Business

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. 

TUNIS — Tunisia's parliament approved on Saturday a long delayed law to attract foreign investment, which fell sharply after the uprising in 2011, in a key reform demanded by international lenders.

Initially expected for approval in 2012, the law was held back by party political conflicts and the change of governments during Tunisia's often turbulent transition to democracy after the ouster of Zine El Abidine Ben Ali.

The new law gives foreign investors more flexibility to transfer funds, including profits, out of the country, and removes tax on profits of major projects for 10 years.

It also establishes a fund for investment which will help finance infrastructure projects and funding to spur investors to launch big projects in marginalised areas of the country.

Foreign direct investment has been slow since the January 2011 revolt against Tunisia's leader Ben Ali, which marked the start of a period of upheaval, including political and social unrest and attacks by Islamist militants.

Tunisia's foreign investment fell from 3.5 billion Tunisian dinars ($1.58 billion) in 2010 to 2 billion dinars ($904 million) in 2015.

The investment law creates a high Investment Authority which will be the only party authorised to deal with foreign investors and facilitate the administrative procedures in an effort to get rid of the bureaucracy which faced projects in the past.

The North African state will host an international conference in November, offering incentives to draw in new investors to projects in Tunisia.

The investment law is just one of a raft of reforms and public spending adjustments the International Monetary Fund and the World Bank are demanding Tunisia carry out to help overhaul its subsidy-heavy economy and create growth and jobs.

AMMAN — A Jordanian delegation representing the trade and industry sectors and the Greater Amman Municipality has recently held talks in Germany focusing on boosting bilateral commercial relations.

The Jordanian delegation, headed by Amman Chamber of Commerce (ACC) President Issa Murad, held bilateral talks at the chambers of industry and trade in Berlin and Hanover, and also at the Arab-German Chamber of Commerce and Industry, according to an ACC statement. 

Meetings on economic cooperation were also held with the Arab-German parliamentary relations committee of the German parliament and with the Euro-Mediterranean-Arab Association. 

During the meetings, the Jordanian delegates briefed their German counterparts on the economic opportunities and the investment incentives that Jordan offers to investors. 

Murad said Germany is one of Jordan’s “top strategic partners", especially in the fields of trade, agriculture, education, renewable energy and tourism. 

In 2015, the Kingdom's exports to the European country stood at JD7 million, compared to JD668 million of imports from Germany, the statement said, adding that exports consist of foodstuff, chemicals, minerals, agricultural products and different machines and equipment in particular. 

WASHINGTON — Middle East economies have plunged into decline in the years of war since the Arab Spring, creating daunting economic and development challenges, according to an International Monetary Fund (IMF) report released Friday.

Nose-diving growth, soaring fiscal imbalances and decimated labour markets across the region call for newly concerted efforts from donor countries and coordination among humanitarian aid groups and development bodies, said the report, released ahead of a United Nations summit on the refugee crisis.

IMF Managing Director Christine Lagarde said that, while the world's attention had been drawn to the humanitarian impact of wars, economic disasters were also unfolding.

"Much of the productive capital in conflict zones has been destroyed, personal wealth and income losses are enormous, and human capital deteriorates with the lack of jobs and education," she wrote in a blog post accompanying the report.

The UN General Assembly on Monday is due to hold a high-level summit to coordinate international responses to the refugee and migration crisis.

The IMF report followed Thursday's release of World Bank research which said the burden of large numbers of refugees and displaced persons was largely borne on the shoulders of poor countries, a fact that likewise called for coordination between humanitarian and development aid policies.

"To varying degrees, these countries face large numbers of refugees, weak confidence and security and declining social cohesion that undermines the quality of institutions and their ability to undertake much-needed economic reforms," the IMF report said.

In a sobering analysis, it laid out the economic costs of war for countries both plagued by conflict or bordering countries that are. 

After four years of civil war, Syria's GDP has fallen by more than half. 

Yemen's economy contracted by 25-35 per cent last year alone.

Libya saw economic activity fall by 24 per cent in 2014.

War damage to Syria's physical capital amounts to $137.8 billion, or 230 per cent of pre-war GDP, the report said, and, with 470,000 killed, 6.6 million displaced and 5 million having fled, the country has lost about 50 per cent of its population.

The strains on governance, state revenues and state institutions such as central banks are profound: preliminary data indicate that Yemen, for example, missed its 2015 revenue targets by as much as 60 per cent. 

The policy temptations for governments in such situations can also be harmful: pressed by dwindling revenues, states can be tempted to control exchange rates, and bias rules and taxation in favour of friends and against foes.

The IMF report said that war-struck countries can also struggle with high inflation even as government spending collapses.

Meanwhile, public services deteriorate, with even neighbouring countries heavily impacted.

Lebanon, for example, has enrolled half the Syrian refugee population's children in its schools, swelling classroom sizes and reducing the quality of education.

All of this called for change, the report said: more humanitarian aid but also a joining of forces between relief work and development assistance. In the near-term, funding has not kept pace with needs as UN agencies have had cut services to the refugee populations in Jordan. 

But preventing poverty from rising in host countries is a pressing need, according to the report, and this requires investing in public infrastructure to create economic opportunities for the populations of the region.

If and when peace comes, reconstruction will require "sizable financing" largely surpassing damaged and indebted countries' ability to collect revenues.

BENGHAZI, Libya — Forces loyal to eastern Libyan commander Khalifa Haftar on Sunday seized at least two key oil ports from a rival force loyal to the UN-backed government, risking a new conflict over the OPEC nation’s resources.

