Iran to Manufacture Tractors in Africa

Scion Industrial Engineering

A business delegation from Tabriz in northern Iran was expected in Namibia’s capital Windhoek on Wednesday to finalize a contract that in a year’s time could culminate in Iranian-designed tractors—for agricultural purposes–rolling off an assembly plant, either in Windhoek or Walvis Bay, and bolstering employment.

This was revealed in an interview by Namibian newspaper New Era in Windhoek by Vahid Karimi, the ambassador of Iran to Namibia, who affirmed the visit of Iran Tractor Manufacturing Company‘s CEO and his delegation as the outcome of a rendezvous some two months ago between the two countries.

“A delegation from Iran was here two months ago and they have seen the sites that could be allocated for that purpose. It could either be in Windhoek or Walvis Bay, but it all depends on the company to have the final decision. I think if everything goes well, within a year we could have the first production of tractors in Namibia,” he said.

“My job as ambassador is to connect the people—as for the details, they are going to work them out when they meet,” he said in response to a question on the number of jobs to be created and the magnitude of Iranian investment in the contemplated tractor assembly plant.

Karimi was very optimistic and said, “The planned tractor assembly plant will help create jobs and help in the transfer of knowledge and skills. In the agriculture area, I am sure it will create lots of jobs.”

The ambassador noted that Rouhani is keen to boost trade and diplomatic relations with the 54 African countries, and in this vein, he gave the assurance: “I’m trying to bring more Iranians here. As you might be aware, Iran’s immediate neighbor is Europe, and many Iranian business people used to go to Europe but now the priority of my present government is Africa, so they are coming to African countries in big numbers where they are engaged in business. I give you the example: last year, our trade with Kenya increased by more than 150%, and in some African countries, Iranian cars are produced and used as taxis.”

Iran’s Foreign Minister Mohammad Javad Zarif led a high-ranking politico-economic delegation to Africa last month.

According to Foreign Ministry’s Director General of Africa Department Mehdi Aqa-Jafari, the African tour–the third such visit in the last four years–indicates Iran’s determination to put promotion of wide-ranging ties with the continent on top of its agenda.

“To establish consistent political relations with Africa, it is essential to develop strong economic interactions and this has been seriously pursued on our part regarding Africa nations,” he has been quoted as saying.

The Iranian delegation visited South Africa, Uganda and Niger.

Iranian President Hassan Rouhani is planning to visit the African Continent by the end of the current Iranian year (March 20, 2018).

During the South African National Assembly Speaker Baleka Mbete’s visit to Tehran in September, she said her country is interested to see Iran join BRICS–an association of five major emerging economies: Brazil, Russia, India, China and South Africa.

Joining the bloc would help Iran to substantially increase its international ties, especially with African powerhouse South Africa.

Karimi was also quick to point out that youth unemployment affects both Namibia and Iran, as oil and gas in the latter accounts for 80% of public revenues and generated over $135 billion in foreign reserves as of last December.

The Iranian ambassador feels the tractor investment has numerous benefits and should not be seen from a one-dimensional viewpoint, as tractors are multi-purpose and could be used for fruit production, poultry production and other agricultural applications.

He recalled that Namibian President Hage Geingob believes that if a country is not “self-sufficient” in food production, it is not independent, and he was absolutely right.

“I am happy that I am doing my duty to do something good for Namibian food production. It is very important,” he said.

Another area of potential bilateral trade cooperation is the possibility of Iran importing beef from Namibia. He said the shorter distance from Namibia to Iran could make business sense to Iranian importers of Brazilian beef–a country that is located far away.

He also commended “the very delicious Namibian hake (a fish related to the Atlantic cod)” that he feels could be imported by Iran that has a population of 82 million, of whom 13.26 million live in Tehran, the capital city.

Iranian investors are also interested in setting up a pharmaceutical plant, while Namibia could reciprocate by importing bitumen and asphalt for highway and road construction.

One of the setbacks he singled out in bilateral ties is that Namibia has not yet established an embassy in Tehran and he jokingly said he is also the de facto Namibian ambassador to his own country.

> Iran’s Tractor Manufacturing Prowess

Iran is a prominent manufacturer of tractors and combine harvesters that are exported across the Middle East and East Asia.

