Gold rush begins for Iran business as EU companies move into the region

Published July 21st, 2015 - 12:34 GMT
Some European companies have already marked out their target markets. (AFP/File)
Some European companies have already marked out their target markets. (AFP/File)

European companies see a huge potential for business in Iran and some of them have already marked out their target markets, waiting for a nod to move in. 

Sweden's Assa Abloy, the world's largest lock manufacturer by sales volume, has bought a company in Dubai for exports of safety doors to Iran, its president and CEO Johan Molin said.

“We are ready,” he told the TT news agency. His company held a conference around the question, “When are we moving in?" on the same day Iran and the P5+1 group of countries finalized their nuclear negotiations.

Swedish Volvo Trucks Corporation even didn’t wait for those talks to conclude, resuming its production in Iran in May by opening a line for a new generation of Volvo FH trucks at Saipa Diesel west of Tehran.

Sweden is one of the few countries in the European Union supporting Iran’s nuclear program, and a staunch opponent of sanctions on Tehran.

Swedish Economy Minster Mikael Damberg has already announced that the government will send a trade delegation to Iran in the fall.

Sweden has been involved in industrial, mining, and telecommunication projects in Iran for decades which it has kept going over recent years. Bilateral trade reached $500 million in 2007 before Western sanctions brought them down to $242 million in 2014.  

“We’ve had business in Iran for over 100 years,” said Ericsson CEO Hans Vestberg.

“Since the telecoms sector was not affected by the sanctions we don’t think the current developments will have an immediate effect on us. But of course it’s a very positive development that Iran is opening up.”

European delegations are already trickling in, adding to an increasingly hectic schedule which Iranian officials are running for foreign trade arrivals.

On Monday, German Economy Minister Sigmar Gabriel hunkered down for key talks with Iran’s Minister of Petroleum Bijan Zangeneh in Tehran. Gabriel is heading a 60-member delegation of big German businesses such as Siemens, Linde, VW, Daimler and GIZ on his three-day visit to the Islamic Republic.

Switzerland's Deputy Foreign Minister Yves Rossier arrived in Iran Tuesday, starting his visit in Ahvaz for a tour of memorial sites from the Iraqi war under the ex-dictator Saddam Hussein in the 1980s, the IRNA news agency said.

Ahead of the visit, Swiss Ambassador to Tehran Ciulio Haas toured Ahvaz, calling on falafel eateries and universities in the city.

French Foreign Minister Laurent Fabius announced last week that he planned to make an official visit to Iran soon. Italians are also preparing a high-profile delegation for a visit to Tehran.

“Iran is a country with both car and oil industries, and a lot of other industrial sectors as well,” said Alrik Danielson, head of Sweden’s SKF, the ball bearings giant. “If all sanctions and obstacles to business disappear, it will naturally be a positive development for us.”

Iran’s foreign debt is basically at zero and the foreign exchange reserve relatively large, which makes investment possible, said Stefan Karlsson, head of the country risk analysis department at the Swedish Export Credits Guarantee Board (EKN).

This story has been edited from the source material.

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