VZCZCXRO8577
RR RUEHBC RUEHDE RUEHKUK RUEHROV
DE RUEHAM #0392/01 0421240
ZNR UUUUU ZZH
R 111240Z FEB 09
FM AMEMBASSY AMMAN
TO RUEHC/SECSTATE WASHDC 4432
INFO RUEHEE/ARAB LEAGUE COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAUSA/DEPT OF HHS WASHDC
RUEHC/DEPT OF LABOR WASHDC

UNCLAS SECTION 01 OF 02 AMMAN 000392 
 
SENSITIVE 
SIPDIS 
 
STATE FOR NEA/ELA 
STATE PLEASE PASS TO USTR (SFRANCESKI, LKARESH, CROMERO) 
DHS PLEASE PASS TO CBP 
COMMERCE FOR ITA/OTEXA (MARIA D'ANDREA) 
 
E.O. 12958: N/A 
TAGS: ECON ETRD ELAB PREL KTEX IS JO
SUBJECT: QIZ GARMENT FACTORIES: JORDANIAN-ISRAELI BUSINESS 
TIES CONTINUE AND MORE JORDANIANS SEEK EMPLOYMENT 
 
REF: A. AMMAN 230 
     ¶B. AMMAN 129 
     ¶C. 08 AMMAN 3359 
 
SENSITIVE BUT UNCLASSIFIED.  CONTAINS BUSINESS PROPRIETARY 
INFORMATION.  NOT FOR DISTRIBUTION OUTSIDE THE USG. 
 
¶1.  (SBU) Summary: Two garment factories in Jordan's 
Qualifying Industrial Zones (QIZs) have continued to show 
strong business links to Israel, despite public calls in 
Jordan during events in Gaza to boycott American and Israeli 
goods (ref B).  The Al-Methaliah factory plans to begin in 
March satellite factory operations in Irbid/Al-Wastieh and 
has already begun training 40 women.  Many of these trainees 
have never previously worked but sought employment to 
contribute financially to their families during difficult 
economic times in Jordan (ref C).  End Summary. 
 
Masera Employs 1,000 Jordanian Workers 
-------------------------------------- 
 
¶2.  (SBU) Officials from Jordan's Ministry of Industry and 
Trade (MOIT) and Econoff visited on February 1 the 
Israeli-owned Masera factory in Al-Hassan QIZ.  Masera is the 
distributor in Jordan for the Israeli company Tefron.  Masera 
Administration Manager Abdel-Hai Al-Serhan explained that 
Masera receives orders from Tefron for U.S. buyers such as 
Victoria's Secret, Nike, Calvin Klein, and Target, and then 
subcontracts the work to ten other garment factories in 
Jordan.  Despite the global financial crisis, Serhan said 
business has remained constant.  He expressed fear, however, 
that any rises in production costs, such as the minimum wage 
(ref A), would cause Tefron to move operations to Egypt since 
garment companies are generally only interested in the 
"bottom-line."  He confirmed that Masera's business remained 
unaffected by the crisis in Gaza, and that there were no 
protests at his factory as in other parts of the country (ref 
B). 
 
¶3.  (SBU) Masera is one of the few remaining QIZ companies in 
Jordan with a 100% Jordanian workforce of 1,000 people, 
including 700 female sewing machine operators.  Serhan said 
that part of the company's success is linked to its training 
program that uses highly skilled Arab-Israeli trainers who 
communicate easily with the Jordanian workers.  MOIT 
officials noted that Arab-Israeli production line supervisors 
were also present in the factory to ensure quality control. 
Masera also provides financial incentives for good 
attendance, which has helped reduce absenteeism. 
 
Methaliah Hiring Women Who Have Never Worked Before 
--------------------------------------------- ------ 
 
¶4.  (SBU) MOIT officials and Econoff subsequently visited one 
of Masera's subcontractors -- al-Methaliah factory in the 
northern city of Irbid.  Owned by a Palestinian-Israeli, 
Methaliah was first established in 2001 in Al-Hassan QIZ.  It 
opened up another factory four years later in Irbid, where 
250 Jordanians currently work.  Methaliah's General Manager, 
Mohammad Adnan Hasseinein, said that while the factory has 
still been paying the lease on its building in Al-Hassan, it 
moved all production to Irbid in late 2008.  He added that 
the company plans to further shift operations and the 
machines previously located in Al-Hassan to a new satellite 
factory in Irbid/Al-Wastieh, which was recently designated as 
a QIZ.  Hasseinein noted that the move from the Al-Hassan QIZ 
to Irbid has helped the company save about $5,000 per month 
in transportation costs of its workers who now live closer to 
the factory. 
 
¶5.  (SBU) Hasseinein expects Methaliah's satellite operation 
to start within the next month and ultimately employ 400 
Jordanians.  He noted that he has already received 250 
employment applications, and hired 40 women who are being 
trained in Methaliah's factory.  Two of the trainees, who 
appeared to be in their late 30's and 40's, said that they 
had said never worked before.  They explained that the 
difficult economic situation in Jordan had put pressure on 
them to get a job and contribute financially to their 
families. 
 
¶6.  (SBU) According to Hasseinein, 70% of the production in 
Methaliah's satellite factory will be underwear for Tefron 
 
AMMAN 00000392  002 OF 002 
 
 
and the other 30% would most likely be for another 
yet-to-be-determined company in Israel.  He explained that 
Methaliah receives the cut components from Tefron through 
Masera; assembles, inspects, and packs the garments; and then 
ships the finished products back to Tefron in Israel for 
export to the U.S.  While the company wants to keep its 
options open, he said he did not expect to export directly to 
the U.S. because it was logistically easier to work with 
companies in Israel. 
 
Visit Amman's Classified Website at: 
http://www.state.sgov.gov/p/nea/amman 
Beecroft