Iranian tractors crush US sanctions, plow European farms

When the US Treasury imposed sanctions on Iran Tractor Manufacturing Company (ITMC) in October 2018, the largest tractor manufacturer in West Asia and North Africa pledged to respond to the measure by ramping up exports.

“This has now been achieved,” ITMC Managing Director Abolfath Ebrahimi said in an interview with Fars news agency, explaining that 1,800 tractors worth 5,000 billion rials ($118 million) were exported in the nine months of the year which ends on March 21.

ITMC predates the 1979 Islamic Revolution, having been established in the northwest city of Tabriz in 1968 to assemble Romanian and British tractors.

The winds of change sweeping through Iran with the Revolution were followed by dark clouds as the West tried to stamp out the nascent Islamic Republic with anything from wars to rolling sanctions.

The embargoes left Iran’s industrial sector facing a tough terrain for survival and ITMC was no exception.

Parts were hard to come by, forcing the tractor manufacturer to start tinkering with anything it can produce. By 2009, ITMC was able to manufacture 40 percent of the parts used in some tractors, while most key components such as engines were sourced from Germany, Italy, Turkey and China.

Then came the big change when ITMC began localizing production of crucial parts including engines, inventing and manufacturing new tractors and completing its production basket according to the needs of the country, Ebrahimi said.

“More than 90 percent of the parts are now produced in Iran Tractor Manufacturing Company. The 10 percent imports are related to the production of large tires and injectors, which do not have any factory in the country, and it is not commercially viable for ITCM to establish one,” he said.

The company will wrap up the Iranian year next month with 22,000 tractors produced, up from 18,500 a year ago. For the new year, the plan is to raise production to 25,000 units.

The A to Z of manufacturing is done at ITMC which has one of the largest cast iron foundries in Iran and the region. Iran Tractor Foundry Company (ITFC), a subsidiary of ITMC, also produces some of the key cast parts for major automakers Iran Khodro and Saipa. According to Ebrahimi, ITFC exports $10 million a year in cast products to European countries.

ME