Tycoons in search of growth in Iran

A group of top Korean business tycoons -- including SK Group chairman Chey Tae-won, GS Group chairman Huh Chang-soo and LS Group chairman Koo Cha-yol -- flocked to the promising Iran market Monday in an attempt to explore new business opportunities in many sectors ranging from energy to infrastructure construction.

They landed in Teheran, capital of the oil-rich Middle Eastern country, with the Korean economic delegation composed of representatives from 236 companies and institutions. The delegation is accompanying President Park Geun-hye who is on a three-day state visit to Iran until Tuesday.

SK Group, the nation’s third largest conglomerate, is one of the most proactive in scouting for business opportunities in Iran, which has an enormous pent-up demand for resumption of oil exports and modernization of its infrastructure after the recent lifting of international sanctions.

“During his visit, the group chairman will seek deals in areas such as energy, trading and infrastructure restoration with five CEOs from affiliates including SK E&S, SK Energy and SK Telecom,’’ a company spokesperson said.

Industry watchers forecast SK which has imported crude oil from Iran for years could clinch possible lucrative business deals in Iran ahead of other Korean conglomerates.

According to the group, SK Innovation, the holding company of SK’s energy businesses, has already increased imports of crude oil and natural gas condensate from Iran in the first quarter this year.

Another energy giant GS Group is also eyeing Iran’s energy and construction sectors for a business bonanza.

LS Group, a global leading power cable supplier, said the group head has an interest in exploring power-related infrastructure restoration and construction projects.

In contrast with the cautious approach of corporates about striking business deals in a new market full of uncertainties, the Korean government was confident that trade and investment with Iran will be lifted to the pre-sanction levels.

“The two heads of state agreed on cooperation and exchanges both in economic and noneconomic areas,” Cheong Wa Dae said in a statement released after the historic summit meeting between President Park and her Iranian counterpart Hassan Rouhani.

In the economic sector, private and public corporate delegation members are expected to sign memoranda of understanding for 66 infrastructure-related construction projects ranging from rails to power plants to hospitals.

In return for hiring Korean contactors, Seoul has a plan to increase its daily crude imports from Iran to around 280,000 barrels from 115,000 barrels last year.

By Seo Jee-yeon (jyseo@heraldcorp.com)