create jobs.”
