Pharmaceutical giant Novo Nordisk said on Tuesday it would invest millions in Iran, joining a still very small group of European companies to have announced concrete deals in Tehran after it struck a deal on its nuclear programme.

Novo Nordisk, the world's largest diabetes drugs maker, said it would build a 70 million euro ($78 million) manufacturing plant in Iran. It already has a subsidiary in the country selling insulin and employing 130 people there since 2005.

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.

He did not say when construction would get under way.

The investment compares to the 80 million euros' worth of deals that Austrian companies struck in Iran earlier this month, the first Western firms to put down concrete stakes in the Islamic Republic since July.

The medicinal sector has escaped US, European Union and United Nations sanctions against Iran that have focused on industries that could be related to nuclear activity as well as banking, technology and a crippling oil embargo.

Nevertheless, the restrictions have 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, citing one example of the problems of working in the Islamic Republic under sanctions.

Several European ministers have visited Iran with businesses in tow since it struck a landmark 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.

Despite the visits, most Western companies say they would wait until the nuclear agreement is implemented and sanctions removed before they make any firm business commitments in Iran. – Reuters