More Businesses Floundering in Iran

EghtesadOnline: The Ministry of Cooperatives, Labor and Social Welfare identified 1,281 economic enterprises by the end of the second quarter of the current Iranian year (Sept. 22) with an array of problems ranging from mismanagement to low productivity to lack of working capital.

News ID: ۷۴۹۱۸۸

15 December 2019

The number shows an increase compared to 1,262 enterprises identified as "troubled" by the end of the first quarter (June 21).

These enterprises had 146,000 employees on their payroll by the end of Q2 compared with 141,074 workers by the end of Q1.

Hormozgan Province had the biggest number of troubled enterprises with 98 by the summer end, followed by Markazi Province with 82, Fars and Isfahan with 81 each, Zanjan with 80 and Sistan-Baluchestan with 77, Financial Tribune reported.

There were 71 troubled enterprises in Khorasan Razavi, 70 in Mazandaran, 59 in Kurdestan, 56 in Qazvin, 53 in Alborz, 52 in Khuzestan, 50 in West Azarbaijan and Kermanshah each, 40 in Tehran, 38 in Lorestan, 31 in Semnan and East Azarbaijan each, 21 in Kerman, 20 in South Khorasan, 19 in Qom and Hamedan each, 18 in Golestan, 16 in Yazd, 14 in Chaharmahal-Bakhtiari, 14 in Bushehr, eight in North Khorasan and Gilan each, seven in Ardabil and two in Kohgilouyeh-Boyerahmad by the end of Q2.

By the end of summer, the number of troubled enterprises increased in five provinces, decreased in 11 provinces and remained unchanged in 15 provinces compared to that of the preceding quarter.

The private sector managed 90% of the troubled enterprises, cooperatives 8% and the public sector 2%, Mehr News Agency reported.

As reported by IRNA last month, a total of 1,726 industrial units, out of the 10,380 inactive ones in Iran were revived in the last Iranian year (March 2018-19), while 529 were revived during the first half of the current year (March 21-Sept. 22).

Iran has a total of 44,432 industrial units, 23.36% of which (10,380) were inactive prior to the revival of aforementioned units. A total of 178,628 people were employed in the inactive units, IRNA reported.

Among the units that are not functioning, 62% went out of business in the fiscal 2016-17 while 38% closed down in the following year.

About 77% of the inactive units (8,012) stopped operating due to lack of money supply; 16% due to lack of market for their products; 3% due to disputes among partners; 3% due to problems associated with supply of raw materials; and 1% due to machinery failure.

As per plans by the Ministry of Industries, Mining and Trade, 1,334 industrial units are planned to be revived by the end of the current fiscal year (March 19, 2020).