An Iranian oil official has announced planning to reopen and resume activities of Iran’s petrochemical office in Seoul of South Korea within weeks.

In time with recent agreements between Iran and South Korea to double the amount of oil sales and exports, Iran’s petrochemical bureau has also been scheduled to reopen in the coming weeks.

Currently, Samsung and LG companies comprise traditional customers of Iran’s petrochemical products and liquid gas as the first shipment of gas condensate produced at South Pars phases has been deployed to Hanwha Total Petrochemicals Company headquartered in Seoul.

Meanwhile, Mehdi Sharifi Niknafas, Managing Director of Iran's Petrochemical Commercial Company (IPCC), has referred to elimination of banking and financial sanctions between the two countries noting “South Korea is a buyer of Iran’s polymer products; however, the export of these products to South Korea is done with caution in order to maintain market in China.”

“Resumption of activities by the petrochemical bureau in Seoul will help increase exports of Iranian products to South Korea,” stressed the official.

In line with the increasing export volume of petrochemical and polymer products to South Korea, the most important venues for boosting bilateral cooperation between Tehran and Seoul in the post sanction era include investment attraction, participation in construction of new petrochemical complexes as well as transfer of technology.

South Korean companies are briskly moving to tap into Iran’s fast-growing construction and consumer markets, regarding the Iranian boom as a breakthrough to their prolonged business slump amid the global economic slowdown.
Local business executives expect that President Park Geun-hye’s visit to Iran, slated for May 1-3, as well as the dispatch of a large-scale business delegation to Tehran, will provide fresh momentum to their inroads into Iran, which is in the midst of rebuilding its infrastructure following the lifting of western sanctions, Yonhap News Agency reported.
The construction sector was quick to move, as major builders are eying large-scale deals with Iran.
Hyundai Engineering & Construction Company is pushing to secure a $500 million contract to build a hospital and medical facilities, a project initiated by Iran’s Ministry of Cooperatives, Labor and Social Welfare. GS Engineering & Construction Co. and Daelim Industrial Co. have sent their staff in preparation for more deals.
Trade firms have also been rushing to Iran. SK Networks, which handled about 14% of Iran-bound exports last year, increased the number of its local staff from nine to 13, with a plan to expand its business.
Shipyards are among those keenly interested in business deals with Iran. Hyundai Heavy Industries Co., a major shipyard here, is reportedly in talks with Iran’s state-run shipper IRISL on a deal to build three container ships for an estimated $350 million.

 1st Presidential Visit Since 1962
From May 1-3, President Park is to visit Iran for a summit with her Iranian counterpart Hassan Rouhani. The president is likely to be accompanied by more than 200 businesspeople from such fields as construction, energy, finance, shipping and steel.
Her visit, the first of its kind by a South Korean president since the two sides established diplomatic relations in 1962, comes as Iran has been emerging as a high-potential market after years of sanctions were lifted in January.
“Relevant government agencies are now making all-out efforts to ensure that the summit talks could lead to more orders and exports in the Iranian market,” a South Korean government official said on condition of anonymity.
With a population of over 80 million, the Middle East country abounds in natural resources, holding the world’s fourth-largest oil reserves and the largest gas reserves.
In the past decades, South Korean builders had clinched deals worth $12 billion with Iran, but since 2009 there have been few deals, due mostly to the economic sanctions that the United Nations imposed on the country over its nuclear program in 2010.
A World Bank report earlier forecast that Iran’s economy will grow 5.1% and 5.5% this and next year, respectively, possibly turning around the negative growth seen in the previous two years.
South Korea once enjoyed active trading with Iran before the crippling sanctions were imposed on Tehran. Government data showed that South Korea’s exports to Iran hit an all-time high of $6.26 billion in 2012 but it had nearly halved to $3.76 billion last year.
Talks have been actively underway between the two countries to put their economic and business ties back on track in many areas.

