Business

AMMAN — Jordan Petroleum Refinery Company will be distributing JD11.25 million in cash dividends to shareholders at  a rate of 18 per cent following their endorsement during a general assembly meeting.

Shareholders will also get bonus shares at a rate of 20 per cent as the company capitalises JD12.5 million of retained earnings raising capital to JD75 million. The general assembly also approved allocating JD3.9 million to mandatory reserve. 

AMMAN — Concern over army setbacks against insurgents in recent weeks drove black market rates for the Syrian pound to a record low against the dollar on Wednesday, dealers and bankers said.

Three dealers speaking by phone from Damascus said it cost as much as 315 to 310 Syrian pounds to buy one dollar on the street. The currency hovered even higher in other parts of the country, trading at 324-328 pounds to the dollar, compared with 220 pounds to the dollar at the start of the year.

"People are trying to get as many dollars as they can get their hands on," said one exchange dealer.

From fresh produce vendors to manufacturers, from importers to taxi drivers, the crisis has brought the dollar into wider circulation as people try to protect themselves against currency depreciation and inflation.

The previous record low was in July 2013 when it hit 310 pounds over concerns about possible US military action. This compared to around 47 pounds at the start of the 2011 uprising against President Bashar Assad.

Insurgents have captured strategic territory in the south of the country and in the northwestern Idlib province, where they have edged closer to the government-held Latakia province, one of the most important areas for Assad and the Alawite community.

As anti-government fighters gain more ground, Syrians are less hopeful the economy will improve, dealers and two bankers said, adding people were increasingly hoarding dollars.

"People have been shocked by the recent rapid events on the battlefield and the psychological impact has made people turn to the dollar as a safe haven," indicated one Damascus-based banker who requested anonymity.

The fall has followed a period of relative stability after the United States and allied forces started air strikes in Syria against Daesh militants last year.

The currency was also buoyed by a government crackdown on speculators accused of profiteering by hoarding dollars and blamed for wild currency fluctuations.

Despite widespread devastation caused by the conflict and Western sanctions imposed on Syria, the currency has so far avoided a complete freefall, bankers say, citing large infusions of aid from the country's main regional ally Iran.

Iran is believed to have deposited hundreds of millions of dollars into the country's now depleted reserves that stood at $17 billion before the crisis.

The Syrian government has clamped down on currency exchanges in an effort to close the gap between the official and black market rate with some success. But the effect is wearing off now, according to a banker in a foreign-based bank that is based in Damascus.

Central Bank Governor Adeeb Mayaleh, who has long blamed the pound's fall in the black market on speculators, has recently vowed to take action to support the currency.

"The central bank hopes in the coming phase to support the stability of the exchange rate by taking a series of economic and monetary measures to support exports and production to reduce pressure on the pound in the short term," Mayaleh said.

"This will allow the central bank to intervene more effectively in the exchange market and satisfy the market needs," he added in recent statement to state news agency SANA.

But dealers and bankers contacted in Damascus and in Aleppo said central bank actions, including injecting $100 million into the market, had not been able to prevent the slide.

They also say commercial banks are not making available the quantities of dollars at the fixed price of 260 pounds to the dollar set by the central bank to calm markets.

The dollar's rise has boosted inflation which is at 120 per cent according to official data but probably is much higher, economists say.

AMMAN — Jordan and Pakistan signed on Wednesday four memoranda of understanding in the fields of investment, commerce, maritime, and standards and metrology during the joint ministerial committee meetings. 

Industry, Trade and Supply Minister Maha Ali and Pakistani Commerce Minister Khurram Dastgir Khan signed the memoranda. 

Ali described the meetings as an opportunity to open new channels of cooperation indicating that the signing of the memoranda would consolidate relations between the two countries.

The minister noted that the volume of trade was below expectations and below potential as it does not exceed $100 million annually.  

Khan said Pakistan is interested in improving economic cooperation with the Kingdom, especially exchanging expertise in order to encourage the private sector to set up joint projects.

Both sides were in agreement over the need to exchange expertise regarding the development of small and medium-size enterprises  

The two sides agreed to organise more visits by economic and commercial  delegations and to hold business events and seminars. 

