Business

DOHA — Hundreds of drivers with ride-hailing service Uber in Qatar went on strike on Monday for the second time in a year to protest against fare cuts.

The US-based company, which started operations in Doha in 2014, has in recent months cut fares by 15-20 per cent for passengers amid growing competition from local firms.

Uber drivers in Doha stayed home on Monday to protest the cuts and an "upfront" service launched by Uber in November that allows passengers to view the total fare before their journey.

"The upfront isn't fair. If you get stuck in traffic or the passenger makes extra stops during the journey, we receive nothing for that," said John, an Ethiopian driver who declined to give his second name.

"If they don't raise fares and treat drivers better we have many other platforms we can go to. I have a family to support," he said.

Uber has tried to drive down taxi fares to win customers from local rivals in Qatar like Careem which has a larger market share than Uber in most of the 32 cities in the Middle East, North Africa and Pakistan region in which it operates.

An Uber spokesman in Dubai said the company was "committed to dialogue with partner drivers" and had made improving their experience a priority.

"We are very proud of the high quality service they offer to riders who want to get around Doha with a safe, efficient and affordable ride," said the spokesman in a statement.

Thousands of Ethiopians, Indians and Nepalis work as Uber drivers in wealthy Qatar where unions and labour protests are banned and authorities penalise dissent with jail terms or immediate deportation.

Some drivers say they have struggled since an oil slump in mid-2014 that has squeezed state finances and last year saw Doha raise the domestic price of gasoline by 30 per cent.

CAIRO — Egyptian chocolate spread maker Swifax has doubled its sales and is struggling to keep up with demand since the pound currency dived in November, forcing shoppers traditionally "obsessed with everything foreign", to ditch pricy imports and buy local.

"People started changing their habits," Swifax's Commercial Director Mohamed El Gammal told Reuters. "We could sell even more ... but we have a problem with our capacity."

The pound's flotation and an ensuing increase in tariffs on more than 300 products shipped from abroad have hit importers hard, but have been a boon for domestic manufacturers such as Swifax.

Once shunned in favour of prestigious foreign brands perceived to offer higher quality, Egyptian-made products are much more affordable for customers who are increasingly price conscious as inflation has shot above 28 per cent.

The bonanza began when Egypt abandoned its peg of 8.8 pounds to the dollar on November 3. Since then, the currency has roughly halved in value to around 17.75.

Sitting in his office next to a glass cabinet crammed with varieties of the sandwich-filler popular with sweet-toothed Egyptians, Gammal said sales have jumped from 2 million pounds ($112,700) a few months before the flotation to 4 million, as rival imported brands become unaffordable to many.

A 350-gramme jar of Swifax's high-end spread, Moltobella, costs 36 pounds, while its budget brand costs around 17 pounds. Its main imported competitor sells for about 70 pounds a jar.

Floating the pound helped Egypt to secure a $12 billion IMF loan in return for a reform programme that includes tax increases and electricity subsidy cuts, driving up inflation in a country where millions live a pay cheque from hunger.

Egypt also raised customs tariffs on many luxury goods to over 50 per cent, plugged customs loopholes and tightened quality controls in an effort to rein in a trade deficit the central bank blames for depressing the currency.

Importers criticised the increases, saying local producers do not have the capacity to fill the gap left by declining sales of foreign goods.

According to Emad Maher, manager of hypermarket chain Samy Salama, switching to local products has increased by 90 per cent, mainly because of the price difference.

"In some products, you can compare the local and imported and not find much difference [in quality]. But Egyptians are obsessed with everything foreign," he said.

At Covertina, another chocolate-maker, business is also booming. Chief Executive Mostafa Sayed Salam said production had risen 19 per cent in 2016 from the previous year. "After the flotation of the currency, it became hard for importers to sell the chocolate at the old prices," he said. "My market share has increased from 50 per cent to 65-70 per cent."

Narrowing the deficit

Multinationals are taking notice. Nestle, the packaged food giant, said in January it had signed a deal to acquire Caravan Marketing Company, an Egyptian instant coffee maker that had increased its domestic market share due to competitive pricing.

With Egypt long dependent on imports, the trend suggests the government's efforts to narrow a big trade deficit and boost domestic industries are starting to work.

Even before the float, imports had been falling due to shortages of foreign currency. Egypt had struggled to attract dollars and revive the economy after the 2011 overthrow of president Hosni Mubarak, with subsequent political turmoil driving away tourists and foreign investors.

