Tire companies are to be provided with subsidized foreign currency at a faster pace, with the government raising the status of their raw material imports to ‘high priority’.
In a move to preserve its foreign reserves, the government introduced a multitier system for allocation of subsidized foreign currency for imports.
The raw material used by the tire industry was in the secondary priority list. In a letter to the Central Bank of Iran, the new Industries Minister Reza Rahmani called for raw materials for the tire industry to be elevated to the ‘high priority list’, the state-run IRIB reported.
In the letter which is address to the CBI’s chief Abdolnaser Hemmati, the Industries Minister has called on the central bank to take immediate action to ease imports of raw materials needed for tire production.
Earlier in the week, the chairman of Iran Tire Industry Association told reporters, “Tire companies hardly have enough raw materials to keep them going for a month.”
Mohammad Reza Ganji said if immediate measures are not taken by the government the local tire companies would be forced to close down and send their workers home.
Tires are made of 70 different materials, 40% of which are imported. "If a company's stock of one of the parts runs out, it cannot function," Ganji warned.
Since the US re-sanctioned Iran, the volatility in the currency market rushed to hit hard most production centers. The tire industry is just a case in point. Managers in no small numbers have warned the government that if rescue packages are not introduced soon their workers would be forced to find another job.
There are 10 major tire companies in Iran, including the well-known Kavir Tire and Yazd Tire companies, employing an estimated 15,000 people.
Some 400,000 tons of tires are sold in the country every year. Local companies on average used to produce 250,000 tons annually.
