Iran eyes oil, coal and cement supply to PH

By on November 17, 2017

Iranian businessmen are exploring trade opportunities in oil, fertilizer, coal, cement and agriculture products in the Philippines as it opens up its economy.

Pedrito Ali Mousavi Mortazi, Iran Chamber of Commerce president, in an interview with Malaya said the governments of Iran and the Philippines are exploring the possibility of sourcing crude oil from the former which would be refined in a third country for export to the Philippines at a lower price.

Mortazi said the Philippines currently buys oil and petrochemical products from traders in Singapore at 40 percent markup.

However, he said, Iran could similarly purchase the same 20 percent cheaper than what it currently buys.

He said the intention is to supply the smaller oil distributors since the big companies Shell, Petron and Chevron have their own refineries.

“This is a direct government-to-government (agreement) for the first time after the revolution in Iran in 1977 when it turned from Kingdom into Republic . Since the time, there has been no serious agreements. The oil and petrochemical business is a multimillion dollar business,” Mortazi said.

He said delegates from the Department of Energy (DOE) and the National Gas Company of Iran signed in August the memorandum of agreement for the supply deal.

Under the plan, the Philippines will import 4 million barrels of crude oil annually.

Mortazi said the Philippines accounts for 40 percent of the bananas supplied to Iran, the biggest share. Ecuador and Vietnam also supplies bananas to Iran.

He said an agreement with the previous administration aimed at hiking the share of imports of bananas did not pan out but is now being seriously looked into. Other agriculture commodities sourced from the Philippines by Iran are coconut and pineapple.

The Philippines is also eyeing the importation of fertilizer from Iran which has a strong industry that could support the country’s agriculture sector.

Another important deal the Philippines and Iran are trying to iron out is the supply of coal.

Ninety percent of the Philippines’ imports of coal come from Indonesia but this is low-grade coal, according to Mortazi. The Philippines has to import up 85 percent of its coal requirements to support its baseload power plants.

Mortazi said one Iranian company has obtained a certificate of analysis from DOE certifying its products’ compliance with Philippine standards.

Mortazi said that company could provide coal at a slightly higher price — $88 to $90 per metric ton versus $85 per mt from Indonesia — but is of higher grade.

This means, power plants would require less coal but would produce more energy, enabling them to produce cheaper energy with less emission of carbon dioxide, ash and dust.

Iran supplies 70 percent of the coal requirements of the Middle East.

Mortazi also said another Iranian firm eyes the acquisition of a Cebu-based construction materials corporation which would repack cement imports from Iran.

The acquisition worth P5 billion to P6 billion is being finalized and would form a joint venture corporation which would distribute the cement under the brand Contempo.

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