Iranian SMEs' Exports Hit $4b

EghtesadOnline: Iranian small- and medium-sized enterprises exported goods worth $4 billion during the last Iranian year (March 2018-19), according to Deputy Industries Minister Mohsen Salehinia.

News ID: ۷۴۸۱۵۴

13 August 2019

The exports were made by 1,100 export-oriented SMEs, he added.

Iran is home to 811 industrial parks and estates. Currently, there are 43,630 small- and medium-sized production units in these industrial parks, 77.5% of which are active, Donya-e-Eqtesad reported.

The active production units have created 710,000 jobs while the inactive ones have the capacity to create 180,000 jobs. More than 1,350 units are expected to be revived by the [fiscal] yearend [March 19, 2020],” Financial Tribune quoted Salehinia as saying.

According to the official, who doubles as the head of Iran Small Industries and Industrial Parks Organization, the financial resources of Iran's Small Industries Investment Guarantee Fund will be doubled by the end of summer (Sept. 22).

“The fund’s capital will be increased from its current 1.1 trillion rials [$9.2 million] to 2.2 trillion rials [$18.5 million] by the end of summer,” he was quoted as saying by Mehr News Agency.

With increased resources, the organization can significantly boost the volume of loans, he added.

ISIPO says it plans to expand the infrastructure of SMEs, increase employment and job creation, improve business environment and supply the working capital of these production units to reach the set targets by the yearend.

Export Share Small

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

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

According to Deputy Industries Minister Sadeq Najafi, small- and medium-sized enterprises constitute 92% of Iran’s manufacturing enterprises.

Noting that the development of small- and medium-sized industries would result in improvement of exports, Moqeiseh said SMEs' share in Japan’s exports is at 60%, Taiwan’s at 70% and Singapore’s at 90%.

Najafi said last year that a total of 35 small- and medium-sized manufacturing enterprises were under development in Iran through foreign investment, adding that 28 of the projects were located in industrial towns with a total of $2.8 billion being invested in them by foreign parties.

He added that 31,500 manufacturing SMEs will be renovated, reconstructed or launched over the next three years.

According to the Islamic Republic of Iran Customs Administration, a total of 117.22 million tons of non-oil goods worth $44.31 billion were exported from Iran in the last fiscal year (March 2018-19) to register a 12% decrease in weight and a 6% decline in value year-on-year.

Iran’s top export destinations last year were China with $9.3 billion, Iraq ($8.9 billion), the UAE ($5.9 billion), Afghanistan ($2.9 billion) and South Korea ($2.5 billion).

The average price of each ton of exported commodities hovered around $378, up 7% compared with the previous year’s same period.

By “non-oil”, IRICA refers to all commodities, except crude oil. Therefore, oil-driven products and byproducts as well as petrochemical products are still categorized as non-oil.

Joining Enterprise Europe Network

Esfandiar Omidbakhsh of Iran Chamber of Commerce, Industries, Mines and Agriculture announced last year that plans were underway to create an Iranian consortium to join the Enterprise Europe Network with the aim of connecting Iranian small- and medium-sized enterprises with their counterparts in Europe and promoting these enterprises on an international scale.

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

According to the network’s official website Een.ec.europa.eu, the network is active in more than 60 countries. It 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 been nominated as members of the consortium.

According to Omidbakhsh, the aim of this consortium, which is to 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 Enterprise Europe Network does not provide financing to non-EU members but they can enjoy the various services offered, including accessing the database, receiving help on implementing research projects and getting to know non-EU SMEs.

Iran also signed a memorandum of understanding with South Korea’s Deputy Minister of SMEs and Startups Choi Su-gyu last year to increase cooperation on the development of small- and medium-sized enterprises in the two countries.

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