SMEs Exports Rise 43% From March 21 to Oct. 7

EghtesadOnline: Small and medium-sized enterprises based in industrial parks across the country exported an estimated $1.5 billion worth of products from the beginning of the current Iranian fiscal year (started in March) to early October -- an increase of $450 million, or 43.27%, compared to last year’s corresponding period.

News ID: ۷۴۹۰۴۲

26 November 2019

According to Asghar Masaheb, deputy head of Iran Small Industries and Industrial Parks Organization, 900 companies in the industrial parks exported goods during the period.

Iraq was the top destination with $320 million worth of imports, followed by Afghanistan with $216 million and Pakistan $51 million, IRNA reported.

Major exports by the SMEs were food products, home appliances, polymer and plastic material, chemicals, machined carpets and leatherwork, according to Financial Tribune.

Masaheb said cement, plaster and decorative stones had a major share in the non-oil exports during the last year’s corresponding period. However their share dropped to one eighth this year as Iraq set restrictions and higher tariffs on imports of these products from Iran.

Iran is home to 80,000 SMEs, 43,000 of which have operating licenses and 70% are active.

Comparatively Smaller Share

SMEs in the industrial parks account for less than 10% of Iran's total non-oil exports.

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

The same SMEs constitute 92% of Iran’s 85,000 manufacturing companies. Share of SMEs in Japanese exports is 60%, Taiwan 70%, and Singapore 90%.

Data provided by the Islamic Republic of Iran Customs Administration shows Iran’s overall non-oil exports stood at 79.42 million tons worth $24.4 billion,  registering a 17.07% growth in weight but down 11.32% in value year-on-year.

China, Iraq, the UAE, Turkey and Afghanistan were Iran’s main export destinations.  Exports to China stood at $6.1 billion, accounting for 24.9% of total exports. Iraq imported $5.17 billion worth of non-oil goods to account for 21.2% of overall exports. The UAE took in $2.78 billion worth of goods accounting for 11.41% of the total exports. Turkey's imports were worth $2.67 billion or 10.95% of the total.  Exports to Afghanistan reached $1.28 billion. The eastern neighbor accounted for 5.26% of the exports.

SMEs Lacking Budget

Data show the SMEs saw a 28% year-on-year increase in the value of investment guarantees issued for them in the March 2017-18 fiscal year, according to the SME Investment Guarantee Fund.

The value of guarantees issued reached 1.64 trillion rials ($13.78 million) for 353 SMEs, compared to the year before when it was 1.28 trillion rials ($10.75 million).

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

Khorasan Razavi Province topped the list in terms of volume and value of guarantees issued with 22 worth 208 billion rials ($1.74 million), up 13% and 271%, ISNA reported.

The fund’s 1,100 billion rials ($9.24 million) budget is not enough to support all the small companies and for this reason export-oriented firms have priority in receiving letters of guarantee.

Plan to Join Enterprise Europe Network

Esfandiar Omidbakhsh of Iran Chamber of Commerce, Industries, Mines and Agriculture said last year that plans are underway to create a consortium to join Enterprise Europe Network with the aim of connecting Iran’s SMEs to their counterparts in Europe and promoting this sector in the international market.

Launched by the European Commission in 2008, Enterprise Europe Network helps businesses innovate and grow globally. 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. 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, the Trade Promotion Organization of Iran and the Science and Technology Department of the Presidential Office have been nominated members of the consortium.

Speaking at a meeting with representatives of the three bodies, Omidbakhsh said the aim of the consortium, which will be formed in collaboration with public and private sectors, is to promote SMEs’ internationally and expand their scale and scope.

“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 at least three 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 members of the consortium.”

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 services, including accessing the database, receiving help on implementing research projects and getting acquitted with SMEs outside the European Union.

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

The MoU was signed in Seoul on the sidelines of the Seventh Korea-Iran Technology Exchange Conference.