TEHRAN -- More than 300 companies worldwide, including triple as many from Japan as last year, have gathered here for Iran's biggest trade fair, seeking opportunities for growth in this vast Middle Eastern market poised for relief from Western economic sanctions.
Among the 18 Japanese companies exhibiting at this year's event is Nippon Steel & Sumitomo Metal, whose wares include seamless pipe for the oil and gas industry. NEC, which did business with the Iranian telecom sector before the sanctions, had network equipment and other technology on display. Both companies aim to rekindle business in Iran.
Others, like Fuji Manufacturing, are hopeful newcomers. Based in the city of Fujioka, northwest of Tokyo, the smallish unlisted company supplies machines that make instant noodles. "With Iran's population approaching 80 million," a representative said, "its demand for food will grow."
The long view
A Japanese delegation of representatives from 30 companies and other organizations visited the Iranian capital Tuesday, headed by Hiroyuki Ishige, chairman of the Japan External Trade Organization. Iran takes the long view on relations with Japan and seeks even stronger ties than before the sanctions, Mohammad Reza Nematzadeh, the country's minister of industry, mining and trade, told Ishige.
Under a deal struck in July between Iran and a group of world powers including the U.S. and the European Union, the Islamic republic is to receive relief from Western sanctions in exchange for accepting curbs on its nuclear program. Iran's purchasing power could recover if these shackles on bank transactions and oil exports were removed.
That would be good news for Japanese companies looking to sell. Stunted by the sanctions, Japan's exports to Iran totaled just 26.6 billion yen ($221 million) last year, only about one-seventh as much as a decade earlier. Some of Japan's lost business appears to have been gained by Chinese companies that have been active here despite the sanctions. The Japanese are preparing to make their move, while trying not to cross any red lines. "The momentum for lifting sanctions isn't going to reverse," a trading house executive said.
Daishiro Yamagiwa, Japan's state minister of economy, trade and industry, traveled here in August to meet with cabinet and other officials. Germany and France have sent their own government-backed corporate delegations to Iran in recent months.
Japanese hotel investment welcome
Iran aims to receive 20 million foreign tourists in 2025, Vice President Masoud Soltanifar told The Nikkei, predicting that his country's popularity as a vacation destination will surge once sanctions are eased. That would mean a fourfold rise in tourist volume from last year.
To attract more visitors, the government is discussing visa waivers with 28 countries, said Soltanifar, who heads Iran's Cultural Heritage, Handicrafts and Tourism Organization.
Hotel construction is a top priority, he said. Iran needs to build 400 four- and five-star hotels in 10 years, and the industry is open to investment from Japan, he added. The country can benefit greatly from tourism but needs better facilities to cater to foreigners. Even high-end accommodations could use updating.
Negotiations are underway with France's AccorHotels to build 30 hotels in Iran and with Rotana of the United Arab Emirates for 15, Soltanifar said.