Capabilities and Potentials of Khorasan Razavi Province 1

Portrait of Khorasan Razavi LIST: • Introducing the Province • Industry Share of the Province • Export Status of the Province • Investment Priorities • Foreign Investment Incentives 2

Khorasan Razavi Geographical Status 3

Khorasan Razavi province is located in the northeast of Iran, close to the borders of Turkmenistan (from norh & northeast, 531. 6 km) and Afghanistan (from east, 302 km) and Mashhad is its capital. With 116, 348 km² is the fourth largest state of Iran and Mashhad, is the second most populous city in Iran (5, 994, 402 people). With deep cultural roots in history and as the religious center of the country, nowadays, has prominent role in the industry and economy. It is an important point in Silk Road, A link between east and west.

Khorasan Razavi encompasses prominent capabilities in different fields of industry, mine and trade and tourism. It’s one of the important poles in automobile industry, steel manufacturing, food industry, agriculture and mining. More than 6000 units are active in the industry and mining field, about 900 units in food industry and 500 units in car spare parts. Agricultural products are unique in the area. It has the first place of saffron in the state (90% of the country) and the world, second place of pistachio, 45% of the conserve products, 20% of the dairies and 30% of car spare parts in Iran. 5

Khorasan due to its geological structure has a lot of mines. Sarakhs Gas resources is one of the richest sources of gas resources of Iran and Sangan iron ore mines in the Middle East is one of the largest mines. Currently there are 450 active mines in the province that it can be divided into two main groups: Metal mines including, Iron ore, copper, lead, zinc and chromite; and Non-metal mines including, industrial minerals like kaolin, talc, silica, calcite, industrial soil, feldspar, gypsum, and fluorite, organic reserves (fossil fuel), gas and coal, construction stones such as marble, granite, limestone, semi -precious gemstones and gold, turquoise and grona. 6

Mashhad , because of holy shrine accept yearlly 25 million internal & foreign piligrims & tourist. So comercial & trade issues have special importants. Khorasan Razavi have about 220. 000 guild unit & 513 guild union. This amount is about 8% of total in country. 7

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Hyper market 10

Khorooshan water park 11

The most important priorities in commerce section are investment to promote hotels, produce of cloth and fabric , investment to jewelry, clothing industry , building of hyper markets, weaving handmade carpets. khorasan carpet cluster is comprised of about 500 units. There is also about 300 carpet showrooms in the cluster. there about 95000 persons in khorasan that are directly involved in this industry. At the moment, Khorasan Razavi Province has a special place with an average production of 600 thousand square meters of different types of handmade carpets such as large carpet fabric, costume-made, export and decorative rugs • The main production areas in Khorasan Razavi Province are: Neyshaboor, Mashhad, Sabzevar, Kashmar, Quchan, Torbat Heydarieh, Torbat Jam, Gonabad, Bardaskan and Dargaz. 12

Pistachio & Saffron 13

Nuts & Barberries 14

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Neishabour Turquoise 16

Mashhad Hotels 17

Mashhad Hotels 18

Mashhad International Fair 19

Exquisite Iranian Carpets 20

Most of state’s exports are to Afghanistan (%47), CIS countries (%29), Arabic countries (%17) and European countries (%4). Khorasan Razavi has an ideal status foreign investment activities. There are five customs office in the state, including Mashhad, Sarakhs, Dogharoon, Bajgiran and Lotfabad and also Sarakhs Special Economic Zone. Considering new economic situation of Iran, one of the main strategies of the state is developing current markets and permeating into new ones by producing under license products of great companies. 21

Export Trade Partners of the Province in 2014 Others 15% Iraq 4% UAE 5% Afghanistan 48% Tajikistan 10% Turkmanistan 18% 22

Major Exported Products in 2014 Agriculture 9% Mining & Mineral Industries 5% Others 26% Chemicals 18% Metals and metal products 5% Food Products 20% Machinery, parts & equipment 7% Carpet 2% Textile & Clothing 5% Construction materials 3% 23

