FRANKFURT, Dec 17 (Reuters) - German engineering trade group VDMA said it planned to open an office in Tehran in the first half of 2016 to help companies sell machinery to customers in Iran, even if it took longer for sanctions against the country to be lifted.
“Embargo products are very specific products. Our members make cement, for instance. We could sell that to Iran. And in some cases we do,” VDMA President Reinhold Festge told a news conference on Thursday.
Iran aims to have sanctions against it lifted by the end of January, which the head of the U.N. nuclear watchdog monitoring Iran’s implementation of a deal struck in July, Yukiya Amano, told Reuters on Wednesday was “not impossible”.
The VDMA, which represents large engineering companies such as Siemens and also thousands of medium-sized industrial goods makers, said it was telling its members to be prepared for all scenarios and to be ready to step up their business with Iran from the first quarter of 2016.
Considered an upper-middle income country, with a population of 78 million and annual output higher than that of Thailand or the United Arab Emirates, Iran is set to be the biggest economy to rejoin the global trading and financial system since the break-up of the Soviet Union over 20 years ago.
Germany exported machinery worth about 630 million euros ($683 million) to Iran last year, accounting for about 13 percent of all international machinery exports to the country.
The VDMA estimates that figure could have been at least 100 million euros higher if German machinery makers’ trade with Iran had not been hampered by uncertainty, an unfamiliarity with the exact trade restrictions and problems related to financing.
Once sanctions are lifted, the VDMA expects German companies’ machinery exports could rise to around 1.6 billion euros in the medium term.
“But we warn against euphoria. This will be a gradual process,” VDMA’s Festge said.
Total machinery exports from Germany were worth about 151.5 billion euros last year.
$1 = 0.9219 euros Reporting by Maria Sheahan; Editing by Mark Potter