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Wed, Jul 01, 2009

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Irancode Mandatory
Abadan-Basra Pipeline Tendered
Iran Largest China Crude Supplier
Auto Growth at 5.4%
GIO Mulling eGov’t
Exports to Australia Double
IDB Affiliate Fund for Barez
Madoff Gets 150 Years
North Drilling Company to Go Public
Textile Smuggling Harms Domestic Production
Talks on Asian Bonds Underway
Tabriz Petchem Exports Up

Irancode Mandatory
By Sadeq Dehqan

Managing Director of National Center for Coding Goods and Services of Iran Ahmad Gholamzadeh said on Monday that based on a recent Cabinet approval, all state organizations are obliged to enlist Irancode, the national certificate, on their products.
Irancode is the Iranian National Products and Services Classification and Codification system. It enables producers and distributors to identify, classify and codify their products and services.
“With the new approval that came into effect on June 17, all state institutions should conduct their medium and large purchases by mentioning the Irancode. This has been annexed to the executive criteria of the 2009-10 Budget Law as an independent article,“ added Gholamzadeh, who was addressing a press conference.
At present, 200,000 goods have Irancode. (Photo by Ali Hassanpour)
Based on the circular of State Treasury Department sent to logistics and related units, all executive organizations of the country and their affiliated units are obliged to mention Irancode in their transactions to avoid accounting problems.
“This is an important move for implementing Irancode in the country. This way, the executive state organizations, which are the largest buyers of goods in the country, cannot buy and use goods that do not have the Irancode,“ he said.
Therefore, producers of goods should get the membership of Irancode system as soon as possible and receive a codification in order to continue transactions with state organizations and companies.
He emphasized that if state companies purchase goods that do not have Irancode, they will face legal problems in settling accounts with the State Treasury Department.
Referring to the Third Irancode Conference slated for July 4, Gholamzadeh said, “In this conference, which will be attended by Commerce Minister Masoud Mirkazemi and senior managers of Commerce Ministry, news and information will be disseminated about the latest accomplishments, requirements and legal approvals regarding Irancode.“
In this event, 16 exemplary companies, which have contributed the most to the classification and coding system, will be rewarded. In the meantime, like previous years, a scientific-expert panel will be held on the sidelines of the conference, in which coding and e-commerce experts would discuss the latest accomplishments worldwide as well as ways of implementing them in the country.
Gholamzadeh said that although studies about Irancode were conducted before the incumbent government, it has seriously supported the Irancode system.
“At present, 200,000 goods have received Irancodes displayed in the national portal of goods. Based on the plans made so far and the implementation of legalities, within one year we will have 90,000 members. Moreover, the national portal for services is also being prepared and it will become operational this year,“ he said.
For rectifying the system of goods distribution, Irancode is among the seven pivotal points of the economic overhaul plan and the government is expected to pay more attention to its successful implementation.