Railroad Map 24

Portrait of Khorasan Razavi Province Total Area (KM 2) Ratio to the Country (percent) 116348 7. 3 Population(people) 5994402 Population ratio to the Country (percent) 7. 98 Industrial Estate: 40 Port: 0 Airport: 4 Center for Higher Education, Research Excellence, Park & Incubator: 14 Powerhouse: 5 Railway: 984 km Refinery: 1 Basic Agricultural Products (crops & garden in million ton): 5. 6 by 98% water products Average rainfall: 203/3 mm (in 2014) Highway: 948. 8 km Scientific, Research & Academic Centers: 181, Industrial land (hectare): 8103 Customs: 5 Border markets: 2 Mineral Deposits Discovered (million ton): 2600 Average temperature: around 15 (centigrade) Access to sea, lake &river: seasonal & permanent rivers Neighbour provinces: North & South Khorasan, yazd, Semnan Energy Consumption of Industry & mine of the Province (2014) Gas consumption: 1759 million m 3 Electricity consumption: 3901135 mw/h Water consumption share in industry & services: 3% Provincial divisions: 28 towns, 72 cities, 70 counties, 164 rural districts, 7361 villages Weather condition: The province is on dry & half dry belt of the earth 25

Portrait of Khorasan Razavi Province Value added in Industry , Mine & Trade & services Million $ The Total Share of industry & mine value added of the province Industry & Mine 39% (178000 people) Trade %61 32856 Industry: 2266 Mine: 121 Trade: 16741 %8. 9 Total people: 456000 people Employment in Industry, Mine & Trade 2014 Percent of the country (Weight ) (Value) 2. 2 3. 6 549 Weight (1000 T) Value (million $) 2154 1795 The value of non-oil exports Value of the Imports in 2014 (million $) 26

Present status of industrial permits Employment license Capital of license(Million $) quantity License type 171869 23504 6232 Establishment License 12968 955. 6 412 Development Plan 187209 6897 5791 Exploitation License 21

Khorasan car factory 28

Khorasan car factory 29

Namjoo Machinery 30

Toos Industrial Complex 31

Porcelains 32

Share of each industry in terms of investment Transport & motor vehicles electronics 5% 3% other 4% Food products & drinks 16% Weaving & leather 7% metals 22% Non-metalic minerals 22% cellulose 3% chemicals 18% 33

hare Share of each industry in terms of Employment license Transport & motor vehicles 7% electronics 7% other 1% Food products & drinks 21% metals 18% cellulose 4% Weaving & leather 9% chemicals 14% Non-metalic minerals 19% 34

Statistics of production of selected commodities in 2014 Unit of measure amount Product name row unit 103053 car 1 1000 Ton 4310 cement 2 1000 Ton 1285 Raw steel 3 1000 Ton 1115 Steel segments 4 1000 m 2 24017 Tile & ceramic 5 1000 No. 1632000 Types of medication 6 1000 Ton 47. 6 Vegetable oil 7 1000 Ton 11. 4 Synthetic fiber 8 1000 Ton 38. 6 paper 9 1000 Ton 220 Tomato paste 10 Unit 42500 Motorcycle 11 1000 Ton 85 Pipe & profile 12 Million no. 8558 Low energy lamp 13 1000 m 2 5322 Machine made carpet 14 1000 Ton 23. 4 Porcelains 15 1000 Ton 112 Sugar 16 29

Current status of mining licenses Quantity Description License type 616 quantity Exploration license 431 quantity 313 Proved reserve (million Ton) 701 Proved reserve (billion ton) 8565 2 Exploitation license 3 employment 220. 6 Exploration certificate Exploitation capacity (million Ton) 2. 6 1 quantity 29 row Investment (Million $) 31

Turquoise mine in Neyshaboor 37

Granites 38

Travertine 39

Zarmehr Gold 40

Important Mineral Deposits Certain storage (million ton) quantity Name row 648 56 Iron ore 1 1568 36 Lime & lvvym calcareous 2 91. 6 129 Building stone 3 24. 9 19 Manganese 4 0. 9 32 chromite 5 5 10 copper 6 82. 6 84 stucco 7 1. 5 3 gold 8 18. 8 14 Silica 9 overall, 46 kind of mineral has been explored and their exploitation license has been issued. * 27

