Embassy of the Islamic Republic of IRAN in Brasilia THE CAPACITIES OF IRAN’S INDUSTRIES Dr. Mohsen...

Embassy of the Islamic Republic of IRAN in Brasilia

THE CAPACITIES OF IRAN’S INDUSTRIES

Dr. Mohsen SHATERZADEHAmbassador Extraordinary and Plenipotentiary

Brasilia – 25 September 2008

Presented to the Representatives of Iron ore deposits from State of Minas Gerais

Embassy of the I.R. Iran - Brazil

THE CAPACITIES OF IRAN’S INDUSTRIES

3 The Capacities of IRAN’s INDUSTRIES - Embassy of the Islamic Republic of IRAN in Brasilia

The general view of Industry and Mine sector in“20-Year Development Perspective” Document

4

Visionary, innovative and developed based on advanced technology

Self sufficient in providing Strategic Commodities

Export Oriented, to obtain major part of foreign exchange, through export.

Balanced in different parts of country based on regional capabilities and advantages.

Exploiting available resources to the optimal level.

Synergic, by setting Networks, Clusters and Chains

Compliance with Regional and International Standards

The Capacities of IRAN’s INDUSTRIES - Embassy of the Islamic Republic of IRAN in Brasilia

Industrial development established by private and cooperative sectors, emphasize on public participation, by forming private and public stock companies.

Investment, in development of Iranian Brands for Industries and their promotion in global Market.

Recommending advanced technology for industry and mine sector and establishing Hi Tech industries associated with top notch technology.

Entrenching of privatization to increase performance and competitiveness

Encourage foreign investment for transfer of technical know-how and technology, to improve managerial and technical capabilities, and gain access to international markets through international marketing networks, and have a reach to foreign investment firms, and have a reach to complementary financial resources.

5

Industrial Development StrategyMacro Policies


Priorities In INDUSTRY and MINE Sectors

Hi-Tech Industries Natural Resources and Energy Based Industries Mines Machinery Industries Light and Heavy Vehicle Industries Rail Industries Marine Transport Industries Agro Industries Textile Industries Home Appliance Industries Chemical Industries


INDUSTRY QUANTITATIVE GOALS ON 2025

7

TITLE % of growth/year MILLION $

HIGH TECH INDUSTRIES 19.9 11630

MACHINERY and EQUIPMENT 12.9 10080

VEHICLE 11.4 27913

ENERGY based INDUSTRIES 11.3 51960

AGRO INDUSTRIES 11.2 15973

METAL MINERALS 18 137311

NON-METAL MINERALS 14 191075

TOTAL 445942


SOME FIGURES OF PRODUCTION CAPACITY Steel : 11 Million Ton / year

Mine : 200 Million Ton / year Car : 1.1 Million / year Power Plant Equipments : 5500 MW/year Tractor : 30000 / year Cement : 48 Million Ton / year Sugar : 1.3 Million Ton / year Oil : 1.5 Million Ton / year Paper : 0.5 Million Ton / year Ceramic : 2.5 Million Ton / year Glass : 0.8 Million Ton / year Textile : 350 Million Square Meter / year


Annual Growth Rate of (Non-Petroleum) Industrial & Mineral Exports

3.8

28.9

61

0

10

20

30

40

50

60

70

1st Dev. Plan 2nd Dev. Plan 3rd Dev. Plan

Per

cen

tag

e


TOTAL CONTRACT VALUE OF TECHNICAL & ENGINEERING SERVICES EXPORTED UNDER

MIM'S SUPERVISION(MILLION DOLLAR)

10

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Year

To

tal C

on

tract

Valu

e



Some Parts of Macro Policies

InIndustrial Sector

Some Parts of Macro Policies in Industrial Sector

To plan production of major metals by 2025, to reach 3.5% of world steel production (55 million MT) and 4% of world export (20 million MT). Furthermore, to increase aluminum production to 1.5 million MT and copper to 800,000 MT.

