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EDITORIAL Editor-in-Chief HH Sayyid Tarik Bin Shabib Editor Mayank Singh Principal Correspondent Visvas Paul D Karra Correspondent Malcolm X Crasta DESIGN Art Directors Sandesh S. Rangnekar Minaal G. Pednekar Senior Designer M. Balagopalan Senior Photographer Rajesh Burman Photographer Sathyadas C. Narayanan Cover Design Chanjeet Singh Production Manager Govindaraj Ramesh MARKETING Group Advertising Manager Jacob George Advertising Manager Avi Titus Assistant Advertising Manager Jinu Mathew Varghese CORPORATE Chief Executive Sandeep Sehgal Executive Vice President Alpana Roy Vice President Ravi Raman Senior Business Support Executive Radha Kumar Distribution United Media Services LLC
Hats off! Your Excellency recall a brief interaction with HE Ahmed bin Abdulnabi Macki, minister of national economy and deputy chairman for Financial Affairs and Energy Resources Council during the official unveiling of our annual Renaissance Day publication, Progress in 2009. HE Macki spoke candidly about various challenges that Oman faced in pursuing development. The size of the country (the Sultanate of Oman is the second-largest country in the Arabian peninsula after Saudi Arabia with an area of 212,460 sq kms), the mountainous terrain and far flung pockets of inhabitation made his work far more difficult. Despite such impediments, His Excellency continues to OER February 2009 issue deliver the goods year-after-year, quite admirably. Coming against a backdrop of economic uncertainty, budget 2009 gave a strong message about the government’s commitment to infrastructure growth and social spending. This went a long way in restoring business confidence. The 2010 budget builds upon the same themes. The statement of accounts is being talked about as the biggest State Budget so far. Total revenues are up by 14 per cent to 6.38bn rials, while estimated expenditure has jumped by 12 per cent to 7.18bn rials. Total approbations for new projects to be implemented in 2010 is pegged at 937mn rials. Healthcare and education spends have also seen a commensurate increase. All this translates into more roads, ports, highways, hospitals, schools and airports. What more can one ask for? Over the years OER has been bringing readers up to speed with the yearly budget. Our cover story for this issue keeps up the tradition with an in-depth analysis of budgetary numbers and insights from corporate captains. Based on market feedback we have introduced a few design changes in this issue. The brief to our art director Sandesh S. Rangnekar was simple – easy readability and pleasing layouts. We like what he has created and hope that it strikes a chord with you too.
OER Presentations – Signature – OER Dossier – Special Report on Al Khalili Group Published by United Press & Publishing LLC PO Box 3305, Ruwi, Postal Code - 112 Muscat, Sultanate of Oman Tel: (968) 24700896, Fax: (968) 24707939 Email: email@example.com All rights reserved. No part of this publication may be reproduced without the written permission of the publisher. The publisher does not accept responsibility for any loss occasioned to any person or organisation acting or refraining as a result of material in this publication. OER accepts no responsibility for advertising content. Copyright © 2010 United Press & Publishing LLC Printed by Oman Printers Correspondence should be sent to: Oman Economic Review United Media Services PO Box 3305, Ruwi 112, Sultanate of Oman Fax: (968)24707939 Email: firstname.lastname@example.org Website: www.oeronline.com
HE Wadhwa unveils Connexion 2010
nited Press and Publishing, the publishing arm of United Media Services, has released the second edition of Connexion – Oman-India Business Review, 2010 coinciding with the 61st Republic Day of India, on January 26. The book was unveiled by HE Anil Wadhwa, Ambassador of India to Oman before an august gathering at the Indian Embassy. Sandeep Sehgal, chief executive, United Media Services; and Mayank Singh, editor, Oman Economic Review, were present during the unveiling of this prestigious publication, which talks about the excellent economic relations enjoyed by the two rapidly expanding nations.
His Excellency Anil Wadhwa, Ambassador of India to Oman and Sandeep Sehgal, Chief Executive, United Media Services unveiling ‘Connexion’
Whether it is investing in India, the joint ventures between the two countries or the growing trade relations, ‘Connexion – Oman-India Business Review, 2010’ talks about all the joint partnerships, both public and private, that have added a new and exciting chapter in the Oman, India business relations. There
has been a meteoric rise in trade and investments between both the countries, and without doubt, India and Oman are on a growth trajectory albeit from different directions. Connexion – OmanIndia Business Review, 2010 offers valuable insights on these achievements making it a must-have resource for
businessmen and investors while taking strategic decisions.
necessary. Only then will it truly make a difference. In the current state of things it will be quite problematic to companies to meet Omanisation requirements and at the same time keep their current business running in the same way as it was. As an example we can take the Food and Beverage sector. I can foresee the difficulties faced by the employers in getting the Omani staff to work on national holidays and weekends, when the majority of the business actually takes place. For now we just have to wait and see what happens.
a lot of issues that the general public would not be aware off. Let’s hope that you will do more such stories in 2010.
empowering employers First of all I would like to wish OER’s team a very happy new year and hearty congratulations on another year of successful issues. After going through your cover story, I personally feel that if Omanisation is to be truly successful and beneficial to the country it is necessary to empower the employer enough to take action when 4
Tony Thomas, Seeb
good awareness I have been a reader of OER for quite some time now. With the latest issue I was pleased to see that a relatively sensitive subject such as Omanisation has taken centre-stage as your cover story for this month. It brought forward
Connexion will be extensively distributed in Oman and India through established channels and will go a long way in creating awareness about trade and investment opportunities in both countries.
Chandan Mitra, CBD
Corrigendum In the special issue of Connexion -Oman-India Business Review, 2010 brought out by Oman Economic Review, it was mentioned in the Telecom story that FRiENDi Mobile customers in Oman can call all customers of IDEA Cellular in Kerala for as low as 139 baiza per minute. The correct phrase should be “for as low as 69 baiza per minute”. The error is regretted. – Editor
Write to us with your comments/feedback at: email@example.com
OIL AND GAS Taking charge
OER talks to John Blascos, the General Manager and Shell Country Chairman, Oman, in an exclusive interview
Lessons from change A new performance agenda is emerging as companies respond to the downturn and prepare for a different future
‘Products are no longer the differentiator’
David Power talks about his plans to transform the retail offerings of the National Bank of Oman
Reorienting property needs for the coming decade The property world, in all probability, won’t be the same again after the economic crisis of 2008/09. It is time to redefine the objectives and reorient strategies, says Nick Smith
Doing itself proud Oman Arab Bank is celebrating its 25th anniversary this year and the bank has many reasons to be proud of
What next for emerging markets? Fiscal stimulus across financial capitals of the world have led to valuation spikes
Four years of success Exterran Holdings is a global market leader in full service natural gas compression
70 Auto Talk
The family friendly coupĂŠ
In the News
79 83 84
CARTOON CORNER By Kannan Murali
Mega spending plans All the GCC countries have plans for large-scale investments in the next five years
Brand Power Opening a franchise always seems to be a rich manâ€™s business. Is this a myth or a reality?
Destination of Choice US is making efforts to attract foreign investors and promote FDI from the Sultanate
Comfort versus going green Omar Qatan, CEO of Oman Oil Marketing Company, shares his views on environmental issues
Standing Tall Burj Khalifa – The world’s tallest tower was unveiled on January 4, 2010 amidst a crescendo of fireworks, lasers and fountain displays. Developed by Emaar Properties, the tower is 828 mtrs (2,716.5 ft) tall. A closely guarded secret, the official height of Burj Khalifa was flashed onto a giant screen before an estimated crowd of 400,000. The height was disclosed in arithmetic progression, with the numbers being flashed onto the screen, one after another. Burj Khalifa is the tallest building in the world according to the three main criteria of the Council on Tall Buildings and Urban Habitat (CTBUH). The CTBUH ranks the world’s tallest buildings based on ‘Height to Architectural Top,’ ‘Height to Highest Occupied Floor’ and ‘Height to Tip.’ Burj Khalifa is 320 mtrs taller than Taipei 101, which at 508 mtrs (1,667 ft) had held the record for the world’s tallest building since 2004. With a total built-up area of about six million sq ft, Burj Khalifa features nearly two million sq ft of residential space and over 300,000 sq ft of prime office space, in addition to the area occupied by Armani Hotel Dubai and the Armani Residences. Coming in the wake of the debt restructuring crisis in the Emirate, The Burj Khalifa ironically, represents both the triumph and tragedy of Dubai. 10
Burj Khalifa, the world’s tallest building
Distributor: Zawawi Trading Company L.L.C., P.O. Box 58, Postal Code 100, Muscat, Sultanate of Oman Tel No.: +968-24565346 / 24562077 Ext. 277/278/279; Fax No.: +968-24565501 / 24562747 Website: www.omzest.com
Fall in IPO activity The IPO activity for 2009 was confined to four markets – Saudi Arabia, which accounted for 48.29 per cent of the proceeds, Qatar, Tunisia and Syria MENA & GCC IPO activity – 2009 versus 2008 ($m) 15,000 12,000 9,000
Total size of offerings ($mil)
13,165.06 1,493.01 11,672.05
# of issues 6
MENA IPOs by volume & num of deals – 2009
2,144.07 156.75 1,987.32 0 2008 2009 Total size of offerings ($mn) Total size of offerings ($mn)
Jan Feb Mar Apr May Jun
87.99 77.4588.43 0
Jul Aug Sep Oct Nov Dec
MENA IPO activity by exchange and sector (2009) Number of deals Damascus SE 17.65%
Saudi SE 64.71%
Financial Services 58.82%
Oil & Gas 5.88%
Telecommunications 17.65% Health Care 5.88%
Tunis SE 11.76%
Industrial Manufacturing 11.76%
Qatar SE 5.88%
Capital raised Tunis SE 3.72% Qatar SE 44.40%
Damascus SE 3.59%
Saudi SE 48.29%
Financial Services 9.21%
Health Care 4.10%
Industrial Manufacturing 8.59%
Oil & Gas 29.85% Source: Zawya
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NBO, TAWASUL Civil Society Leaders Awards PDO’S First eDTL Centre Petroleum Development Oman (PDO) has opened an Electronic Delivering the Limit Centre (eDTL) used to centrally monitor drilling activities throughout its concession area. The opening ceremony was held at Mina Al-Fahal under the auspices of HE Nasser bin Khamis al-Jashmi, undersecretary of the Ministry of Oil and Gas. The eDTL centre was established by the Well Engineering Directorate to electronically monitor and improve the operational performance of the drilling rig fleet.
Hamdan Transport gets ISO certification Hamdan Transport, division of the Hamdan Trading Group received the ISO 9001-2008 Certification at an impressive ceremony recently. The ceremony was presided over by the vice chairman Abdullah Hamed al Ghafry, accompanied by the division manager HTD Jerald Mascarenhas, Dr Ali al Ghafry, group general manager Tajammul Haque Siddiqui and CFO Rajput Goverdhan.
A remarkable year for the Port of Sohar All over the world the year 2009 will be remembered as a year of the financial crisis. Many ports around the world were affected by the recession. In spite of this, The Port of Sohar announced on January 17 that it had seen an increase in overall throughput during 2009. Overall the cargo throughput increased with 39 per cent of freight tonnes from 6.9 million tonnes in 2008 to 9.7 million tonnes in 2009. Oman International Container terminal showed a 200 per cent growth in containers – from 30.000 to almost 100,000 TEU.
National Bank of Oman (NBO) and Tawasul ‘First Civil Society Leaders Awards 2009’ were announced at a special awards ceremony held at the Diplomatic Club, under the auspices of HH Sayyid Faisal bin Turki al Said, CEO of Oman Brand Management Unit, recently. NBO is the first
corporate in Oman to co-host the Awards with Tawasul, the first national, independent, non–profit organisation. HH Sayyid Faisal bin Turki al Said and Sheikh Ahmed bin Suhail Bahwan, NBO’s deputy Chairman, presented the awards to all the winners. Individuals and corporates
who contributed significantly to charitable causes were recognised and honoured at the award ceremony. The competition was in four main categories -- Best Social Investment Programme for 2009, Best Civil Society for the Year 2009, The Civil Society Female Leader for the Year 2009 and The Civil Society Male Leader for the Year 2009. Voters had to choose from 46 candidates contesting for the award categories, through electronic voting. The entire process was supervised by a special committee to ensure fairness. Voters response was indeed overwhelming. Suhail Bahwan Group received the ‘Recognition Award’ for Institutional initiatives in recognition of their distinguishing charity initiatives.
Omanoil gets license from SIPC Oman Oil Marketing Company (omanoil) was recently awarded a marine fuel bunker license by Sohar Industrial Port Company (SIPC) for the establishment of world-class marine fuelling operations in the Port of Sohar. The agreement was signed by HE Maqbool Ali Sultan, Minister of Commerce and Industry and Chairman of SIPC, who signed the agreement on behalf of the Port. The license was awarded by SIPC, the Port’s key authority, in partnership between Oman
Oil Marketing Company and Matrix Marine Holding GMBH to supply marine fuels of various grades including; marine fuel oil, marine gas oil and marine lubricants to all local and international vessels calling the Port terminals at the anchorage area. On
the occasion, Eng. Omar Ahmed Qatan, CEO of omanoil said, “Attaining this imperative bunkering license is a clear reflection of our world-class reputation which has drawn a large number of industry giants to partner with us. As the flagship of the nation, we are proud of further strengthening our partnership with SIPC, which will add an immense degree of value to the Port’s activities and strategic advantages as they continue to expand their operations.”