Abadan-Basra Pipeline Tendered
By Majid Karimi

A tender has been floated for the construction of the Abadan-Basra pipeline.
Ali Moallemipour, the person in charge of the project, said, “So far, five domestic companies have voiced their preparedness for participating in the project. After the tender is held, the contractor of the project will be chosen and operations for building eight kilometers of the pipeline will commence.“
He noted that equipment have been purchased and the Iranian contractor will undertake the task of purchasing the valves.
“The project includes a pipeline 32 inches in diameter for transporting 350,000 barrels of crude per day from the Basra oilfield to Abadan as well as a pipeline 16 inches in diameter for transporting 150,000 barrels of oil products per day from Abadan to Basra,“ he said.
Iran has a 20-percent share in the project and the Iraqi side 80 percent.
Moallemipour emphasized that based on the agreement with the Iraqi side, eight kilometers of each of the pipelines up to the bed of Arvand River will be built by Iran and 45 km of the 32-inch pipeline and 75 km of the 16-inch pipeline will be built by the Iraqis.
Noting that the project will become operational in 2011, he said, “Based on the initial timetable, the project should have become operational in 2009, but due to delays incurred in its implementation, we forecast that the project will go on stream within the next couple of years.“
Last year, the state-run Oil Projects Company (SCOP), which is affiliated to the Iraqi Oil Ministry, called on international companies to participate in the tender for the design and engineering of equipment needed for the pipeline.
With the implementation of the project, which is being studied for the past two years, 50 percent of the feed of Abadan Oil Refinery would be procured from Basra and Iranian oil products would be exported to Iraq. This will prevent the transport of oil products to Iraq by trucks.
Former Iranian Oil Minister Kazem Vaziri-Hamaneh and his Iraqi counterpart, Hussein Al-Shahrestani, in 2007 signed an agreement based on which the 32-inch pipeline would transport crude from Basra to Abadan, and the 16-inch pipeline would transport oil products between the two countries.
In the meantime, negotiations have taken place between Tehran and Baghdad for constructing an oil refinery in Karbala and four other oil refineries in Iraq and Iran have been invited to cooperate with the country in the energy sector.
Based on the initial agreement, Iranian expert teams would be dispatched to Iraq to identify the activities on the basis of which the two countries would cooperate for refining oil products and distributing them.
So far, about 800 million liters of oil products, including gasoil and gasoline, have been sent to Iraq by Iran. Negotiations have also been held between the two sides for continuing the export of oil products to Iraq till the end of 2009.

Iran Largest China Crude Supplier
Energy Intelligence reported that Chinese crude imports rose by 5.5 percent to 4.04 million barrels per day in May, with Iran becoming the largest supplier.
As per the report, imports from Iran almost doubled to 730,000 barrels per day while imports from Saudi Arabia reached 653,000 barrels per day, which shows a 15.5-percent decline, wrote.
Imports from Angola dropped 35.5 percent to 483,000 barrels per day, while volumes from Oman rose 70 percent to 319,000 barrels per day and imports from Kuwait almost tripled to 244,000 barrels per day.
Demand from China may be up, according to the International Energy Agency, while global demand for crude is off 2.9 percent year over year.
Although it might be popular and trendy to talk about China being the “next big thing“, the reality is that the tail cannot wag the dog no matter how much it tries.
The United States is still the world’s largest consumer of oil by far. Unfortunately for China, at least for now, the laws of nature will not be rewritten.
According to the most recent CIA Fact Book figures on Oil consumption, the United States currently consumes nearly as much oil per year as the entire European Union and China combined. As a result, based on these figures, when demand from the US is off, the nearly 5 percent China’s increase does not mean much.
When looking at the math, a 4.9-percent decrease in US consumption equates to 1,013,320 bpd lost. When that figure is contrasted against China’s consumption gain of 6 percent, an increase of 472,800 bpd, the disparity is easily recognizable.
China is not ’really’ increasing consumption, and as a result will not be able to affect oil prices indefinitely. Over the past several months (since March), China has been attempting to hoard commodity resources through speculative buying. This heavy buying is being led by Chinese stimulus money that has been flowing into its banking system.
Once at the banks, due to lending law differences, this stimulus money is able to be lent out for use within the broad commodities markets. More specifically, Chinese banks are able to book physical commodities as allowable collateral assets and can lend on commodity purchases with physical delivery. This cannot be done by many other places in the world.
Since lending on commodity investment is allowable, Chinese banks and investors have little reason to pour money into expanding export infrastructure, which is already far too large for current global demand. As a result, the standard in Chinese lending has changed for the time being.
With nowhere else to lend, this type of commodity borrowing has become lucrative for struggling banks and investors alike. To put it quite simply: What is the point in developing more export infrastructure that’s not needed? The recession will eventually end, so rather than increase capacity, existing exporters are trying to deal with the prospects of future: increased input costs and/or inflation.

