Lebanon Defends Right To Drill For Gas In Offshore Blocks

Drill For Gas In Offshore Blocks

The Lebanese oil ministry will move forward in its much-anticipated oil and gas tender, despite the inclusion of disputed territories in some of the allotted blocks, a new report says.

Current explorations taking place in an offshore gas field are “by all accounts” part of Israel, according to the Israeli defense minister. Lebanese minister Cesar Abi Khalil, on the other hand, considers the statement to be an aggression against Beirut, since Lebanon has demarcated its maritime borders and reported them to the United Nations previously.

In December, the results of Lebanon’s first tender authorized Eni, Total, and Novatek to explore natural gas prospects in two offshore blocks.

Heated letters sent to the UN by Beirut and Jerusalem from 2010-2011 showed the two nations squabbling over the right to claim an 860 kilometer triangular area as part of their respective exclusive economic zones. The dispute is still active, but energy companies are accustomed to working around border disagreements, usually by agreeing to develop a contentious block without touching areas considered to be the most contentious.

Lebanon and neighboring Cyprus signed an agreement delineating their maritime boundaries in 2007, but it remains unratified.

U.K.-based Spectrum performed surveys on the area between 2006 and 2013. The 2D and 3D seismic tests, which covered over 70 percent of Lebanese coastal waters, said the seabed could hold anywhere between 12 to 25 trillion cubic feet of it being recoverable. Before drilling began last month, Lebanon had not achieved a single well in its seabed, so all analysis of potential reserves need to be taken with a grain of salt.

In 2013, former energy minister Gebran Basil said reserves within Lebanese waters totaled 95.9 trillion cubic feet, emphasizing that reserves may be larger than previously expected. These figures were speculative, put out at a press conference to drum up excitement for the licensing round.

Source: https://oilprice.com/Latest-Energy-News/World-News/Lebanon-Defends-Right-To-Drill-For-Gas-In-Offshore-Blocks.html

The Oil Bubble Has Burst. What Now?

Those analysts who warned that oil prices can’t go on rising forever now have the chance to tell everyone else “I told you so.” Brent and WTI have fallen by 9 percent since the highs they hit in late January, with the international benchmark slumping to US$64.42 today in midday Asian trade, and West Texas Intermediate falling to US$60.61 a barrel.

The problem with bubbles is that they are so irresistibly shiny while they expand, but sooner or later every bubble pops. Sometimes the bang can be deafening, which is what happened four years ago. This time it was quite loud, too.

Energy analyst Tom Kloza from the Oil Price Information Service warned at the end of January that there is a “tremendous speculative bubble.” He warned that the price is due for a serious correction. Reuters’ John Kemp noted that bullish bets on Brent, WTI, and the four most popular oil product futures are at all-time highs, which also suggests a correction is pending.

Now, the correction is taking place. It may have started with the stock market slip on Monday, prompted by higher bond yields, but it continued with the Energy Information Administration reporting that the United States have breached the 10-million-bpd oil production threshold for the second time since last November—and apparently much earlier than most observers expected.

U.S. drillers produced 10.25 million barrels of oil daily last week, the EIA said in its weekly petroleum report, and prices slumped further as doubts about the global oversupply—which is still lingering—were reignited. But the weekly report was just additional kindling to EIA’s latest Short-Term Energy Outlook, which forecast that U.S. oil production will top 11 million bpd in 2019.


Nearly Half Of All Public Buses Will Be Electric By 2025

Electric By 2025

Within the next seven years, nearly half of the buses used by municipal transit districts will be electric, with China playing a leading role.

That comes from a new study by Bloomberg New Energy Finance. The study predicts that last year’s sale of 386,000 electric buses will go up to 1.2 million by 2025. China will account for 99% of the world’s electric buses by that time.

“China will lead this market, due to strong domestic support and aggressive city-level targets,” wrote Aleksandra O’Donovan, an analyst for BNEF and author of the study.

Diesel-powered buses were the norm for several decades in municipal bus fleets and with private coach operators. Owners appreciated the performance of diesel engines, broad accessibility to fuel pumps, and the competitive cost of diesel fuel.