Iran Tractor Manufacturing Company is the largest producer of tractors in Iran with an 80% share. The company produced 14,400 tractors and exported 2,000 units worth $235 million to neighboring countries in the last Iranian year (March 2016-17), mainly to Azerbaijan, Afghanistan, Pakistan and Iraq.

ITMCO Chairman Abolfat’eh Ebrahimi said the company plans to produce 18,000 tractors in the current Iranian year and plans for a 30% year-on-year increase.

“Iran Tractor Industrial Group will export up to 25% of its products this year,” he said.

The company produces a range of small and medium diesel-powered tractors with single and double differential gearboxes.

Many of the older models are based on Massey Ferguson designs from the 1970s, as part of a joint venture prior to the 1979 Islamic Revolution.

The company has a production capacity of 30,000 vehicles a year, according to its own estimates.

ITMCO is located on the outskirts of the industrial city of Tabriz in northwest Iran.

Domestic producers recently voiced concerns regarding the import of tractors.

Amir Hossein Shiravi, the director general of Machinery and Equipment Manufacturing Office with the Ministry of Industries, Mining and Trade, said that in the 18 months to Sept. 22, only 2,220 tractors, including 1,740 light- and medium-weight and 480 heavy tractors, were imported into the country, while over the same period, 22,400 tractors were produced by local manufacturers.

“Imports constituted less than 10% of our domestic production. Heavy tractors are imported since we cannot manufacture them inside the country and there is demand for them,” he said.

Shiravi noted that local companies have recently started the domestic production of heavy tractors.

A heavy tractor manufactured by Iran Tractor Manufacturing Company was unveiled on March 2015 during a ceremony attended by Agriculture Minister Mahmoud Hojjati. The company has yet to start mass production.

During the sixth session of Iran-Ghana Economic Commission held on Nov. 13-16 in Accra, Iran agreed to launch a tractor production line in the West African country.


Iran, Turkey, Qatar Sign Deal to Ease Doha Blockade

Scion Industrial Engineering

Turkey, Iran and Qatar on Sunday signed a transportation pact for boosting trade among the three countries.

Turkey’s Economy Minister Nihat Zeybekci and his Qatari counterpart Ahmed bin Jassim bin Mohammed Al Thani were in the Iranian capital Tehran to sign the agreement with Iran’s Minister of Industries, Mining and Trade Mohammad Shariatmadari.

Under the agreement, Iran will be the transit country between Turkey and Qatar. The deal is expected to help accelerate commodity delivery and facilitate trilateral trade, Anadolu Agency reported.

The agreement will lead to the creation of a “joint working group to facilitate the transit of goods between the three countries”, IRIB News reported, adding that the three nations aim to tackle “obstacles to sending goods from Iran and Turkey to Qatar”.

“Iran is playing an important role in the transport of goods from Turkey and Azerbaijan to Qatar,” said the Qatari minister in a bilateral meeting with Shariatmadari.

Saudi Arabia, aided by Bahrain, the UAE and Egypt, cut ties with Qatar in June, accusing Doha of backing extremism, a charge that Qatar denies.

Since the crisis erupted, Iran and Turkey–whose relations have warmed considerably in recent months–have sought to help break Qatar’s isolation, including by increasing food exports to the emirate.

Turkey and Azerbaijan have been using Iran as a land route to export to Qatar, filling the gap in the market in the absence of Saudi Arabia and its allies since the Arab rift.

According to Mohammed bin Mahdi Al Ahbabi, a board member of Qatar Chamber of Commerce and Industry, the land route between Turkey and Qatar via Iran reduces the cost of goods transport by about 80% compared to air cargo.

Expansion of Cooperation

The role of cargo movement through the sea route has also increased in the country after the siege was imposed on Qatar.

“Most of the [Iranian] shipping lines have now switched their transport services to Qatar, instead of the UAE and Oman,” Adnan Musapour, a member of the Export Committee at Iran Chamber of Commerce, Industries, Mines and Agriculture, said.

Torang Darya Shipping Line, the biggest private shipping company in Iran, intends to expand its business in Qatar. The company expects trade between Qatar and Iran to increase in the near future, which will lead to an increase in its frequency from Qatar.

