Business

AMMAN — The Jordan Phosphate Mines Company (JPMC) will increase its production and exports in the coming months, JPMC  Chief Executive Officer Shafiq Ashqar told representatives of cement and phosphate transporting companies during a meeting. He said JPMC plans to increase exports to consuming markets and allied companies in Indonesia. Ashqar noted that these plans would benefit JPMC and the transport companies. Participants at the meeting discussed obstacles facing the sector and the importance of land transport in sustaining the phosphate industry.

AMMAN – Jordanians topped the list of Arab investors in Dubai’s property market during the first half of this year, according to official data from the Gulf emirate. 

Figures released by Dubai Land Department (DLD) on Saturday showed that Jordanian investors registered 640 transactions valued at 1.347 billion United Arab Emirates dirhams –– around JD260 million or $366 million –– during the January-June period of 2014. 

The report  revealed that a total of 20 foreign and Arab nationalities invested 37.5 billion dirhams (JD7.2 billion, $10.2 billion) in Dubai properties during the first six months.

Jordanian investors were followed by Lebanese who purchased 459 properties valued at 1.2 billion dirhams (JD238 million). Egyptians came third on the list followed by Iraqis. 

According to DLD’s report, Indians were the top investors as they spent over JD2 billion on 4,417 properties by the end of June of this year.

Britons came second on the table of foreign investors with 2,258 transactions worth JD1.1 billion, followed by investors from Pakistan, Iran and Canada. 

DLD Director General Sultan Butti Bin Mejren expects demand on properties in Dubai to grow even further in the near future as there would be some major real estate projects.    

“We are extremely proud of these positive results, as they reflect a building momentum in Dubai’s real estate market which has now re-asserted itself on both the regional and global stage. We are certain that the future will see even more demand, especially in light of the government’s declaration of forthcoming major projects,” he was quoted as saying on the Facebook page of the DLD. 

WASHINGTON — Following an unprecedented series of spin-offs by major US media companies, the print news industry now faces a rocky future without financial support from deep-pocketed parent firms.

The wave of corporate breakups comes with newspapers and magazines struggling in a transition to digital news, and shareholders of media conglomerates increasingly intolerant of the lagging print segment.

Gannett, publisher of USA Today and dozens of other newspapers, became the latest to unveil its plan, splitting its print and broadcast operations into two separate units in a move to "sharpen" the focus of each.

This follows the recently completed spin-off by Tribune Co. of its newspaper group, which includes the Los Angeles Times and Chicago Tribune, and Time Warner's separation of its magazine publishing group Time Inc.

Two other newspaper groups, EW Scripps and Journal Communications, announced last month they would merge and then spin off their combined newspaper operations while creating a separate entity focused on broadcasting and digital media.

The trend arguably took hold last year with Rupert Murdoch's split of his empire into separate firms focused on media-entertainment and publishing — 21st Century Fox and the newly structured News Corp.

'Cast out of house' 

The wave of spin-offs "certainly plays into the perception that these are children being cast out of the house by their parents", said Mark Jurkowitz, associate director of the Pew Research Centre's Journalism Project.

Newspapers were snapped up by media groups in an era when print was hugely profitable, but other segments of the media conglomerates are now driving profits, such as local television.

"The market doesn't think much of the newspaper industry's future," Jurkowitz added.

Industry consultant Alan Mutter argues that publicly traded newspaper firms still produce an average profit margin of 16 per cent, higher than that of Walmart and Amazon.

But Mutter said on his blog that profits and newsroom staffing have taken a huge hit in recent years, and that newspapers have failed to do enough in the digital arena.

"Rather than reliably 'owning' their audiences as they once did in print, the internal metrics at every newspaper show an increasing dependence on the likes of Google, Facebook and Twitter to generate the traffic that is the lifeblood of any media enterprise," he indicated.

According to Dan Kennedy, a journalism professor at Northeastern University, newspapers are recovering from the negative impact of earlier corporate tie-ups.

"It's really corporate debt and the expectations of Wall Street that have done as much to damage the newspapers business as Craigslist," Kennedy said. "Newspaper margins are still pretty good. And when you have newspapers owned by private companies without debt, some of them are doing pretty well."

