South Korean general trading companies are turning their eyes to a potentially big Iranian market following the lifting of economic sanctions on the Middle Eastern country, industry sources said Wednesday.
South Korea's five leading GTCs, including Daewoo International, are moving to restore ties with their former trading partners in Iran and consider various ways to explore new business opportunities there.
In particular, the companies are considering participating in such businesses as energy, mineral resources, construction plants and food grain in the Iranian market, according to the sources.
Iran is a resources power with the world's second-biggest deposit of natural gas and the fourth-largest deposit of crude oil.
Iran's crude oil deposit was estimated at 157.3 billion barrels as of 2014.
The United Nations lifted most economic sanctions against Iran on Jan. 16 in a follow-up to a nuclear deal.
Local industries expect there will be big demand regarding Iran's refurbishment of its obsolete infrastructure. Iran reportedly has plans to replace crude pipelines and other infrastructure at a total cost between US$130 billion and $145 billion.
Even under economic sanctions, South Korean GTCs have maintained their offices in Iran and monitored market trends of the country.
Daewoo International, which has maintained an office in Tehran since 1975, is most active in its business with Iran. The company has been making steady efforts to prepare for the lifting of sanctions.
It has increased the number of Korean employees in its Tehran office from two to three. With 15 employees, including 12 local employees, Daewoo is stepping up preparations to capture the Iranian market.
A Daewoo official said the bulk of its sales came from chemical fields last year and expects the plant and steel businesses to be brisk starting this year.
Hyundai Corp. began preparing for the lifting of the sanctions in April last year, conducting market surveys for plants, electric devices, construction equipment, steel, automobiles and petrochemical fields. Its Tehran office is staffed with two Koreans and five local employees.
SK Networks with about 10 employees in Tehran, including three Koreans, is engaging in exports and imports of steel products with Middle East countries. The company is considering developing fresh businesses with Iran like social overhead capital, construction and shipbuilding.
The trading arm of Samsung C&T has two Korean and three local employees in Tehran and is considering a plan to participate in Iran's plant and infrastructure projects, while LG International is also taking a close look into business opportunities in Iran.
Market watchers predict an increase in bilateral trade following sanctions relief. Trade between South Korea and Iran tumbled to $6.2 billion last year from $17.4 billion in 2011 due to the sanctions. (Yonhap)
