Business

AMMAN — Representatives of Korean companies from Yongin held business to business (B2B) meetings on Wednesday to promote their products in Jordan, in the presence of Korean Ambassador to Jordan Choi Hong-ghi.

At the meetings, organised by the Korea Trade- Investment Promotion Agency (KOTRA), Korean businessmen, specialised in manufacturing power saving and medical equipment, said they hoped to find agents for their products.    

“Our role is to get small and medium-size companies, in particular, to get acquainted with the market”, Min-Ho Lee, KOTRA deputy director said. 

“We want to find an agent for the peristaltic pump which is a medical product. So far, we have established some contacts”, Hyeok Jin Park, chief executive officer of EMS Tech told the Jordan Times.

Some Jordanian businessmen expressed interest in the products, but were reserved that some of the technologies are brand new.

Myeong-Il Kye, general manager of a Korean company that manufactures a power-saving multi-tap, said: “This is relatively a brand new technology but we are here because the Jordanian market also represents a gateway to other markets.”

In 2013, Korea’s exports to Jordan totalled $1.317 billion while its imports from the Kingdom stood at $67 million, mainly phosphate, fertilizers and copper scrap, according to KOTRA’s deputy director. 

“In order to solve the issue of the trade gap, we would like to help Jordan  build a manufacturing base. More manufacturing companies should be set up”, he said, highlighting KOTRA’s cooperation and contacts with government officials to increase bilateral cooperation.   

Korean investments
in Jordan

“We want Korean businessmen to come and invest in Jordan. The investment volume is much below the desired level. Korean businessmen are mainly engaged in some water, research and development and energy-related projects in Jordan. But more incentives are needed to further encourage Korean investors to come and launch new projects in the Kingdom,” Akram Al Basha, KOTRA executive manager told the Jordan Times.

AMMAN — Jordan Phosphate Mines Company (JPMC) Chairman Amer Majali announced Wednesday that several deals were signed  to export about 2.5 million tonnes of phosphate to India.

The company signed agreements with the Indian Farmers Fertiliser Cooperative Limited and other Indian companies, Majali said in a statement e-mailed to The Jordan Times Wednesday.

The company will start exporting phosphate to India as of June this year for a period of one year, he added in the statement.

"The agreements were signed at best current international prices of  phosphate in international markets," Majali noted.

He expects production to reach 8.5 million tonnes this year stressing  that the marketing plan is going as scheduled, and that the company will continue to enhance its position in traditional markets as well as opening and penetrating new markets.

Majali indicated that JPMC will soon sign an agreement with an East Asian country to export 500,000 tonnes of phosphate. Details are to be revealed later.

Under strategic plans for expansion, JPMC will establish $1.5 billion worth of joint Arab and foreign ventures.

In a statement released recently, Majali said the projects are intended to gradually raise the production of phosphate by 50 per cent until 2018, of which 30 per cent will be raised by the end of this year. 

According to Majali, this year will witness a “positive” change that will be reflected on JPMC’s financial statement based on an expansion plan that will create 5,000 jobs.

AMMAN — Jordanian companies that produce skin care goods, especially Dead Sea products, will exhibit merchandise in ten booths at the Jordanian pavilion of Beautyworld Middle East Fair 2014, slated to be held from May 27-29 in Dubai. The companies’ participation in this trade fair is organised by the Jordan Enterprise Development Corporation.

AMMAN — Jordan Phosphate Mines Company (JPMC) Chairman Amer Majali briefed an Indonesian parliamentary delegation on Tuesday about the strategic partnerships between JPMC and the Indonesian government. Noting that Jordan has been exporting phosphate to Indonesia for more than 35 years now, Majali pointed to  a partnership that will materialise in July when the first Jordanian-Indonesian joint plant opens. He said other accords were signed for a second joint factory during the visit of His Majesty King Abdullah to Indonesia last February, expressing hope that a deal can be reached soon to set up a third plant in Indonesia.  The head of the delegation said the Indonesian parliament will be willing to support new joint ventures between the two countries. The Indonesian delegates mentioned that their country requires large quantities of fertilisers each year and that the government provides farmers with around $17 billion in annual subsidies.

