In Iran, automotive takes a front seat

Iran may not top the plastics industry''s list of high-growth markets, but don''t tell processors in the auto industry. Pending legislation means the auto market here is poised for expansion.

Despite a chaotic traffic situation in Iran''s major cities, demand for new vehicles is driving the country''s plastics processing sector, say exhibitors and visitors to the country''s recent Iran Plast show in Tehran in late 2003.

Mohammad Reza Nematzadeh, president of Iran''s National Petrochemical Co. and deputy oil minister, said at a press conference during the show that the country is on the verge of legislating that cars more than 20 years old will have to be scrapped and replaced by less-polluting vehicles. This should be a boon to plastics processors and the domestic automobile industry, which produces more than 700,000 vehicles a year, mostly under license from European and Korean builders such as Peugeot, KIA, and Daewoo. Next year should also see the entry of models based on Renault-Nissan and VW designs.

Domestic automobile demand is forcing one supplier, MAPP (Tehran), to double the size of its facilities by mid-year to keep up with orders. The 100-staff, €2-million/yr private injection molder produces more than 100 parts, including air ducts, air conditioning vents, seat adjustment knobs, gear levers, and seals for the country''s key vehicle producer, Iran Khodro. Molds are being supplied by domestic, Portuguese, and Italian moldmakers because Taiwanese or Chinese molds don''t meet the quality standards needed by his customers, says S.H. Zarabiha, factory manager.

State-run supplier MCP (Tehran) is also expanding into adjacent facilities to produce car seats south of its existing plant, where slush molded and thermoformed bumpers, instrument panels, and various accessories are produced for Iran Khodro. The company is also exporting bumper systems as spares to Europe for the now-defunct Peugeot 405, says overseas commercial manager H. Akhavi. The company is in talks with Renault-Nissan and VW to supply parts when their models reach the production stage. Initially these cars will be made from CKD (completely knocked down) kits shipped from abroad until MCP and other molders have the molds and production know-how they need to meet quality standards.

Iranian injection molding machine producer Aslanian (Tehran) expects high demand from auto part producers for its AVT 250/500 vertical machine. This 2500-kN turntable model is intended for insert molding and could cut cycle times by up to 40%, says Henrick Aslanian, managing director.

General Manager Sirus Bakhtiari of Poolad Injection Molding Machines (Tehran) says automotive OEMs are increasing their quality demands of end products. His customers are looking for better and more efficient equipment. Poolad is outsourcing to Woojin (Inchon, Korea) for toggle clamping units from 850 to 4500 kN, as well as injection units. "Such units are affordable for Iranian customers but offer very good efficiency and precision," says Bakhtiari.

One important aspect in Iran for acquiring new equipment to service the automotive market is finding adequate financing of new machines. MAPP''s Zarabiha says official interest rates at Iranian banks for processors are now about 23%, and they can be hard to get. Black market loans run up to 50%. Poolad''s Bakhtiari says his payment concept uses no bank loans, but a 20% down payment followed by 24 payments over a 12-month period for the balance, allowing the processor to pay as he produces. This plan has found high interest among customers, Bakhtiari says. Machine payback is said to be between 12 and 15 months.

Robert Colvin [email protected]

Contact information
Poolad Injection Moulding Machines www.pooladimm.com
National Petrochemical Co. (NPC) www.nipc.com
MAPP www.mapp-mn.com
MCP www.mehrcampars.com