Jordan urged Pakistan to import more Jordanian potash and phosphate.

According to Jordan Chamber of Commerce President Nael Kabariti,  a Jordanian delegation will visit Pakistan next month in order to hold the Jordanian-Pakistani joint business council meeting and put the council's memorandum of understanding into force.

Kabariti called for signing the Jordanian-Pakistani free trade agreement. The two sides highlighted the importance of having specialised exhibitions to showcase their products, like stone and marble, clothes, animal skins, food products, olive and olive oil, medicine, and other products. 

Ali said she will take care of any problems or obstacles facing the trade between the two countries.

AMMAN – Jordanian and Turkish economists have agreed to work together to push forward bilateral cooperation ties and increase the trade balance.

In a meeting on Tuesday, Amman Chamber of Commerce First Deputy President Ghassan Kherfan noted that the trade exchange between Jordan and Turkey is still below the desired level, standing at only $718.5 million in 2014, calling for increasing Turkey's investments in Jordan, especially in vital sectors.

A total of 20 Turkish businesspeople are investing in Jordan with a total capital of JD1.4 million. 

LONDON — Spending cuts are hurting public and social services that give women the chance to find paid work, independence and a chance at equality, a UN report warned on Monday.

The United Nations' organisation for gender equality, UN Women, said in a major study that millions of women around the world are still consigned to low-paid, poor quality jobs.

Across the world, the report reveals that women are paid 24 per cent less than men, and this gender pay gap widens for women with children.

"From Wall Street to the sugar cane fields, the gender norms that work against women are strong," said Phumzile Mlambo-Ngcuka, executive director of UN Women.

One major problem is that women still carry the burden of work in the home, whether it is caring for children or older people or walking miles each day to fetch water.

"Where there are no public services, the deficit is borne by women and girls," said Mlambo-Ngcuka, executive director of UN Women, at the report's launch in London.

The report noted how the extension of childcare, maternity and paternity leave helped women into employment, which in turn gave them and their families a chance at a better life.

Laws regulating domestic work and outlawing gender discrimination and the minimum wage also helped reduce poverty and bring down the barriers to equality, it said.

But in European countries, austerity measures are threatening public services, warned co-author Laura Turquet.

"The austerity measures are a women's rights issue in terms of cuts in public services, and those in particular impact on women because they tend to be over-represented in public sector jobs as well," she said. 

Rather than suggest that such public services were unaffordable, she added that government should view them as capital investments akin to infrastructure.

Noting that women are currently providing many care services without any financial compensation, she said: "It's about redistributing who pays for it and who carries that burden."

The report also finds that women are more likely to work in undervalued occupations — 83 per cent of domestic workers are women, and almost half of them are not entitled to a minimum wage.

The report comes 20 years after landmark conference on women's rights in Beijing.

SINGAPORE/TOKYO — One by one, Japan is turning off the lights at the giant oil-fired power plants that propelled it to the ranks of the world's  top industrialised nations. With nuclear power in the doldrums after the Fukushima disaster, it's solar energy that is becoming the alternative.

Solar power is set to become profitable in Japan as early as this quarter, according to the Japan Renewable Energy Foundation (JREF), freeing it from the need for government subsidies and making it the last of the Group of  Seven (G-7) economies where the technology has become economically viable.

 Japan is now one of the world's four largest markets for solar panels and a large number of power plants are coming onstream, including two giant arrays over water in Kato City and a $1.1 billion solar farm being built on a salt field in Okayama, both west of Osaka.

"Solar has come of age in Japan and from now on will be replacing imported imported uranium and fossil fuels," said Tomas K?berger, executive board chairman of JREF.

"In trying to protect their fossil fuel and nuclear [plants], Japan's electric power companies can only delay developments here," he added, referring to the 10 regional monopolies that have dominated electricity production since the 1950s.

Japan is retiring nearly 2.4 gigawatts (GW) of expensive and polluting oil-fired energy plants by March next year and switching to alternative fuels. 

Japan's 43 nuclear reactors have been closed in the wake of the 2011 meltdown at the Fukushima  power plant after an earthquake and a tsunami — since then, renewable energy capacity has tripled to 25GW, with solar accounting for more than 80 per cent of that.

