Iran Economy in Brief – No. 54

Plasco, Iran’s first high-rise, falls down

Since the Plasco Fire Tragedy, which caused the first skyscraper of Iran to completely collapse, the Government is designing different plans to protect its business owners and employees.

Almost 3000 people were directly earning from this commercial building, who now have lost jobs and capital. First estimations show nearly $500m loss in current and assets.

Plasco Building, located in Tehran downtown, was opened in 15 floors in 1962. The building caught fire at 8 a.m. on the 19th of January 2017 and completely collapsed at 11:30 a.m.

About 30 firefighters were trapped in the building and some other 25 citizens have been reported to be missing. Due to fire for more than five days after the collapse, not more than four bodies were found from debris.

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2025 Outlook for Automotive Industry: Export of 25% of Heavy Cars

New policies aim to revolutionize the automotive industry: a quarter of the commercial vehicles produced in Iran should be exported by 2025. The estimated production of commercial vehicles (passenger and goods transport) is expected to reach 120 thousand units by that year.

This is while in the previous Iranian fiscal year (March 2015-2016) nearly 980 thousand vehicles were manufactured, of which only 1.1%, i.e. 11 thousand units, were commercial vehicles. New policies and plans therefore, require the current production to be more than 10-folded.

Additionally, as the export of such vehicles are currently negligible, Iranian carmakers should also considerably improve their quality.

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New requirements on Fixed Income to increase liquidity

In order to increase liquidity in the stock market, fixed income mutual funds are required to invest at least 5% of their total capital in stocks.

In recent months, a large number of fixed income mutual funds have poured the majority of their holdings into risk-free governmental bonds. At the same time, with charming interest rates offered by banks, great portion of funds’ capitals have remained out of the stock market. Now all this has to change, asks Security and Exchange Organisation of Iran (SEO).

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Production of 120 million tonnes Cement: could or should?

The Minister of Roads and Urban Development questions the goal of producing 120 million tonnes of cement in 2025.

“Unfortunately, no steps have been taken to further the variety of cement products in the country and the goal of producing 120 million tons of cement in the country is illogical”, said Abbas Akhundi, Minister of Roads and Urban Development, in Concrete Structures Conference.

Current production capacities are around 80 million tonnes, where 40% of the cement is left-over. Ministry of Roads suggests to expand the use of concrete in infrastructural projects such as paving roads, airstrips and rail traverses. Otherwise Minister Akhundi doesn’t seem very much convinced of setting such goals.

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