Gulf Business BBG Edition - August 2022

Page 1

SPECIAL REPORT: REGIONAL AVIATION IS FLYING HIGH

gulfbusiness.com / A U G U S T 2 0 2 2

SCAN TO LEARN MORE ABOUT APPDYNAMICS’ CLOUD OBSERVABILITY SOLUTION VIA A SPECIAL AUGMENTED REALITY EXPERIENCE P.14 THE ‘G’ IN ESG: Why strong governance is key to decision-making, accountability and transparency P.60 TRULY PRECIOUS: The inspiration behind the exquisite creations from Van Cleef & Arpels

INVESTED IN THE FUTURE WHY THERE‘S NO STOPPING KUWAITI ENTREPRENEUR TAL AL AL A JMI – FOUNDER AND CEO OF VI MARKE TS



Gulf Business

CONTENTS / AUGUST 2022

07

The brief An insight into the news and trends shaping the region with perceptive commentary and analysis

34 Powering the green hydrogen economy How a little-known machine with a name out of 1950s sci-fi – the electrolyser – is a gamechanger for the hydrogen industry

28

Tapping tech to trade Kuwaiti entrepreneur, and founder and CEO of Version International Markets tells us about the company’s growth and the role that technology has played in it

gulfbusiness.com

August 2022

3


Revolutionary, new out-of-home (OOH) advertising medium, powered by innovative technology. This unique and globally patented Escalator Step Branding Solution gives brands an unrivaled opportunity to connect with audiences across the GCC.

CONTACT US TODAY sales@motivate.ae +971 4 427 3000


CONTENTS / AUGUST 2022

59 Lifestyle

The finer details: Exploring the inspiration behind Van Cleef & Arpels’ creations p.60

Fast and fabulous: We take Ferrari’s 296 GTB for a test drive p.63

Game on: Why Flash Entertainment has entered the esports arena p.66

“It was an honour to be chosen for the first long-duration Arab astronaut mission. I am grateful for our wise leadership’s trust, as well as the support of the UAE Astronaut Programme, which has one overarching goal, to achieve Emirati excellence in the global space sector” Sultan Al Neyadi, UAE astronaut

70 The SME Story Interviews with entrepreneurs and insights from experts on how the regional SME ecosytem is evolving

Editor-in-chief Obaid Humaid Al Tayer Managing partner and group editor Ian Fairservice Group director Andrew Wingrove andrew.wingrove@motivate.ae Editor Neesha Salian neesha.salian@motivate.ae Digital Editor Zubina Ahmed zubina.ahmed@motivate.ae Tech editor Divsha Bhat divsha.bhat@motivate.ae Contributor Zainab Mansoor editorial.freelancer@motivate.ae zzainabmansoor Senior art director Olga Petroff olga.petroff@motivate.ae Art director Freddie N. Colinares freddie@motivate.ae Photographer Mark Mathew

General manager – production S Sunil Kumar Production manager Binu Purandaran Production supervisor Venita Pinto Chief commercial officer Anthony Milne anthony@motivate.ae Publisher Manish Chopra manish.chopra@motivate.ae Sales executive Sonam Sharma sonam.sharma@motivate.ae Group marketing manager Joelle AlBeaino joelle.albeaino@motivate.ae Group marketing manager Dominic Clerici dominic.clerici@motivate.ae

Cover: Freddie N. Colinares Follow us on social media: Linkedin: Gulf Business Facebook: GulfBusiness Twitter: @GulfBusiness Instagram: @GulfBusiness

HEAD OFFICE: Media One Tower, Dubai Media City, PO Box 2331, Dubai, UAE, Tel: +971 4 427 3000, Fax: +971 4 428 2260, motivate@motivate.ae DUBAI MEDIA CITY: SD 2-94, 2nd Floor, Building 2, Dubai, UAE, Tel: +971 4 390 3550, Fax: +971 4 390 4845 ABU DHABI: PO Box 43072, UAE, Tel: +971 2 677 2005, Fax: +971 2 677 0124, motivate-adh@motivate.ae LONDON: Acre House, 11/15 William Road, London NW1 3ER, UK, motivateuk@motivate.ae

gulfbusiness.com

August 2022

5


Exclusive paintings, sculptures, photography and timepieces from award-winning international artists.

Painting by Mai Majdy

Photograph by Anthony Lamb

Sculpture by Ana Laserna Villa


CONNECTED TO THE WEB

The Brief Risk Management Governance Alan’s Corner Productivity E-commerce

12 14 17 19 22

AUG

22

Estimated number of individuals worldwide with access to the internet ONLINE

OFFLINE

WORLD POPULATION (In billions)

8 6 4 2 0

4.90b 5.45b

2.94b

1.02b

2005

2010

2015

2021 Source: Statista / ITU

Diversity, inclusion and equality We look at how companies in the Middle East are incorporating them p.10 gulfbusiness.com

August 2022

7


The Brief / Green Finance COMMENT

Jeffrey Beyer, managing director of Zest Associates, a UAE-based sustainability consultancy

How the Middle East can fund its green transition ILLUSTRATION: GETTY IMAGES/SVETLANA BOROVKOVA

the SDGs. Most of this investment will come from the private sector. But governments in the Middle East have big levers they can pull to mobilise this finance and channel it towards sustainability projects. Financial markets are also innovating to unlock it. ALL EYES ON THE MIDDLE EAST

Three opportunities stand out: harnessing high public spending, leveraging huge sovereign wealth funds, and capitalising on the strength and ubiquity of state-owned enterprises

M

oney matters – and we need a lot of it to address climate change. The challenge is not whether we have the technologies to solve climate change – we mostly do. Energy efficiency solutions, renewables, electric vehicles and climate-smart agriculture are all well-understood and relatively easy to deploy. The question is how to mobilise the $4tn per year needed to reach net zero, or the $7tn required annually to achieve the United Nation’s Sustainable Development Goals (SDGs), which include both environmental and social objectives. In the Arab world, about $230bn per year is needed to achieve 8

August 2022

IN THE ARAB WORLD, ABOUT

$230bn PER YEAR IS NEEDED TO ACHIEVE THE SDGS

The next two UN climate change conferences will be held in Egypt (COP27 in November) and the UAE (COP28 in 2023), bringing the Middle East’s climate credentials under intense global scrutiny. The annual summit’s focus has shifted from simply setting carbon reduction targets to actually implementing them. Governments must show how their pledges are translating into actions that unlock green investments. The recent study I co-authored, Financing a Green Transition in the Middle East, published by the Mohammed bin Rashid School of Government and funded by HSBC, looks at 14 tools to accelerate green finance in Bahrain, Egypt, Iraq, Kuwait, Oman, Qatar, Saudi Arabia and the UAE. These include enablers that shape the investment environment, like green taxonomies, financing strategies, and disclosures around climate and nature risks. They also include specific instruments that de-risk investments and “crowd in” private sector finance, like guarantees, loans and green bonds, or sukuk. Three opportunities stand out: harnessing high public spending, leveraging huge sovereign wealth funds, and capitalising on the strength and ubiquity of state-owned enterprises. SPECIAL OPPORTUNITIES FOR THE MIDDLE EAST

The first capitalises on the countries’ high government spending as a percentage of GDP, averaging 20 per cent versus a global average of 17 per cent, and reaching a high of 28 per cent in Saudi Arabia. gulfbusiness.com


IN 2021, SUSTAINABILITY-LINKED BONDS WERE VALUED AT This gives governments an outsized opportunity to directly shape the sustainability marketplace by greening public procurement. Green procurement creates demand at scale for sustainable products and services, which boosts their availability and lowers their price, making them more accessible to businesses. Governments can also multiply their influence by requiring private sector partners to apply sustainability criteria to their supply chains. The second is size and scope of sovereign wealth funds. Of the eight countries studied, seven have sovereign wealth funds worth a total of over $3tn, and Iraq has plans to create one. Sovereign wealth funds like the UAE’s ADIA, Saudi Arabia’s Public Investment Fund, the Kuwait Investment Authority and Qatar Investment Authority have a mandate to deliver both financial and social returns on investment. Governments across the region can set investment criteria to ensure this huge capital endowment is used to finance a green transition whilst deprioritising investments that exacerbate climate change. The third is the prominence of state-owned enterprises. They represent both a big chunk of the countries’ economies and an outsized proportion of their national greenhouse gas emissions. Governments that own oil and gas companies, heavy industries and airlines can instruct these companies to invest in energy efficiency, low carbon fuels and innovation.

$800bn Jeffrey Beyer

HELPING POLLUTERS ALONG THE JOURNEY

It’s not easy or cheap, however, to transform a highemissions business. Such companies cannot simply be left out of the conversation or told to shut down to achieve national climate change targets. They need to be part of the solution. And they need investment to finance their transition to a low carbon future.

“SUSTAINABILITY-LINKED” LOANS AND BONDS ARE RELATIVELY NEW INSTRUMENTS THAT HELP COMPANIES RAISE MONEY AT A LOWER INTEREST, PROVIDING THEY SET AND ACHIEVE MEANINGFUL SUSTAINABILITY TARGETS ” gulfbusiness.com

“Sustainability-linked” loans and bonds are relatively new instruments that help companies raise money at a lower interest, providing they set and achieve meaningful sustainability targets. They differ from sustainability loans and bonds (without the “linked”) because the capital can be used for anything, so long as the company achieves its targets. Missing the targets results in a penalty. Sustainability-linked loans and bonds are becoming hugely popular, increasing in value by three and ten times respectively year-on-year, to nearly $800bn in 2021. They even surpassed the $522bn green bond market in 2021. But sustainability-linked instruments come with risks. “Meaningful” targets may not be sciencebased. Having ‘sustainability’ in the name could lead to greenwashing. “Linked” instruments do not guarantee additionality, i.e., that sustainability improvements would not have happened otherwise. To be effective, four things should change. Sustainability should be disaggregated into its constituent parts, with a special focus on greenhouse gas emissions. Meaningful climate targets should align with the Paris Agreement and be scrutinised by credible entities such as the Science-Based Targets Initiative. Penalties for missing the target should be high and therefore motivating. To avoid greenwashing, governments should develop harmonised guidance to govern this new asset class, just as the Green Taxonomy guides investments in the EU. SEIZE THE OPPORTUNITY

Climate change is both an existential threat and the “greatest commercial opportunity of our time”, said former Bank of England Governor Mark Carney. Blackrock’s CEO Larry Fink agrees, while warning that countries and companies that do not invest in the opportunity “risk being left behind [and] risk losing jobs, even as other places gain them”. At a time when trillions of dollars are needed to tackle climate change, government action and innovative financial tools will prove vital. The Middle East can use its special position to seize the opportunity and invest in a sustainable transition, creating jobs and ensuring continued prosperity in the future low carbon global economy. August 2022

9


The Brief / Diversity and Inclusion

Explainer: How are companies in the Middle East approaching diversity, equality and inclusion? Current efforts are not limited to just hiring, but also include investing in developing female talent to build up diverse pipelines Why is diversity, inclusion and equality (DI&E) important to the economy?

Increasing the diversity of the workforce by boosting female labour participation will likely improve the region’s competitiveness. Access to a wider talent pool will help to fill gaps in industries like technology, while the inclusion of more varied and diverse perspectives can be key for businesses to thrive and survive in the current landscape. Many studies have shown that diversity drives innovation and the development of new solutions, so welcoming more women to the workforce will strengthen the region’s competitive position. 10

August 2022

AS FOR GENDER DIVERSITY, WE’RE SEEING MORE COMPANY-LED EFFORTS AND INITIATIVES

How are businesses and companies in the Middle East approaching DI&E?

One big advantage the Middle East has is a rich cultural footprint. With various markets welcoming expatriates to the talent pool, we’re already fortunate to leverage the diversity that comes from different nationalities and experiences. As for gender diversity, we’re seeing more company-led efforts and initiatives. This includes flexible working arrangements and maternity policies that encourage and support women to enter, stay, and return to the workforce. International, as well as local companies in the Middle East are increasingly building gender equality into their hiring and promotion process. Unconscious bias training is also being implemented. Additionally, more companies are paying attention to planning for the future. Current efforts are not limited to just hiring, but also include investing in developing female talent to build up diverse pipelines. Diversity, equality and inclusion efforts must be driven at the top and it’s promising to note that many boards are putting female representation high on the agenda and taking steps to nurture women in gulfbusiness.com

ILLUSTRATION: GETTY IMAGES/RALF HIEMISCH

INTERVIEW


Maliha Jilani, member of the global social impact practice and partner at Heidrick & Struggles (Dubai)

Maliha Jilani

their workforce. It’s likely that we’ll see this trajectory continue as organisations strive toward balancing their teams with more diversity. What are the challenges impacting DI&E in regional organisations?

CURRENT EFFORTS ARE NOT LIMITED TO JUST HIRING, BUT ALSO INCLUDE INVESTING IN DEVELOPING FEMALE TALENT TO BUILD UP DIVERSE PIPELINES

One of the challenges that we see both in the region and the global landscape is developing women to grow and take on senior positions. While there is a relatively strong pipeline of female talent available, their participation substantially decreases higher up the ranks. So, what we need to do is identify ways to keep women in the workforce, enabling them to grow in their careers. This is where mentorship can play an important role, providing women with supportive female leaders that they can look up to as role models to learn from. And beyond mentorship, promising female talents will also benefit from sponsorship. Essentially, having advocates who will represent their voices and influence change on their behalf. To grow the female talent pool and effectively help them rise to the C-suite, the combination of mentorship, sponsorship and female role models will be critical to ensuring they are visible at every level. What tools can you use to practice diversity and equality in an organisation?

Incorporating diversity and equality into an organisation’s DNA is not a straightforward task. There are four principles that form an effective framework to promote DI&E in an organisation. 1. Purposeful leadership: Leaders must connect efforts to strategic business priorities and outcomes. The executive leadership team plays the most important part to lead, role model, and be key sponsors of the DI&E efforts.

94% gulfbusiness.com

OF WOMEN PRIORITISE WORK-LIFE BALANCE AND TRAINING AND DEVELOPMENT OPPORTUNITIES

2. Personal change: Leaders may need to address blind spots and change some personal behaviour to foster an inclusive culture. For example, being part of an employee resource group that an executive does not immediately identify with can be a great way for the leader to get insight into the experience of underrepresented employees. 3. Broad engagement: Leaders should quickly engage the entire organisation by role modelling and encouraging new ways of behaviour that will create a sense of belonging for all. 4. Systemic alignment: Across levels, inadvertent systemic preferences and biases, and non-inclusive practices and policies must be identified and removed. How can companies in the region speed up the process of being more diverse and inclusive?

While progress has been made over the years to improve gender diversity in the Middle East through company-led initiatives and also through government mandates (For example, in 2021, the UAE Security and Commodities Authority issued a mandate that listed companies must have at least one woman on their board of directors) for the region to truly achieve diversity, there is more work to be done. Organisations need to commit to more inclusive practices to empower women with the time and opportunity to join or return to the workforce and be able to commit to upskilling programmes. For example, according to McKinsey’s Women at Work Middle East report, the lack of access to childcare can hinder women from working after becoming mothers as they are often the primary family caregiver. Additionally, PwC’s 2022 survey on MENA Women in Work reveals that 94 per cent of women prioritise work-life balance and training and development opportunities. Hence, it’s clear that to attract and retain capable women, organisations need to set the tone of promoting diversity from the top of the organisation, embed diversity and inclusion strategies throughout the organisation, and hold the management accountable for delivering on these strategies. This includes efforts to provide a supportive environment and facilities for women in the office, implementing flexible/remote work arrangements, enhancing support for childcare or eldercare, and of course, creating structured mentorship and training programmes to support female professionals as they grow and advance in their careers. If the private and public sector each continue to do their part and drives efforts to improve female representation, the expanded talent pool and increased diversity will undeniably contribute to a more resilient Middle East economy. August 2022

11


The Brief / Risk Management INTERVIEW

Managing the demands of an evolving business environment

ILLUSTRATION: GETTY IMAGES/SESAME

The importance of effective enterprise risk management has never been more crucial for senior finance executives

Stephen McNally

executives prioritising their objectives in such a climate?

What are the current challenges facing chief financial officers today?

Chief Financial Officers (CFOs) continue to grapple with significant business-related challenges in today’s dynamic economic environment. On the people front, these are things like the ‘Great Resignation’ and addressing hybrid work challenges. On the technology side, it is about working with emerging technology and automation, as well as facing problems regarding heightened cyber security threats. Then there is a greater regulatory and stakeholder focus on making businesses more sustainable and ESG compliant; CFOs are working hard with their teams to take progressive and strategic actions to meet these goals. On the people side, CFOs are cognisant that their workplaces, now more than ever, need to foster diversity, equity and 12

August 2022

inclusion while making it equitable for all. And finally, on the macroeconomic side, economic uncertainty continues with rising inflation and supply chain disruption. A recent report by the global body, Association of Chartered Certified Accountants (ACCA), Institute of Management Accountants (IMA) identifies emerging priorities that will impact the future role of the CFO. The Global Economic Conditions Survey cites several emerging issues that will shape the finance function’s top job. These emerging issues include regulation, globalisation, technology, risk management, transforming finance, stakeholder engagement, strategy, integrated reporting and talent. Geopolitical issues, rising inflation, supply chain challenges and other issues still plague companies. How are finance

Businesses operate in accordance with their vision and mission statements. Currently, businesses are facing a multitude of geopolitical and economic issues that are hindering management’s ability to execute forward-looking plans. Forecasting financial performance over the next few months, let alone accurately developing annual budgets and longer-term strategic plans, has become extremely difficult. Therefore, with different types of disruptions, businesses need to adapt accordingly, innovate, and find solutions. The first thing CFOs and their cross-functional partners need to do is stay calm and make a thorough assessment of the situation. The importance of effective enterprise risk management has never been more crucial. CFOs – using their ability to think strategically, analyse complex business issues and solve problems – should prioritise tighter cash management, fully understand their organisation’s financial position, strengthen their supply chain, and run multiple “what if” scenarios. CFOs need to balance between stabilising the business in the short term and focusing on identifying gulfbusiness.com


SEVERAL EMERGING ISSUES THAT WILL SHAPE THE FINANCE FUNCTION’S TOP JOB: REGULATION GLOBALISATION TECHNOLOGY RISK MANAGEMENT TRANSFORMING FINANCE STAKEHOLDER ENGAGEMENT STRATEGY INTEGRATED REPORTING TALENT opportunities for growth in the long term. Both are equally critical. Fortunately, rapid advancements in technology now provide CFOs and their team the opportunity to reconfigure financial and other business processes and improve business insights through Big Data and analytics. CFOs must play a greater role in strategy development, execution, and validation. Planning, agility, and execution will be key – along with a lot of nerve. How do CFOs determine the risk to an organisation during times of crisis?

For CFOs, there will be greater scrutiny of the effectiveness of risk management processes and the adequacy of longer-term financial plans from the board. Investors and other active stakeholders will also look for assurances over the financial viability of the business’s strategy for delivering longer-term financial success and growth. Emerging risk approaches will place a new premium on understanding the breadth of risks faced by businesses. The risks and opportunities faced by the business should be viewed as a portfolio of linked investments that need careful management, estimation, and financial projection. CFOs and their finance functions are better equipped to calibrate the risks faced by the business and advise on appropriate actions.

Stephen McNally, CMA, CPA, chair of Institute of Management Accountants’ global board of directors for the 2021-2022 fiscal year

For instance, CFOs need to ensure a very disciplined, timely, and steady cash flow process supplemented by trend forecasting. This practice needs to be exercised on a weekly and even a daily basis depending on the situation. CFOs also need to work in tandem with cross-functional partners, ensuring their business partners are aware of current challenges and feel ownership in overcoming them. Tell us how using the COSO ERM framework can help companies prepare for the unexpected.

The emphasis of the new Committee of Sponsoring Organizations of the Treadway Commission (COSO) Enterprise Risk Management (ERM) framework is on strategy. Risk is what could impede the ability of an organisation to achieve its strategic goals and objectives. There is a clear link between an organisation’s mission, vision, and core values, to its development of strategies, goals, and objectives, to its performance, and ultimately, its ability to create economic value. The COSO ERM framework can enable finance professionals – across organisations of all sizes, structures and business models in the region – to contribute to strategic processes and deliver value to stakeholders. Effective enterprise risk management encourages more strategic and innovative discussions around risk appetite and total value proposition management. Adoption of the framework can help an organisation achieve its strategic goals, grow with confidence and integrity, and, at the same time, be more anticipatory, agile, and adaptive amid the unexpected. The business environment is constantly changing. Our response needs to be agile and timely.

“TALENT IS THE MOST IMPORTANT ASSET OF ANY BUSINESS. CURRENTLY, ORGANISATIONS LARGE AND SMALL ARE FACING CHALLENGES AS THEY TRY TO MEASURE EMPLOYEE CAPACITY, CAPABILITY, AND PERFORMANCE, ESPECIALLY WITH A LARGE PERCENTAGE OF TODAY’S YOUNG WORKFORCE OPERATING REMOTELY” gulfbusiness.com

How can CFOs prepare for the future and its demands on finance?

CFOs and their teams need to assume a greater role in their respective organisations to create resilient and sustainable business strategies in these uncertain times. The skillsets required of today’s CFO are broad, at times overlapping the functional areas of their cross-functional partners on the senior leadership team. The role now requires a wide range of skills, including strategic agility, general business acumen, risk management, consulting, technology, data analytics, supply chain, investor management, and overall leadership, among others. At the same time, CFOs must be adaptable according to the nature and size of the company’s operations. CFOs should also establish sustainable business practices that are good for the bottom line. CEOs and cross-functional partners expect their CFO and finance teams to take the lead in enterprise risk management, to understand how strategic goal setting and risk management are crucial for the business. It is imperative for CFOs to build proficiency tools that allow businesses to effectively identify and manage risk and create adaptable strategies to mitigate them. How do you balance the human element with performance metrics?

