“At present, close to 150 types of television sets from 32 inches to 75 inches are manufactured in 14 factories across the country. Our annual production capacity is 3 million sets per year, yet actual production stands at 1.5 million,” Mohammad Reza Shahidi was also quoted as saying by IRNA.
The official noted that domestic demand stands at 2.2-2.4 million TV sets per year.
“Due to an import ban on home appliances, the remaining demand is supplied through contraband. Our estimates are that more than 2,000 television sets are smuggled into the country every day, which reaches 700,000 sets per year,” he said.
Without paying tax, import duties, insurance fees or other such expenses, smugglers can sell their goods at competitive prices in the local market and this robs domestic products of their ability to compete with foreign rivals.
“We expect TV production to reach 1.6-1.7 million sets by the [fiscal] yearend [March 2022], to register a 30% growth compared with the corresponding period of last year. This will only come about if production firms receive the foreign currency they require to import the raw material they need and smuggling is battled effectively,” he said.
Keyvan Gordan, director general of Electrical, Metal and Home Appliances Bureau with the Industries Ministry, has been quoted as saying that Iran’s household appliance exports totaled $200 million in the last fiscal year (March 2020-21), adding that the government plans to increase the figure to $600 million in the current year.
“The ban on imports of home appliances in the year ending March 2019 energized local production. As we speak, domestic production meets 60% of demand for home appliances. The remaining 40% is met through international brands and exemptions considered for imports by residents of border towns. We need to provide opportunities for residents of border towns to make a living through cross-border trade,” Ali Moayedi Khorramabadi, the head of Iran’s Headquarters to Combat Smuggling of Goods and Foreign Exchange, was recently quoted as saying by IRNA.
According to the official, the value of home appliances imported by residents of border towns nears $1.5 billion.
The domestic production of home appliances has been on the rise in recent months. Some manufacturers have even posted a 100% increase in output. For the first time, two well-known local companies launched the production line of dishwashers in the country, IRNA reported recently.
“Home appliance industry’s turnover, including chinaware and crystal glassware, hovers around $6.5-7 billion, of which $2 billion are attributed to smuggling,” says Abbas Hashemi, secretary of the Iran Association of Household Appliance Industries, was quoted as saying by IRIB News.
“During the 10 months to Jan. 19, Iran manufactured 1.7 million refrigerators, which indicate a 30% increase year-on-year. Washing machine production grew by 53% to reach 880,000 and evaporative cooler production jumped by 11.9% to hit 854,000 during the period. A total of 995,000 television sets were also produced during the 10-month period, registering a 44% rise compared with the corresponding period of last year. The growth in production of home appliance during the current Iranian year has been unprecedented in the last decade.”
Noting that the main challenge facing the industry is the insufficient supply of raw materials, the official said, “For instance, manufacturers of refrigerators and freezers need a common thermoplastic polymer called ABS [Acrylonitrile Butadiene Styrene]. The Industries Ministry should provide raw materials in cooperation with petrochemical industry. Home appliance producers refused to sign export contracts because they were not confident about the sufficient supply of petrochemical raw materials. The supply of steel sheets, copper and aluminum parts as well as the allocation of foreign currency for the purchase of essential imported parts are also challenging for the industry.”
Hashemi estimated the value of annual contraband smuggled into and out of Iran at $12.5 billion per year.