Oil & gas companies confirm presence at OGWA The 2010 Oil & Gas West Asia (OGWA) Exhibition & Conference will prominently feature the stands of national oil & gas companies from throughout the GCC, in addition to international oil & gas majors, technology and service providers, and many other local and foreign companies directly serving the industry. The OGWA 2010 exhibition will be held from April 11-13 at the Oman International Exhibition Centre. It will be spearheaded by Petroleum Development Oman (PDO), Oman LNG, Oman Gas Company, Oman Refineries and Petrochemicals Company, Qatar Petroleum, and the Bahrain Petroleum Company (BAPCO). Held under the patronage of the Ministry of Oil & Gas, OGWA 2010 is officially supported by PDO and the Oman Chamber of Commerce and Industry.
Oman Air honoured by SQU Oman Air was honoured recently at the premises of Sultan Qaboos University (SQU), for sponsoring the three-day Tourism Festival held there. This was the fifth edition of the annual tourism festival to be organised by the College of Arts and Social Sciences, Sultan Qaboos University. One of the biggest activities organised by the student community, this festival creates awareness about the potential that Oman holds as a tourist destination. Oman Air has always taken a proactive role in nurturing the efforts of the students’ community especially in areas where it can identify its products and services with the event.
Oryx Metal sets up manufacturing facility HE Mohammed Bin Nasser Al Khusabi, secretary general for the Ministry of National Economy, Inaugurated Oryx Metal Industries (OMI) factory in Sohar on January 20. The event was attended by dignitaries, ministry officials, representatives from the corporate sector and the media. Oryx Metal is promoted by three partners Al Sulaimi Group Holding, National Trading Co. and
Xport Solutions. The factory at Sohar is spread out on 32,000 sq mts, with a 10,000 sq mts workshop and complete tooling facilities. OMI is the first factory in Oman to use the 2D and 3D technology to model their semi trailers and rigid bodies. OMI will cater to both public and private sectors in the Sultanate of Oman and abroad. The chairman
of the company Hamed bin Mansoor Al Sulaimi said “We are proud to be placing Omani products on the global map. We have teamed up with international companies on sharing of the technology. We are sure that Oryx Metal Industries will generate a lot of opportunities for Omani workforce. We are targeting 50 per cent of our sales through export and are quite confident of achieving it.”
Oman Mobile celebrates 2mn subscribers Oman Mobile announced that over two million subscribers excluding national roaming operator subscribers have now signed up and are benefitting from the widest network availability throughout Oman. The landmark figure reinforces the leadership position of Oman Mobile in the mobile telephony market in the country. Out of the two million subscribers, almost 1.9mn subscribers have directly signed up with Oman Mobile while the rest receive their services through the company’s two
mobile reseller partners. Commenting on the announcement, Omantel CEO Dr Amer Al Rawas said: “We are delighted to start 2010 with this landmark
achievement that once again reinforces the leadership position that Oman Mobile established throughout the country in delivering the best mobile telephony services through the most extensive and wide reaching nationwide network.” He added, “We have been the pioneer for mobile services in Oman and will continue to work hard to maintain our leading position in the marketplace and ensure that we continue to offer our existing and future customers the widest choice of quality and innovative services available.”
Almoayyed re-launches Daewoo Electronics RENNA CONCLUDES DEALER MEET renna mobile company recently concluded its extensive dealers meetings across the Sultanate to gauge feedback on the current products and services and disclose details on the company’s outlook for 2010. The meetings conducted in Salalah, Sohar and Nizwa, brought together hundreds of renna distributors to discuss and share challenges, provide solutions and most importantly present an opportunity for face-to-face interaction with the executive and management team. “We operate with transparency and simplicity on all levels. Our objective behind our meetings was to open direct communication channels between the company and distributors,” said Joakim Klingefjord, renna CEO.
BARR AL JISSAH HONOURS DIAMOND MEMBERS Shangri-La’s Barr Al Jissah Resort and Spa recognised the service excellence of 66 employees who reached diamond status as part of the resort’s ongoing Customer Delight Programme. Designed to show appreciation to employees who go the ‘extra mile’ in delighting both internal and external customers, the recognition programme encourages employees to gain the loyalty of guests by anticipating their every need, showing flexibility and ultimately providing the utmost in dedicated service. The Customer Delight Programme has three levels of membership – silver, gold and diamond. All levels reward staff with a recognition certificate and incentive.
January 20th marked a new beginning with Y K Almoayyed Group of Bahrain opening a new company Almoayyed Integrated Enterprise in Oman to re-launch Daewoo Electronics. Farouk Yousuf Almoayyed, Chairman, Y K Almoayyed Group, Bahrain, said, “We bring with us the expertise of our diversified organisation that provides sales, distribution and service facilities for key industry sectors and market segments where we now represent over 300 leading brands from all over the world.” DC Lim, managing director of Daewoo Electronics Middle East expressed pleasure at the new beginning. “This strategic partnership with Y K Almoayyed Group will
provide all the necessary strength in marketing and distribution of Daewoo brand products in Oman while their strong market knowledge and expertise in local business will boost the brand reputation.
Having been associated with them in UAE and Qatar, we are eager to serve Oman consumers with dedicated sales and service network to achieve the highest level of customer satisfaction.”
Al Khalili Group consolidates under one roof The Al Khalili Group, in a recent restructuring, brought all its divisions under one umbrella – Al Khalili United Enterprises. The group’s business interests include building materials, technology, construction, electrical, hardware and lighting. “The move infuses a great
organisational strength even into new venture,” says Talal Bin Salim al Khalili. Areas that the group proposes to venture into include construction of office buildings, hospitals, judiciary buildings, college campuses, multistoried complexes and commercial housing projects as well
as light industrial projects for end users, developers, entrepreneurs, and small businesses. Group managing director, Qais Bin Salim al Khalili says, “We have always placed our efforts on development of infrastructure with aggressive marketing and keen accounting policies.”
Aramex, Z-Corp tie-up for logistics solutions Aramex, the global logistics and transportation solutions provider has entered into a joint venture agreement with the Zubair Corporation (Z-Corp). The new venture will offer businesses in Oman integrated services such as warehousing and
distribution, sea, air and ground transportation, freight forwarding and customs brokerage. Consequently, Z-Corp will outsource significant warehousing and logistics portfolio needs to Aramex. The new company will cater to a wide range
of industries, including telecommunications, FMCG, military, retail and IT. As part of the agreement, Aramex and Z-Corp announced plans to build a state-of-the-art logistics centre in Oman – the first phase to be completed in early 2011.
Taageer Finance invests in Sudan BankMuscat celebrates 40th Renaissance Commemorating 40 years of the glorious Renaissance march under the leadership of His Majesty Sultan Qaboos, BankMuscat, has launched a major national campaign with year-long celebratory initiatives, programmes and activities throughout 2010. Titled ‘Oman Celebrates’, the first in the series of the celebratory initiatives was unveiled on January 12 at the bank’s Azaiba branch in the presence of senior bank officials. BankMuscat will focus and convey the ‘Oman Celebrates’ theme to distinguish all its branding and communication campaigns during 2010. The objective is to initiate programmes that celebrate and mark the country’s achievements during the last 40 years. The year 2010 marks a milestone for Oman and BankMuscat attaches great significance to the occasion.
Change of guard at NBO The National Bank of Oman announced that Murray Sims, CEO of National Bank of Oman (NBO) since April 2008 will be leaving the Bank on the expiry of his contractual term. NBO’s Board has appointed Salaam Al Shaksy as his successor CEO. Al Shaksy has been CEO of Dubai Banking Group and Dubai Bank since May 2005, and prior to this he was the CEO of Dubai Islamic Investment Group. Al Shaksy has more than 23 years experience in banking having worked in senior positions in NBO, Bank Dhofar and as the CEO of Majan International Bank. He currently has board memberships in Oman and elsewhere. Al Shaksy is expected to assume his duties as CEO of the bank at the end of March 2010.
As part of Taageer Finance Company’s efforts to spread its geographical presence, the company has made its first investments in Sudan along with one of the major founder promoters of Taageer (The Arab Investment Company). The most important aspect of the investment is that Taageer would be adding value to Sudan operations by providing technical and management consultancy during the first three years of operations. At the signing ceremony held on January 26 at the Intercontinental Hotel, a Technical and Management Agreement between Taageer Finance Company and The Arab Leasing
Company (TALC), Republic of Sudan, was signed by Eng Khamis Mubarak al Kiyumi,
the chairman of Taageer and Homoud al Otaibi, the chairman of TALC.
A Signature event With 26 teams from across the globe battling extreme weather and each other, it was a true test of endurance at the third, and final, leg of the 2009 Nivea for Men Endurance Challenge which was held in Dubai recently. Signature – Oman’s first luxury lifestyle magazine – was there in the middle of it all to support their team, who returned to the circuit after a sevenyear hiatus. The race began at 2pm on December 11, 2009, with the teams accompanied by family and friends preparing for the upcoming 24 hours in the pits. Challenging weather conditions and stiff competition made this the toughest round yet with many drivers spinning out. The race was a true test of fitness, skill, pit strategy, consistency and teamwork rather than all-
out speed. It was a tough fight between the three top teams NFM Professionals, Batelco and Team Grohe, who led for most of the early part of the race with the NFM Professionals reaching the chequered flag. This also netted them the overall Championship, with Ocean Rubber second and Tracktalk Speedsters third. Though at the beginning ‘Team Signature’ – consisting of four drivers Mitesh Khimji, Andreas Petre, Tarik Al Said,
Fareed Hinai and Rishi Khimji – had a slightly disappointing qualification being placed on the grid at the 20th position, they put up quite a fight and managed to pull up two places before the end of the race coming in at a respectable 18th. They shared their pit with ‘gourmet gulf’, the only other Omani team, with whom they duelled for the duration of the race and eventually came out one position ahead. Signature is partner for this event
Bank Muscat, NBO and Towell Piramal tie up catering to the development needs of the country covering the entire spectrum of mixed use developments.
OAB, BCC Sign pact for building construction Oman Arab Bank (OAB) has recently signed an agreement with Bahwan Contracting Company (BCC) for the construction of OAB’s new head office building in Al Ghubra North. On behalf of OAB, the agreement was singed by Rashad Al Zubair, chairman of OAB and by S K Virmani, managing director of BEG. OAB’s future head office building will be constructed using the latest in technologies and office ergonomics. The new head office building will cater to OAB’s current and future requirements and will consolidate all its departments at one convenient location.
Three leading companies in Oman – BankMuscat, NBO and Towell Piramal have joined hands to form a new real estate company Oman Urban Development Company (OUDC).
OUDC aims to bring about a paradigm shift in the Oman real estate industry by being an active participant in the economic progression of the Sultanate. OUDC would be providing bespoke solutions
DDB Oman, a leading advertising agency in the country, has announced the appointment of Srikanth Viswanathan as the manager of the agency starting January 2010. Srikanth moves into the role with a promotion and as an evolution from his current position of managing some of the key businesses of the agency. “We have ambitious plans which will unfold over the year and Srikanth’s move up is a first step” says Radha Mukherji, executive director DDB Oman. National Bank of Oman (NBO) has appointed Salma Salim Said Al Jaadi as the ‘First woman assistant general manager’ (AGM) in the history of the bank. Salma who was working as NBO’s head of corporate risk, has been promoted to the position of assistant general manager – corporate credit risk, reporting to Nasser Al Rashidi, NBO’s DGM and chief risk officer.
“This tie up is the first of its kind in Oman and we are very proud as a group to be involved in this venture,” said Hussain Jawad, chairman, W J Towell Group. The signing of the shareholders agreement was held recently at Bait Towell in Azaiba. The event was attended by Hussain Jawad, chairman, W J Towell group, Abdul Razak Ali Issa, CEO, BankMuscat, David Murray Sims, CEO, National Bank of Oman and Khusru Jijina, MD Piramal Sunteck, India and other officials.
Grand Hyatt Muscat has appointed Federico Mantoani as the hotel’s new executive assistant manager. Christoph K Franzen, general manager of the hotel says, “We are very proud to have Federico as our newly appointed executive assistant manager in our team. His passion for the hotel business and guest service coupled with his excellent people skills and proven track record in many of our flagship properties makes him the ideal choice for this position”.
Fincorp has announced the appointment of Samer E. Amireh as general manager of its brokerage division. Jordanian born Amireh has been in the banking and finance industry for more than 12 years. His extensive and impressive experience includes holding general manager brokerage positions at DAMAC Securities in UAE and AB Invest in Jordan.
