BAT: a flagship investor
UK-listed company British American Tobacco opened a branch office in Tehran in December 2002, seven months after official importation of its products had begun following the liberalization of the Iranian tobacco industry. It received its licence from the Foreign Investment Board in July 2003, and opened its subsidiary in September 2003. This subsidiary, BAT Pars, was the result of an agreement with the Iranian Tobacco Company, the local monopoly, to produce cigarettes.
Tom Green, a director of BAT Pars, says that the $34 million investment involves BAT providing machinery and its expertise through management staff, with ITC providing the production capability, the premises, and production staff. The seven-year investment was licensed by the Foreign Investment Board under the Foreign Investment Promotion and Protection Act. "BAT is the first 100% foreign investment protected by Fippa," says Shadi Sedghinejad, managing director of legal and investment consultancy Evina Enterprises. "Previously, a JV had to be created with foreign ownership limited to 49% of the total project."
Green sees BAT as something of a flagship investor, and thinks its success sends a positive signal to other foreign investors.