Iran breaks ground on €200m tire plant

Sanandaj, Iran – Iran has broken ground on Razi Tire greenfield tire plant in the western city of Sanandaj, Kordestan Province, sources in Iran have confirmed to ERJ.

The ground-breaking ceremony was held concurrent with Iran’s 10-day celebration of 1979 Islamic Revolution and was attended by the industry and mines minister Mohammad Reza Nematzadeh and the head of the Industrial Development and Renovation Organisation (IDRO) Reza Norouzzadeh.

IDRO has a 19-percent share in the project, while the remaining 81 percent is owned by Razi Industrial group.

Formerly named Sabalan Tire, Razi Tire is owned and run by entrepreneurs the Ganji brothers, who have two other tire projects in Iran: Artawheel Tire in Ardabil province and Yazd Tire in the central province of Yazd.

Speaking to ERJ earlier in January, Kamran Afshar-Imani, vice president and member of the board of directors at Razi Tire said that the company was in talks with major European technology and machinery suppliers including Pirelli, HF and VMI.

Construction work on the 50,000-tonne/year plant is expected start by the spring 2016, according to Afshar-Imani.

Some 30 percent of the plant’s products will be all-steel light truck tires and the rest will be passenger SUV tires.

Sources in Iran have indicated that the preferred choice of finance is via European and Western banks, as Chinese banks require a high proportion of Chinese involvement in the investments and have high interest rates.

Razi Tire is one of four greenfield tire projects being pursued by the Iranian government to add 200,000 tonnes/year of local production capacity in the country.

Three of the four projects will be constructed in partnership between IDRO and private investors.

The fourth, to be constructed in Pakistan-bordering Sistan-Balulchestan province will be championed by IDRO alone as it has not been well received by private investors.

The construction on the first project, operated by Nikro Gostaresh Khorramabad Tire Co., started in July 2015. The company is headed by Amirali Zohreh-Nejad an Iranian entrepreneur whose father currently imports tires into the country.

The final project, championed by Ms Mitra Farzadnia, is to be completed in Kermanshah Province, where Farzadnia has her own tire cord company.