Once Japan reaches cost-revenue parity in solar energy, it will mean the technology is commercially viable in all G-7 countries and 14 of the Group of 20 (G-20) economies, according to data from governments, industry and consumer groups.

A crash in the prices of photovoltaic panels and improved technology that harnesses more power from the sun has placed solar on the cusp of a global boom, analysts say, who compare its rise to shale oil.

"Just as shale extraction reconfigured oil and gas, no other technology is closer to transforming power markets than distributed and utility scale solar," said consultancy Wood Mackenzie, which has a focus on the oil and gas industry.

Oil major Exxon Mobil says that "solar capacity is expected to grow by more than 20 times from 2010 to 2040".

Investors are also re-discovering solar, with the global solar index up 40 per cent this year, lifting it out of a slump following the 2008/2009 financial crisis, far outperforming struggling commodities such as iron ore, natural gas, copper or coal.

Cheaper panels 

By starting mass-production of solar panels, China is the driving force in bringing down solar manufacturing costs by 80 per cent in the last decade, according to Germany's Fraunhofer Institute.

In Japan, residential solar power production costs have more than halved since 2010 to under 30 yen ($0.25) per kilowatt-hour (kWh), making it comparable to average household electricity prices.

Wood Mackenzie expects solar costs to fall more as "efficiencies are nowhere near their theoretical maximums".

Solar is already well-entrenched in Europe and North America, but it is the expected boom in Asia that is lifting it out from its niche.

China's new anti-pollution policies are making the big difference. Because of these policies, Beijing is seeking alternatives for coal, which makes up almost two-thirds of its energy consumption.

China's 2014 solar capacity was 26.52 GW, less than 2 per cent of its total capacity of 1,360 GW.

But the government wants to add 17.8 GW of solar power this year and added 5 GW in the first quarter alone, with plans to to boost capacity to 100 GW by 2020.

Coal-dominated India, with its plentiful sunlight, could also take to solar in a big way.

Despite this boom, fossil-fuelled power is far from dead.

"Additional generating capacity, such as natural gas-fired plants, must be made available to back up wind and solar during the times when the sun is not shining and the wind is not blowing," Exxon says.

AQABA — The Baddad Company for Aviation on Saturday received the first plane at its maintenance centre in Al Hussein International Airport in Aqaba to undergo maintenance, Fatin Baddad, chairman and chief executive officer of Baddad Holding, said Sunday.

Baddad, who has recently announced the launch of the first phase of the centre's operations, added that tens of planes are expected to arrive at the centre for maintenance in the future. The centre, among the biggest private centres in the Middle East, was established on a  65,032 square metres plot of land inside the airport. The Baddad Holding has other aviation projects, including a logistics centre specialised in private aviation, a centre for tourist helicopter aviation and a centre for spare parts for different kinds of planes.

AMMAN — A concerted drive is under way in Jordan to reinvigorate the important tourism sector that has been curtailed by regional instability.

The total number of visitors in 2014 dipped 1.2 per cent year-on-year, reaching 5.3 million, as the number of tourists arriving on daytrips slipped 7.4 per cent year-on-year to 1.3 million, according to data provided by the Jordan Tourism Board (JTB). The number of overnight visitors fared slightly better in the year, rising 1.1 per cent to reach nearly 4 million, but according to the latest data, the tally for January and February is down 8.3 per cent year-on-year.

Despite the drop in overall numbers, tourism receipts remained stable throughout 2014, totalling JD3.1 billion ($4.37 billion), according to Central Bank of Jordan data, up 6.3 per cent on the previous year, thanks in part to a rise in tourists from the Gulf region.

Jordanian expatriates accounted for the largest number of all visitors in 2014, making up just under a third of all overnight stays in 2014, marking an increase of 10.8 per cent year-on-year. Overnight arrivals from Gulf countries, which made up 17.3 per cent of the total number of visitors, rose 3.1 per cent. However, visitors from other Arab countries, which represented the largest group of visitors in 2013, slipped 7.6 per cent to make up 27.6 per cent of total overnight arrivals in 2014.