  Construction Sector at Forefront
In late February, the two sides held a meeting of a joint commission for economic cooperation in Tehran and agreed to expand cooperation in infrastructure, including power plants, petrochemical factories, dams and railroads. This raised hopes that construction might be one of the key areas that could benefit from the opening of the Iranian market.
“South Korea will push for partnership and cooperation with Iran from a long-term perspective,” Joo Hyung-hwan, South Korean minister of trade, industry and energy, said at the meeting. He cited three major fields: Iran’s campaign to restructure its industry, the nation’s efforts to improve welfare services, including healthcare and education, and the joint development of social overhead capital.
In one of close to 300 potential deals discussed, POSCO Energy Co., a unit of South Korea’s top steelmaker POSCO, signed a memorandum of understanding with Iranian steelmaker PKP to build an off-gas power plant in the Middle Eastern country.
“In particular, the construction sector will likely get a boost from the opening of the social overhead capital in Iran,” said Hong Joon-pyo, a researcher at Hyundai Research Institute, a private think tank.
“We expect the president’s visit to resolve sensitive issues and break any logjam... What the president has to do is to reduce risks and uncertainties facing businesses seeking to enter the market.”
During her stay in Iran, talks will likely be held about cooperation in the energy sector and more specifically the construction of hospitals and multipurpose dams and seaports there, sources said.
Bracing for increasing exchanges going forward, both sides are expected to discuss ways of building settlement systems using such currencies as the euro and the renminbi to facilitate bilateral trade, which has been hampered by sanctions, they added.
The corporate circle seems to be keenly interested in the president’s trip to Iran, with the sights trained on their own possible business opportunities.
The list of companies joining the delegation has not been finalized but the number will likely grow to over 300, industry sources said. It would be more than three times larger than a similar delegation led by the commerce minister who visited Iran in late February.
According to media reports, high-ranking officials from large business groups such as SK, Hanjin and KT Corp. have already expressed their intention to join, as they are seeking deals in each of their interested areas, namely energy, airline and telecommunications.

South Korean companies are briskly moving to tap into Iran’s fast-growing construction and consumer markets, regarding the Iranian boom as a breakthrough to their prolonged business slump amid the global economic slowdown.
Local business executives expect that President Park Geun-hye’s visit to Iran, slated for May 1-3, as well as the dispatch of a large-scale business delegation to Tehran, will provide fresh momentum to their inroads into Iran, which is in the midst of rebuilding its infrastructure following the lifting of western sanctions, Yonhap News Agency reported.
The construction sector was quick to move, as major builders are eying large-scale deals with Iran.
Hyundai Engineering & Construction Company is pushing to secure a $500 million contract to build a hospital and medical facilities, a project initiated by Iran’s Ministry of Cooperatives, Labor and Social Welfare. GS Engineering & Construction Co. and Daelim Industrial Co. have sent their staff in preparation for more deals.
Trade firms have also been rushing to Iran. SK Networks, which handled about 14% of Iran-bound exports last year, increased the number of its local staff from nine to 13, with a plan to expand its business.
Shipyards are among those keenly interested in business deals with Iran. Hyundai Heavy Industries Co., a major shipyard here, is reportedly in talks with Iran’s state-run shipper IRISL on a deal to build three container ships for an estimated $350 million.

 1st Presidential Visit Since 1962
From May 1-3, President Park is to visit Iran for a summit with her Iranian counterpart Hassan Rouhani. The president is likely to be accompanied by more than 200 businesspeople from such fields as construction, energy, finance, shipping and steel.
Her visit, the first of its kind by a South Korean president since the two sides established diplomatic relations in 1962, comes as Iran has been emerging as a high-potential market after years of sanctions were lifted in January.
“Relevant government agencies are now making all-out efforts to ensure that the summit talks could lead to more orders and exports in the Iranian market,” a South Korean government official said on condition of anonymity.
With a population of over 80 million, the Middle East country abounds in natural resources, holding the world’s fourth-largest oil reserves and the largest gas reserves.
In the past decades, South Korean builders had clinched deals worth $12 billion with Iran, but since 2009 there have been few deals, due mostly to the economic sanctions that the United Nations imposed on the country over its nuclear program in 2010.
A World Bank report earlier forecast that Iran’s economy will grow 5.1% and 5.5% this and next year, respectively, possibly turning around the negative growth seen in the previous two years.
South Korea once enjoyed active trading with Iran before the crippling sanctions were imposed on Tehran. Government data showed that South Korea’s exports to Iran hit an all-time high of $6.26 billion in 2012 but it had nearly halved to $3.76 billion last year.
Talks have been actively underway between the two countries to put their economic and business ties back on track in many areas.

