The presidents of Iran and Venezuela launched construction of a joint petrochemical plant, strengthening an 'axis of unity' between the two oil-rich nations.

Venezuela's Hugo Chavez and Iran's Mahmoud Ahmadinejad, who both often rail against Washington, also signed a series of other deals to expand economic cooperation, ranging from setting up a dairy factory in Venezuela to forming an oil company.

The two presidents -- whose countries are members of the OPEC oil producing cartel -- earlier attended the ceremony to start building a methanol facility with an annual capacity of 1.65 million tonnes on the Islamic Republic's Gulf coast.

Iranian officials said a second methanol plant would be set up in Venezuela. Each would cost about 650 million U.S. dollars (USD) to 700 million USD and take four years to complete. Methanol is an alcohol which can be used as a solvent or an element in fuel.