Ahmed Al Masmari, a spokesman for Haftar’s self-styled Libyan National Army (LNA), said LNA fighters seized control of Es Sider, Ras Lanuf and Brega, but still faced resistance at the port of Zueitina and around the nearby town of Ajdabiya.

The attacks on Libya’s major oil ports by Haftar, who opposes the UN-backed Government of National Accord (GNA), pushes the North African state towards a broader battle over its oil resources and disrupts attempts to restart production.

Armed conflict, political disputes and militant attacks have reduced Libya’s oil production to about 200,000 barrels per day (bpd) from 1.6 million bpd it was producing before an uprising and fall of Muammar Qadhafi in 2011.

Haftar, a former army general who has been a divisive figure in Libya since Qadhafi was toppled, has resisted attempts to integrate him into a unified armed forces and overcome divisions between the east and west regions.

Many in western Libya and Tripoli criticise Haftar as a former Qadhafi ally bent on establishing a military dictatorship, but he has become a political figurehead for many in the east who feel abandoned by the capital.

The state-run National Oil Corporation confirmed Ras Lanuf and Es Sider were under full control of Haftar forces while Zueitina was still held by loyalist forces.

Export questions

The attacks complicate Western attempts to bring together Libya’s rival armed factions under the GNA and stabilise a country where chaos allowed militants and migrant smugglers to operate across swathes of territory.

Control by Haftar’s brigades will also raise questions for the market about the legality of crude exports by a force opposed to the internationally recognised government in Tripoli.

A government and parliament based in the east still resist the GNA’s authority in Tripoli and they have in the past threatened to try to sell crude themselves.

The ports targeted by the LNA were previously under the control of the Petrol Facilities Guard (PFG), which struck a deal with the GNA in July to end its blockade of Ras Lanuf, Es Sider and Zueitina.

A port engineer confirmed that Haftar’s forces had entered Ras Lanuf and Es Sider, Libya’s largest, and said a tank at Es Sider had been set alight in the clashes. The NOC said the blaze was in a small fuel tank for power generation.

The LNA’s claims of control could not immediately be verified and Ali Al Hassi, a PFG spokesman, said fighting was continuing at Ras Lanuf.

In recent weeks, as the PFG struck its deal with the GNA to try to restart exports, the LNA mobilised in the area leading to fears of a struggle for control.

Libya’s National Oil Corporation has been removing oil stored at Zueitina because of fears it could be lost during any clashes.

Ras Lanuf and Es Sider were badly damaged earlier this year in attacks by the Daesh terror group militants based in Sirte, where they are currently on the verge of defeat by forces aligned with the GNA backed by US air strikes. 

AMMAN — A Korean trade delegation, from Jeonbuk city, met last week with representatives of Jordanian companies and discussed ways to boost business cooperation, in the presence of Korean Ambassador to Jordan Lee Bom-yon.

The visiting delegation included representatives of 10 companies specialised in manufacturing and exporting various industrial and medical equipment.

The visit was organised by Korea Business Centre in Amman (KOTRA), the commercial office of the embassy of the Republic of Korea.

The meetings are aimed at building business partnerships and creating deals to strengthen economic and investment relations between the two countries, a KOTRA statement said.

The delegation’s visit to Jordan coincided with the recent launch of the “Jordan-Korea Business Council”. 

AMMAN — Kazakh officials agreed to the establishment of a factory for Hikma Pharmaceuticals in the central Asian country with a starting capital of $150 million, Deputy Prime Minister for Economic Affairs and Minister of Industry, Trade and Supply Jawad Anani said on Saturday.

In a statement following the Jordanian-Kazakh Joint Committee’s fourth meeting that concluded in Astana on Thursday, Anani said this is an important step for Jordanian pharmaceuticals to penetrate the Kazakh market and other neighbouring markets, the Jordan News Agency, Petra, reported.

Both sides also agreed to examine the possibility of establishing an air shipping company to increase the commercial exchange volume, and the possibility to export to nearby markets.

At the meetings, Anani said Jordan attaches great importance to economic and trade cooperation with Kazakhstan and he urged the private sector in Amman and Astana to benefit from the “distinguished bilateral ties” between them. 

ALGIERS — Algeria’s energy minister says there is a consensus among OPEC and non-OPEC members about the need to stabilise the oil market to support prices, state news agency APS reported.

Noureddine Bouterfa was speaking after meeting his Saudi counterpart Khalid Al Falih and OPEC Secretary-General Mohammed Barkindo in Paris late on Friday.

Bouterfa has travelled to Qatar, Iran and Russia this week to push for stabilising the oil price between $50 and $60, and said he was “confident” about the outcome of an OPEC meeting, scheduled to be held in Algiers on September 26.

Bouterfa said Algeria would submit a proposal to steady prices at the meeting. “Our discussions with our partners show that there is a consensus around the necessity of stabilising the market. That is already something positive,” Bouterfa said.

“We are in contact with the members and the secretary-general of OPEC and that is part of this work of achieving a consensus and I am optimistic.”

“There is support from Saudi Arabia, Qatar, Iran, Venezuela, Kuwait and from non-OPEC countries, notably Russia.”

Algeria is hosting a meeting of the International Energy Forum alongside the OPEC meeting later this month, and Bouterfa said he had discussed both sessions with Falih and Barkindo in Paris.

Algeria is among the oil producers to have taken a heavy hit from the halving of oil prices over the past two years.

Moves towards clinching a global deal on stabilising crude output come five months after talks for such a deal failed when Saudi Arabia insisted Iran join the pact.

Tehran says it supports any measures to stabilise the market, but it has stopped short of indicating whether it would join a global deal before its production reaches 4 million barrels per day, the level at which it says it was pumping before the imposition of Western sanctions in 2012.