  Construction Sector at Forefront
In late February, the two sides held a meeting of a joint commission for economic cooperation in Tehran and agreed to expand cooperation in infrastructure, including power plants, petrochemical factories, dams and railroads. This raised hopes that construction might be one of the key areas that could benefit from the opening of the Iranian market.
“South Korea will push for partnership and cooperation with Iran from a long-term perspective,” Joo Hyung-hwan, South Korean minister of trade, industry and energy, said at the meeting. He cited three major fields: Iran’s campaign to restructure its industry, the nation’s efforts to improve welfare services, including healthcare and education, and the joint development of social overhead capital.
In one of close to 300 potential deals discussed, POSCO Energy Co., a unit of South Korea’s top steelmaker POSCO, signed a memorandum of understanding with Iranian steelmaker PKP to build an off-gas power plant in the Middle Eastern country.
“In particular, the construction sector will likely get a boost from the opening of the social overhead capital in Iran,” said Hong Joon-pyo, a researcher at Hyundai Research Institute, a private think tank.
“We expect the president’s visit to resolve sensitive issues and break any logjam... What the president has to do is to reduce risks and uncertainties facing businesses seeking to enter the market.”
During her stay in Iran, talks will likely be held about cooperation in the energy sector and more specifically the construction of hospitals and multipurpose dams and seaports there, sources said.
Bracing for increasing exchanges going forward, both sides are expected to discuss ways of building settlement systems using such currencies as the euro and the renminbi to facilitate bilateral trade, which has been hampered by sanctions, they added.
The corporate circle seems to be keenly interested in the president’s trip to Iran, with the sights trained on their own possible business opportunities.
The list of companies joining the delegation has not been finalized but the number will likely grow to over 300, industry sources said. It would be more than three times larger than a similar delegation led by the commerce minister who visited Iran in late February.
According to media reports, high-ranking officials from large business groups such as SK, Hanjin and KT Corp. have already expressed their intention to join, as they are seeking deals in each of their interested areas, namely energy, airline and telecommunications.

This February South Korea’s POSCO signed a memorandum of understanding with Iranian Pars Kohan Diyar Parsian Steel Complex (PKP) for cooperation in the construction of a 1.6-million-ton steelmaking plant aimed to produce value-added flat steel.
Within the framework of this agreement POSCO is to supply its FINEX technology, which allows significant costs reduction through the use of iron ore fines and non-coking coal avoiding agglomeration and coking operations. POSCO will own 8% of PKP.
This, however, will not be the only steel project where POSCO plans to participate. The company reached an agreement worth €1 billion that will spread in Iran its FINEX and Compact Endless Cast and Rolling Mill (CEM) technologies, Metal Expert, a Ukraine-based provider of news and analysis on steel products and steelmaking raw materials industries, wrote in a recent report dubbed “Iran in Focus”.
Based on this business model, POSCO will collect royalties from steelmakers using their technologies, as well as part of the revenue from orders won by producers using their management systems. The company also expects to profit by dispatching its engineers to overseas facilities. This will help the company maintain the share in Iranian steel market, as the country aims to reduce import by imposing higher tariffs for making Iran self-sufficient in steel.
In 2012, Iran’s steel import from South Korea totaled 1.1 million tons, while this year it dropped to around 600,000 tons.
Despite the fact that the Iranian steel market is narrowing for foreign suppliers, South Korea will still benefit from this cooperation via such steel-consuming industries as ship and railbus building, automotive sector and home appliances.
Over the years of sanction, the infrastructure and technologies in Iran have become outdated, which makes it a blank space among today’s saturated global markets.   

 Logistics, Marine Industries
South Korea has expressed readiness to invest in Iran’s fast-growing logistics and shipbuilding industry as well as ports. The volume of South Korea’s investment in such areas is expected to rise to $10 billion within five years.
At the end of April, Daewoo Shipbuilding & Marine Engineering confirmed to local press that it is in negotiations with an Iranian customer for offshore plant orders.
Hyundai Heavy Industries is also in talks to build three 14,500 TEU container ships for IRISL, while the latter is also negotiating with SPP Shipbuilding for tanker orders.
In late February, an MoU was signed by Islamic Republic of Iran Railways, Korean Hyundai-Rotem and Japanese Marubeni companies. According to the agreement, 150 railbuses worth $260 million will be manufactured based on finance credit acceptable to the Central Bank of Iran and the Ministry of Economy, which will be opened by the Hyundai-Rotem Company.
The Hyundai-Rotem had already signed the contract for joint manufacturing of another 150 railbuses with Iranian Rail Industries Development Company. So far, 17 of them have been delivered to Iran and put into use in the country’s railroads network. Besides, South Korean Daelim is expected to become one of the contractors for the construction of railroad in Isfahan Province.