Talent is the most important asset of any business. Currently, organisations large and small are facing challenges as they try to measure employee capacity, capability, and performance, especially with a large percentage of today’s young workforce operating remotely. We need to set shared objectives for the hybrid workforce along with evaluating individual performance. For the hybrid workforce to work in tandem and to their full capacity, and to ensure consistent performance, we need to enable them with the right set of work technology. This requires establishing clear processes and using relevant technologies so that both the creative process and collaboration are not hindered. This is where the right balance between the use of technology along with talent management processes to keep the workforce proficient and productive come into play. August 2022

13


The Brief / Governance A N A LY S I S

The ‘G’ In ESG: Exploring the impact of corporate governance Getting the governance proposition right can present an opportunity for companies to drive sustainable, long-term value creation

1. DEFINING AND DRIVING GOVERNANCE So, you’ve arrived at a critical juncture where your organisation wants to level-up its ESG approach. However, knowledge gaps exist with regards to which governance interests should be prioritised within the corporate decision-making process. At this stage, being aware of governance risks and opportunities in the decision-making process is essential. The two most important steps here are: Evaluating the corporate governance performance of an organisation involves laying out additional key metrics that evaluate the organisation’s 14

August 2022

ILLUSTRATION: GETTY IMAGES/BOOBLGUM

T

he ‘E’ and ‘S’ in ESG (environment, social, governance) have had no shortage of attention following the Covid-19 pandemic and the rate at which the global climate crisis continues to heat up. Despite this, ESG goes beyond an isolated consideration of ‘E’ and ‘S’. In fact, by leaving governance factors out of the decision-making process altogether, organisations risk missing a crucial opportunity to fully leverage the power that comes with embedding sound corporate governance and risk management systems into their corporate pillars. This can spell disaster in a world where failing to act on governance matters – and omitting a holistic ESG consciousness – could induce implications for the financial performance of an organisation, as well as those investing in its future. On the flipside, getting the governance proposition right can present an opportunity for companies to drive sustainable, long-term value creation. As boards enter the financial disclosure period for 2022, three certainties are apparent. The world continues to evolve rapidly, new generations of investors are influencing the investment sector like never before, and technology has an immense role to play. Here are five key governance considerations that all organisations need to be cognisant of when striving to embed the full breadth of ESG values and address systemic risks.

HAVING STRONG GOVERNANCE CRITERIA CEMENTS THE FOUNDATIONS FOR SUCCESSFUL ESG MANAGEMENT

management systems, as well as its ability to manage long-term environmental and social risks and opportunities. Systems and structures in place to transform the organisation towards a model that will deliver sustainable business advantages and measurable value. 2. THE CORE PILLARS OF GOVERNANCE With ESG strategies maturing faster than initially predicted within many industry forecasts, it’s easy to become caught up in the hype and need to accelerate ESG adoption. However, it’s essential to understand the key governance pillars involved and which of these apply to an organisation’s context before jumping straight in or spending time addressing the wrong areas. These pillars are: gulfbusiness.com


Hamza Al-Haboubi, senior consultant – ESG advisory at WSP Middle East

Board structure and diversity – Assessing the

composition of the board. Code of conduct and reporting on breaches – Assessing the mission, core principles, values,

and rights of the organisation; in addition to any emerging allegations faced within the public realm. Transparency – Disclosure of publicly available information and reporting. Executive remuneration and link to ESG performance – Tying ESG performance back to

executive remuneration. Risk and crisis management –Measures to assess

emerging risks associated with ESG.

‘GOVERNANCE SHORTFALLS’ AT 14 COMPANIES RECENTLY COST SHAREHOLDERS A COMBINED TOTAL OF

$490bn

IN VALUE ONE YEAR LATER

ESG integration in supply chain – Ensuring incorporation of ESG aspects within supply chain screening of potential or existing vendors. Materiality assessment and impact disclosures – The processes of identifying, assessing and

incorporating ESG material. 3. UNDERSTANDING GOVERNANCE RISKS Insufficient governance practices can have a significantly negative impact on business reputation and investor confidence. According to a 2019 Diligent Institute report, ‘governance shortfalls’ at 14 companies recently cost shareholders a combined total of $490bn in value one year later. The main risks that can lead to similar issues in the modern governance setting are related to compliance, resilience, transparency and disclosure. Compliance: Risk of reputational damage associated with failure to fulfil the reporting, accounting, auditing and complying with regulations risks. Resilient ‘E’ and ‘S’ systems: Incorporating environmental, social and economic systems into the investor’s decision-making process. Transparency and disclosure: Public disclosure of the key material topics association with the business exposure of the organisation to ensure maintenance of the environmental and social licenses to operate. The cost of poor governance is high, hence it’s essential to address potential crises before they happen by embedding structural safeguards within ESG frameworks.

“INSUFFICIENT GOVERNANCE PRACTICES CAN HAVE A SIGNIFICANTLY NEGATIVE IMPACT ON BUSINESS REPUTATION AND INVESTOR CONFIDENCE” gulfbusiness.com

4. BENEFITS OF STRATEGIC GOVERNANCE CRITERIA Having strong governance criteria cements the foundations for successful ESG management. When initiated effectively, the value derived can deliver multiple advantages, especially promoting investor confidence, enhancing financial performance, instilling risk management, and laying a platform for broader consideration ‘E’ and ‘S’ issues. Promoting investor confidence – Disclosing the organisation’s policies, standards, information disclosure, auditing and compliance to investors. For example, investors want to know that a company’s accounting is both accurate and transparent and that its business practices are ethical. Financial performance – Direct correlation between good corporate governance and higher financial returns Risk management – Fast-track the identification of risks for investors and shed greater light on the company’s prospects Consideration of ‘E’ and ‘S’ issues – Organisations with strong corporate governance structures and performance are better placed to understand, monitor and manage the environmental and societal issues that could impact the company value. 5. THE ROLE OF TECHNOLOGY Within any transformation that takes place in the contemporary business context, technology and digital touchpoints can’t be overlooked. When paired within the deployment process of essential ESG strategies, technology can play a role in bridging analysis gaps and strengthening the quality of ESG data. Several governance solutions have emerged to help boards analyse their composition, benchmark against peers, identify inefficiencies, and stay up to date with industry trends and stakeholder expectations. These include: Analytics programmes for benchmarking activities and flagging discrepancies. Systems that monitor governance ‘health’. Intelligence on standards, trends, news and stakeholder sentiment. Reporting solutions that consolidate frameworks and streamline stakeholder communications. CREATING AND PROTECTING SUSTAINABLE LONG-TERM VALUE Although the realm of governance is evolving, it’s clear that the ‘G’ in ESG is a vital cog that must be considered when instilling balance – not just in terms of financial management, but also social and environmental issues in the creation of a sustainable investment proposition. August 2022

15


BRAND VIEW

What do employers look for in the youth of today? Rajinder Sharma, head of the Global College for the degree entry programme at Heriot-Watt University Dubai, reveals the skills that offer more value to students What do employers look for in the youth of today? The most obvious are the tech skills needed to keep up with digital transformation. There will be a continuous drive towards highlyskilled occupations and jobs in science, research, engineering and technology fields have been predicted to grow twice as fast as other careers. Next are personal skills such as critical thinking and problem-solving that have always been much sought after and will continue to be so. However, some other personal skills such as resilience, stress tolerance, good communication skills and flexibility will grow in importance in the future and will play a large role in determining worker success. Finally, we will see an increase in awareness around reskilling and lifelong learning, with professionals seeking training and opportunities internally through online learning platforms and through external workshops. Recent research by the World Economic Forum suggests that every five years, our skills are about half as valuable as they were before.

How do universities currently focus on technical and hands-on skills? How is your university focused on doing that? Over the past decade, more colleges have embraced experiential learning, which refers to activities that let students apply the skills they learned in the classroom in a real-world setting. These opportunities can typically take place in internal university programmes and activities, as well as internships. At DEP, hands-on experiences are a core part of our programme and approach that we follow with our students. For example,

16

August 2022

DEP design students collaborated last year with Altearah, a Middle Eastern perfume brand in a competition to create UAE National Day-inspired packaging design. The purpose of the project was to allow students to practice their technical skills and bring their creative ideas into reality. A series of inspiring designs were showcased by the students. These projects greatly boost the students’ confidence and foster an in-depth interest in their fields, as they get to apply what they are learning and witness the results for themselves.

How can universities build links with business leaders to enhance the employability outcomes for students? Universities can build those links through hosting or being part of forums and conferences that can foster knowledge exchange with industry leaders. For example, we recently hosted the Global Executive Learning (GEL) 25th Global Forum at Dubai Campus. The forum brought together business executives and practitioners, thought leaders, academics, and subject matter specialists. In addition, we hold career fairs at least three times a year. This not only gives us as a university an opportunity to link with business leaders, but most importantly they enable students to form these links directly. During our last career fair this year organised inthe first quarter of the year, 500 students showed up at the career fair and networked with more than 60 companies. Some of the leading companies included L’Oreal, Chalhoub Group, JLL, Dubai Islamic Bank, Dubai Pharmacy College, Deloitte & Touche, Apparel Group, Michael Page International and more.

Can you shed some light on the importance of transferrable skills? Transferable skills are a proof of adaptability and well-roundedness. Employers are seeking candidates who can complete multiple things and fill different roles if and when needed. This is very important for students to learn and are key skills for every role. Through programmes that enable students to develop an end-to-end project, we aim to harness these skills in our students. For example, one of the projects that students worked on included developing a model that showcased a comfortable and safe work environment, inspired by Bauhaus furniture – a school of design and architecture that focuses on using materials in their most natural, honest form. Students worked on a series of images, sketches, final drawings and models of their design idea. Another example is a project in which students drew inspiration from two contemporary designers, Takashi Murakami and Kasama, and drew their abstract design on shoes. The students then organised an exhibition showcasing their designs. This project enabled students to understand the overall process of commercial designing from conceptualisation to prototyping and presentation. These types of projects engage different parts of students’ skills, including teamwork, problem solving, communication and more.

gulfbusiness.com


The Brief / Alan’s Corner

Alan’s Corner Alan O’Neill, author, keynote speaker and owner of Kara, specialists in culture and strategy

Leading to trouble

ILLUSTRATION: GETTY IMAGES/DMITRII_GUZHANIN

Effective strategies to avoid leadership foot-in-themouth and its damaging impact

I

n the late 80s and into the 90s, the British retail press was dominated by two quite flamboyant names. At that time, George Davies was heading up Next and delivering exponential growth. While sales and profits followed one trajectory, it seemed that his reputation was growing at a faster pace. The other contender for the airwaves was Gerald Ratner. Ratner took over his father’s business and became CEO of Ratner’s. A publicly listed company, he grew the business very quickly by disrupting the pedestrian jewellery industry, through discounting and offering low-priced merchandise. Then he went down in history for causing one of the biggest corporate collapses in the UK, after describing merchandise in his own stores as gulfbusiness.com

“total crap”. He seemed to enjoy his success a little too much, becoming arrogant and over-confident in his speech to the Institute of Directors, in 1991. After the share value dropped by £500m, he was fired and the company changed its name to Signet. Around that time, we also had Jack Welch, the CEO of General Electric, who proudly promoted senior executives based mainly on their ability to maximise shareholder value. That drove a ‘growth at all costs’ culture with CEOs of subsidiary companies competing with each other for Jack’s gold stars. While Jack was lauded around the world for his great leadership qualities, I’m curious about the welfare of other stakeholders, such as employees, customers and suppliers. Did

that culture cause short-term focus linked to quarterly results? Ratner is certainly not the last senior executive to cause a fuss with ill-chosen and poorly-timed utterances. KPMG recently lost its chairman Bill Michael after he allegedly told his staff on a virtual town hall meeting to “stop playing the victim card” and to “stop moaning” about life during lockdown. Considering these examples, what leadership style do you admire? There was a time when the masses took their lead from so-called pillars of society. Regardless of whether they exhibited good or poor behaviour, teachers, politicians and other public figures set the agenda. Life lessons were more often caught than taught as children would mimic their parents’ behaviour. That extended to the workplace where autocratic bosses often ruled the roost. Some team members would admire that behaviour and form the belief that “it’s how you get things done in that company”. And they would adopt that style and perpetuate that culture. Today, while there are still bad bosses behaving in the same way, it just doesn’t cut it anymore. Employees today are more questioning. Can you imagine the culture in organisations in our modern world that are led by bosses with this kind of attitude? Many team members will feel totally disconnected from that style. Therein lies the dilemma as discomfort, disharmony and poor morale sets in. And that all leads to low productivity, under-performance and high staff turnover. THE LEADERS’ 6-PACK Here are the characteristics that I believe make a great leader. For me, it starts with emotional intelligence rather than great strategic, functional or technical skills. It’s less about the individual leader and more about the team. This is my ‘leaders’ 6-pack’ for developing great leadership strength, and consequently great followership. 1. Humility. Think of yourself less. Recog-

nise that power comes from building trust and role-modelling, rather than talking yourself up. Find opportunities to recognise others. Be authentic, as it is so much more engaging. August 2022

17


The Brief / Alan’s Corner COMMENT

3. Objectivity. We are all part of something bigger. From societies and economies to supply chains and business ecosystems. Leaders research what’s going on at a macro level and keep up to date. They look at implications for their own business and influence change, shape purpose and ambition. 4. Core skills. There is a core set of management and leadership skills that are essential to analysing and making good decisions. This also includes having the critical knowledge for the industry you’re in. 5. Communication. Consider how our

government heads are communicating key messages right now, such as when hospitality will reopen. From external to internal stakeholders, great leaders know when, how often, in what way and whom they should keep in the loop. Being visible and providing clarity and certainty is essential. Be the rock of consistency. 6. Accountability. You should consult, del-

egate, empower, build and nurture, but you yourself must show up and take ownership. The buck stops with you as a leader. THE LAST WORD EQ (emotional quotient) is not just a new management fad. It’s very real and while we all need some, we don’t all have it. Some people are lucky that it is in their DNA and others have learned it. Empathy for example, is an acquirable skill. I was struck by a piece of research that was conducted by New York based SJR Group since the start of Covid. By scanning six million entries across several digital platforms, they identified the top leaders from the top Fortune 100 leaders. Six women were rated ahead of Warren Buffet, Tim Cook and Jeff Bezos. A not surprising but delightful outcome. 18

August 2022

ILLUSTRATION: GETTY IMAGES/BAGIRA22

2. Empathy. Role model with empathy and passion to build rapport and earn respect. A positive culture of inclusion, supporting and challenging as appropriate will permeate and inspire your team. Develop your team and remove obstacles that prevent them doing their job. In a word, listen.

Finding value in structure A well-designed knowledge production process is not a barrier to agility and nimbleness

D

efining what value creation is, for a knowledge worker, remains a challenging problem. After all, a knowledge worker doesn’t produce cars or a washing machine, a physical gizmo or gadget, but they do produce deliverables that are of value to the organisation. If we use the language of manufacturing, then we are talking about an output of production – for a consulting firm this might be advice and reports for executives; for a HR team, a learning and development programme; for a marketing firm, a communications campaign for a client; and for a business school, courses for students. If we can start to think about what we do as an output of production, then we can begin to focus not just on the people, but also the process of delivering this output. Today, what happens is that we leave the process of producing knowledge work to an informal ill-defined form of selfmanagement. The reason we like to avoid process is to allow people to think outside the box and be agile. However, a well-designed knowledge production process is not a barrier to agility and nimbleness. Every organisation will have a different flavour of how it coordinates or processes work. In consulting teams where I have worked, our raison d’être has been to solve a business problem for executives. We have

THE REASON WE LIKE TO AVOID PROCESS IS TO ALLOW PEOPLE TO THINK OUTSIDE THE BOX AND BE AGILE

gulfbusiness.com


The Brief / Productivity Rehan Khan, principal consultant for BT and a novelist

achieved this through a structured approach in which we undertake a piece of knowledge work. The key thing here I have found is that consultants must be committed to single tasking, doing one thing at a time, without distraction. TRACKING THE PROCESS The process starts with defining the customer’s problem and agreeing on this with executive sponsors. This is followed by undertaking a scoping exercise, in which we understand the business and operating challenges facing the organisation, as well as understanding how they conduct business operations today. Throughout this process, we upload our findings into a shared online site, such as Teams, or Trello, in which the raw information resides, consultants’ comments exist, the status of the work and any attachments related to this particular unit within the process are stored. As we move towards completion of a particular stage, we change the status from underway to review required, before finally to complete. This then kicks off the next stage. We need to do things one at a time, because the first part of the process, scoping, then feeds into the second part, choices. We can’t make strategic choices, until we have a solid sense of the requirements and the current state. As a result, when we mobilise technical resources for the choices phase, in which we produce design blueprints, there is no ambiguity in what they are working on. The scoping outputs have been clearly defined and so the techies can get to work, within the same shared online site where there are boards in which they can see their progress against the overall process. As they complete their design blueprints, and upload them into the boards, this will then be reviewed by the consultants who managed the first phase, to ensure they meet the requirements of the customer. If these are aligned, then a number of scenarios are modelled and each one is then prioritised with the customer based on strategic fit.

gulfbusiness.com

“IF WE USE THE LANGUAGE OF MANUFACTURING, THEN WE ARE TALKING ABOUT AN OUTPUT OF PRODUCTION – FOR A CONSULTING FIRM THIS MIGHT BE ADVICE AND REPORTS FOR EXECUTIVES; FOR A HR TEAM, A LEARNING AND DEVELOPMENT PROGRAMME; FOR A MARKETING FIRM, A COMMUNICATIONS CAMPAIGN FOR A CLIENT; AND FOR A BUSINESS SCHOOL, COURSES FOR STUDENTS”

THE FINAL STAGE The final part of the process then moves the choices made into a financial model. Here, the cost inputs are obtained from a commercial team, scenarios forecast, a cash flow produced and finally, a set of recommendations made for the customer. All of the inputs can be loaded onto a shared MS Excel folder which is centrally hosted. We just need to ensure people input the data they own into the right fields. This can at times cause some difficulty, which is why we sometimes lock the sheet and then when an owner is ready to provide the data, we work with them to input it. Throughout the process, we would not have sent anything via email or IM. Our time is dedicated to actually doing the work we have been trained to do. As we often work with stakeholders from different parts of the business, we either provide them with access to our production process, or we use the oldfashioned email and IM to communicate and work with them. But for the core consulting team which owns the knowledge production process there is absolutely no need to resort to email or IM. CREATING VALUE I have always encouraged members of my team to finish their day at the appointed hour or before if they get their work done. If it’s taking them longer to get things done, then its either one of two things: I am giving them too much to do, which I need to curtail; or they are working inefficiently, which is most likely down to how they process work. Very rarely have I isolated the problem as being one where a team member didn’t know how to do the work, it was more often related to how they processed work. Value for knowledge workers is created by doing work, not processing work or talking about it. August 2022

19


The Brief / Calev’s Newsroom

Calev’s Newsroom Calev Ben-David, anchor of the nightly news programme, The Rundown, on i24NEWS

How Israel and the Gulf are cooperating on defence

ILLUSTRATION: GETTY IMAGES/CSA IMAGES

The growing level of cooperation has been set in motion by the Abraham Accords

W

hen US President Joe Biden arrived in Israel on July 13th, the first thing he did was visit a display arranged by the Defence Ministry of its multitiered air-defence systems – the Arrow, David’s Sling, Iron Dome and still experimental laser-powered Iron Beam – designed to counter aerial threats ranging from ballistic missiles to low-flying drones. The event looked like a sales exhibition, and in a sense it was; but the intended client wasn’t the US, which has partnered with Israel in the development of many of these systems. 20

August 2022

WHEN IT COMES TO DEFENCE COOPERATION ON BOTH THE GOVERNMENTAL AND COMMERCIAL LEVEL, THE SKIES ARE LITERALLY THE LIMIT

The customer in mind that day was the Arab World – particularly the nine countries whose leaders greeted Biden two days later in Jeddah, Saudi Arabia, at the gathering of what’s been dubbed the ‘GCC +3’: the six nations that constitute the Gulf Cooperation Council, along with Egypt, Jordan and Iraq. Going into that summit, the US hoped to join these nations into a regional air-defence alliance that would in some way utilise Israel’s expertise in the field, thus helping to further integrate it into the region and expand the diplomatic developments set in motion by the Abraham Accords. Nothing like that came out of the Jeddah summit. Although the concluding statement declared the US would accelerate its “cooperation with Saudi Arabia and other partners in the region to counter unmanned aerial systems and missiles that threaten peace and security in the region,’’ and that it remains “committed to advancing a more integrated and regionally-networked air and missile defense architecture,’’ Saudi Arabia explicitly rejected the idea of an “Arab NATO” and any Israeli component to those plans. Israeli defence technology, in particular that relating to air defence is filtering into the Arab world, with a potentially profound impact. This is especially so concerning its two Gulf partners in the Abraham Accords, the UAE and Bahrain. According to Israel’s Defence Ministry, seven percent of all the country’s arms sales in 2021, which rose to a record $11.3bn, went to the Gulf. Defense Minister Benny Gantz said just prior to Biden’s visit that the total figures of Israel’s arms exports to the Gulf since the signing of the Abraham Accords amounted to roughly $3bn. Though much of that work will continue to remain out of the public eye for the time being, the expanding market for Israel’s defence industries in the region is certainly no secret. The unprecedented participation of such Israeli defence firms as Israel Aerospace Industries (IAI), Rafael, Elbit Systems, Nir-Or, UVision and Tomer, in last November’s Dubai Air Show provided those companies with a highly visible platform to display their wares. The Biden visit is likely to boost those prospects. His administration came into office seemingly hesitant to provide the Gulf states with the kind of advanced defence technology it needs to counter regional challenges; for example, initially declaring a pause and review of the $23bn sale of US F-35 jets to the UAE, seen as a corollary arrangement accompanying the Abraham Accords. But there has been a clear shift in Washington as the aerial threat to its allies in the Gulf has become gulfbusiness.com


“IT’S AN OLD AXIOM THAT IN THE MIDDLE EAST, DIPLOMACY MOVES WITH THE SPEED OF A GLACIER. THE ABRAHAM ACCORDS PROVED THAT IT IS POSSIBLE FOR A DRAMATIC BREAKING OF THE ICE” more pronounced, such as the drone attacks launched at the UAE by Yemen’s Houthi rebels. The growing need for increased oil production by Gulf States in the wake of the Ukraine conflict and cut-off of Russian energy exports to the West, has also made the Biden administration more accommodating towards meeting the defence needs of its partners in the region. The change in tone from Washington towards military exports to the Gulf has another effect, an Israeli defence industry executive told me; it will likely also make Israel’s Ministry of Defence, which in some cases, has been hesitant to sign off on

gulfbusiness.com

SEVEN PER CENT OF ALL THE COUNTRY’S ARMS SALES IN 2021, WHICH ROSE TO A RECORD

$11.3bn

WENT TO THE GULF

sending some sensitive technology to even friendly Arab states, more pliable in this regard. This works in the other direction as well, he notes, pointing out that Israeli defence firms are eager to set up joint initiatives with UAE partners, benefitting by both its substantial technological investment, and position as a gateway opportunity to other nations in the region and beyond. While political considerations may hold back more of Israel’s Arab neighbours from taking steps toward normalisation, the executive believes commercial ties, especially in the military realm, will continue to develop unimpeded, both in under-the-radar sales, and Israeli participation in regional defence-and-security exhibitions. It’s an old axiom that in the Middle East, diplomacy moves with the speed of a glacier. The Abraham Accords proved that it is possible for a dramatic breaking of the ice. Security concerns in the Gulf were a driving force in that process – and one can now say, without exaggeration, when it comes to defence cooperation on both the governmental and commercial level, the skies are literally the limit.

