Trading with countries that are subject to international embargoes can create extra hurdles for companies. Stefano Iannacone, the managing director of IBS-MAPEI, which makes products and chemicals for the construction industry, speaks about pushing farther into Iran, where distributors have been selling its products for more than 20 years.
What was your strategy when you opened in Dubai about five years ago?
MAPEI is in the upper market segment. We cater for medium to high-quality construction projects. We specifically decided to start focusing only on the UAE. For a few years, we will build up the team in the UAE, and once we have consolidated this, then we would start looking at other countries.
Are you starting to look at expanding elsewhere?
Yes, already in 2011 and 2012 - with even more emphasis - we are looking at Iran [despite] all the problems it brings.
Because the market potential is big. It is the most populated country in the region. It's a rich country and [the people] are educated.
Does the current political situation not put you off?
Yes, it does, but we are selective in where we sell. Of course, we have a checklist we have to go through. We follow the EU and UN embargo rules.
How do you make sure products, such as your tiles, are not going to be used in the nuclear project?
We have compliance protocols, so we exactly make sure what the products are used for. We have end-user certificates which are undertaken. [For example,] we sold some products for the Tehran metro, for the underground works, and we know that it is a metro because the people are going down there with the products. Our chemicals are not related to any kind of nuclear facility. If [the project] is embargoed it does not come to us.
Are you interested in any other markets in the region?
Iraq is huge. Of course, we are in construction, and they have to rebuild the whole country. Saudi of course is big. Qatar as well. It's a bit more complicated than other countries because of the restrictions that they have for importing chemicals. It is a longer process to cross the border with the materials. Qatar has a big potential for a limited period of time.
I might be wrong, [but] there is a lot of building that is going on now, and more to come because of the World Cup. Once this construction is done, there will be maintenance, but it will have to be put into perspective. Maintenance of a country [with] 1 million people living in it - out of which 30 or 40 per cent are workers - is not the market for us, because these are South Asian workers brought in who don't spend their income in the country.