Iran: 35 SMEs Under Construction Through Foreign Investment

EghtesadOnline: A total of 35 small- and medium-sized manufacturing enterprises are currently being set up in Iran with foreign investment, a deputy industries minister said.

News ID: ۷۴۵۴۵۸

13 June 2018

Sadeq Najafi added that 28 of these projects are located in industrial towns with a total of $2.8 billion invested by foreign parties, IRNA reported.

Noting that small- and medium-sized enterprises constitute 92% of Iran's 85,000 manufacturing enterprises, the official, who also doubles as chairman of Small Industries and Industrial Parks Organization of Iran, said 31,500 manufacturing SMEs will be renovated, reconstructed or launched over the next three years.

Iranian SMEs exported a total of $2.7 billion worth of commodities last year, Financial Tribune reported.

By definition, enterprises run by fewer than 50 workers and fewer than 100 workers are considered small- and medium-sized enterprises respectively, according to ISIPO.

According to Mohammad Khazaei, the head of the Organization for Investment, Economic and Technical Assistance of Iran, foreign funds attracted during the fiscal 2017-18 amounted to about $5 billion.

“Plans and projects approved to receive finance from the specialized government council, which was formed to ratify foreign finance projects, totaled 190 with an approved investment of $10.6 billion. The number of projects was higher by 25% year-on-year,” he said.

According to Khazaei, $5 billion in foreign funds absorbed during the fiscal 2017-18 indicate an increase of more than 45% when compared with the year before, as the volume for that year stood at more than $3 billion.

In outlining the latest data concerning Iran's attracted foreign finances, the OIETAI chief said that since the fiscal 2015-16, the total volume of finance deals clinched between Iran's banking system and foreign creditors were worth over $32 billion.

Khazaei also sought to reassure that no changes have so far been made to Iran's foreign finance deals despite the fact that US President Donald Trump on May 8 withdrew from the Joint Comprehensive Plan of Action and reimpose sanctions against Iran.

"No official requests have so far been filed with OIETAI indicating the withdrawal of foreign investments made after obtaining investment permits under the law on incentivizing and supporting investments," he said.

His comments came as the United Nations Conference on Trade and Development recently put the volume of foreign investment inflow into Iran in 2017 at $5.019 billion, registering an over 48% rise compared to the year before.

"Following the lifting of sanctions in 2015, the country’s rich reserves started to attract significant foreign participation in oil and gas exploration and production. In July 2017, Total (France), CNPC (China) and the National Iranian Oil Company signed a contract to develop Phase 11 of South Pars, the world’s largest gas field," reads part of UNCTAD's latest report "World Investment Report 2018".

"In August, Unit International (Turkey), Zarubezhneft (Russia) and the local Ghadir Investment Holdings jointly agreed to invest $7 billion in three oilfields and a gas field. The Turkish company has also reached an agreement with the Iranian government to build seven power plants in the country. However, the United States’ decision to withdraw from the Iran nuclear deal has led to uncertain prospects for these investment projects."