French seed firm Vilmorin maintains some Iran sales, awaits EU scheme

Vilmorin & Cie SA

05/03/2019 14:46

By Gus Trompiz
    PARIS, March 5 (Reuters) - French seed maker Vilmorin
 VILM.PA , said on Tuesday it was continuing some exports to
Iran with the backing of a French bank, and will participate in
efforts to implement a European scheme to avoid U.S. sanctions
targeting trade with Tehran.
    Vilmorin, one of the world's largest suppliers of seeds for
grain and vegetable crops, has cited the U.S. sanctions against
Iran as among the short-term risks to its activities in emerging
markets, along with currency volatility.  urn:newsml:reuters.com:*:nL8N1WY5FK 
    Food and agricultural goods are not directly targeted by
U.S. sanctions related to Iran's nuclear programme, but
restrictions on dollar-based transactions have impeded trade. 
    Vilmorin is working with a banking partner that is not one
of the big French lenders to finance deals with Iranian clients
able to pay in euros, Chief Financial Officer Vincent Supiot
said at a presentation of the company's first-half results.
 urn:newsml:reuters.com:*:nFWN20R0RV
    "We have done a few transactions since the start of the
financial year," he told reporters. 
    "We are going to have lower sales (to Iran) than before," he
said, adding they should amount to "several million euros".
    He declined to name the bank working with Vilmorin but said
it was much smaller than the major French lenders that have U.S.
activities and massive dollar flows. 
    Vilmorin had previously reported annual sales of around 10
million euros ($11.33 million) in Iran. 
    While this was small compared with group sales of 1.35
billion euros in its 2017/18 year to June 30, disruption of
Iranian trade could trim short-term growth prospects and was
also a setback given strong seed demand in Iran, the world's
fifth-largest vegetable grower, Supiot said.
    To maintain exports to Iran, Vilmorin was also exploring the
potential for new local customers with access to foreign
currency, and the possibility for customers to set up outlets in
third countries that would then ship goods on to Iran. 
    The seed maker is also considering taking part in a proposed
European scheme, known as INSTEX, to conduct non-dollar trade
with Iran via a barter system that would avert U.S. penalties.
    Vilmorin is among some 70 French food, farming and
pharmaceutical firms invited to a briefing at the French finance
ministry with the head of INSTEX on Thursday.
    "We consider that we'll be able to conduct sales (to Iran)
this financial year with the help of our banking partner, we'll
have to see for the other scheme," Supiot said.
    France, Germany and Britain legally set up the entity in
January, but it is expected to take several months before it
becomes operational. The European powers must first establish a
budget for INSTEX and define its rules. Iran must also set up a
mirror company.  urn:newsml:reuters.com:*:nL5N1ZV1UQ
    
($1 = 0.8829 euros)

 (Editing by John Irish and David Evans)
 ((gus.trompiz@thomsonreuters.com; +33 1 49 49 52 18; Reuters
Messaging: gus.trompiz.thomsonreuters.com@reuters.net))