There is a high demand for modern agriculture solutions in Iran. Finnish agrotechnology companies JPT-Industria and PEL-Tuote, supported by Agrotechnology from Finland, are in a good position to seize the vast opportunities in Iran.
Iran has enormous natural resources and is one of the global agricultural powerhouses. The Iranian agricultural technology markets, ranked among the top three in the Middle East, are opening up for Western business again.
A Team Finland business delegation trip to Tehran in February 2017 confirmed that Iran is definitely a very promising market for Finnish high-quality agrotechnology companies and that there is strong interest in the Finnish offering.
Both Juha Nisula, CEO at JPT-Industria and Jens Köllner, Export Manager at PEL-Tuote, believe that Iran will become an important export country for their companies. They consider the Team Finland delegation visit, led by Mr. Petri Peltonen, Under-Secretary of State, Ministry of Economic Affairs and Employment of Finland, as highly beneficial in facilitating the companies’ entry into the challenging Iranian market.
Iran’s huge number of poultry, cattle and sheep farms offers nearly unlimited potential for JPT-Industria’s feed manufacturing plants. Juha Nisula is pleased with the delegation visit. In addition to meeting 5-6 potential clients, the visit also helped JPT-Industria to get a local agent.
“We found an agent who has helped us to enter the market. At the moment, we have several negotiations underway. The value of an individual deal varies between 250 000 – 500 000 euros. It usually takes approximately six months for a deal to be completed,” says Nisula.
JPT-Industria currently exports mainly to East Africa, Eastern Europe and Kazakhstan. Nisula sees a lot of potential in Iran for the company’s energy-efficient, hygienic and reliable feed factories. However, there are also some challenges.
“Finnish banks are not very keen to undertake financial transactions to Iran. Finnvera is looking into this matter, and we are hoping to get assistance from Finnvera with letters of credit.”
PEL-Tuote’s Jens Köllner gives positive feedback about the delegation arrangements and is optimistic regarding Iran’s business potential.
“We met potential clients, two of them being very important and major players in their field,” says Köllner. “Thanks to previous delegation trips, we have made good deals in Kazakhstan and Algeria. I’m positive that we will also land good deals in Iran, even though we expect tough competition from other foreigner companies, especially from Germany.”
According to Köllner, there are already competitors working in the market but with low-quality products. He emphasizes that PEL-Tuote’s stone pickers are of high quality and always tailored to meet the local requirements. Therefore, it is extremely important to have the opportunity to visit model farms and get a comprehensive picture of the existing machinery. Tailoring a stone picker is not something that is done hastily; a project can take 1-3 years. The value of a deal varies from 40 0000 euros to 80 000 euros.
The Agrotechnology from Finland program, managed by Finpro, helps Finnish agrotechnology companies to find new markets and increase their exports. Iran is one of the main target countries of the program. JPT-Industria and PEL-Tuote are active members of the program.
According to Nisula and Köllner, Agrotechnology from Finland plays an important role in providing a joint platform for Finnish companies trying to break into new markets.
“We have top-notch agrotechnology expertise in Finland, but many of the companies are small or medium-sized. It is very difficult to enter a new market alone. It is vital that Agrotechnology from Finland provides us a platform for targeting export markets as a joint effort,” says Nisula.
The government of Finland is actively seeking ways to support exports to Iran. A Memorandum of Understanding, in which agricultural and forestry machinery and technology was identified as mutually high priority area of cooperation between Finland and Iran, was signed at the end of 2016 in Tehran.
Nisula and Köllner appreciate the support from the Finnish government.
“Exporting agrotechnology is a long-term business. We are extremely glad to have the support of the Agrotechnology from Finland program and hope that it will continue in the long run and have sufficient resources also in the future,” Nisula and Köllner say.