End of sanctions against Iran

Iran: Justified optimism

| Author / Editor: Ulrich W. Schamari / Udo Schnell

The end of the Iran sanctions rouses new growth expectations – the German industry is overwhelmingly optimistic.
The end of the Iran sanctions rouses new growth expectations – the German industry is overwhelmingly optimistic. (Photo: © lassedesignen - Fotolia)

The hopes are high. The sanctions against Iran will be lifted or suspended. For the German industry, this is an opportunity - more or less all representatives of the most different of sectors agree. On the one hand, there is a massive demand backlog, on the other the country must invest in the ramshackle infrastructure. And due to the different oil happenings, the country can also provide the financial resources required for this. But experts warn against too much euphoria – there are still formidable obstacles.

The German industry is expecting a powerful boom in business with Iran after the lifting of the nuclear power-related economic sanctions against the Islamic Republic in the Middle East. “We consider a doubling of exports in the coming five years from the current approx. 2.4 billion Euro to be realistic”, said Ulrich Grillo, President of the Federation of German Industry (BDI) for instance.

To ensure that this objective becomes reality, he appealed to the German Federal Government and the governments of the Federal States of the Gulf Region to create the preconditions for a permanent peace. In Iran, the demand for modernization of the industrial infrastructure is supposed to be extraordinarily huge. The modernization of the oil industry in particular, opens up large marketing opportunities for German machines and plant manufacturing. Further opportunities are on offer – according to the BDI –in automobile production, in the chemical industry, in the health care industry, in the extension of renewable energies, in waste management and in the building materials industry.

Iran offers small to medium-sized enterprises solid opportunities in international competition

It is not just the large enterprises that expect good business, even small and medium-sized companies are sitting on the Iran boom, as Mario Ohoven, President of the German Association of Small and Medium-sized Businesses (BVMW) documents: “Iran offers big opportunities to the German small and medium-sized enterprises in particular in international competition, because as before, ‘Made in Germany’ products enjoy an excellent reputation in Iran.” Small and medium-sized German companies would exploit their opportunities as suppliers – for example in the Airbus deal. They would also enter the Iranian market themselves and the BVMW would support them now through its own representation in Teheran.

Development in exports in the areas of machine building, traffic infrastructure and renewable energies are expected to be particularly dynamic. After all, quite a few world market leaders in machine building and renewable energies do come from the German small and medium-sized enterprises sector. Ohoven is clearly even more optimistic than Industry President Grillo: As a result, he estimates the Germany-Iran trade volumes to increase four-fold by 2020 from the current mere 2.5 billion Euro.

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