Iraq, Afghanistan: Destinations of Iran Plastic
Trading with Afghanistan and Iraq has historically been of significance to Iran. Cultural, historical and religious commonalities have added to the importance of these neighboring countries in different sectors. Over recent years, Iran has had abundant commercial and economic transactions with Iraq and Afghanistan. One of sectors Iran has traded with its eastern and western neighbors has been export of technical and engineering services, as well as petrochemical products. Iran has also a good market for importing commodities from Iraq and Afghanistan.
According to official data, more than two-thirds of Iran's plastic products go to Iraq and Afghanistan.
Tehran has recently hosted a seminar to promote export destinations for Iran's plastic industry in the two countries. Senior officials from Iran's National Petrochemical Company (NPC) and delegates from Iraq and Afghanistan attended the event.
Polymer Exports to Iraq Quintupled
Reza Mohtashamipour, director of downstream industries office at the NPC, said Iran's export of polymer products had more than quintupled over the past five years to more than 100,000 tonnes.
Reiterating the need for preserving and boosting the market for Iran's plastic and polymer products, he said: "In such markets, the most significant need is to develop capital and have a strong presence. Iran can be a supplier of plastic industry machinery to Iraq and Afghanistan, along with after-sales services."
Mohtashamipour said that machinery constituted more than 20% of Iraq's imports over the past two years.
"In the near future, we will be dealing with an industrialized country whose share of plastic industry will increase and it has to start planning for such circumstances," he added.
Jump in Polymer Exports to Afghanistan
Abbas-Ali Motevasselian, chairman of Association of National Plastic Industry, said in the seminar that the decline in the activities of "Daesh" terrorists in Iraq would be the best chance for Iran to increase polymer exports to its western neighbor.
"The volume of polymer product exports to Iraq and Afghanistan has experienced a jump," he said.
Motevasselian said Iran's share of polymer markets in the two countries was still meager.
"Breaking into neighboring countries' markets must be the top priorities of our country's economic diplomacy. This issue needs a precise and specialized knowledge of target markets," he added.
"The ground is paved for the delivery of goods to Afghanistan. Common language and national willingness for Iranian polymer products in Afghanistan could be influential," he said. "Currently, Afghanistan is importing $300 million of polymer products, which Iran has had a $42 million during the first five months of the current [calendar] year."
Motevasselian referred to Iran's polymer market targets, saying: "China, the United Arab Emirates, Belgium, Turkey and Iraq are the leading importers of raw materials and polymer products from Iran."
He said that Iran exported 36,000 tonnes of polymer products and raw materials, worth $67 million, to Afghanistan during the first five months of the year, up 16% year-on-year.
He said that increasing exports would require cooperation on the part of the NPC, as the state-run administrator of downstream petrochemical industries.
Motevasselian said Iran's potential in the plastic industry must be known on a larger scale in order to win toeholds in neighboring countries' markets.
As "Daesh" is getting defeated, he added, stability and security is returning to Iran to the benefit of Iran's plastic industry.
He said Iran's export of raw materials, as well as polymer products to Iraq and Afghanistan have experienced growth in both value and volume. He added that this upward trend had to continue.
Afghanistan Opens Polymer Market
Jaber Ansar, the economic counselor of the Afghan embassy in Iran, said his country was willing to benefit from Iran's plastic industry technologies in its own industries.
"Rather than importing the commodities from other countries, the Afghans are more willing to use Iranian commodity. Afghanistan is cut off high seas, but it enjoys a good status geopolitically. Therefore, Iran can make optimal use of this chance for communication with other countries," he said.
The Afghan diplomat said Iran and Afghanistan would be playing in a win-win game due to mutual incentives.
Ansar said 35% to 37% of Afghanistan's $300 million market belongs to Iranians, expressing regret that Iranian commodities were sent only to west and southwest.
He highlighted the role of common language as an advantage for mutual transactions, saying: "Afghanistan can benefit from Iranian universities and specialists and that would facilitate Iran's presence in Afghanistan for long time. That would create solidarity between Afghan industrialists and Iranian researchers."
He said Afghanistan needed investment and was willing to use Iran's technology.
Ansar said Afghanistan's investment support law was the newest law on investment in the region, adding: "Investors can take out 99% of their liquid capital and they are exempt from 50% of taxes for ten years. Foreign investors can also benefit from these incentive packages."
He said Iran's plastic industry was not limited to a single phase, adding that Iran could show off its potentialities in this sector.
Iranian Investors in Iraq
Abdussamad Rahman Sultan, advisor to Iraqi prime minister for economic and infrastructure investment affairs, said his country was open to investment in petrochemical projects.
He said that Iran and Iraq had broadened their ties after the downfall of Saddam Hussein.
He highlighted Iran's role in Iraq's political and economic stability, saying: "Earlier I dreamt of academic attendance at Iran Plast so that we would benefit from Iran's scientific potential and also make reforms at Iraqi universities."
He said that workshops were expected to be held to discuss development of trade with Iran. He expressed hope that Iran would be a model of development for all countries including Iraq.
"In 1977 we were able to produce ethylene, but Iraq plunged into long wars. Today, we intend to attract new investment in petrochemical industry and I would like to note that we have permanent supportive laws for investment and Ministry of Industry has opened all doors to investment," he said.
The Iraqi official said that his country would not be complete without Iran's market. "We hope that current political stability would continue and we are making efforts to facilitate Iran's investment."Daesh" has vanished in Iraq and 2017 is the year of putting an end to all enemies of Iraq."
"We have to eye economic evolution and we invite everyone for investment," he said.
Technical Presence in Iraq
Hamid Hosseini, secretary general of Iran-Iraq Chamber of Commerce, said: "In light of establishment of stability and security in Iraq we can stabilize our presence in the Iraqi market, and the best way to achieve this objective would be through Iranian engineers and specialists for software and education."
"Opportunities for job creation and exports in the Iraqi market have increased in the current year; therefore, we can see Iraq as the opportunity for the supply of Iranian products," he said.
Hosseini said: "Iraq can be our biggest and the most important trading partner and in light of its growing population and on average in 20 years' time it could be a potential market for Iran's polymer products."
"Therefore, the intact capacities of Iran and Iraq must be put together and since Iraq's infrastructure is not ready for industrial work, Iran can use its own capabilities and technical knowhow to build capacity in Iraq."
Hosseini said: "Iraq alone makes up 50% of our non-oil exports and we can use Basra Port for maritime transport."
"Iraq is our second destination for exports and our commodity exports to this country will increase 20% by the end of the current year, and once Iran's gas pipeline is operational the volume of Iran's exports would go to $4 billion," he said.