Industrial Sector Survey on the Potential for Non-Oil Manufactured Exports
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OCCASION This publication has been made available to the public on the occasion of the 50th anniversary of the United Nations Industrial Development Organisation. DISCLAIMER This document has been produced without formal United Nations editing. The designations employed and the presentation of the material in this document do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations Industrial Development Organization (UNIDO) concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries, or its economic system or degree of development. Designations such as “developed”, “industrialized” and “developing” are intended for statistical convenience and do not necessarily express a judgment about the stage reached by a particular country or area in the development process. 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Industrial Sector Survey on the Potential for Non-Oil Manufactured Exports Islamic Republic of Iran Industrial Sector Survey on the Potential for Non-Oil Manufactured Exports Islamic Republic of Iran Field Operations and Administration Division Asia and Pacific Bureau 6-~~~I ~~ UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION UNITED NATIONS DEVELOPMENT PROGRAMME UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION ISLAMIC REPUBLIC OF IRAN INDUSTRIAL SECTOR SURVEY ON THE POTENTIAL FOR NON-OIL MANUFACTURED EXPORTS NC/IRA/94/0lD/08/37 Cl United Nations Industrial Development Organization Copyright © 1999 by The United Nations Industrial Development Organization First published 1999 Acknowledgments This Study has been prepared by the United Nations Development Organization under a project funded by the UNDP Office Tehran. In carrying out the assignment, UNIDO has drawn on the collective efforts of a team of national consultants recruited for the purpose in close consultation with the relevant authorities of the Islamic Republic of Iran. A word of appreciation must be directed to the Resident Representative of the UNDP and his staff for the active support and valuable guidance indispensable to the task. Likewise, the authorities at the Ministry of Industries of the Islamic Republic oflran, and particularly those at the Export Promotion Department, spared no efforts in guiding the project team by reviewing multiple drafts of the document prior to its finalization. Further assistance to the investigation was given by the Ministry of Commerce in the framework of its SENOX (Sustainable Enhancement of Non-Oil Exports) project, the Ministry of Agriculture, the Export Promotion Centre of Iran, the National Petrochemical Company and the Iran Chamber of Commerce, Industries and Mines. Finally the sectoral analysis could not have been undertaken without the exemplary cooperation demonstrated by numerous enterprises of the private sector. The designations employed and the presentation of material in this publication do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations Industrial Development Organization concerning the legal status of any country, territory, city or area, or of its authorities, or concerning the delimitation of its frontiers or boundaries. The opinions, figures and estimates set forth are the responsibility of the authors, and should not necessarily be considered as reflecting the views or carrying the endorsement of UNIDO. The designations "developed" and "developing" economies are intended for statistical convenience and do not necessarily express a judgement about the stage reached by a particular country or area in the development process. Mention of firm names or commercial products does not imply endorsement by UNIDO. This document has not been formally edited. Islamic Republic of Iran: Industrial Sector Survey on the Potential for Non-Oil Manufactured Exports CONTENTS Page LIST OFTABLES lV LIST OF FIGURES VI EXPLANATORY NOTES vii PREFACE lX SUMMARY OF FINDINGS AND RECOMMENDATIONS xi A Introduction XI B. Constraints XU C. Recommendations xiii CHAPTER 1. THE POLICY AND REGULATORY FRAMEWORK 1 1.1 Introduction 1.2 The current macro-economic environment of Iran 2 1.2.1 The socio-economic rationale of recent developments 2 1.2.2 Growth patterns in the post-war period since 1989 5 - The first Five-Year Socioeconomic and Cultural Development Plan (FFYP), March 1989 - March 1994 5 - The second Five-Year Socioeconomic and Cultural Development Plan (SFYP), March 1995 - March 2000 6 - The third Five-Year Socioeconomic and Cultural Development Plan (TFYP), March 2000 - March 2005 7 1.2.3 Resource mobilization for economic growth 8 1.2.4 Foreign policy constraints 9 1.2.5 Foreign trade patterns 9 1.2.6 External payments and debt 10 CHAPTER 2. POLIOES FOR THE PROMOTION OF NON-OIL 13 EXPORTS 2.1 Industrial development policies 13 2.1. l The implementation and impact of the FFYP, 1989-94 13 2.1.2 The implementation and impact of the SFYP, 1995-2000 15 2.1.3 Policies towards foreign investment 16 2 .1. 