BMI's Executive Summary

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The Iranian construction industry has been witnessing a turnaround since 2005 and is expected to grow 6.86% year-on-year (y-o-y) in 2007. Despite United Nation's (UN) sanctions on Iran, foreign investments in the country have not plunged, reflecting well on its business potential. Both housing demand as well as industrial construction show strong growth potential. This report forecasts the industry is likely to be valued at US$13.10bn in 2008, and register an average growth of 4.40% over 2008-2012.

The Iranian government is taking several steps to expand the construction industry of the nation. In the budget for 2007, the government allocated more than US$1bn for the development of nuclear power plants in the country. It is also expected to invest in the development of oil refineries across the country. Iran is also encouraging greater participation by foreign investors through its new buyback contract formula that helps the investors realise higher profits over a longer period. But the biggest infrastructure project on the anvil in Iran has been the Iran-Pakistan-India (IPI) pipeline valued at US$7-8bn. Another key project in the preliminary stage is the Nabucco Iran-Europe gas pipeline (US$5.5bn).

But serious issues like poor building standards and systemic corruption need to be addressed to improve the construction scenario in Iran. Also, construction costs fuelled by very high land prices have resulted in a reluctance to incorporate modern technology. Political uncertainty, largely as a consequence of the ongoing international stand-off over Iran's nuclear ambitions, may also prove to be a serious hurdle.

Spurred by the need to improve its infrastructure in order to meet the basic global standards, and the need to provide housing to its burgeoning population, the Iranian construction industry will continue to grow in the medium term. BMI forecasts the industry to be valued at US$26.40bn by 2012.

Contents

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Chapter 1 – Industry Trends And Development

Market Overview

Iran's Economy In 2005–2006

Iran's Construction Sector In 2005–2006

Major Companies

Some Recent Investment Initiatives

Chapter 2 – Key Projects

Transport

Utilities

Cement And Steel Production

Residential And Commercial Construction

Table: Iran Major Infrastructure Projects

Chapter 3 – Business Environment Ranking

Introduction

Table: Middle East/Africa Business Environment Ranking

Explanation Of BMI Rankings

Middle East And North Africa Regional Overview

Iran: Business Environment Ranking

Economics — Long–Term Risk

Politics — Long–Term Risk

Construction Growth

Competitive Environment

Anticipated Potential

Chapter 4 – SWOT Analysis

Iran Infrastructure Industry SWOT

Iran Economic SWOT

Iran Political SWOT

Iran Business Environment SWOT

Chapter 5 – Industry Forecast Scenario

Table: Iran Construction And Industry Data

Macroeconomic Forecasts

Uninspiring Q106 Data

2005 GDP Boosted By Non–Oil–Sector Growth

Key Risks — Imprudent Economic Management

High Political Risk Deters Business

Table: Iran Economic Activity

Chapter 6 – Competitive Landscape

Table: Key Players In Iran's Construction Industry

Chapter 7 – Company Profiles

Industrial Development and Renovation Organisation of Iran (IDRO)

Aker Kvaerner

Iran International Engineering Company (IRITEC)

Chapter 8 – BMI Forecast Modelling

How We Generate Our Industry Forecasts

Construction Industry

Sources

Competitive Landscape for Middle East & Africa Infrastructure Reports: Sample of Companies Ranked

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Comparative company analyses and rankings by sales, % market share, employees, registration date and ownership structure. Company profiles include fully researched senior executives and contact details, business activity and leading products and services. SWOT (strengths, weaknesses, opportunities, threats) of the state’s business environment, infrastructure sector, politics and economics, which carefully evaluates the short- and medium-term issues facing the industry.

Network of Middle Eastern & African Infrastructure Sources

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BMI's Middle Eastern & African Infrastructure Reports are based on an extensive network of multilateral organisations, government departments, Infrastructure industry associations, chambers of commerce and company reports. Information sources include: