South Korea to invest in Iran’s Caspian port

Business Materials 9 December 2017 09:51 (UTC +04:00)
South Korea is among the countries which has take serious steps to enter Iran's market following the removal of international sanctions on the Islamic Republic.
South Korea to invest in Iran’s Caspian port

Baku, Azerbaijan, Dec. 7‎

By Fatih Karimov – Trend:‎

South Korea is among the countries which has take serious steps to enter Iran's market following the removal of international sanctions on the Islamic Republic.

South Korea ranked fourth among Iran's top trade partners in non-oil sector during the first seven months of the current Iranian fiscal year (started March 20, 2017). The mutual trade (including gas condensates) accounted to $4,288 million in the period.

South Korean companies also have signed various contracts with Iranian counterparts for joint venture investment in energy, auto manufacturing, railway, shipbuilding and maritime sectors.

The latest deal was signed by a South Korean firm for investment in Iran’s Noshahr port, in Caspian Sea.

According to Iran’s Roads and Urban Development ministry, South Korea’s JJ Consulting Ltd has signed a memorandum of understanding with Ports and Maritime Organization(PMO) of Mazandaran Province to make an investment, worth $500 million for the port’s development.

Under the MoU, signed by Ju Yeon park, the Asian company’s managing director and Mohammad Taghi Anzanpour, head of Mazandaran of PMO, the South Korean company expressed its interest for investing in the implementation of the land development plan of Noshahr port, in order to carry out maritime and port-related activities based on the plans approved by the PMO and in compliance with the regulations of the Islamic Republic.

The Korean company will apply for investment permits from the Organization for Investment and Economic and Technical Assistance of Iran within a month.

The sides also agreed to sign a contract in the near future which will include the executive details related to the design, implementation and costs of the project as well as the period of investment repayment and running the project.

Iranian firms have already signed deals with South Korean companies for cooperation in maritime and shipbuilding sector.

Last December, the Islamic Republic of Iran Shipping Lines (IRISL), finalized a contract with the South Korean industry giant, Hyundai to buy 10 ships worth $650 million, Iran’s first contract to purchase ships from a foreign shipbuilder after removal of the international sanctions in January 2016. the vessels including container ships and oil tankers will be delivered to IRISL from 2018.

Later in December 2016, the Industrial Development & Renovation Organization of Iran (IDRO), one of largest organizations involved in the country's development and industrialization process, signed a document with Daewoo Shipbuilding & Marine Engineering Company (DSME) for cooperation in developing Iran’s shipbuilding industry and overhauling the large and medium-size ships in the country.

Under the deal, the two sides will form a joint company and the South Korean firm in addition to providing financial resources will transfer technical and engineering knowledge as well as basic materials and equipment for the joint venture.

Last year, South Korea and Iran also signed a maritime pact covering shipping and fisheries that would give Korean companies greater access to Iranian markets.

The signed understanding would allow ships from both the countries to pass more easily through each others’ territorial waters and would help them get equal support in case of emergencies.

The two countries had unsuccessfully tried to implement a similar pact in 1998.

Following the removal of the embargoes, it is expected that the Islamic Republic will pay more attention to transport sector, in particular the maritime projects to restore its sanctions-hit economy and the South Korean firms alongside with certain European companies, are among the entrepreneurs have taken serious steps to get involved in the sector, to enjoy the huge-market’s opportunities.

According to PMO, in total, some 101 million tons of various goods were loaded/unloaded at Iranian ports during the current fiscal year (started March 20, 2017).

The volume is 1 percent more than the loaded/unloaded products in the same period of preceding year (March 20-Dec. 6, 2016).