In recent years, municipal transit agency buses powered by compressed natural gas took away some of the market share that diesel buses had dominated for years. Fleet operators were impressed by the reductions in air pollution for compliance with federal, state, and local regulations offered by bringing compressed natural gas (CNG) buses into their fleets. Cost of operation became more reliable, with natural gas providing a stable fuel price. That helped CNG-powered buses see sales growth when the pump prices of diesel and gasoline shot up in 2008 through 2010.
Related: OPEC-Russia Deal Could Extend Until H1 2019

Electric buses may take away some of the market share from both diesel and CNG buses. While electrified buses are more expensive in upfront costs than diesel and CNG buses, the BNEF study found that all-electric buses can offer lower total cost of ownership through their vehicle lifecycles. The cost of fuel and maintenance expenses can be much lower. Electric buses are much easier to maintain and require less parts replacement than diesel- or natural gas-powered buses.

The BNEF study forecasts that expected declines in lithium battery prices will make electric buses more competitive with diesel buses by 2026.

Battery-powered buses also make a visible, massive presence on a city’s streets. Observers will read about the buses being electrified, which can stir up their interest and research even more. Electric buses convey a local government committed to making air quality improvements, finding savings in operating costs, and taking action to make the municipal transit agency look more innovative and committed to integrating new technology.

China’s new energy vehicle policies have been behind electric bus sales strength, and expectations that it will grow over the next decade. BYD Co., China’s largest seller of electric vehicles and backed by Warren Buffett’s Berkshire Hathaway, is well-positioned to take advantage of government incentives. Last year in China, BYD sold 128,000 new energy vehicles, which include all-electric and plug-in hybrid passenger and commercial vehicles. That went up from 100,183 in 2016.


Iraq Seeks $100B Investments To Revive Oil, Transport Sectors

Transport Sectors

Iraq is looking to attract US$100 billion worth of foreign investment that would help it rebuild its oil refining and petrochemicals sectors and reconstruct crucial infrastructure after it repelled Islamic State out of its territory following a three-year war against the militants.

In December last year, Iraq declared the war with ISIS over and is now seeking foreign investments in major projects that would help it to revive its economy, which has also been hurt by low oil prices.

Ahead of a conference on Iraq’s reconstruction that will be held in Kuwait next week, Iraq’s National Investment Commission published a list of major strategic projects available for investment, with 157 different opportunities up for grabs.

A total of 18 investment opportunities are up on offer in the chemicals, petrochemicals, fertilizers, and refinery sectors.

Iraq—OPEC’s second-largest oil producer behind Saudi Arabia—will be looking to attract investment mostly in the downstream, planning the construction of new refineries with different capacities, including one at the Al-Faw Port with a 300,000-bpd capacity. The other refinery projects are a 150,000-bpd refinery in the Anbar province and a new Al-Nasiriy refinery in Thi Qar province with a production capacity of 150,000 bpd.

Iraq also plans oil storage facilities in the provinces Basra, Mosul, and Saladin.

According to the Kuwait Chamber of Commerce & Industry, Iraq will present at the conference next week feasibility studies for 60 key investment projects with total amount exceeding US$85 billion.

Railways, airports, and ports construction, reconstruction, and rehabilitation are also high on Iraq’s investment opportunities list, including berths for oil products exports and imports at the US$6-billion project for the Grand Port of Al Faw at Basra.

Iraq will probably find investments into the oil industry and agriculture easiest to attract because of its large crude oil reserves and available land and water, Mudhar Saleh, an economic advisor to Iraqi Prime Minister Haider al-Abadi, told Reuters.


Saudi Arabia’s private sector ends 2017 with strong growth

Saudi Arabia's private sector ends

Increases in both output and new orders contributed to the growth

Saudi Arabia’s non-oil private sector ended 2017 with a sharp improvement in business conditions, according to the adjusted Emirates NBD Saudi Arabia Purchasing Manager’s Index.

The index – a composite gauge designed to give a single-figure snapshot of operating conditions in the non-oil private sector economy – fell fractionally to 57.3 during December, from 57.5. Overall, however, the latest figure showed that expansion remained steep and above 2017’s average.