Shell to start operations at Port of Sohar Shell Oman Marketing Company makes a major foray into Sohar with this move
n a major move to enhance services at the Port of Sohar, the Shell Oman Marketing Company and Sohar Industrial Port Company have inked an agreement to set up the port’s first bunker operation for marine fuel The new service by Shell Oman is seen as an added strategic advantage for the Port of Sohar, which is located close to some of the busiest shipping lanes in the world. The port is fast developing into a worldclass logistics points. Shell Oman will be working in association with Shell Global Marine Products, with the objectives to providing worldclass bunkering services at Port of Sohar. Faisal al Hashar, managing director, Shell Oman said,
ore than 150 companies have already c o n fi r m e d their participation in the Interiors and Buildex 2010 which will be held on 15-17 March at the Oman International Exhibition Centre. Among the companies that will be taking part include the Al Sulaimi Group, Windows 2000, Dosteen Doors & Engineering Services, Kehlan Trading, Al Anwar Ceramics, Al Turki, OMASCO, Nuhas Oman, and Darwish ast. A large number of international firms will also be taking part in the event. Leading the list of international participants are the national pavilions of Turkey, Egypt, Italy, UK and the UAE. Other countries that will be represented at Interiors & Buildex 2010 include Belgium, Germany, India, Jordan, Korea, Lebanon, Malaysia, Malta, and Saudi Arabia. 24
Interiors & Buildex 2010 is officially supported by the Oman Chamber of Commerce and Industry (OCCI), Oman Society of Contractors, Oman Society of Engineers, UK Trade & Investment, and the Embassy of the Republic of Turkey. For the third straight year, the event is also being supported by Windows 2000 as the platinum sponsor. The gold sponsors are Panorama Windows and Dosteen Doors and Eng Services, while Darwish AST Services, V-Kool Oman and IQue serve are the silver sponsors. The event’s visitor badge sponsor is Mohammed Riaz . The media sponsors of the event include Arab Construction World as the official magazine, Construction World and Al Maskan magazine, Times of Oman and Al Shabiba are partners. OER Dossier is the media partner for this event
“Providing bunkering services in Sohar Port will create competitive advantages for Shell Oman and it will enable us to extend our excellent products and services to our local and international marine customers who visit Sohar Port.” Mike Lumley, Shell marine products regional general manager for the Middle East, Africa and South Asia also added, “We are delighted to have been granted this licence which will extend our network of ports in the region in line with our global strategy of selective expansion in core growth markets.” Shell Oman has stated that besides the supply of high quality products, the company will also put in place a robust HSSE (Health, Safety, Security, and Environment) management programme.
Showcasing growth Interiors & Buildex 2010 will highlight the growth of Oman’s building and construction industry
The grand finale Winners of 2009 Oman Web Awards were felicitated at a glittering ceremony at the Al Bustan Hotel
he Oman Web Awards 2009 registration closed with a record participation this year and witnessed a crowd of almost 500 at the award function. The jury panel comprised of experts in the field of IT from reputed institutions around the Pan Arab region.
Top: Munira Macki, DGM HR & Corporate Support, Bank Sohar presenting the third prize for Oman Green Awards to Visvas Paul D Karra, principal correspondent, OER; and below: Suddhasatwa Basu and Ali Amur Al Ghaithy, Account Managers, Reach Oman receiving the third prize in Media category
of the Year’ and ‘Best Arabic Content’.
Spotlight Events, a member of SJS Group were the main presenters of the event and it was held in association with Microsoft, BSA and AYNA corporation. The main sponsors for the event were Taameer Investment, the category sponsors were MB Holding Company (corporate), Majan The award function was graced Consolidated Co. and Hadid by HE Eng Ahmed Bin Hassan Majan (engineering/manufacal Dheeb, undersecretary for turing), Oman Cables Industry Ministry of Commerce and (engineering/manufacturing), Industry. Also present were Ahmed Mohsin Trading (rePierre Moukarzal, president – tail), Bank SoPan Arab Web har (hospitality) Award Academy Top honours and the support and Dr Salim Al Best website of the year: sponsors beRuzaiki, CEO Inwww.zed-communications.com ing COWI and formation Tech(Zed Communications) Partners (enginology Authorneering/manuity. The event is Best web design company of facturing), Welheld under the the year: GulfCyberTech care Diagnostic auspices of In& Treatment formation Tech- Best Arabic content: Centre (healthnology Author- Ministry of Education care), Jawharat ity. The panel of A’Shatti (retail), Eqarat Injudges comprised from various ternational Property Consultcountries of Pan Arab region. ants (real estate), Crème de la Crème as official luxury magaJudging process zine, Al Roya as official Arabic The criteria for judging the business daily, Oman Air as websites are concept/creaofficial airline, Times of Oman tivity, technical/ease of use/ and Al Shabiba as official navigation, content/structure, newspapers, TUNES as light visual design solution/aesand sound partners, Al Bustan thetics and interactivity. In InterContinental Palace Museach category there were three cat as Hospitality partners, winners and there were three Hi FM as Radio partner and grand awards presented this Oman Printers and Stationers year for the ‘Best Website of as print partners. the Year’, ‘Best Web Company OER and Alam Aliktisaad Wala’mal were the official media partners for the event
By Sridhar Sridharan
Lessons from change A new performance agenda is emerging as companies respond to the downturn and prepare for a different future. Not all of these lessons from change may be new. But they are taking on new importance as companies strive not only to survive, but to thrive The author is a tax partner with Ernst & Young. This article is extracted from Ernst & Young’s publications on Lessons From Change
he world is still reeling from the biggest financial downturn since the 1930s. Trillions of dollars have been lost, millions of people have become unemployed and the global economy has all but shuddered to a halt. During the last two years, the seemingly infinite pool of global funding that delivered a decade of cheap and abundant credit has dried up. Economic players dependent on this credit — consumers, companies and governments — have had to make rapid and radical adjustments. Some have not survived. Some still struggle. And some have emerged as new leaders. But all have had to adjust. If we are to avoid repeating the mistakes that have caused such economic distress, we need to learn from the past as we build for the future. It has often been said that the most important lesson to master is the ability to learn. Learning from others is lower cost and lower risk than learning from experience. Ernst & Young has continued to gather deep insights from companies in many industry sectors and markets around
the world on how they are managing in this downturn. We have pulled together these insights and tested our findings through an in-depth survey of over 500 Ernst & Young client service partners from our member firms across the globe and additional research by our Global Industry Centres. Combining all that we have learned gives us a unique perspective into how companies are responding to the new environment. In this article, we look across these analyses to try to establish a broader agenda for action that will be relevant for all business — in every sector, in every country. As a consequence, we believe a new performance agenda is emerging as companies respond to the downturn and prepare for a different future. Not all of these lessons from change may be new. But they are taking on new importance as companies strive not only to survive, but to thrive. Back from the brink From the crash of Lehman Brothers in September 2008 through to late February 2009, there was a real sense of panic across the world. Uncertainty as to the financial strength – or weakness – of a company
extended from the boardroom to its customers, suppliers and shareholders. Nightmare scenarios were discussed. The economic world, as we knew it, looked over the edge – and stepped back. Through bold government action and massive, multifaceted stimulus bills, most of the major world economies have modestly recovered from their abysmal performance. Market indices have risen and trade measures have begun to grow again. And most measures of consumer, producer and executive sentiment have also begun to turn around. … but not to normal However, there is a sense that the future economy may be different from the past. Demand may reappear, but it is likely to be depressed. The reappearance and continuation of high levels of unemployment, the prospect of increased taxes to fund the deficits and further restrictions on consumer credit will act to dampen consumer confidence and increase price sensitivity. As stimulus measures are gradually withdrawn a period of public spending contraction in real terms can be expected for many economies. Extensive losses to both in-
The objective of this series of articles is to share our perspective, explore the different challenges and opportunities faced by different industry sectors vestors and the public purse renew pressure on the corporate governance approach that has seemed to deliver neither transparency nor protection for wider interests. At the same time, the regulatory burden is expected to rise: partially to mitigate the role business plays in damaging the environment and partially to respond to failures in the market. These failures include risk management programmes that neglected to spot risk and remuneration programmmes that rewarded people where businesses have failed. prepare for rebound Depressed demand and additional burdens make for a highly cost-sensitive environment. Many companies expect their access to additional funding to remain constrained, as banks act to recapitalise and the market for fundraising remains largely tepid. As a result, we are seeing major program of cost reduction and restructuring in many companies across most sectors in an attempt to free up working capital and improve performance efficiencies. On the upside, many executives believe there are major opportunities to make a step-change transformation
to markets and competitive positions. This has been a global recession and it will be a globalised recovery. The structure of many sectors may be open to a fundamental change in a way not seen for decades. Similarly, it is widely felt that many of the largest “emerging” markets, particularly China, India and Brazil, have finally emerged into the global economy and are likely to perform more strongly than many of the “mature“ economies. performance agenda These factors suggest that a new performance agenda is emerging, where cash remains important, but is no longer the primary objective for management. Reading across the insights we have identified eight primary performance goals that companies are, or should be, adopting to prepare for the rebound and to succeed in the new economy. 1. Reevaluate your business model. Embed innovation and constantly challenge your existing business models against the new business environment. 2. Optimise the flexibility of your operations. Improve the responsiveness and flexibility of the organisa-
tion to drive down cost, improve efficiency and adapt more quickly to changes in the market. 3. Optimise capital availability and deployment. Reflect the continued importance of cash and constricted funding by optimising the availability and deployment of capital for a more flexible and robust balance sheet. 4. Optimise your market reach. Optimise your global market reach and product/service mix to exploit opportunities, achieve optimum returns and mitigate risk. 5. Accelerate your decisionmaking and execution. Make and execute decisions more quickly to take advantage of shorter windows of opportunity and respond more quickly to adverse developments. 6. Revitalise the way you manage risk. Identify the full risk complexity of the market and develop and align a strong control framework for your business. 7. Strengthen your management talent. Gain, retain and deploy a management team that is capable of addressing the complex market and organisational environment. 8. Strengthen your stakeholders’ confidence. Regain and
retain stakeholder confidence through transparency and better communication on financial and nonfinancial performance. These eight goals are interlinked to form a wheel of performance objectives. Their importance varies from sector to sector, country to country and company to company. But they all merit attention and, typically, progress on all of them is required to optimise a company’s position. Steering the future A growing number of indications suggest that the economy is coming back to health. But these indications also suggest that the recovery is likely to be gradual. The market will remain difficult and competition will be intense long into the future. Wishing recovery to be the case is not sufficient. Now is the time for management to take action. The performance wheel will provide a structured framework to set a new agenda and priorities. Each sector – and indeed company – will have a different set of priorities. But by considering own priorities and looking to understand how others are responding, companies will be well-positioned to steer their future. 29
Taking Charge Fatma Al Araimi talks to John Blascos, the new General Manager and Shell Country Chairman, Oman, in an exclusive interview
Can you tell something about your educational and professional background.
challenge considering the frantic pace of growth being witnessed.
I’m from the United Kingdom, though my name is Spanish, which is misleading at times. I am a qualified engineer by profession, having graduated from Cambridge. I later went on to complete my Masters in Business Administration. After completing my education, I joined Shell as a training engineer in drilling / production technologies in the early 80s, and have been working for Shell for almost 28 years.
What’s your take on the changing oil and gas scenario here?
I am sure that 28 years with Shell has given you the opportunity to work in different parts of the world. Can you please share your experiences in various countries?
One thing hasn’t changed much in Oman is the Omani warmth. The people are extremely kind here. Though I must admit that Oman has developed, and become quite advanced on all fronts
After working in the UK, I worked as a drilling engineer in Algeria. In 1985 I married and moved to work in Petroleum Development Oman (PDO), continuing in the same role and later on in production technology. Four years later, I moved to London and took up a gas commercial role. I have worked in Nigeria as the head of production technology and later moved to Malaysia as a development manager at one of our units there. A period in Shell’s upstream head office followed in the Hague. And now, I am right here in Oman.
You have been posted twice now in Oman, in 1985 and 2003 and once again this year. During this intermittent period, have you been a witness to any dramatic changes in the country? This is a very good question. I was first here in 1985, and worked for four years, before coming back in 2003, for a two-year stint. And, here I am once again. One thing hasn’t changed much in Oman is the Omani warmth. The people are extremely kind here. Though I must admit that Oman has developed, and become quite advanced on all fronts. Personally, I hope Oman will continue to strike a balance between development and preserving its nature and beauty. Of course, it’s going to be a difficult
I have been witness to the less technically challenging times, when I was here in the early 80s. Now it is more challenging, as we gradually move away from the so-called “easy oil”, which is not unique to Oman but a common feature across the world. However, advanced new tech-
nologies should help meeting these challenges. As I was leaving Oman for the first time, gas discovery was in a very nascent stage. We now have state of the art gas facilities like Oman LNG, Qalhat LNG, etc.