Official trade figures for 2016 have yet to be released but a government official told Reuters earlier this month that the deficit had narrowed by 17.4 per cent compared to 2015. Imports fell to $62.93 billion from $70.28 billion, said the official, but higher exports also helped to shrink the gap. These rose to $20.26 billion in 2016 from $18.67 billion.

As the unofficial figures suggest, the weaker pound is also helping Egyptian exporters.

Hesham Zahra, chairman of Yasmine cosmetic company, said production had risen 25-35 per cent since the flotation boosted sales both at home and abroad. "Today our prices have become competitive in foreign markets, and we can compete with some countries in exports," he said, adding that Yasmine lotion retails for a quarter of the price of some imported brands.

Trade and Industry Minister Tarek Kabil told Reuters in October that Egypt had produced $4 billion worth of import substitutes since the start of 2016, and aimed to expand domestic industry by 8 per cent in three years.

Food industries were leading the way, he said, but local products were also compensating for a retreat in imported building materials, chemicals, leather and furniture.

"This is a golden opportunity for Egyptian producers," said Abu Bakr Emam, head of research at financial firm Prime Holding. "Local producers used to be unable to compete but now is the right time to go in to compete against imported goods due to the price advantage after the dollar rises."

Rising prices

Still, the pound's dive is a double-edged sword for local manufacturers who largely depend on imported raw materials.

At Swifax, Gammal said the cost of cocoa butter and hazelnut had more than doubled since the flotation. A tonne of hazelnut used to cost 90,000 pounds but now it costs 230,000.

This forced the company to dip into funds that had been earmarked for expansion. This will now take longer despite the more pressing need to raise capacity. "In the end we increased production without the expansion by tripling the shifts at our factories which adds a lot of strain on the machines," he said.

With Egypt aiming to raise economic growth under the IMF programme to 5.5 per cent by the 2018-19 fiscal year from 4.3 per cent in 2015-16, the government can ill-afford large numbers of firms to delay investment like Swifax.

But as prices rise, ever more families are looking to save money. "People right now don't care about the quality, it's all about the price," said once shopper in Cairo who called himself Abu Abdulla. "I walk around the supermarket and just look at the prices," he said as he pushed a trolley piled with seven family-size boxes of Egyptian-made biscuits.

Tapping into the trend, a Facebook group called "Made Proudly in Egypt" lists tried and tested local products, from foods to detergents and even pots and pans.

One of the more than half-a-million members of the group, writing under the name of Om Khaled, said the bargains sell fast. "I used to get [imported] nappies and baby food for my son and now I get local alternatives, but unfortunately the cheap Egyptian products are not always available. I have to look hard for them," she said. 

AMMAN — Jordan Phosphate Mines Company (JPMC) and the government of Bangladesh on Saturday signed a memorandum of understanding, under which JPMC will supply the south Asian country with 270,000 metric tonnes of phosphate and phosphoric acid.

At a total value estimated at $280 million, the company is to deliver these amounts over a period of three years.

The MoU was signed by JPMC Chief Executive Officer Shafiq Ashqar and Chairman of the Bangladesh Chemical Industries Corporation (BCIC) Mohammed Iqbal, in the presence of senior officials from the two countries.  according to a JPMC statement.

JPMC will provide BCIC with 150,000 metric tonnes of rock phosphate and 120,000 metric tonnes of phosphoric acid, used to produce fertilisers.

The company will also look into the possibility of exporting DAP fertiliser to Bangladesh. 

An agreement to be renewed on annual basis for three years, will be signed between the countries soon, to mark the start of the first shipment. 

In the first year, JPMC will export $80 million worth of the quantities agreed on while it will export the remaining $200 million worth of materials in the next two years.  

Speaking to the press, Ashqar said that the relationship between JPMC and BCIC extended for so many years where the company used to be the main supplier of phosphate to the Bangladeshi market.

Iqbal voiced confidence that the deal to import Jordanian phosphate and fertilisers will contribute to the development for his country's agricultural sector.

“It is our pleasure to announce exclusive contract with JPMC which will help to have a long relationship”.

Industry, Trade and Supply Minister Yarub Qudah, Bangladeshi Minister of Industry Mohammad Amir Hossain and JPMC Chairman Amer Majali attended the signing ceremony.

Also on Saturday, representatives of the Amman Chamber of Industry council met with the Bangladeshi minister and discussed means to boost economic cooperation between Jordan and Bangladesh furthermore, according to the Jordan News agency, Petra.