The Petrochemical industry is supposed to produce 51 million MT of Ethylene, Methanol, and different types of Poly-Ethylene by 2025, in order to share 34% of Middle East and more than 6.5% of world major petrochemical products

Investment in design and production of five models of vehicles, under local brands in coming two decades, with competitive advantage on global level


Establishment and expansion of foreign sights for assembly of Iranian products with assistance of Iranian investors

Co-marketing of Iranian vehicles through international sales and distribution networks in return to offering market share in Iran

Design and production of four classes of natural gas run engines, with auxiliary equipments.

To set incentives and support domestic and foreign investors for production of different types of locomotives.

Encouraging private sector to invest in marine industry and to boost foreign investment



Providing guarantees and financial support for loans with low interest, and political support of domestic ship-building industry in foreign markets, through reciprocal and active export, to obtain fair market share.

Establishing engineering design and access to current technology of ship-building, support research and development, having close connection with universities, training skilled workforce in demand, with respect to current and future requirements of world market and international standards

Updating and development of maintenance, process, packing and distribution technology, exploiting biotechnology and nanotechnology considering environmental and optimization of energy consumption.

With respect to upstream and downstream investments made in the country and region to spot the opportunities and threats, explore for new markets while developing guidelines for investment and expansion.



TITLEGOAL CAPACITY

(thousands ton)

SHARE Of

WORLD PRODUCT

NEW CAOACITY(thousands ton)

TOTAL INVESTMENT COST

(MILLION) $

STEEL Projects 55 000 3.5% 26000 18200

COPER Projects 800 - 600 3600

ALUMINUM Projects 1500 - 900 3600

PETROCHEMICAL GOODS

(ETHYLENE ,METANOL)..,

51000 6.5% - -

Perspective Document for Iran Development in 2025 (Quantitative Goal)


SOME SPECIFIC ENHANCEMENTS INTRODUCED

BY

FOREIGN INVESTMENT PROMOTIN and PROTECTION ACT

(FIPPA)

for

FOREIGN INVESTMENTS IN IRAN


SOME SPECIFIC ENHANCEMENTS INTRODUCED BY FOREIGN INVESTMENT PROMOTIN and PROTECTION ACT(FIPPA) for FOREIGN INVESTMENT IN IRAN

Broader fields for involvement by foreign investors including in major infrastructure: Foreign Direct Investment (FDI) Project Financing Methods:

Civil Participation Buy Back Counter Trade BOT .

Introduction of new legal option governing the government investors relations,


Reasons to Invest in Iran

Iran qualifies from many respects to be a good location for investment and doing business.

Some of the features are:


REASONS TO INVEST IN IRAN

1. Strategic Location: A unique geographical location at the cross-road connecting the Middle East, Asia and Europe, empowered by many inter-and trans-regional trade, customs, tax and investment arrangements;

2. Privatization Plans and Article 44 of the constitution: The result of IRAN' s development plants and article 44 of the constitution; Public companies will be privatized and some state sectors will transfer to the non-state sector.



3. Market Potentials and Proximity: Vast domestic market with a population of 65 million growing steadily as well as quick access to neighboring markets with approximately 300 million inhabitants;

4. Labor Privileges: Large pool of trained and efficient manpower at very competitive costs in a diversified economy with an extensive industrial base and service sector;



5. Membership of international groups/organizations (some of them are as bellow): Customs Co-operation Council (CCC), Economic Cooperation Organisation (ECO), Economic and Social Commission for Asia and the Pacific (ESCAP), Food and Agriculture Organisation (FAO), International Bank for Reconstruction and Development (IBRD), Islamic Development Bank (IDB), International Finance Corporation (IFC), International Labour Organisation (ILO), International Monetary Fund (IMF), International Organisation for Standardisation (ISO), Organisation of the Islamic Conference (OIC), Organisation for Petroleum Exporting Countries (OPEC), Permanent Court of Arbitration (PCA), United Nations (UN), United Nations Conference on Trade and Development (UNCTAD), United Nations Industrial Development Organisation (UNIDO), World Confederation on Labour (WCL).


