Trading giant Itochu Corp. will be the first Japanese company to invest in Iran since 1989, as it mulls signing corporate alliance pacts with the Siam Cement Public Co. group and Thailand's state-run PTT Public Co. group in a bid to begin producing polyethylene in Iran in 2008.
The investment for this project will be about 25 billion yen of which about 70% will be financed by loans from parties including the Japan Bank for International Cooperation. Itochu and the Thai firms themselves are likely to establish an investment firm in Iran along with Iran's state-run National Petrochemical Co. The alliance between Itochu and the Thai firms is to take a 60% stake in the investment firm, while the Iranian entity will hold the remainder. Itochu and its partners believe their petrochemical investment in Iran will not go against the U.S. law because it does not plan to involve oil-related development. The current U. S law restricts business operations by companies engaging in oil and natural gas development projects in Iran from operating in the United States due to Tehran's suspected nuclear arms program.
Earlier Mitsui had formed a joint venture with Iran's state-run NPC to build a petrochemical plant, but it was suspended due to the Iranian Islamic Revolution in 1979. Failing to resume the project due to the Iran-Iraq War in 1980, Mitsui decided to exit Iran in 1989 and the joint venture failed.
04-Jun-05 
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