LS Mtron Ltd., machinery arm of South Korean conglomerate LS Group, has set a target to ship $15 million worth tractors to Iran next year in hopes to expand to the Middle East and Africa.
The machinery maker said on Thursday that Iran’s Deputy Agriculture Minister Abbas Keshavarz and Adineh Group Chairman Sharifi met with LS Group Chairman Koo Ja-yeol and LS Mtron Vice Chairman Koo Ja-eun in Korea to discuss various measures to cooperate to manufacture tractors in Iran.
The Iranian heads’ meeting with the Korean company was held as a follow-up to the memorandum of understanding signed between LS Mtron, the Iranian agriculture ministry and Iran’s largest private company Adineh Group in May to join hands to supply agricultural equipment and manufacture them in Iran. The group chairman Koo visited Iran as a part of economic mission accompanying Korean President Park Geun-hye during her state visit to Iran in May.
LS Mtron’s tractor shipments to Iran grew from $2 million in value in 2014 to $7 million last year, and it aims to expand the tractor shipments to Iran up to about $150 million next year.
Iran is the largest tractor market in Middle Eastern and African regions, with annual sales of tractor reaching about 20,000 units. About 60 percent of arable lands in Iran are still left undeveloped, and local agricultural machines that the country’s tractor maker supplies are outdated being about 30 years old while occupying 80 percent of the country’s total tractor market. The outlook for the Iranian agricultural equipment market is bright with high growth potential, the company said.
Making an advancement into the Iranian market is meaningful as the international agricultural equipment giants such as John Deere of the United States still struggles to penetrate into the market, said LS Mtron CEO Lee Gwang-won, adding that the company expects Iran would provide a stepping stone for other Middle Eastern and African markets.