Additionally, non-oil private sector companies in Saudi Arabia continued to report steep rates of expansion in output, with anecdotal evidence suggesting that domestic demands and an increase in orders from neighbouring countries has contributed to higher output requirements.

Inflows of new business to Saudi non-oil private sector firms were also found to have increased over the course of December. While the expansion was sharp, it remained below the historical average, according to Emirates NBD.

New export orders also expanded at the fastest rate since August, which extended the current sequence of growth to five months. Additionally, non-oil private sector companies continued to hire more staff in December, although at a slower rate than the series’ long-run average.

Average cost burdens in Saudi Arabia were found to have risen significantly during August, and increased demand for raw materials led to higher prices. Despite rising input costs, selling prices only rose at a fractional pace overall amid competitive pressures in the non-oil private sector.

Saudi Arabia’s private sector ends 2017 with strong growth
Increases in both output and new orders contributed to the growth

Inflows of new business to Saudi non-oil private sector firms were also found to have increased over the course of December.
Saudi Arabia’s non-oil private sector ended 2017 with a sharp improvement in business conditions, according to the adjusted Emirates NBD Saudi Arabia Purchasing Manager’s Index.

The index – a composite gauge designed to give a single-figure snapshot of operating conditions in the non-oil private sector economy – fell fractionally to 57.3 during December, from 57.5. Overall, however, the latest figure showed that expansion remained steep and above 2017’s average.

Additionally, non-oil private sector companies in Saudi Arabia continued to report steep rates of expansion in output, with anecdotal evidence suggesting that domestic demands and an increase in orders from neighbouring countries has contributed to higher output requirements.

Inflows of new business to Saudi non-oil private sector firms were also found to have increased over the course of December. While the expansion was sharp, it remained below the historical average, according to Emirates NBD.

New export orders also expanded at the fastest rate since August, which extended the current sequence of growth to five months. Additionally, non-oil private sector companies continued to hire more staff in December, although at a slower rate than the series’ long-run average.

Average cost burdens in Saudi Arabia were found to have risen significantly during August, and increased demand for raw materials led to higher prices. Despite rising input costs, selling prices only rose at a fractional pace overall amid competitive pressures in the non-oil private sector.

On a negative note, business confidence towards future growth prospects was found to have declined slight, even while remaining generally optimistic. An upturn in business conditions and increased marketing activity were expected to underpin output growth in the next year.

“The December PMI survey continued to show a strong rate of expansion in December, and the data suggests that non-oil growth accelerated in the final quarter of 2017, as well as for the year as a whole compared to 2016,” said Khatija Haque, head of MENA research at Emirates NBD.

“Nevertheless, we expect headline GDP growth to be close to zero in 2017 as substantial oil production cuts will offset the expansion in the non-oil sectors of the economy.

“We are more optimistic about growth prospects in 2018 however,” he added.


Qatar’s manufacturing sector registers exceptional growth

Qatar Economy

While the Qatari economy displayed an exemplary resilience to the impact of the unjust siege imposed by the Saudi-led bloc, the country’s manufacturing sector led the way in 2017 by clocking exceptional growth and unprecedented expansion.

Thanks to the concerted efforts by all stakeholders, Qatar has been able to transform the challenges into opportunities in almost every sector of the economy. While ramping up production of its existing industrial units, the country began setting up new factories to quickly move towards self-sufficiency.

According to a statement by the Minister of Energy and Industry HE Mohammed bin Saleh al Sada, the number of factories entering the production stage in the first six months of the siege doubled compared to the same period a year ago.

The minister’s statement hinted at the futile attempt by the siege countries to jeopardize Qatar’s economy.
In fact, Qatar’s economy has only picked up momentum since the siege with new plants in manufacturing, food, cement, plastic and steel sectors developed at a fast pace. Qatar has managed to attract huge investments into its manufacturing sector. According to a statement issued by Ministry of Energy and Industry, Qatar has attracted investments of about QR260 billion in its manufacturing sector.

“A total of 730 industrial facilities have been registered with the ministry. Qatar is putting a lot of efforts to realise the directives of the wise leadership in achieving a balanced and sustainable industrial development,” Sada was quoted as saying by Qatar Tribune.