AMMAN — A forum to strengthen economic partnership between Jordan and Spain opened this week, according to a statement received by The Jordan Times on Thursday. 

Representatives of public and private sectors from both countries are participating in the forum in a bid to strengthen joint business relations. 

On the sidelines of the forum, the Amman Chamber of Commerce and Amman Chamber of Industry signed a cooperation agreement with the Madrid Chamber of Commerce and Industry to foster economic coordination and cooperation, the statement said. 

The Jordanian delegation to the forum includes Amman Chamber of Commerce President Issa Murad, Amman Chamber of Industry President Ziad Homsi, Jordan Europe Business Association President Jamal Fariz, EDAMA Association for Energy, Water and Environment’s Board of Directors President Dureid Mahasneh, Secretary General of the Jordan Investment Commission Mikhled Omari, and representatives of several commercial and industrial companies.

In his inauguration speech, Jordan’s Ambassador to Spain Ghassan Majali stressed the strong Jordanian-Spanish relations, expressing hope that it will lead to further commercial and technology cooperation. 

“We gather here today to discuss ways that enable us to increase the partnership between the two countries in investment fields,” he said addressing the forum. 

He said the investment volume and trade between the two countries was below the desirable level, calling for holding “direct” meetings to understand the needs of investors and to highlight the opportunities available to boost joint investment projects.

The forum provided a platform for the attendees to discuss investment, trade and industrial issues, besides related legislation. 

NEW YORK/LONDON/DUBAI — Boutique investment bank Moelis & Co has been chosen as an adviser by Saudi Aramco on what is expected to be the world's biggest initial public share offering, sources familiar with the matter told Reuters.

The IPO, which Saudi officials expect to value the oil producer at a minimum of $2 trillion, is the centrepiece of a Saudi Arabian government plan to transform the economy by attracting foreign investment and diversifying away from oil.

Moelis will be the internal independent adviser, a key position in which it will provide counsel on selection of underwriters, how much to pay them and where the shares should be listed, said the sources, who spoke on Tuesday and Wednesday. The persons spoke only on condition of anonymity because the process is confidential.

Moelis' appointment is a big win for the New York bank, dwarfing previous IPO advisory mandates that include luggage maker Samsonite International SA on its $1.3 billion IPO in 2011 and last year's flotation of Extraction Oil & Gas Inc., which valued the company at $3.23 billion.

Moelis, founded by veteran US dealmaker Ken Moelis in 2007, itself went public less than three years ago.

Moelis shares rose as much as 7 per cent on Wednesday and were still up 2.6 per cent at $35.90 in late morning.

The major selling point of boutique banks is that their lack of sales and trading divisions allows them to offer unconflicted advice to corporate clients.

Moelis' win comes after the bank bulked up its energy business and presence in the Middle East. It opened offices both in Houston and the United Arab Emirates in 2011. The Houston unit, which hired three people last year, now has six managing directors and one senior adviser.

In the UAE, advisory positions include Dubai ports operator DP World Ltd. on its $3.5 billion acquisition of Economic Zones World FZE and the Government of Dubai on the $24.9 billion restructuring of state-owned conglomerate Dubai World.

Senior dealmakers at the bank, whichjavascript:void(0); has offices around the world, have worked for years to win a role with Saudi Aramco, one of the sources said.

Saudi Aramco is expected to decide by early next week on the appointment of international and local banks for preparatory work, the people said.

Representatives of Moelis and Saudi Aramco declined to comment on Wednesday.

Local and major international banks including Morgan Stanley, HSBC Holdings Plc. and Citigroup Inc. were among those asked to pitch for an advisory position with Aramco three weeks ago, Saudi-based industry sources said last month.

Wall Street bank JPMorgan and independent boutique bank Michael Klein had already been picked to advise the country ahead of any listing.

Generally, government work is poorly paid all over the world, but banks often vie for the contracts simply to build a relationship with the state in the hope of winning future business.

The listing of Aramco is slated for 2018, so the appointment of banks to run the share sale as lead managers and book runners is still some way off, the sources said.

Saudi Energy Minister Khalid Al Falih said last week the company was evaluating concurrent listings on more than one exchange.

LONDON — BP returned to profit in 2016 as cost-cutting and lower charges linked to the Gulf of Mexico oil spill offset weaker crude prices, the British energy giant announced on Tuesday.