  President Park’s Landmark Visit
South Korean President Park Geun-hye paid a landmark state visit to Tehran in early May focused on boosting bilateral economic cooperation. The visit–the first by a South Korean president in more than half a century–represented South Korea’s efforts to tap into business opportunities in Iran.
“I believe Iran can become a land of opportunity for many South Korean firms,” Park told reporters on a plane back to Seoul.
During her visit, the two countries signed dozens of preliminary deals that could lead to contracts worth tens of billions of dollars. Seoul hopes the signed memoranda of understanding could pave the way for South Korean companies to eventually win massive infrastructure projects underway in Iran.
South Korea’s presidential office has described the MoUs as the “biggest-ever economic accomplishment”.
The Korea Electric Power Corporation opened an office in Tehran with a visit by Kepco CEO Cho Hwan-eik, one of the 236 delegates on the mission.
Kepco signed 10 business agreements, including four major electricity infrastructure projects, with Iranian counterparts such as the Iran Power Generation and Transmission Company. One of the four major projects is to expand the capacity of Iran’s electrical grid to 765 kilovolts.
If Iran decides to install the new network, Kepco will participate in a $5 billion extra-high-voltage electrical grid construction project. Another major project is the introduction of an advanced metering infrastructure, which enables users real-time monitoring of electricity use.
The Korea Shipowners’ Association and Shipping Association of Iran signed a memorandum of understanding to form a taskforce to expand direct shipping lines between Asia and the Middle East. Member companies of the associations will form an alliance.
“We expect the transport of goods between Korea and Iran to rapidly increase,” the Korean association said in a statement.
Incheon International Airport signed a memorandum of understanding with Tehran’s Imam Khomeini International Airport. The two are expected to send delegations on a regular basis to share information on airport operations, aircraft management, development of surrounding infrastructure and co-marketing projects.
Meanwhile, Woori Bank has launched a Tehran office. It is the first Korean bank to set up its office in Iran. After economic sanctions on Iran were lifted in January, Woori Bank sent experts to research the Iranian market and attained approval from the Central Bank of Iran on April 12 to open an office in Tehran. The Tehran office is not capable of banking operations.
The office will collect market information and connect already established branches of Woori Bank in the UAE and Bahrain. The bank also signed a business partnership with Pasargad, the second-largest bank in Iran, to boost Korea-Iran trade, share information about local markets and provide financial services.

  Cooperation in Auto Sector
Automotive industry is also one of the prospective points of cooperation for both countries. Currently, there are no joint ventures between Iran and South Korea for automobile manufacturing. Nevertheless, Korean producers do not exclude the possibility of establishing auto manufacturing plants, considering the potential of Iranian market. According to Islamic Azad University’s research, Iranian car production dropped by around 40% during the period of sanctions. Their removal will lead to the recovery and growth of the industry, providing favorable conditions for steel consumption.
Iranian automotive industry used to cover most of its steel needs with South Korean material. Pending the new protective measures against imported steel, it is likely that trade cooperation between the countries will shrink and turn to technologies transfer and investments.
In fact, South Korea plans to use the potential of Iranian market in terms of automobile export, which will lend support to Korean steelmakers, Hyundai in particular, which supplies steel to its subsidiaries Hyundai Motor and Kia Motors.
“The group has increased its sales target by 240% [to 60,000 units] from 25,000 cars sold to Iran in 2014,” Hyundai Motor CEO Jeong Jin-hang was quoted as saying by The Korea Herald.

  Home Appliance Partnership
Last but not least, home appliance is an important segment. Over the years of sanction, Iran has become starved of new technologies and now needs modern electronics at reasonable prices.
This again clears two possible paths for Korean producers. First is to export finished appliances made from local steel, second–to establish joint ventures. The latter, however, will depend on the incentives Iranian government is ready to give.
In January 2016, LG Electronics announced plans for the establishment of a large production plant in Tehran. According to industry sources, the plant is expected to produce over 500,000 TVs with the same number of refrigerators and washing machines.
“We will make a final decision after seeing what kind of protections the Iranian government will adopt for foreign investors,” an official from LG Electronics said.
To provide financial support to numerous bold plans, central banks of both countries are in discussion to enhance banking cooperation, open line credit facilities and establish a mechanism to clear mutual debts.
Moreover, since both sides understand that economic recovery of Iran will take time, South Korea agreed to provide comfortable terms of payment for the country.
“To promote trade and investment, Seoul is committed to maintaining the current Korean-won based settlement of accounts system while adding other forms of exchange using different foreign currencies,” South Korean Minister of Trade, Industry and Energy Joo Hyung-hwan told local press. “The euro and Japanese yen can be used in tandem with the won to settle accounts,” he said.

  

South Korean President Park Geun-hye, accompanied by five ministers and a 300-member economic mission, is due to visit Iran in early May, according to director general of International Affairs Office at Korea International Trade Association KITA, Hakhee Jo. “Ten memoranda of understanding are expected to be signed during the trip,” Iran Chamber of Commerce, Industries, Mines and Agriculture’s news service quoted the South Korean official as saying during a meeting with the chamber’s deputy for international affairs in Tehran last week. Park would be the first South Korean president ever to visit Tehran. In late February, Korean Minister of Trade, Industry and Energy Joo Hyung-hwan led 250 delegates from 100 South Korean companies during a two-day visit to Iran and attended the South Korea-Iran Business Forum organized by KITA. During the trip, Tehran and Seoul signed a finance agreement based on which South Korean trade insurance corporation K-Sure pledged to invest up to $5 billion in Iran’s development projects.