August 2022

21


The Brief / E-commerce A N A LY S I S

NUMBERS BACK THE OPTIMISM ILLUSTRATION: GETTY IMAGES/WE ARE

TOTAL E-COMMERCE IN THE UAE REACHED JUST

OVER $5bn 2021

IN AND IS PROJECTED TO EXCEED

$8bn BY 2025

The rise and rise of e-commerce

E-commerce in the UAE is expected to maintain its upward momentum, finds Zainab Mansoor

T

here was a time was when e-commerce was little more than a fancy buzzword. Come 2020, and it morphed into a near essential, bundling convenience and efficiency into one offering. While consumers and businesses in recent years have pivoted towards digital solutions for varied reasons, e-commerce emerged as a natural winner in the wake of the Covid-19 pandemic, playing an instrumental role in helping people run their lives seamlessly. Be it ordering in groceries or buying furniture, e-commerce helped streamline the purchasing process for customers, and in good time too. Numbers back the optimism: Total e-commerce in the UAE reached just over $5bn in 2021 and is projected to exceed $8bn by 2025, according to a report launched by EZDubai, an e-commerce zone in Dubai South, and Euromonitor International. More consumers in the country made online purchases across all categories during 2021 compared to 2020, with an average 75 per cent of respondents typically purchasing online, it noted. 22

August 2022

market size in the MENA region was estimated at $31.7bn, with the region expected to witness e-commerce growth of over $18bn in absolute value terms over 2021-2025, crossing $49bn in 2025, the report revealed. Countries in the Middle East are strongly placed to enable further e-commerce growth owing to high GDP per capita and internet penetration rates, with the UAE and Qatar being in the strongest spot, with GDP per capita above $40,000 and internet penetration above 90 per cent, it added. MOVING AHEAD

To bolster the local e-commerce ecosystem, various initiatives have been undertaken in the past several months. Towards the end of 2021, company formation specialists, Virtuzone partnered with the likes of Etisalat, Aramex and others to launch the first e-commerce-focused accelerator programme in the UAE and MENA region. The programme aimed to expedite the growth process for aspiring e-commerce entrepreneurs and minimise the challenges. Earlier this year, Dubai CommerCity and AstroLabs partnered to launch an e-commerce academy to provide a range of key services. The platform also aimed to enhance the e-commerce talent pool of the country. The region mirrors an upward momentum as well – in 2021, the e-commerce

This year yields promising numbers too; E-commerce spend in the UAE grew at double the rate of point of sale (POS) transactions in the first quarter 2022, compared to the same period in 2021, according to digital commerce enabler Network International. The surge in online spending – including debit card and credit card transactions – was led by digital payments in the government sector, followed by restaurants, supermarkets and convenience stores. Meanwhile, the future looks bright too – 74 per cent of online shoppers in the UAE polled by e-commerce accelerator Pattern revealed that they would spend more on on online shopping in 2022. With key initiatives and a strong underlying infrastructure at play, the country’s e-commerce trend is set to continue its winning streak.

“COUNTRIES IN THE MIDDLE EAST ARE STRONGLY PLACED TO ENABLE FURTHER E-COMMERCE GROWTH OWING TO HIGH GDP PER CAPITA AND INTERNET PENETRATION RATES” gulfbusiness.com


BRAND VIEW

Powering the future of Web3 From foraying into the Web3 space to NFTs to blockchain technology, Decentralised Investment Group (DIG) is revolutionising the digital world

T

he Web3 space has opened up many opportunities, bringing in a wave of disruption and innovation across the globe. According to the World Economic Forum, Web3 is not only a new foundational layer of the world wide web, it is a fundamentally new approach to corporate governance, value creation and stakeholder participation. It presents an opportunity where people are not merely products or beneficiaries of technology-powered business models but builders and owners of digitally unique assets. The potential of Web3 to unleash the next wave of digital disruption is clear. Society is on the cusp of this transformation, technology companies across have been exploring the possibility of its future. Awardwinning Dubai-based Decentralised Investment Group (DIG) is once such company joining the league. DIG and its international subsidiaries are on a mission to unearth and invest in a plethora of innovative products and build within the Web3 space, while instilling the values of decentralisation, financial independence and individual liberty. A multinational blockchain technology conglomerate, DIG is seeking out exclusive investment opportunities within blockchain and the metaverse space and turns these opportunities into industry-leading products aimed at disrupting the digital

gulfbusiness.com

Haydn Snape, DIG CEO

world and global economy as we know it. This ethos is in line with DIG’s chosen location in Dubai, the crypto hub of the region and the world, especially following the recent announcement by Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Dubai Executive Council, that the city will host the inaugural Dubai Metaverse Assembly in September. The Dubai Metaverse Strategy aims to contribute Dhs4bn to the national economy over five years, along with supporting 40,000 virtual jobs. Under the leadership of founder and global managing partner Haydn Snape, DIG has been at the forefront of metaverse compatibility and preparation, building digital products that promote equitable, accessible and trusted open systems to

facilitate economic growth, using innovative and cutting edge blockchain technology. DIG and its team of more than 250 global innovators, engineers, designers, developers, technologists and creatives have been innovating products that harness the power of decentralised technology in revolutionising the digital world. This includes establishing XYZZY, DIG’s GameFi subsidiary, a Miamibased metaverse company bridging the virtual world with the physical. XYZZY provides iconic brands an entry point into the future, while also purchasing and converting traditional fan favourite games into play-to-earn NFT games. Some of DIG’s investments include the state-of-the-art blockchain game development studio Wild Thunder in Vietnam and a pioneering digital marketing agency ROOK Digital in the Philippines. Most recently, DIG and its Wild Thunder team are bringing blockchain to the world of Hollywood by partnering with BRON Studios, where DIG’s CEO, Haydn Snape, acts as Digital Advisor to BRON Studios on all film, television and streaming initiatives. Bron Studios is a worldwide and critically acclaimed media and entertainment company that has garnered 32 Academy Award nominations and six wins. DIG revealed its foray into Hollywood at the NYC.NFT Week 2022, which wrapped up in New York on June 23. “This is going to herald the futurisation of film and television, and we will be reinventing how audiences engage with content in the filmmaking world. “This is a new era for Hollywood, and we will be developing new financial architecture and interfaces born out of Web3 thinking, which include innovations like tokens, gamification, metaverse compatibility and the like,” says Haydn Snape, DIG CEO. As a company that believes in always giving back, Snape also set up the charitable DIG Foundation, a non-profit subsidiary with a mission to empower underprivileged communities through providing them with cutting edge STEM education, so they may thrive in a growing digital economy. From foraying into the Web3 space to NFTs to decentralised technology, DIG is slowly heralding into the future of the internet.

August 2022

23


The Brief / Digital Transformation COMMENT

An educated approach Adopting and adapting to technology enabled many organisations, including educational institutions, to pivot almost immediately and continue work with minimal disruption during the pandemic. We look at the valuable lessons learned from this process

L

ike many other industries, education was severely disrupted by the pandemic and the successive restrictions it imposed. Like other professional service industries, the sector adapted very rapidly in general and did so with reasonable speed and quality in spite of the challenges. Here, we want to highlight some key takeaways from this experience that can be adopted by companies in other industries. We believe that the service sector, by the nature of its operations, has been among the fastest adopters of technological innovations and provides a roadmap for everybody else. The transformations we witnessed in education are also likely to expand to other sectors.

ILLUSTRATION: GETTY IMAGES/WESTEND61

FIRST LESSON: Technology favours the “prepared mind”. Early in the pandemic, we discovered that initial conditions mattered a lot: some educational institutions had invested in online models and other technologies that enabled distance learning prior to the pandemic, and were experimenting with them to enhance their programmes. The “prepared mind” here means that some organisations had invested in technological platforms ahead of the need because, as many discovered during the pandemic, preparation helps. Technological platforms (such as ERPs, learning management systems, and, in general, a strong ‘digital backbone’ that can orient operations) allowed some educational institutions and other companies in different industries to pivot almost immediately and continue working with minimal disruption. Yet, not all organisations were able to adapt that fast, and those who had not been following technological changes found themselves at a considerable disadvantage. We also discovered that many did not know how to use the technologies very well. Some organisations lacked the capabilities to take advantage of their investments so they kept to their old routines with shiny new machines. SECOND LESSON: Owning a technology and deploying it fruitfully are different things. From the early days of the confinement, many organisations discovered 24

August 2022

gulfbusiness.com


ILLUSTRATION: GETTY IMAGES/MALTE MUELLER

Dr Pablo Martin de Holan, dean of HEC Paris Qatar

“TECHNOLOGICAL INNOVATION HAD ALWAYS BEEN IMPORTANT, BUT WITH THE ACCELERATION OF COVID-19, IT IS LIKELY TO BE INDISPENSABLE: NOT SOMETHING THAT DELIVERS AN ADVANTAGE, BUT SOMETHING THAT IS NECESSARY TO BUSINESS” that they had invested in technologies that they could not use properly, and their operations suffered. In short, they had the assets and had made the capital expenditures, but they did not have the necessary ‘know-how’ to do it. This stresses the critical need for training and upskilling to deploy new technologies. THIRD LESSON: What we have seen is just the (technological) beginning. Prior to the pandemic, digital technologies had made significant transformations in the way to do business, and gave birth to a number of innovative companies, industries and business models. The pandemic showed that the transition to a digital world, which began in the 90s, is very likely to accelerate substantially. Our near future will be very different from our past because very soon anything that can be made digital will be made digital, and many of these innovations will produce gulfbusiness.com

better results than the prior alternatives, to the point that in a few years we will have a difficult time remembering how we operated with ‘old’ technologies. Technological innovation had always been important, but with the acceleration of Covid-19, it is likely to be indispensable: not something that delivers an advantage, but something that is necessary to business. A wave of innovation has been unleashed and it is unlikely to be stopped anytime soon.

THE FOURTH LESSON is a summary of the experiences gathered in the education sector. Certain things are better with strong technology behind them, certain things could be good if enough technology was deployed, and certain things do not work online at all, at least now. Identifying what works best, what could work and what does not work is, in our opinion, a central element of the post-pandemic competitive advantage. We are not recommending the use of technology for technology’s sake. Rather, we feel that the adequate acquisition and deployment of technology can not only provide the flexibility (and resilience) that companies need to operate in uncertain environments, but also offer elements to build sustainable, competitive advantage. OUR FINAL LESSON is based on the large number of innovations, digital or not, that were created during the pandemic and that have lead to new companies, new business models, and new ways of doing business. The wave of ‘creative destruction’ unleashed by the pandemic is very unlikely to stop. This means that companies, regardless of the sector, should prepare for more competitive disruptions, for shorter periods of advantage, and for a world that will require constant managerial attention to technological changes, business model innovations, and, ultimately, new ways of doing business that we hope are more adapted to the realities of a world going through climate change events. Businesses have to be more respectful of the environment, more circular, and ultimately, sustainable from a business and environmental perspective.

OUR NEAR FUTURE WILL BE VERY DIFFERENT FROM OUR PAST BECAUSE VERY SOON ANYTHING THAT CAN BE MADE DIGITAL WILL BE MADE DIGITAL, AND MANY OF THESE INNOVATIONS WILL PRODUCE BETTER RESULTS THAN THE PRIOR ALTERNATIVES

August 2022

25


The Brief / Lightbox

A forest firefighter scans the damage caused by fire in Pinos Puente, Spain, on July 25. Forest fires have devastated almost 200,000 hectares in the country this year, already considered the worst of the century. Europe is in the throes of a heatwave that has fuelled wildfires across France and Spain, forcing thousands to evacuate 26

August 2022

gulfbusiness.com


gulfbusiness.com

August 2022

27

PHOTO : CARLOS GIL ANDREU/GETTY IMAGES


28

August 2022

gulfbusiness.com


C O V E R

S T O R Y

INVESTED IN THE FUTURE TALAL AL AJMI, KUWAITI ENTREPRENEUR, AND FOUNDER AND CEO OF VI MARKETS, A LEADING TRADING PLATFORM IN THE MIDDLE EAST, TELLS US HOW INVESTING IN TECHNOLOGY HAS BEEN KEY TO HIS COMPANY’S GROWTH, AND ALSO TO BUILD AND EDUCATE THE REGION’S TRADING COMMUNITY WORDS: ZUBINA AHMED

V I

gulfbusiness.com

M A R K E T S

August 2022

29


“SUCCESS IS A GIGANTIC WORD

and a great responsibility. But I’m sure of one thing, if you love what you do, you will definitely excel.” This has been the guiding principle behind Kuwaiti entrepreneur Talal Al Ajmi’s success as the founder and CEO of Version International Markets (VI Markets). Al Ajmi founded VI Markets in 2010, as a trading platform that caters to retail and institutional investors. “What started as an idea actually filled a gap in the market back in the day,” he says. “When I founded VI Markets, the primary idea was to educate people who were interested in trading and dispel misconceptions about online trading and brokerage firms. Spreading awareness and educating our clients via workshops and seminars made a significant impact on our customer base and was a key differentiator in the market.”

30

August 2022

gulfbusiness.com


COVER STORY VI MARKETS

DURING THE INITIAL YEARS, THE MOST SIGNIFICANT CHALLENGE WAS CAPITAL. DUE TO THE LACK OF MARKET KNOWLEDGE, TRADING WAS DEEMED TO BE HIGH RISK AND PEOPLE WERE RELUCTANT TO INVEST” An interesting journey

Born and raised in Kuwait, Al Ajmi comes from a modest background, but his ambitions were always lofty, he says. He attended the University of Philadelphia to study information technology. Stock trading was not a conventional career back then, as people perceived it to be difficult, risky and uncertain, he reminisces. Despite his background in IT, Al Ajmi says he was always interested in the stock market. “During my years at university, I was very keen to learn about stocks and trading. I would read about trending stocks and do research after I finished classes. My interest in setting up a business was also triggered around this time. However, I did gain valuable work experience at the reputed organisations I worked at before I took the plunge.” Al Ajmi’s early experiences prepared him to navigate the company through its biggest challenges. “During the initial years, the most significant challenge was capital. Due to the lack of market knowledge, trading was deemed to be high risk and investors were reluctant to invest. “The second major obstacle was the Covid-19 pandemic, but we managed to get through it and succeed. In fact, when many businesses were closing and cutting costs, we made investments in technology. It proved to be one of the best decisions I’ve taken for the company,” says Al Ajmi. Today, the online trading platform offers a wide range of financial instruments across forex, and CFDs. Under forex, VI Markets offers majors as well as a multitude of currency pairs such as USD/SGD, USD/ZAR. It also trades in crypto assets as well. The company’s mission, Al Ajmi says, is to re-invent the way the trading business works, and become one of the prominent names in online trading globally.

Performance, growth and success

Sharing insights into his company’s performance and growth over the last few years, Al Ajmi states, “We invested heavily in technology to reach out to all our clients at home and provide them with the same service and information during the pandemic, as we gulfbusiness.com

did pre-pandemic. We kept our services running online. Although the country and region was under lockdown, we witnessed a huge jump in revenue and growth while working remotely and online.” Another aspect benefitting VI Markets is its partnership with the London-based One Financial Markets. Through this collaboration, the company is one of the few in the Gulf to be regulated by the UK’s Financial Conduct Authority (FCA). Al Ajmi’s approach to scaling his business – despite the slowdown prevailing in the stock market after the pandemic – has also been a game-changer. He believes that even in hard times, opportunities do exist. “If we go back to 2008, a lot of people knew how to make money even during the huge downturn faced across markets. Having said that, during the pandemic many governments around the world pumped a lot of money money into markets, resulting in an increase in liquidity. Also, the Fed and central banks eased regulations on interest rates – this was a great opportunity for people to invest in booming industries such as tech.” Opportunities complemented by dedication and hard work have supported his company’s growth, says Al Ajmi. “In my opinion, success can be obtained by diligence, devotion and simplicity of adaptability. As I stated earlier the pandemic taught us a vital lesson – you have to be prepared to adapt quickly to changes that might endure for years. Having said that I believe investing both in people and technology is an important element for efficiency.” He adds: “I don’t refer to what I do as a job since I truly like it. The individuals close to me and the team that supported me are the most crucial elements that have contributed to my success. For me, every day is a fresh challenge and an opportunity to establish countless new objectives.”

VERSION INTERNATIONAL MARKETS WAS FOUNDED IN 2010

Right place, right time

Al Ajmi has been quick to seize opportunities in his home market, Kuwait, and the region. “The Gulf region and Kuwait in particular has always been keen to invest in August 2022

31


WOMEN MAKE UP MORE THAN 15,000 TRADERS, OF ALL ACTIVE TRADERS WHO HAVE ENROLLED WITH OUR FIRM AS A RESULT OF THE PROGRAMME. ADDITIONALLY, SINCE 2016, THE NUMBER OF TRADERS USING OUR PLATFORMS HAS CONSTANTLY INCREASED”

Leveraging opportunities

AROUND 30,000 TRADERS CURRENTLY USE VI MARKETS’ PLATFORM

32

August 2022

the financial industry since Souq Al Manakh. Kuwait was one of the first countries to look into cryptocurrencies, forex and stocks. This region tends to show high demand when it comes to this field-boosting brokerage and online trading due to the high liquidity and disposable income prevalent here.” Al Ajmi says the entire investment ecosystem of Kuwait has evolved over the years. “The Gulf region and Kuwait are moving towards investing heavily in the private sector, to provide more job opportunities and allow youngsters to invest in projects with more relaxed governmental rules and regulations. Moving towards promoting the private sector is a great step to help industry and the economy evolve.” VI markets has also succeeded in opening branches outside Kuwait, reaching Egypt, Oman, UAE among other markets. “During the last few years we have planned to target the MENA region and specialise geographically to serve them, and the aim is to always go big and international,” states Al Ajmi. This expansion is underpinned by strong values, says the CEO. “At VI Markets, we all strive to work by a few core values that go hand in hand with our vision and mission and these include integrity, honesty, transparency and accountability.”

Be it crypto assets, CFDs and other financial instruments, the pandemic and the uncertainty it brought, Al Ajmi says, has given people the impetus to explore online trading. “It is now seen as a way to diversify one’s income streams. Technological advancements only hastened the process. However, the nature of online trading has obviously changed.” One of the most significant changes is how quickly transactions can now be completed. Al Ajmi says, “We can now trade using a smartphone and all you need is a platform and an internet connection for your sell or purchase.” However, looking forward, he believes that rapidly advancing technologies such as artificial intelligence (AI) will reshape investment strategies and methods, ultimately reducing the risk. “The trading experience can be improved by investing in emerging technologies such as AI. There are a lot of other opportunities, but the primary one is raising awareness and educating people so they can make their own decisions rather than having negative perceptions about trading.” Another trend Al Ajmi is keen to leverage is ‘copy trading’. As the name suggests, this involves tracking and imitating the trades and deals being carried out by a particular investor or account. Tech-driven copy trading is allowing investors to join the social trading revolution. They can connect with other traders, discuss different strategies, and copy – or even mirror – their trades. “Experienced traders often take this up as a fulltime job and provide all the trades to those who wish to implement copy trading. This technology is being used widely and, in the coming five years, we are expecting a huge development in it, allowing traders to explore many options in the future.” gulfbusiness.com


COVER STORY VI MARKETS

He adds: “I found that most clients needed and wanted the technology behind copy trading, and we have invested in the technology to provide it to them.” He hopes to soon enable VI Markets’ users to link their accounts with others for automatic copying, in addition to tech tools that analyse a client’s position through a report that focuses on their successful strategies. “This analysis will give the client an idea on how to manage their portfolio and, specifically, how to minimise risk,” he emphasises. The company will also look at funding potential portfolios revealed through these reports.

Why awareness is key

Although trading is becoming more popular every day, awareness is key to mitigating the risks linked to trading,

gulfbusiness.com

says Al Ajmi. In an effort to help individuals in making better educated judgments about investing their money online, he has chosen to forgo conventional marketing methods and address the general public directly. He shares his opinions on stocks and commodities on his social media platforms, interacting directly with both users on his platforms and others who are curious about online trading. “I never thought that social media channels will be as effective and as engaging as you can see with trading. My aim was to spread awareness about trading and teach whoever is interested in reading the markets through sharing my trades with everyone. My aim was also to change their perception about the markets, and I hope I did. I can’t deny that social media is a strong medium of communication in my field and many others,” asserts Al Ajmi. His customer base and followers are on the rise, with women comprising a significant number of users on his platform. “Women make up more than 15,000 traders of all active traders who have enrolled with our firm as a result of the programme. Additionally, since 2016, the number of traders using our platforms — 30,000 in total — has constantly increased.” With the growth in the number of women interested in trading, Al Ajmi started Yasmeen, a forum designed specifically to support female empowerment in business and financial investment, through structured training and education. “The initiative was launched primarily to empower Arab women in general. The inspiration struck me when I observed that many of these women expressed an interest in trading but were reluctant to speak up during mixed training sessions. Having recognised this opportunity, I wanted to encourage women in the Arabic speaking world to fully participate and lead in the trading sector,” he states. Yasmeen has conducted many seminars and workshops – led by well-known coaches and entrepreneurs – across the region. “Yasmeen has given female entrepreneurs the opportunities to gain support, coaching, and funding for their own new business ventures. Our social networks enable women to share their business experience, helping them to achieve their professional goals by learning from individuals who have encountered similar difficulties,” says Al Ajmi. Al Ajmi is also a strong believer in creating the right conditions and environment to support trading. “My belief is that creating a powerful supervisory regulatory authority to closely cooperate with and oversee trading firms would unquestionably be at the top of the list,” emphasises Al Ajmi.