“Before the siege (imposed on Qatar), we did not have any desire (to expand ties) because Qatar was importing most of its requirement from some of its neighboring countries. But right now, we have the desire and the plan for import and export from Qatar. We want to extend our business in Qatar,” Amir Khani from TDS Line, who was in Qatar to participate in an industry exhibition, was quoted as saying by Qatar’s daily newspaper The Peninsula.

Valfajr Shipping Company (affiliated with the Islamic Republic of Iran Shipping Lines), Rah Abrisham Marine Shipping Agency and Pasargad Shipping Lines are among Iranian firms that have started services to Qatar.

Masoud Khayatzadeh, the head of Abadan Chamber of Commerce, said the chamber has been holding talks with major Qatari companies to establish an exclusive wharf in Qatar for Iranian goods to ease transportation to the neighboring state.

According to Iranian Minister of Roads and Urban Development Abbas Akhoundi, the two countries formed a joint committee to boost cooperation in air and marine transportation, during Qatari Minister of Transport Jassim Saif Al Sulaiti’s visit to Tehran in late October.

The Qatari government has facilitated business trips for Iranians by issuing six-month visas. The move has resulted in higher demand for business trips to Qatar in recent weeks.

Qatar Airways and Iran Air have recently increased the capacity of their flights to Doha, especially from the southern Iranian province of Fars where a large number of merchants reside.

Iran Aseman Airlines and other private airliners are also working to launch cargo and passenger flights from Shiraz to Doha.

Iran, Turkey Moving Toward Free Trade Deal

Zeybekci on Sunday also attended the closing ceremony of the 26th meeting of Iran-Turkey Economic Commission.

Stressing both countries’ strong economies, Zeybekci said a free trade deal between Ankara and Tehran could pave the way for hundreds of new companies.

Iran and Turkey are signatories to a preferential trade agreement since 2014. Currently, the two sides have 265 categories of goods under their PTA. Iran accounts for 140 and Turkey for 125 categories in the list.

In the most recent development regarding the PTA, the two sides announced plans to add 60 categories of goods each to the agreement.

“The lion’s share of what Iran is going to add to the agreement is petrochemical products,” the head of Iran-Turkey Studies Center and Secretary-General of the two countries’ commercial council, Jalal Ebrahimi, told Financial Tribune.

According to the official, Turkey has requested to add vehicle spare parts, electric and mechanical machinery and equipment, aluminum products, iron and cast iron products, steel, construction stones, apparel and textile and cellulose products like paper, cardboard and wooden products, among other things, to the list.

Iran intends to add 30 categories of petrochemical products, polyester, copper products like cables, aluminum, ferromolybdenum and other iron alloys, direct reduced iron, pellets, cold-rolled coil, steel bars, zinc and its artifacts, floorings and synthetic fibers in return.

During the Sunday commission meeting, the two countries also reportedly signed a bilateral deal in the engineering field that targets $10 billion in annual trade.

Iran’s Rising Trade With Turkey, Qatar

Latest statistics released by the Turkish Statistical Institute show trade between Iran and Turkey stood at $8.15 billion during nine months since the beginning of 2017. The figure indicates a 14.24% rise compared with the same period of the preceding year.

Iran’s exports during the period amounted to around $5.84 billion, 75.7% more year-on-year. In return, Turkey exported $2.31 billion worth of goods, compared with $3.81 billion in the corresponding period of last year, indicating a 65% decline.

A review of the past six years ending March 20, 2017, shows Iran’s trade with Turkey peaked in the last fiscal year (March 2016-17) at $5.92 billion.

Latest statistics released by the Islamic Republic of Iran Customs Administration show Iran exported $139 million worth of non-oil goods to Qatar during the seven months to Oct. 22, registering a remarkable 117.5% increase compared with the same period of last year. Notably, Iran’s exports to Qatar saw a significant growth during the month to Oct. 22. Iran exported about $50 million of non-oil products to Qatar during the one-month period, which shows a fivefold surge YOY.

While in Tehran, the Qatari economy minister met with Iran’s Foreign Minister Mohammad Javad Zarif on Sunday. The two sides emphasized the need to remove trade barriers and facilitate conditions for economic exchanges between Iran and Qatar, IRNA reported.

In a meeting with Shariatmadari, the Qatari minister said Doha is seeking to increase bilateral trade with Iran.

“Foodstuff and construction material have been Qatar’s main imported goods from Iran [in the last few months],” Mehr News Agency quoted him as saying.