AMMAN — Planning and International Cooperation Minister Ibrahim Saif, Jordan’s governor at the European Bank for Reconstruction and Development (EBRD), recently participated in the 23rd annual meeting of EBRD governors which was held in Warsaw. In an address titled “Changing Economies towards Changing Life”, Saif expressed Jordan’s appreciation for EBRD’s efforts in enabling southern and eastern Mediterranean countries, including the Kingdom, to get financial and technical assistance. EBRD’s support includes developing small- medium-and micro-sized enterprises, infrastructure, energy and water. On the sidelines of the meeting, Saif held a meeting with EBRD President Suma Chakrabarti and other senior officials. Chakrabarti said he would visit the Kingdom in September, noting that EBRD is currently developing a strategy to help Jordan.

AMMAN — Aqaba Container Terminal (ACT) announced in a press statement on Tuesday a tariff adjustment effective June 15, 2014. 

“The adjustment is a result of consumer price index changes and increased utility costs,” the company said in the statement noting that the ACT has kept its tariffs unchanged over the last four years.

According to the statement, rapidly rising costs for utilities and services necessitate the adjustment.

“The cost of petrol has increased by more than 45 per cent and the cost of electricity has increased by more than 100 per cent since the last tariff adjustment of 2010,” the company indicated.

It pointed out that, overall, the cost increases represent more than 25 per cent of ACT’s operating cost which is no longer sustainable.

“ACT has, with due consideration to the shipping lines, changed the storage calculation for export containers to stop upon container loading onto the vessel in lieu of vessel departure and ,with due consideration to the local trading community, kept storage free-time at 7 days, as well as keeping storage tariffs from 7-14 days unchanged,” the company explained.

While the storage fees for the first 14 days remain unchanged, “ACT is inviting all stakeholders to continue working together on the imperative requirement for Jordan to keep increasing the efficiencies of its supply chain through faster clearance and evacuation of the import full containers from the terminal”.

ACT said in the press statement that it will continue to increase its engagement by investing in the container terminal as well as further increasing the productivity through already defined efficiency programmes. 

“Since the successful partnership between APM Terminals and Aqaba Development Corporation was established in 2006, ACT has through its shareholders invested $284 million including expansion programmes nearly doubling the berth capacity to 1 kilometre of quayside, as well as investing in state of the art ship-to-shore cranes and yard equipment,” it added.

“Furthermore, ACT has over the same period increased its productivity by more than 20 per cent in order to stay the most efficient transportation hub for the Levant region,” the company continued.

ACT is a joint venture between the Aqaba Development Corporation and APM Terminals — operating via a 25-year build-operate-transfer agreement signed in 2006.

The terminal constitutes the logistical and economic backbone of the Aqaba Special Economic Zone Authority, serving as the preferred gateway to the region for many active markets around the world.

AMMAN — The Jordan Chamber of Commerce (JCC) will promote investment opportunities available in the Kingdom to the European business community at the beginning of next month, on the sidelines of the 17th Arab German Business Forum that will be held in Berlin. On Monday, JCC President Nael Kabariti said the chamber will work to draw more investments to the Kingdom, especially in the fields of therapeutic tourism, renewable energy, healthcare, pharmaceutical industry, information technology and communications. The JCC will market Jordan over three days, targeting European businessmen, on the sidelines of the forum.  Jordan is participating in the forum which will be attended by more than 600 experts and decision makers, who are specialised in different areas of business, politics and science. 

AMMAN — Prime Minister Abdullah Ensour on Monday directed the Jordan Industrial Estate Corporation (JIEC) to speed up work on studies and designs for new industrial estates in the governorates in order to arrive at the tendering process as quickly as possible. At a meeting, attended by JIEC’s  Director General Loai Suhweil and other concerned officials, the premier also called for speeding up work on the initial stages in order to ready the estates for receiving early  investments. After a briefing about JIEC’s plans to set up industrial estates in the governorates, Ensour stressed that the government will provide all necessary facilities as well as incentives for investment projects at industrial estates, especially in the governorates of Salt, Mafraq, Madaba, Zarqa, Tafileh, Jerash and Ajloun, in accordance with the Royal directives. The premier highlighted the importance of investments in the governorates for bringing about sustainable development, providing work opportunities for young Jordanians and ensure technology transfer. Suhweil spoke about obstacles and measures that are deemed necessary to facilitate the corporation’s plans.