Shell Development Oman has moved to a new office in Oman. How is it going to impact your operations? We began here modestly by representing our parent company. However, we have evolved and our activities have increased beyond the limit of a representative office. We have established Shell Technology Oman Center and a regional Learning
Hub. Also some of the business activities that used to be handled by the regional office in Dubai will be done from here. Obviously as you grow and add business activities and people, you need that extra space but also this is a sign of our longterm commitment to Oman. What value in your opinion would be a fair price for crude oil? This is a difficult question; no one can speculate what the oil prices should be. Last year we have seen the price of oil reaching $147 and later this year it dropped below $50. There are many factors, which determine the price of oil, a fair price is the price that is good for both producers and consumers but also should be high enough to allow oil companies to invest in major projects, which should secure the energy need for future generations. We at Shell believe that the need for energy across the world would double by the year 2050. We also believe that to meet most of this need, most would come from fossil fuel. We must continue to invest in oil and gas projects in order to meet the energy challenge. What role are you expected to play in your new position? As the GM and Shell country chairman, I will be looking after our interests in Oman, while simultaneously nurturing the relation between us and our stakeholders in the Sultanate. I am a member of the board of directors of Petroleum Development Oman (PDO), Oman LNG and Qalhat LNG (QLNG). In addition I am also the chairman of Shell Oman Marketing Company.
You obviously have a strenuous job. How do you normally relax? I am a sports enthusiast and I like golf and sailing. I love photography and it’s the best way to capture nature and relive memories somewhere down the line. I look forward to discovering more of Oman during my leisure time taking in the natural beauty and enjoying the warmth of the people. 31
Injecting confidence All eyes were on 2010 General State Budget as it came in the aftermath of the
global economic crisis. HE Ahmed bin Abdulnabi Macki surpassed expectations by presenting the biggest budget in decades and reinvesting surpluses of the past few years into the economy to meet the objectives of the seventh five-year plan. Visvas Paul D Karra tracks a few key indicators of the budget in this report
ike the rest of the region, Omanâ€™s economy is largely dependent upon a single commodity -- oil and therefore any reading of the State Budget 2010 has to take into account the fortunes of oil during the turbulent period in the past year. Commodity prices rallied back in 2009 on the back of the global economic recovery and improved demand from emerging economies like China, India etc. In 2009, oil prices bounced back to $70 per barrel by the middle of the year after reaching low of $36 a barrel in February. The government of Oman budgeted oil price at $45 per barrel in 2009 whereas the actual realisation was $56.7 per barrel after the prices dropped from $101.1 per barrel in 2008, reflecting a decrease of 44 per cent. This decrease was, however, compensated by the hike in daily oil production, which increased by seven per cent in 2009 to around 810,000 barrels per day up from 756,800 in 2008. Despite additional projects, which were sanctioned during the year, and the financial approbations, which were allocated to cover the different elements of the public expenditure in 2009, a large part of the estimated deficit of 810mn rials was covered by oil prices, which 34
HE Ahmed bin Abdulnabi Macki, Minister of National Economy
2009 nominal GDP (at current prices) is expected to be above 20 per cent. As per the latest data of Ministry of National Economy, the nominal GDP has declined by 27.2 per cent to 12.760bn rials at the end of September 2009.
peaked at $70 per barrel by the last quarter of the year.
Conservative pricing The 2010 budget is based on an oil price of $50 per barrel (versus $45 in 2009). Says Ashok Hariharan, Partner, Tax - Oman and UAE, KPMG, “as is the practice for several years, the government is quite conservative in its budgeting and has rightly considered for the budget an average oil price of $50 per barrel. This contrasts with the actual average oil price of $57 per barrel achieved in 2009 and an average price of $70-80 per barrel expected by experts during 2010.”
Salient features The biggest highlight of the 2010 Budget is that it is considered the biggest State Budget so far with an ambitious layout. The total revenues are estimated at 6.38bn rials – an increase of 14 per cent over the 2009 budget. Total estimated expenditure is also up by 12 per cent to 7.18bn rials. On a segmental basis, oil and gas revenues contribute around 76 per cent of the total revenues, whereas the current and capital revenues amount to 24 per cent of total revenues.
Despite the presence of lower oil prices during the first half of the year, and the slowdown of global economy, the national economy is expected to report a positive growth of 3.7 per cent at real GDP in 2009. However, the contraction rate of
The economy is expected to grow by 6.1 per cent at constant prices and 18.4 per cent at current prices in 2010 and
inflation rate is set to stabilise at 3.5 per cent. The budget is expected to result in a deficit of 800mn rials in 2010 as against the 810mn rials estimated deficit in the previous budget. The deficit is 13 per cent of the revenues and three per cent of the gross domestic product (GDP). As a percentage of the GDP this is considered as being economically safe and acceptable. This confidence stems from the fact that the national economy showed an ability to counter and confront the repercussions of the large decline in oil prices last year. Says HE Ahmed bin Abdul Nabi Macki, Minister of National Economy, who is Supervisor of Ministry of Finance and Deputy Chairman for Financial Affairs and Energy Resources Council, “The ability of the national economy to counter this external shock stems from a number of factors mainly the increase in oil production rates, the economic policies
MAIN COMPONENTS OF 2010 STATE GENERAL BUDGET 2010 Revenues Oil revenues
Taxes and fees
Other curent revenue
Capital revenue & repayments
Oil and Gas production
Participation and subsidies
Interest on loans
Defence and Security
Other civil ministries
1% 13% 22% 9%
Source: Ernst & Young
aimed at further economic diversification, encouragement of investment and the expanding fiscal policies adopted by the government to support domestic demand.” Similarly, monetary policies and other measures undertaken for liquidity availability and support of the banking and financial sector stability in general also contributed to this. According to Hariharan, an indication of the state of the economy is provided by the government’s estimated revenue from taxes and fees. The increased revenue budgeted from taxes and fees would suggest that economic activity in 2010 would be much better than in 2009. Revenue from income tax alone is projected to go up by 33 per cent compared to the 2009 budget to 300mn rials in 2010. It is understood that collections from income tax during 2009 significantly exceeded the 2008 budget of 225mn rials. The reduction in foreign company tax rates from 30 per cent to 12 per cent is not likely to have an effect on the 2010 revenues, as this would largely impact collections only in 2011. It is worth noting that the government’s budgeted collection from income tax during 2008 was only 166mn rials. In two years time i.e. in 2010, the government is budgeting a revenue of 300mn rials despite there being no increase in tax; this is 80 per cent higher than the budgeted collections for 2008. The government is also expecting a marginal increase of seven per cent in revenue from customs duties budgeted at 160mn rials and three per cent (110mn rials) from non-Omani labour licences. This contrasts with a 50 per cent increase in budgeted revenue from customs duties during 2009 and a 24 per cent increase in budgeted revenues in 2009 from nonOmani labour licences. The increase in customs duties and non-Omani labour licence revenues in 2010 are significantly smaller than those resulting from the 2009 budget possibly reflecting the impact of Free Trade Agreements and continued focus on Omanisation.
Five-year plan impact This year’s budget must be viewed in the light of the Seventh Five-Year Development Plan (2006-2010). The five36
Ashok Hariharan, Partner, Tax – Oman and UAE, KPMG
Approbations for 7th Five-year Plan (rials)
Highlights of 2010 STATE budget (rials) Economy expected to grow by 6.1% (at constant prices) and 18.4% at current prices
460mn for contributions to the capital of companies with govt stake
Town planning and municipalities
Education, health receive priority with an increase of 106mn
Revenue from corporate tax – 300mn
New projects (2010)
Revenue from customs duty – 160mn
937mn allocated for development projects New projects to create 4,000 new jobs
Source: Ministry of National Economy
year development plans, which are part of the Vision 2020 development document are considered to be the prime mover and executive tool of the budget. According to HE Macki, it should be noted that 2010 is the last year of the Plan and as such, the government has continued to allocate finances for its development programmes to fulfill its commitments for completion of infrastructure projects. With this in mind, all the surpluses of the previous budgets have been utilised till November
2009 and there has been a large increase in size of approbations for development programmes.” HE Macki disclosed that most of the projects were in response to the Royal Directives during the Royal Tours, which explore the pressing needs of citizens in all the wilayats and regions and work for their fulfillment along with the implementation of a number of development programmes. Additional
funds were also allocated for rehabilitation of infrastructure which was affected by the unusual weather conditions of June 2007 totaling 494mn rials. Thus, there was a whopping 221 per cent increase in approbations year-onyear with a total of 6.665bn rials for the development programme taking the allocations to 9.681bn rials as compared to the approved 3.016bn rials at the start of this five-year plan. “The continuance of government public spending towards achieving its objectives of the seventh fiveyear plan is expected to create more new jobs which in turn would increase local consumption, forming the cornerstone for economic growth. The efforts taken towards the completion of projects along with the additional approbations done in the development programme would in turn be the key hauler for the private sector investments in the country,” says Sankar Kailasam, senior vice president (Asset Management), Gulf Baader Capital Markets. The Omani economy remained resilient in 2009 on the back of increased infrastructure spending along with the presence of favourable monetary policies and the support to the local banking system by means of availability of liquidity. Kailasam believes that the government’s role in maintaining the stability in economy would in turn provide continued growth, offering strength to the economy in the current situation as well. The additional approbations during the past years were for a number of projects in various sectors like roads (1.777bn rials); ports (1.025bn rials); housing (406mn rials); airports (882mn rials); health (247mn rials); town planning and municipalities (252mn rials); and education (119mn rials). In addition to this, total approbations for the new projects to be implemented in 2010 is pegged at 937mn rials.
Employment generation The government’s thrust as always has been on infrastructure development and employment generation. The total expenditure for 2010 has been estimated at about 7.180bn rials as against 6.424bn rials in 2009, an increase of 12 per cent 38
Philip Paul, Head of Country (left) and Francis Selvaraj, Associate Partner, Cluttons
BUDGET AT A GLANCE Based on oil price of $50 per barrel Revenues -- 6,380mn rials Expenditure -- 7,180mn rials Deficit -- 800mn (13%) Inflation to stabilise at 3.5% Source: Ministry of National Economy
year-on-year. Of this, the total current expenditure for the year is forecast to be 4.432bn rials, forming around 62 per cent of the total expenses. The government has budgeted 10.9 per cent increase in investment expenditure for 2010 to 2.128bn over the previous year’s budgeted amount of 1.919bn rials. The budget has allotted 30mn to cover the operational expenses of the new projects intended to be operated for ministries during the year 2010. This would result in the creation of 4,000 new job opportunities in the labour market. It
is believed that the government’s thrust on employment generation would in turn help local consumption growth thereby aiding economic growth. Adding up to this, the project investments would help in increasing the private sector investments. “In general we are seeing a very optimistic budget which is definitely going to give a good impression to everybody, both to the market and investors. This will give confidence to the people that the economy is growing and the development spending is going on, as we know that the economy depends upon investments and expenditures. It gives us a signal that we have a healthy economy and it is going to be a good year despite the consequences of the past year,” says Abdullah Salem Al Salmi, executive vice president, Capital Market Authority. Referring to the MSM, which bounced back in the second half of 2009, Al Salmi says, “Once the results of the companies are out, a lot of doubts will be cleared and clarified and investors will know where
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they are standing. The annual results are emerging and this will clear up a lot of issues and we are quite confident about the performance of the banking sector. According to CBO figures, the money market was distinguished by the growth of money supply where the domestic liquidity increased by 5.6 per cent by the end of October 2009 as compared to the same period in 2008.”
Construction benefits The biggest beneficiary of this year’s budget is going to be the construction sector, whether it is for roads, buildings or engineering fields. This is indicated by the budget allocations of 937mn rials for new projects followed by education (847mn rials); and health (294mn rials). The increased allocation is sure to translate into new hospitals, educational facilities and roads. It is worth mentioning that the new housing units to be constructed in the various areas of the Sultanate during the Seventh Five-Year Plan amounted to about 4,989 units. There have been additional approbations for construction, development and expanding of Al Duqm port by 788mn rials; additional approbations for airports sector for Muscat airport (513mn rials) and 121mn rials for airport development of Sohar, Al Duqm, Ras Al Hadd and Adam. Philip Paul, head of country, Cluttons Chartered Surveyors, Property Consultants, says that if you look at the overall economy, there is a significant movement from old areas to new primarily because of growth in economic activity and the need for companies to expand their operations. It is more like an evolution of the city. One such example is BankMuscat which is building a new head office at Airport Heights. Another example, is the demand for affordable housing, which is going up as more nationals attain purchasing power. “Thus, there is not only a natural progression of the city by expanding outward, but the economy itself is creating more demand for office space and residential accommodation which means that more infrastructure facilities like houses, roads, water and power utilities have to be built. Apart from these there 40
Abdullah Salem Al Salmi, Executive Vice President, Capital Market Authority
2009 PERFORMANCE Deficit of 810mn rials covered due to actual oil price of $56.7 per barrel against budgeted $45
Oil prices dropped from $101.1 per barrel in 2008 to $56.7 in 2009, reflecting a decrease of 44%
Despite large decline in oil prices, the economy registered a growth of 3.7% at constant prices but declined by about 20% at current prices
Balance of trade surplus decreased to 4.4bn rials in 2009, a decrease of 32% compared to 2008
Oil sector recorded a decline of 37% as global crude prices fell
Daily oil production increased by 7% in 2009 to 810,000 barrels per day
Non-oil sector recorded growth of 2.9% Inflation rate declined to about 3.6% at constant prices and declined by about compared to 12.4% in 2008 2.2% at current prices MSM volume of trade scaled up to 6.7bn rials recording an increase of 11.2% compared to 2008
is a move to re-develop existing areas like Ruwi, CBD and the Muttrah Corniche, all of which will create a knock-on effect,” adds Paul. Says Francis Selvaraj, associate partner, Cluttons, “Despite the global doom and gloom situation, Oman has fared better though the demand for sales and leasing of properties declined. Earlier it (the demand) was because of speculation, but when the prices came down, it was a real correction as actual buyers entered the market.” “There will be a qualitative shift in rental and office accommodation as real estate projects get approved and work begins. A substantial amount of office space will be added if organisations want to upgrade the quality of their offices and seek movement,” says Selvaraj. For example, Cluttons is working with Oman Air Management Services (OAMS) to develop a real estate master plan for the peripheral airport area. The company will be advising OAMS about office space, logistics, retail related areas like an airport city etc. The development will run in parallel with the actual airport development. The housing sector is also expected to contribute to inflationary pressure, which will be created by the recovery of the global economy in 2010 and the rise in commodity prices. It is important that economic growth is achieved with a reasonable inflation. In this respect, it was good to note that during the first nine months of 2009, inflation was estimated at 3.6 per cent compared to 12.4 per cent in 2008. It is reasonable to presume that the inflation would not be significantly higher during 2010, adds Hariharan.
