Persian Empire 1845

Chapter 210 Private Trade and Investment

The Tehran Stock Exchange has been bustling these days, with a large volume of trading in various company stocks. Although investment involves risks, the high profits still attract many people to invest their money here.

At the headquarters of the Iranian company, Hodni, Suleiman looked at the asset statistics and considered the next steps in his plan. He had to admit, the stock exchange was a great asset; in less than a month, he had raised the funds for expansion.

Since establishing his textile factory with a loan, Suleiman's business journey has been fraught with ups and downs. After all, you need people to buy what you produce, so he personally promoted their textiles. However, with so many textile factories, competition within Iran is fierce.

Competition was fierce, but the textile factory managed to establish itself and recoup its investment in its second year. The construction of the railway allowed goods to be transported to more distant places, expanding the market. As a result, Suleiman began to expand his textile factory and export to places like Cambodia.

After returning from his studies in the UK, Suleiman applied the new economic entity of the joint-stock company to Iran, establishing Hodni Joint-Stock Company, which became one of the first listed companies after the establishment of the stock exchange.

Such success is nothing to Suleiman, who now plans to build a 300-person factory in Isfahan and open textile shops in Bukhara, Khiva, and Bushehr.

"Chairman, this is our investigation report. Ottoman textiles are expensive, so we can open up sales channels in Istanbul. In addition, according to the comparison, cotton from Bukhara is of the best quality and is one-third cheaper than American cotton. Of course, domestic cotton is also very good, but the output is too small and the price is also different."

Currently, the company's products have a large market in the East, but we can also try to expand into the West to make our products more comprehensive.

"Isn't the Ottoman Empire already occupied by Britain and France? Why would they buy our goods? I think we should expand eastward. Aren't they selling quite well in Qinistan?"

While Iranian goods pale in comparison to those from Britain and France, they represent a game-changer for countries like Cambodia. The company's fabrics are very popular in Cambodia, thanks to low tariffs and machine-woven fabrics, allowing them to easily outcompete locally produced textiles and enter the Eastern market.

"Mr. Chairman, having multiple countries is not necessarily a bad thing. During Shah's visit, agreements were signed with ten countries. We can try exporting to Europe."

This free trade agreement is indeed a boon for Iran. If it can export to Europe, it will be very beneficial for the company's expansion.

Moreover, it wasn't just their company; other factories also began exporting in large quantities. In particular, wine merchants, thanks to Nasser al-Din's personal advertising, saw Europe import large quantities of Iranian wine out of curiosity, making it the second fastest-growing export commodity.

Furthermore, after the opening of the wine trade, there were no major problems caused by drinking alcohol in various regions. This trend even influenced the Ottoman Empire, with Sunnis who wanted to drink grape juice converting to Shia Islam. The reason given, of course, wasn't this; rather, they claimed that they believed Shia doctrine was correct and that Ali and his descendants were the true successors of Muhammad.

To change one's beliefs in order to drink grape juice openly is something that would be absolutely unique in the world.

"Now we should focus on quality; relying solely on colonies won't work. British cloth is far superior to ours, and they also have the world's best navy, so they can sell their goods anywhere. But we can't do that. Our country's current strength is not enough to compete with Europe, and their textile industry is already saturated, which is why I don't plan to expand in Europe."

Yes, Europe's textile industry developed a hundred years earlier than Iran's. Why should we compete with them in Europe? So, the East is still the best.

Suleiman's idea represented the thinking of most business people: if Europe was not an option, then they should go to the East, to the New World, where the vast market was very promising.

To continue expanding, capital is needed. The funds raised through bonds are being rapidly depleted, but he doesn't want to repeat that process. Firstly, it's the first time he's issued shares, and secondly, he wants to maintain control of the company. Currently, Suleiman remains the largest shareholder, but this capital increase has significantly diluted his stake. He founded this company; he can't let others take it away.

"Let's set up the factory in Isfahan first, which will bring us 60 in revenue every year. In two years, we will be able to expand our business."

Company expansion is a gradual process, but you can use some money to start a related business. For example, a textile company can retail fabrics, or it can directly open a clothing company to process and sell garments.

There is a huge demand for textiles in daily life. After the raw materials are turned into finished products, they are printed, dyed, and cut, and then purchased and used by the public. This is a very large market, which is why Suleiman went into the textile industry.

"Or perhaps we shouldn't look at Europe, but at the United States."

"Chairman, that's impossible. The United States is very protective of its industries; the tariffs on textiles alone are 100%."

美国1816年的关税法订定了从7.5%到30%的从价税，对棉花、羊毛、生铁和其它一些受到最近战争鼓励的制成品给予了特别保护。后来在1833年提高到70%，现在更是提高到100%。而且这个时期长期存在的征税视同价使实际征收的关税大大高于名义税率，而且越是低价的纺织品越是得到更严格的保护。

"Is the United States the only country?" Suleiman was well aware of the US's high tariff policy, but the Americas weren't just home to the US. Mexico, Venezuela, Colombia, Brazil, Chile, and Bolivia—these countries' purchasing power seemed no less than that of the US. Moreover, they had no tariff barriers and all believed in free trade; wasn't this a natural market?

Most South American countries primarily export agricultural products, with limited industrial development. A significant amount of goods are exported to these countries, including to Iran. Brazil is Iran's largest trading partner in South America, with kerosene and coffee being the main commodities traded between the two sides.

Persian Bank also opened a branch in Rio de Janeiro because the financial sector in South America was largely untapped, giving them an opportunity to enter the market.

However, the most important factor was domestic development, with foreign trade surpluses and investments flowing back into the country. The government undertook a large amount of railway, highway, and port construction, as well as heavy industry investment.

(End of this chapter)