Mining benefits of the province for Investment 1. Ore resources in Khaaf, Khalilabad 2. Silica resources in Torbate-e Jam and Kashmar 3. Granit stones in Bige area of Torbate-e heydarieh 4. Storages related to indutrial soils (Molibden, Caolen) 5. Rare metallic elements (esp. gold, zinc & lead on which semidetailed studies are not completed. ) To determine the real benefit of mineral storages, detailed studies are necessary. Province operation in mineral exploration plan is up to semi-detailed level. 42

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Marl and limestone 44

Underground salt using a basic room 45

Lead and Zinc 46

Industrial priority projects

Strategic Plan #1 Systematic exploration in the field of geophysical airborne & new technology in fast drilling for exploration of the different minerals & new technology in processed building Stones.

Project Title: Executive: Required Capital: 16. 5 million dollars

Strategic Plan #2

1. Sangan Steel project Provision of Infrastructure including water, electricity, gas and • rail transport development inorder to complete steel value chain upto production of 10 million tonnes The investment that is estimate in progress in 5 big projects in steel • industry is about 4. 6 billion $

Required Infrastructure Water supply Method : Extraction of brackish and saline water from Zozan plain and Khaf salt pan and installing desalination and pumping stations Required Water : 700 liters per second Gas supply Method : Network development and creation of a One hundred kilometer transmission line with branching from the main line (North to South) Required gas : 97, 730 cubic meters per hour Required Electricity : 400 MW Required Rail capacity : 23 million tons Rail capacity supply Method : Allocation of national credit inorder to execute rail transport development to Sangan- Khaf project

2. Clothes town & fashion school in Mashhad 53

Iranian and foreign Tourists Technical courses students Foreign manufacturer that produce products with top Brands in clothes Clothes town Unido aids Iranian manufact urer that produce Export products Design companies Manufacturers of auxiliary Industries

Purposes of founding clothing town in Mashhad ü Cooperation of manufacturers that reside in this town in common works for produce high quality products for export & reduce costs of production ü Accesstion the market to production place in this town & reducing costs ü Availability of fashion salons for showing designs of manufacturers ü Availability of fashion school for training to employees for developing clothing industry ü Availability of sightseeing places for visitors such as kindergarten , restourant , coffe shop , park & … that visitors enjoy from this place and they can buy all of needs to clothes with high quality & suitable price

Suggestions for Cooperation with other countries for clothing town in Mashhad ü Cooperation in training about design and produce clothes & leather products ü Cooperation in accessing to update technology in this industry ü Founding factory of clothes & leather products by companies that have top brands in this clothing town ü Joint big factories with top brands to factories in iran for produce common products ü Founding professional academy in clothes industry in this clothing town for training about update technologies

3. Fertilizers Park (including urea and ammonia production) Location: Sarakhs Products: urea and ammonia Annual capacity: ammonia 677, 000 tons , urea: 1 million tons Comparative advantage: Sarakhs refinery as the supplier of raw materials Employment: 1000 people Required Capital: $ 600 millions Required Infrastructures: Water : 4. 5 millions cubic meters, Electricity : 24 MW, Gas: 554 millions cubic meters , Land : 200 Hectares

4. Fertilizers Park (including Sulfur fertilizer production) Location: Khangiran Region, Sarakhs Products: 7 product of sulfur compounds including sulfur coated urea, Triple superphosphate, sodium tripolyphosphate , Ammonium diphosphate, etc. Annual capacity: 2 million tons Comparative advantage: Enjoying the second richest sulfur source of the country with capacity of 500 thousand tons Employment: 1000 people Required Capital: $ 327 millions Required Infrastructures: Water : 10 millions cubic meters, Electricity : 61 MW, Gas: 66 millions cubic meters , Land : 70 Hectares

