Three Indonesian Firms Explore Export Opportunities to Iran

TEMPO.CO, Jakarta -  Industry Minister Airlangga Hartarto said that Indonesia may increase the value of industrial product exports to Iran. At least three Indonesian companies are currently exploring export opportunities to Iran, namely Sinarmas Group, Tri Mega Baterindo and Kreasindo Resources.

Sinarmas plans to export pulp and paper, tissue paper and palm oil, whereas Tri Mega Baterindo and Kreasindo Resources plan to export car batteries and natural rubber, respectively. Airlangga is hopeful that national exporters could enter Central Asia and the Middle East markets through Iran. However, he said that bilateral agreements in the banking sector would be needed to facilitate transactions between the two countries' businesses.

According to Airlangga, current payment mechanism is carried out through banks based in other countries, such as the United Arab Emirates, Turkey or Malaysia. "The main challenge is the payment transaction mechanism. Therefore, national banks are expected to establish cooperation with Iran-based banks in providing financial facilities to allow more industrial products into the country," Airlangga told Tempo via email last week.

Exports from Indonesia to Iran include natural rubber, palm oil, paper, tires and chemical products. On the other hand, Indonesia needs Iranian products, namely steel, petrochemicals, minerals and raw materials for synthetic fibers. In 2016, the trade volume between the two countries increased from USD270 million to USD330 million.

Indonesian Ambassador to Iran Octavino Alimudin said that Indonesia re-started discussion about the opportunity to increase export value to Iran after the 12th meeting of Iran-Indonesia joint economic commission in November 2016, President Joko Widodo’s working visit to Iran on December 2016 and the Coordinating Minister for Economic Affairs Darmin Nasution’s visit to Iran in February 2017. "The meetings discussed the increase in [the value of] industry exports," Octavino said.

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