LONDON/ANKARA — Payment problems are disrupting commercial food cargoes to Iran, with hundreds of thousands of tonnes of grain and sugar stuck in transit, as Western banking sanctions complicate deals and trade financiers scale back exposure.

Iran is not barred from buying food or other "humanitarian" goods under sanctions imposed over Tehran's pursuit of nuclear technology, but measures by the European Union (EU) and the United States have made trade more difficult over the past two years.

Several international trade sources, with knowledge of deals that have been affected, told Reuters that ships carrying cargoes of grain, including wheat and soybeans, as well as raw sugar, have been stuck for several weeks outside Iranian cargo ports such as Bandar Imam Khomeini and Bandar Abbas.

With evidence of people starting to stockpile food and prices rising following cuts in government subsidies, Iranian officials acknowledged to Reuters that there are import problems, notably due to reluctance among international banks.

One European trade source said: "There are problems getting paid on deals and Iran looks to be struggling on the trade finance side. It comes down to the banking complexities, which have held up cargoes for a number of suppliers."

Several trade sources point to growing difficulties opening letters of credit, vital to ensuring smooth delivery of goods.

"Western banks are unwilling to get involved," a second European trade source said. "As soon as the banks see the word 'Iran' in the paperwork, you get it rejected."

Banks ‘afraid’

Bankers and government officials said Western lenders are steering clear of attempts by Iran to get them involved in financing humanitarian transactions, fearing they could be penalised under US sanctions.

"We still cannot open letters of credit," said one Iranian government official, who spoke on condition of anonymity.

"International banks are concerned about — or let's say afraid of — doing business with Iran," the official added. "And we don't know what the solution will be. Dozens of ships are waiting at the ports and we just can't do anything."

Reuters ship tracking data shows that five panamax-sized vessels, each capable of carrying 60,000 to 70,000 tonnes of grain, reached Iran in early April from ports in Europe, Australia and South America. The vessels were still located around Bandar Imam Khomeini and Bandar Abbas on May 9, several weeks after they should have been able to discharge a cargo.

Reuters was unable to reach owners of the five vessels, which all sailed from international wheat terminals, including Australia's Kwinana and Rostock and Hamburg in Germany.

"Having a panamax at port for that long would suggest to me there has been a payment issue," said a Sydney commodities trader. "There have been some issues with Iran in the past."

The five cargoes would represent nearly 2 per cent of Iran's estimated annual wheat consumption of around 17 million tonnes.

Ships waiting

Ship tracking data indicated that other vessels may also have been disrupted in recent months. Four panamax-sized vessels left Australia for Iran at the end of January.

After arriving in Iranian waters in mid- to late February, the vessels were stuck mainly around Bandar Imam Khomeini until they departed in April. A spokesman at agribusiness group Cargill's Australia office said three panamaxes it had been involved with had been delayed due to port congestion in Iran.

A separate panamax vessel originating in Ukraine was also stuck in Iran for weeks until April. A further three smaller vessels, including one carrying raw sugar, were also held up for weeks, ship tracking data showed.

A European trade source noted that at least one or two cargoes had been re-routed to other buyers. 

"The shipments in question were stuck in Iran for a long time and clocked up a big loss," the source said. "They were subsequently traded to other buyers."

A second Iranian government official said ships were waiting with perishable goods. 

"A few have had to return to the country that we purchased goods from,” he indicated "Various factors are involved — like Iran not facilitating the delivery and also the banking problems."

A spokeswoman for US agribusiness company Archer Daniels Midland, which has supplied Iran, said many international banks would not participate in transactions with Iran "for fear of being sanctioned or fined".

"Another hindrance is Iran's foreign currency controls," she added. "Ships arriving in Iran with grain must frequently wait weeks for the Central Bank of Iran to approve the release of funds to pay for the cargo."

According to banking and trade finance sources, several Iranian banks were cut off from the global electronic cross-border payment system SWIFT, which was adding to further financing problems.

A banking source said: "We should not rule out further bureaucratic delays in Iran to manage their limited availability of hard currency until sanctions are properly eased."