AS A FORUM, YASMEEN EMPOWERS ARAB WOMEN

August 2022

33


FEATURES / RENEWABLE POWER

FUELLING THE GREEN HYDROGEN ECONOMY FOR MANY HYDROGEN ADVOCATES, THE ELECTROLYSER IS THE MISSING PIECE TO FULFILLING RENEWABLE POWER’S PROMISE

34

August 2022

gulfbusiness.com


FEATURES / RENEWABLE POWER

olar power depends on the solar cell. Wind power, the wind turbine. The key to the green hydrogen economy is a little-known machine with a name out of 1950s sci-fi — the electrolyser. And after a century of obscurity, the electrolyser’s moment has come. The device uses electricity to split water into hydrogen and oxygen. If that electricity comes from wind turbines, solar panels or a nuclear reactor, the whole process gives off no greenhouse gases. Factories, power plants, even jet aircraft can then burn that hydrogen without warming the earth. There are other ways to make hydrogen fuel, from natural gas or even coal. But the ways to do it carbon-free, with no emissions that need to be trapped and stored, rely on the electrolyser.

S

A BUILDING BLOCK “I don’t think people grasp what an electrolyser is,” says Andy Marsh, chief executive officer of Plug Power, which makes the devices. “It is the building block of green hydrogen.” Unlike wind turbines and solar cells, electrolysers aren’t immediately easy to understand. Larger ones can look like a jumble of tubes and pipes, while smaller, more modular versions are collections of electronics and machinery crammed into boxes the size of a shipping container or even a fridge. Scientists discovered the process the electrolyser employs — electrolysis — more than two centuries ago, and commercial electrolysers hit the market in the 1920s. They were the main way to produce hydrogen until the 1960s, when a process using steam to strip hydrogen from natural gas supplanted them. Almost all of the hydrogen used around the globe today — in oil refineries, fertiliser plants and chemical facilities — comes from natural gas. Demand for electrolysers dried up. That has now changed — in just the last few years. Measured by the amount gulfbusiness.com

MEASURED BY THE AMOUNT OF POWER THE MACHINES CONSUME, WORLDWIDE ELECTROLYSER SALES DOUBLED

FROM 200 MEGAWATTS IN 2020 TO 458 IN 2021,

ACCORDING TO BLOOMBERGNEF, A CLEAN ENERGY RESEARCH GROUP

of power the machines consume, worldwide electrolyser sales doubled from 200 megawatts in 2020 to 458 in 2021, according to BloombergNEF (BNEF), a clean energy research group. They’re expected to triple this year, reaching anywhere from 1,839 megawatts to 2,464 megawatts, BNEF predicts. It may be the kind of hockey-stick moment solar power experienced a decade ago. “It’s going to be difficult to supply all the demand,” says Amy Adams, vice president of fuel cell and hydrogen technologies at Cummins, a veteran engine maker that has jumped into the business. “Can everybody scale up the supply base as fast as people would like?”

RISING GROWTH POTENTIAL Even more explosive growth likely lies ahead. Electrolyser “gigafactories,” each able to make enough electrolysers in one year to use at least 1,000 megawatts of power, have been announced in Australia, China, India and Spain. “When somebody says they’re going to build a gigafactory, they’re talking about in a year having more capacity than is installed in the world today,” says Patrick Molloy, a manager in the climate aligned industries programme at the US-based RMI energy and climate think tank. The amount of hydrogen each megawatt of electricity can produce varies, making comparisons between products

and projects difficult. The most popular electrolyser technology needs between 51 and 54-kilowatt hours of electricity, on average, to produce one kilogram of hydrogen, according to BNEF. The underlying idea may be old, but there’s plenty of innovation. Electrolysers come in three basic flavors – alkaline, proton-exchange membrane (PEM), and solid oxide – with different pros and cons. All involve water reacting with oppositely charged electrodes and an electrolyte, sometimes liquid, sometimes solid. Competitors are vying to perfect each technology. They’re paring down the use of such expensive catalysts as iridium and figuring out better ways to build a product that, until now, was largely assembled by hand.

DRIVEN BY DEMAND Driving all of this is the need for a clean, carbon-free fuel. Solar and wind power now cost less than new fossil fuel generation in much of the world, but storing that electricity in bulk remains difficult and expensive. And some things, like steel mills and jet planes, can’t easily run on electricity. A molecule that can be produced, stored, shipped and used without pumping heat-trapping carbon into the atmosphere would work far better. Governments and companies worldwide are betting hydrogen will be that molecule. “You need long-term energy storage, and you need it transported place to place,” says KR Sridhar, chief executive officer of Bloom Energy, a veteran cleantech company now diving into the electrolyser market. Large-scale batteries, he said, only provide energy for a few hours and aren’t portable. “You will not charge a big battery in Australia, ship it to Japan, discharge it and ship it back to Australia,” Sridhar says.

FROM BLUE TO GREEN Hydrogen is the most common element in the universe. But here on Earth, it’s August 2022

35


FEATURES / RENEWABLE POWER

Hydrogen has become a priority for the Chinese government, and electrolysers are a big part of the push. Electrolyser deliveries there may top 1,600 megawatts this year, mostly on orders from state-owned businesses such as oil and gas giants Sinopec and CNPC, as well as high-emitting companies like coal-based chemical company Ningxia Baofeng Energy Group

typically bound together with oxygen, nitrogen, carbon or other elements. To use hydrogen as a fuel, it must be cleaved off of those compounds. That can be done in a dizzying array of ways, each represented by a specific shade on a constantly expanding colour wheel. The dominant form of hydrogen today, pulled from natural gas, is “grey hydrogen.” Capture the CO₂ from that process, and it’s called “blue.” Strip the hydrogen from water using renewable power and an electrolyser, and you get “green hydrogen.” Plug the electrolyser into a nuclear plant, and it’s “pink.” Green hydrogen now costs far more than grey or blue: as much as $9.62 for a kilogramme of green hydrogen, compared to $2.72 for blue, according to BNEF. But that likely won’t last. BNEF predicts that by 2030, green hydrogen will be cheaper than blue in every country the analysis service tracks. For many hydrogen advocates, the electrolyser is the missing piece to fulfill renewable power’s promise. It can take the excess electricity streaming from solar plants at noon and turn it into a fuel for use any time. “That’s one of the things about electricity – we as consumers want it when we want it, and renewables don’t always work that way,” says Ian Russell, Bloom Energy’s director of development engineering. Two of Bloom’s electrolysers perch behind a low industrial building in Fremont, California, just up the freeway from Tesla’s original auto plant. Seven feet tall, their smooth, rounded covers pop out and up to reveal a mass of circuit boards, red and orange wiring, and 36

August 2022

a metal core that holds the “hot box” where water vapour separates into hydrogen and oxygen. The core runs between 750 and 800 degrees Celsius – a scorching 1,472 degrees Fahrenheit – but touch its exterior, and it feels warm. The only sound is the whir from a row of fans at top. Bloom built its business on fuel cells, devices that generate electricity through an electrochemical reaction rather than combustion. Now the San Jose company is selling solid-oxide electrolysers using most of the same technology, but in reverse. Hydrogen fuel cells combine hydrogen and oxygen into water as they produce power – electrolysers do the opposite. They’re almost mirror images of each other. “We’re building on our track record of fuel cells,” Russell said. “The manufacturing technologies, the field service programme we have in place, the global supply chain – we already know how to do this.” Plug Power also started with fuel cells before adding electrolysers, and several competitors sell both. Cummins in 2019 spent $290m to buy Hydrogenics for its fuel cells, thinking they could help decarbonise Cummins’s customers in mining and heavy transportation. But Hydrogenics had also developed electrolysers, and now those look like the better business, says managing director Alex Savelli. “We came to realise the electrolyser opportunity is probably as big if not bigger, and probably will happen sooner, than the fuel cell,” he says. “Sometimes, it’s OK to get lucky.”

BENEFITS GALORE Each type of electrolyser has its selling points. Alkaline electrolysers, for example, tend to be the least expensive and have become the technology of choice for Chinese manufacturers. They’re trying to undercut their global competitors on price – just as happened with solar cells a decade ago – and BNEF reports that Chinese alkaline electrolysers currently cost 73 per cent less than comparable units made in the West. PEM technology uses more rare metals and costs more, but it can start faster than alkaline, something worth considering if the power source is as variable as the sun and the wind. Hydrogen has become a priority for the Chinese government, and electrolysers are a big part of the push. Electrolyser deliveries there may top 1,600 megawatts this year, mostly on orders from state-owned businesses such as oil and gas giants Sinopec and CNPC, as well as high-emitting companies like coal-based chemical company Ningxia Baofeng Energy Group. If anything, demand is rising faster than production. And the companies making the machines – including one of the world’s largest solar manufacturers, Longi Green Energy – don’t want to limit themselves to the Chinese market. “It’s quite difficult to order electrolysers now,” says Mao Zongqiang, a professor at the Institute of Nuclear and New Energy Technology at Tsinghua University in Beijing. “The supply can’t meet the demand.” The customers could, in the end, span many industries. Oil companies need hydrogen for their refineries, where it helps lower the sulfur content of fuel, although many have their own way of producing it from their own natural gas. But semiconductor and LED factories use hydrogen, too, and could benefit from on-site production. Electrolysers would provide that. Owners of solar plants and wind farms may want to add electrolysers, just as they’re adding batteries to their projects today. “We’re just at the beginning of where this industry’s going,” says Ole Hoefelmann, general manager of Plug Power’s electrolyser business. Bloomberg gulfbusiness.com


READY RECKONER DUBAI’S OFFICIAL RESIDENTIAL REAL ESTATE PERFORMANCE INDEX According to Property Finder, Dubai recorded sales transactions worth Dhs22.75bn in June, the highest volume for the same month in the past nine years

Mo’asher: Sales

THE OFFICIAL SALES PRICE INDEX FOR THE EMIRATE OF DUBAI

APRIL TO JUNE THIS YEAR

INDEX VALUE

DUBAI OVERALL INDEX

KEY FINDINGS • In June, 8,897 sales transactions worth Dhs22.75bn were recorded. Around 60.05 per cent of sales transactions were in the secondary market, while 39.95 per cent were for the off-plan market

Index value Dhs1,013,973

Index value Dhs1,009,593

Index value Dhs1,141,665

Index value Dhs1,288,925

1.4 1.2 1

IN Q2 2022, A TOTAL OF 22,504 SALES TRANSACTIONS WORTH

0.6 0.4 0.2

Dhs59.15bn

May 2022

June 2022

Apr 2022

Mar 2022

Dec 2021

Jan 2022

Oct 2021

Nov 2021

Aug 2021

Sep 2021

Jul 2021

Jun 2021

Feb 2022

August 2022

37

SOURCE: PROPRIETARY PROPERTY FINDER DEMAND DATA, JANUARY 2021 TO JUNE 2022

June 2022

May 2022

Mar 2022

Apr 2022

Jan 2022

Index value Dhs2,157,668

Feb 2022

June 2022

Apr 2022

May 2022

Feb 2022

Mar 2022

Dec 2021

Jan 2022

Oct 2021

Nov 2021

Sep 2021

Jul 2021

Aug 2021

Jun 2021

Apr 2021

May 2021

Mar 2021

0 Jan 2021

0 Feb 2021

0.2

Dec 2020

0.4

0.2

Dec 2021

0.6

0.4

Oct 2021

0.8

0.6

Nov 2021

0.8

Aug 2021

1

Index value Dhs2,003,451

Sep 2021

1

Jul 2021

1.4 1.2

Index value Dhs1,822,342

Jun 2021

1.4 1.2

gulfbusiness.com

May 2021

Index value Dhs1,691,696

May 2021

Index value Dhs1,200,353

Apr 2021

Index value Dhs1,026,758

Mar 2021

Index value Dhs904,920

Feb 2021

Index value Dhs953,616

DUBAI VILLAS/TOWNHOUSES INDEX

Jan 2021

DUBAI APARTMENTS INDEX

Apr 2021

Dec 2020

INDEX BASE: JANUARY 2012

Mar 2021

0

WERE RECORDED

Dec 2020

AND THE VALUE INCREASED BY 61.56% COMPARED TO Q2 2021

Jan 2021

45.86%

0.8

Feb 2021

IN Q2, SALES TRANSACTIONS VOLUME INCREASED BY


Mo’asher: Rental

THE OFFICIAL RENTAL PERFORMANCE INDEX FOR THE EMIRATE OF DUBAI

JANUARY 2021 -THIS APRIL 2022 DECEMBER 2020 - JANUARY 2022 APRIL TO JUNE YEAR KEY FINDINGS

INDEX INDEX NUMBER VALUE

DUBAI OVERALL INDEX

• June had a total of 40,924 rental contracts, of which 63.20 per cent were new contracts and 36.80 per cent were renewals

Index value Dhs56,246

Index value Dhs50,730

Index value Dhs51,184

Index value Dhs52,498

1.4 1.2

IN Q2, THERE WERE

123,856

0.6

RENTAL LEASES 59.48% WERE NEW, WHILE 40.52% WERE RENEWALS

38

June 2022

Apr 2022

May 2022

Feb 2022

Mar 2022

Jan 2022

Nov 2021

Oct 2021

Sep 2021

Jul 2021

Aug 2021

Jun 2021

Dec 2021

June 2022

Apr 2022

May 2022

Feb 2022

Index value Dhs133,330

Mar 2022

Dec 2021

June 2022

Apr 2022

May 2022

Feb 2022

Mar 2022

Dec 2021

Jan 2022

Oct 2021

Nov 2021

Sep 2021

Jul 2021

Aug 2021

Jun 2021

Apr 2021

August 2022

May 2021

0 Mar 2021

0 Jan 2021

0.2

Feb 2021

0.4

0.2

Jan 2022

0.6

0.4

Nov 2021

0.8

0.6

Oct 2021

0.8

Sep 2021

1

Jul 2021

1

Index value Dhs131,428

Aug 2021

1.4 1.2

Jun 2021

1.4 1.2

Index value Dhs127,680

Apr 2021

Index value Dhs133,245

May 2021

Index value Dhs48,226

Mar 2021

Index value Dhs46,951

Jan 2021

Index value Dhs46,833

DUBAI VILLAS/TOWNHOUSES INDEX

Feb 2021

Index value Dhs51,389

Dec 2020

SOURCE: PROPRIETARY PROPERTY FINDER DEMAND DATA, APRIL 2022 TO JUNE 2022

DUBAI APARTMENTS INDEX

Apr 2021

INDEX BASE: JANUARY 2013

May 2021

0 Feb 2021

WERE NON-ANNUAL CONTRACTS

0.2

Dec 2020

18.59%

0.4

Mar 2021

WERE ANNUAL CONTRACTS WHILE

Dec 2020

81.41%

1 0.8

Jan 2021

IN Q2,

gulfbusiness.com


The most sought-after areas in Dubai A guide to the most popular areas to live in Dubai’s residential real estate market, with details on the average sales and rental rates SALES: APARTMENTS

SALES: VILLAS/TOWNHOUSES Arabian Ranches 2

Dubai Marina

9.80%

15.90% Dubai Hills Estate

Downtown Dubai

7.80%

12.20% Palm Jumeirah

TOP 5 SEARCHED AREAS

8.10% Business Bay 7.20% Jumeirah Village Circle 5.30%

April to June 2022 combined

AVERAGE PRICE PER TYPE OF UNIT

DHS MILLIONS * DHS THOUSANDS

Studio

Arabian Ranches 3 6.10%

TOP 5 SEARCHED AREAS

Palm Jumeirah 5.60% Arabian Ranches 5.10%

April to June 2022 combined

AVERAGE PRICE PER TYPE OF UNIT

DHS MILLIONS

2 Bed 2.1

1.4 1.6

750* 770*

420* 1 Bed

3 Bed 700*

1.1 1.3

1.7

2.3

1.7

2 Bed

2.2

2.9

4

8.9

4 Bed 1.2

1.9 2

3 3.2

2.3

3 Bed

4 4.2 4.4

17

5 Bed 1.5

2.7

3.3

4.5

5

5 5.2 6.3 6.4

25

RENT: APARTMENTS

RENT: VILLAS/TOWNHOUSES

Dubai Marina

Dubai Hills Estate 10.40%

6.70%

Downtown Dubai

Jumeirah 7.20%

Business Bay

TOP 5 SEARCHED AREAS

6.80% Jumeirah Village Circle 6.30% Jumeirah Lake Towers 4%

Al Barsha

TOP 5 SEARCHED AREAS

4.60% Arabian Ranches 4.50% The Springs 4.40%

April to June 2022 combined

AVERAGE PRICE PER TYPE OF UNIT

DHS THOUSANDS

Studio

April to June 2022 combined

AVERAGE PRICE PER TYPE OF UNIT

DHS THOUSANDS

2 Bed 35 42

54 55

90 103 110 125 130

70

1 Bed

3 Bed 50

65

74

145 165 190 200 210

85 105

2 Bed

4 Bed 70

90

115

125

200

200

3 Bed

310

5 Bed 110 115

gulfbusiness.com

220 230 250

155

195

300

250 285 300

August 2022

370

39

SOURCE: PROPRIETARY PROPERTY FINDER DEMAND DATA, MARCH 2022 TO JUNE 2022

5.70%


Top performers

The areas in Dubai that recorded the largest number of residental sales transactions in the last three months (April, May and June) APARTMENTS

VILLAS/TOWNHOUSES

OFF-PLAN

OFF-PLAN

Downtown Business Bay Dubai Creek Harbour (The Lagoons) Mohammed Bin Rashid City Jumeirah Village Circle Dubai Marina Dubai Harbour Arjan Jumeirah Al Safa (Damac City)

1305 1150

Dubai South (Dubai World Central) Arabian Ranches 3 Villanova The Valley Rukan Town Square Tilal Al Ghaf Dubai Investments Park Dubai Hills Estate Mohammed Bin Rashid City

756 607 527 405 268 249 235 231

SECONDARY

2022 YTD (until June 30)

Dhs114,556,109,273 438 334 179 139 118 111 83 44 21 16

SALES VALUE 17,655 transactions SECONDARY

OFF-PLAN

25,380 transactions

SECONDARY

Dubai Marina Business Bay Jumeirah Village Circle Downtown Palm Jumeirah Jumeirah Lake Towers International City Jumeirah Beach Residence Dubai Creek Harbour (The Lagoons) Dubai Hills Estate

760 701 657 637 456 378 359 314

The Springs Damac Hills 2 (Akoya) Jumeirah Park Arabian Ranches Dubai Hills Estate Arabian Ranches 2 Villanova Al Furjan The Sustainable City Reem

230 215

141 122 121 116 108 99 90 82 68 64

Dhs52,663,218,298 MORTGAGE VALUE SECONDARY

9,663 24 transactions SOURCE: DUBAI LAND DEPARTMENT

MORTGAGE

SALES SALES VALUE Total sales volume

SOURCE: DLD TRANSACTIONS REGISTRY

Sales volume

Dhs59,154,558,604 22,504 Off-plan

9,074

Secondary

13,430

SALES VALUE

Dhs22,750,503,052

Total sales volume

8,897

Sales volume

40

August 2022

transactions

OFF-PLAN

Off-plan

3,554

Secondary

5,343

April to June 2022

June 2022

MORTGAGE VALUE

Dhs26,775,043,414

Total mortgage volume

4,863

Mortgage volume

Off-plan

12

Secondary 4,851

MORTGAGE VALUE

Dhs11,206,274,212

Total mortgage volume

2,127

Mortgage volume

Off-plan

7

Secondary 2,120 gulfbusiness.com


FEATURES / ELECTRIC CARS

LET THE ELECTRIC R ACE BEGIN... WHY THE ELECTRIC CAR MARKET IS ABOUT TO GET CRAZY (AND CONFUSING)

T

he early days of any new technology tend to be – to put it technically – insane. Airlines in the 1960s, PCs in the 1980s, iPhone apps in the 2000s. Their origin stories all are similar: there’s a crush of new product, a marketing dash for FOMOmotivated customers and piles of money to burn as companies buy into the new game. The US electric car market right now is no exception. And that’s where Bloomberg Green’s Electric Car Ratings come in. In an effort to make sense of this mad market – to catalogue in close-to-real-time every one of the EVs on offer at the moment – it produced a rating of electric cars. The dashboard covers every new fully batterypowered vehicle available for sale in the US, calling out metrics from price and range to charging speed and number of seats.

