Opportunities in Iran's East Azerbaijan Province for Baku

By Dalga Khatinoglu- Trend:

The government of Iran's East Azerbaijan Province says currently about $2 billion of commodities produced in this province are exported, but the figure will double in two years.

Esmaeil Jabbarzadeh told Trend on Oct. 22 that Iran and Azerbaijan have quite significant potential to boost trade and financial relations, establish joint ventures, cooperate in joint projects, increase bilateral trade and boost goods transport through their territories to other countries.

According to an Iran Custom Administration's report, the country exported $132.8 million worth commodities (-44.66%) to Azerbaijan in first half of current fiscal year, while its import from Azerbaijan Republic reached $10.7 million.

Iran's fiscal year starts on March 21.

The report says that $485.165 million worth of commodities was exported from East Azerbaijan's customs and the import value reached $535 million during this period.

The figures includes the exports at four major customs of province and doesn't indicate the export amount of province's own produced goods necessarily.

However, according to official statistics, during a fiscal year, corresponding to 2014, the export of industrial goods of Iran's East Azerbaijan Province reached $895 million (+3.2%), while agricultural, petrochemical, metal exports were $277 million (+6.6%), $137 million (+13.1%) and $184 million (+3.5%) respectively.

The province's raw mineral, as well as carpet and handicraft exports also reached $164 million (+3.1%) and $187 million (-15%).

It's estimated the total goods export- produced in this province- was about $2 billion during last year, while the total non-oil export of country was $35.739 billion (excluding gas condensate, which Iran puts it in non-oil exports basket).

East Azerbaijan has common borders with the Azerbaijan Republic, the Nakhchivan Autonomous Republic and Armenia.

Jabbarzadeh says during his visit to Baku (from Oct.19 to Oct.22), he visited with President Ilham Aliyev as well as several ministers and the atmosphere of negotiations and the willingness of the leaders of both countries gives hope to boosting trade and financial relations. "We hope East Azerbaijan Province's export to reach $3 billion in 2016 and $4 billion in 2017," he said.

The governor invited Azerbaijani entrepreneurs to Iran, saying that there are "big profits and opportunities in East Azerbaijan projects".

Despite a 5.5 percent of East Azerbaijan Province's share in total non-oil export, the share of it in GDP is only 1.9 percent. Iran's GDP stood at about $406.3 billion in 2014, according to the World Bank's estimation.

It is not clear how much Azerbaijani entrepreneurs can be involved in Iranian projects, while the both sides suffer heavily from low oil prices that are expected to continue in coming years, but coming to East Azerbaijan Province, there are more than 7,500 industrial projects (developed by 0% to 20%) in the province. There are 638 mines in this province, most of them are operative, but for instance there are two huge undeveloped copper mines with 16 million tons reserves in East Azerbaijan Province.

There are not any annual statistics about the province's industrial products for 2014, but in a fiscal year, corresponding to 2013, East Azerbaijan Province's major industrial products were:

On the other hand, the Aras Free Zone is located 137 km from Tabriz, neighboring Azerbaijan and Armenia is one of the major academic and industrial hubs of Iran.

The zone includes 51,000 hectares of land.
Iranian officials have repeatedly invited the foreign investors to investment in the AFZ. Iran exported more than $180 million of products from its northern Aras Free (AFZ) in the past Iranian fiscal year.

Jabbarzadeh says Iran Azerbaijani investors are a priority for Iran to take part in development of AFZ

There are two huge industrial complexes in East Azerbaijan Province as well, both of them are located in Tabriz: TABRIZ Petrochemical Company (T.P.C) and Tabriz refinery.

Azerbaijan can become a transit route for Iran to export surplus petrochemical products and diesel, produced in Tabriz. "Iran also can provide opportunities for Azerbaijan to export its products through Iran from Persian Gulf and other directions," he said.

Tabriz petrochemical complex's nominal capacity is producing 818,000 tons annually, mostly raw polymers, polyethylene, polystyrene and A.B.S, while main feed and consumed raw materials are naphta, LPG, Acrylonitrile, A.M.S., mineral oil P.B.R., etc.

Tabriz refinery also processes 115,000 barrels of oil per day. Every day, the plant produces 3.3 million liters of gasoline, 1.4 million liters of kerosene, 6.6 million liters of diesel and 1.4 million liters of fuel oil. The factory also daily produces 600,000 liters of liquefied gas (LPG).

Edited by CN

Dalga Khatinoglu is an expert on Iran's energy sector, head of Trend Agency's Iran news service.