Auto Growth at 5.4%
Despite a 3.7-percent fall in the global automaking sector in 2008, Iran’s auto-manufacturing sector witnessed a 5.4-percent growth, the International Organization of Motor Vehicle Manufacturers (IOMVM reported.
According to IOMVM, Iran manufactured 1.51 million motor vehicles in 2008.
Global auto manufacturing in 2008 reached 70.526 million cars, of which 52.63 million cars accounted for sedans and 17.889 for commercial cars. In terms of auto sector growth, Iran ranks 12th.
The country manufactured 941,000 sedans and 110,000 commercial cars in 2008. Iran is ranked 14th in terms of sedan production and 22nd in terms of commercial car production.
Among the world’s motor vehicles manufacturers, Iran is ranked 16th and has overtaken Italy, Poland, Turkey, Slovakia, Sweden, Australia, Portugal, Austria, the Netherlands and Finland.
The Islamic Republic has produced 301,000 Peugeot sedans in 2008, making it the biggest manufacturer of the product among non-European countries.
According to the report, Iran has produced 9 percent of the world’s total Peugeot products by manufacturing 301,000 cars under the Peugeot brand in 2008. Producing 1.348 cars, France is the biggest Peugeot manufacturer in the world and Iran is placed after Spain which produced 506,000 cars.
In this way, Iran is the third biggest Peugeot manufacturer worldwide. In 2008, Iran’s Peugeot products show an increase of 64,000 cars over 2007 by manufacturing 237,000 Peugeot cars.

GIO Mulling eGov’t
General Inspection Organization (GIO) Director Mostafa Pourmohammadi stated on Monday that the organization will develop the electronic government.
“One of the major duties of the inspection systems and organizations is developing the electronic government. It means that we should try to realize the aims of the electronic government and then establish electronic inspection to monitor the electronic government,“ he said in the inauguration ceremony of the Conference on Electronic Government in Tehran.
According to Mehr News Agency, Pourmohammadi said the electronic government is essential to serve the society.
“Fortunately, the tools for establishing the electronic government exist in the country … I do not agree at all with those who say that the infrastructure for establishing the electronic government is not ready in the country.“
Pourmohammadi emphasized the necessity of drawing up a comprehensive plan for developing the electronic government and said, “Without having a plan…we will not achieve the delineated objectives in the society.“
Pointing to the recent unrest over the election results, Pourmohammadi said, “The law should be followed under any circumstances, especially in such an important issue as the election. I believe that there are shortcomings in the current election law that we should try to overcome.“
Pourmohammadi added that one of the best solutions is to devise the software for holding elections and said if these were used in the presidential election it would have been easier to address all complaints.

Exports to Australia Double
Australia’s Commerce Ministry announced that Iran’s exports to this country reached $120 million in 2008, showing an increase of 230 percent.
Trade between Iran and Australia in 2008 reached $324 million, of which $120 million account for Iran’s exports to Australia and $204 million for Iran’s imports from Australia, the report added.
Based on the report, annual trade between Iran and Australia increased to 23 percent in 2008. In 2007, trade between the two countries stood at $262 million, reported IRNA.
Coal, motor vehicles, barley and manganese ore are among the main products Iran imports from Australia. Fruits and nuts, building ceiling covers, propane and butane are also among the main Iranian products exported to Australia.

IDB Affiliate Fund for Barez
The International Islamic Trade Finance Corporation (ITFC), an autonomous entity within the Islamic Development Bank (IDB), has allocated 25 million euros to Iran’s Barez Industrial Corporation to import its required items. ITFC’s responsibility is to monitor market trends and achieve the Islamic Development Bank’s objectives through the introduction of specialized funds, ISNA wrote.
Through its trade finance operations, ITFC strives to raise the volume and value of intra-trade, contribute to market development and increase export capabilities in the member countries.
In this respect, ITFC initiated and approved 70 trade finance operations with a total value exceeding $2.5 billion. Of this amount, $878 million, representing 35 percent of the total came from external mobilization of resources.
According to IRNA, the IDB in June announced it has earmarked $150 million for five of Iran’s development projects.
The Islamic Development Bank is an international financial institution established in pursuance of the declaration of intent issued by the Conference of Finance Ministers of Muslim Countries held in Jeddah in December 1973.

