With Iranplast 2018 currently in full swing in Tehran, German machinery trade association VDMA has expressed cautious optimism for trade with the Islamic Republic amid heavy U.S. sanctions on the country.
While German plastics and rubber machinery manufacturers gained further market shares in Iran in 2017, declining deliveries in the first six months of 2018 give reason for “cautious hope” for the second half of the year, VDMA said in a Sept. 24 statement.
In 2017, Germany ranked second among top plastic & rubber machinery exporters to Iran with 38 million euros worth of machinery sales to the country. China led the exporters' table at 99 million euros. The total export deliveries of plastics and rubber machinery to Iran stood at 206 million euros in 2017.
In the first half of 2018, however, VDMA noted a year-on-year 11 percent decline in sales of rubber & plastics machinery to the Islamic republic, which stood at 22 million euros.
This brings Iran three points down to the 28th position in the ranking of major export destinations for Germany.
"With growth rates of annually almost 6% for the consumption of plastics, Iran is still considered a high-potential market for the plastics sector," explained Thorsten Kühmann, managing director of VDMA Plastics and Rubber Machinery.
Kühmann pointed to “the increasingly difficult political framework conditions accompanied by still insufficient financing options” in Iran. However, he remained optimistic, saying VDMA would face the difficulties “by nailing our colors to the mast also in difficult times."
The association has also noted a clear decline in German participation in Iranplast 2018, with the number of exhibitors more than halved to 17.
“Decreasing export figures for 2018 also have an impact on the size of the German Pavilion at the international trade fair for plastics and rubber Iranplast,” VDMA added.
During the show, VDMA is also holding its annual Iran Management Meeting, which it has been organising since 2015.
Iranplast 18 takes place in Tehran Sept. 24-27.
Washington pulled out of the landmark Iran nuclear deal in May, subsequently returning sanctions on the Islamic Republic this summer.