6. Developed Infrastructure: Territory developed networking in the area of telecommunication, roads and railways across the country;

7. Low Utility and Production Cost: Diversified range of energy, telecommunication, transportation, as well as public utilities;

8. Abundant Natural Resources: Varied and plentiful reserves of natural resources ranging from oil and gas to metallic and non-metallic species reflecting the country’s accessibility to readily available raw materials;

9. Climatic Characteristics: A four season climatic endowment as a privilege to agricultural activities throughout the country and throughout all seasons;




10. Fiscal Incentives: Reduced tax rates from 65% to a flat fixed 25% rate of tax income despite various tax holidays highlighted as follows:Highlights of Tax Holidays

Activity Level of Exemption Duration of Exemption

Agriculture 100% No Time Limit

Industry and Mining 80% 4 Years

Industry and Mining in Less-Developed Areas

100% 10 Years

Tourism 50% No Time Limit

Exports 100% No Time Limit


11- Political Stability: Representative system of government based on friendly relationship with other nations;

12 - New Investment Legislation: Enactment of new Foreign Investment Promotion and Protection Act (FIPPA) to substitute the former Law Concerning Attraction and Protection of Foreign Investments in Iran (LAPFI) providing full security and legal protection to foreign investments based on transparency and international standards.



Streamlined and fast-track investment licensing application and approval process,

Creation of one-stop shop called the ”Center for Foreign Investment Services” for focused and efficient support for foreign investment undertaking in Iran,

Foreign Investors enjoy the same treatment as accorded to domestic investors,

There is no restriction on the percentage of foreign shareholding,

SOME SPECIFIC ENHANCEMENTS INTRODUCED BY FOREIGN INVESTMENT PROMOTIN and PROTECTION ACT(FIPPA) for FOREIGN

INVESTMENT IN IRAN


SOME SPECIFIC ENHANCEMENTS INTRODUCED BY FOREIGN INVESTMENT PROMOTIN and PROTECTION ACT(FIPPA) for FOREIGN INVESTMENT IN IRAN

Foreign Capital is guaranteed against nationalization and expropriation, and in such cases the Foreign Investor shall be entitled to receive compensation,

Foreign direct investment in areas where the activity of private sector is permissible,

Iranian natural and juridical persons applying for investment in the country, can enjoying the facilities and protections under FIPPA,


FOREIGN INVESTMENTS

UNDER

FOREIGN INVESTMENT PROMOTION AND PROTECTION ACT(FIPPA)

(DURING 1993-2007)

Caution: This Statistical Report is Excluded Foreign Investments in Oil Exploration and Exploitation and Foreign Investments without Foreign Investment License.


VOLUME OF FOREIGN INVESTMENTS UNDER FIPPAby sector

(THOUSANDS US$)

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

00000000000000

#REF! #REF! #REF!


NO. OF FOREIGN INVESTMENT UNDER FIPA (1993-2006)

NO. of FOREIGN INVESTMENTS UNDER FIPPA(DURING 1993-2006)

0

10

20

30

40

50

60

70

80

90

Industries & Mines 60482536257161861713532

Other Sectors 2013643000020200

All Sectors 80613140287161861913732

20062005200420032002200120001999199819971996199519941993


DURING 1993-2006 ,331 FOREIGN INVESTMENT PROJECTS, WORTH OF 21.36 BILLION US$ COVERED BY FIPPA281 PROJECTS WORTH OF 15.15 BILLION US$ RELATED TO INDUSTRY AND MINE SECTORS

21.36 15.15 6.21

331

281

50

0

50

100

150

200

250

300

350

Value(billion US$) Progects

FOREIGN INVESTMENTS UNDER FIPPADURING 1993-2006(by progects & value)

