Features

Iran: Politics of Print

by FESPA Staff | 17/11/2014
Iran: Politics of Print

In the third in our series on the Persian Gulf, we look at that most enigmatic of all the Gulf states - the Islamic Republic of Iran.

Iran is the largest non-Arab country in the Middle East, with a young and growing population of almost 80 million people. Thirty-five years after Ayatollah Khomeini jetted into Tehran to take charge of the world's first Islamic republic, Iran finds itself at a crossroads. Most Iranians will tell you that the revolution has run its course, and it is time to move on. A sentiment manifested last year with the election of the western educated moderate cleric - President Hassan Rouhani.

Rouhani is seeking to reintegrate the Islamic Republic into the international community, following a period of isolation under the previous hardline conservative president, Mahmoud Ahmad-i-Nejad.

Iran is subject of a number of United Nations resolutions calling for it to suspend uranium enrichment and reprocessing activities. President Rouhani's priority is to limit the impact of international sanctions on Iran's fragile economy and to secure a substantial and permanent easing of those sanctions.

An interim agreement between Rouhani and world powers has resulted in about US$ 7 billion in relief from sanctions with a deadline for a final agreement by November 24.

Iran is OPEC’s third largest oil producer. It has approximately 13.1% of proven world crude oil reserves. The economy relies heavily on oil export revenues, which account for around 80-90% of total export earnings and 40-50% of the government budget.

International sanctions have raised the cost of imports by 15-30%. The decision by the Gulf States to stop trading in Iranian rials also deals a harsh blow to Iranian companies that use the Gulf to import and export non-oil merchandise. Prior to 2012, when sanctions were tightened, the Islamic Republic was the UAE's second-largest market for the export of non-oil goods and re-exports, and its fourth-largest trading partner overall.

Iran’s economy faces serious problems. Exporters still have little chance of gaining access to world markets until the USA lifts its veto of Iran’s membership of the World Trade Organisation and sanctions are removed.

Iran’s strained relations with the West are partially offset by strong oil exports to Asian markets. The Asian region as a whole accounted for 55.0% of Iran’s total exports in 2013. China made up 26.7% of total Iranian exports in 2013 while Japan accounted for 7.3%.

Iran has also increased its economic ties with neighboring Turkey. Iran’s Ministry of Commerce recently announced the opening a new free trade zone in Maku city just 22km from the Turkish border to bolster the economic relationship by allowing Iranian and Turkish privately-held companies to invest jointly in Maku.

The standard of infrastructure is relatively high but has been neglected due to the economic and political troubles in Iran. Iran was given a ranking of 65th out of 148 countries in terms of its infrastructure in the Global Competitiveness Index 2013.

The Print Market

Iran generated print revenues of US$ 624 million at the beginning of the decade of which 40% were in offset printing and 15% in flexo. The market is forecast to grow to around US$ 927 million by 2015, driven by strong growth in flexo packaging as well as digital print. Iran counts for 8% of total print revenues in the Middle East.

Iran is neighboured by Iraq, Afghanistan and the CIS countries with a total population approaching 400 million, as such Iran’s print industry benefits from its location. These countries are large importers of Iranian food products, and lately Iranian print houses have begun to attract printing orders from them; helped by the devaluation of the rial against the dollar and other foreign currencies, leading to increased purchasing power.

Due to the West's sanctions imposed on Iran, the Iranian print industry faces a number of obstacles when it comes to investment: import restrictions on certain goods, import restrictions from some countries, and the increased cost of access to goods through third countries.

These barriers resulted in a sharp decline in purchasing power and led to a lack of development in some parts of the industry.

Jalal Zokaei, CEO of the Toranj Trading Group and former Director General of the Culture and Islamic Guidance Ministry's Printing Office explains, “ Traditionally Iran was oriented towards Europe, in particular Germany. The Western sanctions imposed on Iran have unfortunately, have forced Iranian print house owners to approach Eastern Asian countries such as Korea, China, and Taiwan in order to fulfill their needs in supply, and so European countries have lost their professional market in Iran.”

But development, business and production cannot be halted says Mr Zokaei, “Print house managers are compelled to find a quick and convenient way to satisfy their needs, so in this situation the odds favoured East Asian manufacturers to gain benefit from the market, and in some cases, particularly in the Iranian print industry, print houses, with determination produced their own supplies.”

“Offset print is not economical at all for low numbers and it is just a waste of human and financial resource, yet the digital print makes the publication of pamphlets and researches in low circulation numbers as the most efficient print method at hand.”

As in other Middle Eastern states buyers tend to prefer acting through local agents when buying machinery and technology and inform themselves of the latest innovations and products through websites such as iranprint.com, social media and regional trade shows.  FESPA Eurasia being particularly popular with Iranians making up some of the largest attendance numbers.

Iran can boast the largest print house in the Middle East - Offset Press Inc. with a turnover of over US$ 30 million p.a. is privately owned and recently floated on the Tehran Stock Exchange - making it the only printing company on the market.

Arash Panah, marketing manager at Offset Press, said,“The private sector is increasing due to the slight easing of the sanctions this year. Taxes are not high compared to the US or Europe. This makes it very profitable to print in Iran compared to the neighbouring countries. However, sanctions affected the print industry very harshly, especially for buying spare parts and getting new materials.”

How can FESPA Eurasia benefit Iran?

FESPA Eurasia offers an opportunity for the Iranian print industry to view, experience and discuss the latest cutting edge technology in the digital print world with industry leaders from the region and beyond.

Iran’s print industry has a different market and a different pace of purchase and development from other Middle Eastern countries; however it is a large and significant one in the region. Despite the challenges the sector faces, with enthusiastic leaders Iran’s print industry will prove itself resilient and more than capable of improving its market share.

by FESPA Staff Back to News

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