Pouyakar Company operates in three sectors: machine tools, tools, and parts manufacturing. What impact has the US withdrawal from the JCPOA had on each of these sectors?

The US withdrawal from the JCPOA has affected the machine tool sector the most and the parts manufacturing sector the least. In producing machine tools, we depend on importing high-technology standard components subject to sanctions, which are not produced domestically.

The disruption in the JCPOA has hindered money transfers and the import of higher technology parts. More importantly, the misguided policies of the government have tied our hands; we are being punched by the enemy, but our hands are tied, and our ability to defend against the sanctioning party has been taken away. Our concern is that the export of our parts manufacturing sector will also be cut off due to completely wrong government policies on mandatory currency repatriation, banking conditions becoming more difficult, and these severe currency fluctuations.

How do the sanctions of this period differ from previous sanctions?

In my opinion, the biggest difference this time is the loss of hope among Iranian industrialists and the distrust of the people. When the government repeatedly makes the same mistakes and gets the same wrong results, there is no longer any hope for solving the industry's problems.

Moreover, this time China, contrary to what it advertises, is extensively cooperating with the sanctioners, especially in banking sanctions, and due to the trade war initiated by the US, is sacrificing trade with Iran for the huge benefits of trading with the US, which is quite natural and logical.

Have you imported machinery with the 4200 Tomans currency rate? And have you sold it at the same price? Have you imported machinery with the 8000 Tomans currency rate and at what price have you sold it?

We were the first and, in my opinion, the only company that transparently advertised selling machine tools at the 4200 Tomans exchange rate to consumers, as evidenced by the advertisement we published for two of our best-selling machines through your magazine.

To our surprise, machinists did not take advantage of this very valuable and very short opportunity, thinking that the machine was very expensive at this currency price and buying a machine is not suitable in the current economic recession. And now they have to buy at double the price with the official currency. With this currency, we imported machine components for our parts manufacturing sector with great difficulty, time, and risk.

After that, when the 4200 Tomans rate was discontinued and replaced by the NIMA system rate of about 8000 Tomans, we registered our orders with this rate and sell to our customers at the same price.

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

Yes. The price of some of the received currency is uncertain and may be calculated at double the price. Although the provincial industry department supported us a lot, due to wrong legislation and the way laws are enacted, we were delayed for more than two months until the circulars were issued and the system started working, and we are still in trouble, our situation is not entirely clear. Although it seems that raw materials and production equipment should no longer have any problems in this regard.

What dollar price does the machine tool market bear?

Considering the recession and the current market situation, due to severe dollar fluctuations and its several-fold increase in a very short period, which has shifted sales from installment to cash, I doubt the machine tool market can even bear a dollar price of more than 6000 Tomans. Currently, no one is hopeful about investing.

What price does the tool market bear in terms of dollar?

I can't say exactly, but it's unlikely that the tool sector, even with much difficulty, can bear a market of more than 8000 to 10000 Tomans per dollar.

You participated in the AMB exhibition this year but are not present at the Tehran Industry Exhibition. What is the reason?

The purpose of participating in the AMB exhibition is to introduce and offer high-technology machines and methods, and we participated in this exhibition according to a well-planned program we had several months before the exhibition. We offered our new products and services along with educational and consulting information to our customers and were very satisfied with the results of this exhibition.

After the AMB exhibition, the dollar fluctuations increased daily, and the government dollar rate suddenly doubled. Frequent changes in laws and ignoring the requests and suggestions of economic activists led to the loss of hope for improvement. Therefore, we preferred to spend the exhibition costs on other advertising methods and give discounts to our customers. If the purpose of the exhibition is only to sell machines, we don't need this function. Many of our customers know us and will come to us whenever they need to buy a machine.

How do you see the future of Iran's machine tool industry? Can you make a general comparison of Iran's machine tool industry with other countries?

We are ashamed to say that we have a machine tool industry in Iran. Because we neither have the hundred-year experiences and technical design knowledge and research and development system of advanced countries; nor the economic conditions of countries like China and Taiwan to produce existing designs at a reasonable price for advanced countries or a part of the consumers.

Machine tools are a fundamental industry that is not economically viable if it is not export-oriented because how much is our domestic need that can compensate for the overhead costs and reach the break-even point with domestic consumption?

With the isolation we have in the current international relations, especially banking, there is no hope for fundamental work, and we should entertain ourselves with the amount of work we are doing.

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

If our country intends to keep itself isolated from the world as before and repeats its repeated economic, currency, and banking mistakes, the current activities will soon disappear.

But if only some reforms are made in laws and attitudes, and currency fluctuations and inflation are more controlled, there is a very bright future for Iran in the parts manufacturing and tooling sectors, and Iran can replace 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 does not have an industrial guardian. Can you explain this?

Does it need an explanation?!

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

We are a manufacturer of machine tools, and apart from the experiences and knowledge that Pouyakar's managers previously had in designing, producing, testing, and controlling machine tools, in these years, we have acquired technical knowledge and production necessities for standard-class machines by spending money and enduring a lot of hardships for training personnel in foreign countries, as well as providing production equipment. We are constantly upgrading our technical knowledge and production capability.

If we do not further localize the components for these standard machines, it is due to the lack of economic efficiency resulting from the unstable economic conditions of the country, not technical capability.

The production license does not provide us with any rent. We tried twice to explain the tariffs to the Ministry of Industry, Mine and Trade and the Customs of Iran, which was not successful.

We import parts of the machine, not the complete machine. Some parts of the machine are made in Iran and are not imported at all. We have not only been unable to use the 4% tariff for parts but most of the time have paid a 10% tariff similar to the complete machine, and sometimes even paid about a 22.5% tariff for the control system. Also, we usually sell controllers as spare parts for our own machines or for retrofitting use, which comes with installation and retrofitting services, not as a controller seller.

Moreover, the real trouble is that the customs tell us that since we import a significant portion of the parts, the value of your goods is equivalent to a complete machine! Go anywhere in the world and say that this is how they treat manufacturers in my country, and they will grant you asylum right away. (Bitter laughter)

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

In a country like China, the import tariff of machine components for a machine manufacturer is zero percent. This is how they can produce machines with suitable price and quality using extensive Taiwanese components and export them. In other countries like Taiwan or Germany, or many industrialized countries, the import tariffs of industrial components are below ten percent and with little difference, but in our country, where many slogans are given in support of domestic production, the tariff of a controller, which does not have a domestic manufacturer and makes the production of machine tools possible domestically, is double the tariff of importing a complete machine; does this mean anything other than supporting foreign manufacturers and hindering domestic production?

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

First, I thank God that I am not in their place. Everyone knows that one hand cannot clap and the problems of the industry are not supposed to be solely on the shoulders of the Minister of Industry, Mine and Trade.

Second, I have not had the opportunity and the appropriate team of advisors for this job 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 bother people with systems like NIMA and ... and instead of liberalizing trade and entrusting it to the private sector, I would not create artificial, momentary circulars that create opportunities for rent-seeking.

How can government policies stimulate demand and support your production?

The government should not harm us, stimulating demand and supporting production is a bonus.

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

The increase in currency price benefits domestic producers only if they are not forced to buy their raw materials from the market at double the official currency price but sell their products at the official currency price, that too with thousands of commitments, paperwork, and attritional warfare. The exchange rate must also have relative stability and allow the market to determine the price through natural mechanisms. Despite all these conditions, since the wage rate and technical knowledge - at least in the short term - have less correlation with the dollar rate, our parts manufacturing exports have grown in this short period, and our competitiveness in machine tool production has improved compared to foreign equivalents.

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