PÖYRY POINT OF VIEW REPORT / 17 May 2017
Iran Unchained: Untapped Potential in Forest Products Trade?
During the years of economic sanctions against Iran, its relative isolation led the country to establish an independent and diversified economy. When many of the sanctions were lifted over a year ago, doors were opened for international investments. Among those, one of the most obvious opportunities can be found in the forest products sector.
Iran is the third largest economy in the MENA region after Turkey and Saudi Arabia. It has the second largest population in the region after Egypt with an estimated 82.8 million people in 2016. In addition, Iran has fostered a strong workforce and it has an established manufactured commodities market. It has also taken crucial steps to mend business relations with the West.
The country is sparsely forested with only some 7 million hectares of forest covering less than 5% of the nation’s land area. While the general consensus of the local industry players is that the forest products market will grow, they are also facing some challenges such as a costly and limited supply of wood or fiber, a need to modernise mill assets and the threat of strong international competition.
Those challenges open doors for foreign capital and investment in a market with high demand and little production. This Point of View takes a closer look at the investment opportunities and the barriers that foreign investors need to overcome.