German exporters see opportunity in Iran, no El Dorado
14/07/2015 13:23
FRANKFURT/BERLIN, July 14 (Reuters) - Germany's exports to
Iran could as much as quadruple in the next few years as a
result of a nuclear deal reached between Tehran and six world
powers, German industry associations said.
It will be a tough market for German companies in the face
of competition from Chinese, Korean, Middle East and other
rivals that filled the void left by Western companies prevented
from trading under U.S.-led sanctions against Iran.
But from industry heavyweights such as Volkswagen
VOWG_p.DE and Siemens SIEGn.DE to thousands of smaller
family-owned firms, German companies are keen to reclaim their
once-dominant role in exports to Iran. ID:nL8N0ZK0GT
"The modernisation of the oil industry in particular opens
big opportunities for German machinery and equipment makers,"
the head of the BDI Federation of German industries, Ulrich
Grillo, said in a statement on Tuesday.
He forecast German exports to Iran could leap to more than
10 billion euros ($11 billion) "in the medium term" from 2.4
billion last year, seeing the car, chemical, healthcare and
renewable energy industries as other likely beneficiaries.
Under the deal agreed on Tuesday after more than a decade of
negotiations, U.S., EU and U.N. sanctions will be lifted in
return for Tehran imposing long-term curbs on nuclear
activities, which the West has suspected are aimed at making an
atomic bomb. ID:nL2N0ZT2L4
The export chief of Germany's DIHK chambers of trade and
commerce, Volker Treier, said the country's exports to Iran
could now double to about 5 billion euros within just two years,
not the five years he forecast in February. ID:nL5N0VY24U
Speaking to Reuters by telephone from Tehran, he said 80
German companies had subsidiaries in Iran and another thousand
had representatives there.
German exports to Iran slumped from a high of 4.4 billion
euros in 2005 to 1.8 billion euros by 2013. However, in an
apparent anticipation of an easing of sanctions, they jumped 30
percent last year, driven by sales of machinery, agricultural
products and pharmaceuticals.
The head of Numov, the German Near and Middle East
Association, urged Berlin to send a minister to Tehran soon.
"A trip by a minister would be very important to support
German business," said Helene Rang. "It mustn't happen that
German business is disadvantaged in comparison to others when
the country opens up."
German economy and energy minister, Sigmar Gabriel, is said
to be planning a trip to Tehran this month, according to
political sources, but the visit has not been confirmed.
Engineering association VDMA, whose members accounted for
more than a quarter of Germany's exports to Iran last year, said
the Iranian market offered interesting prospects but cautioned
that it was "no El Dorado".
Klaus Friedrich, VDMA's Iran and embargoes expert, said
Germany could hope in the medium term to win up to 15-20 percent
of a potential 8 billion euros in international machinery
exports to Iran annually, up from 5 billion last year.
"Even in the most optimistic scenario, Chinese engineering
firms will keep more than 10 percent market share, Korea will
fiercely defend its newly won share, and don't forget the United
States is back in play," Friedrich said.
($1 = 0.9077 euros)
(Reporting by Georgina Prodhan, Rene Wagner and Andreas Rinke;
Editing by Susan Fenton)
((georgina.prodhan@thomsonreuters.com; +49 69 7565 1279;
Reuters Messaging:
georgina.prodhan.thomsonreuters.com@reuters.net))
Keywords: IRAN NUCLEAR/GERMANY BUSINESS