NOTHING’S PERFECT Electric cars are drastically cleaner than gulfbusiness.com

conventional gasoline vehicles, particularly as renewable power starts to comprise more of the grid. However, there’s a growing awareness that none of this 2,500-kilogramme hardware comes without a carbon cost; there’s no such thing as a “zero-emission vehicle,” as they have been branded by policymakers and early champions. Steel body panels don’t grow on trees. Lithium doesn’t just flow out of the ground and into battery plants. And electricity – even the stuff coming from solar panels – isn’t captured without a great deal of capital and carbon expense. That’s why the EV ratings also measure how “green” each of these machines is with a formula based on the economy of the vehicle, how far it travels relative to how many kilogrammes it weighs, and the size of its battery. The economy part of the equation is weighted at 70 per cent of the score, which is roughly equivalent to the amount of an EV’s emissions that come from driving. The remainder of an EV’s carbon footprint comes from its manufacturing, especially

Electric cars are drastically cleaner than conventional gasoline vehicles, particularly as renewable power starts to comprise more of the grid. However, there’s a growing awareness that none of this 2,500-kilogramme hardware comes without a carbon cost”

August 2022

41


FEATURES / ELECTRIC CARS

THE INDUSTRY IS SHIFTING EVEN FASTER IN ASIA AND EUROPE, WHERE ALMOST 10 PER CENT OF NEW VEHICLES PURCHASED ARE NOW ENTIRELY BATTERY POWERED”

the construction of the battery. Thus, in Bloomberg’s model, battery size serves as a proxy for all manufacturing impacts and is weighted at 30 per cent. How the decisions are made and some additional context is spelled out at length in the methodology.

MAKES THE LIST It will come as no surprise that among the models currently on the dashboard – which will be updated when new models are introduced and key metrics change – Elon Musk has bragging rights. Tesla’s Model 3 Long Range tops the list of green machines. It travels up to 576 kilometres at a time, thanks in part to an aerodynamic design and software meant to squeeze every last electron from a medium-sized battery. GMC’s Hummer EV brings up the rear with its massive battery and a chassis geared for off-road brawn rather than on-road economy. In the US alone, there are about 33 electric vehicles on sale right now – almost triple the number of choices a year ago. By this time next year, there will be dozens more, including a bunch of super-sized pickup trucks that Americans covet. There hasn’t been this many new new cars since Henry Ford stopped fiddling with steam engines and got down to business. North Americans will purchase about 1.4 million electric vehicles this year, the majority of which will be fully electric, not hybrid, according to BloombergNEF estimates. They made up more than 6 per cent of new sales in the first quarter. And the industry is shifting even faster 42

August 2022

in Asia and Europe, where almost 10 per cent of new vehicles purchased are now entirely battery powered. For carmakers, the electric race is existential; for customers, however, it’s bewildering. As if it weren’t hard enough to keep track of the blitz of new machines hitting dealerships, car companies are redirecting their publicity dollars to tout battery-powered models that won’t hit the streets for years. General Motors “revealed” its Chevrolet Silverado EV in January, though the first customers won’t get the truck until next spring. It’s anyone’s guess when we might see the Tesla Cybertruck Musk pulled the cover off of nearly three years ago. Every company in the game is pushing a parade of EVs while trying to make good on pledges to sunset internal-combustion models by self-imposed deadlines. There’s an argument to be made that EV demand, for so long a rounding error in the car business, is actually outstripping supply. A few months ago, one in four Americans surveyed told J D Power they were “very likely” to go electric with their next car purchase, and that was before the crisis in Ukraine pushed gas prices to a record high. NORTH AMERICANS WILL PURCHASE ABOUT

1.4 MILLION ELECTRIC VEHICLES THIS YEAR, THE MAJORITY OF WHICH WILL BE FULLY ELECTRIC, NOT HYBRID

Waitlists for the newest, hottest models – such as the Hyundai Ioniq 5 – are stretching for months and steep mark-ups to the sticker price are the norm. Ford Motor has gone so far as to stop taking orders for its new F-150 Lightning and its Mustang Mach-E until its factories can catch up with demand; meanwhile it’s hustling to open more assembly lines. When Nissan introduced the Leaf in 2010, an electric car was a small, funky looking hatchback, short on range and long on virtue signalling. Over the following decade, Tesla made them into sporty status symbols. Now the legacy automakers have begun churning out pickups and SUVs every bit as powerful as their combustion engine predecessors, and far quicker. These are finally no-compromise vehicles and convincing consumers to buy them is a critical step in the climate fight. The next impactful step, perhaps 10 years from now, will be convincing them to buy only as many EVs as they really need. The car market may never be this crazy and confusing again. If you are shopping for a new ride, investing in these companies or are just among the increasing crowd of the EV-curious, come back here anytime to see how the race is shaping up and, of course, which machine is out front. Bloomberg gulfbusiness.com


S P E C I A L R E P O RT

AVIATION: ON THE RUNWAY TO RECOVERY


Special Report / Aviation

ON AN UPWARD TRAJECTORY AS THE AVIATION SECTOR’S RECOVERY HAS QUICKENED, IATA RECENTLY UPGRADED ITS OUTLOOK FOR THE INDUSTRY’S FINANCIAL PERFORMANCE THIS YEAR WORDS: NUSRAT ALI

L

ast month’s images of queues disrupting operations at UK’s prominent airports and the subsequent calls to cap passenger numbers by the country’s aviation authorities may not have gone down well with airlines and travellers, but in the larger – and probably brighter – picture, are indicative of the rapid recovery of the global aviation industry. The International Air Transport Association (IATA) forecasts that 2022 will be a promising year for the aviation industry, as demand for travel returns, and industry-wide profitability is possible by 2023. The North American market is already expected to deliver a profit of $8.8bn by the end of this year. Industry losses are expected to reduce to $9.7bn (compared to the previous estimate of a loss of $11.6bn) for a net loss margin of -1.2 per cent. This is a huge improvement from losses of $137.7bn (-36.0 per cent net margin) in 2020 and $42.1bn (-8.3 per cent net margin) in 2021. Driven by strong pent-up demand, eased travel restrictions, and growing employment rates, passenger numbers will reach 83 per cent of pre-pandemic levels this year. Cargo volumes are expected to reach a record high of 68.4 million tonnes in 2022. “Airlines are resilient. People are flying in ever greater numbers, and cargo is performing well against a backdrop of growing economic uncertainty,” says Willie Walsh, IATA’s director general. “It is a time for optimism, even if there are still challenges on costs, particularly fuel, and some lingering restrictions in a few key markets.”

Growth drivers

As people return to travel, flying revenues are rising. But now airlines are faced with the challenge of keeping costs under control if they want to see top-line growth. IATA’s improved 44

August 2022

financial outlook comes from pegging costs to a 44 per cent rise while revenues increase by 55 per cent. “As the industry returns to more normal levels of production and with high fuel costs likely to stay for a while, profitability will depend on continued cost control. And that encompasses the value chain. Our suppliers, including airports and air navigation service providers, need to be as focused on controlling costs as their customers to support the industry’s recovery,” adds Walsh. According to IATA, industry revenues will reach $782bn (an increase of 54.5 per cent compared to 2021), 93.3 per cent of 2019 levels. A total of 33.8 million flights are expected to take off this year, which is 86.9 per cent of 2019 levels (38.9 million flights). Passenger revenues will double from 2021 levels, standing at $498m. Scheduled passenger numbers are expected to reach 3.8 billion, with revenue passenger kilometres (RPKs) growing 97.6 per cent compared with 2021, reaching 82.4 per cent of 2019 traffic. As pent-up demand is released with the easing of travel restrictions, yields are expected to rise by 5.6 per cent. The outlook for cargo is buoyant too, aiming to rake in $191bn in revenues. The industry expects to carry a record-high of over 68 million tonnes of cargo by the end of this year. It won’t only be revenues that will rise this year. Goaded by the rise in fuel prices, the crisis in Ukraine, and general inflation, the industry’s overall expenses are also expected to surge by 44 per cent from 2021, touching $796m. Fuel will be the industry’s highest expense, accounting for 24 per cent (based on an expected average price for Brent crude of $101.2 per barrel and $125.5 for jet kerosene) of overall costs. This year, the high spread between crude and jet fuel prices has been well above historical norms due to capacity restraints at refineries and will continue to remain elevated in 2023 if gulfbusiness.com


further investments are not made in this sector. The situation will push airlines to improve their fuel efficiency through the use of more efficient aircraft and operations. Labour was named as the second highest operational cost for airlines by IATA. As the industry rebuilds, direct employment in the sector is expected to reach 2.7 million, an increase of 4.3 per cent from 2021. However, this is still below 2019’s 2.93 million jobs. The time required to recruit, train, complete security and background checks, and perform other necessary processes before staff is “job-ready” is presenting a challenge for the industry in 2022. In some cases, employment delays may act as a constraint on an airline’s ability to meet passenger demand.

Regional focus

Middle East airlines will heave a sigh of relief as international routes and long-haul flights make a comeback this year. Region-wide, net losses are expected to narrow to $1.9bn in 2022, compared to losses of $4.7bn last year. Demand (revenue passenger kilometres or RPKs) is expected to reach 79.1 per cent of pre-crisis (2019) levels, and capacity 80.5 per cent. For the financial year ending March 31 2022, Dubai’s national carrier, Emirates Airline’s total revenue increased by 91 per cent to Dhs59.2bn ($16.1bn) from last year. The airline carried 19.6 million passengers (up by 199 per cent) in 2021-22. Emirates SkyCargo reported a revenue of Dhs21.7bn ($5.9bn), an increase of 27 per cent over last year. The Emirates Group posted a revenue of Dhs66.2bn ($18.1bn), marking an increase of 86 per cent over the 2020-2021 results. This summer, the airline expects to fly over half a million passengers out of Dubai. Similarly, flydubai is expecting three million passengers to travel across its network from July to September, marking the period as the busiest summer in the airline’s history. An average of 8,500 departures per month are scheduled across flydubai’s network of 102 destinations, which exceeds prepandemic levels. “Our agility and preparedness, strong business model, and the scheduled aircraft deliveries this year will see that we are well placed to overcome the challenges through which we as an industry continue to navigate. We look forward to an exceptional summer of connecting people, opening up underserved markets, and providing our customers with more options to travel,” says Ghaith Al Ghaith, CEO at flydubai. The airline has already added frequency on some of its popular routes and will also be adding four new aircraft to its fleet this month. The upcoming FIFA World Cup in Qatar is also a major number booster for the airline which has launched gulfbusiness.com

‘Match Day Shuttle’ flights between Dubai and Doha. The shuttle flights are being offered in partnership with Qatar Airways and other partner GCC national carriers and will provide football fans with convenient travel options to the matches that will take place from 21 November to 18 December 2022. On the freight front, Emirates SkyCargo reopened its hub at Dubai World Central (DWC) in March this year, after a hiatus of almost two years. The reactivation is in response to the growth of Emirates’ passenger network and operations, as well as the progressive increase in cargo volumes. In a related development, Dubai International (DXB) airport raised its annual passenger traffic forecast for 2022 to 58.3 million, from an earlier projection of 57 million. Passenger traffic in the first three months of the year clocked in at 13.6 million – double the number during the same period last year. The airport’s performance is a “direct outcome of Dubai’s clear strategy and efforts to restore international air connectivity and mobility, and lead the global aviation industry out of an unprecedented crisis”, says Paul Griffiths, chief executive of Dubai Airports. The UAE capital’s flagship carrier, Etihad Airways posted a record-breaking core operating profit of $296 million in the first half of 2022, compared to a $392 million loss in the same period last year. The airline carried 4.02 million passengers (three million more than the same period last year) and pas-

Airlines are resilient. People are flying in ever greater numbers, and cargo is performing well against a backdrop of growing economic uncertainty” senger revenues reached $1.25 billion in H1 2022. Cargo operations saw a 6 per cent revenue growth at $802 million for the same period. The airline is now geared up for a busy summer. In June 2022, Etihad announced that it was ready to welcome 2.7 million passengers across its network of which 1.4 million would depart from its hub at Abu Dhabi International Airport. Mohammad Al Bulooki, chief operating officer, Etihad Aviation Group, said: “As travel rebounds from the impact of August 2022

45


Special Report / Aviation

the global pandemic, Etihad has witnessed a vast increase in bookings over recent weeks. With summer holidays upon us and to manage the increase in passenger numbers, Etihad has bolstered operations both locally and across our global network to ensure guests enjoy a seamless airport and flight experience.” Neighbouring Saudi Arabia has announced ambitious plans for its aviation sector, as it continues its privatisation drive. As per the National Aviation Sector Strategy announced by the General Authority of Civil Aviation (GACA), Saudi Arabia will boost its tourism market through increased connections to over 250 destinations around the world, reaching 330 million passengers. At last month’s Farnborough International Airshow (FIA), Saudi Arabia announced that it would slash airport charges by almost 35 per cent at its Riyadh, Jeddah, and Dammam airports. The reductions will be implemented later in the year. Preparations are also in place to launch a new national airline. Based at the King Khalid International Airport in Riyadh, the new carrier will play a central role in the country’s plan to kick-start its “golden era of travel” and transform it into one of the leading aviation hubs in the Middle East. Additionally, Saudi Arabia is seeking to position itself as a cargo hub. At the FIA, GACA invited private companies such as Amazon, Alibaba and DHL to ramp up their operations and infrastructure, create local partnerships, and set up freightforwarding and warehousing activities in the kingdom. The advance into air cargo and logistics is in line with Saudi Arabia’s Vision 2030 framework to reduce its dependence on oil and diversify its economy and aims to accelerate the capacity of the kingdom’s air cargo sector to more than 4.5 million tonnes per year by the end of the decade as part of a $100bn plan to enlarge the aviation sector. Further afield, Qatar Airways is preparing to launch more routes this year. The airline returned to profitability in 2021 – the first time since 2017 – reporting a net profit of $1.54bn. For this year, the airline plans to continue its strategic investments in other airlines, which include International Airlines Group (25.1 per cent), Cathay Pacific (9.99 per cent), LATAM (10 per cent), and China Southern Airlines (3.62 per cent). Steered by agile and fit-for-purpose operations across all business areas, the Group generated a strong EBITDA margin

46

August 2022

In a related development, Dubai International (DXB) airport raised its annual passenger traffic forecast for 2022 to 58.3 million, from an earlier projection of 57 million”

of 34 per cent at QAR 17.7bn ($4.9bn), higher than the previous year’s EBITDA by QAR11.8bn ($3.2bn). Despite the pandemic, Qatar Airways grew to more than 140 destinations in 2021/22. The airline opened new routes as well as resumed operations in its key markets across Europe, Africa, the Middle East and Asia. Qatar Airways Cargo (QAC) remained one of the leading player in the world as its revenue experienced an impressive growth of 25 per cent over last year. It was named among the top leading cargo airlines in the world by the IATA World Air Statistics 2021 report, coming in at number three position with 13.74 billion CTK (Cargo-TonneKilometres). QAC transported more than 600 million doses of the Covid-19 vaccine, over the course of the pandemic up to June 2022. For this year, the airline plans to continue its strategic investments in other airlines, which include International Airlines Group (25.1 per cent), Cathay Pacific (9.99 per cent), LATAM (10 per cent), and China Southern Airlines (3.62 per cent). Saudi Arabian Airlines (SAUDIA) climbed up by 13.1 per cent in the annual Brand Finance Top 50 airlines annual report, a review of the most valuable and strongest airline brands worldwide, in June 2022. Achieving an ‘A’ brand rating, SAUDIA was rated the ‘fastest growing airline brand’ in the Middle East. The airline attributed the surge in brand performance to overall growth in its route network; expansion to new markets; growth in passenger numbers, and enhancements in the onboard product, lounges, and guest services. Given the spate of positive news coming out of the Middle East’s aviation sector, it is evident the industry is well on its way to recovery, underlined by enhanced passenger numbers, cargo and an increase in fleet sizes. gulfbusiness.com


Special Report / Sustainability

AIMING FOR SUSTAINABILITY FLY HIGH, BUT KEEP EMISSIONS LOW HAS BECOME THE RALLYING CRY FOR THE GLOBAL AVIATION SECTOR. WE LOOK AT THE EFFORTS THAT AIRLINES AND AVIATION-RELATED COMPANIES ARE PUTTING IN TO ENABLE NET ZERO AVIATION

WORDS: NUSRAT ALI

L

ast month’s Farnborough International Airshow (FIA) put the spotlight on sustainability in aviation, as 1,200 companies took part in one of the world’s largest airshows. Aircraft manufacturers used the event to showcase a host of next-generation environmentallyfriendly technologies. Rolls-Royce, Hyundai, Airbus, CFM, and Boom were some of the companies that announced major sustainability initiatives. Rolls-Royce and Hyundai Motor Group announced plans to collaborate to bring all-electric propulsion and hydrogen fuel cell technology to the advanced air mobility (AAM) market. The partnership will leverage Rolls-Royce’s aviation and certification capabilities and Hyundai’s hydrogen fuel cell technologies and industrialisation capability. Airbus and CFM International will flight test CFM’s cuttingedge open fan engine architecture, as they target future engine and aircraft efficiency improvements, including improved fuel efficiency that could provide a 20 per cent reduction in CO2 emissions and ensure compatibility with 100 per cent sustainable aviation fuel (SAF). The joint demonstration will use shared flight test assets, wherein the first set of tests comprising engine ground tests and flight test validation will be conducted by CFM. The second phase of flight tests will be performed from the Airbus flight test facility in Toulouse, France, in the second half of the decade. Boom Supersonic revealed the latest design iteration of its ‘Overture’ aircraft capable of carrying 65-80 passengers at twice the speed of today’s airliners and running on 100 per cent SAF.

Mounting concerns

These were just some of the biggest news to come out of the gulfbusiness.com

FIA. But they give a clear indication of the industry’s biggest concern as air travel resumes globally. In 2021, the world grappled not only with a crippling pandemic, but also with distressing climate change that broke new records – greenhouse gas concentrations, global annual mean temperature, and global mean sea level all reached record new highs. These developments brought a renewed sense of urgency to the call issued by the United Nations’ Intergovernmental Panel on Climate Change (IPCC) to limit global warming to 1.5°C to avoid many of the worst effects of climate change. For this, the global economy would have to reach net-zero emissions by 2050. With the global aviation industry producing around two per cent of all man-made carbon dioxide (CO2) emissions, and aviation responsible for 12 per cent of CO2 emissions from all transport sources, the aviation sector’s contribution to achieving net zero by 2050 is crucial. Notably, two of the leading global aviation agencies, the International Air Transport Association (IATA) and Air Transport Action Group (ATAG), have committed themselves to achieve a net-zero emissions target by 2050. With this, both organisations fall in line with the objectives of the Paris agreement to limit global warming to 1.5°C and as such have developed roadmaps in support of this goal. In parallel, the International Energy Agency (IEA), in its ‘Net Zero by 2050’ report has also set out a path for how the global energy sector, including transport, can reach this target. All three agencies agree that the entire aviation industry including aircraft and engine manufacturers, airlines, airports, and air navigation service providers, and not just airlines, will have to work in tandem to progress towards greener flying. The industry will have to use a combination of August 2022

47


Special Report / Sustainability The Rolls-Royce Trent XWB-powered Airbus A350

technology, operations, infrastructure, sustainable aviation fuels, and out-of-sector carbon reductions to reach net-zero at a global level. Among these, technology and SAF will collectively deliver the highest improvement benefits according to IATA.

Airlines at the forefront

UAE’s national carrier, Etihad also made news at FIA, as it announced its membership in the Aviation Impact Accelerator (AIA), an international group of practitioners and academia convened by the University of Cambridge, that aims to accelerate the work of aviation companies toward net-zero operations. Etihad Aviation Group CEO Tony Douglas said in a statement: “We are proud to be partnering with one of the world’s leading jet engine research labs to further support the decarbonisation of our industry. Etihad is committed to sustainability and the dedication of its fleet as flying test-beds for research and innovation through the Greenliner and Sustainable50 programmes, and this new collaboration with the University of Cambridge, through the Aviation Impact Accelerator, will allow for more industrial and academic synergy.” Etihad has been spearheading the UAE’s aviation sustainability efforts for quite some time. The airline lays claim to the world’s most comprehensive industry-wide testing and innovation programme. It became the first airline to secure commercial finance based on verified compliance with the UN’s Sustainable Development Goals. Etihad is also the first to implement pioneering operational efficiencies and technology solutions such as the Jeppesen Flite Deck Advisor, SATAVIA contrail avoidance, GE Engine Foam Wash, eTech logs, and lightweight Unit Load Devices. It also holds the distinction of launching the first aircraft carbon offset programme in the Middle East. Last month, it was named ‘Environmental

Airline of the Year 2022’ in the annual Airline Ratings awards. Etihad celebrated the delivery of its new Airbus A350 with an inaugural flight to New York’s John F Kennedy International Airport in June 2022. With highly efficient fuel consumption and CO2 savings, Etihad’s new A350s are an important element of its Sustainable50 programme that was born out of a partnership between the airline, Airbus and Rolls Royce in 2021. The programme uses Etihad’s A350s as flying testbeds for new initiatives, procedures, and technologies to reduce carbon emissions. Earlier in April, over 40 of Etihad’s commercial flights tested contrail avoidance technologies in partnership with SATAVIA, a UK-based green aerospace company, in a week-long series of tests. Etihad’s EY20 Sustainable Flight from London to Abu Dhabi last year earned recognition as the “world’s most sustainable flight” as it operated on a combination of contrail forecasting, a high blend of SAF, and new plastic-free or sustainable in-flight products. The airline plans to operate 13 more such flights this year. The UAE’s national carrier, Emirates, has adopted a threepronged approach to sustainability that includes reduced fuel emissions, responsible operations, and protection of biodiversity. The airline operates one of the youngest fleets in the industry - an average age of fleet in 2020-21 of 7.3 years – that is fully compliant with the International Civil Aviation Organisation’s (ICAO) noise and engine emission standards. Right from the

