Tehran, Iran, Dec. 1
By Mehdi Sepahvand – Trend:
While around 80 percent of tiles made in Iran are exported to Iraq, none of it is paid for in dollars, according to the Iranian Tile Production and Sales Union President Mostafa Goudarzi.
The whole export is paid for in the Iranian rial, meaning no dollar comes to Iran for the entire amount of trade, Goudarzi told Trend.
Years of sanctions have kept Iran relatively empty of the dollar currency, which is necessary especially for companies to buy machinery and intermediate goods from abroad.
Goudarzi said as they cannot earn any dollars out of their exports, Iranian tile makers face problems to buy paint, enamel, or modern machines such as digital ceramic printers.
He said the government has offered much cooperation to ease the export of tiles, such as providing producers with tax exemption and creating political adhesion with Iraq in order to prepare the atmosphere for businessmen, but said the currency should change to dollar in order for Iran to benefit fully from the business.
"Currently Iraqi businessmen are willing to do business with Iran, thanks to government’s efforts," he pointed out.
Goudarzi said another threat to Iran’s tile market in Iraq is the businessmen from neighboring Turkey.
"The Turkish businessmen found monopoly over 80 percent of the tile market in Central Asia where Iranian products used to go. Now they are turning towards Iraq," he said. "At some point dumping forced Iranian tile producers to sell at lower prices in the Iraqi market, or to have to cut down their quality. Turkish rivals seized the situation to override them."
According to Goudarzi, Iraq is currently the biggest market for Iran-made tiles. As a result of stagnation in the housing sector in Iran, the domestic market cannot demand more than 20 percent of the current output, he mentioned.
"The Iraqi market itself is subject to two factors. One is the Iraqi people’s level of income, which directly influences their activity in the housing sector. The other is security issues," he explained.
Barely on its feet after the downfall of former dictator Saddam Hussein, Iraq saw many years of US military presence in the 2000s up to December 2011. Yet again, in mid-2014 the country faced a vast onslaught by the terrorist group "Islamic State" (IS, ISIL, ISIS, Daesh), with much damage to the country’s economy.