AMMAN -- Jordan Ceramic Industries (JCI) has given in, in the face of external competition, idling production lines and shifting away from manufacturing to other activities.
"We cannot compete with Saudi, Egyptian and Chinese goods in terms of price, despite the fact that the quality of our products is much better," Mohammad Taha Al Harahsheh, JCI chairman, told The Jordan Times on Monday.
"In Tabouk, the Saudis are producing ceramics at much lower costs," he said, noting that industries in the neighbouring kingdom are supported by cheap energy prices and that the availability of gas in Egypt makes products more competitive than those in Jordan.
According to Harahsheh, tiles and sanitary wares manufactured by JCI were protected on one occasion, when the government slapped a 750 fils levy on imported ceramics, but this was later cancelled.
"Industries in Jordan receive no support and no facilities," the chairman stressed, accusing the government of only focusing on revenue collection and not safeguarding the interests of industrialists and productive companies.
"I had to fire tens of workers from JCI because it had become a losing concern," Harahsheh said.
Fakhri Hiyasat, board member and former general manager of JCI, said about 10 employees man the plant now, down from around 350 workers many years ago.
He added that losses at the company reached JD3 million, weakening the financial capabilities of the firm to a great extent, especially when also taking depreciation into consideration.
He noted that its capital has been reduced from JD7.5 million to JD3.75 million with an estimated JD1 million of loans to banks.
Harahsheh and Hiyasat attributed the demise of the manufacturing activities to dumping of ceramics from abroad at rock-bottom prices and JCI's inability to compete.
The two mentioned high diesel and electricity prices in Jordan as a key detriment, indicating that energy accounted for 35- 40 per cent of JCI costs.
Hiyasat said energy costs in Jordan are 10 times higher than in Saudi Arabia, and this translates into a 15 per cent increase in the price of finished products.
"At this rate of difference between prices of ceramics made in Jordan and those manufactured in Saudi Arabia, there is no way the local industry can compete," he added.
According to the former general manager, the JCI board of directors decided against continuing the industrial path and is currently examining alternatives to manufacturing because it is a "doomed sector".
He said the company has no intention to go into voluntary liquidation. Instead, he added, the plan is to alter the objectives and the functions, capitalising on the assets, especially the large plot of land and the hangars, among other things.
"We have a sister company, wholly owned by JCI, that is engaged in trading ceramics and such import business is generating good profit," he noted.
The chairman and the former general manager noted that two other local ceramic manufacturers are not faring well; one of them is relocating to Saudi Arabia.
"The relocation to the border town of Al Omari is very close to the Jordanian border so the industry can benefit from cheap Saudi energy prices and lower costs and, at the same time, maintain the ability to sell in Jordan," Hiyasat indicated.
He lamented the absence of a local strategy and policy that safeguard the economic interests of the country and protect the productive elements of the workforce.
Harahsheh blamed consecutive governments for "bankrupting companies and damaging business".
He described governments' philosophy as futile and with only one objective: To collect taxes.
"The Income and Sales Tax Department and the Social Security Corporation are giving us no room to find a way out of the mess we are struggling with, as they continue to slap big fines on the company," for not being able to pay their dues, he said.
Hiyasat was also critical of the "selective policy that shows favouritism", in reference to the steel industry, which is being protected by additional government fees on imported products.
"I wish there were consistency and a steady course in dealing with issues, without changes in tracks as positions warrant," he said.
Several industries in the Zarqa area that once used to be Jordan's industrial pride are now closing down or struggling as well, Hiyasat remarked.
The Jordan Industries and Match Company is reportedly shifting away from manufacturing and the Jordan Paper and Cardboard Company is reportedly passing through difficult times.
Jordan Tanning Company has opted for voluntary liquidation last month.
© Jordan Times 2013