Bustanica is the world’s largest vertical farming facility

DUBAI INTERNATIONAL’S TERMINAL 2 BOASTS A 15,000 –PANEL SOLAR ARRAY, THE LARGEST AT ANY AIRPORT IN THE MIDDLE EAST 48

August 2022

gulfbusiness.com


Special Report / Sustainability IN JULY, EKFC OPENED THE WORLD’S LARGEST VERTICAL FARMING FACILITY, BUSTANICA, IN COLLABORATION WITH US-BASED CROP ONE. SPANNING A

panels that are expected to generate more way the airline washes its aircraft – its foam than 1,800 megawatthours of electricity wash technique for cleaning engines saves and save around 800 tonnes of carbon about 200 tonnes of carbon dioxide emisdioxide every year. sions per year across its fleet while the airSimilarly, EKFC’s rooftop comprising craft dry wash technique saves 11 million 8,112 solar panels is expected to generate litres of water annually, Emirates has a host 4,195 megawatt-hours of electricity annuof technical and operational sustainability ally, reducing traditional energy consumpinitiatives in action. In partnership with tion by 15 per cent across its laundry, food air navigation service providers around manufacturing, and staff accommodation the world, Emirates’ operates ‘flex tracks’ 130,000 facilities. Last month, EKFC opened the or flexible routings through which it creSQUARE-FOOT world’s largest vertical farming facility, ates efficient routes that take advantage CONTROLLED Bustanica, in collaboration with US-based of natural tailwinds. The airline actively Crop One. Spanning a 130,000 squareworks with IATA to implement this routing ENVIRONMENT foot controlled environment facility, it is system as a standard operating procedure FACILITY, IT geared to produce more than 1,000,000 where possible. IS GEARED kilogrammes of high-quality, herbicideIt has also reduced the number of flights TO PRODUCE and pesticide-free leafy greens daily, using placed into holding patterns as part of its 95 per cent less water than outdoor fields. traffic management systems. Increased MORE THAN Since the facility will be located within availability of ‘Free Route Airspace’ trans1,000,000 EKFC’s premises, it will reduce transportlates into more efficient routings. This is KILOGRAMMES related carbon emissions too. complemented by a robust fuel monitoring OF HIGH-QUALITY, As part of its biodiversity conservation system and data analytics, resulting in the efforts, Emirates funds the Dubai Desert reduction of discretionary fuel uplift from HERBICIDE- AND Conservation Reserve through an ongocrews and dispatchers. On the ground, its PESTICIDE-FREE ing investment of over Dhs28m, in addifuel-efficient practices include the use of LEAFY GREENS tion to being on its management board. ground power units instead of the aircraft The airline’s One & Only Wolgan Valley, a auxiliary power unit and switching one or DAILY conservation-based resort in Australia, was two engines off while taxiing in after landthe first carboNZero certified hotel in the ing. The airline has moved its entire cockworld, and the first carbon neutral resort to pit crew to electronic flight bags – devices be certified through an internationally accredited greenhouse used to electronically store and retrieve documents required gas programme, when it opened in 2009. for flight operations – to save weight and help crew manageBoth of Dubai’s airports, Dubai International (DXB) and ment tasks easily and with less paper. Dubai World Central (DWC), achieved Level 3 (OptimiWhile the airline has not made public the details of its move sation) of the Airports Council International’s (ACI) Airto sustainable aviation fuel, it has said that it will “encourage port Carbon Accreditation programme in 2019. As part of the development of a commercially-viable supply chain for Dubai’s commitment to achieving environmental sustainSAF and conduct trials of, and purchasing, electric and hybrid ability, a number of environmental initiatives are in place ground equipment and vehicles to replace diesel-fuelled at both airports. Dubai International’s Terminal 2 boasts equipment” while continuing to “explore partnership oppora 15,000–panel solar array, the largest at any airport in tunities in the few destinations on its network where SAF is the Middle East. Plans are underway to replace the ground being made available and is reviewing longer-term prospects services vehicle fleet with electric and hybrid vehicles and for technologies such as power-to-liquid fuels”. However, existing light fixtures at DXB are being replaced with LED Emirates’ last annual report (2020-21) gives an indication of bulbs to cut energy consumption. the challenge the airline faces. In the year reported on, EmirIn its latest contribution, Dubai Airports implemented a ates used 3,494,233 tonnes of fuel, of which only 77 tonnes food waste treatment plan, which uses a special high-tech were SAF. biodigester compost system to capture and compost more Sustainable infrastructure than 2,000 tonnes of food waste annually from food and bevTwo of the airline’s major facilities – Emirates Engine erage outlets, lounges, and hotels across DXB terminals and Maintenance Centre (EMC) and Emirates Flight Catering concourses. Decomposing food waste in landfills results in the (EKFC) – are powered by solar power systems targeting a CO2 emission of methane gas which is 72 times more harmful to reduction of 3.8 million kilogrammes annually. EMC’s car the environment than CO2. The programme which started park roof has a one-megawatt array of 2,990 solar photovoltaic in June this year has already achieved more than 40 per cent gulfbusiness.com

August 2022

49


Special Report / Sustainability

reduction in waste, including a special initiative that captures 100 per cent of all cooking oil used in airport F&B outlets and converts it to biodiesel fuel.

Ground handling goes green

Global air and travel services provider dnata, which is headquartered in Dubai, has announced plans to invest $100m in green operations, across its global network, over the next couple of years. The company plans to reduce its carbon footprint by 20 per cent by 2024, and by 50 per cent by 2030. “We’ve been making great progress on reducing our carbon footprint, minimising waste, and reducing energy and water consumption across our operations. We will further increase our investments and efforts in strong cooperation with our partners to achieve our targets and preserve the environment for current and future generations,” said Steve Allen, CEO of dnata Group, in an official statement. The ground handler has earned the distinction of being the first to complete green aircraft turnarounds, using only zero-emission ground support equipment (GSE) in the US and UAE. In recent years, dnata has significantly invested in advanced technologies such as solar panels, heat recovery units, and electric vehicle charging. It has increased investments in electric and hybrid ramps, ground support, and forklift equipment, and refurbished existing GSE with new technologies to further decrease emissions and update them to the latest safety and quality standards. In May, dnata announced that it would replace all its vehicles and equipment with electric ones, starting with Dubai. The operator currently has 30,000 types of equipment including motorised and non-motorised trolleys, hybrid cars, and tractors, across its Dubai and Jebel Ali facilities. It has started replacing them with electric ones as well as exploring the replacement of heavy-duty tractors with electric units.

Qatar Airways was the first airline in the Middle East to be certified to the highest level of IATA’s ‘Environmental Assessment’ programme

50

August 2022

The industry will have to use a combination of technology, operations, infrastructure, sustainable aviation fuels, and out-of-sector carbon reductions to reach netzero at a global level” Regional efforts

In May, Qatar Airways published a special two-year edition sustainability report (FY2019-21). Themed Response, Relief, Recovery, Resilience, the report details how the airline aligned its short-term emergency responses with investments into long-term economic, social and environmental objectives. Qatar Airways was the first airline in the Middle East to be certified to the highest level of IATA’s ‘Environmental Assessment’ programme (IEnvA) and also the first in the region to join IATA’s ‘Turbulence Aware’ data exchange platform, which targets lower fuel burn through smoother flights. The airline has committed to achieving 10 per cent SAF by 2030 and is actively working to establish a viable pathway for the adoption of SAF. In 2021, it committed to purchasing 350 million gallons of blended SAF at San Francisco Airport over a period of seven years, starting from 2024. Meanwhile, Royal Jordanian is in a SAF “information-gathering phase” and will incorporate its use in the airline’s soonto-be-launched environmental management system. Currently, SAF isn’t used by the airline, but it is keen to implement a change over the next two years. Bahrain’s Gulf Air operated its first transcontinental lower emission flight in April last year. Flying from Helsinki, Finland to Manama, Bahrain, the airline’s flagship Boeing 787-9 Dreamliner used Neste’s SAF for the journey. “This is a major milestone for Gulf Air and an important chapter of our history. This lower emission flight marks the beginning of our journey into our future strategy to explore the use of Sustainable Aviation Fuel in our aircraft and standing by our commitment to lower our carbon emissions,” said Captain Waleed AlAlawi, acting chief executive officer, Gulf Air, at the time. With MENA’s biggest aviation players investing millions in lowering emissions and reducing their carbon footprint, it’s evident sustainability forms the core of the region’s aviation sector. So far, much ground has been gained, but there is still a long way to go. gulfbusiness.com


Special Report / Budget Airlines COMMENT

Low-cost carriers fly high

The Middle East’s budget carriers are cashing in on the growing trend for affordable luxury and increasing demand WORDS: NUSRAT ALI

T

raditionally viewed as exotic and luxurious holiday destinations, Middle Eastern countries are trying to recover tourism without diluting their ‘luxury’ appeal. A report by data analytics and consulting firm, GlobalData, predicts that the Middle East is set for a low-cost carrier (LCC) boom, as the region experiences demand for affordable luxury. As such, countries like the UAE, Bahrain and Kuwait are diversifying into mainstream leisure markets with the help of low-cost carriers. The premise is simple: travel cheap, but still holiday in luxury. With the onset of the pandemic, low-cost fares have become valuable and perhaps the most influential factor in booking a holiday as shown in a GlobalData Q3 2021 Global Consumer Survey. Fifty-eight per cent of the survey’s respondents pointed toward the cost factor. gulfbusiness.com

Amongst UAE-based respondents, 57 per cent agreed with this sentiment. Both numbers highlight the demand for affordable holidays along with a demand for low-cost airlines from both inbound and outbound tourists. With passengers facing the pressures of growing inflation, budget airlines with fares costing up to 60 per cent less than average full-service carriers have become the preferred choice for a majority of travellers. From top-line growth to expanding networks and fleets, the region’s budget carriers have demonstrated an upswing in all areas. Flydubai reported an “exceptional performance” for the first quarter of 2022 with a 114 per cent increase in passenger numbers compared to 2021. The airline carried 2.35 million passengers between January 1 and March 31 this year. Connecting traffic also surged by 15 per cent from last year, touching the 43 per cent mark compared to 2021’s 28 per cent. One of the few budget carriers to have a premium offering, demand for business class grew across its global network: Europe saw an increase to 51 per cent in 2022 up from 39 per cent in 2021. Sharjah-based Air Arabia showed a net profit of Dhs291m for Q1 2022, a whopping 756 per cent increase compared to the Dhs34m registered for the same period last year. With an average seat load factor of 79 per cent, more than 2.4 million travellers took off from the carrier’s five hubs between January to March. Commenting on the results, Sheikh Abdullah Bin Mohammad Al Thani, chairman of Air Arabia, says: “The strong performance we witnessed last year continued in the first quarter of 2022 and was supported by higher customer demand for Air Arabia’s value-driven product as

A WHOPPING

Dhs291m SHARJAH-BASED AIR ARABIA NET PROFIT FOR Q1 2022

756 PER CENT

INCREASE COMPARED TO THE DHS34M REGISTERED FOR THE SAME PERIOD LAST YEAR

August 2022

51


Special Report / Budget Airlines

The latest market analysis suggests that budget carriers such as Air Arabia Abu Dhabi and Wizz Air Abu Dhabi will drive demand for new narrow-body aircraft” well as rigid cost control measures that the airline took since the start of the pandemic.” The airline ended 2021 on a high too, reporting a net profit of Dhs720m. Touching Dhs3.17bn, Air Arabia’s turnover for 2021 was 71 per cent higher than that of 2020. Etihad Airways’ joint venture with Air Arabia further endorsed the rising significance of LCCs in the aviation landscape. Launched during the peak of the pandemic, Air Arabia Abu Dhabi was created to serve the two-fold purpose of complementing Etihad Airways’ services from the UAE capital, as well as catering to the low-cost travel segment. The airline reported a “fully profitable” first year, calling its performance a “testimony to Air Arabia’s ability to run a very tight ship indeed”. This year, Air Arabia Abu Dhabi expects to carry over a million passengers, up from 800,000 since its inception in July 2020. If the start of the pandemic in 2020 seemed like a setback for European carrier Wizz Air, which had just announced the creation of Wizz Air Abu Dhabi in partnership with Abu Dhabi Development Holding Company, the airline managed to turn around the situation in its favour quickly. Michael Berlouis, managing director of Wizz Air Abu Dhabi, says: “We’ve been able to grow our network to more than 38 destinations within a five-hour flight time radius of Abu Dhabi despite all the challenges of the pandemic. Postpandemic, we have been capitalising on the countries that have been opening up and the pent-up demand for travel, with the GCC encouragingly leading the way as one of the quickest tourism markets to recover.” Wizz Air Abu Dhabi launched more than 34 destinations and operated over 1,000 flights amidst continuing restrictions. Despite a persisting pandemic, the country’s low-cost carriers (LCCs) added a host of new destinations to their networks as well. In April, Wizz Air Abu Dhabi 52

August 2022

THIS YEAR, AIR ARABIA ABU DHABI EXPECTS TO CARRY OVER A MILLION PASSENGERS, UP FROM

800,000 SINCE ITS INCEPTION IN JULY 2020

added seven new European destinations to its network followed by stops in Saudi Arabia and Sri Lanka. “We are also ramping up our operations further in 2022 by bringing a fifth aircraft into operation; adding more frequencies to our existing routes and starting new destinations including Dammam, Kuwait and the Maldives. We are looking forward to doubling the size of the team in 2022 to 400 as well as increasing the size of our fleet,” adds Berlouis. Demonstrating its prowess as MENA’s largest low-cost airline, Air Arabia added 43 new routes to its global networks from its hubs in the UAE, Morocco and Egypt in the first nine months of 2021. Not just new destinations, Air Arabia has gone all out to announce two new budget carriers, Fly Arna and Fly Jinnah, in collaboration with the Armenian National Interests Fund and Lakson Group respectively. The same optimism is evident in the region’s other popular LCCs as well. Kuwait’s Jazeera Airways booked a net profit of KD7.1m (Dhs84.7m) for 2021, up 126.8 per cent from 2020. Its passenger numbers touched one million, a 48.2 per cent hike from the previous financial year. Operating revenue for 2021 stood at KD80.4m (Dhs96m), up 94.3 per cent, and operating profit increased by 152.2 per cent to KD10.8m (Dhs129m). Apart from passenger numbers, LCCs are also playing a huge role in the demand for aircraft. “The latest market analysis suggests that budget carriers such as Air Arabia Abu Dhabi and Wizz Air Abu Dhabi will drive demand for new narrowbody aircraft,” said Danielle Curtis, Exhibition Director ME, Arabian Travel Market, in a statement. The forecast is on point as starting in 2024, Air Arabia will start taking delivery of the 120 Airbus A320neo aircraft order it placed in 2019. Encouraged by its 2021 financial results, Saudi carrier flynas is looking to increase its outstanding aircraft order to 250 after receiving approval from its board of directors earlier this year. The airline already has 120 aircraft on order with Airbus, of which 21 have been delivered. flynas is currently discussing drafting agreements with aircraft manufacturers. Having bases in numerous countries has also been beneficial to LCCs – they could quickly move crew and aircraft around to match market conditions or commercial deals. With increased frequencies, new destinations, and a growing fleet, LCCs are certainly leaving no stone unturned to reclaim, and even expand, their share of the skies. gulfbusiness.com


Special Report / Private Aviation COMMENT

Demand for private jets takes off post pandemic Private aviation is appealing for people who regularly fly commercial, but want to reduce their reliance on connecting flights and the risks that come with them

T

he private jet industry – once viewed as a luxury primarily for the rich and famous – is now more accessible, thanks to several bespoke operators around the world offering journeys at competitive prices. With the rise in disposable incomes and a shift to ‘exclusive’ travel, as health, hygiene and social distancing become top priority, it’s no surprise that private charter services have become popular, despite commercial aviation making a come-back after the pandemic. In fact, many people booked private jets for the very first time during the COVID-19 pandemic. This new customer base is made up of those people who regularly fly first or business class, but are now considering booking a private jet because of the comfort, convenience, flexibility and safety they offer. Private aviation is especially appealing gulfbusiness.com

Dmitriy Korshunov, CEO of Delta World Charter

for people who regularly fly commercial, but want to reduce their reliance on connecting flights and the risks that come with them. Governments too have been increasingly using chartered jets to transport supplies in the last two years, which gave the business a further boost. Now as the world adapts to the new normal, the future looks bright for the private aviation market.

Shift in appetite On a global scale, business aviation trends in 2022 have been more promising than commercial aviation patterns, as private jet operations for the first week-and-a-half of 2022 rose by 38 per cent over 2021. But growing household incomes and a hunger for experiential travel is propelling the leisure tourism industry forward. The UAE has historically been a haven for premium holidays, but now Saudi Arabia is also emerging as a competitive tourism destination, with projects such as the Red Sea Development Company, NEOM, Al Ula and Qiddiya, among others. This is creating a demand for private aviation. Furthermore, high net worth individuals (HNWIs), including VIPs, senior government officials, CEOs and business heads are a captive and growing market via loyalty programmes or even fractional ownership. Charter operators are expanding their fleet size, adding new routes or offering bespoke itineraries to meet the demands of this niche segment. Many have changed their marketing efforts, which earlier focused on the August 2022

53


luxury experience and quicker flight time to the increased safety and hygiene that private jets offer.

Keeping the momentum going As the number of HNWIs in the region continues to grow, new and emerging business opportunities will open up for private charter operators, extending beyond business or leisure travel, including cargo operations, emergency medical services and equipment supplies. Delta World Charter reported strong growth in Q1 2022, generating over $26m in revenue between January and March this year. This growth was despite challenging market conditions, including a pandemicinduced economic recovery, fluctuating oil prices and global political instability as a result of the ongoing Russia-Ukraine crisis. The anticipated growth in volumes of charter flights has prompted many airports in the region to establish dedicated spaces for charter flights. For example, Kuwait, Bahrain and Oman are setting up business aviation facilities to enable smooth operations. Both the Dubai and Abu Dhabi international airports have been upgraded and are well-equipped to manage the expected growth of charter flights in the future. Given that business aviation provides flyers with more flexibility, time efficiency, and a larger possible reach, the demand is expected to grow for the rest of the year. Of course, it isn’t going to be all smooth sailing for private charter operators. Costs have increased due to the low supply and high demand for private travel, and private jet owners still have to deal with several costs related to the operation of their jets. Factors such as insurance, fuel, and a limited number of qualified pilots can contribute significantly to overall costs. If these issues can be addressed, the private aviation business will truly take off in 2022 and beyond. While Covid-19 remains a concern for flyers, the desire to reduce one’s exposure to other diseases and viruses could continue to be a big consideration for travel. The private aviation market has a great opportunity to continue to respond to these concerns by working on ways to deliver a safe and hygienic flying experience. 54

August 2022

How data science is transforming the travel industry Airlines can make informed decisions about pricing and market positioning and other areas of the business through the smart use of data

D

espite the pandemic and economic uncertainty, the public’s love affair with holiday travel remains unshakeable. Whether looking to reconnect with loved ones, catch up on that ultimate destination holiday, or just take a well-earned family break, eager travellers are increasingly expecting a seamless air travel experience from door to door. Highly dependent on consistency and stability, the travel and tourism sector has been rocked by mass cancellations and disruption in recent years, with a travel boom now a very real reality as pentup demand materialises. As airports welcome droves of summer travellers, some locations may be more prepared to meet the increased demand than others. gulfbusiness.com


Special Report / Data Science By Karl Crowther, regional director, MEA, Alteryx

COMMENT

While, on a micro-scale, disruptions and delays are known challenges along the traveller’s journey, mass disruption issues at any point along this chain can negatively impact each interdependent segment of the tourism ecosystem, and sour what could be a highly profitable relationship between business and consumer.

DATA-DRIVEN INSIGHTS ENHANCE ON-TIME PERFORMANCE, ASSIST WITH FLIGHT DEMAND FORECASTING, MANAGE FLIGHT CREW AVAILABLE TIME AND SCHEDULING

operational efficiencies, and improving the passenger experience. The challenges associated with providing these vital insights are often compounded by the continued use of outdated legacy systems. Spreadsheets, for instance, are regularly used as a proxy for data preparation and analysis, but are error-prone and expose the organisation to compliance and trust issues. McKinsey found that “the success of an organisation’s planning was strongly linked to its use of modern digital tools, especially advanced analytics”.

Data fuels trustworthy and accurate insights As with many sectors, travel is a complex datadependent industry with an extreme requirement for customer experience. Airlines correlate and analyse hundreds of aircraft and operations datasets to identify, monitor and predict factors that potentially put flight operations at risk. Often working collaboratively, airports also capture thousands of dispersed data points from various sources, including flight data from tens of thousands of flights and external airport and airline services. With many organisations struggling with the level of data being generated by current customer volumes, the aviation sector is no exception. An increased volume of fragmented raw data from new travel technologies may easily overwhelm them. Data has gone digital – evolving towards artificial intelligence (AI)-driven chatbots, to internet of things (IoT) devices and automated app-driven systems. This massive shift in how data is collected and stored requires a problemsolving and insight-generating strategy underpinned by analytics, providing more flexibility, agility, and resilience across the journey. Disruption due to poor resource forecasting and broken processes break the positive customer experience that the aviation industry relies on to thrive. Aeroplanes are reportedly off course at least 90 per cent of the time due to weather conditions, turbulence, and other factors, but are kept on track through hundreds of tiny data-informed adjustments – one degree at a time. But what happens when those micro-adjustments are no longer sufficient, and a macro change is required to keep pace?

