Business

AMMAN — A Korean trade delegation met on Thursday with its Jordanian counterpart, in the presence of Korea’s Ambassador to Jordan Lee Bom-yon. The delegation, comprising five manufacturers and exporters of several products, was the second to come to Jordan from Daejeon City this month to look into the possibility of increasing commercial cooperation.

The visit is intended to explore opportunities for cooperation between the Korean and Jordanian sides and ways of developing current collaboration, according to a statement by the Korea Business Centre in Amman, the Commercial Office of the embassy of the Republic of Korea.

FUJAIRAH, United Arab Emirates — At the mouth of the oil-rich Gulf region, the little-known UAE emirate of Fujairah is positioning itself as a major player in oil exports with a new dock for supertankers.

Sandwiched between the rocky Hajar mountains and the Gulf of Oman, the city of Fujairah has evolved around its port, whose oil terminal and storage facilities keep expanding. 

The facility handled 56 million tonnes of petroleum products in 2015.

Fujairah's location on the Gulf of Oman allows the seven-member United Arab Emirates to ship the bulk of its oil exports bypassing the strategic Hormuz Strait, which giant neighbour Iran threatens to close in times of tension.

Other major oil producers in the Gulf, including world top exporter Saudi Arabia, have to ship most of their exports through the Hormuz.

The UAE in 2012 inaugurated a 360-kilometre pipeline connecting Abu Dhabi's rich oil fields with Fujairah's coast. It has a capacity to pump 1.6 million barrels per day.

The OPEC member produces around 2.5 million 

But in a bid to capitalise on its location, Fujairah on Wednesday opened a new dock for supertankers, built at a cost of 650 million dirhams ($177 million).

The new terminal facility allows it to handle tankers up to 334 metres in length and weighing 330,000 tonnes, port director Mussa Murad said at the inauguration ceremony.

At 26 metres, "this dock is the deepest oil dock in the Middle East", he said.

Murad said the jetty could process 2 million tonnes of petroleum products at loading or unloading in 24 hours.

"We are determined to put the name of Fujairah... on the map of petroleum exchange on the regional and global levels," said the emirate's Industry and Economics Department head, Sheikh Saleh Bin Mohammed Al Sharqi. 

A port official said Fujairah did not spare any effort to "move mountains" to be able to handle supertankers.

As much as 22 million tonnes of rocks were quarried to reclaim land and build the new jetty, allowing supertankers to dock and load at ease.

Supertanker Kelly inaugurated the new jetty, blasting its siren as it berthed for loading. 

The facility can load or unload 2 million tonnes of oil products in 24 hours, according to Mourad.

The port already boasts a large storage capacity with hundreds of giant reservoirs spread across the facility.

"Storage capacity has jumped from 550,000 tonnes in 1994 to 10 million tonnes today," said Mourad. The number of reservoirs has shot up from 8 to 338 in the same period.

Refuelling services have also expanded from 2 million tonnes to 24 million annually.

Fujairah officials said they are counting on increased demand from India and China, and on diversification of its services, such as bunkering.

ANKARA, Turkey — Turkey's central bank cut a key interest rate for the seventh month in a row on Thursday as it tries to shore up an economy that has been shaken this year by a series of bombings and an attempted coup.

The bank said it had cut its overnight marginal funding rate to 8.25 per cent from 8.5 per cent. That is intended to help banks borrow more cheaply from day to day, which could help keep the financial system running smoothly at a time of heightened uncertainty.

The central bank said recent indicators for the first quarter pointed to a "deceleration" in economic activity and that current "financial conditions are tight".

"With the supportive measures and incentives provided recently, domestic demand is expected to recover starting from the final quarter," said the bank, which also kept its one-week rate at 7.5 per cent.

Turkey's economy has suffered this year in the face of a string of extremist attacks and uncertainty following the failed coup on July 15 that saw more than 270 people killed. Tourism, a key component of the economy as well as a substantial foreign-currency earner, has taken a hit.

Though the central bank noted that developments in tourism revenues will have "a negative impact" in the short run, it said the recent fall in the country's currency, the lira, will help improve the nation's current account. Demand from the European Union continues to support exports, it added.

Turkey needs foreign capital to help finance its sizeable current account deficit, which stood at around 4.5 per cent of the country's annual GDP in 2015.

The bank said one positive emerging from the moderation in economic growth is that underlying inflation is easing.

However, recent changes in fuel prices and other increases in costs will limit the drop in inflation. As a result, it said a "cautious monetary policy stance" was still required.

