Analysis
Trade

Joramco flies high as UAE and Jordan deepen industrial ties

August 24, 2023, 3:18 AM

A trade boost is expected following a meeting between UAE president Sheikh Mohamed and King Abdullah of Jordan

Aircraft deal a sign of growing trade
2022 partnership agreement fruitful
Jordanian tech industry draws investment

Commercial aircraft maintenance operator Joramco is establishing a new Boeing Converted Freighter production line in the Jordanian capital of Amman.

The company, which is part of Dubai Aerospace Enterprise, is flying the flag for trade relations between the UAE and Jordan as they expand their joint industrial ambitions.

Joramco said the new venture will support future Boeing freighter conversions of both domestic and foreign aircraft.

Dubai Aerospace Enterprise CEO Firoz Tarapore said that engineering revenues have more than doubled since the company bought Joramco in 2016. He added that it expects to reach 22 maintenance lines by the end of 2024.

The UAE and Jordan are capitalising on new opportunities arising from the Industrial Partnership for Sustainable Economic Growth, signed alongside Egypt last year.

The partnership agreement – which has since added Bahrain – included a $10 billion investment fund managed by Abu Dhabi’s ADQ Holding.

Ali Metwally, director of economic intelligence at ITI consulting, told AGBI that the UAE is hoping the partnership will give impetus to its investment and trade relationship with Jordan. The UAE is the fifth largest source of Jordanian imports.

Together, the combined industrial capacity of the four nations in the partnership represents 30 percent of Mena’s industrial output.

Aircraft at Joramco's conversion facility in Amman — Aircraft at Joramco’s conversion facility in Amman

It is already bearing fruit with deals worth $2 billion announced this year which are expected to create 13,000 job opportunities across the countries.

These include Dubai electric vehicle manufacturer M Glory Holding, which plans to build a factory in Jordan to produce 40,000 compact crossover SUVs within the first three years of operation.

Also planned is an expansion of a magnesium oxide plant by Manaseer Group in Jordan, valued at $70 million. Once completed, the plant will have a total annual production capacity of 270,000 tonnes.

Focus on tech

UAE defence and tech giant Edge also announced a deal earlier this year to buy an 80 percent stake in Jordan company Mars Robotics and is part of a wider tech focus for UAE investments in the country.

Last year, ADQ launched a $100 million technology-focused venture capital fund with the Ministry of Digital Economy and Entrepreneurship in Jordan.

Vijay Valecha, chief investment officer at Century Financial, said the fund “bodes well” for future trade ties.

“Jordan’s tech sector has often been overlooked. The nation has witnessed triple-digit growth in startup funding in recent years. The nation will likely provide immense investment potential for the ADQ fund,” he told AGBI.

Jordan is home to more than 600 tech companies and 27 percent of tech entrepreneurs in the Middle East and North Africa region are Jordanian.

According to figures from the Department of Statistics, trade between Jordan and the UAE amounted to JD508 million ($663 million) during the first five months of 2023.

Exports to the UAE grew to JD150 million – more than double the year-earlier period – while imports from the UAE decreased to JD358 million against JD449 million.

Trade growth is also expected to be boosted by an official visit to Jordan by UAE President Sheikh Mohamed bin Zayed Al Nahyan to Jordan this month where he met King Abdullah II bin Al Hussein.

“Jordan has one of the greatest potentials in the mining sector among all Mena and Gulf region nations,” said Valecha. “Potash is one of the significant natural resources available in Jordan and the commodity is especially expected to be of high export potential value.”

But Metwally cautioned that there were still challenges to bilateral trade growth, including Jordan’s legal environment.

“Despite stringent intellectual property rights laws benefiting industries like pharmaceuticals, growing concerns about high bureaucracy levels have been undermining investor confidence.

“Moreover, the high costs and time delays associated with resolving commercial disputes have been deterring potential investments,” he explained.

He added that while the government’s efforts to privatise the economy have improved the investment climate, certain sectors still retain foreign ownership restrictions.