Regional challenges

The various regional conflicts, and most notably the rise of the so-called Daesh in neighbouring Syria and Iraq, is largely responsible for visitors staying away, even though internally Jordan remains stable.

Industry players believe that other regional events are also causing problems. 

“A lot of winter bookings were cancelled in the wake of the Gaza conflict and since then the issue of Daesh…has become more and more prominent,” said Peter Hoesli, general manager of the Mövenpick Resort Dead Sea in Sweimeh, near Madaba. 

The fall in visitors number has prompted the authorities, supported by industry representatives, to introduce measures aimed at boosting activity. A Cabinet reshuffle in early March led to the reappointment of a dedicated minister for tourism in a widely welcomed move.

Later in the month, the Ministry of Tourism and Antiquities launched a campaign in conjunction with the JTB and tour operators to galvanise domestic tourism. The campaign includes promotions on travel packages to the Dead Sea and historical sites such as Petra.  

But keen to see more done, industry players have also drawn up a number of proposals, which include a reduction of entry fees to Petra for visitors staying in nearby hotels, as well as proposals to support the struggling hotel industry with cuts to taxes and lower electricity prices. 

Reaching for the skies 

New developments in the aviation sector could prove instrumental in boosting air traffic, and visitor numbers, to the Kingdom.

In a significant development at the start of the year, UAE-based budget airline Air Arabia bought a 49 per cent stake in Jordanian charter carrier Petra Airlines, to be rebranded Air Arabia Jordan.

The firm plans to open a new international hub at Amman’s Queen Alia International Airport (QAIA), becoming Air Arabia’s fifth in the region and operating flights to Europe, the Middle East and North Africa. 

“The acquisition is good news for the industry, as Air Arabia represents a new, large potential source of capital,” Kjeld Binger, chief executive officer at Airport International Group — which operates QAIA — told Oxford Business Group (OBG). 

“It will bring more jobs and contracts for services, and more competition will give rise to market growth and more innovation,” he added.

Industry players hope that the merger of these low cost carriers will help counter the 15 per cent year-on-year drop in passenger traffic seen at QAIA last year. This was compounded by the UK’s budget airline easyJet cancelling its three-times-weekly London Gatwick route to Amman last year.

Directives from the government to boost tourism numbers are spurring other carriers into action. 

In March, the national flag carrier, Royal Jordanian, announced plans to offer discounted tickets to tour operators for use in package deals. The initiative is targeted primarily at Gulf Cooperation Council and European markets, which, between them, account for almost half of overnight arrivals before the inclusion of Jordanians living abroad.

The tourism industry is also calling for other measures to be introduced including the abolition of a departure tax for charter flights and low-cost carriers using Amman Civil Airport at Marka.

Whilst perhaps little can be done to boost sentiment amongst travellers, the Jordanian authorities and stakeholders in the tourism sector are looking to do all they can to try to create an environment for the industry to grow. 

In the long-term, they will certainly be hoping for more favourable regional headwinds.

This article was provided by Oxford Business Group

DAMASCUS — Syria's entrepreneurs, suffering from crippling losses after four years of civil war, have launched a drive to encourage consumers hit by burgeoning inflation and a shortage of imports to "buy Syrian".

A first instalment of the "Made in Syria" fair in Damascus this month attracted around 60 local companies to showcase products that are both easier to acquire and far cheaper than whatever imports are available.

Fuad Adam is sales director at kitchenware company Heart, whose factory in Douma, near the capital, was destroyed by months of fighting.

But he is at the fair anyway, offering whatever wares could be saved before the plant was reduced to rubble.

"We're participating in this exhibition to keep our brand alive in the minds of consumers," he explains, as shoppers make their way through what looks like a makeshift hypermarket set up in a sports complex in the Mazzeh residential district.

Organised by the Damascus Chamber of Industry, the fair aims to "promote our industry and encourage people to buy Syrian products, which are half as expensive as imported goods", says chamber official Mohammed Omar.

This first event was such a success that organisers are planning monthly fairs, not only in the capital, but also in other areas under government control, including one in the western province of Tartus in May.

They could be a major boon for Syrian consumers, whose purchasing power has been devastated as the economy has crumbled amid the fighting.