In a bid to encourage local industry and small and medium enterprises, Qatar has provided incentives for industries such as fee exemption on equipment, raw materials and machine parts.

The manufacturing sector has become one of the most attractive investment opportunities in Qatar following the new legislation which facilitates the process while providing investors with a slew of incentives.

The ‘Own Your Factory in 72 Hours’ initiative launched by the Ministry of Economy and Commerce (MEC), after the blockade, has been a major draw. Under the initiative, 63 investors were shortlisted for setting up factories in Qatar worth a total of QR2.5 billion. The ministry has already provided licences to the shortlisted firms and begun allotting land for setting up the factories in New Industrial Area.

Ahmad Zeidan, head consultant of ‘Own Your Factory in 72 Hours’ initiative, told Qatar Tribune that the shortlisted investors had already started work on their respective projects.”Within one year, all the factories will begin production,” Zeidan said.

Launched as part of the MEC’s ‘Single Window System’, the ‘Own Your Factory in 72 Hours’ initiative, has drawn a huge response from both local and global investors.

The ministry set up a committee comprising representatives from 10 different ministries and government bodies to evaluate the applicant-investors.

The committee received a total of 8,128 applications from investors in Qatar and more than 1,000 requests from 50 countries for winning the 250 investment opportunities covering eight major industrial sectors.

Out of the 9,128 applicants, the committee shortlisted around 900 investors for evaluation and meetings.
After holding more than 450 personal meetings with investors, the committee finalised the names of investors for 63 projects. More names will be announced at a later stage.

According to information provided by the ministry, out of the 63 investors, 22 will be setting up industries in the food sector.

While the overall manufacturing sector witnessed growth, there was more focus on food, medicine and other essential products with a view to tiding over the diplomatic crisis.

The Qatari government also partnered with the private sector to promote local products both in domestic and international markets.

The ‘Made in Qatar’ exhibition organised by Qatar Chamber in partnership with the Ministry of Energy and Industry and Qatar National Bank became a huge success.

The size of the area allocated for the exhibition increased from 15,000 square metres (sqm) last year to 30,000sqm this year. The number of exhibitors also doubled compared to the previous edition.

Qatar Chamber Chairman Sheikh Khalifa bin Jassim al Thani told Qatar Tribune that the siege has given birth to an”industrial renaissance” in the country.


Bahrain acquires Lenovo’s US headquarters

Bahrain acquires Lenovo's US headquarters

Acquisition is latest addition to Mumtalakat’s portfolio of office space in the US

Bahrain’s sovereign wealth fund, Mumtalakat, has acquired an office campus in North Carolina in the United States that houses Lenovo’s US headquarters, the company announced today.

The acquisition was made in partnership with Sentinel Real Estate Investment Corporation (Sentinel), Mumtalakat’s first joint venture with the New York based real estate investment management firm.

Mumtalakat has made a number of investments in US properties since 2014, including a $250 million in office space in Phoenix, Arizona, and Dallas, Texas, in partnership with Us-based Regent Properties.

The latest acquisition is fully leased to Lenovo, one of the largest PC makers in the world. Located in the Research Triangle Park, in Raleigh-Durham, a 7,000-acre (28 sq km) scientific research park, the campus provides strong cash flows, attractive yields and solid rent growth, Mumtalakat said in a statement.

“Real estate is a key component of our portfolio growth strategy, and the US real estate market is growing significantly. In fact, Raleigh-Durham is one of the fastest growing markets in the US,” said Mahmood H. Alkooheji, CEO of Mumtalakat.

“The area has shown strong employment growth, at twice the national average over the past year, setting a new peak in total employment. It also boasts a dynamic business climate and solid infrastructure with a growing economy, which makes it a very attractive market for us to invest in. With this transaction, the sector represents approximately 22% of our total portfolio companies.”

Mumtalakat’s real estate investment strategy will continue to focus on developed markets with a high demand for income generating assets including commercial offices, added Alkooheji.

