IRAN

Risk, or at least a big Chance

RISK OR NEW OPPORTUNITIES TO ENTER THE IRANIAN MARKET

IRAN AND EU A LOVE-HATE RELATIONSHIP

EU need the markets in Middle East

Iran prefers European products over Asian products

Trade is rising, more than 300 delegation from anywhere of the

world in the last 2 years (inclusive 9 from Austria)

3

SNAPSHOT IRAN

4

NON-OIL EXPORTS

5

6026

12832

11744

303

3269

1096

0

2000

4000

6000

8000

10000

12000

14000

CONDENSATES GAS & INDUSTRY RUGS & CRAFTS AGRO PRODUCTS MININGPETROCHEMICAL PRODUCTS

SOURCE: TPO OF IRAN

MOST IMPORTANT EXPORT-PRODUCTGROUPS ACCORDING TO THEIR VALUE

6

38,2

10,7

8,4

5,6 5,2

2,3 1,8 1,8 1,7 1,6

0

5

10

15

20

25

30

35

40

45

Mineral fuels,

mineral oils and

products of their

distillation;

bituminous

substances;

mineral waxes

Plastics and

articles thereof

Organic chemicals Iron and steel Edible fruit and

nuts; peel of citrus

fruit or melons

Ores, slag and ash Fertilisers Salt; sulphur;

earths and stone;

plastering

materials, lime

and cement

Dairy produce;

birds' eggs;

natural honey;

edible products of

animal origin, not

elsewhere

specified or

included

Carpets and other

textile floor

coverings

Source: TPO of Iran

IRAN ECONOMY HIGHLIGHTS

7

Iran – Biggest Industrial Base in Middle East and North Africa (MENA)

Oil – 3rd largest proven reserves

Gas – 2nd largest proven reserves

Petrochemicals – 2nd largest producer in ME

Mining – 5500 active mines in Iran

o Copper – 2nd largest producer in ME

o Iron Ore – Large reserves with high quality

o Chromate, Lead, Zinc,… - Largest producer in ME

Automotive – Largest in ME, more than 1,3 Mio. cars/year

MOST IMPORTANT IMPORT PRODUCTS GROUPS ACCORDING TO THEIR VALUE

8

16,9

10,4

6,45,9

4,3 4,33,5 3,2 3 2,8

0

2

4

6

8

10

12

14

16

18

Source: TPO of Iran

Dependency on oil & gas price development, sanctions & FDI

Certain sectors privileged- economy partly run by state owned, bonyads& big holdings

Despite problems: Iran is a wealthy country in minerals and has the highest industrialization rate in the MENA region

Oil is the dominant export commodity (4/5 of total exports)

15% of GDP, 80% of Budget

Very high rate of imports --->disadvantage for Iranian economy

1 million jobs per year are required

Private sector (28% of GDP is competitive and able to create jobs)

9

Economic Growth

INDUSTRIAL TRENDS

10

(Source: Ministry of Industry)

Number of licenses issued to establish a factory or company in 2016

Industrial GroupQuantity

(2015-2016)Industrial Group

Quantity

(2015-2016)

Food & Beverages 2646 Machinery & Equipment 983

Tobacco 12 Office machines 47

Textil 575 Electrical machinery and equipment 483

Clothing & Fur processing 472 Radio, TV, Media 75

Tannery, Leather, bags, Luggage, Shoes 109Medical- Optical- Measuring Technology-

Equipment237

Wood & wood products except furniture 407 Motor Vehicles 339

Paper & Paper products 562 Other transport vehicles 91

Printing Houses 33 Furniture 526

Koke & Petroleum products 152 Recycling 426

Chemical products 1189 Power generation 74

Rubber & polymer products 1738 Transport services 98

Other Minerals & non-metallic products 1924 Computer 6

Metalls 566 Engineering services 988

Metall products 1252 Total 11637

Industrial Base Iran

11

Important Sectors

CHANCES FOR AUSTRIAN COMPANIES

12

AutomotiveIndustry

Minerals & Metals

PetrochemicalIndustry

Food & Beverages

Almost all existing plants does need complete revamping and

modernization of the machines. During the sanction over 90% of the

machines came from China and Korea, a small part from India and Turkey

Iran's annual petrochemical production capacity is

around 65 million tons

Iran's petchem exports to reach 20 Mio. tons by March 20

2017

Production of different kinds of petrochemical products,

showing 18 percent growth

Better international engagements and positive

atmosphere in the post-JCPOA era

2nd largest petrochemicals producer in ME

13

Iran Petrochemicals Current Status

INVESTMENT OPPORTUNITIES

The nominal capacity of the petrochemical industry will rise to 72 million tons a year.

Call for boosting the capacity of the production to 130 million tons a year by the end of the sixth economic development plan (2017-22)

before reaching 180 million tons by 2025 needs $72 billion in foreign investment for 80 major petrochemical

projects NPC's plans to have a stronger presence in world markets Iran Petchem exports to Europe rise up two-fold Forecast domestic sales of petrochemicals to rise by 25% 1st petrochemicals producer in ME

OIL, GAS AND PETROCHEMICAL INDUSTRYIN 2025

IRAN’S AUTOMOTIVE INDUSTRY OVERVIEW

16

• Iran’s automotive industry is the 2nd most important industry of the

country, after the oil and gas industry, accounting for 10% of Iran's GDP

• Biggest in ME, number 15 in the world

• The market share for Chinese cars have raised, as they have filled the

void left by European manufacturers who left the market due to the

sanctions.