Madoff Gets 150 Years
Bernard Madoff’s conviction in a New York courtroom followed his apology and testimony from victims of the multibillion-dollar fraud.
Bernard Madoff has been sentenced to 150 years in prison for his multibillion-dollar fraud scheme.
US District Judge Denny Chin handed down the sentence in New York on Monday, June 29.
The 71-year-old former Nasdaq chairman was arrested late last year after confessing to his sons that his secretive investment advisory business was a “big lie“. He pleaded guilty to securities fraud and other charges in March and has been jailed since, AP reported.
Minutes before the sentence was handed down, Madoff apologized to his family and to the victims of his multibillion-dollar fraud scheme. The financier said that he “will live with this pain, this torment, for the rest of my life“. Madoff says that he dug himself “deeper into a hole“ as the scheme progressed.

Symbol of Greed
Madoff, wearing a dark suit, white shirt and a tie, sat and listened as emotional witnesses described how he spoiled their security, and they urged Judge Chin to send him to prison for life.
The jailed Madoff already has taken a severe financial hit: Last week, a judge issued a preliminary $171 billion forfeiture order stripping Madoff of all his personal property, including real estate, investments and $80 million in assets his wife Ruth had claimed were hers. The order left her with $2.5 million.
The terms require the Madoffs to sell a $7-million Manhattan apartment where Ruth Madoff still lives. An $11 million estate in Palm Beach, Fla., a $4-million home in Montauk and a $2.2-million boat will be put on the market as well.
Before Madoff became a symbol of Wall Street greed, he had earned a reputation as a trusted money manager with a Midas touch. Even as the market fluctuated, clients of his secretive investment advisory business--from Florida retirees to celebrities such as Steven Spielberg, actor Kevin Bacon and Hall of Fame pitcher Sandy Koufax--for decades enjoyed steady double-digit returns.
But late last year, Madoff made a dramatic confession: Authorities say he pulled his sons aside and told them it was “all just one big lie“. When Madoff pleaded guilty in March, he said he was “deeply sorry and ashamed“. He insisted that he acted alone, describing a separate wholesale stock-trading firm run by his sons and brother as honest and legitimate.

Aside from an accountant accused of cooking Madoff’s books, no one else has been criminally charged. But the family, including his wife, and brokerage firms who recruited investors have come under intense scrutiny by the FBI, regulators and a court-appointed trustee overseeing the liquidation of Madoff’s assets.
The trustee and prosecutors have sought to go after assets to compensate thousands of burned victims who have filed claims against Madoff. How much is available to pay them remains unknown, though it’s expected to be only a fraction of the astronomical losses associated with the fraud.
The $171-billion forfeiture figure used by prosecutors merely mirrors the amount they estimate that, over decades, “flowed into the principal account to perpetrate the Ponzi scheme“.
The statements sent to investors showing their accounts were worth as much as $65 billion were fiction.
The investigation has found that in reality, Madoff never made any investments, instead using the money from new investors to pay returns to existing clients--and to finance a lavish lifestyle for his family.

North Drilling Company to Go Public
A 5-percent block of shares of North Drilling Company will be offered as an initial public offering this week on Tehran Stock Exchange.
According to, the Iran Privatization Organization’s plan is intended for price exploration of NDC’s shares as the first privatization-bound subsidiary of the National Iranian Oil Company in the upstream oil sector.
The price exploration process had been planned for the past Iranian year (ended March 20, 2009), but it was postponed due to some problems.
NDC is the Oil Ministry’s third affiliate to be privatized, after Fanavaran Petrochemical Company and Isfahan Oil Refinery sold their shares on February 3 and June 29, 2008.
The Oil Ministry formerly released the list of 21 companies to be offered to the private sector in line with Article 44 of Iran’s Constitution.
Of these companies, five belong to National Iranian Oil Company (NIOC), nine to National Petrochemical Company (NPC), five are affiliates of National Iranian Gas Company (NIGC), and two of National Iranian Oil Refining and Distribution Company (NIORDC).
According to Iran’s Fourth Five-Year Economic Development Plan (2005-10), Iran Privatization Organization, which is affiliated to the Ministry of Economic Affairs and Finance, is in charge of setting prices and offering shares to the general public via the stock market.
Once the shares are sold to the public, it will establish a market price on which further offerings can be based.

