EghtesadOnline: Iran is self-sufficient in the production of detergent and hygienic products. Domestic brands have long dominated the market, alongside a few foreign brands that have found their way on to the shelves.
The 25th International Exhibition of Detergent, Cleanser, Hygienic Cellulose Products & Machinery, also known as "Iran Beauty and Clean 97", was held at Tehran's International Fairground for four days, concluding on Sunday.
The expo hosted hundreds of domestic and foreign companies that showcased their latest products and services.
“The country's production capacity is high and there are a lot of companies operating in this sector. Domestic companies are capable of fully meeting domestic demand,” Ardeshir Mosleh, with the Padide Shimi Paydar Company's Advertisement Department, told Financial Tribune at the expo.
A subsidiary of Golrang Industrial Group, the company is a leading producer of a range of detergent and hygienic products, including hand washing liquid, laundry detergent, shampoo and soap, among others. As the parent company to eight subsidiaries itself, products of Padide Shimi Paydar are sold under the brands of Active Home, Active Soft, Hayat, Landi, Tiyan, Roya, Pico Plast and Hobo.
Mosleh noted that products in every category of detergents are produced with high quality.
"Over 100,000 workers are directly involved in the Iranian detergent industry," he said.
Commenting on the presence of foreign brands in the Iranian detergent market, Mosleh asked whether foreign companies produce their products in Iran the way they do in Europe.
He claimed that what these companies offer to European customers are much better in terms of quality compared to the products they offer to Iranians.
“We are not opposed to competition. Competition leads to growth. But I believe if a foreign company enters the Iranian market where there are already a lot of competent producers, there should be more supervision, more strictness. They should apply their global standards when entering the Iranian market with their own equipment, machinery and technology, but that is not the case now,” he said.
Mosleh noted that people tend to choose famous international brands regardless of where they have been made or whether their quality really is better than Iranian products.
> Production, Trade
Speaking to Financial Tribune at the expo, Managing Director of Paxan Company Ali Safavinejad said Iran's nominal detergent production capacity stands at over 4 million tons while the actual capacity is 1.45 million tons.
According to Secretary of Detergent Producers Council Jamshid Forouzesh, about $200 million worth of detergents are exported from Iran every year. He believes there is capacity to increase the output fivefold, as many production units are working under capacity amid stagnant demand in the domestic market, ILNA reported.
Iraq, Afghanistan, Central Asian countries and Turkey are the main customers of Iranian detergents.
According to Mosleh, laundry detergents have a higher share in Iran’s detergent exports. However, he voiced concern that fluctuations in the foreign currency rates have cause a major headache for Iranian exporters.
As Iran’s detergent production currently meets 100% of domestic demand, there is no need for import of such products into the country.
However, as Hassan Khorvash, the consultant to Pars Company and Condor Company, told Financial Tribune, the import of some raw materials that are not produced in Iran, such as detergent enzymes, scents and acids, will continue.
> Lucrative Market for Global Players
Financial Tribune also had the opportunity to have a talk with Nawin Arenja, the managing director of Dubai branch of Dullberg Konzentra. Based in Hamburg, Germany, Dullberg Konzentra is a global manufacturer of fragrances and essential oils used in different types of detergent and cleanser products.
As Arenja explained, the company has been present in Iran for the past 30 years and is very well-established in the Iranian market.
“The reason why we are very much concentrated on the Iranian market is because … first of all its population. It’s quite huge. There are a lot of consumers who are hungry for new products. So there’s a big potential, especially for our products."
Asked whether they have ever considered investing and starting a production line in Iran, he said they actually have but after checking the market conditions and regulations, especially from the customs side, they have come to realize that at present, it’s not economically viable to manufacture in Iran.
“Maybe in the near future, the situation may change but currently there’s no benefit to manufacture here,” Arenja said.
On their future in the Iranian market, he said since they are not touched by sanctions and restrictions of exporting products to Iran, they don’t see a big problem in the future even if the economic situation now is clouded in uncertainty.
“In terms of investment or market concentration, we won’t reduce it. On the contrary, we’re trying to find new people to increase our business, to hire more people, increase our distribution capacity,” he said.
Dullberg Konzentra exports products all over the world.
Arenja noted that the German company has created jobs for Iranians too.
“We are working with Iran Talent (a leading online job site in Iran) to recruit Iranian workforce for our company. Our current staff with the local office is around 10 people. We started with I think one or two, and the number is growing. With the progress of the business, we need more staff,” he said.