5. Production of steel sheets Location: Binaloud/ Quchan / Roshtkhar Products: Hot and cold rolled steel sheets Annual capacity: 550 thousand tons Comparative advantage: Existence of needed raw materials such as iron ore, manganese, chromium and silicon in the area Employment: 450 people Required Capital: $ 510 millions Machinery Required capital: € 290 millions Required Infrastructures: Water : 2. 4 millions cubic meters, Electricity : 70 MW, Gas: 35 millions cubic meters , Land : 100 Hectares

6. Production of hybrid and electrical cars Location: Binaloud-Neyshaboor Products: hybrid and electrical cars Annual capacity: 50, 000 Comparative advantage: There are experts and professional workers and also part suppliers in the province Employment: 500 people Required Capital: $ 110 millions Required Infrastructures: Water : 1 millions cubic meters, Electricity : 20 MW, Gas: 5 millions cubic meters , Land : 50 Hectares

7. Production of car tires Location: Binaloud-Neyshaboor Products: Car tires Annual capacity: 50, 000 tons Comparative advantage: There is a car manufacturing factory in the province Employment: 1550 people Required Capital: $ 182 millions, Machinery Required capital: $ 125 millions Required Infrastructures: Water : 500 thousand cubic meters, Electricity : 15 MW, Gas: 12 millions cubic meters , Land : 50 Hectares

8. Production of Solar cells Location: Gonabad/ Taibad Products: solar cells Annual capacity: 200, 000 NO. Comparative advantage: production of clean energy Employment: 50 people Required Capital: $ 17 millions, Machinery Required capital: € 9. 6 millions Required Infrastructures: Water : 7 thousand cubic meters, Electricity : 1 MW, Gas: 500 thousand cubic meters , Land : 2 Hectares

9. Production of Magnesium billet Location: Zaveh Products: Magnesium billet Annual capacity: 24, 000 tons Comparative advantage: Existence of Minerals Employment: 300 people Required Capital: $ 104 millions, Required Infrastructures: Water : 20. 5 thousand cubic meters, Electricity : 8 MW, Gas: 86. 4 millions cubic meters , Land : 50 Hectares

10. Production of Ferrosilicon & Microsilica powder Location: Neyshaboor Annual capacity: Ferrosilicon 26, 000 tons , Microsilica powder: 8000 tons Comparative advantage: Existence of Minerals Employment: 200 people Required Capital: $ 47. 5 millions Required Infrastructures: Water : 20 thousand cubic meters, Electricity : 32 MW, Gas: 4 millions cubic meters , Land : 50 Hectares

11. Production of computer equipment and hardware

Strategic Plan #3 Reduction of distribution network costs and streamlining the network through constructuion of industrial towns

Project: Construction of a professional-industrial site focusing on reduction of distribution costs Goals: production of households’ main consumption basket, preparation of fruit and • vegetables and construction of a large exhibition site and gathering production units particularly downstream industrial units Empowering suburb of Mashhad • proposed businesses : small and medium professional manufacturing workshops, construction of a fridge, storage, sorting and packaging lines, loading site and a big exhibition complex inorder to sell Town products

Project: Construction of a professional-industrial site focusing on extending manufacturing workshops and related sectors Location: Miami Boulvard to Mashhad East bypass Responsible for implementation : the private sector in collaboration with • the City Council of Mashhad The advantages : easy access to urban transportation networks and all • infrastructural services (water, electricity, etc) in the area, organizing the urban area and preventing uncontrolled expansion of illegal settlements and converting this to production capacities and employment Required space : An area of 800 hectares and allocation of 40% of the total • area to green space and 60% to construction of roads and buildings Required capital : $ 365 Millions •

Incentives & benefits of foreign investment in Iran: No restriction on the percentage of foreign shareholding Transferability of principal capital and the profit Three year residence with family Tax exemption: 80% from the date of exploitation or extraction for four years, and in less developed regions as 100% of the income for a term of 10 years. Incentives in Free Trade & Industrial Zones: 15 year tax exemption No visa Flexible banking Services Customs duty exemption for raw materials & industrial machineries Possibility of exporting products to the mainland Long Term Lease of the land Suitable rates for Energy consumption 69

At the end, we invite respected authorities and all investors for a visit from these capabilities. We welcome close, mutual cooperation. Thank you for your attention. 70