The activities of Pouyakaar Company are in three sectors: machine tools, tools, and parts manufacturing. What impact has the U.S. withdrawal from the JCPOA had on each of these sectors?

The U.S. withdrawal from the JCPOA has affected the machine tools sector the most and the parts manufacturing sector the least. In the production of machine tools, we are dependent on the import of standard high-tech components that are subject to sanctions and are not produced domestically.

Disruption in the JCPOA has hindered the transfer of money and the import of higher technology components; however, more importantly, it is the erroneous policies of the government that have tied our hands behind our backs; we are being hit by the enemy but our hands are also tied, and we have been deprived of the ability to defend against the sanctioning party. Our concern is that the export of our parts manufacturing sector will also be cut off due to the completely wrong policies of the government regarding the obligation to return foreign currency earned from exports, the tightening of banking conditions, and the severe fluctuations in currency prices.

What difference do the sanctions of this period have compared to previous sanctions?

In my opinion, the biggest difference this time is the loss of hope in the hearts of Iranian industrialists and the distrust of the people. When the government repeatedly makes the same mistakes and achieves the same erroneous results as in the past, there is no longer any hope for resolving the industry's problems.

Moreover, this time, contrary to what it advertises, China is cooperating extensively with the sanctioning parties, especially in banking sanctions, and due to the trade war initiated by the U.S., it sacrifices trade with Iran for the enormous benefits of trade with the U.S., which is, of course, very natural and logical.

Have you imported machines with the 4,200 Toman exchange rate? And have you sold them at that price? Have you imported machines with the 8,000 Toman exchange rate, and at what price have you sold them?

We were the first and, in my opinion, the only company that transparently advertised for the sale of machine tools at the 4,200 Toman exchange rate to consumers, as evidenced by the promotional advertisement we published for two models of our best-selling machines through your magazine.

Surprisingly, machine operators did not take advantage of this valuable and very short opportunity, as they thought that machines at this currency price were too expensive and that purchasing machines was not feasible in the current economic recession. And now they have to buy with the official currency at double the price. We imported machine components for our parts manufacturing sector with great difficulty, spending time and taking significant risks.

After that, when the 4,200 Toman exchange rate was cut off and the Nima exchange rate, at around 8,000 Toman, was substituted, we registered orders with this currency and are selling to customers at this price.

Have you faced the problem of being required to pay the difference in currency price?

Yes. The price of part of the received currency is uncertain and will likely be calculated at double the price. Although the provincial industry office has supported us greatly, due to erroneous legislation and the way laws are enacted, we were delayed for more than two months until the circulars arrived and the system got underway, and we are still stuck, and the paperwork and... our situation is not entirely clear. Although apparently, raw materials and production equipment should no longer have problems in this regard.

What dollar price can the machine tool market bear?

Considering the recession and the current state of the market, and due to the severe fluctuations in the dollar and its multiple increase in a very short time, which has shifted sales from installment to cash, I doubt that the machine tool market can bear a dollar price of more than 6,000 Toman. For now, no one has hope for investment.

In the tool sector, what dollar price can the market bear for purchases?

I cannot comment precisely, but it is unlikely that the market in the tool sector can bear more than 8,000 to 10,000 Toman for the dollar, even with great difficulty.

This year you participated in the AMB exhibition, but you are not present at the Tehran Industry Exhibition; what is the reason for that?

The purpose of participating in the AMB exhibition was to introduce and showcase machines and high-tech methods, and we participated in this exhibition according to a well-structured plan that we had several months before the exhibition. We presented our new products and services along with educational information and consulting to customers, and we were very satisfied with the results of this exhibition.

After the AMB exhibition, the fluctuations in the dollar increased daily, and the government dollar rate suddenly doubled. Frequent changes in laws and the lack of attention to the requests and suggestions of economic activists led to the loss of hope for improvement in conditions. Therefore, we preferred to spend the costs of participating in the exhibition on other advertising methods and offer discounts to our customers. If the function of the exhibition is only to sell machines, then we do not need that function. Many of our customers know us, and whenever they need to buy a machine, they come to us.

How do you see the future of the machine tool industry in Iran? Can you provide a general comparison of the Iranian machine tool industry with other countries?

We cannot say that we have a machine tool industry in Iran. Because we neither have the hundred years of experience and technical knowledge in design and research and development systems of advanced countries, nor the economic conditions of countries like China and Taiwan that produce existing designs at reasonable prices for advanced countries or some consumers.

