Industry Investments in Jordan – Aqaba International Industrial Estate
In the decade that PBI Aqaba has been working in Jordan it has seen huge development; however Chairman and CEO Mr Sheldon Fink says that “Jordan is far away from having realised its potential and that is great for business.”
Amman, February 2016
PBI Aqaba Industrial Estate LLP is a partnership registered in the United Kingdom that develops and manages Aqaba International Industrial Estate (AIIE) under a concession contract with the Jordanian government. Its partners are from the US, UK, and Turkey. The partners are:
- Mr Sheldon Fink, Chairman and CEO of PBI Aqaba. Mr Fink has extensive experience in industrial and logistics development, power and water projects and a good understanding of management in the Middle East.
- Cengizhan Yuceel, a Turkish entrepreneur experienced in civil engineering, power and renewable energy initiatives.
- PARSONS BRINCKERHOFF INTERNATIONAL, established in 1885, it is one of the oldest and largest international engineering and project management groups with over 10,000 employees worldwide.
PBI Aqaba has been operating for the past nine years. During that period it has marketed land areas of approximately 700,000m2. Infrastructure is in place for that area and for an additional 500,000m2. In addition AIIE has an undeveloped land reserve of 500,000m2 that is to be developed in the coming 3 to 5 years and the company is presently negotiating an additional area of 1 million m2. Total investment to date exceeds $300 million. By the end of the next decade PBI Aqaba’s goal is to reach $700 million of investment with the occupied area exceeding 1 million m2. The Industrial Estate has created 1,000 new jobs as of now and, when fully occupied, will provide jobs for over 3,000 employees.
PBI Aqaba aims to develop and promote regional and international manufacturing as one of the pillars of the Jordanian economy and particularly for the economy of Aqaba. The company aims to do so by supporting and encouraging the industrial and logistical sectors in Jordan which according to Chairman and CEO Sheldon Fink are “the kind of businesses that are very good for creating employment in relation to the amount of money invested per job.” It is in fact one of the company’s main objectives to create new job opportunities and to maximise the added value to improve the future of the residents of Aqaba. In addition PBI Aqaba aims to do all this whilst maintaining a safe, clean and aesthetic environment.
When PBI Aqaba first arrived in Jordan, the vision held for Aqaba was principally based on the tourism sector and very little attention was paid to the role of industry. As time went on, PBI Aqaba was able to demonstrate the importance and value of industry for the region and for Aqaba. Not only did the GDP of Aqaba increase significantly but a great deal of employment was created which proved to the government of Jordan that Aqaba along with being an important tourism destination could be a great manufacturing location. The task now is to continue attracting more local and international investment so as to continue this success.
Aqaba International Industrial Estate is situated next to the King Hussein International Airport and just 15 km from the Sea Port in the Aqaba Special Economic Zone (ASEZ). Aqaba is just a short 4 hour drive from the country’s capital city Amman, making it an excellent strategic location. Aqaba is Jordan’s only seaport; it serves as a forwarding and trans-shipment port to Iraq and other neighbouring countries. This great location serves to make AIIE a very attractive investment location. Mr Fink states that “Aqaba is very well placed in the Middle East, and Jordan is perceived as and is a safe haven” and he adds that “as a result of Jordan’s good relations with other nations it means that it is easy to market to all of the countries in the region, which may not be possible when based in other locations due to political disputes.”
Further advantages to being based in the Industrial Estate at Aqaba include the International Market Access Agreements that Jordan is party to including WTO, US FTA, EU FTA, AFTA and QIZ. Companies located at AIIE are not subject to any limitation or restriction imposed by such agreements on “Free-Zones” which is a significant incentive for investors. There are also no duties on raw materials and equipment or any bond or guaranty requirements. Additionally there are no restrictions on foreign currency transactions and when it comes to foreign ownership there are no requirements for local partners. Foreigners may own a 100% interest in companies and in land at AIIE. 70% of employees may be foreign without the need for special approval other than the customary visa formalities. If no Jordanian employees are available for specific jobs, then the 70% quota may be increased. Further benefits include the fact that according to the Law, Aqaba Special Economic Zone (ASEZ) registered enterprises will be subject only to a flat 5% income tax on net profits and will be entitled to duty-free imports including capital equipment and raw material. There is no foreign equity restrictions on investments made in the industry, retail, tourism and related sectors; no import taxes or tariffs on goods imported for individual consumption; no property or land taxes in some instances; flexible labour laws; and a multimodal transport hub with an airport and seaport. The Industrial Estate also offer training support to those located in its premises and PBI Aqaba provides support and assistance to any investors that have to deal with Government agencies and the local community both before and after commencement of their operations.
Industries locating in the AIIE may invest in a wide variety of activities including metals and engineering industries, logistics and warehousing, construction materials, food processing, and plastics raw materials and finished products, packaging and printing, and also commercial to name but a few. Currently there are companies located in AIIE from all over the world including Germany, Canada, Libya, Turkey and Syria. In the past two or three years various international companies that traditionally did not consider having a base in the Middle East are now looking towards AIIE as an attractive location to do business due to the aforementioned advantages and incentives.
The new Shenzhen Aqaba Estate is planned for an additional $700 million investment and should create an additional 2,500 jobs. The Shenzhen Aqaba Industrial Estate will be the first Shenzhen-based project of its type outside China.
The Aqaba International Industrial Estate has been internationally recognized as one of the world leading projects of its type. It was recently ranked 10th out of the MENA “free zones of the future” in a list compiled by the FDI Intelligence Magazine, put out by the UK’s Financial Times. In addition, in its October/November 2015 issue, the Financial Times magazine recognized AIIE in its “Best in Class” winners among global Free Zones. “Free Zones” includes Special Economic Zones and Industrial Estates. Aqaba International Industrial Estate is the only zone in Jordan included in the list of winners. The estate was commended as a Best in Class Winner in three categories: Facilities upgrades, Infrastructure improvements and China strategy and engagement.
To further the international investment in the industrial estate, PBI Aqaba on its own initiative introduced ASEZ to the investment community in Shenzhen and other cities in South East China. AIIE signed a joint venture with the Shenzhen Chamber of Investment (SZCI) and the Aqaba Special Economic Zone Authority (ASEZA) to market, encourage and support investment, and has opened an office in Shenzhen in cooperation with the SZCI. PBI Aqaba, SZCI and the Aqaba Development Corporation (ADC) have signed a memorandum of understanding (MOU) for development and marketing of the AIIE expansion area as a Shenzhen Aqaba Industrial and Logistics Estate. The Estate is in the Southern area of Aqaba Special Economic Zone (ASEZ) near the new Aqaba Port Development. The Estate will occupy an area of about 1 million m2. The Shenzhen Aqaba Estate will be managed as an expansion of the Aqaba International Industrial Estate.
The new Shenzhen Aqaba Estate is planned for an additional $700 million investment and should create an additional 2,500 jobs. The Shenzhen Aqaba Industrial Estate will be the first Shenzhen-based project of its type outside China. Documentation, Planning and Permitting should be completed in 2016. The Estate should be operational in 2017. Until then, new demand for space will be met at the existing AIIE facility.
PBI Aqaba and the Aqaba International Industrial Estate invite all interested investors to consider Jordan and particularly Aqaba International Industrial Estate as a base for their operations. In the decade that PBI Aqaba has been working in Jordan it has seen huge development; however Chairman and CEO Mr Sheldon Fink says that “Jordan is far away from having realised its potential and that is great for business.” He declares that there is room for plenty more industries and that Jordan has a very good future.
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