The fear for many is that Turkey is moving towards a more authoritarian model of governance — a trend that could further dent any hopes that the country has of joining the European Union.

DUBAI — After a 10-year planning process and numerous delays, the Hyundai Motor Company announced the establishment of its Genesis Motors luxury brand late last year. Widely anticipated in recent years, especially after the debut of the second generation Hyundai Genesis executive saloon with a distinct new emblem in 2014, the Genesis brand and its full-size flagship G90 luxury saloon finally launched in the Middle East earlier this month. Meanwhile, the Jordanian Genesis dealership is expected to launch in January next year.

At the recent regional launch event in Dubai, the head of Global Genesis and Hyundai senior vice president, Manfred Fitzgerald, discussed the Korean automotive giant’s move into the luxury market with The Jordan Times.

 Conceding that this is Hyundai’s “first serious attempt going into the luxury field on a global basis”, Fitzgerald stated that for “over 50 years this corporation has been very successful” and that “the Genesis brand is the next logical step for the Hyundai Motor group”. 

Taking a similar path to the luxury sector as Japanese brands back in 1989, Genesis is effectively to Hyundai what Infiniti is to Nissan or Lexus to Toyota. While reticent about naming perceived competitors, Fitzgerald says that it is “very obvious who we are benchmarking”, in what might be understood as a hint at the Audi, Mercedes-Benz and BMW German luxury car troika. Nevertheless, he underlines that “to compete on a global basis with incumbent competitors… means that in terms of product, you have to be at least on par with them”, adding that “we believe that we have all the ingredients… to be a true competitor”.

Among the latest high-flying auto executives headhunted by Hyundai, Fitzgerald comes to the Genesis brand after a 12-year stint at Lamborghini, where he served as director of brand and design. Fitzgerald says that the crux of this endeavour is “about creating emotions and that is what we will be focusing on at each and every touch point for our customers”. 

Adding that Genesis’ proposition is more about emotions than it is about technology, Fitzgerald points out that “the technology side is something that is only your entry ticket into this arena of the luxury segment”. As to how Genesis will find its feet in a tough playing field among firmly established players, Fitzgerald says that “this won’t come overnight” but that “a brand has to evolve”. He added: “We are more about showing than talking, so we want people and customers to experience our products.”

Asked whether the Genesis strategy is to convert existing luxury customers or to attract a new client base migrating to the luxury sector, Fitzgerald says that “there is no target customer in that sense”, but that “anybody who buys into our values, anybody who buys into our product and can relate to us as a brand and as a manufacturer” would be welcomed, underlining the brand’s “spirit of audacity”. However at time of publication, Genesis is playing its cards close to its chest, with no regional sales or market share projections or expectations being disclosed. Regional and Jordanian prices for the G90 have also not yet been released. 

Humble audacity

As to whether Genesis will bring a distinct Korean flavour to the luxury market, such an influence “won’t be about any kind of ostentatious expression, as the Koreans are very humble”, he said. “You will feel it in a very subtle way,” he added, and this “will be more by perception, than by speaking about it”. Meanwhile, Fitzgerald stressed the “great significance” of the Middle East region to Genesis’ plans, saying that the region “is known for being a luxury market. They value extraordinary things, and we believe that we have here… a playing field to expose what we’re all about”.

In addition to the G90 flagship, the existing Hyundai Genesis executive saloon, from which the luxury brand takes its name, is expected this year as a revised and rebranded Genesis G80. A further compact executive G70 saloon is in the pipeline for next year. And with two SUVs and a sports coupe expected by 2020, Fitzgerald states that it would be a major success if we, in three to five years time are considered as a true competitor in this luxury segment. “A further success for me would be if we could help establishing ‘made in Korea’ as a trademark for luxury,” he added.

DOHA — Qatar's budget should be back to "near balance" by 2018, as it overcomes the shock waves from a global fall in energy prices, economists at Qatar National Bank have forecast.

The QNB, in its "Qatar Economic Insight" report, predicts that rising oil prices and the introduction of a value-added tax will help Qatar recover from the deficits expected in 2016 and 2017.

"The government's budget balance is expected to register a deficit of 5.3 per cent of the GDP in 2016 and 2.2 per cent in 2017, before recovering to near balance in 2018," the report said.

"The government's revenue is expected to recover in 2017 with rising oil prices.”