Some analysts say that the breakup of big media firms may force publishers to create ways to connect with readers online.

"The real problem with newspaper industry has not been with the dead tree part, it is the failure to monetise the digital eyeballs," Jurkowitz indicated. "Unless there is an increase in digital revenue streams it's hard to imaging them getting out of the situation they are in."

The industry is closely watching the efforts of newspapers like The New York Times, which is experimenting with new digital access plans, and The Washington Post, which under new owner Jeff Bezos has boosted online readership to record highs.

'Not the death phase' 

Kennedy said that while newspapers may be profitable and an important part of the community, they may not be able to meet Wall Street's expectations for growth.

"It's not a growing business," Kennedy remarked.

Private owners can still keep the business in the black, said Kennedy, citing the record of Boston Globe's new owner, sports magnate John Henry.

But he added that newspapers need to make considerable investments "to make a smart transition to digital" in the coming years.

Peter Copeland, a former Scripps Howard News Service editor and general manager who now is a media consultant, noted that the breakups are logical and generally positive for newspapers.

"It's better for the newspapers and TV to be separate," Copeland said. "They were never a match. They are very different businesses".

Now, he added, the owners "will be able to focus 100 per cent on the newspapers".

According to Copeland, newspapers may end up severing their corporate ties and going back to their roots of local and private ownership.

"Newspapers always had difficulty" being part of corporate empires, Copeland indicated. "I think newspapers are entering another phase. It's not the death phase, it's just another phase in the life cycle."

SAO PAULO — Russia's embargo on US and European Union (EU) food products has opened a window of opportunity for Latin America, which could capitalise on the Ukraine crisis to become a major food supplier to Moscow.

Furious over the sanctions Western countries have imposed on Russia over its support for Ukraine's separatist rebels, the Kremlin announced on August 7 it was placing a "full embargo" on most food imports from the United States and EU.

That could enable major Latin American food producers like Brazil, Argentina, Chile and Mexico to get a foothold in the Russian market, analysts told AFP.

But challenges abound, including long shipping distances, production costs, the difficulty of scaling up production to meet massive Russian demand, and the political tensions such exports could create with Western allies.

"This could motivate Latin American companies to turn towards the Russian market. It would be with considerable caution though, because of the political situation," said Mexican academic Jesus Valdes Diaz de Villegas of Iberoamericana University's business department.

Such a move would have to come from private firms, "without any kind of statement of support for Russia on the part of the government", he added.

Russian President Vladimir Putin reached out to Latin America last month on a six-day tour that included a stop in Brazil, the region's largest food producer.

Moscow then sealed import deals with two dozen Brazilian poultry companies and five pork producers, just days before announcing its Western import embargo.

Russian health regulators have since granted new import permits to 87 meat producers and two dairies in Brazil.

"From the commercial point of view, it's an opportunity for Brazil. From the political point of view, it's a problem Brazil will have to deal with," Jose Augusto de Castro, the director of the Brazilian Foreign Trade Association, told AFP.

The South American country's bilateral trade with Russia totalled $3 billion in the first six months of the year, $563 million of it in beef.

Castro estimated the country's additional exports to Russia this year could add up to an extra $300 million to $500 million over previous years.

'Strictly business' 

Other Latin American countries are smelling similar opportunities.

Russia is currently just the sixth-largest market for Chilean food exports, but businesses there have been in talks with Russian officials to increase exports of fruits and fish.

"The Russians have asked us to help them find suppliers," said Diego Vicente, the manager of the National Agriculture Society's Russia-focused Business Development Platform.

The Russian embargo is an "opportunity" for Chile, said the director of the country's International Economic Relations office, Andres Rebolledo, insisting it was "strictly a business matter".

Russian officials have also been in contact with Argentine farmers.

"We've gotten a lot of requests from Russia, mainly in citrus, dairy and meats," said Matias Garcia of the Argentine-Russian Chamber of Commerce and Industry.

"Consultations have increased, because the major Russian distributor has to replace the products it used to import from countries like Germany, Italy or Holland. There's unprecedented potential," he added.