Source: http://www.arabianbusiness.com/news/389390-bahrain-acquires-lenovos-us-headquarters

Khudairi signs Shell Lubricants distribution, Iraq

Manufacturer and Exporter of Scrap Grinder Machine

Khudairi Group has been appointed as the macro-distributor of Shell Lubricants in Iraq following a signing ceremony in Dubai.

The agreement will see Khudairi Group’s subsidiary, Al Khudairi Distribution Company, distribute Shell’s complete range of motor and industry lubricants in Iraq – including products aimed at heavy-duty transport, mining, power generation, general engineering and also consumer motoring.

Aziz Khudairi, chairman and CEO of the Khudairi Group, said: “The partnership with Shell is testament to our long standing commitment to excellence. We are confident that Shell’s technology will allow us to continue delivering premium products with high quality service to our Iraqi consumers.”

Amr Adel, GM for Shell Middle East, added: “The decision to partner with Khudairi Group will ensure further growth of the company’s premium lubricants brand in Iraq.”

The agreement with Shell is the latest in a series of deals signed by the Khudairi Group the last six months that have seen it sign both a franchise agreement with Hertz Equipment Rental Corporation (HERC) and a distribution agreement for Terex’s Genie-branded aerial work platforms in Iraq.

The HERC franchise expanded the group’s rental offering to include one of the largest light to medium equipment fleets in the country across, energy, construction and industrial customers.

The Khudairi family began trading vehicles and equipment in 1963 when it became the first dealer in Iraq for General Motors and Volvo, Subhi Khudairi (senior) established the Al Nadir Trading Company.

Today, the group is led by Aziz Khudairi and his two sons, Subhi Khudairi and Mohammed Khudairi, and employs over 250 full-time employees across its offices in Baghdad, Basra, Erbil, Sulaymaniyah, Amman, Dubai and Houston. It is also the dealer for John Deere and Sany construction equipment.


Rulexx Lubricants looks to export markets for growth

Rulexx Lubricants

Volatility in raw material prices and aggressive price competition in the UAE market are forcing local lubricant manufacturers such as Rulexx Lubricants & Grease Industries to look to export markets for growth.

Currently, Rulexx exports 80% of its products from the UAE to markets such as Pakistan and Afghanistan. The manufacturer is seeking further expansion across the Middle East, in Saudi Arabia, Iraq, Jordan, Lebanon, Egypt and Kuwait.

Rulexx’s product portfolio includes automotive oils, gear oils, transmission fluids, hydraulic oils, marine oils, turbine oils, industrial lubricants, motor oils, auto coolants, brake fluids, and greases.

The company’s production facility is situated in the Al Jurf industrial area in Ajman and houses its office, labour accommodation, R&D department and warehouse.

The plant’s storage capacity for base oil is 3 million litres, distributed in 6 storage tanks, each with a maximum capacity of 500,000 litres. Its filling capacity per shift is up to 45,000 litres, equivalent to the total capacity of two fuel tankers.

“We operate five filling machines for small packaging formats, ranging from 500ml to 10l, as well as large quantities, which include 20l, 25l and 200-l drums. We have machines dedicated to filling plastic and metal cans. The facility is equipped to fill up to six different packaging formats at the same time,” says Mohammed Abdallah, export sales manager, Rulexx Lubricants & Grease Industries.

Abdallah points out that intense price competition in the UAE market along with unreasonable payment terms are making it increasingly difficult for manufacturers to offer attractive prices while maintaining high quality standards.

“There are more than 100 factories in the UAE blending lubricants only for the local market. A large number of them do not confirm to American Petroleum Institute (API) or other standards associated with high-quality lubricants, which gives them the advantage of offering low prices that we cannot match,” he says.

Payment terms is another deterrent to doing business in the UAE, according to Abdallah. Six-month credit terms with the possibility of further delay are common in the UAE market, which does not make if feasible for a company that wants to maintain its cash flow. Rulexx maintains its sizeable market share and cash flow in the UAE by dealing only with reputed large enterprises which usually settle payments in 3–4 months.

“Almost all raw material suppliers demand cash payments. Carton and plastic suppliers may give us credit facilities from time to time, but that’s roughly 20% of our costs. No supplier will give us credit for the two major raw materials, base oil and additives. When 80% of our costs are settled in cash payments, we cannot afford to give credit to the market,” says Abdallah.