Diversifying the economy It is noteworthy that oil and gas revenues finance about 68 per cent of the public expenditure, whereas the nonoil revenues finance about 21 per cent thereof. There has been a considerable improvement in the contribution of nonoil revenues over the Seventh Five-Year Plan period. The finance rate of oil and gas revenues decreased from 83 per cent to 68 per cent, from 2006 to 2010
Sankar Kailasam, Senior Vice President (Asset Management), Gulf Baader Capital Markets against an increase in the finance rate of the non-oil revenues from 17 per cent to 21 per cent. Based on the $50 per barrel budgeted price, oil revenues are estimated to amount to about 4.050bn rials i.e its contribution shall be at about 63 per cent of the total revenues, whereas the contribution of the gas revenues will be 800mn rials or 13 per cent. The current and capital revenues are estimated to be about 1.530bn rials ie an increase of eight per cent over the 2009 budget or 24 per cent of the total revenues.
Favourable outlook The local consumption story remained strong during the last fiscal year on the back of robust government spending towards economic diversification, which in turn lead to increased private
sector investments Kailasam says.
Commenting further, he says the government has the taken right steps in offering a development-oriented budget in 2010 by maintaining its fiscal spending and focus on job creation, which is beneficial for economic growth in the long run. Taking into consideration the consensus that oil price will stay above $70 per barrel in 2010, along with the continuing support from the government towards increased fiscal spending and economic policies, it is likely that the pace of growth and development wo;; acceleterate. In fact, the government may end the year with a surplus provided the global prices remain the same. Moreover, development programmes would in turn be the key hauler for the private sector investments in the country. 41
FACT FILE David Power, a South African national, joined NBO in October, 2009. He is responsible for the development and distribution of retail products and services through the 67 branches in the franchise, the virtual banking channels and the Wealth Management (Sadara) Centres. He is also responsible for the bank’s retail marketing activities. Prior to his appointment at NBO, he held the position of deputy general manager for retail banking of Gulf Bank in Kuwait for two years. During his professional career spanning over 20 years, he has served in a number of leadership positions including Divisional Director of private banking at Nedbank Ltd, Johannesburg, South Africa and Head of Priority Banking at Standard Bank Ltd, Johannesburg, South Africa.
‘Products are no longer the differentiator’ David Power, the new general manager and chief retail banking officer of National Bank of Oman, talks about his plans to transform the retail offerings of the bank in a conversation with Akshay Bhatnagar
What brings you to Oman? The GCC is currently one of the best regions to be in at present, if one is in the banking industry. Though the global recession has hit a number of banks in the region, the local markets have remained stable primarily due to significant government support and healthy current account surpluses. Oman is indeed a very good example of a structurally sound banking system with strong support from the regulator. Prior to my current role in Oman, I was based in Kuwait where I looked after the retail operations of one of the leading banks in the country. When I was presented with the opportunity to move to Oman I was extremely excited about the challenge and was particularly taken by the history and beauty of the country! Over and above this, I was also going to be working for the oldest and leading bank in the Sultanate with the National Bank brand! Its value of “For You. For our Nation” showed me its deep seated roots with the community and its desire to become the best bank in Oman! The bank had also embarked on a journey to reposition itself in the community by doing a complete rebranding exercise as well as a complete refurbishment of its retail franchise. This showed to me the bank’s commitment not only to become better at what it had done in the past, but it also showed me that it wanted to remain connected to the lifeblood of the community no matter what was changed! I have spent a large part of my life serving various communities in my spare time and NBO’s commitment to Oman and the Omani culture was a breath of fresh air in this fast paced world that we currently live in. So for me, Oman ticked all the boxes as it not only gave me a chance to serve the community but also contribute to NBO’s quest to take its retail banking services to newer and better heights. How do you view the consumer banking scenario in Oman vis-à-vis your experience in other markets? In the retail banking arena, Oman is not dissimilar from rest of the GCC region with Dubai being the most likely exception. Most of the local banks are in various stages of modernization and all, without many exceptions, want to be completive with the global players that are busy entering the market. There is a
desire to break away from the traditional style of retail banking and move more towards a customer centric model. There are however a number of challenges specifically related to compliance, electronic banking, electronic channels and the management of these areas. Having said this however I do believe that retail banking in this region is rapidly catching up with the rest of the world and is becoming more competitive each year. The significant differentiator in this region is that customer service is still a key factor in any retail banking strategy. The other regions in the world have learnt at great cost, that you lose focus in this area at your peril. It is therefore quite interesting how so many global banks have now made customer service the cornerstone of their respective recovery strategies! What has been the brief to you at NBO? To build on the rebranding exercise that was completed last year and to drive NBO to be the most respected and highly regarded retail franchise in the country. I have further been tasked with expanding our revenue lines away from the traditional net interest income model to one which is more diversified. We also need to become the benchmark in customer service and to do this we need to relook at a number of internal aspects of the bank. We need to be constantly asking ourselves – how do we make our customers’ life easier allowing them to be more focused on their family and work environments. Banking should be a pleasure and not a task and we intend to leave no stone unturned to make this a reality! We have already begun this journey with our award winning internet banking site. This is ably supported by our recently launched 24x7 call centre, full sms banking and so on. A number of new initiatives are planned for roll out during the course of this year and
We have very good processes and standards in place but our focus is going to be on how can we enhance it further and ensure customer delight
it is particularly pleasing to be doing all this during the 40th Anniversary year of His Majesty benign rule. Why should a customer place his savings in an account in NBO hoping to strike it lucky in the Al Kanz scheme when his fund’s purchasing power will reduce lying idle? It all depends on the customer’s risk profile. If the customer has a higher risk appetite and invests in an investment fund, there is a downside chance that he could lose some of his capital. This has been evident over the past two years in the global market. The old saying of high risk–high reward should always be remembered when placing one’s hard earned cash into an investment! If the customer is going to keep his money in a savings account, his capital will always be guaranteed. What Al Kanz 2010 does is to give our customer an opportunity to significantly grow his capital and a chance to win a million rials. Our intent is to continue to provide customers with the opportunity to transform their lives and we believe that the 2010 scheme will reach out to an even wider cross section of the community and continue to touch the lives of many. The new savings scheme offers total prize money of 3.6 million rials during the course of 12 months. The most unique feature of the new Al Kanz Scheme is the popular loyalty programme. This feature gives every Al Kanz customer more chances of winning for every month they stay in the scheme. For example, a customer who deposits 1,000 rials in month one will have 10 chances of winning the monthly prize in that month, 20 in the next month, 30 in the next, going up to 60 chances for the December mega prize. What are your plans to enhance your customer service standards? I don’t talk about customer service anymore, I talk about customer delight. My team hears this saying regularly and we intend to set the pace in this area! We are fortunate in that we have very good processes and standards in place but our focus is going to be on how can we enhance it further to ensure customer delight. Other banks can offer similar products to us but they can’t replicate our service standards. Products are no longer the differentiator. 45
What next for Emerging Markets?
Macro-economic developments like fiscal stimulus across financial capitals of the world have led to valuation spikes across developing markets and a growth in GDP The author is a renowned investment banker based in Dubai
Emerging markets were the winner asset class after Wall Street’s epic sentiment U-turn last March, when it became evident that the Federal Reserve and the US Treasury were determined to bail out the American banks as the lender, guarantor and insurer of last resort. It is no coincidence that the Fed’s determination to act as the lender of the last resort meant a dramatic plunge in systemic risk metrics and a fall in the US dollar, the safe haven in world finance after the meltdown of Lehman Brothers in September 2008. Zero interest rates, trillion dollar fiscal stimulus, credit support packages and lower dollar meant the best of all possible worlds for commodities markets. After all, even though the World Bank estimated that the world economy contracted by three per cent in 2009, copper prices more than doubled as industrial metal prices were goosed by Chinese state hoarders and the moneyprinting spree of the central banks. Crude oil prices rose from $35 to almost $80 even though more than 160 million barrels in excess black gold and distillates are still stored offshore in supertankers
off the coast everywhere from Dorset and Scotland to Singapore and Greece.
growth is expected to rise at least five per cent soon.
This macro milieu has led to dramatic valuation spikes in emerging markets. I still believe it is premature to take profits in most emerging markets. The Federal Reserve cannot and will not raise interest rates as long as the US economy’s return to growth is so fragile. Nor will the Chinese Politburo allow the People’s Bank of China to tighten monetary policy as long as exports have not revived and inflation is not an imminent threat. Meanwhile, GDP growth in the emerging markets will accelerate as global consumer demand and industrial production revives.
The central bank spent $300bn in reserves to successfully stabilise the rouble and can now safely cut the refinancing rate from its current nine per cent to as low as seven per cent by next summer. The Kremlin has now agreed to cut taxes on East Siberian crude to encourage capex, a positive development for shareholders at Rosneft and Lukoil. Above all, Russia still trades at a 30 per cent discount to the Morgan Stanley emerging markets index. The Templeton Russia fund (TRF) is listed on the NYSE and enables investors to gain exposure to a broad spectrum of Russian blue chips.
The Russian ‘roulette’ A weak dollar, strong commodities, eight per cent Chinese GDP growth, no Fed rate hikes and rising risk appetites are all bullish for emerging markets as an asset class. Russian equities are still attractive even though the Moscow MICEX index has doubled in 2009. Russia witnessed the worst economic squeeze since Putin was anointed/elected President in 2000 with a draconian 10 per cent contraction in 2009. However, its GDP
India, Turkey costly I am less sanguine on India and Turkey, two of 2009’s fabulously profitable emerging markets. India is expensive at Sensex 17000 or 17 times forward earnings at a time when rising inflation will inevitably force the Reserve Bank of India (RBI) to hike interest rates by next spring. Moreover, Indian IT service colossi will be clearly hit by tighter margins, decelerating earnings growth and a stronger rupee. I can easily envisage a
The central bank of Russia spent $300bn in reserves to stabilise the rouble and can now safely cut the refinancing rate fall in the Infosys ADR listed in New York from 50 now to 38-42 in the next 12 months. Turkey’s Istanbul ISE index more than doubled in 2009 as the central bank slashed interest rates by more than 1000 basis points. Yet Turkey’s epic monetary ease is over and interest rates could well rise by 200-300 basis points as the Ankara central bank responds to inflation. This will lead to a stock market correction as the ISE index has a 50 per cent weightage in banks, similar to the GCC indices. Moreover, Turkish banks’ balance sheets are highly correlated to interest rates, with almost one third in assets invested in government debt securities. Since Prime Minister Erdogan has not concluded a credible IMF deal, it is entirely possible that global investors will take profits in Turkish equities as local lira rates rise. Clear beneficiary Hong Kong is the clear beneficiary of its peg to the US dollar, acceleration in Chinese GDP and corporate earnings, the lowest interest rates in the Pacific Basin and a surge in Asian trade, manufacturing and a robust property market.
