- Swedbank AB also seeks direct access to Iran as `huge market'
- July nuclear deal spurred European rush for Iran market access
Sweden’s biggest companies and banks, including telecommunications firm Ericsson AB and truck and bus producer Scania AB, want to invest in Iran if economic sanctions are lifted following its nuclear agreement with world powers.
“We are ready,” Scania spokesman Hans-Aake Danielsson said by phone Wednesday. “If and when it takes off, Iran can be a significant market for Scania." Ericsson spokeswoman Karin Hallstan said in an e-mail that the company has had customers in Iran “for over 100 years” and plans to “explore opportunities” with new ones as it monitors developments following the nuclear deal.
At least 10 European trade delegations, including from France, Germany and Italy, have visited Iran since the July accord, which imposes limits on Iran’s nuclear program in return for access to oil and financial markets. Swedish multinationals see opportunities in health care, transportation, infrastructure, technology and energy, according to Ylva Berg, chief executive officer of government and industry lobby group Business Sweden.
Before the sanctions were imposed, Iran was “a big export market for Sweden for many, many years,” Berg said in an interview Tuesday at an investor conference in Dubai. Now, "all major multinational companies in Sweden, say the ‘Big 10’ plus some others, are interested in getting started as fast as it’s possible," she said. The group’s representatives are planning to visit Iran, perhaps in December, to evaluate prospects.
About 200 Swedish investors are in Dubai this week to learn about opportunities in the region, including in Iran, she said.
The nuclear deal came into force on Oct. 18 and the first sanctions are expected to be removed in the first quarter of 2016. Iran must first comply with its commitments under the accord, including eliminating its stockpile of highly enriched uranium.
"Five or six years ago, Iran was one of our five largest markets for buses," Scania’s Danielsson said. "There is a large pent-up demand, but if the sanctions are lifted it will probably take some time before it takes off."
A number of Swedish business delegations have already visited the country, according to Sweden’s ambassador to Iran, Peter Tejler. They include venture capitalists from Sweden’s population of 100,000 Iranians, and Tejler is connecting firms with local partners and explaining the political and economic context, he said in an interview.
Swedish exports to Iran amounted to 7.9 billion kronor ($951 million) in 2005, according to Business Sweden. Exports fell 83 percent in 2012 after more sanctions were imposed, it said in a report.
Investors are weighing whether Iran can address problems such as corruption, banking liquidity and the close ties between business and government.
It’s going to be "very tough" for the private sector to develop even though President Hassan Rouhani’s government is pushing for it, Trita Parsi, author of "A Single Roll of the Dice - Obama’s Diplomacy with Iran," said in an interview.
“This is just one out of many factors that’s going to make Iran a lucrative but complicated place to be," he said.
Swedish exports to Iran could be seven times higher once sanctions are lifted, said Daniel Lorentzon, vice president and client executive of bank relations at Swedbank AB. The bank wants to provide financing for exporters and is also examining how it could enter Iran once restrictions are lifted, he said.
"Ideally, we will be able to go directly" instead of using an intermediary such as Dubai, he said.
Other companies expressing an interest in Iran at the Dubai conference included Swiss-Swedish power transformer producer ABB Ltd, and Danish banking group Danske Bank A/S.
For Tullinge, Sweden-based Bactiguard AB, the challenge isn’t getting products to Iran, but getting paid for them, according to the company’s director of marketing Nina Nilsson. Bactiguard has been shipping medical devices to Iran for the past two years through a local distributor, and is now looking to set up a company in Dubai with a local bank account so that its Iranian partner can transfer payment, she said.
"We’re putting a lot of effort into our expansion in Iran," Nilsson said. Lifting the sanctions "would make a tremendous difference for us," she said.