Danish drug maker Novo Nordisk will invest 70 million euros ($78 million) to build a manufacturing plant in Iran, joining a small group of European companies to announce concrete deals there since the Islamic Republic reached a nuclear deal in July.
Novo Nordisk, the world’s largest diabetes drugs maker, has had a subsidiary in the country since 2005 selling insulin and employing 130 people.
But the plant “signals our long-term commitment to Iran”, the Danish company said in a statement.
“We have been working on this for a long time, also before the nuclear agreement was settled, and we have confidence that the Iranian society and economy is developing positively,” Ole Moelskov Bech, head of the firm’s Near East unit, told Reuters.
Construction is expected to begin in six months’ time, the company said.
The medicinal sector has escaped U.S., European Union and United Nations sanctions, which have focused on industries that could be related to nuclear activity as well as on banking, technology and oil.
But the restrictions have nevertheless made doing business in Iran tricky, Bech said.
“Even though the medicine industry was never abandoned in Iran (by foreign businesses), the sanctions have been making it all much more difficult as a lot of rules needed to be followed, on information technology and banking, which made it necessary to have individual systems for Iran,” Bech told Reuters.
Novo Nordisk has not been able to use the same IT platforms as in the rest of the business, forcing the company to spend time on work-around solutions, Bech said.
Several European ministers have visited Iran with businesses in tow since it struck the deal with six world powers in July under which it must curb sensitive aspects of its nuclear energy programme in exchange for a lifting of sanctions.
Earlier this month, Austrian companies signed deals worth 80 million euros with Iranian partners.
But most Western companies say they will wait until the nuclear agreement is implemented and sanctions removed before they make any firm business commitments in Iran.
Copenhagen Airport A/S said on Tuesday the first flights between Denmark and Iran would begin in March 2016, resuming a direct service between the capitals that had been suspended for eight years.($1 = 0.8950 euros) ($1 = 6.6867 Danish crowns)