DUBAI Saudi Industrial Exports Co (SIE) said on Tuesday it had completed an agreement with a group of banks to guarantee payments for the export of Saudi goods to Iran. We have been working on this deal for a long time...now that the deal has been finalized, our Saudi exports to Iran will take a new upward turn, Soleiman Abdul Mohsen al-Oweid, a senior SIE manager, told Reuters by telephone from Riyadh. SIE, a Saudi public share holding company, specializes in marketing Saudi industrial products in Iran and advising Saudi industrialists on export opportunities.

Oweid said banks involved in the deal with SIE would confirm letters of credit for Saudi exports to Iran. With expected growth in business on the back of improved Saudi-Iranian ties, a more solid system had to be established, he said, adding that the deal would remove obstacles facing Saudi exports to the Islamic Republic. He said export guarantees would be provided by a number of Saudi, Iranian, and international banks.

He said SIE had been doing business with Iran for more than three years exporting Saudi made air-conditioning units and petrochemicals used in the plastics industry. Latest available trade figures carried by Saudi newspapers showed the two-way trade between the two countries touched 825 million riyals in 1995, almost 240 percent higher than in 1993. Saudi Arabia is trying to diversify its economy away from oil by establishing an industrial base capable of manufacturing export-oriented products.

Since 1970, Saudi Arabia has set up 10 industrial cities which have brought the number of its factories to 2,598 in 1997. (Reuter)