Unlocking the potential of data Unable to unlock raw data for new opportunities to create customer-centric travel experiences, the travel industry must now embrace a data science and analytics roadmap to make the best possible use of big data for fast insights. Against a constant backdrop of uncertainty, data is one of the core drivers behind understanding traveller behaviour, increasing day-to-day gulfbusiness.com

Using data for resilience intelligence

AEROPLANES ARE REPORTEDLY OFF COURSE AT LEAST 90 PER CENT OF THE TIME DUE TO WEATHER CONDITIONS, TURBULENCE, AND OTHER FACTORS, BUT ARE KEPT ON TRACK THROUGH HUNDREDS OF TINY DATA-INFORMED ADJUSTMENTS

Considering the business requirement for fast insights, combined with a global industry environment rocked by disruption, timely and highquality insights don’t just magically appear. Once gathered, processed and analysed, data can then help streamline day-to-day operations and automate manual processes while improving the customer experience. Amidst this background of travel disruption, one major North American airline underpinned by a culture of data science and analytics delivers insights with the level of detail and timeliness needed to enhance on-time performance and assist with flight demand forecasting. Serving 100 destinations with more than 4,000 flights per day during peak travel and a total crew labour force of over 24,000 pilots and flight attendants, datadriven insights enhance on-time performance, assist with flight demand forecasting, manage flight crew available time and scheduling, and plan for fuel demand. Data and analytics significantly improve the accuracy of crew scheduling forecasts, helping them avoid hundreds of thousands of dollars in extra costs from failure to anticipate daily changes while reducing costs by increasing fuel forecasting accuracy by 70 per cent. It’s clear that those travel industry leaders that have fully integrated data analytics are already the ones best mitigating and adapting to rapidly changing market conditions, from passenger flow, to staffing levels and minimising the time-on-theground of the plane. Already an industry that deeply leverages data, airlines and travel companies have an opportunity to take data insights to new heights. August 2022

55


Special Report / Airport Hacks

Dealing with summer travel woes

Seven ways to avoid airport chaos when the usual logic doesn’t apply

I

f luggage could talk, it would tell a pretty interesting story this summer. Mishandled luggage incidents in the US were up 60 per cent from April 2021 through March 2022, compared to the year-earlier period; in Europe, insurers are reporting a 30 per cent spike in lost luggage claims compared to summer 2019. But those statistics fail to fully paint a picture of the chaos that has descended on airports. More telling are the images of thousands of bags piled up unclaimed in airport storehouses, or airlines filling planes not with humans but with suitcases that needed to be reunited with their owners. And that’s just the bags. There are roughly 20,000 delayed and cancelled flights every day, not to mention hours-long security and 56

August 2022

immigration queues, missed connections, and inflated prices. “This is a time where none of the usual logic – and certainly none of the usual travel hacks – apply,” explains Michael Holtz, founder and chief executive officer of SmartFlyer, a luxury travel agency. “I wish there were such thing as a silver bullet, but there just isn’t.” This doesn’t mean travellers are powerless in the face of mounting obstacles. Here are seven tips to get through your next trip unscathed – or as close to it as possible.

01.

Know how luggage protection works Travel insurance policies can cover lost bags, but usually there’s no payout if a suitcase eventually gulfbusiness.com


Special Report / Airport Hacks

turns up. This means that claims can sit around gathering dust for so long that you’ve already returned from your trip – perhaps with a new wardrobe. What’s more, policies often require travellers to maintain itemised lists of what was packed, including receipts to prove the costs of the lost belongings. It’s a time-consuming exercise that will discourage most claims. One company that travel agents are currently recommending is Blue Ribbon Bags, which guarantees up to $2,000 in reimbursement for each piece of luggage that’s gone missing for at least four days. The amounts depend on the exact policy; travellers can insure bags for $5, $7.50, or $10 each, netting respective payouts of $1,000, $1,500, or $2,000. The policy’s only fine print is that travellers must file a report of missing luggage with their airline within 24 hours and collect the correct documentation to prove and process the claim. And while you can insure luggage at any time until departure, even covering bags that are checked at the gate in the last moments, you can’t decide to make the investment in the middle of a connection that already appears to be going haywire.

ONE COMPANY THAT TRAVEL AGENTS ARE CURRENTLY RECOMMENDING IS BLUE RIBBON BAGS, WHICH GUARANTEES

UP TO $2,000

IN REIMBURSEMENT FOR EACH PIECE OF LUGGAGE THAT’S GONE MISSING FOR AT LEAST FOUR DAYS

02.

Ship your luggage or rent locally Not everyone can manage to carry all the luggage they need on board, Holtz concedes. If you’re travelling with a gaggle of kids to a wedding, or are moving across international lines, consider using a specialised shipping service such as Luggage Forward. It is not cheap, however, and requires planning. Let’s use a real-life situation as an example: Some friends of mine who were trying to get their two toddlers through a tight connection from New York to Harare, Zimbabwe, via Johannesburg’s O.R. Tambo airport, would have had to pay $694 for each of their standard-size suitcases and $389 for each small bag – and pack them all 12 days

MISHANDLED LUGGAGE INCIDENTS IN THE US WERE UP 60 PER CENT FROM APRIL 2021 THROUGH MARCH 2022, COMPARED TO THE YEAR-EARLIER PERIOD; IN EUROPE, INSURERS ARE REPORTING A 30 PER CENT SPIKE IN LOST LUGGAGE CLAIMS COMPARED TO SUMMER 2019 gulfbusiness.com

before departure. That’s a steep price, if perhaps less than the cost to their sanity of wondering whether irreplaceable wedding attire would get lost in transit. (Miraculously, it didn’t, though their au pair’s anti-malarial drugs remain stuck in a suitcase in Edinburgh.) A more conventional trip may be less expensive. Shipping bags from New York to Amsterdam – where Schiphol airport is so burdened that it has at times stopped accepting checked luggage on certain connecting flights – costs $359 for a standard suitcase that will arrive within seven business days. There’s also the option of renting what you need wherever you are going, rather than taking it with you. Rent the Runway is one convenient, well-known option, and it has recently started partnering with hotels. BabyQuip is more specialised but perhaps even more useful: It will deliver bulky and such hardto-pack items as cribs, strollers, diapers, and other infant-related gear to your hotel or Airbnb, so that you don’t have to waste your precious overhead compartment space on that portable pack ‘n’ play. It serves 900 destinations around the world, but works a bit like home-sharing sites; the gear is loaned by local businesses that list with the website, which makes availability spotty, especially outside the US.

03.

Don’t expect an AirTag to save you

Many travellers have resorted to putting tracking devices, such as AirTags, in their luggage as a precautionary measure should they become separated from their belongings. Brooke Lavery, a partner with bespoke travel consultancy Local Foreigner, says that they have at times proved helpful. “Someone on my team had boarded [her flight] and realised, via her AirTags, that her bag was not onboard the plane,” says Lavery. When the passenger alerted the flight attendant, the airline was able to address its mistake and get the bag properly loaded on the cargo hold. “If you have the technology to solve the problem, it can result in an expedited solution,” she concludes. That may have been a best-case scenario. “It doesn’t help to know where your luggage is if you can’t get to it,” explains Holtz, outlining a much more common outcome. “The only reliable way to land with your belongings is to carry them on.” One way to make do with less stuff, he says, is to rely on hotel laundry services. “Every four- or five-star hotel will have laundry options,” he notes. August 2022

57


Special Report / Airport Hacks

04.

Invest in airport greeters Lavery’s company has starting requiring all of its Europe-bound travellers to sign up for airport VIP services. Paul Tumpowsky, founder of digital travel agency Skylark, also schedules them for his clients as soon as possible after buying their flights. “These services need to be booked well in advance these days,” he says, citing demand, “so we just get it done as soon as possible.” Pricing has surged for these services, too. In Tel Aviv’s Ben Gurion Airport, for instance, greeters have been in especially high demand. It used to be common to pay $250 or so per group, but one company we priced out was charging $475 to welcome an arriving family of four; a second company had no availability remaining for the rest of this summer. It was asking $769 for two people in September. Still, the cost can be worthwhile. In one success story, Lavery says a VIP airport representative in Athens took the client “to the front of a 250-person queue of passengers logging baggage claims. The rep knew everyone at the desk, was able to go behind the counter, file a claim on her behalf, and expedite it.” The bag arrived two days later. They can also offer back-door entry to airport lounges. Even if you’re sitting in business class and have already guaranteed access, your designated lounge may be full; the one next door may not be. And airport greeters will also offer expedited access through security, customs, and immigration, where staff shortages and undertrained hires are causing hours-long delays that can cause you to miss connections.

05.

Book morning flights About those overcrowded lounges: In US hubs, at least, lounges are at their worst in evenings, when passengers are getting ready to depart on overnight transatlantic flights. It’s one reason travel advisers are recommending that you book daytime and morning flights. (Those flights also tend to have better on-time performance.) You’re less likely to hit backed-up airport operations—those long lines—earlier in the day. “It’s the same concept as not driving to the Hamptons at 3 pm on a Friday,” Holtz jokes.

06.

Use your credit card perks

Some of the airport conveniences you’re willing 58

August 2022

TRAVELLERS CAN INSURE BAGS FOR $5, $7.50, OR $10 EACH, NETTING RESPECTIVE PAYOUTS OF $1,000, $1,500, OR $2,000

to pay for may already be taken care of by your credit card – assuming that you have premium plastic in your wallet such as American Express Platinum and Centurion cards or Chase Sapphire and Reserve cards. Before you leave, see if your card includes a free signup for Clear, the biometric airport security service that’s often much faster than TSA PreCheck. Even if your card doesn’t cover the $189 annual fee, you may want to consider joining the programme. Registration is practically instantaneous: On a recent flight I took from Newark Airport, Clear agents were processing applications from passengers stuck in a longer-than-typical PreCheck line. The same is true for Priority Pass, a network of independent airport lounges with 1,300 locations around the world. Its lounges are often smaller and less plush than, say, the American Express Centurion ones, but they’re relatively under-utilised. If your card offers free access, that could be worth considering.

07.

Reroute (or reschedule) your travels

Tumpowsky says airlines have been giving agents such as him special dispensation, in some circumstances, to proactively change schedules that look doubtful. Some carriers, for instance, have been letting him reroute clients from distressed airports, or have offered additional flexibility in making changes to itineraries with tight connections. It’s one reason you may consider booking any remaining summer travel through an agent. Even if it costs a fee, Lavery recommends that you consider rebooking to avoid the most overburdened airports. The online travel agency Hopper helped Bloomberg crunch data as to which airports in Europe are struggling most with delays and which are relatively painless. Lavery adds that “wherever possible, we are avoiding Schiphol, Charles de Gaulle, and Heathrow.” Seek any possible way to avoid a connecting flight. “If you must travel somewhere that requires a connection, consider only flying on one of the legs,” advises Holtz. In other words: Nix your second flight and rent a car or take the train the rest of the way. “Think of it as disaster prevention,” he says, warning, “this is not the time to be scheduling connecting flights.” And trust that the summer travel rush will lighten up soon. “It’ll all get better after Labour Day,” Holtz promises. Bloomberg gulfbusiness.com


AUG

Lifestyle

22

Hot wheels

We test drive the 296 GTB, an evolution of Ferrari’s mid-rear-engined two-seater sports berlinetta concept, featuring a new V6 engine coupled with a plug-in electric motor that packs a punch p.63

“The Regional Artist Spotlight is an ongoing initiative, promoting content from artists who don’t have access to the scale of promotion that international artists would receive” John Lickrish, CEO of Flash Entertainment gulfbusiness.com

Jaeger-LeCoultre Reverso Tribute Enamel Hokusai ‘Amida Falls’ To capture Japanese artist Hokusai’s original image on a surface of just three square centimetres, master artisans miniaturised and copied every detail, and created the illusion of the woodblock printing technique

August 2022

59


Lifestyle / Jewellery and Watches

Fine Heritage WITH OVER 126 YEARS OF HISTORY, FRENCH JEWELLERY HOUSE VAN CLEEF & ARPELS KNOWS EVERYTHING THERE IS ABOUT IMPECCABLE CRAFTSMANSHIP AND THE FINER DETAILS. HERE, CEO NICOLAS BOS DISCUSSES THE RICH HERITAGE OF VAN CLEEF & ARPELS AND EXACTLY HOW THE MAISON FINE-TUNES DETAILS WHEN IT COMES TO ITS ICONIC PIECES BY OLIVIA MORRIS

What does the Van Cleef & Arpels brand represent?

To me, Van Cleef & Arpels represents enchantment in the field of high jewellery and watchmaking. Our sources of inspiration also helps us suffuse a sense of poetry 60

August 2022

into jewellery or even in the ‘Extraordinary Objects’ we create. In the past and until today, nature, couture, dance, imaginary worlds and travels inspire us for our creations. Each collection is a new chapter in the maison’s long story.

To continue to nurture creativity, the maison’s philosophy is to always keep the balance between the respect for our traditions and identity and the introduction of a contemporary approach. To do so, we strongly believe in making bridges with other artistic fields – such as dance, photography, but also design, drawings, publishing – through collaborations: for instance, we gulfbusiness.com


Lifestyle / Jewellery and Watches

How do you choose the gems for your High Jewellery pieces?

“Van Cleef & Arpels has its very own approach to High Jewellery: benevolence, poetry and vitality are the keywords leading our designs while movement, asymmetry, figurative or abstract representations characterise their aesthetics” collaborated with Alexandre-Benjamin Navet around our flower celebration. In the field of dance, our partnership with the L.A. Dance Project goes on and in 2020, we even launched an initiative around contemporary dance with the project ‘Dance Reflections by Van Cleef & Arpels.’ All of these create a unique blend proper to Van Cleef & Arpels and allow us to deliver the maison’s vision of a timeless universe filled with beauty and harmony – two words that probably represent the best of what we are aiming to express. Van Cleef & Arpels is all about the finer details when it comes to its pieces. Talk us through this process.

Techniques and know-how are our identity and are often very sought-after by high jewellery collectors. Couture is also one of the maison’s key sources of inspiration: fabric movements such as pleats, drapery or ribbons are reinterpreted through precious metal and gems in several creations. gulfbusiness.com

How do you ensure you continue the legacy of such a historic maison?

The maison has been perpetuating its historical sources of inspiration such as nature, couture, imaginary worlds and dance, while nurturing it with a contemporary vision. Twenty years ago, Van Cleef & Arpels started to launch thematic ‘High Jewellery’ collections and we carry on down the same path. It means pushing the technical boundaries further with innovations to enrich the creativity. For instance, the Mystery Set, which is a signature of the maison, was patented in 1933, which we continue to develop. Today, we’ve mastered the Vitrail and the Navette Mystery Set techniques. In watchmaking, it means constantly innovating to tell new stories that enchant and invite to dream. This is the exact goal of our ‘Poetic Complications’ and ‘Extraordinary Objects’ collections. They are an invitation to see time as a story-maker, thanks to expert craftsmanship and virtuoso mechanisms.

We always want to spark emotion, this is why coloured stones have been at the core of the maison’s creative process. Selected according to the most demanding criteria when choosing raw minerals, we cannot but be humble and admire what nature can create. The stones’ journey from the depth of the Earth into the craftsman’s hand reveals beauty, it is also with great pride that we can see what we are able to accomplish today with these treasures through our know-how. Not only does High Jewellery evoke exceptional gems, it also suggests renowned and expert craftsmanship perpetuated by our craftsmen that we call Mains d’Or (Golden Hands). These techniques are at the service of the maison’s creativity and style which all contribute to giving birth to timeless creations. Van Cleef & Arpels has its very own approach to High Jewellery: benevolence, poetry and vitality are the keywords leading our designs while movement, asymmetry, figurative or abstract representations characterise their aesthetics. Heures Florales recently debuted at Watches & Wonders. Tell us about it.

The Lady Arpels Heures Florales and Lady Arpels Heures Florales Cerisier watches are inspired by the idea of a garden that would be able to tell the time. This very specific inspiration – l’horloge de Linné – was born from Carl von Linné’s works, a Swedish scientist and naturalist of the 18th century. He came up with the idea of a floral clock that would be a garden where you would be able to tell exactly the time depending on the number and the nature of the flowers that are open and/or closed. Of course, this idea was really a dream and nobody could actually ever create that garden. But we thought that the story was so beautiful that we could try to use the possibilities of mechanical watchmaking to give it life. And this is what we managed to do with a watch where you don’t see any indications of time, you don’t see hands, you don’t see traditional watchmaking elements. You see very delicate three-dimensional flowers that, hour August 2022

61


Lifestyle / Jewellery and Watches

while adopting technical evolutions that can speed up the production process?

“We wanted to find out what we could create if we weren’t constrained to a wristwatch, and the Fée Ondine automaton paved the way to the ‘Extraordinary Objects’ that we continue to create today” after hour, open and close their petals and tell you the time in a very accurate manner. The three ‘Extraordinary Objects’ are true feats for our partners and watchmaking workshops in Geneva. It took all the expertise and savoir-faire of our teams, several years and countless hours of work to come up with such complex creations, imbued with the magic of the cosmos or the wonders of nature. The sense of magic associated with automatons fascinates us because, as jewellers, what we try to render through the stilllife that a brooch or a necklace can be, is a sense of movement, and with the possibilities of mechanisms, we can create that movement in an unexpected and magical manner. When the animations start, you either see the ballet of the planets or the full beauty of love in nature. With these unique pieces, we aim to arouse a deep sense of surprise and wonder. 62

August 2022

Throughout its lengthy history, Van Cleef & Arpels designs have adorned many notable figures. How is this seen within the timepieces, especially the ones displayed at Watches & Wonders?

It is true that, over the decades, the maison’s creations have found success with notable personalities. This is a part of our history in which we take great pride. But I am not sure that it is embodied in the new creations presented at Watches & Wonders. The watches and ‘Extraordinary Objects’ that we introduced this year pay tribute to Van Cleef & Arpels’ cherished sources of inspiration, notably nature and astronomy. They offer an enchanted stroll into the maison’s creative and poetic universe, instilling a sense of wonder to the measurement of time. In terms of craftsmanship that was and is still a very important pillar for the brand, how do you maintain this balance in keeping particular handcrafts alive

In the luxury business, creation prevails, but if you don’t associate that with a business sense, you can’t perpetuate a legacy. At the end of the day, good business comes from good creation. The more creative, the better the quality, the more expertise used, the more chances you have of being successful. With that comes a strong research on innovation, to improve the way we make our pieces. We strive to keep rare skills and craftsmanship alive, notably in our watchmaking collections. But, at the same time, we constantly think of new ways to improve our processes, not especially to speed them up – because good creation takes time – but to ever improve the quality of our pieces, so that they keep on enduring the test of time. Throughout your career what has been your most memorable project?

There are a great number of projects that are memorable to me. But, if I must choose one, I would think of the Fée Ondine automaton, because it gave us the privilege to revive the very old tradition of automatons, which gathered 13 different workshops around the same goal. It opened up a lot of possibilities for the maison. We wanted to find out what we could create if we weren’t constrained to a wristwatch, and the Fée Ondine automaton paved the way to the ‘Extraordinary Objects’ that we continue to create today. These exceptional pieces are not made with a commercial purpose, they offer a way to show that Van Cleef & Arpels’ spirit of storytelling is still very much alive. They evoke a sense of wonder, like reading a fairy tale. gulfbusiness.com


Lifestyle / Auto

Fast and furious T FERRARI HAS STARTED A NEW JOURNEY WITH THE 296 GTB. IT IS A CAR FITTED WITH A V6 HYBRID POWERTRAIN – A FIRST FOR THE BRAND BY SHIVAUM PUNJABI

gulfbusiness.com

he 296 GTB follows in the “footsteps” of the SF90, Ferrari’s first commercial PHEV model with a V8 hybrid powertrain. When it comes to design, the 296 GTB takes its cues from the 1963 250 LM Ferrari, one of the automaker’s first mid-engine sports cars: the 296 GTB’s rear haunches are smooth and a clear throwback to the classic. Simply put, it’s stunning. The entire design of the vehicle is very contemporary, incorporating elements

from other modern Ferraris. It is minimalist and elegant, with smooth, powerful lines. Multiple vents, ducts and spoilers hide in plain sight over the surface of this car. Cleverly packaging the aerodynamic elements retains its elegant form. On the inside, the interior is inspired by the Roma and SF90. Infotainment has gone digital with updated software. All the relevant information is visible to the driver on the dashboard, and all the controls are on the steering wheel. Understanding August 2022

63


Lifestyle / Auto

“You can buy the 296 GTB as a hardtop or a convertible hardtop variant. Customers who want to take the car to the race track can spec the car with the Asseto Fiorano pack”

this system takes some practice, but can be learned quickly. Following the modernisation of the interiors, the 296 GTB gets a HUD or heads-up display. This is a driver’s car, and everything in the vehicle is designed to ensure you get the best possible driving experience. You can buy the 296 GTB as a hardtop or a convertible hardtop variant. Customers who want to take the car to the race track can spec the car with the Asseto Fiorano (AF) pack. With the AF pack, you can get lightweight carbon fibre seats, rims, door pads, a carbon fibre roof and other weightsaving elements. The AF pack also adds an additional body kit for more downforce and better handling on the race track. The pack has multiple cost options for customers to choose from and an optional paint scheme inspired by the LM. 64

August 2022

You can choose from a wide range of materials for the interiors and external paints to customise the car as per your preference. The quality of materials used in the interiors is luxurious, and the entire interior is covered in plush leather.

THE V6 HYBRID ON THE 296 PRODUCES 819 HORSEPOWER AND DOES 0-100 KMPH IN 2.9 SECONDS. THE BATTERY PACK PRODUCES 164 HORSEPOWER AND CAN BE RECHARGED VIA A WALL SOCKET

Time to answer the key question. Does it drive like a Ferrari? The answer is yes. You will instantly be in familiar territory if you’ve driven one. This car feels at home while cruising effortlessly on Beach Road or tackling hairpins at Yas Marina, and I did both. It even comes with a drift mode. The V6 hybrid on the 296 GTB produces 819 horsepower and does 0-100kmph in 2.9 seconds. You can also drive in pure electric ‘eDrive’ mode for up to 25km. The battery pack produces 164 horsepower and can be recharged via a wall socket. The V6 twin-turbo engine delivers the balance 655 horsepower. All the power is sent to the rear wheels, and managed by Ferrari’s brand new eight-speed dual-clutch gearbox. The 296 GTB also provides ample grip, giving the driver a sense of confidence. The short wheelbase helps boost the agility of gulfbusiness.com


Lifestyle / Auto

the car: the 296 GTB can dart in and out of gaps smoothly. The steering response is razor-sharp and gives the driver precision feedback, which is amazing and empowering. You can attribute this to the computer-controlled brain of this cool hybrid model. Ferraris are known for their sound. It’s integral to the essence of the car. With sound and emission norms becoming stricter globally, car brands are trying to gulfbusiness.com

stay true to their original engine notes. Ferrari successfully creates a unique and distinct sound for the 296 GTB. The sound is deep, just like a V12 so much so that it has an in-house nickname, piccolo V12, which means “little V12” in Italian. Due to advanced technology, the engine can be heard inside the cabin, as the engine sound pipes in via speakers. So is there any competition for the Ferrari 296 GTB? While the McLaren Artura claims

similar performance numbers, it produces lesser power than the 296 GTB. The MC20 from Ferrari’s sister brand Maserati also has less power than the 296 GTB – and is not a hybrid car. The Ferrari 296 GTB, on the other hand, is the most expensive one in this line-up, with prices starting at Dhs1.4m. Deliveries for the 296 GTB start this year, and after driving the car extensively, all I can say is get in line. August 2022

65


Lifestyle / Entertainment & Sports

Flash Forward JOHN LICKRISH, CEO OF FLASH ENTERTAINMENT, TELLS US HOW THE COMPANY CONTINUES TO PLAY A BIG ROLE IN SHOWCASING ABU DHABI AS A PRIME GLOBAL SPORTING AND ENTERTAINMENT HUB, AND ITS RECENT FORAY INTO THE FAST-PACED WORLD OF ESPORTS BY NEESHA SALIAN

What are some of the innovative entertainment and sporting experiences you’ve brought to the region?