Profit after tax stood at $115 million (108 million euros) compared with a net loss of $6.5 billion in 2015, BP said in an earnings statement.

BP took another huge charge linked to its role in the 2010 Gulf of Mexico oil spill — but at $4 billion which was lower than in 2015.

The latest charge brought the overall cost to BP to around $63 billion, or $44 billion after tax.

"We have delivered solid results in tough conditions and are well prepared for any volatility in oil pricing," BP Chief Executive Bob Dudley said in the statement. 

"We have adapted by cutting our controllable cash costs by $7 billion from 2014, a full year earlier than planned.

"Continued tight discipline on costs remains essential. Everything we have done during the year has made us a more resilient and competitive company," he added.

In 2015, BP posted the company's biggest loss in at least 20 years, ravaged by Gulf of Mexico spill costs and tumbling oil prices — which caused the group to axe jobs and cut investments.

In 2010, a deadly explosion on a BP-leased drilling rig, the Deepwater Horizon, unleashed the worst environmental disaster in US history.

"With our Deepwater Horizon financial liabilities now substantially behind us, BP is fully focused on the future," Dudley added on Tuesday after a year in which BP was hit hard also by weak oil prices despite a market recovery in the fourth quarter.

BP noted that average Brent North Sea crude prices stood at $44 a barrel in 2016, the lowest for 12 years.

Crude prices have however rebounded sharply in recent months, with Brent back above $55 thanks to a deal by OPEC and non-cartel members to limit output.

Prior to the recovery, crude markets slumped over a period of around two years on a global supply glut, hitting 13-year lows under $30 a barrel at the start of 2016.

AMMAN — A delegation comprising Jordanian businessmen and industrialists will leave for Spain on Wednesday to highlight investment opportunities available in the Kingdom. The delegation will also work to boost Jordanian exports to European markets, the Jordan News Agency, Petra, reported on Tuesday. 

The delegates include Amman Chamber of Commerce President Issa Murad, Amman Chamber of Industry President Ziad Homsi, Jordan Europe Business Association president Jamal Fariz, EDAMA Association for Energy, Water and Environment's President of the board of directors Dureid Mahasneh, Secretary General of the Jordan Investment Commission Mikhled Omari, and representatives of several commercial and industrial companies. 

BEIJING — Executives of two Chinese companies included on a new US sanctions list targeting Iran said on Sunday they had only exported "normal" goods to the Middle Eastern country and did not consider they had done anything wrong.

The sanctions on 25 individuals and entities imposed on Friday were the opening salvo by President Donald Trump who has vowed a more aggressive policy against Tehran and came two days after the administration had put Iran “on notice” following a ballistic missile test.

Those affected under the sanctions cannot access the US financial system or deal with US companies and are subject to secondary sanctions, meaning foreign companies and individuals are prohibited from dealing with them or risk being blacklisted by the United States.

The list includes two Chinese companies and three Chinese people, only one of whom the US Treasury Department explicitly said was a Chinese citizen, a person called Qin Xianhua.

Richard Yue, who is on the list, told Reuters he was also Chinese and that he thought the decision was unfair. His bank account had been frozen, meaning he could not work, he said.

"I export to lots of countries, and Iran is a customer too. That's totally normal," Yue said.

"How is this fair? Why should others pay attention to what Americans say? What's wrong with my daily use goods?"

Yue added he did not know what he would do, or whether he would try and seek help from the Chinese government.

He did not elaborate on what products his company, Cosailing Business Trading Co. Ltd., based in the northern port city of Qingdao and also on the sanctions list, exported to Iran.

The company's website shows it is involved in trading everything from furnaces to treadmills and false eyelashes. Yue is listed on the site as Cosailing's sales manager.

The other Chinese company on the list is Ningbo New Century Import and Export Co., based in the eastern port city of Ningbo, which business-to-business websites show advertises exports and imports of fire hydrants and inner tubes for motorcycle tyres.

An export manager at Ningbo New Century who gave his family name as Tang told Reuters they made "normal" exports to Iran, though he would not say of what.

"There's nothing we can do. Let them put us on the sanctions list," Tang added, declining further comment.

Reuters was not able to locate contacts for the two other Chinese people on the list.

China's foreign ministry has not commented on the new sanctions.

The official Xinhua news agency, in a commentary on Sunday, said while the new sanctions would have a limited effect on Iran, they opened a new chapter in the stand-off between Washington and Tehran.