Textile Smuggling Harms Domestic Production
Contraband textiles and apparel into Iran are undercutting Iranian producers and costing jobs in the domestic textile industry.
Iran, with a population of 70 million, requires 1.4 billion square meters of textiles annually.
Due to the huge amount of trafficking taking place in the country, the annual textile production has been restricted to 800 million square meters, Presstv reported.
“Overseas companies smuggle textiles and apparel into Iran at a rate that is decimating Iran’s textile manufacturers and costing Iranian jobs,“ said Mohammad Moravvej, the head of the Board of Directors at the Association of Iran Textile Industries (AITI).
The Iranian textile industry has been forced to shed jobs, as poor trade policies are forcing the industry to compete on an unfair playing field.
“The textile industry is facing enough challenges without having their prices undercut by smuggled products,“ Moravvej said.
Trafficking has taken its toll on textile production throughout the country in recent years.
“Investors would rather invest in a trouble-free market than such a challenging market. This is quite natural,“ he said.
Iranian companies and thousands of hardworking Iranians are counting on the Customs Administration to adequately enforce our import laws.

Talks on Asian Bonds Underway
Iran is in talks with Asian banks on a 1-billion-euro ($1.40 billion) bond to finance the development of its largest gas field, as part of its pursuit of billions of energy sector funding, a senior Iranian oil official said on Monday.
“We are discussing with at least two Asian banks on the lead role for a 1-billion-euro participation bond and we hope to issue the first tranche soon,“ Hojjatollah Ghanimifard, vice president of international affairs at the National Iranian Oil Company, told Reuters. “We have not decided which one will be the leader.“
He said the bond was to finance the development of the South Pars gas field, the world’s largest pure gas reservoir, and added that the participation bond was a kind of lease. It would not give the banks equity in the field, but the reserves would act as a guarantee for the loan.
In May, an Iranian state firm said Iran planned to issue $12.3 billion of foreign currency and rial-denominated bonds over the next three years to help finance the South Pars field.
“In all, Iran’s five-year energy sector investment plan required investment totaling around $30 billion per year,“ he said.
For years, the country has struggled to develop its huge reserves and like the rest of the world now has to contend with an international lack of credit, as well as problems specific to Iran.

Tabriz Petchem Exports Up
Since March 21, exports from Tabriz Petrochemical Company have increased by 270 percent over the corresponding period of previous year.
In the last three months, the company exported 20,000 tons of various petrochemical products to 13 countries worth $19 million.
According to Moj News Agency, the exports show a growth of 270 and 140 percent in terms of volume and value, respectively. Turkey (5,700 tons), Germany (5,400 tons) and Sweden (2,800 tons) were among the main importers of the Iranian petrochemicals.
Iran Privatization Organization plans to offer 33.09 percent (equaling 602.171 million) of shares of Petrochemical Industries Investment Company on Tehran Stock Exchange tomorrow.
Some 380 trillion rials (about $38.4 billion) worth of 253 state-run companies have been transferred to the public, fully or partially, in the past four years.
During the first three months of the current Iranian year (started March 21, 2009), around 5.8 trillion rials ($586 million) worth of governmental shares were sold in the stock market.
Under the Fourth Five-Year Economic Development Plan (2005-10), Iran Privatization Organization is in charge of setting prices and offering shares to the general public on the stock market.

45 Int’l Flight Routes
Despite the illegal US-led sanctions, Iranian planes ply 45 international flight routes, said Managing Director of Iran Air Saeed Hesami.

1m Jobs Created
More than one million jobs have been generated in Iran by small businesses since 2006, statistics released by the Ministry of Labor and Social Affairs show.

