Aqaba can capitalise on opportunities in logistics industry — investor

AQABA — Although encouraging tourism in Aqaba is important for the economy, projects in the logistics industry create more jobs and have more added value to the economy, according to one investor in the port city.

Sheldon Fink, chairman and CEO of PBI Aqaba International Industrial Estate (AIIE), said Sharm El Sheikh was the model for the Red Sea resort when the Aqaba Special Economic Zone Authority (ASEZA) was first established. However, “the vision changed two years ago.”

Citing the AIIE as an example, Fink said his company invested $300 million leading to the creation of 1,000 jobs, while there are projects in other sectors in Aqaba worth $2 billion in investments that do not create this number of jobs.

AIIE is a destination for manufacturing, logistics, storage, renewable energy and energy efficiency initiatives, and related services. The location is developed and managed by PBI Aqaba.

“So, if you want to have an effective way where the country does not have so much money, projects in… logistics create more jobs than other sectors, and more added value to the economy than real estate and tourism,” the PBI CEO said in a recent meeting with the press.

“We helped in advocating this approach and showed it is successful to use this model.”

The company, which started its investment in Aqaba in 2005, is expanding with hopes to attract more investors from China, according to Fink.

“We sold about 800,000 square metres [sq.m.] of land. About half of that is built up and operating, while the rest is either in the process or reserved and held by the existing companies,” he explained, noting that PBI Aqaba will be marketing another 600,000 sq.m. over the next four years.

The company also signed a memorandum of understanding with the Aqaba Development Company to obtain another 1 million sq.m. for development in the south of Aqaba. “We have now about 1,000 people working here and when we are fully developed, we will have about 2,500, and then in the south, eventually we will have another 2,500,” the investor noted.

Current investments in AIIE stand at $300 million and when “it is finished we will have up to $600 million” and then in the south there will be another $600 million, Fink said.  

The government has received about $30 million from the company in revenues.

Fink said 65 per cent of the employees in the companies within the AIIE are Jordanians although under ASEZA law “we can have up to 70 per cent foreign workers and 30 per cent Jordanians.” 

Turning to PBI Aqaba's future plans and investments in AIIE, the CEO said most of the expansions in 2016 and 2017 will be for Chinese companies, although in the past two years they were for Syrian and Libyan firms. 

“They will continue there but will not be the biggest companies.”

Although Jordan is the safest place in the region, an issue that the company uses to attract investors and more projects to Aqaba, there are some “problems” that if solved, will double investments, according to Fink. 

One of these problems, he emphasised is “old-fashioned laws” which are "not helpful" in attracting foreign investments compared to the laws in the United Arab Emirates and Oman.

In Jordan “you can’t make a contract to buy and sell land except at the land registry office when you are prepared to pay the money to finish the transaction,” Fink said.