All Sectors Industries & Mines Other Sectors


SOME

INVESTMENT OPPORTUNITIES

IN

INDUSTRY AND MINE SECTORS


SOME INVESTMENT OPPORTUNITY IN INDUSTRY AND MINE SECTORS

STEEL Projects

CEMENT Projects

Non Steel Projects

MINE Projects

IDRO `S Projects

PETROCHEMICAL DOWN STREAM Projects

Some Other (Industrial) Industry Projects


SOME POSSIBLE COMMON COOPERATION BETWEEN IRAN AND OTHER COUNTRIESTHROW FINANCING OR JOINT VENTURE

JOINT COOPERATION WITH PROJECTS (IN) INSIDE IRAN LIKE:

» Steel Projects» Cement Projects» Non Steel Projects (ALUMINIUM, COPPER, ….)

» Down Stream Projects JOINT COOPERATION IN MULTI NATIONAL PROJECTS

LIKE :» D8 Projects, » ECO Projects, » …….


LocationEstimate Costs

PROJECT TITLE RAW

Province Local Currency

(Billion Rials)

Foreign Exchange (Million $)

Esfahan 1485 90 Saba Steel Capacity Development 1

Esfahan 5175 490 Mobarakeh Steel (Shahid Kharrazi) 2

Charmahal Bakhtiyari

1400 124 Charmahal Bakhtiyari Steel 3

Azarbayejan 1919 127 Azarbayejan Steel 4

Kerman 1600 136 Kerman Steel 5

Yazd 1600 136 Yazd Steel 6

Fars 1288 124 Fars Steel 7

Khuzestan 2142 128 Khuzestan Steel 8

STEEL PROJECTS


STEEL PROJECTS

LocationEstimate Costs

PROJECT TITLE RAW

Province Local Currency(Billion Rials)

Foreign Currency(Million $)

South Khorasan 1300 124 South Khorasan Steel 9

Razavi Khorasan

1600 136 Razavi Khorasan Steel 10

Yazd 895 198 Grafiti Eletrod Production 11

Hormozgan -_ 163/2 Nama Power Plant 12

Khuzestan 580 365 Oxin Steel Making 13

Yazd 560 45 Alloyed Steel Capacity Development 14

Razavi Khorasan

_ 400 Khorasan Steel (Capacity Enhancement) 15


CEMENT PROGECTS

LOCATIONStart of

CunstructionCAPACITY

(ton per day)

PRIJECT TITLE

RAW

PROVINCE

SISTAN BALUCHESTAN 2005 600 KHASH 1

KERMAN 2004 3300 MOMTAZAN 2

MAZANDARAN 2004 3300 NEKA Developing Plan 3

GILAN 2004 2000 KHAZAR 4

ISFAHAN 2002 3500 LORESTAN 5

FARS 2006 700 ABADEH 6

ISFAHAN 2004 3300 SEPAHAN Developing Plan 7

CHARMAHAL BAKHTIYARI 2003 3500 SHAREKORD 8

TEHRAN 2005 2000 SHOMAL 9

KHORASAN RAZAVI 2004 3300 LAR SABZEVAR 10


LOCATIONStart of

CunstructionCAPACITY

(ton per day)PRIJECT TITLE

RAWPROVINCE

BUSHEHR 2003 5500 SAROOJ BUSHEHR 11

MARKAZY 2004 3400 OMRAN ANARAK 12

KERMANSHAH 2005 2000GHARB Optimization

13

ISFAHAN 2005 2000 SAROOJ ISFAHAN 14

HAMADAN 2004 3400 HEKMATANEH Developing Plan

15

GHAZVIN 2003 5000 Abyek Line(1) 16

KHORASAN SHOMALI 2005 3300 BOJNOORD Developing Plan

17

MAZANDARAN 2004 2000 NEKA 18

FARS 2007 2000 FASA 19

KHUZESTAN 2007 2000 OMIDIYEH 20

CEMENT PROGECTS


MINE PROJECTS

Location TOTAL INVESTMENT COSTS

PRODUCT PROJECT TITLE RAWPROVINCE

Local Currency(Billion Rials)

Foreign Currency(Million $)