2009 ECONOMIC SCENARIO ¾¾Federal Reserve and US Treasury bail out American banks as the lender, guarantor and insurer of the last resort ¾¾The Fed’s determination to act as a lender sees a dramatic plunge in systemic risk metrics and a fall in the US dollar
¾¾Zero interest rates, trillion dollar fiscal stimulus, credit support packages and lower dollar are a plus point for commodities markets ¾¾Despite World Bank estimates of a 3 per cent contract in world economy in 2009, copper prices
more than doubled ¾¾ Crude oil prices rose from $35 to almost $80 even though more than 160 million barrels of oil are still stored offshore in supertankers
2010 EMERGING MARKETS SCENARIO ¾¾RUSSIA yy Equities are still attractive even though the Moscow MICEX index has doubled yy Despite a draconian 10 per cent contraction in 2009, GDP growth is expected to rise at least 5 per cent yy Russian central bank spent $300bn in reserves to successfully stabilise the rouble yy The Kremlin agrees to cut taxes on East Siberian crude to encourage Capex
17000 or 17 times forward earnings yy Reserve Bank of India expected to hike interest rates by next spring yy Indian IT service colossi will be clearly hit by tighter margins, decelerating earnings growth and a stronger rupee yy A fall is predicted in Infosys ADR listed in New York from 50 now to 38-42 in the next 12 months ¾¾TURKEY
yy Russia still trades at a 30 per cent discount to the Morgan Stanley emerging markets index
yy Istanbul ISE index more than doubled in 2009 as central bank slashes interest rates by over 1000 basis points
¾¾INDIA yy India is expensive at Sensex
yy Turkey’s epic monetary ease is over and interest rates could well
While HSBC and Standard Chartered bank’s exposure to Dubai have hit their shares and therefore the Hang Seng index, I would buy the
Hong Kong index at 18,000 for a 25,000 target in 2010. Singapore’s index EWS is also a potential Asian value play as I am convinced that
rise by 200-300 basis points due to inflation yy A stock market correction is expected as the ISE index has 50% weighting in banks, similar to GCC indices yy Turkish banks’ balance sheets are highly correlated to interest rates, with investments in government debt securities ¾¾HONG KONG yy Benefits from peg to the US dollar due to acceleration in Chinese GDP and corporate earnings and the lowest interest rates in the Pacific Basin yy Surge in Asian trade, manufacturing and a robust property markets help the Hong Kong index
every correction will trigger buy on dips psychology. The bull run in the asset class will continue even if it will not be a bull rampage. 47
DOING ITSELF PROUD Oman Arab Bank is celebrating its 25th anniversary this year and the bank has many reasons to be proud of, writes Visvas Paul D Karra
f I drive from Muscat to Sohar, I feel very proud because many of the roads and buildings that I pass by between the two cities have been financed by Oman Arab Bank, says Abdul Kader Askalan, CEO of Oman Arab Bank. Indeed, many of the infrastructure projects in the Sultanate of Oman have been financed by Oman Arab Bank (OAB). In Sohar, most of the big-ticket projects contributing to the industrialisation of the nation have been funded by OAB. That is the powerful presence that has been established by Oman Arab Bank, in Oman, since its inception on October 1, 1984. The bank began its operations after acquiring the branches of Arab Bank, which had been operating in Oman since 1973. Presently, Arab Bank holds 49 per cent stake in OAB while the rest is held by Oman International Development and Investment Co (OMINVEST).
Maximising maxim OAB provides a comprehensive range of services in retail, corporate and investment banking. It has maintained its position as a pioneer in financing projects in various sectors such as infrastructure, industrial, petrochemical and tourism and performed exceptionally well in the areas of trade finance and corporate banking. The bank has also pioneered a number of sophisticated products and services for its retail customers, tailor made, depending upon their requirements. OAB derives strength from its parent bank, Arab Bank, which had opened its first branch in Muscat, in 1973. â€œTo 50
understand the legacy of OAB, it is interesting to note that Arab Bank had financed the first industrial projects to come up in Oman, namely Raysut Cement and Oman Cement Company to the tune of 50mn rials and 40mn rials respectively. The third project, Oman Flour Mills, was also funded by Arab Bank,” says Askalan, while recollecting the bank’s initial days. Askalan recounts the routed history of OAB from its humble beginnings as Arab Bank Plc to its present status as one of the only banks in Oman to produce consistent results, year-on-year. Indeed, while celebrating the silver jubilee of OAB, Askalan has yet another reason to be proud; as he is the longest serving banker in Oman.
Pioneer banker Askalan had actually come to Oman in 1973, for three days, to visit the Muscat branch of Arab Bank. He saw a bleak horizon but his keen business insight foresaw immense business opportunities for the bank to grow and decided to stay back. The rest of the story as to how he led the shaping and growth of the bank, from being just a branch of an international bank to its present form as a formidable local bank, is practically a case study in building a financial institution.
“If I drive from Muscat to Sohar, I feel very proud because many of the roads and buildings that I pass by between the two cities have been financed by Oman Arab Bank” – Abdul Kader Askalan, CEO, Oman Arab Bank
projects financed, include Sur IWP, Barka IWPP phase II; Oman Shipping Company; Oman Aromatics and Sohar Aluminium. This is in addition to the facilities granted to the EPC contractors of these projects. OAB has also provided facilities to Sohar Ports’s
Arab Bank, with a particular emphasis on providing the highest level of personalised services to its customers.
OAB’s growth and success can largely be attributed to its conservative philosophy instilled into the bank’s core values. Since its inception, OAB has followed the principles of business conservatism of the
The bank continues to actively participate in project finance and some of the major, more recent
OMAN ARAB BANK PERFORMANCE Rials ’000
Loans & Advances
new jetty development and the EPC contractors to the wastewater project as well as many other international and local companies.
Developmental role Talking about the bank’s conservative policy, Askalan says, “We continue to concentrate on project finance, be it industrial, petrochemical, infrastructure or trade finance related. In addition, we minimise our exposure to personal finance. Our policy stems from adopting prudent, lending practices that do not overburden our customers.” Emphasising his point, Askalan continues, “Some of the banks are giving large personal loans up to 70 times and more of an employee’s salary. How long should such people continue to be in debt? Moreover, this will create many social problems.” Operating under this conservative policy instilled by Askalan, the bank’s foreign exposure was nil thus helping the bank to endure the global financial crisis, which took a heavy toll on banks across the world.
“We are developing our retail segment in line with market needs. However, we do not believe in overburdening our customers” – Rashad Jaffer Al Shaikh, Head, Retail Marketing and Business Development, OAB
Retail reach If Askalan is an old-school banker who has steered OAB through the years with his keen business sense and instinctive forays to build the portfolio of the bank, then Rashad Al Shaikh, head - Retail Marketing and Business Development represents the other side of the same coin. Young and full of enthusiasm, Al Shaikh is seamlessly merging his aggressive approach to grow the bank’s business with its core values by saying that OAB’s strategy is to rationalise and leverage on the existing growth of the last few years under the conservative umbrella. “We are developing our retail segment in line with market needs. However, we do not believe in overburdening our customer; as it is our CEO’s vision to curtail this unhealthy trend,” says Al Shaikh. The bank’s goal is to develop products and services that are need-based for the retail customer, under a conservative lending policy umbrella. Under Al Shaikh’s guidance, the retail banking 52
Employees Paid up capital Branches
division of OAB is also looking at various developments aimed at enhancing and integrating the touch points with the customer.
Service channels “One of our main goals is to seamlessly integrate all customer touch points or “fulfilment centres” in order to provide our customers with high levels of personalised service that connects emotionally with our clients,” says Al Shaikh. Initially established with a share capital of 6mn rials, OAB’s capital has increased progressively over the years and presently rests at 75mn rials. OAB currently operates through a network of 53 branches and offices and a staff
headcount of more than 800. OAB also has access to Arab Bank’s large network of over 450 international branches in over 40 countries. The total assets of the bank as on September 30, 2009 were 771mn rials. Moody’s Investors Service has upgraded the long term and short term foreign currency deposit rating of OAB to A2/ Prime-1 from A3/Prime-2. The outlook on these ratings has been changed from positive to stable; showing the solid stability of OAB. The bank is currently building a new state of the art headquarters in Azaiba, near the Ministry of Tourism office, to accommodate the growing requirements of the bank and to be in line with overall developments. Given its history, one can confidently look forward to OAB financing many more buildings and projects along multiple roads in Oman for years to come.
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Four Years of Success
Exterran Holdings is a global market leader in full service natural gas compression. It opened its first outlet in Oman in 2005 and has grown exponentially. Malcolm Xavier Crasta reports
FROM L-R: Christian Donnet, Dale Barletter and Pedro Diaz 54
new company with the combined strengths of Hanover Compressor Company and Universal Compression Holdings, Inc., Exterran is a premier provider of sales, operations, maintenance, fabrication, service and equipment for oil and gas production, processing and transportation applications. With operations in every major hydrocarbon region around the globe, Exterran offers customers a world of solutions across the energy spectrum – from producers to transporters to processors to storage owners. In Oman, the company was first created in 2005, under the name of Hanover Middle East. The first project they undertook was the Block-44 surface facility for PTTEP. “We provided the complete production station for the Thailand oil company, which has a production share agreement with the Ministry of Oil and Gas,” says Pedro Diaz, regional business development manager, Middle East, Exterran. This first job was completed in 2007 and was soon followed by two more projects. One was the Daleel Gas plant in 2008; it was used to recover natural gas from Flare, basically a flare reduction project used to produce LPG and hydrocarbon condensate to be produced with oil stream. The other project was compression at the Zauliyah station, for PDO, in South Oman. One of the recent projects taken up by Exterran Middle East was the provision of compression services to Occidental Oman to support the Omani gas balance and recover this gas from the flare. Through its contract operations business line, Exterran owns a fleet of natural gas compression equipment and crude oil and natural gas production and processing equipment that it uses to provide operations services to its customers. Basically, Exterran is a service provider to the oil and gas sector that provides the manpower and the equipment to resolve the needs of the clients. So if a client doesn’t want to grow in infrastructure or doesn’t want to invest money on the surface equipment, Exterran can provide, operate and maintain it for the client.
In cases where the client wants to buy the equipment, Exterran provides that service as well. Exterran is also able to provide, not only gas handling and producing facilities, but also crude oil early production facility installations. The primary reason for their success in the region is the fact that they own manufacturing facilities for processing equipment in various locations; in Dubai and Jebel Ali Free Zone and also manufacturing shops in the Hamriyah Free Zone. Including these they have operations in 30 countries, manufacturing and facilities in 14 countries and four major engineering hubs. “When we say manufacture we mean that in certain locations we can package compressors, in others we can manufacture vessels, and in certain facilities we can even recondition existing units,” adds Diaz. Considering that contract operations services comprises a large part of Exterran’s business, this is extremely useful. Once a contract is over, the equipment can be taken to be reconditioned and then put back into the fleet. He adds, “We keep a fleet of production equipment and compression that is available for the oil and gas field as per their requirement. We own around six million horse power worth of equipment which is available in different size ranges.” Exterran is a company that strongly supports Omanisation and tends to hire local personnel as much as possible, primarily young engineers and technicians from the local universities and technology institutes. During the initial phase of operations technicians are brought in from various locations to train local personnel for six months to a year, depending on the complexity of the project, and then leave it in the hands of the local personnel. Exterran Middle East the Oman branch of the company has around 120 staff of which 80 per cent is local talent, 20 are based in Muscat and the remaining are in the field. Presently Exterran doesn’t have a fabrication shop facility in Oman but if business continues to grow the way it
PERSONAL PROFILES Pedro Diaz Position: Regional Business Development Manager Middle-east Quick Background: More that 26 years of experience in the oil and gas sector. Has a strong background in chemical (process) engineering and project management holding Masters Degrees in both areas. Established Exterran’s Middle East Operations in 2005 Responsibility: Responsible for client management and interface from project conception through contract close-out
Dale Barlette Position: Regional Director of Operations Quick Background: Over 25 years in the oil and gas industry. Over 18 years in gas compression and process operations with operations management experience in several international locations Responsibility: Responsible for the Middle East Region Geographic Business Unit of Exterran
Cristian Donnet Position: Country Operation Manager Quick Background: Over 14 years in gas compression and process operations with operations, logistic, purchasing and sales experience in international locations Responsibility: Responsible for the daily operations in Oman
has been over the past four years, we can expect to see one in 2011 or maybe even late 2010. The facility, once ready, will not only provide additional local jobs, but will also provide services to Exterran and also other operators and producers in Oman.
Reorienting property needs for the coming decade The property world has changed – in all probability it won’t be the same again after the economic crisis of 2008/09. It is time to redefine the objectives and reorient strategies if we want to maximise the potential of the real estate sector in Oman, says Nick Smith, real estate and property business advisor
efore we look at expectations for the next decade 2010-2019, let’s look at the headlines from the last one in the real estate sector. The residential segment has changed drastically during the last ten years, especially after 2006 with the change in the freehold ownership law. It has created new opportunities. As a result, we currently have three Integrated Tourism Complexes (ITCs) – The Wave, Muscat; Muscat Hills; and Shangri-La’s Barr Al Jissah Residency – which are either partly complete or expected to deliver residential property shortly. Muriya are also building at Sifa and Salalah. Some of the other ITCs have been either put on hold or plans are progressing but not at the same pace as per the original plan.
Relook at ITCs I think some analysis needs to be done on the progress of the ITCs that were set up to bring in foreign investment and promote tourism in the Sultanate. To some extent, ITCs have worked, but they have not fully performed in the way they were originally conceived. I’m sure the authorities will be looking at how ITCs have fared so far, whether or not they are meeting their desired goals, financially, socially and for tourism. All the ITCs have failed to provide 56
affordable housing for the Omani and GCC population. It can always be argued that they were never set up to do that. They were more focused on bringing investors from abroad. But, the question is, following the global crisis, is there enough demand from overseas? With the collapse of Lehman Brothers and the chain reaction that followed that event, global dynamics have altered dramatically and the world has become a very competitive place. We
must also factor in that there are many other countries that are also building competing tourism schemes. Oman is one of the more expensive places world-wide, and this will limit incoming investment. Looking at the current situation, it will be quite a challenge to attract a large number of foreign buyers (as originally envisaged) to ITCs in Oman. The ITCs will have to relook at their objectives and see how things could be done in a better and more investment attractive way.