Millions of Syrians have been driven into exile by a war that has killed more than 220,000 people, and the United Nations estimates that four out of five of those who remain are living below the poverty line.

Dania, 30, says she came to the fair just "to walk around".

But she ends up with such a load of cleaning products, milk, cheese and even thyme, all of which were discounted to encourage spending, that her husband has to carry the bag for her.

"It's worth it," she says. "It's half the price of the store."

Crumbling economy 

For Dania, like many other Syrians, buying imported products has become nearly impossible.

Syria's currency has plunged since the beginning of the conflict in 2011, dropping from 50 pounds to the dollar to 300 pounds this year.

To limit the damage caused by a foreign currency shortage, authorities are curbing imports while trying to promote exports, according to Fares Shehabi, president of the Syrian Federation of Chambers of Industry.

"Whatever we can produce here will no longer be imported. We will be able to provide the market with many products," he says.

But boosting exports will be difficult for a country where many companies and businessmen have been under international sanctions since 2012.

Syria's exports have plunged from $11.3 billion (10.5 billion euros) in 2010 to only $1.8 billion last year, according to pro-government newspaper Al Watan.

Sanctions and loss of government control over many border areas have made it difficult to bring in goods, cutting the export-import ratio from 82.7 per cent in 2010 to 29.7 per cent in 2014.

The family-owned Halwani company is one of Syria's most important producers of halwa, a sweet made of sesame, almonds, and honey. It has seen sales plummet by 60 per cent over the past four years.

"There were so many customers for us throughout Syria and now we have lost that market," says owner Louay Halwani.

Communication lines between provinces have been cut, and suburbs around the capital are either besieged by the regime or have been destroyed by battles, he adds.

To offset its drop in sales, the company wants to use the new fair "to approach consumers directly, without going through intermediaries", Halwani says, determined to save the company founded by his great-grandfather 185 years ago.

Ahmad has a factory that produces pret-a-porter clothing and lingerie and says sales have dropped 50 per cent since the war's outbreak, explaining that consumers are no longer buying "non-essential items".

Speaking to a young customer who picked out a counterfeit "Chanel" T-shirt adorned with sequins, Ahmad emphasises the bargains to be had.

"We have new skirts in different colours for only 2,000 pounds ($7)," he says. "It's really nothing!"

AMMAN — Jordan Steel Group has all options on the table for a solution to its meltshop, shareholders were told in the 21st annual report disclosed to the Amman Stock Exchange.

"The board of directors realises the size of investment and the importance of the meltshop in the production process, and is fully convinced that the current conditions are only transitory due to the regional situation and other business constraints," Chairman Mudar Badran wrote in a foreword.

"As such, all the options are open to find a solution for its status, whether to restart operations should the conditions change or lease the meltshop for a limited period as a temporary solution," he said.

The meltshop, operated by the Consolidated Jordanian Co. for Steel Industry Ltd. which is wholly owned by Jordan Steel Group, was idled in January 2015 and all its workers laid off  to avoid incurring additional operational losses.

The Consolidated Jordanian Co. for Steel Industry Ltd. registered a JD2.6 million loss in 2014 on top of JD2.4 million in accumulated losses from previous years. 

Faced with a labour dispute, the company opted to shoulder extra losses and agreed to compensate the workers whose services were terminated and help them by more than what they are legally entitled to.

According to the annual report, JD700,000 were deducted from the  2014 income statement as an end-of -service indemnity expense related to the  dismissal of around 200 workers.   

Badran indicated that the meltshop closure was the last option for the board of directors which considered moving it abroad and the possibility of finding investors who would contribute to relocating and operating it.

Noting that regional conditions did not help moving in such direction, Badran said negotiations were also held with several companies outside Jordan with the intention of selling the meltshop to investors abroad, but prices offered were low and no deal could be reached with any. 

"Consequently, efforts are continuing in this venue to obtain the best prices that would safeguard the interests of the company and shareholders," he added.

The chairman listed several factors, including higher costs for electrical power, that led to losses at the mother company and almost all subsidiaries.