BERLIN — German industry is ramping up efforts to dissuade Chancellor Angela Merkel from imposing tough new economic sanctions on Russia over Ukraine, warning of lasting damage to domestic firms and the broader economy if Moscow is hit hard.

Although German companies have toned down their public criticism of sanctions since the chief executive officer (CEO) of Siemens was vilified in the press for meeting Russian President Vladimir Putin in late March, a behind-the-scenes lobby effort remains in full force.

A confidential paper from the German-Russian chamber of foreign trade, which was sent to the government this month, shows the extent of the concern in German business circles as a May 25th presidential election in Ukraine nears.

Merkel has said she will press for more punitive measures against Russia if the election is disrupted.

The two-page position paper, dated May 7, says the Ukraine crisis is already having a "massive impact" on German business in Russia and warns of dire consequences if Europe follows through on threats of economic sanctions.

"Deeper economic sanctions would lead to a situation where contracts would increasingly be given to domestic firms, projects would be suspended or delayed by the Russian side, and Russian industry and politicians would turn to Asia, in particular China," the paper points out.

The resulting loss of market share for German and European firms would be "long-term and sustainable", causing "irreparable damage" to Germany's competitive position, according to the paper, provided to Reuters by an official in Berlin.

Moreover, sanctions would lead to job losses in Germany and  expose companies to "massive compensation" claims if they were forced to break contracts with their Russian counterparts, it says.

The chamber represents over 800 companies, providing support to German firms operating in Russia and Russian companies present in Germany. Rainer Seele, the chief executive of Wintershall, the oil and gas unit of German chemicals company BASF, serves as president of the group.

Close ties

Germany has close economic ties to Russia. Over 6,000 German firms are active there. And Germany receives roughly a third of its oil and gas from Russia.

Recent data showed German exports to Russia — its 11th biggest trading partner — slumping 16 per cent in the first two months of the year. That was before the European Union unveiled a first round of mild sanctions in the form of visa bans and asset freezes against Russians individuals, many close to Putin.

The economic risks have not prevented Merkel from warning repeatedly that she is ready to introduce deeper-cutting trade sanctions, a stance that has opened her up to criticism from former German chancellors Gerhard Schroeder and Helmut Schmidt, Social Democrats (SPD) who reject confrontation with Russia.

German industry, on the other hand, has gone quiet since Siemens CEO Joe Kaeser met with Putin and referred to the Ukraine crisis as "short-term turbulence" which would not get in the way of his firm's ties with Russia. Last week, Kaeser said he regretted his choice of words.

Out of public view however, lobbyists for German industry continue to warn loudly against steps that might lead to a full-blown economic confrontation with Russia in the hope that Merkel could waver.

The "Ost Ausschuss", or Committee on Eastern European Economic Relations, has been at the forefront of these efforts.

Its message to German politicians has been that a confrontation with Russia would hit not only Germany, but southern European countries that are just starting to recover from the euro crisis. The suggestion is that Europe itself would be plunged back into deep economic and social turmoil.

In a sign that German industry remains determined to keep Russia close, the CEOs of big utility E.ON and retailer Metro, as well as Klaus Mangold, the chairman of tourism group TUI — and former head of the Ost Ausschuss — are all planning to attend an economic conference in St. Petersburg this week that will be hosted by Putin.

US executives have pulled out of the conference after the White House made clear that their participation would be frowned upon. Like their German counterparts, several French CEOs will also attend.

"Especially during a time of crisis like this, an international business dialogue is of great importance," Eckhard Cordes, current head of the Ost Ausschuss, told Reuters in an interview last week.

One of the biggest concerns among German businesses is that US firms will end up being the big beneficiaries of an economic confrontation between the West and Russia.

"We shouldn't forget that the debate about Russia is also about economic competition between the United States and Europe," said Heino Wiese, a former SPD politician with close ties to Schroeder who runs a consulting firm in Berlin that advises German and Russian firms.

Wiese, who admits to being a "Russia sympathiser" and has a photo of himself shaking hands with Putin prominently displayed in his office, pointed to news last week that US Vice President Joe Biden's son is joining the board of a Ukrainian gas company as evidence the US is already seeking to gain from the crisis.

"At the end of the day, the US wants to be the one that sells gas to Europe," he said.