819 SMEs Revived Since March 20

EghtesadOnline: A total of 819 small- and medium-sized enterprises located in Iran’s industrial parks and estates have been revived since the beginning of the current fiscal year (March 20), according Iran Small Industries and Industrial Parks Organization.

News ID: ۷۸۵۶۶۵

10 November 2020

"By reviving these SMEs, more than 14,458 jobs were created or reinstated,” Asghar Masaheb, the deputy head of the organization, was quoted as saying by IRNA.

"More than 9,800 industrial units are currently inactive. The plan is to revive 2,000 industrial units by the end the current [fiscal] year [March 20, 2021]."

There are 820 industrial towns across the country.

According to the official, Tehran Province accounted for the largest number of revived SMEs with 84 units. Mazandaran, Isfahan and Qom provinces came next with 62, 61 and 61 respectively.

The revived units had been either partially or completely shut down due to the lack of working capital, loss of markets, inability to update technology and lack of investment, the official explained.

Official statistics say a total of 1,444 SMEs were revived in the last Iranian year (March 2019-20).

"The revival of each industrial unit regenerates jobs for an average of 18 people and costs 33 billion rials [$127,000] on average," Masaheb said.

Small businesses reportedly account for 52% of the total number of industrial units and 45% of industrial jobs in Iran.

Small- and medium-sized enterprises located in industrial estates exported $2.4 billion worth of goods in the last fiscal year that ended on March 19, 2020, accounting for 5.8% of Iran's total non-oil exports ($41.37 billion).

Latest data show SMEs, affiliated with Iran Small Industries and Industrial Parks Organization, exported $1.74 billion worth of goods during the first half of the current Iranian year (March 20-Sept. 21) to register a 16.7% growth compared with the similar period of last year.

The main export destinations of these SMEs were Pakistan with $1 billion, followed by Iraq with $364 million, Afghanistan with $83 million, the UAE with $50 million, Turkey with $36 million, Azerbaijan with $26 million, Armenia with $25 million and India with $20 million.

The exported products were food products, steel and steel containers with 20-liter capacity, plastic containers and chemicals that prevent gas hydrate formation.

A total of 430 SME units across the country exported their goods during the six-month period.

Khorasan Razavi with $343.9 million, Tehran with $133.7 million, East Azarbaijan with $123.2 million, Fars with $88.7 million and Yazd with $83.7 million topped the provinces with the highest volume of exports in H1.

Masaheb was quoted as saying by ILNA that 27 new industrial estates will be inaugurated in the current year (March 2020-21), adding that the share of SMEs in exports is expected to increase.

By definition, enterprises run by 50 workers or less and 100 workers or less are considered small- and medium-sized enterprises respectively, according to Iran Small Industries and Industrial Parks Organization.

A total of 1,535 small- and medium-sized enterprises and projects with a physical progress of above 60% received 39,000 billion rials ($150 million) in loans during the first half of the current fiscal year.

According to the Ministry of Industries, Mining and Trade, 6,301 SMEs and unfinished projects applied for loans in H1, of which 3,236 were introduced to the designated banks across the country.

The overall volume of ratified loans planned to be allocated to these SMEs and projects tops 113,000 billion rials (more than $437 million), IRNA reported.

Khorasan Razavi, Semnan, Isfahan and Qom registered the highest number of applicants for loans during the period.

The highest number of eligible applicants who were introduced to designated banks was the highest in Semnan with 299 projects, Gilan 143 projects and Khorasan Razavi with 131 projects.

Each country has its own definition of what constitutes a small and medium-sized enterprise.

By definition of Iran Small Industries and Industrial Parks Organization, enterprises run by 100 workers or less, and 50 workers or less are considered small- and medium-sized enterprises respectively.

In the United States, there is no distinct way to identify small- and medium-sized enterprises. The European Union offers clearer definitions, characterizing a small-sized enterprise as a company with fewer than 50 employees and a medium-sized enterprise as one with less than 250 employees. In addition to small- and medium-sized companies, there are micro-companies, which employ up to 10 employees.

SMEs' share in Japan’s exports is at 60%, Taiwan’s at 70% and Singapore’s is at 90%.

Though small in size, SMEs play an important role in the economy. They outnumber large firms considerably, employ vast numbers of people and are generally entrepreneurial in nature, helping to shape innovation.

SMEs constitute 92% of Iran’s 85,000 manufacturing enterprises.

Many people in emerging economies find work in small- and medium-sized enterprises. SMEs contribute roughly 45% of total employment and 33% of GDP in these countries, according to the Organization for Economic Cooperation and Development.