Private Processors Seek State Aid, Fewer Restrictions

The recent Iran Plast 2002 exhibition in Tehran brought to light issues facing private processors and equipment makers in an economy that is still tightly controlled by the Iranian government. While state officials expressed their support of the burgeoning private sector at the event’s opening ceremonies, a different view was seen on the show floor.

Mahmood Aref, Iran’s Vice President, indeed, emphasized that the government should increase its interest in the needs of the private sector. He said the government is doing its best in protecting private investment, encouraging processors to create jobs, and bolstering foreign investment. Oil Minister Bijan Zanganeh said the country’s petrochemicals industry is providing marketing support for downstream industries.

The response to the government’s proclamations of support among exhibitors was subdued. Mehrdad Varzidehkar, president of Varzidehkar, a Tehran-based representative for 14 European equipment makers, noted that in 1988, following Iran’s war with neighbor Iraq, it was necessary for the government to take control of major aspects of the economy to help rebuild the country. But now, he said the state needs to loosen control and give private processors marketing, distribution, and export assistance in order to level the playing field with state-run operations.

A. Hrachian, general manager of Iranian granulator maker Top Technique, in Tehran, said he has seen no substantial assistance from the government. Fatemeh Mohamadinia of the commercial department of sheet processor Noavaran Aida Plastics, in Tabriz, said one key reason the private sector has not been properly heard is that there is no permanent representative in Iran’s parliament to champion its causes. She also noted politicians should be more attuned to environmental issues like the use of CFCs to foam polyurethane for refrigerator insulation. “But as long as [local white goods] manufacturers sell on price and don’t aim [for] quality, we’ll continue to have such problems.”

Hasein Zeidar, owner of Tehran-based Zeidar Plast, a processor of injection molded bath and kitchen fixtures, said the domestic market is tough for processors that sell on quality. He said the government should limit lower-priced, low-quality imports from China and Taiwan, and crack down on illegal processors in the country.

H. Sadrzadeh, director of Tehran-based corrugated pipe processor Polico, said the country’s processors are looking for a foundation to maintain their business — the same one state-run companies have — and to conduct business unfettered. Navid Famili, director of Karyar, Tehran, a developer of inline compounding injection molding machines, said that the government should leave private industry alone.

Meanwhile, equipment sales agent Varzidehkar remarked that in Iran, “you have to sell complete ideas to someone who wants to operate as a processor,” adding “sometimes technical know-how is lacking… [Y]ou have to offer a complete package with all the elements.” Henrick Aslanian, managing director of Hambasspar, a family-owned producer of injection molding machines, agreed, saying more and more companies are investing in equipment without processing experience or an understanding of production concepts. His company has had to offer complete packages to such operations.

Mohammad Reza Nematzadeh, president of polymer producer NPC, Tehran, a major Iran Plast sponsor, hoped the annual venue will spur more competition in the private sector and allow foreigners to find opportunities in Iran. Nematzadeh, who is also the country’s Deputy Minister, emphasized that Iran welcomes U.S. equipment and resin producers to the next fair, though U.S. trade sanctions have made it difficult to attract American attendees.

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