"Furthermore, the introduction of a value-added tax (expected at 5 per cent rate) should boost the government's revenue in 2018 by about 1 per cent of the GDP."

This year Qatar faces its first budget deficit in 15 years — expected to total more than $12 billion — as the emirate copes with the oil price slump. 

Qatar, a major energy exporter, has 40 years' worth of oil reserves and 135 years' worth of gas at current extraction rates, the QNB said.

Despite belt-tightening in some sectors, spending on major infrastructure projects will continue as the country prepares to host the 2022 football World Cup, the bank added.

PARIS — The United States has begun unblocking deals by Western planemakers to renew Iran's ageing passenger fleet in a move likely to ease growing complaints from Tehran over the implementation of last year's historic sanctions deal.

Europe's Airbus said on Wednesday it had received US Treasury approval to begin exporting jetliners to Iran and its US rival Boeing said it looked forward to receiving similar licences "shortly".

The move signals the unfreezing of one of the most high-profile deals between Iran and foreign companies since last year's agreement between Tehran and world powers to open up trade in exchange for curbs on the country's nuclear activities.

But complex questions remain over the financing of deals between Iran and Western planemakers that could still obstruct deliveries of many of the planes, in what is seen as a test case for Western trade and investment following the nuclear deal.

Earlier this year, Airbus and its US rival Boeing each signed deals to supply over 100 jets to flag carrier IranAir to modernise and expand the country's elderly fleet, held together by smuggled or improvised parts after years of sanctions.

But nine months after the first deal was signed, Iranian officials have voiced growing concerns about what they see as slow progress in obtaining in the US licences needed for most modern aircraft because of their ample use of US parts.

An Iranian official told Reuters earlier this week that its deal for 118 Airbus jets was being trimmed by six units following the regulatory delays.

Airbus said on Wednesday it had been granted an initial licence to supply 17 A320 or A330 jets that are slated for early delivery, and that it expected a second licence covering the remaining aircraft within the next few weeks.

Aviation sources said the US Treasury was expected within "days" to begin unblocking Boeing's deal to sell or lease over 100 jets.

Iran has also ordered up to 40 Franco-Italian ATR turboprop planes that are awaiting Washington's green light. Iran has said it could start receiving a limited number of aircraft this year. Some airlines are also looking at buying secondhand planes to meet their most urgent needs.

Diplomats say new jets will allow Iranian President Hassan Rouhani to argue the sanctions deal is working, but the deals are opposed by US Republicans who say the jets could be misused and by conservatives in Iran who oppose the country's opening and say the purchases will not benefit most Iranians.

CAIRO — Egypt will send a delegation to Moscow next week hoping to resolve a dispute with Russia that began when Cairo refused a Russian wheat shipment found to contain fungus, an official said Tuesday.

Egypt, the world's biggest wheat importer, will send officials on Monday to thrash out a deal to end the stand-off, which saw Moscow respond by suspending imports of Egyptian citrus fruits.

Russia's health agency announced last week that it was introducing "temporary restrictions" to potentially "high risk" Egyptian produce.

Egyptian Commerce and Industry Minister Tarek Qabil said the delegation would comprise officials from his ministry and the agriculture ministry, as well as business representatives. 

"We want Russia to tell us what the problems are," Qabil said.

The dispute between the two key trading partners began in August when Egypt refused Russian wheat imports due to the presence of ergot, a common grain fungus.

"We will not take ergot in any case," an agriculture ministry spokesman underlined this week.

Egyptian citrus exports to Russia had grown since Moscow imposed an embargo on some Turkish fruit and vegetables last year, with the trade worth several million dollars annually.

FRANKFURT — German chemicals giant Bayer said Tuesday it had increased its earnings and profits forecasts after signing a deal to take over US seeds and pesticides maker Monsanto.

"We are optimistic for the medium-term development of Bayer and have set ourselves correspondingly ambitious targets," Chief Executive Werner Baumann said in a statement.

In the crop science division that will integrate Monsanto, Bayer said it would grow sales faster than the market and increase its profit margin to "more than 30 per cent" after 2020, three years after the merger is slated to be finalised.

Between them, Monsanto and Bayer's crops division brought in 23.1 billion euros ($25.8 billion) in sales in 2015.

Bayer justified the predictions with a "broad product palette and research and development pipeline" for the two companies, adding that the merged firms would bring new products to market faster.

The 58.8-billion-euro deal is the largest takeover in history for a German firm and would create a giant in the agribusiness sector.

