SMEs Account for 10% of Iran's Exports

EghtesadOnline: Small- and medium-sized enterprises account for just over 10% of Iran's total exports, according to Managing Director of small Industries Investment Guarantee Fund Mohammad Hossein Moqeiseh.

News ID: ۷۴۶۱۱۳

16 October 2018

By definition, enterprises run by 500 workers and 100 workers or fewer are considered small- and medium-sized enterprises respectively, ISIPO reported.

According to Deputy Industries Minister Sadeq Najafi, SMEs constitute 92% of Iran’s 85,000 manufacturing enterprises.

Noting that the development of small- and medium-sized industries would help improve exports, Moqeiseh said SMEs' share is 60% in Japan’s exports, 70% in Taiwan and 90% in Singapore, according to Financial Tribune.

Najafi said in June that a total of 35 small- and medium-sized manufacturing enterprises are currently under development in Iran through foreign investment, adding that 28 of these projects are located in industrial towns with a total outlay of $2.8 billion invested by foreign parties.

The official, who doubles as chairman of Small Industries and Industrial Parks Organization of Iran, said as many as 31,500 manufacturing SMEs will be renovated, reconstructed or launched over the next three years.

> Plan to Join Enterprise Europe Network

Esfandiar Omidbakhsh of Iran Chamber of Commerce, Industries, Mines and Agriculture announced last month that plans are underway to create an Iranian consortium to join the Enterprise Europe Network for connecting Iranian SMEs with their counterparts in Europe and promoting these enterprises at the international level.

Launched by the European Commission in 2008, the network helps businesses innovate and grow on an international scale. It is the world’s largest support network for SMEs with international ambitions.

As the network’s official website Een.ec.europa.eu says, the network is active in more than 60 countries and brings together 3,000 experts from more than 600 member organizations, all renowned for their excellence in business support.

The Research Department of Tehran University, Trade Promotion Organization of Iran and the Science and Technology Department of the Presidential Office have currently been nominated as members of the consortium.

As Omidbakhsh explained during the meeting with the representative of the aforementioned organizations, the aim of this consortium, which will be formed in collaboration with both the public and private sectors, is to promote SMEs’ international activities and expand their capacities.

“The Enterprise Europe Network focuses on three main areas, namely trade, technology transfer and research collaboration,” he said, explaining that the first step to join the network is to form a consortium that should have three to four members.

The ICCIMA official emphasized that members should be selected as per the network’s priority areas.

“To finalize Iran’s membership in the network, two memorandums of understanding should be signed: one between Enterprise Europe Network and the consortium and one among the consortium’s members,” he added.

Omidbakhsh noted that organizations in non-EU countries can apply on a self-financing basis and EEN does not provide financing to non-EU members but they can enjoy the services offered, including accessing the database, receiving help on implementing research projects and getting to know non-EU SMEs.

Iran signed a memorandum of understanding with South Korea’s Deputy Minister of SMEs and Startups Choi Su-gyu on August 31 to increase cooperation on the development of SMEs in the two countries.

The MoU was signed during Najafi’s visit to Seoul to attend the Seventh Korea-Iran Technology Exchange Conference.

> Inadequate Budget to Support SMEs

Iranian SMEs saw a 28% year-on-year increase in the value of investment guarantees issued during the last fiscal year (March 2017-18), according to SME's Investment Guarantee Fund.

The value of guarantees issued reached 1.64 trillion rials ($12 million) for 353 SMEs, compared with the year before last's 1.28 trillion rials ($9 million).

The number of total guarantees, however, dropped by 18% YOY to 189.

Khorasan Razavi Province topped the charts with 22 guarantees issued worth 208 billion rials ($4.95 million), indicating a 13% and 271% growth YOY, ISNA reported.

Moqeiseh said the fund’s 1,100 billion rials ($7.43 million) budget is not sufficient to support the country’s tens of thousands of small enterprises so export-oriented ones take priority in receiving letters of guarantee, IRNA reported.

Tehran hosted a three-day exhibition called 'SME Iran 2018' in August, in which more than 1,200 SMEs together with those from 15 countries, including Turkey, Pakistan, Malaysia and South Korea, showcased their latest products and services in a wide range of fields such as pharmaceuticals, cosmetics, toiletries, chemicals, metals, foodstuff, home appliances and construction material.