The Jordan Safi Salt Company (JOSSCO) and the Qatar Vinyl Company (QVC) on Sunday, November 26, clinched a multi-million dollar deal whereby Jordanian industrial salt would be exported in bulk to the Gulf state.
Under the long-awaited pact, which followed two years of negotiations, 250,000 tones of industrial salt will be shipped to the Qatar-based company annually, with the first shipment in November of 2001.
The five-year renewable contract, has a provision for a 25 percent increase on the original amount, which could boost the total exported quantity to 2 million tones by the end of the pact; in 2006.
The salt, extracted from the Dead Sea through JOSSCO, will be utilized as a raw material in manufacturing chemical products by QVC.
The Qatari firm, a $750 million investment, is a limited holding company with Qatari and foreign investors, including a 30 percent Norwegian stake. The company is set to start operation in mid-2001.
QVC highlighted the quality and competitiveness of JOSSCO's salt as incentives behind choosing the Jordanian company as a supplier.
“The industrial salt is of a good quality, and the price was competitive,” said Hamad Mohannadi, QVC vice chairman.
“Besides, enhancing economic cooperation falls under Arab integration, and fostering bilateral relations,” Mohannadi said on the sidelines of the signing of the agreement.
But this is not the first deal signed with the Qataris this year, as a private Qatari company is slated to acquire a 40 percent stake of JOSSCO, while channelling JD4 million to JOSSCO.
In preparation for that partnership, JOSSCO halved its capital to JD6 million, with the second half used to write off accumulated losses.
The partnership agreement, is expected to be finalized by the end of this week pending the approval of the Jordan Securities Commission on the deal; a routine procedure.
“The agreement means that we secured a substantial amount of the volume which we will need for the next five years,” said Ottar Berge, QVC general manager, who was on a short visit to the Kingdom to conclude the deal.
“It is also important to import from the region, which means a reduction in freight costs,” added Ottar.
“We are satisfied with the quality of the salt, which is competitive to the Australian salt we import,” commented Ottar, who noted that the approval for JOSSCO as supplier followed intensive tests to okay the industrial input.
The pact, signed at JOSSCO's premises, is seen as an excellent catch for similar future deals in the Arab and international arena.
“That we will be supplying the Qatari firm with a major portion of its needs of industrial salt will be a good reputation for our product,” said Sameer Habashneh, JOSSCO's board chairman.
“It might also be a step towards tapping other markets worldwide,” he told the Jordan Times.
“The QVC will be a good reference for our firm; reaffirming JOSSCO as a reliable source of salt,” explained Ali Ghezawi, JOSSCO director general.
“On top of that, the deal will be a key contributor of cash flow to the company,” noted Ghezawi.
The deal, is forecast to boost production at JOSSCO to its maximum capacity of 1.25 million tones to provide the agreed-upon quantity.
Established in 1996, JOSSCO is the largest producer of salt in the region, and is specialized in manufacturing both industrial and table salt.
The Arab Potash Company presently owns around 61 percent of JOSSCO. Other investors include the Arab Mining Company and the Jordan Investment Corporation. ― (Jordan Times)
By Rana Awwad
© 2000 Mena Report (www.menareport.com)