But the tie-up still has to be voted through by Monsanto shareholders and pass regulators' scrutiny in both Europe and the US.

Environmental groups on both sides of the Atlantic have promised fierce opposition to the deal.

Baumann said the pharmaceuticals division, one of two other major business areas, looked forward to "particularly high growth in sales and margins".

The prescription medicines unit would target annual sales growth of 6 per cent on average until the end of 2018, the firm said, and boost margins to "between 32 and 34 per cent" compared with 2015's 30 per cent.

Bayer pointed to a stable of five new medications — now forecast to bring in 10 billion euros in annual sales, up from 7.5 billion — and a "highly promising" pipeline in the division to explain its optimism.

"By the end of 2023, we are planning to launch at least 20 new products in pharmaceuticals," Baumann said.

Meanwhile, the consumer health unit aims to increase sales and margins by focusing on its globally recognised brands, such as aspirin, and key markets, including the US, Russia, China and Brazil.

Bayer added that the group would "exhaust the potential for licensing previously prescription-only medications for self-medication" as well as developing new digital health offerings.

WOLFSBURG, Germany — Germany appeared set on Monday to back an ambitious trade accord between the European Union and Canada after the leader of the Social Democrats (SPD), junior partner in the ruling coalition, overcame left-wing resistance to the deal within his party.

The SPD decision paves the way for EU member states to approve the Comprehensive Economic Trade Agreement (CETA) next month before Brussels signs the accord with Ottawa on October 27.

Left-wing SPD members had argued that CETA would undermine workers’ rights and environmental standards, but party leader Sigmar Gabriel said it represented the EU’s best chance to shape globalisation in the interests of ordinary people.

“It’s a really good day for the SPD but especially for the implementation of rules for globalisation,” Gabriel told a news conference after two-thirds of delegates at an SPD congress backed a compromise deal over CETA.

“Until now globalisation only served economic interests. Now we are finally beginning to take the interests of people and citizens into consideration.”

Gabriel, who is also vice chancellor and economy minister in Chancellor Angela Merkel’s conservative-led coalition, has staked his political future on securing SPD backing for CETA.

Failure at Monday’s congress, held in the carmaking city of Wolfsburg in northern Germany, would have likely scuppered Gabriel’s chances of standing as the SPD candidate for chancellor in national elections due in October 2017.

This might have unleashed a damaging power struggle within the SPD at a time when it is badly trailing Merkel’s conservatives in opinion polls. The coalition’s popularity has also suffered following Merkel’s decision last year to open Germany’s borders to more than 1 million migrants.

AMMAN — IFC, a member of the World Bank Group,  committed over $1.3 billion in the Middle East and North Africa (MENA) last fiscal year, leveraging the power of the private sector to create jobs, improve local infrastructure and spur economic growth in countries from Morocco to Afghanistan.

During the fiscal year 2016, which ended in June, IFC worked on addressing the fundamental barriers to economic development in the region through a range of investments and advisory projects, according to an IFC statement.

The statement said the total amount included $331 million mobilised from other investors. The organisation also launched 20 new projects to advise both governments and private businesses on issues ranging from regulatory reform, to corporate governance and dispute resolution. 

“From a political and economic standpoint, it has been a challenging year for many countries in the region,” said Mouayed Makhlouf, IFC regional director for the MENA. “But MENA has tremendous long-term potential and by tapping into the creative force of the private sector, we can help create jobs, support infrastructure, and bring sustainable growth to the region.”

During the last fiscal year, IFC's work focused on promoting gender equality, supporting states affected by conflict, bolstering local infrastructure, especially power supplies, combating climate change, and expanding access to finance for smaller businesses, according to the statement.

Among other projects, IFC arranged a $375 million financing package for Iraqi power company Mass Global Energy Sulimaniya, helping to increase access to energy for 3 million people in the Kurdistan region of Iraq. IFC also provided $74 million in loans to Jordan's Fotowatio Renewable Ventures, helping the company build a 50-megawatt solar power plant north of Amman.

IFC worked to extend access to finance for micro, small and medium enterprises, the backbone of most regional economies. The organisation provided a $100 million loan to Egypt’s Arab African International Bank and $75 million to the National Bank of Kuwait-Egypt, helping the firms scale up their lending to small and medium enterprises.

IFC also invested $10 million in Afghanistan International Bank, helping it reach out to SME borrowers, and provided a loan to Lebanese micro-lender Al Majmoua, helping it to provide financing for entrepreneurs, including women, in the rural areas of the country.