Insider news & Analysis in Iran

by Jazeh Miller

Iran’s manufacturing sector is in dire need of a major revamp, as they are currently being out produced and undercut by other countries.

Gholam Hussein Shafei, the head of Iran’s Chamber of Commerce, Industries, Mines and Agriculture said: “In the field of cement, there are 73 licenses and 92 permits under construction, which makes it a total of 165 units. However, South Korea with 10 units produces much more cement than us.”

He said that this is the same across most other sectors and that “fundamental change” is necessary.

On Friday, Shafei gave a speech to the meeting of the Committee on Industry and Mines of the Parliamentary Assembly and the Council of Governmental Dialogue and Private Sector of Khorasan Razavi, in which he highlighted the realities of inefficiency and low productivity in Iran's industries.

He said: “In the automotive industry, we have 49 licensees and 32 licensed vehicles under construction, and a total of 81 units of automobile production in our country. The number of units in the automotive industry in Germany is 12, in the US 29, in France 8, in Japan 11, and in South Korea 5 units.”

So Japan’s 11 automotive companies produce about 10 million vehicles per year, most of which are sold internationally, while Iran produces less than a million cars, despite having a much larger number of automotive companies, and sells most of them domestically.

Shafei said: “In the production of motorcycles, 177 licenses and 33 units are under construction and we have a total of 110 units. The total number of motorcycle units in the countries of Indonesia, Taiwan, Turkey, Saudi Arabia, Pakistan, Vietnam, Thailand, China, Malaysia, India, Bangladesh, the Philippines, Japan and South Korea is 82 units. "

Of course, one of the biggest problems is that the Iranian Regime is pretending to transfer industry from the government to the private sector, whilst really keeping a lot of it under the control of their cronies (especially the Iranian Revolutionary Guards Corps (IRGC)).

Tahmaseb Mazaheri, the former head of the Central Bank of Iran said: “The government has a large share of the country's production. The feeble private sector cannot compete with the coarse and strong private-governmental sector.”

This means that the real private sector is displaced by the private-government sector, which uses government facilities without paying for them and therefore does not need to worry so much about profit.

Mohammad Shariatmadari, Minister of Industry, Mining and Trade, said: “One of the problems we face is private-governmental transfer and the major firms in the country are faced with management and governance challenges and I consider it my responsibility and mission to make transfers to the private sector. But in this way, those who are not responsible, in the exercise of ownership create a crisis in the administration of the large enterprises of the country.”

He admitted that some of the owners are his colleagues and their families or friends.

 

 

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