But he noted that insufficient production capacity and finding mutually attractive prices could pose obstacles.

For Mexico, which currently sends just one per cent of its exports to Russia, the situation provides an opportunity to diversify its partners and reduce its food industry's dependence on the US.

Currently, Mexico runs a trade deficit with Russia, but the embargo could change that, said Antonio Gazol Sanchez of the National Autonomous University of Mexico's school of economics.

"Now an opportunity has opened to balance our trade with Russia if we take advantage of the gap the European Union is leaving," he added.

AMMAN — Jordan Emirates Insurance Company's (JEIC) general assembly decided last week to increase the company's capital by JD5 million to become JD10 million. The decision, taken upon a recommendation from JEIC's board, is part of the company's future plans to enhance its performance.

AMMAN — In response to brutal Israeli attacks on Gaza, Jordan Chamber of Commerce (JCC) President Nael Kabariti called on Jordanian traders and importers to boycott Israeli goods and ports. These remarks were made at a meeting between JCC board of directors and a delegation representing the Palestinian union of commercial, industrial and agricultural chambers. The meeting aimed to discuss mechanisms to support Gazans and rehabilitate what was destroyed. Kabariti stressed the importance of conducting a study on destroyed commercial projects and factories in Gaza to find suitable funds through Arab and Islamic chambers of commerce to contribute to their restoration. He also underscored the establishment of the Palestinian products exhibition in the Kingdom, stressing that JCC will be the sponsor and donor for this exhibition. He said JCC and the Palestinian union will contact the Jordanian and Palestinian governments to hasten the establishment of the joint free zone to expand commercial exchange and economic relations between the two countries. A joint committee was formed to make a work mechanism to execute the plans agreed on in the meeting. 

AMMAN — Cumulative debts owed to Jordan Petroleum Refinery Company (JPRC) reached JD1.07 billion. 

JPRC Chief Executive Officer Abdel Karim Alawin told Energy Minister Mohammad Hamed that National Electric Power company (NEPCO) and Royal Jordanian were the main debtors among other institutions which have not paid anything for more than one year.

Alawin was giving a presentation to Hamed who on Saturday visited the company to check on its operations and future projects. 

JPRC’s chief warned that unless the government formulates a reformed subsidy structure for gas and petroleum derivatives, and rectifies the issue of debt accumulation, the operations of the refinery will be greatly hampered. 

Alawin indicated JPRC refines 14,000 barrels of light Arab oil daily, noting that the maintenance, replacing reactors and developing work systems are continuing in line with building new reservoirs for liquefied gas with a capacity of 8,000 tonnes, for petrol with capacity of 40,000 cubic metres and plane fuel with a 20,000-litre capacity. 

He said JPRC entirely stopped using lead in petrol in 2007, before the oil derivatives market liberalisation, and started installing a unit to extract sulfur from diesel at a cost of 16 million euros, scheduled to operate in the fourth quarter of 2014.

He added that Jordan’s imports of crude oil and its derivatives during the first half of this year increased to 3.8 million tonnes compared with 3 million tonnes during the same period in 2013.  

The Kingdom’s consumption of diesel increased by 34.1 per cent, reaching 1.7 million tonnes compared with 1.2 million tonnes during the same comparison period, around 54.4 per cent of which were consumed by NEPCO. 

JPRC’s data, Alawin said, showed that fuel oil consumption increased by 9.7 per cent, rising from 823,000 tonnes to 903,000 tonnes during the same period, mostly for generating electricity purposes at about 86.5 per cent of the total amount.

Costs of oil imports cost rose by 21.8 per cent reaching JD2.3 billion compared with JD1.9 billion during the same period.  

Regarding the expansion, he said there are three alternatives: The first entails adding some facilities to the refinery to produce a lead-free petrol in a way other than the current one and improving the quality of diesel at a cost of $400 million.

The second alternative is a limited expansion to the current refinery to improve the quality of the products and transforming heavy fuel at an expected cost of $900 - $1,100 million.

According to Alawin, the third alternative is a comprehensive expansion to increase production, develop the quantity and transform heavy fuel at an investment of $2 billion to meet the full needs of the Kingdom’s oil.