4 Policy targets and performance of non-oil exports 17 2.1.5 New policy initiatives for the promotion of manufactured exports 19 2.1.6 The policy impact on manufactured exports 20 2.2 New market opportunities in a changed global and regional 26 environment CHAPTER 3. EFFECTIVENESS OF INSTITUTIONAL SUPPORT 29 3.1 The High Council for the Promotion of Non-oil Exports (HCPE) 29 3.2 Provincial export promotion committees 29 3.3 The Ministry of Industries 30 0 United Nations Industrial Development Organization ii C0.1'T£1'TS Page 3.4 The Ministry of Commerce 30 3. 4 .1 The Export Promotion Centre of Iran (EPCI) 31 3.4.2 The Iran Carpet Company 31 3.4.3 The Export Guarantee Fund of Iran (EGFI) 31 3. 4. 4 Commercial bureaux overseas 32 3.5 The Export Development Bank of Iran (EDBI) 32 3.6 The Iran Chamber of Commerce, Industries and Mines (I CCIM) 33 3.7 The Industrial Managers' Association (IMA) 33 CHAPTER 4. ANALYSIS OF EXPORT POTENTIAL OF SELECTED 35 INDUSTRIAL SUB-SECTORS 4.1 Food processing industries 35 4 .1.1 Introduction 35 4.1.2 Food processing plants 37 4 .1. 3 Expected growth patterns of food processing industries 40 4 .1.4 Prospects for exports of processed food products 41 4 .1.5 Conclusions and recommendations 43 4.1.6 Annex: Medicinal herbs and plants 46 4.2 Fish processing industries 48 4.2.1 Introduction 48 4.2.2 The fisheries industries 50 - The Caspian Sea 50 - The Persian Gulf and Sea of Oman 53 - Inland fisheries and aquaculture 57 4.2.3 Exports of fish and fish products 63 4.2.4 Conclusions and recommendations 66 4.3 The leather industry 71 4 .3 .1 Introduction 71 4.3.2 Tanning industries 73 4.3.3 Exports ofleather goods 75 4. 3. 4 Conclusions and recommendations 76 4.4 The textile industry 77 4 .4 .1 Introduction 77 4.4.2 Blankets 79 4.4.3 Machine-made carpets and moquette 80 4 .4 .4. Hand-made carpets 80 4.4.5 Serge 81 4 .4. 6 Garments 81 4. 4. 7 Other textiles 82 4. 4. 8 Conclusions and recommendations 82 4.5 Non-metallic mineral (building materials) industries 83 4.5.1 Introduction 83 4.5.2 Floor and wall tiles 84 4.5.3 Sanitary wares 88 4.5.4 Sheet glass 89 4 .5 .5 Cement 91 4.5.6 Fibre cement pipes and sheets 94 Islamic Republic of Iran: Industrial Sector Survey on the Potential for Non-Oil Manufactured Exports CoivTEl>/Ts iii Page 4.5.7 Granite and building stones 95 4.5.8 Conclusions and recommendations 96 4.6 The petrochemical industries 98 4.6.1 Introduction 98 4.6.2 Historical background of the petrochemical industries 92 4.6.3 Principal outputs of the petrochemical industries 104 4.6.4 Survey of selected export-oriented plants and their products 107 - Shiraz Petrochemical Complex (SPC) 107 - Kharg Petrochemical Complex (KPC) 108 - Bandar Imam Petrochemical Complex (BIPC) 108 - Razi Petrochemical Complex (RPC) 109 - Arak Petrochemical Complex (ArPC) 109 - Isfahan Petrochemical Complex (!PC) 109 - Tabriz Petrochemical Complex (TPC) 110 - Khorasan Petrochemical Complex (KhPC) 110 4.6.5 Competitiveness of the Iranian petrochemical industries 110 4.6.6. Investment prospects in the petrochemical industries 113 4.6.7 Conclusions and recommendations 115 4.7 Engineering and electronics (domestic appliance) industries 117 4.7.1 Introduction 117 4.7.2 Development and structure of the home appliance industries 118 4.7.3 Television sets 120 4.7.4 Radios 121 4.7.5 Refrigerators and freezers 121 4.7.6 Gas stoves and cookers 122 4.7.7 Juicers 123 4.7.8 Meat grinders 123 4.7.9 Water heaters 124 4.7.10 Rice cookers 124 4.7.11 Vacuum cleaners 125 4.7.12 Washing machines 125 4.7.13 Gas and kerosene heaters 125 4.7.14 Water coolers and fans 126 4.7.15 Pressing irons 126 4.7.16 Dishwashers 127 4.7.17 Sewing machines 127 4.7.18 The international competitiveness