The Blue City The case of the Blue City is different from the other ITCs. It is a huge project and the idea behind it was to be more like a real city, with all of the differing land uses and functions that a city provides. I believe the other ITCs are fundamentally more tourism-oriented. The key to the success of Blue City is land usage. All the necessary facilities such as schools, hospitals, local government, religion, culture, transportation, and recreation infrastructure are needed to create a proper sustainable city. The key however is to create opportunities for business. Without employment a city cannot grow, and job creation, whether privately or publically initiated, is fundamental. Without this, there is no reason for the people to move in. Construction work at Blue City is going well, and it has a role in the Asian Beach Games, which will give it a big boost too.
Opportunities for growth The affordable housing sector is a very interesting and highly promising area. It has been largely undeveloped in Oman. There is a sizeable young population in the Sultanate. They are seeking employment, many of them are moving from junior and middle management to higher levels. They want good accommodation to be built for them. As Muscat is growing, there is a huge demand for affordable residential products to attract the masses. The popularity of the affordable segment will be the single biggest change in the next decade in terms of the housing stock. There will be number of developers that will build better quality well designed houses which are affordable also. Some developers such as Zain and Abraj have already started doing it. I think the banks will initiate more products in home loans and financing to enable young people to own their residence by starting with a small down payment and rest of the payment via equated monthly instalments (EMIs) over a period of time. The traditional values in Oman are to aspire for large villas which ensure privacy behind high walls. This will remain a priority for the upper class whereas the entry level will go for smaller houses out of necessity but they
can still be designed to offer privacy and reflect culture. In terms of location, when I look around, I see growth happening in the areas around the airport. The west of the airport will grow dramatically in the next decade. Beyond Muscat, Sohar is the obvious next location. With the new coastal road, it will change significantly. People have a real reason to go there as jobs are being created. The Blue City is another interesting prospect as it is on the coast between Muscat and Sohar. As mentioned above, I believe the Blue City has to become more flexible with the changing times
The traditional values in Oman are to aspire for large villas which ensure privacy behind high walls
airport. In 10 years, it will be a different place, but it is more of a 25 year plan. And Salalah will grow, predicated by the port and expanded air traffic. Who will drive investment Oman’s real estate sector?
This is a difficult question to answer at this stage. With the exception of the Blue City, most of the other ITCs in Oman are funded by financing from the region. The rest of the world is recovering from recession at a very slow pace. The region is in a better position than most, but Dubai’s woes are going to make inflow of investors to the region and Oman a lot slower, and they will be more cautious about making commitment. The good thing about Oman is that the Sultanate has followed a very controlled approach towards development and with time this has proven successful and more prudent than some other economies. But the next three-to-five years are going to be challenging. I don’t foresee a drastic leap in Oman’s real estate landscape. Currently things do not happen that fast here. There are notable opportunities for more leisure and retail oriented developments, on and near the beaches, promenades and in places where people want to spend their leisure time. There are very few of these places in Oman. In terms of office space, there is an oversupply right now in Muscat. A couple of years ago, under supply was an issue. But the market will correct itself. There will be a gradual increase in demand and fresh supply will not come on stream until then.
and become a proper city, and I think it is going down this route already. Affordable housing for Omanis is a big opportunity there. The government may also have to look at easing regulations, to proactively bring in business and residents, to help it achieve the role of a big city. Without these positive measures it is difficult to imagine it reaching its target of 250,000 inhabitants. Their first hotel is expected to be ready by the Asian Beach Games, and activity will then be openly visible. Everywhere, the government must continue to kick start new cities and towns. Duqm, I believe, will definitely happen on the back of the port and
As a final thought, I suggest that if various government ministries and authorities could work more cohesively to fast track critical projects and issues through single window systems, it could go a long way in optimising the full potential of the real estate sector in Oman. This would help both government and private initiatives. Making the entry into the market easy for investment is the major key to stimulating the property sector. As told to Akshay Bhatnagar. Nick Smith can be contacted on email@example.com 57
Dr Jasim Husain Ali
Mega spending plans in regional economies All the GCC countries have plans for large-scale spending in the next five years, thus providing a filip to different economic sectors like construction The author is an eminent economist and Member of Parliament, Bahrain
he mighty projected spending patterns of the Gulf Cooperation Council (GCC) countries reflect welcome expansionary fiscal policies, in turn serving the purpose of overcoming challenges associated with the global financial crisis. Figures compiled by Trowers & Hamlins, the international law firm, point to sizeable spending plans across the GCC. The UAE, in turn the second largest economy amongst GCC countries after Saudi Arabia, stands out in terms of allocated spending statistics. More specifically, the UAE is projected to spend just over $1trn in the next five years on 2,674 projects. Still, some $856bn of the projected amount is yet to be spent. However, the UAE suffers from the phenomenon of delayed projects in the aftermath of the global financial crisis. Also, it remains to be seen to what extent Dubaiâ€™s debt restructuring programme will affect implementation of construction projects in the emirate. Steady spending For its part, Saudi Arabia is geared to spend some $442bn, of which $421bn remains to
be spent. Yet a good portion of the remaining amount is due to be spent in fiscal year 2010, thereby confirming determination to press ahead. Projected Saudi expenditures for 2010 amount to $144bn, up by 14 per cent versus the originally planned figure for fiscal year 2009. What is more, the authorities allocated some $70bn for developmental projects in 2010, up by $10bn from the previous fiscal year. Undoubtedly, this is a considerable figure by virtue of accounting for 49 per cent of total projected expenditures. Projects envisaged include expansion of the road network and new power and water plants, construction of numerous educational and training institutes throughout the kingdom. Still, chances are that actual spending could end up being higher than projected, much like fiscal year 2009. Revised official estimated statistics for 2009 illustrate notable changes from projected ones, with expenditures growing from $126bn to $147bn. Also, total revenues are estimated to have increased from $109bn to $135bn. As a result, the kingdom posted deficit of $12bn, down from the $17bn
projected figure. The shortfall was the first of its kind since 2002 following years of surpluses. Smart housing schemes In addition, other GCC countries have their own sizeable spending plans on numerous projects for the next few years. The figures range from $166bn in Kuwait, $51bn in Qatar, $49bn in Bahrain and $45bn in Oman. The Sultanate of Oman has plans to spend some $16bn on airport infrastructure, tourism and heavy industry. The same report by Trowers & Hamlins indicates trends that include a drive for affordable housing and moving away from high-end residential projects in GCC economies. Recently, Bahrain authorities opted for Chinese style smart housing projects to meet demand. Many Bahrainis depend on the government for their housing needs. Hundreds of Chinese workers were due to arrive in Bahrain in early 2010 to help construct some 4,000 residential units. Selection of Chinese smart housing scheme is designed to meet variables such as speed, cost and efficiency.
Significant public spending by Gulf nations is essential for addressing economic challenges Addressing challenges It can be argued that significant public spending is essential for addressing economic challenges that include creating jobs for locals. Already, two GCC states, namely Bahrain and Saudi Arabia suffer from relatively high unemployment rates amongst locals. Unemployment rates range from eight per cent in Bahrain to 12 per cent in Saudi Arabia. For instance, Saudi authorities are under pressure to create 160,000 jobs annually for nationals entering the job market. Demographic statistics add to spending pressures, as about half of locals are below the age of 20. Undoubtedly, many would be entering the job markets in the next few years looking for suitable employment. As argued, steady public sector spending is possibly more important now than in the past few years if only to avoid turning the financial crisis into an economic one. Already, some reports point out to slower growth of gross domestic product (GDP) in all regional countries. A report attributed to the International Monetary Fund (IMF) estimated real (adjusted for inflation) GDP growth in GCC states combined at
five per cent in 2009 down from 7 per cent in 2008. Sovereign wealth Indeed, the time is ripe for regional countries to use part of their financial reserves to boost spending in local economies. GCC countries enjoy extraordinary financial capabilities. Latest available statistics suggest that together GCC states have amassed some $1.5trn in the form of sovereign wealth funds (SWF). The UAE stands out by virtue of accumulating an extraordinary $875bn. Saudi Arabia, Kuwait and Qatar follow suit with $300bn, $250bn and $40bn, respectively. GCC member states succeeded in strengthening their SWFs over the last few years on the back of firm oil prices.
GCC SPENDING SIZE UAE projected to spend over $1trn in five years on 2,674 projects Saudi Arabia • Geared to spend $442bn • Projected expenditures in 2010 amount to $144bn • $70bn for developmental projects in 2010
GCC SOVEREIGN RESERVES The GCC member states succeeded in strengthening their Sovereign Wealth Funds (SWFs) over the last few years on the back of firm oil prices thus enjoying extraordinary financial capabilities. Below are latest available statistics. Total SWFs: $1.5trn UAE: $875bn
Saudi Arabia: $300bn
Qatar: $51bn in
Oman: $45bn • $16bn on airport infrastructure, tourism and heavy industry
By the same token, accumulated surpluses pave the way for stronger spending, in turn deemed essential to deal with challenges of the global financial crisis. In the case of Saudi Arabia, the budget posted a record $157bn surplus in 2008 on the back of firm oil prices. Oil prices reached a record $147 per barrel in July 2008.
and strong public sector spending serves the purpose of encouraging private sector investors to follow suit, hence a welcome development. As a rule, private sector investors draw comfort from stronger government spending and see it as a measure of economic direction.
Therefore, the positive spillover effect and steady
In short, much is at stake with regards to GCC
countries in the next few years. As indicated, Saudi Arabia, the largest regional economy, intends to spend some $144bn in 2010, nearly half of that on development projects. International firms need not miss emerging opportunities in industrial, logistics and infrastructure projects in GCC countries. Clearly, all roads are leading to GCC economies. 59
Opening a franchise always seems to be a rich manâ€™s business. Is this a myth or a reality? Malcolm Xavier Crasta explores the issue
urgeoning under the impact of commercial growth in past few years, franchises are spread all over Oman, ranging from big retail brands to cafĂŠs and fast-food joints. A competitive environment thrives, especially in the food and beverage industry. Inspired by the boom in industrial sectors and the success of numerous outlets, many people are now considering operating a franchise. However, to do so, there are
three key things that one would need to know: an overview of the business in Oman as seen in global perspective; common mistakes that entrepreneurs make, and finally, what one needs to be prepared for.
Franchising in Oman Generally speaking, franchising is a smart business practice of putting into use another personâ€™s business model. The franchisor grants the independent operator the right to represent its
Hani Ali Mirza and Jannat Shafaei Bin Mirza International 62
products, techniques and trademarks for a slice of gross monthly sales and a royalty fee. Various support services like training and marketing are usually provided by the franchisor to the operator. Agreements by and large last from five to thirty years. As in other parts of the globe, in Oman a franchisee pays a franchisor royalty fees while signing the agreement, thereby gaining access to the brand, the business model and support system. Turnover can be boosted without increasing assets or infrastructure.
The differences are only marginal when Oman is compared to the rest of the world. Whatever variation is there is simply because Oman is a smaller market visa-vis the West. Here one is allocated the entire Sultanate as an exclusive territory, while in the West the territory allocation is based on demographics. “For example, the franchise for Second Cup in Oman is owned entirely by us whereas Second Cup Canada has franchisees for every outlet,” says Jannat Shafaei, marketing director, Bin Mirza International, which is also the franchisee for Nandos, Cinnzeo and Breadtalk. Very often the entire Middle East is taken as a unit for franchise and then each country is sub-franchised. “For Second Cup, we are the sub-franchisee. The master franchisor is in Dubai and he has the whole Middle East, while he subfranchises each country. But for Nandos, we have the master franchise for Oman and it is the same for Breadtalk. While we own the master franchise, we have the liberty to sub-franchise the brand in Oman and that is generally how it is done,” adds Hani Ali Mirza, managing director, Bin Mirza International. As far as fees are concerned, it is the middleman that rakes in money and as such a master franchisee, so to say, enjoys his situational advantage. Those placed in the lower rung, bear the brunt of the entire process and have to shell out more. Jannat adds, “For Second Cup we pay Dubai and they pay Canada whereas with Nandos we pay South Africa directly as there is no middle man, so to speak.” So, if one were to take the whole region, the franchisee is more likely to have lower rates and on top of that he/she would make money from the sub franchisees as well.