Hamed said the stop of supplies of the Egyptian gas largely contributed to increasing the oil bill in addition to the halt of the Iraqi oil since the end of 2013.

ROME — The conflict in Gaza has caused serious damage to crops, herds and fishing as well as greenhouses and irrigation systems, bringing food production to a halt and sending prices sharply higher, the United Nations food body said on Thursday.

The Rome-based Food and Agriculture Organisation (FAO) said in a statement that virtually the entire local population of about 1.8 million was dependent on food aid and significant long term help would be needed for local farms to recover.

Ciro Fiorillo, head of FAO's office in the West Bank and Gaza Strip, said specialists had been able to make a series of field visits to the coastal Palestinian enclave to prepare a detailed assessment of the damage during the latest ceasefire.

He said bomb damage, water and electricity shortages and financial problems, as well as the uncertainty about a possible resumption of military activities had caused major problems.

"Under the most recent ceasefire, many farmers and herders are now able to access their lands, however resumption of food production faces serious obstacles", he added.

Food prices have shot up for many items since the start of hostilities, with egg prices up 40 per cent, potatoes up 42 per cent and tomatoes up as much as 179 per cent.

FAO indicated that there had been substantial direct damage to the 17,000 hectares of croplands in Gaza and the area had lost around half its population of poultry either through direct hits on shelters or by lack of feed or water.

Around 64,000 sheep and goats needed feed and water, while the fishing sector had lost 234.6 tonnes of potential catch in from July 9-August 10, around 9.3 per cent of the annual catch.

According to FAO, some 19,000 people in Gaza rely on farming for their livelihoods, with a further 6,000 living from livestock raising and another 3,600 dependent on fishing.

It said it could begin distributing fodder to sheep and goats as well as 4,000 water tanks as soon as a permanent ceasefire was established.

AMMAN — Despite higher earnings from sales, data published by Jordan Phosphate Mines Company (JPMC) showed a JD6.7 million loss during the first six months of this year.

Midyear financial results revealed that JPMC’s sales reached JD328 million, a 13.8 per cent increase over the JD288 million recorded during the January-June period of 2013.

According to the company, sales of crude phosphate went up by 21 per cent and fertiliser exports surged by 61 per cent. But the rise was  shattered by low prices on the international market. 

Data showed that JPMC enjoyed a rise in cash flow from operational activities as the amount reached JD26.3 million during the first half of 2014, compared to JD3 million during the same period of 2013.

Operational profit shot up by 41 per cent, reaching JD10.6 million, compared to JD7.5 million, and the company's assets also rose by 4.4 per cent to JD1.16 billion at the end of June compared to JD1.11 at the end of last year.

Although  profit before tax and provisions amounted to JD8 million at the end of June 2014, down from JD10.3 million at the end of June 2013, the company ended the first half of this year in the red.  

JPMC noted that JD13 million allocated as “incentives for employees” besides taxes, the gross profit turns into a JD6.7 million loss.    

JMPC's Chairman Amer Majali attributed the lower profitability, despite the increase in output and sales during the first six months of the year, to the decline in prices on the international market and higher expenditure  linked to the rise in labour agreements' costs. 

He listed work-stoppages and strikes as well as the increase in costs of production inputs such as raw materials, electricity and water prices and mining fees as other negative factors  

However, Majali underlined that all indicators, including the production and sales, continue to improve as planned. 

He noted that the company is currently embarking on plans to reduce production costs, while increasing operational efficiency to generate more profit during the second half of the year. 

According to JPMC Chief Executive officer Shafiq Ashqar, strikes held for almost three weeks in the second quarter of the year have negatively affected the company's financial situation for the first half of 2014.

Experts estimated the losses as a result of the strike at around $45 million, said Ashqar, who noted that this amount would have increased the company's profits by no less than $12 million.  

AMMAN — Emirates announced in a press statement on Wednesday that the airline has been operating a third daily flight between Dubai and Amman since the beginning of this month.

It said in the statement that since Emirates started flying to Amman in 1986, the airline transported 3.44 million passengers.