We take great pride in our contribution to the growth and recovery of the UAE’s entertainment and sporting industry. Collaboration is key to any successful event, and we have worked closely with a range of stakeholders such as the Executive Affairs Authority (EAA); Department of Culture & Tourism - Abu Dhabi (DCT Abu Dhabi); Abu Dhabi Sports Council, Miral, Abu Dhabi Motorsport Managemen, Etihad Airways, Mubadala and global partners such as Asian Football Confederation (AFC), Ultimate Fighting Championship (UFC), Federation Internationale de Football Association (FIFA) 66

August 2022

and more to produce a range of phenomenal events over the past 14 years. Some of our highlights include the Abu Dhabi Showdown Week and the Fight Island series, five FIFA Club World Cups, including 2021; Mubadala World Tennis Championship, and the ever-popular Yasalam After-Race Concert series, which accompanies the annual Etihad Airways Abu Dhabi Grand Prix. Yasalam was truly the industry pioneer in this space, as the first city-wide entertainment festival associated with a Formula One event, bringing AAA (Adult album alternative) artists, regional talent and more, to the emirate for the final race of the F1 season every year. Hosting three UFC Fight Island events in the space of seven months, including the

first event with attending fans since the beginning of the pandemic, demonstrated Abu Dhabi’s readiness to welcome visitors and underlined its capability to host major international events within the highest global standards of health and safety. With Abu Dhabi Showdown Week and the Fight Island series, we have supported DCT Abu Dhabi in bringing some of the biggest names in UFC to Abu Dhabi in a safe and secure environment. During the first Covid lockdown, we hosted the region’s first virtual concert with artists from across the UAE performing, including Freek, FAFA and Mo Flow, which has paved the way for some exciting new content we are working on. We also partnered with AD Gaming to launch a gulfbusiness.com


Lifestyle / Entertainment & Sports

John Lickrish

virtual esports series, featuring four popular events. Another innovation we are proud of is the launch of our ‘Regional Artist Spotlight’ platform, which was devised to provide support for musical talent in the GCC after the entertainment industry was hit during the pandemic. Regional Artist Spotlight is an ongoing initiative, promoting content from artists who don’t have access to the scale of promotion that international artists would receive. Our focus is to help this regional talent gain exposure to a broader audience. The launch of the Regional Artist Spotlight platform was quickly followed by another innovation at the opening of Ain Dubai in October 2021, where we had our first RAS Sessions, with our regional artists performing on the main stage through the weekend’s celebrations. Another big milestone for the RAS platform was having the artists on stage at the 2021 Yasalam After Race Concert Series. They opened for the AAA artists, warming up the crowds, on three of the four nights. We are aiming to do the same again during this year’s edition in November. How has the company contributed to raising Abu Dhabi’s profile as the region’s sporting and entertainment capital?

Abu Dhabi has a diverse mix of cultural, sporting and entertainment attractions

our stakeholders and partners and looking at combined programmes to increase the length of stay of visitors coming to Abu Dhabi for specific events. At present, a visitor can plan for activities that span several days, across multiple genres and interests, including concerts, museums, arts and culture, lifestyle and sport. What do customers want today when it comes to entertainment, and how have their expectations changed since the Covid-19 pandemic?

catering to all preferences, and we have contributed to the emirate’s success by delivering more than 400 major events across live music, sport, cultural events as well as events of national importance. Collaboration is key and we’ve had great success in working with government entities and stakeholders to help cement Abu Dhabi’s status as the region’s sporting and entertainment capital. We are constantly exploring new opportunities with

“Another innovation we are proud of is the launch of our ‘Regional Artist Spotlight’ platform, which was devised to provide support for musical talent in the GCC after the entertainment industry was hit during the pandemic” gulfbusiness.com

Since the pandemic we have learned a lot and there is more we can all now do in the digital space to enhance experience for fans and stakeholders. However, nothing can replicate the thrill of live in-person experiences when it comes to entertainment events. Fans still crave the feeling of attending live events even more so after not being able to experience them for some time; diversifying our offerings and being able to provide a unique and premium experience is paramount to the success of our events. Ultimately, the most important thing for the entertainment industry is to engage people while continuing to showcase Abu Dhabi and the broader region’s capabilities, and all it has to offer. Any challenges you are facing or faced because of the pandemic?

There is no denying the challenges caused by the pandemic. The global events industry was hit hard, and we were not immune to it. Covid-19 changed the events and August 2022

67


Lifestyle / Entertainment & Sports

us re-enter Dubai in 2021 and early 2022 with our work on Expo 2020 Dubai where we worked with organisers and stakeholders on a range of live events throughout the Expo season, which resulted in us winning the award for ‘Best Event Production Live Entertainment Programming at the Middle East’, along with our partners HQWS and The Fridge. Tell us more about your collaboration with AD Gaming, and how it aims to propel the UAE into the forefront of esports in the region?

INDUSTRY REPORTS SUGGEST THERE ARE ALREADY 100 MILLION GAMERS IN THE MIDDLE EAST, AND 73 PER CENT OF THE UAE’S POPULATION ARE GAMERS entertainment landscape, but it is all about how to react and adapt. Thanks to our agile business model, we were at the forefront of the region’s response, adapting quickly to continue hosting events during the Covid-era and taking the lead post-pandemic. We maximised the opportunity to evolve our virtual entertainment offering and digitisation of content to meet the acceleration in digital platform consumption through the pandemic. And, our teams worked tirelessly to ensure health and safety protocols were in place throughout our venues, including Etihad Park and Etihad Arena. Throughout the lockdown we worked closely with Abu Dhabi authorities to ensure that once restrictions started easing, we were able to bring back the return of live, in-person events in a safe environment. Tell us about the company’s diversification strategy. How is gaming and esports part of it?

The development of new technologies has 68

August 2022

presented different ways for event organisers to reach their audiences. Gaming has witnessed a huge increase in recent years within the region. We saw the opportunity to: 1) capitalise on the growing trend and 2) support the vision to create a gaming hub in the UAE capital. We worked with our partners AD Gaming to launch a series of four esports events to grow the regional gaming ecosystem. The series gave regional esports talent a platform to develop their skills against some of the best players in the world. As strategic partners of Abu Dhabi Gaming, we delivered events around four hugely popular games: Dota 2, PUBG, Fortnite and FIFA. The Dota 2 MENA Cup event won Gold in the ‘E-Sports Event of the Year’ category, at the recent SPIA Awards. This was a proud moment for us, as it was our first award in the gaming sphere and demonstrated that we could deliver innovative events and our strategy to keep diversifying our offering. Our diversification drive also saw

As mentioned, our strategic partnership with AD Gaming is a collaboration to transform gaming in the region with the ultimate aim of fostering and growing a regional gaming ecosystem, right here in Abu Dhabi. The partnership aligns with our goal to continue introducing innovative solutions and delivering unmissable experiences for residents and visitors alike. It is an exciting development for the region’s entertainment industry, and it is another example of how Flash Entertainment is striving to enhance the region’s entertainment landscape and provide a platform for regional talent. The partnership leverages AD Gaming’s knowledge and our vast experience in delivering exceptional events. It lays solid foundations for Abu Dhabi’s esports and gaming community to test and develop their skills against global esports stars. What is your outlook for the region’s gaming and esports sector in the coming months?

The global gaming industry is growing at a rapid pace, it is on course to surpass $200bn by 2023, and Abu Dhabi is at the forefront of driving that growth. Industry reports suggest there are already 100 million gamers in the Middle East, and 73 per cent of the UAE population are gamers. Governments across the region are hugely supportive of developing the gaming sector, and our partnership with AD Gaming is the next step in creating a thriving gaming ecosystem for the region. Nearly half the population in the MENA region is under 25; they have grown up as digital natives and gaming is a huge part of their lives, so there is great opportunity for organisations such as ours to capitalise and create exceptional events and platforms, in collaboration with our strategic partners, for young regional talent to shine. gulfbusiness.com


Experience the UAE’s remarkable journey through the arts

ava i l a b l e at a l l m a j o r b o o k s t o r e s a n d o n b o o k s a r a b i a . c o m

www.motivatemedia.com

MOTIVATEBOOKS

MOTIVATE_BOOKS

MOTIVATEBOOKS


AUG

22

The SME Story A dedicated hub for the regional startup and SME ecosystem

INTERVIEW

Grand ambitions

Innovation, sustainability and technology underpin the operations of three companies, which include an on-demand laundry and dry cleaning platform, a startup that digitises communication between restaurants and suppliers, and a fintech that has created a mobile banking app for teens

Mayur Bommai, co-founder and chief of logistics, Laundryheap

Tell us about your company and its offerings.

Laundryheap is a next-generation laundry and dry cleaning company. We use digital technologies and sustainable methods to optimise the process of laundry and delivery in 24 hours. We have increased sustainability measures 70

August 2022

and customer offerings to continue Laundryheap’s evolution to be a purpose-led, customer-centric business with sustainable initiatives at its centre. In line with UAE’s commitment to reach net-zero carbon emissions, we include sustainable measures such as washing clothes at 30˚C, saving a significant amount of energy that would otherwise go towards heating water. In addition, we'e replaced plastic bags with cotton alternatives. Laundryheap now uses central boilers in order to avoid electrically heating every machine so heat can be controlled, and steam can be reused for dryers, dry cleaning and ironing. We also introduced water treatment and filters for our water before it is sent to the sewers. As a 24-hour laundry service, Laundryheap features a powerful logistics support team and state-of-the-art routing technology to enable sustainable route optimisation. The company uses vehicles with better fuel consumption and regional fencing technology that allows reducing waste in vehicle mileage.

What are some of the key milestones of your journey?

As the laundry delivery service industry continues to go from strength to strength, Laundryheap has seen significant volume growth in the UAE, in line with the industry projection to grow up to $111.93bn in 2022 at a compound annual growth rate of 7.4 per cent. In 2021, we reported a 353 per cent increase in order volume within the UAE with an estimated growth of 450 per cent in order volume in the UAE for 2022 compared to the previous year. We've seen significant growth in the region, as we achieved notable business milestones due to our team’s collective efforts, commitment to our customers, and the UAE’s progressive digital economy, which ensures maximum success for SMEs and startups. We also launched our B2B service, ‘Laundryheap Linen’, offering bed linen, towels, accessories, and other related rentals for the hospitality and holiday home sector in the UAE. In addition, we've partnered with salons, e-commerce apps, such as Noon VIP, and rewards platforms such as gulfbusiness.com


The SME Story

353%

INCREASE IN ORDER VOLUME WITHIN THE UAE IN 2021

Etisalat Smiles, to expand our presence and diversify the platforms where our customers can reach us. The significant demand for the laundry service industry continues to grow in the UAE, and I am excited for our progression in the coming year and beyond. Tell us about the challenges you've faced along the way.

There is a critical need for channelling sustainability in the laundry industry, as with all businesses. Our clothes are mostly made of polyester, nylon and acrylic. When these materials are spun around in a washing machine, they release microplastics, and harmful chemicals end up in the

ocean. In fact, this accounts for as much as 35 per cent of the primary plastic in our oceans. Domestic laundry can exacerbate this issue, as many household washing machines don't have the appropriate filters to reduce microplastic output. At Laundryheap, we take this challenge as an opportunity to create a positive impact and are committed to reducing our plastic and carbon footprint through innovative solutions and saving our planet. While we are cognisant that further studies are needed to prove the full effectiveness of commercial use of filtration systems, we are working towards reducing our impact through measures such

What inspired you to start the company?

Dani El-Zein, co-founder and CEO of Supy

gulfbusiness.com

As a restaurant owner, I felt a lot of frustration when it came to managing my costs, especially with ingredients, fresh produce and kitchen supplies. I recognised and felt the pain points of using emails and WhatsApp as a means of communication with suppliers, as well as using paper invoices and physical bank cheques for payments. This made me realise that the food service industry is one that is yet to be digitised. I felt inspired to come up with a solution that would streamline the space and alleviate these pain points.

as integrating microfibre capturing bags for synthetic items as a priority to further ensure we curb the plastic emissions of every wash. Recently, we also hit a huge milestone by being the first laundry provider in the region to introduce electric bikes for delivery, with the aim of saving fuel and carbon emissions. The initiative sees a positive sustainability impact as one bike is able to do 1,000 deliveries covering 3,000km, saving 300 litres of fuel in a month. Any key takeaways from starting your business?

As an entrepreneur, I have learned that your employees are your most important asset. We are lucky to have a fantastic team made up of enthusiastic staff who want to push themselves to be the best. We already knew they were highly capable, but the pandemic showed just how people can raise their game in times of adversity.

What is the core concept of Supy?

We provide restaurants with a sophisticated software that is available on both web and mobile. The software aims to bring value to all stakeholders within a restaurant. Whether it’s a chef looking to conveniently place orders with suppliers from his mobile, or the accountant wanting to reconcile invoices and update the inventory via our integration system, Supy is designed to facilitate the process. Moreover, restaurant owners who want a deep understanding of all purchasing trends can also access valuable data via our real-time analytics tool. August 2022

71


The SME Story IN JULY, SUPY RAISED $8M IN SEED FUNDING BRINGING THE TOTAL FUNDS RAISED TO DATE TO

Supy’s co-founders: (l-r) Ibrahim Bou Ncoula, Dani El-Zein and Yazeed Bin Busayyis

$9.5M

“WE HAVE BUILT A DATA SCIENCE TEAM THAT WILL FOCUS ON HELPING RESTAURANTS EFFECTIVELY FORECAST THEIR PROCUREMENT NEEDS, ALLOWING THEM TO BETTER MANAGE THEIR RELATIONSHIPS AND TRANSACTIONS WITH SUPPLIERS” relationships and transactions with suppliers. Similarly, suppliers will also be empowered to receive forecasts allowing them to project their own procurement needs. Supy aims to build a data-led ecosystem which will integrate number-based factual planning within existing processes.

What were some of the challenges you faced when starting off ?

When digitising a certain process that has been functioning for the past few decades, which in our case is the communication with suppliers, there is a distinct element of user behaviour that is extremely difficult to change. Not only are we looking to change the behaviour of restaurant owners and chefs, but also suppliers. Since our launch, facilitating that shift in behaviour has been our biggest challenge.

SUPY PROVIDES RESTAURANTS WITH A SOPHISTICATED SOFTWARE THAT IS AVAILABLE ON BOTH WEB AND MOBILE

Tell us about your recent funding round. How do you plan to utilise it?

We just raised $8m in seed funding bringing our total funds raised to date to $9.5m. All of our existing investors, which included COTU Ventures, Valia Ventures, and angel investors participated in our seed funding. We also welcomed new investors such as BECO Capital, Global Ventures and AMK Capital, among others.

new service offering which will offer an extended unique value proposition to both restaurants and suppliers. We have built a data science team that will focus on helping restaurants effectively forecast their procurement needs, allowing them to better manage their

What are your predictions for how the food and beverage sector will evolve going forward?

In the region’s post-covid recovery, we have witnessed an emergence of more fine dining concepts as well as a monumental shift in dining behaviour with delivery becoming more aggressive. We are also noticing a palpable change in the adoption of digital solutions by suppliers who were previously reluctant to adapt to the technological movement. As a result, the outlook for Supy looks promising and the growing demand for our digital solutions is a testament to the rising evolution.

What are the expansion plans you have in the pipeline?

We recently launched our services in Saudi Arabia and are currently focusing on growing within that market. We do have some exciting plans to enter new regional markets in the coming months. We are also doubling down on product and tech, and are introducing a 72

August 2022

gulfbusiness.com


The SME Story

Jane Harvey, CEO and co-founder, Savii

Bahrain and we currently have a team of 18 spread across Bahrain, UAE and Ukraine. Half of our team is under the age of 25 which is really important to us to ensure we get the voice of Gen Z into every aspect of Savii from product through to marketing. Savii will be launching in Bahrain and the UAE in the next few months. We have strategic investors in both Bahrain and the UAE, with our most recent investment coming from Flat6Labs UAE. Tell us your growth plans.

What is the core concept of Savii?

Savii is a mobile banking app and Visa spending card designed for youth aged 13 and above. With Savii, teens get their own prepaid debit card that can be used for online or in-store purchases, anywhere Visa is accepted. They can send and request money from their friends in real-time, access discounts and rewards from their favourite brands, and use Savii pots to stash away money towards their savings goals. We want to be a teen’s first ‘bank’ account and spending card, enabling them to learn how to manage their money responsibly and empowering them to become financially independent. Savii is a completely free service: there’s no minimum balance and no monthly fees. Teens under 18 require parental approval to open an account, and within the app, parents can monitor their teen’s spending activity and fund their teen’s account from their own debit card or bank account. We’re bank agnostic so regardless of who parents currently bank with, their teens can sign-up for an account with Savii. Give us an overview of your operations.

Savii is headquartered in gulfbusiness.com

Our immediate focus is on launching in Bahrain and UAE. We’ve already built a substantial waitlist. We launched the Savii app earlier this year which allowed teens to register for their account and earn money for inviting their friends to join the waitlist and, to date, 76 per cent of our waitlist has come from a referral. Teens will get their cash rewards deposited into their Savii account available for spending once we launch the cards and they fully activate their account. In 2023, we plan to expand into Egypt and Saudi Arabia

HALF OF OUR TEAM IS UNDER THE AGE OF 25 WHICH IS REALLY IMPORTANT TO US TO ENSURE WE GET

THE VOICE OF GEN Z

and have already started the groundwork in building the local partnerships necessary to enable a successful launch in these markets. What are your predictions for how the neo-banking space will evolve going forward?

One size doesn’t fit all when it comes to banking. Neo-banks can deliver a radically different, more personalised experience to customers, than traditional Savii co-founder and product manager, Nichola Collinson

banks, and I believe the future of neo-banking will be fintechs building products and services to meet the specific needs of hyper-niche verticals of our society, whether that be demographics (B2C) or industries (B2B). The future is ‘banking for pensioners’ or ‘banking for construction companies’. Neo-banks can provide a service to the unbanked and underbanked segments of the population that are not formally served by traditional banks. This is exactly what we’re doing at Savii with ‘banking for Gen Z’. August 2022

73


The SME Story Peter Heredia, managing director - MaxSales Solutions, sales coach and author

The subtle art of follow-up The significance of following up, touching base and pursuing a client is key to closing a deal, particularly for a growing small- or medium-sized company. Here’s how to do it without crossing the line

F

ollowing up after having a chat or a meeting with a prospect is an integral part of the sales process. Its purpose is to keep you and what you can offer at the top of your prospect’s mind. When done right, following up conveys a message to a potential client that you want to work with them, that you are the right person for the job, and that you are excited to get started. Crossing the line

But at what point does following up become hassling? If you’re calling every day, or emailing every ten minutes, you are being a pain. It’s important to respect a prospect’s time; at least give them a week before you reach out. 74

August 2022

“IT’S NOT PRACTICAL TO KEEP CALLING SOMEONE AFTER GETTING A NEGATIVE RESPONSE. HOWEVER, DON’T LET THAT DETER YOU FROM YOUR GOAL: ENSURE YOU HAVE A STRATEGY IN PLACE AND CONTINUE PITCHING YOUR PRODUCT OR SERVICES TO DIFFERENT CLIENTS” When prospects don’t call you back

So, you meet a prospective client. They seem delighted by you and what you can

offer, and are happy to chat about working together. Following the meeting, you send them a “great to meet you” email, but you don’t get any response. So, why haven’t they called? The fact is that they’re probably busy with other things: work pressure, vacation, kids, or a multitude of other things that life throws at them. In such situations, keep prospective clients “interested and engaged” by making yourself useful and relevant. It’s all about: “How can I serve you?” Even if you are disheartened, don’t give up. Remain humble and polite when you reach out again – each call, email or message should be as respectful and modest in attitude as your first one was. To give you an example, I recently worked on a deal to roll out a global sales development programme. The prospect, the CEO of the company, had made it clear to me, when we met at an event, that he was interested in taking the deal forward. When I emailed him asking if he was ready to have a call, he replied very nicely, but clearly stated that he would contact me when he was ready, and that there was no point to follow up until then. I knew I had to stay "top of mind", but I had to respect his request: no sales talk. Two weeks later, I sent him an article that referenced the event we attended, adding some helpful comments. He replied within the hour, and didn’t mention the article or my comments, but asked when we could have that call to roll out the programme. Another effective strategy to elicit a response is to find out which communication method works best for them. Some clients never answer my calls, but always respond to WhatsApp. Others don’t use WhatsApp but prefer to respond by email.

Stay on track It’s not practical to keep calling someone after getting a negative response. However, don’t let that deter you from your goal: ensure you have a strategy in place and continue pitching your product or services to different clients. Your persistence will result in success. gulfbusiness.com


WE BRING CONTENT TO LIFE

motivatecreate.com | +971 4 427 3040


THE LINE is a revolution in civilisation. However, the true wonder is not what it is, but what it will do for its citizens. Running from the mountains in the East of NEOM right through to the Red Sea in the West, THE LINE is a city that follows a single, perfectly straight line 170Km long, 500 metres high and just 200 metres wide. It is designed for 9 million people and combines the most advanced engineering and design imaginable, from some of the greatest architectural minds the world has to offer. However the true wonder is what it will deliver for everyone living there. A place for commerce and communities to thrive like never before.

NEOM.COM


Issuu converts static files into: digital portfolios, online yearbooks, online catalogs, digital photo albums and more. Sign up and create your flipbook.