• The available platforms are three decades old

• Efforts to privatize the sector

• Customer satisfaction is decreasing because of the old style, quality

issues, customer care, prices and etc.

• In order to bring the technology up to date, new platforms are needed.

The current platforms are not proper for high level technology

• To reduce the high excessive emission

IRAN OEM`S IN IRAN

41%

46%

11%

2%

Saipa Group Iran Khodro Group Private Companies Import

17

Joint Ventures with:PSA (Peugeot, Citroen), Volkswagen, Renault-Nissan, Mazda, Mercedes,

AUTOMOTIVE INDUSTRY TARGETS 2025

18

Achieve the 1st position in the region, 5th in Asia 11th in the world through

competitiveness based on technological development

Bring in modern technologies for automobile design, testing, engineering

services and assembling

Establishment of an authorized brand whether domestic, regional or global

for auto parts manufacturing and assembling

Production rate 3 Mio. Vehicles per year

To increase the export rate to 1 Mio. Vehicles per year

Acquiring a minimum 4% share of the total GDP by automotive industry

productions

Acquiring a minimum 20% share of the total national added-value industries

by automotive added-value industry

MINERALS- & METALS

Minerals, Iran Proportion at the World Production

19

No. MineralsRank

( Producer)Iran Proportion at the world production 2015 in %

1 Gypsum 2 8.53

2 Kaolin 8 4.41

3 Barite 5 4.02

4 Sulphur 10 3

5 Feldspat 6 2.83

6 Bentonite 8 2.69

7 Clinker 6 2.19

8 Ammonia 16 1.71

9 Cement 7 1.59

10 Molybdenum 9 1.5

11 Fluorine 7 1.44

12 Iron Ore 11 0.99

13 Limestone 13 0.8

(Source: USGS)

Iran 15th mineral-rich country

Iran possesses over 68 types of minerals

Iran holds……..

37 bn tons proven reserves

57 bn tons potential reserves

7% of the global mineral reserves

Mineral processing major deficiences

Lack of modern technology

Export minerals in unprocessed form

Need 40 bn US$ Investment

1.7 bn Tons Mineral Reserves discovered 2016

310 Mio. Tons produced in 2016

20

MINING & METAL

11/05/2017 21AHST Teheran

MINING & METAL PRODUCTION

• Major Production of Iron, Steel, Copper &

Aluminum

• Over 5.500 active mines

• Close to 115.000 people employed

• Benefiting from huge skilled labor force and

low labor costs

11/05/2017 22AHST Teheran

IRON & STEEL

• About to reach self-sufficiency in steel-production in the next years

• 17.89 Mio. tons crude steel production in 2016

• 10.8 % growth compared to 2015

• Projected to reach 55 Mio. tons till Vision Plan 2025

• Aim to become world‘s 6th steel producer 235.000 engineers graduate from Iranian engineering faculties every year, meaning that the

industries are well staffed with experts and skilled personnel.

WORLD RANKING IN AGRO-PRODUCTS

1st Pistachio, Berberis, Caviar, Saffron, Stone fruits, Berries

2nd Dates, Apricotss

3rd Watermelons, Cherries, Apples, Figs

4th Wool, Almonds, Walnuts

5th Fennel, Anise

6th Hazelnut, Tomatoes

7th Grapes, Onions, Kiwi

8th Lemones & Limes, Oranges, Goat products

9th Lentils

10th Tea, Natural Honey

12th Citrus fruits, Wheat, Plum

13th Hen eggs, eggplants, Melon seeds

23

FOOD & BEVERAGES

82% of the food consumed in Iran comes from the country's own agriculture

6.5 million are active in the agriculture sector

High subsidies in the energy sector (electricity, water, fossil fuels)

Thousands of valuable jobs

Approximately 25% of all Iranian bank loans go to agriculture

Investment in the agricultural sector represents a total of only 5% of total Iranian investment

24

FOOD & BEVERAGES

30% of all agro-products are wasted

Number of farmers is reduced by 50,000 every year due to a lack of

facilities in the sector

The volume of agricultural products that go to waste in Iran is enough to

feed up to 18 million people annually

About 9.3 billion cubic meters of water are lost every year thanks to the

wasted crops

Need: Silo, Cooling systems, modern slaughterhouse technology,

Breeding facilities, packaging, production & storage technologies,

poultry farming equipment, food processing technology

25

Current Status

11/05/2017 26AHST Teheran

FOOD INDUSTRY

• 12.000 firms (about 12 % of industrial sector)

• 330.000 employed

• Close to 20 % of Investment in Industries

• Investment opportunities for food related machines

& technology, hygiene management and prevention

of plant and animal diseases, packaging …

27

• Allgemeine und gezielte Info über den Markt

• Vermittlung von Geschäftspartnern/Vertretern

• Firmenpräsentation & Marketing

• Ihr Partner bei Messeauftritten

• Konferenzräumlichkeiten mit sehr guter

Ausstattung und österreichischem Flair

• Troubleshooting in allen Situationen

Vielen Dank !

AußenwirtschaftsCenter TeheranWirtschaftsdelegierter Dr. Georg Weingartner

Africa Expressway - Golgasht Street Nr. 20 Teheran 19157, Iran Tel.: +98-21 2204 77 91, 2205 18 20, 2201 66 28Fax: +98-21 2205 18 16E-Mail: teheran@wko.atInternet: www.wko.at/awo/ir