Made in Jordan: Inside the Unexpected Powerhouse of Garment Manufacturing

AMMAN, Jordan — The ancient city of Petra, 70 years of regional turmoil and the spiralling Syrian refugee crisis. All spring to mind at the mere mention of Jordan, the Middle Eastern nation that shares a border with Iraq and Syria. Few of us, however, would think of its vibrant garment manufacturing industry.

But look at the labels stitched into clothing made by Gap, Victoria’s Secret, Hanes, Eddie Bauer, Lands’ End or Macy’s and there it is: “Made in Jordan.” Garment exports make up roughly 20 percent of the country’s gross domestic product.

In the arid outskirts of Jordan’s cities sit a growing number of industrial parks that house garment factories quietly churning out clothing for some of the world’s most recognisable brands.

There are currently 75 factories producing everything from towels to t-shirts, fleeces to frilly knickers. They account for 95 percent of the industrial workforce, and 95 percent of apparel exports.

Despite its reputation as the safest place in the Middle East, instability in Jordan is at an all-time high. More than one million Syrian refugees are jostling for shelter and a few Jordanian dinars a day (one dinar is equivalent to $1.41). Jordan is the only Arab country still active in the coalition against Isis, and the threat of destabilisation from Syria and Iraq have authorities working all-out to protect the country’s northern and eastern borders.

Jordan’s political opposition, the Muslim Brotherhood, is breaking apart, allowing the dissenters to slip under the radar. The country’s ruler, King Abdullah, has increasingly relied on financial and practical support from his allies, such as the United States, to support not only his people, but also asylum seekers from Syria, Iraq, Sudan and Yemen. Many diplomats in Amman privately admit they think of a terrorist attack in terms of ‘when,’ not ‘if.’

Yet, somehow, the industry is growing at a time when all common-sense indicators suggest it shouldn’t be.

“When you step into Jordan, you never feel the regional tumult,” says Radhakrishnan Putharikkal, president of the Classic Fashion factory on the sprawling, 118 hectare Al-Hassan Industrial Estate just outside the northern city of Irbid.

Classic is now the leading garment manufacturer in the Kingdom. Its exports accounted for nearly 13 percent of Jordan’s $1 billion garment exports to the United States last year, according to Jordan’s Trade Ministry. Established in 2003, it has grown from a small-scale operation (300 people, 130 machines and $2 million turnover per year) to 15,000 employees, 7,500 machines spinning out close to 200,000 garments each day, and an annual turnover of more than $250 million.

“Jordan’s stability and location made us choose it over Morocco or Tunisia, and our calculations were 100 percent right,” says Putharikkal.

Industry origins

In contrast to its neighbours Israel and Saudi Arabia, Jordan is a poor country, devastatingly dry with few resources: potash, phosphates, concrete and tourism top the list. Oil is imported, along with nearly half the country’s food and the bulk of manufactured goods. Despite the economics, how Jordan became a manufacturing powerhouse is more about politics than purchasing power.

When the 1994 peace accord was hammered out between Jordan and Israel, a key economic element was introduced: the Qualifying Industrial Zone (QIZ). Under this legislation, goods produced in collaboration with Israel could enjoy freer access to the US market. The QIZs were packaged as a “peace dividend,” says Jordan scholar Sean Yom, a political science professor at Temple University in Philadelphia.

“They were presented this way to convince many Jordanians that the 1994 peace accord with Israel would benefit them. It was supposed to catalyse the export sector, spread more jobs and attract foreign investment.”
This happened, but only up to a point: the group that benefited most from foreign investment was merchants and businessmen, people who already had financial capital and could leverage their connections to secure new contracts, and as Yom puts it, “rake in more profit.”

“Most of the jobs initially went to foreign labour anyway, before a backlash forced managers to hire locally,” says Yom.

Some experts say the export potential of the QIZ project became moot in 2000, when the US inked its free trade agreement with Jordan, cutting out the need for an Israel connection. But others say the QIZs served another purpose: fast-tracking the free trade deal with the US.

