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Caution reigns at Iran Plast show

February 1, 2006

6 Min Read
Caution reigns at Iran Plast show

Key market for Asian and European processing equipment makers starts to sputter.

The mood at Iran Plast 2005 late last year was one of "wait and see," as the country''s ongoing international dispute over its nuclear energy program, coupled with domestic concerns, unsettled processors.

"Processors are not willing to fork out cash for new machinery when the political situation remains unstable," said one Iranian processor at the show who asked not to be identified. "Constant change in government does not facilitate confidence for the Iranian processing community. Stability would bring benefits for everyone."

The potential importance of the market is reflected in sales of foreign-made processing equipment. Joachim Vettkötter, vice managing director of Germany''s equipment association VDMA (Frankfurt), says Iran is now Germany''s seventh-most important export market. Claudio Celata, head of the Italian plastics equipment manufacturers'' association ASSOCOMAPLAST (Milan), told MPW in Tehran that Iran is the country''s 12th-most important export market for processing equipment. Exports have grown from €28,712,000 in 2002 to €39,500,000 in 2004. In the first six months of 2005 alone (the latest numbers available), the figure reached €37,730,000.

Yet the numbers could be higher if companies were less hesitant to invest, says Celata. M. Sodody, president of the Iranian Society of Tool Makers, says his members'' customers are delaying orders for new tools until they see who will be the real players in the new government. Many processors at the fair said they believe the new government (President Mahmoud Ahmadinejad took office in August 2005) will be less free-enterprise-friendly than the last.

Still, some exhibitors reported a 2005 that was far better for them than the previous year. Ali Mirkhan, chairman of Peykareh Group (Tehran), a processor of bottle-to-PET packing strap and films, says the company has seen PET straps taking 20% of the metal strap market in 2005. "Extruded PET straps are one-fifth the weight of metal, one-third the cost, and they don''t rust or damage the packed goods like metal does," he says. More than 30% of his output is being exported to South Africa, Malaysia, Australia, Pakistan, and neighboring Persian Gulf countries.

Mirkhan also sees huge demand in Iran for film. To help satisfy this, Peykareh is making a €12 million investment in three Windmöller & Hölscher coex blown-film lines, a five-color offset printer, and a new filling line. His company will be producing three-layer film for 25-kg resin bags for the country''s key polymer producer NPC (Tehran).

At Noor Ista Plastic Co. (Tehran), a processor of reinforced composite prepegs, automotive components, kitchen sinks, and water tanks, F. Yousefi, export manager, says the seven-year-old company is seeing a 20%/yr increase in exports. Although a recent law to pull cars 20 years and older off the streets for environmental reasons should benefit vehicle parts suppliers like his company, the buying power of Iranian workers has so slipped that new cars are often a luxury they cannot afford. This explains a slowdown in much of the country''s car industry, he says.

M. Varzidehkar, president of the like-named distributor for a number of European brands such as Krauss-Maffei, Motan, and Greiner, says business could always be better, but he finds state-owned companies are now opting for European-made equipment for quality reasons.

Poolad, a Tehran-based manufacturer of injection molding machines which holds 30% of the local market for machines up to 450 tonnes clamping force, says its main competitors are Chinese machines that are often 15% cheaper. But Sirus Bakhtiari, general manager, says Poolad units generally have a 20% higher performance output over comparable Chinese machines and that after five years of use, a processor can sell his used Poolad machine for 80% of the original price, "something you won''t see with Chinese-made equipment," says Bakhtiari.

Henrick Aslanian, owner of Aslanian Injection Machine Mfg. (Tehran), says that although his company is seeing 10-15% growth/yr, sales could be even higher. "Chinese imports are destroying the [local] market because they are undercutting our prices to gain market share," he declares. He goes on to say that the Iranian government needs to protect domestic equipment makers from such unfair practices.

What foreign exhibitors are saying

Many exhibitors from abroad to Iran Plast 2005 saw the potential of big sales in this hungry market. First-time exhibitor Optical Control Systems (OCS; Witten, Germany) expected interest in its inspection systems would come only from polymer manufacturers or perhaps large masterbatchers. "We were surprised that so many processors are actually looking for inspection equipment in order to produce world-class products," says Fatah Najaf, company director. "We''re really optimistic about possible sales here."

 Hans-Peter Krukenberg, sales manager at mixing systems manufacturer Reimelt Henschel (Kassel, Germany), says interest generated at the fair was for small, single units to replace locally produced ones that don''t offer the quality to hold up under sustained use. "Although domestic mixers can be up to 69% cheaper than what we offer, Iranian processors appear to be looking for equipment that has better quality and lower maintenance," Krukenberg says.

Reza Asgharzadeh, managing director of Reza Zaden (Aachen, Germany), a used injection molding equipment distributor, sold eight overhauled Windsor injection molding machines during the show. "Demand is coming from processors who previously farmed out production of items like consumer goods to job shops but have decided it is better to process these themselves," Asgharzadeh says.

 By the end of 2006, Austria''s EREMA (Ansfelden), a producer of plastics recycling systems, hopes to have 11 of its machines in this market, says Stefan Lehner, area sales manager. "The problem so far has been financing, but we hope this will change next year," Lehner says, noting the Iranian market is very important for EREMA and sales have increased from year to year.

Competitor Next Generation Recyclingmaschinen (NGR; Marchtrenk, Austria) returned for a second time to the show because it expects good growth in the market. Iranians considering NGR equipment are switching from cheaper Asian lines because they want maintenance-free operation, says Christian Fellner, area sales manager. RC

Robert Colvin [email protected]

Contact information

Aslanian Injection Machine Mfg.  

[email protected]

ASSOCOMAPLAST  

www.assocomaplast.org

EREMA GmbH  

www.erema.at

Iranian Society of Tool Makers  

[email protected]

Next Generation  Recyclingmaschinen GmbH  

www.ngr.at

Noor Ista Plastics Co  

www.nipcomposite.com

NPC  

www.nipc.net

OCS GmbH  

www.ocsgmbh.com

Peykareh Group  

www.peykareh.com

Poolad Mfg. Co.  

www.pooladimm.com

Reimelt Henschel  MischSysteme GmbH  

www.reimelt-henschel.com

Reza Zadeh GmbH & Co KG  

www.rezazadeh.de

Varzidehkar Co.  

www.varzidehkar.com

VDMA e.V.  

www.kug.vdma.org

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