Iran agricultural products share is about 1% of world’s products, and agricultural products volume is estimated about 100 mn tons per year. Thus, establishing food industry is important in order to realize the healthy food, job creating, increase export, raising value added and avoiding agricultural products waste.
Food industries include 18.3% of total industries volume in Iran. Moreover, 15.1% of employment, 8.93% of investment and 9.64% of value added belong to this industry. As well 16,500 food companies are working under license of “Ministry of agriculture and Ministry of Industry, Mine and Trade” with about 100 mn tons nominal capacity which their actual capacity is about 50 mn tons.
Table 1 Capacity and estimated production in the year ended in March 2016 (000 tons)
Source: Ministry of Industry, Mine and Trade
Food and beverage expenditure in household budget
Food and beverages share amounted 23.61% of all life expenditure in Iranian households.
Table 2 Food & beverages expenditure for Urban households (mn IRR)
Food and beverage export
Table 3 Food and beverage export
Iraq, Afghanistan and the UAE are three countries possessing approximately 70% of Iran export destinations, which it would be a challenge for export, thus it must be tried to develop new countries.
Table 4 Export destination
Table 5 Iran total food and beverages export
Figure 1 Total food and beverage export
Food and Beverage Import
According to the latest statistics, Iran food and beverage import is more than 1,925,000 tons with 2,242 mn USD value.
Table 6 Food and beverages import
Figure 2 Trend of food and beverages total import
Table 7 Import of main Items of food and beverage products
Nearly 70% of food import provided by countries as the UAE, Turkey, Switzerland and India. Most of oil seeds import provided by countries as Argentina, Brazil, Ukraine, and raw oil import provided by Brazil, Argentina, Indonesia and Malaysia. Following economic sanctions and none of bank relationship in addition to orders in countries such as Switzerland and India, it has led to make import destinations to be different from main destinations.
Table 8 The main import origin countries
Figure 3 Food and beverage import and export (mn USD)
Iran owns the fourth rank of food export among West Asian Countries.
Table 9 Iran export value compare countries in west Asia (mn USD)
Source: Trademap * Note: Sources are related to IRICA statistics, the year ended in March 2013 -16
– Appropriate access to major raw materials in Iran
– Efficient, educated and expert human resources
– Extend land, climatic variation and enjoying full natural resources
– Access to export markets of the region and the world
– Creating appropriate capacity in food industry
– New food resources enriched with micronutrients based on social health
– Food products adaptation with standards and healthcare requirements in international area
– Vast job creating in supply, produce, distribute and sell fields in food and beverage value chain
– Developing food industries capacity and capability of designing and making machines and equipment
– Desirable flavor in agricultural raw materials
– Access to inexpensive energy sources
– Low efficiency in some small and medium companies since low professional and efficient work forces in production units
– Weakness in R&D
– Old machines and equipment
– The high prices of raw materials (agricultural, horticultural, dairy and protein) rather than world prices
– None mass agriculture production
– Multiplicity of policy makers in developing, enforcing and screening about standards
– High energy intensity in industry
– Small companies, which have led to increase in the cost and inability at exporting.
– Weakness in domestic and international advertising and marketing
– Low competitiveness in world by costs and quality
– Inefficient distribution system and goods exchange high cost and restriction in road and rail transportation facilities
– Low working capital and banking system inability
– No capable export management companies
– Population growth in Iran and regional and international markets for Food and beverages
– Society trends to consume appropriate Food by means of easy making and fast cooking
– Appropriate geographical and geopolitical location in the region
– Change in global export from raw materials to completed products with higher value added
– Decline in the world’s grains and other raw materials cost
– No food processing capacity in some neighboring countries
– Growing demands for halal products in the world
– Appropriate access to import raw materials
– Inconstancy cost of raw materials and its effects on competitiveness of goods in the world
– Shortage of mechanized and industrialized agriculture in order to create the required industrial varieties and declined cost for making them competitive
– Interventions from other sectors in the food industry
– Ban and restriction in food products and raw materials import and export by ministry of agriculture
– High interest rate and lack of financing diversity
– Regional conflicts in some of neighboring countries resulting in serious problems in export
– Dried and semidried climate in Iran
– Dependency on raw materials import
– Export ban in some of food materials by ministry of agriculture
– No qualified and independent director to determine eligibility for “Halal standard” and lack of trained auditors IRAN BUSINESS TIME 203
Vision in 2025
Food and beverage industries would be based on knowledge and modern technology that secure supplying food needs with vision in 2025, including the pioneer industrialized economic sectors that are as follow:
“Achieving the second rank of export in West Asia with 6.5 bn USD in 2025” The main goals of food and beverage industries will be as bellow until 2025.
1. Supplying the country’s needs in processing and producing healthy and nutritious Food
2. Improving efficiency and raising the competitiveness capability in order to develop export.
3. Developing export by emphasizing on Halal products
4. Enforcing the production companies to develop research activities and more cooperation with domestic and foreign scientific centers.
5. Attracting the foreign investments by valid brands to invest in export.
6. Managing the food and beverage industries value chain
7. Integration of small companies to produce economic scale and to achieve valid brands.
8. Access to compatible health and environment requirements and standards in national and international area.
Quantitative targeting until 2025
Table 10 Food and beverage current status and targeting
Source: Ministry of Industry, Mine and Trade
– Dextrose, Maltose, Fructose
– Food essence
– Producing and packaging all types of herbal essence
– Food coloring
– Producing probiotic bacteria as nutritional supplements for livestock, poultry and seafood
– Food or medicinal grade beta- carotene and dietary supplement beta- carotene (15 soft gels) mg of food Omega 3 supplements
– Suitable fridges for regional needs and food export
– Competitive food industries projects
Food industries in capital market
Food companies in stock exchange market are dealt under the title of two groups’ food industries and sugar. Food industry market value is 1779 mn USD and sugar market value is 352 mn USD that totally amounted 1.82% of Iran’s stock exchange market value. P/E Ratio for food group and sugar is 8.63 and 13.05 respectively.
Table 11 Food industries (except sugar) profitability ratio (%)
Figure 4 Food and beverage group except sugar index
Figure 5 Sugar group index