Machine tools are a foundational industry, and if it is not export-oriented, production in it does not have economic justification because how much is our domestic need to cover overhead costs and reach a break-even point with domestic consumption?

With this isolation we have in international relations, especially banking, there is no hope for the possibility of fundamental work, and we must keep ourselves occupied with the limited work we do.

How do you see the future of the parts and tools industry?

If our country continues to isolate itself from the world as in the past and repeats its repeated economic, currency, and banking mistakes, even the existing activities will disappear in the near future.

However, if only some reforms are made in laws and perspectives, and if currency fluctuations and inflation are more controlled, there is a very bright future for Iran in the parts manufacturing and tool making sectors, and Iran can take the place of Turkey, Eastern Europe, and even some Southeast Asian countries – both in terms of quality and price – and consequently have good exports.

It is said that the country's industry lacks an industrial steward; can you explain this?

Does it need an explanation?!

Are you really a manufacturer of CNC machine tools, or are you just using the rent of the production license? For example, did you import the CNC controller you sell in the market with a tariff of 50% or 4%?

We are manufacturers of machine tools, and apart from the experiences and knowledge that the managers of Pouyakaar have previously had in the design, production, testing, and control of machine tools, over the years, we have invested significantly in training personnel in foreign countries, as well as securing production equipment, acquiring technical knowledge, and production requirements for standard class machines, and we are continuously upgrading our technical knowledge and production capabilities.

If we are not increasing the localization of components for these standard machines, it is due to the lack of economic justification arising from the unstable economic conditions of the country, not technical capability.

The production license does not provide us with any rent. We have tried twice to explain the tariffs to the Ministry of Industry and the Iranian Customs, but it has not been successful.

We import some of the machine components, not the complete machine. Some parts of the machine are manufactured in Iran, and no components are imported at all. We have not only been unable to use the 4% tariff for components, but most of the time we have been given a 10% tariff similar to the complete machine, and sometimes we have even paid a tariff of about 22.5% for the control system. Moreover, we usually sell as spare parts for our own machines or for the purpose of upgrading the controller, which also comes with installation and upgrading services, not as a controller seller.

Furthermore, I must say that the unfortunate situation is that customs tells us that since you import a large part of the components, the value of your goods is equivalent to a complete machine! Wherever you go in the world and say that this is how producers are treated in my country, they will grant you asylum. (bitter laugh)

We no longer have the patience to say that today the technical knowledge of product design and assembly of CNC machines brings the main added value, not the manufacturing of components that are produced as standard. Unless we become component manufacturers (for example, if we produce ball screws), which would be a different business unrelated to machine tool production and, of course, has its own added value.

In a country like China, the import tariff for machine components for machine manufacturers is zero percent. This is how they can build and export machines at reasonable prices and quality using a wide range of Taiwanese components. In other countries like Taiwan or Germany or many industrial countries, the import tariffs for industrial components are under ten percent and with little difference, but in our country, where many slogans are given in support of domestic production, the tariff for controllers, which do not have domestic manufacturers and whose import makes machine tool production possible, is double the tariff for importing complete machines; this means nothing but support for foreign producers and interference with domestic production, right?

If you were the Minister of Industry, what would you do?

First, I thank God that I am not in his position. We all know that one hand cannot clap, and the problems of the industry are not supposed to rest solely on the shoulders of the Minister of Industry.

Secondly, I have not had the opportunity and suitable team of advisors for this work to think about what I would do if I were the Minister of Industry; I only know that if I were the Minister, I would not keep people busy with the Nima system and... and instead of liberalizing trade and handing it over to the private sector, I would not create artificial, whimsical circulars that would lead to rent-seeking.

How can government policies stimulate demand and support your production?

The government should not harm us; stimulating demand and supporting production are a bonus.

It is said that the increase in currency prices benefits domestic producers; does this apply to your products as well?

An increase in currency prices only benefits domestic producers if they are not forced to buy their raw materials from the market at double the official currency price while exporting their products at the official currency price, with a thousand commitments and paperwork and a war of attrition. The exchange rate must also have relative stability and allow the market to determine prices through natural mechanisms. Despite all this, since the wage rate and technical knowledge – at least in the short term – have less correlation with the dollar rate, in this short period, our parts manufacturing exports have grown, and our competitiveness in machine tool production has improved compared to foreign counterparts.

Sanctions and their impact on the machine tool industry. An interview with Engineer Moallemi, CEO of Pouyakar Company, b

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