Yazd 25081.8Million

Euro450 k ton COAL

ConcentrateParvade.4 Coal Mine

Equipment1

Kerman 105 107310 k ton COAL

ConcentrateKhomrod Coal Mine

Equipment2

Kerman 380173 Million

Euro3 MILLION TON

Jlal Abad Iron Ore Mine Equipment

3

Wst Azarbayej

an_

44.8Million Euro

3 ton Gold Zarshuran Gold Mine Plant 4

Razavi Khorasan

1990 297 6.2 Moillion TonSangan 2 Capacity

Enhansment5

Kerman 4041412 Million

Euro10 MILLION GOL GOHAR(phase2) 6


Non Steel Projects

Location Total Investment Cost

Project Title RAWProvince

Local Currency)Billion Rials(

Foreign Currency)Million($

Kerman 1180 84 SARCHESHMEH(phase2) 1

Kerman 1085 56 KHATOON ABAD Development 2

Kerman 695 103 KHATOON ABAD SOLFORIC ACID 3

Kerman 635 32 KHATOON ABAD Refinery 4

East Azarbayejan 1197 29 SONGUN(PHASE2) 5

East Azarbayejan 585 29.22 SONGUN Refinery 6

East Azarbayejan 2201 120 SONGUN SOLFORIC ACID 7

East Azarbayejan 745 39 SARAB ALOMINA Production 8

East Azarbayejan 900 354 SOUTH ALUMINIUM 9

Fars 612 900 KHALIJ FARS ALOMINA 10

_ 3189 700 KHALIJ FARS ALOMINA 11

_ 1069 104 PETROLIUM COC FACTORY 12


IDRO `s Projects

Estimate CostsProject Title RAWLocal Currency

)Billion Rials(Foreign Currency

(Million $)

150 - 6-7 Seat Aircraft 1

200 - 8-12 Seat Aircraft 2

200 - 19 Seat Aircraft 3

20 - Light Weight Aircraft 4

- 5 Shiraz Electronic Tower 5

- 3 طرح جداسازی آموزش الکترونیکی از مگفا در SBU قالب

6

- 4 طرح جداسازی سیستم پیام دهی از مگفا در قالبSBU

7

- 20 - 8

- 20 IT Park Establishing 9

- 5 A.T.M Production 10

- 20 G.T.L Production 11

- 5 Cool Gas Productin 12

- 5 Vaccine Production 13


Investment(million Dollars)

Annual Capacity (Thousand Ton)

Projects Title index

19.24 20 Methyl Ethyl Kotone 1

51.5 26 Isobutylene Isoprene Rubber(ILR) 2

46.4 140 Petroleum Coke (Graphinated & Calcinaled ) 3

32.6459

AnilineNitrobenzene 4

135 115 Methyl Metharcrylate 6

26.2 22.5 Ethylene Amines 7

500 1600 Methanol To Propylene 7

46.3 50 Mineral Oil (White Oil ) 9

150 150 Poly Vinyl Chloride 10

IDRO `s Projects


IDRO `s Projects

Investment(million Dollars)

Annual Capacity (Thousand Ton)

Projects Title index

100 70 Acrylonitrile Buladiene Styrene(ABS) 11

39 32 Purified Ethylene Oxide 12

36 15 Titanium Tetracachloride 13

300 350 Terephthalic Acid 14

95 50 Styrene Butadiene Styrene 15

75 300 Triple Super Phosphate Fertilizer 16

400 500 Propylene From Propane 17

100 130 Oxo Alcohols 18

123 500 Base Oil 19

45 3 Polyurethane 20

25 9 Bopet 21


SOME IMAGINABLE COMMON COOPERATION BETWEEN IRAN and Other Countries

THROW FINANCING or JOINT VENTURE

JOINT COOPERATION WITH PROJECTS INSIDE IRAN LIKE:» Steel Projects» Cement Projects» Non Metal Projects (ALUMINIUM, COPPER, ….)