"Now Trump has taken office, uncertainly in the US-Iran relationship has risen, and this may become a ticking time bomb for peace and stability in the Middle East," Xinhua said.

China has in the past been angered by what it calls unilateral sanctions placed on Chinese firms by the United States and others in relation to Iran or North Korea's nuclear ambitions.

China has close economic and diplomatic ties with Tehran, but was also instrumental in pushing through a landmark 2015 deal to curb Iran's nuclear programme.

AMMAN — The Jordan Investor Confidence Index continued to recover in November 2016, reaching 91.75 points in comparison with 89.45 points in October. 

The monthly-issued index, published by the Jordan Strategy Forum, measures the confidence of investors operating in the Jordanian market, according to a statement of the forum.

The index measures confidence in the Jordanian currency and monetary system, the real economy, and the Amman Stock Exchange (ASE).

According to the forum, confidence in the monetary system sub-index decreased to 87.90 points for November. 

Despite an increase in the Central Bank of Jordan’s gross foreign reserves, the monetary system sub-index remained below its expected point for this month, reaching its lowest since the beginning of the year.   

However; confidence in the real economy sub-index reached its highest since the beginning of 2016 with 109.61 points, an increase of 1.95 points from October. 

The number of registered companies went down to 670 companies in November from 828 in the previous month. However, the capital of these registered companies increased to reach JD8.7 million compared to JD7.8 million in October.

Furthermore, the number of construction permits rose significantly in November to 3,442 from 2,904 — the highest number reached this year.

This was coupled with an increase in the tax on the monthly real estate volume to reach JD10.6 million from JD10.2 million in October. 

The manufacturing quantity production index, however, decreased to reach 96.5 points from 101.9 in October.

Moreover, the confidence in the ASE continued to recover from the decrease it witnessed in September to reach 94.23 points, according to the forum. The ratio of inflow to outflow of foreign investment in the ASE remained at a high level despite the slight decrease it had witnessed from 156 per cent to 151 per cent.

The ASE index went up by 63.4 points to 2170.98 in November.

NEW DELHI — Apple is to start making iPhones in India this year, a local government official said Friday, as the company seeks to tap into a booming middle class while sales in China are slowing down.

Karnataka's IT minister said Apple had agreed to assemble its hugely popular phones in the southern state, whose capital Bangalore is India's technology hub.

Apple, which has not commented on the minister's statement, remains a relatively small player in India, where sales of its smartphones lag those of rival Samsung.

But Chief Executive Tim Cook said this week it would "invest significantly" in the country of 1.25 billion people.

"We have an understanding with Apple and we expect them to start manufacturing in Karnataka by the end of April," State Minister of Information Technology and Biotechnology Priyank Kharge told AFP.

He said the new operation would likely assemble iPhones for the domestic market.

Apple has only a 2 per cent share of the Indian market, well behind rival Samsung on 23 per cent, according to research firm Canalys.

By pricing itself exclusively at the luxury end, Apple has distinguished its brand from Samsung which has both low-cost and high-end phones. 

Last year Apple had 48 per cent of the premium sector in which phones sell for $450 and above.

It applied to open Apple Stores in India last year, but was reportedly rebuffed because of a diktat that states foreign retailers must source 30 per cent of their products locally. 

New Delhi has since relaxed the rules, giving companies up to eight years to meet the sourcing requirements, as part of a push to attract foreign investment and create jobs.

It is not clear whether the Karnataka plans would help it clear that hurdle but experts said manufacturing locally would reduce the company's costs and enable it to lower prices.

"They're eager to be here because they've identified India as a strategic focus market," said Jaideep Mehta of research firm IDC.

"They had a fantastic 2016 in India and shipped more, 2 million devices to India, and now they're looking to ultimately manufacture here as that gives them more flexibility to respond to market changes."

Apple currently sells through third-party retailers in India, which accounts for only around 1 per cent of global iPhone sales.

Experts say India's giant population and low number of smartphone owners relative to its size mean it is a huge potential market.

Last year Cook visited India on a charm offensive and was pictured using Prime Minister Narendra Modi's gold iPhone to launch the premier's new app. 

Analysts said that if confirmed the move would be a coup for India's government, which has been trying to persuade foreign companies to manufacture in the country.

Reports in Indian media said Wistron Corp., a Taiwanese electronics manufacturer, was lined up to assemble iPhones at a plant on the outskirts of tech hub Bangalore.

Apple outsources all its manufacturing globally.