The only remaining challenge is the integration of the Iranian financial sector into the international one. Work must be done on both sides.

Amir ALIZADEH Deputy Managing Director GERMAN-IRANIAN CHAMBER OF INDUSTRY AND COMMERCE

German interest in Iran

November 14, 2017

Amir Alizadeh, deputy managing director of the German-Iranian Chamber of Industry and Commerce (AHK), talks to TOGY about momentum in the Iranian market and the role of German companies in the country’s oil and gas industry. AHK was created in 1975 to promote German-Iranian business ties. It has 2,500 member companies, 80-90% of which are based in Iran, with the rest in Germany.

• On knowledge transfer: “There is a presumption that Iranians always want investment, financing. This is true, of course, but it’s not the only thing. They also want to invest in know-how and knowledge transfer. It’s not always about FDI.”

• On the Iranian market: “Iran is a very developed country with great infrastructure, young and well-educated people and a lot of entrepreneurs, especially women.”

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What are the expectations for market momentum in Iran?
The market momentum, especially after Total’s South Pars phase 11 deal last July, is alluring. There are many projects in line ready to be financed and the country has the will and security to move it all forward. The petrochemical sector in particular will experience a great boost since the government has planned huge investment over the next decade.
In my opinion, the only remaining challenge is the integration of the Iranian financial sector into the international one. Work must be done on both sides. Europeans have to be more willing and Iranians have to be more clever or engaging in improving their infrastructure.

 

Which oil and gas products and services are most requested from German companies in Iran?
Machinery, industrial parts, raw materials such as pipes, plates and other ad hoc products. There is also engineering know-how, IT solutions, electrical devices and so on. Generally, whatever is needed in refineries and petrochemical plants, from know-how to engineering to machinery, and everything in between. The main strength of German companies is high-tech solutions. The co-operation with German companies goes in that direction.

So Iranian companies demand more high-tech solutions from German companies?
Yes. There is a presumption that Iranians always want investment, financing. This is true, of course, but it’s not the only thing. They also want to invest in know-how and knowledge transfer. It’s not always about FDI.

How has business between Iranian and German companies improved since the JCPOA in 2015?
From July 2015 until the end of 2016, we had more than 40 business delegations coming from Germany, far more than we expected. We realised, based on these delegations, that the picture German companies had of Iran, especially the new ones, was not realistic. These trips, however, helped them to gain a more realistic and positive picture. Iran is a very developed country with great infrastructure, young and well-educated people and a lot of entrepreneurs, especially women.
The German hall at the Iran Oil Show can serve as an example. We have experienced an upward trend since 2015, from 40 companies showcasing their products and services that year, to 80 in 2016, to finally reaching 130 companies in 2017.

What is AHK’s background?
The German-Iranian Chamber of Industry and Commerce was established in 1975 to enhance German-Iranian trade relations and help companies do business. Prior to the [1979] revolution, Germany was Iran’s second-biggest trade partner in terms of trade volume after the US, and above Japan, China and India.
We were able to survive no matter what the situation was, during the war in the 1980s, the revolution in the 1970s and the severe sanctions imposed over the last decade. Of course, between 2009 and 2013, we downgraded our activities a little, but we are back in shape again.

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