An Israeli textile company has been transferring its operations to Jordan since April, when Israel's minimum wage rose 10.2 percent, reported Haaretz newspaper on Thursday.
"We've already moved 60 percent of our production volume to Jordan," said Abraham Limor, Standard Textile Israel’s CEO.
The first of Jordan's five existing QIZs, where goods enjoy duty-free status to the US market, was set up in Irbid in 1997. A mandatory percentage of Israeli input wins them US trade privileges.
The company, a subsidiary of the American multinational Standard Textile, operates an Israeli factory and a Jordanian plant in Irbid.
"Two months ago, we began transferring our production lines because of the minimum wage, and we plan to continue doing so," Limor said.
"Whoever thinks they are helping workers by raising the minimum wage is mistaken," he said, adding that the company faced stiff competition from the Far East, and that its customers in the US and Europe demanded less expensive textiles.
Standard Textile Israel was established nine years ago and in 1998 opened its Jordan plant, which specializes in clothing for hospital staff. The company employs 90 workers in Israel and its sales in 2000 totaled $20 million, said Haaretz.
All production is for export, with half going to Europe and the other half to the United States.
"We didn't go to Jordan to pad our pockets," Limor said. "We went so as to survive and compete. We've already shut down three production lines and, if there is no alternative, we'll step up production in Jordan and close in Israel."
A $360 million investment in five QIZs in Jordan, the centerpiece of US-Israeli-Jordanian efforts to deliver an elusive peace dividend for Jordanians, had reportedly created more than 10,000 jobs for Jordanian citizens by the end of 2000, according to the Jordan Times.
Israeli and Jordanian manufacturers must contribute 19.7 percent of the value of materials used in the production of goods shipped to the US, while 15.3 percent input could come from a Jordanian QIZ, Israel, the US, the West Bank or Gaza.
The remaining 65 percent could be from anywhere in the world – Albawaba.com
© 2001 Al Bawaba (www.albawaba.com)
