Iran’s Wood and Paper Industry on the Verge of Bankruptcy

TEHRAN (Iran News) In an interview with ILNA, Ghasem Mohammadi, former MP and current CEO of Mazandaran Wood and Paper Industries, described the wood and paper sector as “a deeply interlinked system” whose infrastructure is now severely deteriorated.

“The investments made in the 1970s are now facing serious depreciation and risks,” he said. “For example, companies like Chooka in Gilan, Mazandaran, and Khuzestan are about 30 years old. At the start, consortiums provided strong scientific, educational, sales, and engineering support. But after sanctions, these supports were cut off, and many traders and suppliers of machinery parts left the country and the region, creating major operational difficulties.”

Mohammadi added that much of the factory equipment has reached the end of its lifespan. “We need comprehensive overhauls and technical reconstruction to complete the value chain and re-enter domestic and regional markets,” he stated.

He emphasized that Iran’s wood and paper industry is strategically located in forested regions and was established based on proper feasibility studies.

“For instance, a one-million-dollar investment was made in Sari and Kiassar for an annual production of 175,000 to 190,000 tons. Initially, the results were impressive, but over time, performance declined sharply due to lack of technical and engineering support,” Mohammadi explained.

As a former member of the parliamentary agriculture committee, Mohammadi criticized the “Forest Breathing Law,” which bans logging in natural forests.

“Instead of supporting industrial development, this law has become restrictive,” he said. “Countries like Brazil and South Korea manage forest harvesting scientifically and sustainably, but in Iran, we lack such mechanisms. As a result, downstream industries are now facing severe shortages of wood supply.”

While acknowledging that international sanctions have hurt the industry, Mohammadi argued that domestic restrictions have been even more damaging.

“When raw materials like wood are limited, production cannot continue. We’re forced to import from BRICS countries, but their systems are not compatible with our European-style machinery,” he noted.

Mohammadi also highlighted the industry’s long-standing debts: “Up until 2017, the Forests Organization owed us 303,000 cubic meters of wood. After persistent negotiations and numerous meetings—nearly 200 hours in total—we managed to settle most of the debts. Even the head of the Judiciary personally followed up on the case in Mazandaran.”

He stressed that with “dedicated and responsible management,” the industry can be revived—provided that government agencies cooperate. “If handled with knowledge and prudence, the results will be positive,” he said.

Regarding paper production, Mohammadi said the company operates two main production lines: “The first line produces printing and writing paper for school textbooks and calendars. In the past year, we produced around 35,000 tons of paper, of which 22,000 tons were used for textbooks.”

He criticized the “anti-domestic production mindset” among some policymakers who favor imports over local manufacturing.

“When we took over, the company had 2 trillion rials in debt and 800 billion rials in accumulated losses. Despite these challenges, we continued production and have secured authorization to produce 50,000 tons of paper in the coming years,” he said.

Mohammadi added that cooperation with the Forests Organization has led to the allocation of 120,000 tons of wood for the next two years, ensuring uninterrupted production.

He concluded: “With careful planning, constant follow-up, technical expertise, and dedicated management, we can revive Iran’s wood and paper industry. Our goal is to strengthen domestic production, secure raw materials from internal sources, and expand to international markets with high-quality, competitive products.”