Iran Economy News Iran’s Industries Destroyed by Privatization

Iran’s Industries Destroyed by Privatization

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Day 41 of the Haft Tappeh sugarcane workers' strike in Iran

By Jubin Katiraie

One of Iran’s so-called international affairs analysts Siavash Fallahpour said: “The prelude to the Syrian war began with privatizations and rent-seeking;

Exclusive privatizations that lead to increased poverty, the development of corruption and unemployment among many young Syrians, and foreign sanctions and the recession are exacerbating the situation.

The names of HEPCO and Haft Tappeh were intertwined even before the workers’ protests in recent weeks. The two industrial giants were among dozens of factories that collapsed in recent years because of rent-seeking and non-transparent privatizations, which led to a sharp drop in factory output and the downsizing of many workers so that more than 1,000 workers at HEPCO and in the agroindustry of the Haft Tapeh, about 500 workers were laid off during the years the company was privatized.

This flawed trend has repeatedly pushed the two industrial giants to the brink of bankruptcy, and as a result, the workers’ wages are paid several months late, an issue that has sparked protests and rallies from time to time, and halting privatization has become one of their main demands.

But in the meantime, the wounds of privatization have been inflicted on the bodies of many factories and workers in different provinces; factories that may be less well-known, but with these failed privatizations, thousands of workers have been laid off and factories closed completely.

In different provinces, there are more than 50 unsuccessful examples of privatization based on a reduction of about 50% in the productivity index and adjustment of manpower. The provinces of East Azerbaijan, Gilan, Fars, and Mazandaran are in a more difficult situation in terms of the number of factories and complete cessation of production.

Dena tires and thousands of unemployed workers

Dena Tire Factory used to be one of the largest industries in Shiraz; an industry that went through many financial and labor crises after repeated privatizations and divestitures.

Eventually, managerial incompetence, reduced production, and downsizing of the industrial unit led to rallies and union protests. Eventually, it culminated that the factory board members being barred by the workers from entering and taking over the factory in response to the dismissal of their representatives.

Prior to the privatization, more than 20,000 personnel and workers were indirectly employed in this factory and about 2,000 people were directly employed, who will be unemployed with the complete closure of this industrial unit.

Azmayesh, the factory that became an onion warehouse

Marvdasht Azmayesh factory in Fars province, whose products such as air conditioners, refrigerators, and fans were once famous Iranian brands, was transferred to the private sector through the stock exchange in early 2009, and after that, due to various problems, production fell and the downsizing shifted from 1,400 workers to 160. Eventually, without necessary action by the authorities, this factory of the famous Iranian brand was closed down, until a short clip showed that the big hall of this factory has been turned into an onion warehouse.

Iranit and illegal sale of factory property

The Iranit factories in Tehran and Isfahan have a strange story in the privatization process. It is said that the officials of this company have sold some of the devices and infrastructures of the factory to the industrial debris contractors without holding a legal auction, while this company is a public joint-stock company and the sale of tastes of the factory property is prohibited by law.

The factory stopped its meager production in January 2016 and postponed the payment of workers’ salaries every time. The Iranit factory was eventually shut down with the dismissal of all workers.

Privatization brought the polyacrylic giant to its knees

Isfahan Polyacrylic Company, which includes six factories, has been involved in several problems since 2009 due to improper privatization so that with the transfer of this company, four factories and some of its production lines were closed and a number of workers became unemployed and their salaries were postponed for several Month.

Also, a few days after the liquidation of the four companies, the executive board of Polyacrylic announced in a statement, emphasizing that there will be no new production for another three months, that if they (workers) want unemployment insurance on the night of Eid, they should say goodbye soon. Polyacrylic was one of the largest companies in the 90s, and its workers were relatively well off at the time.

Privatization’s scar on the body of Calcimin Company

Calcimin Company in Zanjan started its activity in the field of zinc concentrate. Calcimin is one of the factories that experienced a sharp decline in production after privatization, so that factory production fell from 100 tons to 20 tons. This trend indicates an 80% closure of production in this factory.

Calcimin also had about 1,200 employees before several transfers, 300 of whom were fired under the pretext of downsizing.

Unhappy situation of Keyvan factory in Hamedan

Keyvan factory in Hamedan with more than four decades of activity in the field of food production after privatization is not happy.

This factory had the ability and potential to produce 30 types of products and was handed over to the private sector in February of 2009. After that, the forced downsizing in this factory became so strong that a number of workers in this production unit were fired every year.
Eventually, of the factory’s 900 or so workers, 63 remained, and production ceased.

The sad story of industrial machinery for tractor manufacturing

Tabriz Industrial Machinery Company, which has several factories such as tractor forging, tractor casting, tractor engine makers, and industrial blacksmiths, was transferred to the private sector in 2006. The company’s production was finally virtually halted in 2014, and its workers were not paid for 18 months. With about 300 workers, the factory faced 28 months of non-payment or late payment, which caused many problems for the workers.

The transfer to incompetent people and their misconduct caused the powerful and old company of tractor manufacturing machinery to owe money to the Social Security Organization, the General Directorate of Tax Affairs, and several banks of East Azerbaijan, and finally, the factory was completely closed.

Gilan, victim of privatization

There are many factories in Gilan province that have been closed down due to improper divestitures, and about 25,000 workers have lost their jobs in the process. These factories include Rasht Electric Gilan, Gilan Carpet, Niknoush, Gilan Socks, Hemp Work, Iran Hemp, Northern Silk Cocoon, Chini Gilan, Pars Iran, Behpa Shoes, Soomehsara Silk Industries, Taz Yarn, Persan, Larkas Tondar, Alo Maks, North Plastic, North Pipe Manufacturing, Rasht Wood Industries, Gilan Paket (4 factories in Lahijan), Iran Jika, Nazpoosh, Rudbar Leather, Gilan Leather, Ganjeh Spinning, Ganjeh Shoes, Caspian Aluminum, Yourtan, Gilan Tile, and Lushan Cement, East, Fumnat, Iran Berk, Iran Poplin, and Asalem Wood Industries were mentioned.

Most of these closures were in the late 1990s and early 2000s, and due to a large number of factories and the lack of accurate information, very few reports are available on the status of these companies.

 

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