Volvo Halts Iran Truck Assembly Following US Sanctions

Swedish truck-maker Volvo has joined other companies withdrawing from Iran, six weeks after the second phase of US sanctions entered into force.

The company stopped assembling trucks in Iran because US sanctions are preventing it from being paid, a spokesman for the company said on Monday.

In August, US President Donald Trump reimposed sanctions against Iran after his decision to pull out of a nuclear deal with Tehran, which have forced companies across Europe to reconsider their investments there.

Volvo spokesman Fredrik Ivarsson said the trucks group could no longer get paid for any parts it shipped and had therefore decided not to operate in Iran in another blow to the country’s car industry, which unlike the energy and banking sectors, had managed to sign contracts with top European firms.

“With all these sanctions and everything that the United States put... the bank system doesn’t work in Iran. We can’t get paid... So for now we don’t have any business (in Iran),” Ivarsson told Reuters.

Ivarsson said Volvo had no active orders in Iran as of Monday.

Before the sanctions were reimposed, Volvo had expressed an ambition for Iran to become its main export hub for the Gulf region and North Africa markets.

EU implemented a law to protect its companies, but the sanctions have deterred banks from doing business with Iranian firms as Washington can cut any that facilitate such transactions off from the US financial system.

Volvo was working with Saipa Diesel, part of Iran’s second-largest automaker SAIPA, which was assembling the Swedish firm’s heavy-duty trucks from kits shipped to Iran.

A commercial department manager at Saipa Diesel confirmed that sanctions had prompted Volvo to terminate their partnership agreement.

“They have decided that due to the sanction on Iran, from (May) they couldn’t cooperate with us. We had some renovation planned in Iran for a new plant but they refused to work with us,” said the manager, who declined to be identified.

More than 3,500 Volvo trucks had been assembled by Saipa Diesel in the year to May, but none had been assembled in this financial year although the original deal was for at least 5,000 trucks, explained the manager.

Meanwhile, Finnish mining technology company Outotec will pull out of Iran due to the new sanctions, a company spokeswoman said on Monday

Outotec builds plants, makes equipment and offers services for the metal and mineral processing industries. It has a long history in Iran and it remained in the market after the US imposed sanctions in 2010.

Its business started to normalise after the 2015 nuclear deal, helping Outotec to book orders from National Iranian Copper Industries Company (NICICO) and Iran International Engineering Company (IRITEC).

New sanctions on Iran have forced companies across Europe to reconsider their investments there.

“We comply with all existing sanctions. Our projects in Iran are already in their final phases ... and we aim to complete our projects before November 4,” asserted spokeswoman Eila Paatela.

Outotec has not disclosed the overall volume of its business in Iran but it said in May that the market did not represent a significant share of its global sales of about $1.41 billion.

The NICICO order is for two sulphuric acid plants for copper smelters with a value of around 50 million euros. The IRITEC order is for technology worth 45 million euros for an iron plant.

Chiang Mai, Thailand's northern city popular with tourists, was inundated by widespread flooding Saturday as its main river overflowed its banks following heavy seasonal rainfall.
Authorities ordered some evacuations and said they were working to pump water out of residential areas and clear obstructions from waterways and drains to help water recede faster, The Associated Press reported.
Dozens of shelters were set up across the city to accommodate residents whose home were flooded. The Chiang Mai city government said the water level of the Ping River, which runs along the eastern edge of the city, was at critically high levels and was rising since Friday.
However, the provincial irrigation office on Saturday forecast that the water level was likely to remain stable and recede to normal in about five days.
Thai media reported that efforts to evacuate elephants and other animals from several sanctuaries and parks on the outskirts of the city were continuing Saturday. About 125 elephants along with other animals were taken to safety from the Elephant Nature Park, from where some escaped on their own to seek higher ground. About 10 animal shelters in the area have been flooded.
Chiang Mai Gov. Nirat Pongsitthavorn said that the latest flooding, the second in six weeks, exceeded expectations.
Thailand's state railway suspended service to Chiang Mai, with trains on the northern line from Bangkok terminating at Lampang, about 1 1/2 hours ride to the south. Chiang Mai International Airport said it was operating as usual on Saturday.
Flooding was reported in 20 Thai provinces on Saturday, mostly in the north. At least 49 people have died and 28 were injured in floods since August, the Department of Disaster Prevention and Mitigation said.
In the Thai capital Bangkok, the government said Saturday it will let more water flow out of the Chao Phraya Dam in the central province of Chai Nat over the next seven days, as it risks exceeding it capacity. The release of the water may affect residents downstream who live near waterways in Thailand’s central region, including Bangkok and surrounding areas.

Volvo Halts Iran Truck Assembly Following US Sanctions