Conexio consulting

INVESTMENTS- TURKEY IRAN

After the withdrawal of the embargo, especially the Western countries are focusing on Iran, and in  that new scenario Turkey has the a big chance. It is mentioned that Turkey and Iran can collaborate together to do business in 3rd countries. There are many businessmen planning bilateral visits and most of them end up with big scale projects. Let’s focus on these investmens in different sectors and fields between the two countries.

The WILCO Group, which has investments in 65 cities  all over Turkey, and the AIDA Group (with investments in Iran), decided to invest in Van about 50 million euros in the scope of attractive centers programme. For the related Project, 100.000 m² place will be allocated from organized industrial sites. On the field, 70.000 m² closed area will be built and 500 people will be employed. The general manager of AIDA Group Hossein Beyramzadeh said that they want to develop the same amount of investment in Turkey as they  made in Iran. He continued that the two companies chose Van to invest to reach Iran, Iraq, Syria and new markets easily.

Another sector, plastics, is also very beneficial to work on. Today, the Turkish plastic sector has the capacity to process almost 8,5 million tones of products and in total realized 12 billion $ exports. When reviewing the export numbers to Iran, we can observe 45 million $ plastic raw materials, 198 million $ plastic products and 15 million $ plastic processing machines. In total 258 million $ exports, only in plastic sector. Also Turkey imports from Iran, around 505 million $ raw material plastics, 11 million $ plastic products and 1 million $ plastic processing machines.

Let’s look closely to the tourism sector. Iran has a great potential. There is a huge lack of hotels and quality services in Iran, which is trying to be supported with good incentives. Each year around 4 million tourists are visiting Iran which will definitely increase with new hotel investments. And here we can say that Turkish brands can easily enter the market and can develop the sector. The supply-demand equilibirium in accomodation sector of Iran is very problematic. Demand is increasing constantly but the supply is so low or even there is no supply. According to the evaluations, the accomodation sector needs around 17,4 billion $ investment. The largest part of it will be provided by foreign investments or external borrowing. In addition to the need of hotel supplying, Iran is also attractive with the incentives offered to the investors. For example, in the first year of operation, hotels are not paying any tax, after the following years so little amount is given, around %12,25, as income tax. The easily obtained investment license (FIPPA) enables a free import and return of the capital.

There is also another advantageous sector, automotive. In January 2017, the exportation level to Iran was so high and industrial automotive suppliers decided to pick Iran as one of the main target markets. Iran has signed an agreement with the world’s top six automobile companies. This is the beginning of a new era in the Iranian industry and Turkey wants to increase the trade and business alliance with Iran in this period.

We can count more sectors, Projects and agreements which has been developed and will continue to develop in the future. The logistic advantages, the richness in natural resources and the cultural relation will bend Turkey and Iran and will keep attracting the investors.

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