Industry and Retail
From The Report: Jordan 2012
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Jordanian manufacturers continue to make up a sizeable slice of the country’s GDP. According to the Central Bank, in the first three quarters of 2011 the manufacturing sector made up 20.3% of GDP, expanding by 4.1% on the same period in 2010. Despite the political unrest that overtook much of the Middle East in 2011, Jordanian exports proved surprisingly resilient, both within the region and further afield, and are being encouraged by free trade agreements (FTAs). A number of FTAs have come into effect in recent years, including one with the US, the kingdom’s primary clothing export market. Foreign investment may continue to be deterred by regional uncertainty, although the first two months of 2012 saw a notable increase in investor interest. Going forward, the phosphate and potash industries, as well as fertiliser manufacturers, look set to continue on a path of strong growth.

This chapter includes interviews with Hatem Halawani, Chairman of the Jordan Chamber of Industry; and Bashar Arafeh, Director and CEO at ePoints.

Articles from this Chapter

Overview

A growth market: Increasing export levels and new free trade deals boost the sector in spite of difficult global conditions
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In the face of rising energy costs and limited access to financing for smaller businesses, many Jordanian manufacturers can nonetheless feel optimistic in 2012. Despite the political unrest which overtook much of the Middle East in 2011, Jordanian exports proved surprisingly resilient, both within the region and further afield, and are being encouraged by free trade agreements (FTAs). Some sectors have seen a drop in exports, but most have seen a rise, with prospects looking especially strong…

Analysis

A vital contribution: Industrial estates and special zones provide a number of advantages
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Through its industrial estates, free zones and development zones, Jordan has continued to attract local and foreign investment. These make a vital contribution to national exports and to the economy in general, despite some concern that Jordanians have not benefitted from the jobs created. At the same time, the government is working to unify relevant public bodies in order to simplify the investment environment, which some investors still claim is hindered by red tape. Jordan’s five operating…

Interview

Strong growth: OBG talks to Hatem Halawani, Chairman, Jordan Chamber of Industry (JCI)
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Interview: Hatem Halawani What is being done to facilitate low-interest lending to small and medium-sized enterprises (SMEs)? HATEM HALAWANI: Total credit facilities extended by commercial banks in 2011 reached about JD15.8bn ($22.2bn), up 9.7% over 2010. However, only 14.5% of these facilities were directed to the industrial sector, and less than 5% of the industrial sector’s share reached SMEs. Moreover, the prime lending rate is still above 8%, which means the cost of SME borrowing exceeds…

Interview

OBG talks to Bashar Arafeh, Director and CEO, ePoints
OBG
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Interview: Bashar Arafeh What major trends are shaping the retail business in Jordan and the Middle East? BASHAR ARAFEH: Retail is strongly influenced by demographic factors. Given the region’s youthful population, as well as the fact that young consumers are more likely to buy products online, retail companies are earning more and more revenue from internet-based transactions. Although young online customers in the region tend to buy inexpensive items, they are highly active consumers and make…

Analysis

Cultivating the market: Higher prices and exports have boosted the potash industry
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At a time of growing global demand for fertiliser, the potash industry in Jordan is becoming increasingly profitable. An ingredient in a number of fertilisers, potash is extracted from the Dead Sea. Most of the product is then exported to a growing Eastern market, including to India, South-east Asia and China. The industry comprises the Arab Potash Company (APC), which was partially privatised in 2003 and has an exclusive concession from the government until 2058. PERFORMANCE: APC’s performance…

Analysis

Dressed for success: Trade deals make the garment segment a key contributor to exports
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Clothing manufacturers in the kingdom experienced strong growth in 2011. As the country’s most economically important export, they contributed JD708m ($994.9m) to the year’s total national exports, 14.8% of the total. The main driver behind this growth is the US market, which received 93% of Jordanian clothes exports in the first 11 months of 2011. Clothes exporters had preferential access to the US after the full implementation of a bilateral free trade agreement (FTA) at the start of 2010.…

Overview

Finding a niche: Hypermarkets and large shopping centres are growing in spite of reduced purchasing power
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The last few years have presented a challenging market for the retail sector, with Jordanians’ incomes squeezed by the increasing cost of living. Yet new malls continue opening, hypermarkets continue to grow, and more retailers are still entering the market. Economies of scale can offer attractive savings to consumers who have less disposable income, many of whom appear to be sticking to familiar household brands despite the tough conditions. But the stakes are high amidst changing consumer…