Shariatmadari said since Qatar will be hosting the 2022 FIFA World Cup, Iran’s technical and engineering services can meet the needs of the Qatari market. He said the Qatari side has offered to increase bilateral trade with Iran to $5 billion per year.


Iran’s Exports to Syria on the Rise

Scion Industries Pvt. Ltd.

Iran’s exports to Syria have been on the rise since the 2014-15 fiscal year–the lowest ebb of $103.013 million over the last 10 years.

The highest level of exports during the period under review was registered in March 2010-11 when Iran exported $524.48 million worth of goods to Syria.

Latest statistics released by the Islamic Republic of Iran Customs Administration confirm that the rising trend in Iran’s exports to Syria is continuing, as 15,214 tons of commodities worth $156.75 million were exported during the seven months to Oct. 22, registering an increase of 11.82% and 16.31% in volume and value compared with last year’s corresponding period.

Iran mainly exports chemicals, pipes and profiles, electronic parts, pharmaceuticals, auto parts, baby formula, faucets and organic compounds to Syria.

Iran’s imports from Syria, on the other hand, are meager, standing at an average of $23 million per annum over the 10-year period under review.

Syria mainly exports olive, olive oil, herbs, apparel, yarn and fabrics and steam turbine parts to Iran.

In a telephone conversation with Syrian President Bashar Assad on Saturday, Iran’s President Hassan Rouhani said the Islamic Republic will continue to stand by the Syrian nation and government, and is ready to participle in the reconstruction projects of the war-torn country.

His comments came after armed forces in Syria and Iraq recently managed to flush IS militants out of their last strongholds in both countries. Backed by popular groups and Iranian military advisors, the two countries declared their full victory over the notorious and brutal terrorist group.

The recent recapture of the two cities of Abu Kamal in Syria and Rawa in Iraq marked the end of the IS reign of terror, which started in 2014 with the group making vast territorial gains in a lightning offensive and establishing its self-proclaimed “caliphate” in the Iraqi city of Mosul and the Syrian city of Raqqah.

The presidents of the three guarantors of Syria peace process, namely Iran, Russia and Turkey, met in the Russian city of Sochi last week, calling for a national dialogue in Syria for creating stability and security in the country.

Rouhani’s expression of readiness to help the reconstruction of Syria has been repeatedly echoed by other Iranian officials.

“Iranian organizations, firms and provincial commerce chambers are able to meet Syria’s business needs and help the country implement its reconstruction projects,” the deputy head of Iran’s Chamber of Commerce, Industries, Mines and Agriculture, Hossein Selahvarzi, said in a meeting with Syrian Minister of Economy and Foreign Trade Mohammad Samer al-Khalil in the Syrian capital Damascus back in August.

The Iranian trade official urged the Syrian minister to facilitate free trade between Iran and Syria, and appoint a representative to follow related affairs.

Iran and Syria signed an agreement in Damascus in May to enhance economic cooperation.

Earlier in January, Iran signed major economic contracts with Syria in what Tehran and Damascus hailed as “a new page” in economic ties.

Five memorandums of understanding were signed during a visit by Syrian Prime Minister Imad Khamis to Tehran, including for Iran to operate a mobile phone service in Syria and phosphate mining.

Tehran and Damascus also signed a memorandum of understanding to cooperate in a phosphate mine in Syria’s al-Sharqiya.

Syria is among the world’s largest exporters of rock phosphate, a raw material used in the production of phosphatic fertilizers, although the war has marred its ability to mine and market the commodity.

The country agreed to give Iran 5,000 hectares of land for farming and 1,000 hectares for setting up oil and gas terminals. A deal was also signed on providing lands for animal husbandry.

Syria is increasingly indebted to Iran financially: Tehran opened a $3.5 billion credit line in 2013 and extended it by $1 billion in 2015, which economists say has helped keep the Syrian economy remain afloat.

Tehran has already shown interest in helping Syria rebuild its roads, airports, power stations and ports.

Iranian firms are already involved in a series of electricity projects worth $660 million in Syria.

Iran aims to export electricity to Syria and create the biggest power network in the Muslim world by hooking up Iran’s national grid with those of Iraq and Lebanon.

Syria’s GDP contracted last year by just 4% year-on-year, compared with a 36.5% YOY decline in 2013.