» Down Stream Projects JOINT COOPERATION IN MULTI NATIONAL PROJECTS LIKE :

» D8 Projects, » ECO Projects, » …….


SOME OTHER POSSIBLE COMMON COOPERATION BETWEEN IRAN AND OTHERS COUNTRIES

THROW FINANCING OR JOINT VENTURE

JOINT COOPERATION WITH IRANIAN COMPANIES FOR EXECUTION OF PROJECTS IN THE WORLD:

I.R. IRAN has Cooperation with some Group of Countries around the World such as:

Neighboring Countries CIS Countries ECO Countries Middle East & North Africa Countries D8 Countries Latin America & ALBA Countries SHANGHAI Countries South & NAM & African Countries




Signed Agreements with Countries Such as: Venezuela ,Syria ,Belarus ,

Iraq ,Azerbaijan ,Bolivia ,Senegal ,Tajikistan, Turkey , China , Kazakhstan, Russia ,Turkmenistan , Algeria, Oman, Cuba, Egypt

nAgreements Amount: Over than 37 Billion of Dollar

Contracts Amount: 10.5 Billion of Dollar. 45 The Capacities of IRAN’s INDUSTRIES - Embassy of the Islamic Republic of IRAN in Brasilia

Tractor Industry Refinery Wagon Industry Transformer Electrical Post Station Power Plant Vehicle Industry Petrochemical Plants Mills Production Factory Plastic Injection Plant Factory Dairy Products Industry Medical Equipment Industry Shipping Industry




Food Industries Cement Plant Factory Radio and TV Equipment Industry Composite Aircraft Factory Bicycle Industry Building Materials Factory Steel Factory

I.R.IRAN Invite Investors for Establishing Joint Cooperation

Bilateral Joint CompanyOr

MULTILATERAL Joint Company




IRANIAN PROJECTS AROUND THE WORD

1- VENEZUELA

Tractor Industry Vehicle Industry Petrochemical Plants Mills Production Factory Plastic Injection Plant Factory Dairy Products Industry Medical Equipment Industry Shipping Industry Food Industries Cement Plant Factory Radio and TV Equipment Industry Composite Aircraft Factory Bicycle Industry Building Materials Factory Steel Factory Civil Projects Agriculture Projects Sugar Industries



2 - SYRIA Vehicle Industry Oil Refinery Plants Power Plant Electrical Post Station Glass Industry Food Industries Cement Plant Factory Textile Industry Piece of Cars Factories Building Materials Factory Agro - Industry Projects Silo Project



3 - CUBA Mills Production Factory Wagons Medical Equipment Industry Cement Plant Factory Radio and TV Equipment Industry Home Appliance Industry Bicycle Industry Building Materials Factory Paper Industry Sugar Industries Biotechnology Cooperation Agriculture cooperation



4 – IRAQ Sugar Industries Textiles Industries Power Plants Road & Rail Road Industries Electrical Industries Rubber Industries Cement Industry

5 - SENEGAL Vehicle Industry Electrical Post Station Civil Projects



6 - Bolivia Mills Production Factory Plastic Injection Plant Factory Dairy Products Industry Food Industries Building Materials Factory Civil Projects Agriculture Projects

7 - BILORUSSIA Vehicle Industry Power Plant Cement Plant Factory ICT Industry Tractor Industry Civil Projects


8- EGYPT Vehicle Industry Textile Factory Sugar Industries (from Egypt)

9- KAZAGHESTAN Shipping Industry Food Industries Mineral Plant Factory Bicycle Industry Steel Factory Civil Projects

10 - CHINA Vehicle Industry

11- TAJIKESTAN Tractor Industry

53

Iranian Projects Around the Word


THANK YOUfor

YOUR ATTENTION

Dr. Mohsen SHATERZADEHAmbassador Extraordinary and Plenipotentiary

Brasilia– 25 September 2008

Embassy of the Islamic Republic of IRAN in Brasilia THE CAPACITIES OF IRAN’S INDUSTRIES Dr. Mohsen...

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