Regional instability takes toll on free zone business

AMMAN – Manufacturers and investors in Jordan's free zone are struggling with "sky-high" shipping costs to reach their clients in trouble-hit Iraq. 

According to President of the Jordan Free Zone Investors Association Nabil Rumman, exports from the free zone in Zarqa to the once lucrative Iraqi market have dropped sharply due to instability, which he said forced exporters to avoid the border crossing of Treibil. 

Most investors are currently delivering their products as land cargo via Saudi Arabia and Kuwait to Iraq's Basra, or by maritime shipping from Aqaba to Iraq's only seaport of Umm Qasr, Rumman told The Jordan Times Saturday, adding the shipping costs to Basra are four-fold higher than exporting via the border crossing.

He added that there are around 25 factories valued at JD600 million established by local and foreign investors that used to export goods to Iraq, indicating that the free zone was the major supplier of cars to the Iraqi market.

Rumman noted that in the first 10 months of this year, a total of 80,000 cars were re-exported to regional markets from the free zone, 70 per cent of them were shipped to the Iraqi market. 

But he said that in October, auto exports to Iraq declined by 50 per cent due to raging violence there. 

"Exporters and manufacturers in Jordan suffer because their major markets for their products are unstable," he said, adding that Iraq, Syria and Libya were once key importers of goods made in the free zone.

Regarding auto imports for the domestic market, Rumman said that over 56,000 cars entered the free zone during the first 10 months of this year, nearly 15,800 of which were hybrid cars.