“Without these factories in the QIZ zones we could never have started the process to attract these Hong Kong and China manufacturers and the US trade,” says Halim Salfiti, the former chief executive of Al Tajamouat Industrial City.

“There was a process of the foreign manufacturers educating the locals by showing them how to do this. The foreign manufacturers started working here, then they started trading. And they had relationships with buyers, so for Jordanian manufacturers starting up, that was a door-opener. It was easy to market,” says Salfiti.

With most of the old QIZ factories growing and new industrial areas springing up under the US-Jordan free trade agreement, business boomed. In 2006 and 2007, the multi-billion dollar business of exporting manufactured goods (mainly clothing) was Jordan’s largest export.

Workforce challenges

One area where the QIZ project failed, and where the garment manufacturing industry under the US free trade agreement is still floundering, is around employing locals, particularly women. Official statistics show that for years, the labour market participation of girls and women aged 15 and above has stagnated at around 12.6 percent, compared to 60.3 percent of men in the same age bracket.

Classic has struggled with this in its urban factories, which employ around 2,000 Jordanian workers. Cultural factors are significant: Jordan is a socially conservative country and in rural areas and smaller cities, like Ajloun, where Classic has a satellite factory mainly employing Jordanians, women tend to withdraw from work upon marrying.

Anecdotally, among Jordanians, factory work tends to be seen as shameful, and even in areas with high levels of unemployment, meeting labour demands with skilled or trainable local staff is challenging.

Classic has set up a crèche as a way of retaining its 90 percent female workforce at its Ajloun factory. But employee turnover is between 15 percent and 20 percent, mainly due to marriages.

Local employees are also more expensive: Jordanian workers receive an additional 80 dinar per month for their living expenses, whereas international workers receive in-kind payment in the form of housing, food and living costs.

Foreign workers typically come to Jordan on three-year contracts and work six eight-hour days, with 125 percent minimum wage pay for overtime and 150 percent for holidays. Many are members of Jordan’s General Trade Union of Workers in Textile Garment and Clothing Industries, which in 2013 saw a landmark collective bargaining agreement on wages, employment conditions and seniority issues take effect.

All of this is a marked improvement over conditions during the sector’s most prolific stretch, around 2006 to 2007. Factory owners and subcontractors were accused of a range of workers’ rights abuses at the factories making clothing for Victoria’s Secret, as well as Levi’s, Gap and Calvin Klein. A New York Times investigation accused Jordan of running sweatshops where workers were abused and even imprisoned.

Imported labour

Better Work Jordan runs a workers’ centre at Al Hassan where foreign workers can access social support, prayer rooms, information on human rights and labour rights, and take part in social activities from holiday celebrations to games. The organisation also offers employers training in labour law and human rights.

Linda Kalash, executive director of Tamkeen Fields for Aid, a Jordanian non-governmental organisation that works to protect migrant workers’ rights, says the situation still isn’t good enough.

“The violations continue,” she told BoF at a meeting in her Amman office. She faces a steady stream of migrant workers in need of help, from making complaints about treatment on the factory floor to requests for legal help with hefty fees incurred for breaking contracts early. Kalash says grievances are fewer and less egregious than in past years, but she and her team are still run off their feet.

What next?

As Jordan’s tourism industry collapses in the face of regional chaos, revenue from garment manufacturing is becoming more valuable. Growing the sector and employing more locals and more women is the next challenge. And here, progress begets progress: nine months ago Jordan’s Ministry of Labour inked a deal to establish a new, partly-subsidised factory in the country’s deprived Husseiniya district. The project guarantees 500 jobs for local women.

With a busy, high-functioning port in Aqaba on the Red Sea and access to Israel’s Haifa port through the Allenby Bridge crossing, Jordan is well placed to be a global manufacturing hub. Shipping from Jordan to the US is quicker and cheaper than shipping from Southeast Asia, and as Classic’s Putharikkal points out, Jordanian factories are developing a reputation for good work delivered on time.

As regional tensions ratchet up, it’s undeniable that some sort of change is coming. But in Jordan’s factories, for now, at least, it’s business as usual.