Must-know, Art of Doing Business in IRAN-Chapter Three : IRAN Industries Landscape

Iran is a founding member of OPEC and GECF & the petroleum industry is income generator, oil accounts for 80% of export revenues.

Export (Blue) Vs. Import(Red)

  • Due to the improvement of the economy, Consumer Spending in Iran increased from from 671000 IRR Billion up to 676000 IRR Billion in 2016.

The top exports of Iran in 2016 are total of $49.5B as:

Crude Petroleum $18.3B, Ethylene Polymers $2.4B, Acyclic Alcohols $1.27B, Other Nuts $830M and Peat $694M

In 2016 Iran imported $42.3B, making it the 51st largest importer in the world.Top imports are :

Cars $3.4B, Corn $936M, Vehicle Parts $932M, Jewellery $885M, Flat Flat-Rolled Steel $860M

The top import origins of Iran are China ($17.8B), South Korea ($3.76B), Turkey ($3.62B), India ($3.13B) and Germany ($2.19B)

As you can see the the improvement is significant and therefore Iran is becoming more attractive for the foreign investors.

  • Top headlines of local industries statistics are:
  1. Food Industry: Approximately over 330,000 people are employed in this sector also with total value added of over $3.81 billion, Iran’s food industry accounts for 11% of all the value added created by the industrial sector. Almost all raw materials for food processing industries are domestically produced in Iran. A notable example of how the government’s backing helped food exports is the allocation of export subsidies to dairy products, which led to a significant rise in their exports.
  2. Pharmaceuticals & Healthcare Industry : Iran is a large pharmaceutical market in regional terms having a large and fast-growing population, Iran pharmaceutical market valued over 4.3 billion USD & there are over 50 pharmaceutical companies operating in Iran.
  3. Oil, Gas & Petrochemicals Industries: After the nuclear deal with 5+1 countries, there are lots of opportunities for investment and the government has prioritized the development of this sector. a total of $5 billion new foreign investment will enter the country’s petchem industry by participation only three European firms.
  4. Consumer Electronics & Computer industries : Which is defined as computing devices, mobile handsets and video audio and gaming products and it has value of over $15B, also the Iran’s total retail market will reach about US$167 billion, from US$95 billion in 2015 which is huge increase.
  5. Telecommunications: There are 30.3 million landline phones in Iran, about 77.5 million of active SIMs.This places Iran ahead of Italy and the UK at 14th place in terms of mobile phones in use at any given time.With more than 50,000 online shops active in Tehran, shopping online has become trendy in all major cities & the value of the goods purchased via Internet reached $16.2 billion.
Considering the $1,471 billion share of e-commerce globally there is room for improvement & also Iran is among the first five countries which have had a growth rate of over 20% and the highest level of development in telecommunication
  6. Automotive Industry: Currently the Iranian automobile import market is ranked on 75th place worldwide with value of $3.4B, it is huge profitable market. For example Renault signs JV deal worth $775.7m in Iran.

Last but not least, Iran government had guaranteed $12b foreign investment in 2016 and Iranian officials say the country needs to attract $50 billion in foreign direct investment annually.

This is the end of chapter three, Stay tuned!

Iman Soltani

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