Mohammadmehdi Khorasani, chairman of the board of the Association of
Masterbatch and Polymer Compound Producers, said the policy would undermine a
knowledge-based export-oriented industry that has expanded rapidly over the
past decade.
Citing data from the Ministry of Industry, Mine and Trade, Khorasani
said installed capacity in the sector reached about 4.8 million tonnes by the
end of the Iranian year ending March 2025 and was expected to rise to around
5.5 million tonnes this year as new projects come on stream.
Domestic consumption, however, is estimated at less than 1 million
tonnes, highlighting the industry’s reliance on export markets, he said.
“This capacity was created with an export-oriented vision,” Khorasani
told reporters. “It was never intended to compete irrationally in a limited
domestic market, but to serve regional and global demand.”
Exports of masterbatch and polymer compounds rose from about $100
million in the early 2020s to more than $620 million in 2024, he said, adding
that shipments this year were projected to exceed $700 million and could
potentially reach $1 billion under supportive conditions.
Khorasani criticised the government’s decision to impose export duties
on raw and semi-raw materials, saying it had delivered a “serious shock” to
producers and exporters at a time when the industry was gaining momentum.
He said the issue was not the legal basis of export duties under
Iran’s seventh development plan, which mandates levies on raw material exports
to support value-chain investment, but the way implementing regulations had
been drafted and enforced.
An initial list of 700–800 tariff codes subject to duties included
products that were neither raw nor semi-processed, prompting strong opposition
from the private sector, Khorasani said. Although the list was later reduced to
about 300 items, delays in revising and approving the final version meant
export duties were applied before corrections were made, he added.
Khorasani said the move was particularly contradictory given that
masterbatch and compound production represents one of the most
knowledge-intensive segments of Iran’s plastics value chain. More than 60
companies in the sector are classified as knowledge-based firms, he said.
“It is a clear paradox to label a knowledge-based industry as a
producer of raw materials,” he said.
Beyond the duties themselves, Khorasani warned that inclusion on the
raw materials list removes export tax exemptions and threatens delays or
suspension of value-added tax refunds, further eroding competitiveness.
“With export tax exemptions removed and new duties imposed, competing
in global markets becomes impossible,” he said. “If exports collapse, there
will be no revenue to channel into innovation funds either.”
He said the industry employs more than 35,000 people, much of it
linked directly to export activity, warning that continued implementation of
the policy could lead to significant job losses and the loss of regional market
share in coming months.
Khorasani said the industry had proven capable of operating under
international sanctions, but warned that poorly designed domestic regulations
risked imposing what he described as “self-inflicted sanctions” on a strategic
sector of Iran’s manufacturing economy.