Japanese Unemployment High
Japan’s unemployment rate rose to its highest level in more than five years as companies slashed jobs to cope with the worst postwar recession in the world’s second largest economy, data has shown.
On a brighter note, consumer spending rose for the first time in 16 months, supported by the government’s economic stimulus efforts, Forbes wrote.
The jobless rate climbed to 5.2 percent in May--a level last seen in September 2003--up from 5.0 in April, the internal affairs ministry said.
While hopes are mounting that Japan’s economy has come through the worst of its export and production slump, there are concerns that unemployment may rise further as companies seek to recover from heavy financial losses.
The jobless rate, which was slightly worse than expected, is close to a post-World War II high of 5.5 percent, which was last seen in April 2003.
The number of people in unemployment rose by 770,000, or 28.5 percent, from a year earlier to 3.47 million.

IMF Boosts Belarus Loans
The International Monetary Fund (IMF) has said it had increased by $1 billion its assistance to Belarus to help it weather the greater than expected impact of the financial crisis, bringing the country’s total loans to $3.5 billion.
The assistance provided by the International Monetary Fund amounts to 7 percent of Belarus’s gross domestic product, the Washington-based institution said in a statement.
According to AFP, the original agreement in January provided for the disbursement of $2.5 billion but Belarus’s economy has been hit hard by a fall in external demand and volatile cross-currency movements since the program.
Increased aid comes in return of “stronger efforts“ by Minsk “to liberalize the economy and prepare for privatization, which are essential to improve prospects for long-run growth and external stability,“ said IMF Deputy Managing Director Takatoshi Kato.

Saudi Economy to Shrink
The Saudi economy is forecast to shrink 1.2 percent this year, despite a stronger market for oil and expanded government investment. The recovery of oil prices to above $60 a barrel and a forecast 24-percent increase in government spending is not enough to offset a sharp slowdown in private sector activity, Riyadh-based Samba Bank said.
“Public sector investment has been vigorous in both the oil and non-oil sectors; private investment, in contrast, remains weak, hemmed in by extremely tight credit conditions and poor export prospects,“ Samba told Gulf Daily News.
It forecast GDP would contract by 1.2 percent after 4.5-percent growth last year. Growth would resume next year hitting 4.4 percent.
It pointed to a continuing weakness in markets for petrochemicals and refined products, the country’s leading exports after oil and natural gas, with prices for polyethylene still at half the highs of mid-2008, for example.
Multibillion-dollar refinery and petrochemical projects expected to carry economic growth have been delayed, Samba said, including the Jubail refinery planned by state oil giant Aramco and France’s Total.

Xstrata Bid for Anglo
Mergers and acquisitions may show signs of recovery from a six-year low as the credit freeze thaws and chief executive officers such as Xstrata Plc’s Mick Davis gain confidence to do deals.
Record bond sales and the Standard & Poor’s 500 Index’s 40-percent gain from a 12-year low in March are fueling optimism that deals can be funded again. Any rebound may be fragile, bankers say, Bloomberg wrote.
Companies announced $773 billion of takeovers in the first half, the slowest period for mergers since 2003, data compiled by Bloomberg show. Xstrata’s $40 billion bid for miner Anglo American Plc, and takeovers by companies such as Cisco Systems Inc. may be among second-half deals.
The S&P; 500 has moved by more than 3 percent on 23 trading days this year. That’s the third-most volatile period in the benchmark’s 81-year history after 1932 and 1933, said Howard Silverblatt, senior index analyst at S&P; in New York.

Putin Urges Increased Lending
Russian Prime Minister Vladimir Putin called on banks to increase lending by $16 billion this year to combat a sluggish economy and tightening credit.
“I am asking the heads of financial institutions to control this situation and not to plan any summer holidays until the moment that this has been dealt with as it should,“ Putin said.
Putin pressed for increased lending despite rising loan defaults in Russia, which have reached 6 percent at VTB, the country’s second-largest state-controlled lending institution, Financial Times reported.
“I know the fear about the growth in bad loans,“ Putin said. “But I suggest that the less lending goes on, the greater the risk is that loans won’t be returned, because by ceasing credit, you are strangling the real sector.“