Besides the regional turbulence that negatively affected local economic and business activities and caused a relative decline in the construction sector, especially mega infrastructure and investment projects, Badran mentioned scrap metal as a dilemma for the company.

He said that due to the drop in the quantities of scrap metal in local market, competition sharpened domestically and negatively impacted the results of the group.

Badran added that it was impossible to import scrap metal from abroad in a realistic way because of the complexities imposed for such purchases in addition to the lack of means for handling and unloading at the Aqaba port.

Based on the aforementioned shortcomings, and with insufficient quantities of scrap metal in the local market and the unfeasibility of competing with imported billet at present, the chairman revealed that a number of firms opted in 2014 to shutter operations and dismiss workers.

He wondered why Jordan has no controls to protect the local industry from dumping policies just like other countries.

The chairman went on to explain the circumstances that put Jordan Steel Group in a bind pointing in the foreword to the crisis in Ukraine, the slowdown in China's economy and the steep decline in oil prices as reasons that caused a sharp fall in the international prices of steel.

"Due to the decline in prices, domestic competition became more acute as local steel firms scrambled to dispose of their accumulated inventory in a market  already facing lower demand as a result of diminished economic growth," Badran indicated, noting that this competition overburdened the company financially.

To minimise the impact of price volatility on the financial results, he said the company also moved to lower the stocks of finished products at its rolling mill stressing the management's keenness to bring down spending and raise production efficiency in the hope of overcoming the current difficulties and achieving better results in order to regain profitability.

Within this context, the group is considering an upgrading of rolling mill's production programmes and liquidating its subsidiary Jordan Steel Engineering Industries Company and transferring its production line to the mother company.

Jordan Steel Engineering Industries Company, with a cadre of 23 employees at the end of 2014,  posted a JD74,051 loss last year on top of JD7,744 in accumulated loss. 

Modern Wire Mesh Co., the third subsidiary with a cadre of 10 employees at the end of 2014, was also in the red last year with a JD92,517 loss and a JD47,743 of accumulated losses before 2014.

Ammoun Steel Trading Co., the fourth subsidiary tasked with marketing the output of Jordan Steel and construction materials and steel products in general besides representing local entities and foreign corporations in an attempt to diversify and improve the group's income resources, was slightly profitable generating JD6,797 profit in 2014. Its accumulated profit from previous years amounted to JD4,696.

According to the balance sheet as of December 31, 2014, Jordan Steel achieved JD102.2 million in sales last year, 8.1 per cent than the JD96.4 million recorded in 2013.

The highest sales figure was registered in 2011 when the amount peaked at JD118.5 million.

Noting that the company, employing some 200 workers, sells part of its output to Aqaba's free zone in addition to local traders, contractors and housing projects, the report estimated its domestic market share at around 31 per cent, despite fierce competition from about nine firms operating in the same sector, besides the imported steel quantities.        

The growth in sales could not sustain the high profitability of Jordan Steel whose gross profit fell noticeably due to the difficult circumstances plaguing the steel industry.

The consolidated statement of comprehensive income showed that gross profit tumbled from JD3.2 million in 2013 to JD1.1 million in 2014.

Taking into consideration various other revenues and expenses as well as finance cost, allowance for doubtful receivables, and end-of-service indemnity, the 2014 net result came at JD2.7 million loss compared to a JD216,000 profit in the previous year.

The highest net profit was registered in 2007 when it peaked at JD6.3 million.

The balance sheet's highlights include a drop in bank debts from JD29.3 million in 2013 to JD26.2 million last year, and a sharp drop in current assets from JD41 million to JD33.5 million due mainly to much lower inventory.

Financing costs, at JD1.3 million, puts a heavy burden on the company because the meltshop could not supply the rolling mill with the needed billet raw material and, thus, had to be imported.  

Fixed assets, mainly, property, plant and equipment totaled JD41 million, down from JD42.2 million in 2013. The amounts are also considered to be capital investments.  

The company attributed the rise in receivables from JD7.5 million at the end of 2013 to JD7.7 million at the end of last year to fervent sales and special facilities given to certain customers. 

The Social Security Corporation owned a 6.7 per cent stake in Jordan Steel at the end of last year as its equity stood at 2,355,071 shares.