Starting a franchise Though it is expensive to own a franchise, but one can have it at lower rates also. The cost to setup a sub franchise is significantly lower than a master franchise, despite the presence of a middleman. Many franchises do not have a master franchise in the region at all. Instead, with limited number of stores per area, they work on a store-tostore basis, where each store is run by a different operator. It is a good model to start with, though it may be risky for
Ajit Singh General Manager-Retail, Asha Enterprises
Careful Planning and Execution ›› Research the viability of the brand in the country and the location ›› Remember, there is always room for negotiations, especially when it comes to rates, fees, royalties etc ›› Always take a close look at the franchisor and his setup and more importantly, talk to other franchisees and get their feedback on the company ›› Read the contract very carefully and if possible hand it over to a lawyer to be read and obtain his feedback
›› It is imperative that one has access to all necessary finances prior to entering the business, especially so because government approvals and procedures can take a lot of time ›› Be passionate about the business that one plans to open ›› Successful franchises are a day-in and day-out commitment so one has to be prepared to spend a lot of time with it
the franchise, the more favourable it is for the operator. This doesn’t, however, mean that one cannot enjoy any freedom at all, though it may vary from franchise to franchise. In general, a franchisee is allowed to make changes based on the market and within the bounds of the agreement. Usually, but not always, autonomy can be exercised so long as the changes do not affect the concept of franchise that is in place. Franchising became popular for decentralised organisational structure at the end of the 20th century. Elements from the concept of franchising have been used, tried and tested and changing them in any way and adapting them to the local market defies the point of obtaining the franchise in the first place. The operator also needs to be aware about his own market and be in constant dialogue with the concerned people to keep them aware of his efforts in maintaining guidelines. “As long as you have got that openness from the beginning, especially in this part of the world, then they tend to be quite flexible and will be willing to work with you,” adds Singh.
Kim Jepsen General Manager, Markaz Al Bahja people with lower incomes, as a lot of care has to be taken in handling them simply due to the fact that the owners of the master franchise, wherever he is located, will take the fee regardless of the profits made by the business.
costs, I can tell you that it is not cheap and when you are looking at furniture retail you are looking at four-to-five years before you have returns on your investments,” adds Jepsen.
Kim Jepsen, general manager, Markaz Al Bahja and Oasis Lifestyles, the franchisee of IDdesign, bodum and ZONE, says, “Most franchises I know, in addition to the royalty and franchise fee, earn money from their products, shop fittings, training sessions and all that you will purchase from them. The regular fees are only a part of the cost albeit a major portion of it.” As such, a franchisee would need to have enough reserve money to sustain himself on a long term basis. “There are a number of franchises that are very cheap and then there are franchises like IDdesign. While I cannot disclose how much IDdesign
Opening a franchise anywhere is a time consuming process as it involves a gamut of procedures and queries. “I think if anyone is taking over a franchise and the franchisor isn’t following a structured due diligence process and at the same time is not forthcoming with answers to the queries which the operator or franchisee may have, I would be worried about taking over the franchise,” says Ajit Singh, general manager-Retail, Asha Enterprises, the franchisee for Barista. Keeping this in mind, it is advisable to enter into a relationship with a brand that is protective over what they do because, in general, the more protective
Time and freedom
Common mistakes One of the major mistakes made by people is the lack of research on the viability of the brand in the country and the location. A business that may have boomed elsewhere may not find a market in another region. One has to consider differences in climatic conditions, sociocultural characteristics, and the spread of sparse population in clusters in the Sultanate and a host of other factors before getting a franchise into Oman. Sharing his views on the subject, Nick Braxton-Abery, country manager, Emirates Leisure Retail, which runs Noodle House says, “There are instances where a franchise is successful in one market but fails in others. There could be a number of reasons for this; the support from the franchisor could be inadequate or the local franchisee may not be a suitable partner.” Brand recognition is also an important criterion and bringing in a brand that is not recognised, is not necessarily a good idea, unless it has unique features.
Also, while people think that they are dealing with a fixed set of norms, in reality there is always room for negotiations, especially when it comes to rates, fees, royalties and more. It is imperative that a franchisee takes a close look at the franchisor and his setup and more importantly, talks to other franchisees and get their feedback on the company before signing. It is important to explore whether they are satisfied with the å from the franchisor as that is one of the key necessities of a successful franchise. Sometimes in the excitement of obtaining the franchise, one’s judgment can get clouded whereby the contract is not read in its entirety (neither handed over to a lawyer to be read and obtain his feedback). This could land the franchisee into trouble or he may end up with a raw deal. It is also important to be passionate about the business that one plans to open though not just assume that the business would do well in Oman. This is also a key point that franchisors look for in prospective operators as it shows the amount of involvement one would willingly have in the business, primarily because the franchisee will be representing their brand in Oman. If one were an engineer, it would be advisable to look for a franchise related to his profession, as it would be easier for the franchisee to grasp nuances of the business and at the very least when one is negotiating with the franchisor, he will be speaking the same language.
Scope for more While it may seem that the market is already saturated with established businesses, there is still scope for opening a successful franchise as long as one looks for a niche or a specific product that is not yet available in the market. Besides, a place like Oman is still growing and there is a lot that has not happened yet. Consumers in Oman are very different from what one would find elsewhere. They are brand conscious and as mentioned earlier, they are a sparse population, spread all over the country in clusters. Hence, chances of spreading business by word of mouth is not always easy. It is a tough business but franchising, in the end, is an easier way
Nick Braxton-Abery Country Manager, Emirates Leisure Retail of operating a business for someone who wants to be an entrepreneur. It is a tried and working business model and no one has to reinvent the wheel. However, one should be aware that financial institutions in Oman have adopted a cautious approach, especially in the light of the global economic downturn. So it is imperative that one has access to the necessary finances prior to entering the business.
The bottomline The most important factor in a lot of failed businesses is the inability of the operator to sustain the business through its initial few months prior to the business being opened. Government approvals and procedures can take a lot of time, especially when it comes to a franchise, so one would have to make sure that he has enough money
to sustain the business for the first few months prior to the business being opened and even for the first few months after it has opened. Where many people also go wrong is that they don’t think about cash flows. So in addition to already having the startup capital, it is just as important that one also takes into account the money needed to sustain the business until the franchisee begins to make profits. “Successful franchises are a day-in and day-out commitment where both parties, the franchisee and franchisor, have to ensure that the brand is always being nurtured and constant effort and innovation is going into new products,” concludes Braxton-Abery. The more positive interactions there are between the two parties, the better are the chances to run a successful moneyspinner franchise. 65
Destination of choice Invest in America promotes and supports foreign direct investment (FDI) in the US. It is the primary US government mechanism to coordinate inward investment promotion. Its efforts are focused on outreach to foreign governments and investors. Aaron Brickman, director, Invest in America, 66
visited Oman recently as a part of a series of planned visits from senior US officials to promote FDI from the Sultanate. Mayank Singh speaks to him about the impact of the financial crisis on FDI flows, the changing perception of the US as the destination of choice for capital and visa concerns. Excerpts
What is the purpose of your visit to the Sultanate of Oman? I am on a visit to various countries in the region like Saudi Arabia, Qatar, Abu Dhabi and Oman to raise the profile of the Invest in America programme. The US has been an investment destination of choice for decades. FDI creates jobs
and promotes economic growth. Free Trade Agreements (FTA’s) with various countries have created five and a half million jobs in the US, so it is good for us, but it is also a win-win situation for the country of origin because it leads to technology transfer, know how gains in terms of management techniques etc. In 2008, the US received FDI worth $320bn. The purpose of this visit is to strengthen this message.
best risk adjusted returns over the years. We are a low risk country and so there are lower rewards compared to other countries but it remains indisputably the most predictable operating environment in the world. This helps in attracting a constant flow of FDI. A Daimler C class plant has been set up in Alabama recently and there is a steady trickle of mid-sized companies in the last few years to the US for a variety of reasons.
What kind of FDI flows has the US been attracting from Oman and the Gulf region? We have not seen as much FDI interest from Oman as we would like, but there is a wider interest in investing in the US from the Gulf region. A lot of this investment takes place through securities. But if we look at the larger picture, Arab investment is a very small part of the overall FDI inflows to the US. Talking about splits, Western Europe accounts for 71 per cent of FDI inflows into the US, this is followed by Japan, Canada and Australia. Together these countries make up 85 per cent of FDI into the US.
What makes US an attractive destination for FDI? The US offers a fully developed market of 320mn people with an expanding population. It represents over 40 per cent of the world’s consumer goods market and 35 per cent of the luxury products market. It has a per capita income of $30,000. All these factors attract a steady stream of business. Almost half of the patents from other countries are registered in the US. This reflects the intellectual knowhow of the country. The country offers good infrastructure in the shape of roads, railways, information technology (IT), airlines etc. These factors have helped us to hold onto FDI inflows. And we believe that even in these challenging times there are opportunities. The US has had historical ties with various countries and has traditionally been attracting investments from these countries, but it is also increasingly attracting investments from India and China.
Has the financial crisis in the wake of the sub prime crisis affected FDI flows to the US? During the recessionary period, in comparison to other developed economies, the US has fared much better. The UK, Netherlands and Germany have seen a decline in FDI inflows in contrast the US has continued to attract as much investment in 2009 as in 2008. So we are holding even. In times of crisis, the US remains a destination of choice. Historically, investors have flocked to gold and the US in times of a crisis. The US was seen as a low-risk-low return market, so even if the returns were less compared to similar investments made in developing countries it was acceptable to investors. But the global financial crisis and its impact has shown that the US is as vulnerable to a financial crisis as any other country. Will this perception impact America’s ability to attract FDI inflows in the future? Nobody ever guaranteed returns on the stockmarket. As a country the US has been resilient to economic downturns for the last 100 years and has given the
Though Oman and the US have signed a Free Trade Agreement (FTA), there are apprehensions that the difference in scales between companies in the US and the Sultanate will make local companies uncompetitive in the US.
We have not seen as much FDI interest from Oman as we would like, but there is a wider interest in investing in the US from the Gulf region
Are such concerns justified? FTA’s have always encouraged more investments between signatories. Year-onyear we have seen more such agreements being ratified with various countries like Chile, Costa Rica, Singapore, Oman and so on. If you look at sectors like IT and biotechnology almost all companies start off small. The US has so many success stories like Intel Corporation, Yahoo, Google, Hewlett Packard – all of which have started off as small companies. A good idea, the right plan and strategic partners is the recipe for success in the US. It is important for Omani businesses to study how others have engaged themselves in the US market and to do their due diligence properly. This requires investment in terms of time and resources. Invest in America can be of help here as it continually develops programmes and services to educate international investors on topic related to Investing in the US. We also organise a number of world class trade shows in various countries. There is a perception that people from the Middle East find it difficult to get visas to the US. Is this a deterrent to attract FDI from the region? The world has changed since 9/11. In its wake a lot of entry procedures and visa restrictions were put in place for national security. Things have changed since then, the State Department in the US has been working on managing the process better. Though things are far from ideal in terms of equal treatment, a lot of effort is on to streamline procedures. An occasional negative story makes bigger news than the fact that numerous people travel everyday to the US without any problems. Oman for instance has a very low visa refusal rate. The Dubai Port World episode got a lot of negative publicity in the regional press giving credence to stories that investments from the Gulf region was not welcome in the US. How would you react to this charge? Since DP World, a number of companies from the region have come and invested in the US. A notable example being Dubai Aerospace. So DP World should be treated as an exception and not as the norm.
comforts versus going green Environmental issues are occupying the same position as routine work for most of corporate Oman. Starting this month, as part of Oman Economic Review’s green campaign, every month we will be featuring the ‘green’ views of corporate captains. Omar Ahmed Qatan, CEO of Oman Oil Marketing Company, shares his views on environmental issues.
The whole world is talking about going green to save the environment. What does ‘going green’ mean to you?
to become friendly to Mother Earth. The major risk exposure of leakage and contamination due to corrosion has been minimised by changing over to double skin fibre-glass tanks manufactured to international standards.
Going green simply reflects our ability to conserve our natural resources and become more environment friendly or to reduce emission of toxic gases to save the ozone layer and create a healthy breathing atmosphere.
Omanoil strongly supported the government’s decision to phase out leaded gasoline and this was achieved with no disruption to customers. We also promote low sulphur diesel oil, which is distributed both through Omanoil’s network of filling stations and commercial installations.
How real is the threat of environmental degradation to planet earth? The present “climate change” is a real indication that the planet’s resources have been exhausted by man to enhance their lifestyle. Also, there is a high consumption of oil products and high emissions of sulphite, CO2 and non- degraded biproducts. I believe in a balance between sustaining a healthy and comfortable life with less damage to mother earth.
The company has successfully initiated new technologies in environmental clean-up such as the redemption system which has been designed, developed and implemented for the first time in Oman and the Gulf.
Economic experts have suggested that creating a green economy will top the agenda of most corporates by the turn of this decade. Your comments.
Further, we have made paper recycling as the main goal to be achieved in 2010 both in-house as well as at our convenience stores. Omanoil has received the “BP Top Honours” in upholding the highest Health, Safety and Environment (HSE) standards in Middle East and North Africa (MENA).
It is true. We need to invest more in going green in order to keep a control on environment degradation. However, this will create extra load on the finances of a company and this may be passed on to the end users in terms of higher costs for products. This means we will need to adjust our lifestyles to costly products, which will make our living suitable for our environment.
What is your opinion about initiatives like Oman Green Awards? Oman Green Awards will definitely raise awareness among people. But it will require a strong campaign in the media targeted at special tourist areas, public locations, schools curriculums etc.
How is Omanoil contributing to the cause of environment protection? We at Omanoil Marketing have adopted serious measures to be safe and environment friendly by creating a culture in the company, which educates individuals and gets them committed 68
For more information, login to: www.oeronline.com/greenawards
The campaign will require specific criterion so that the industry can compete.
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The Family Friendly coupé We had driven the A5 last year and it swept us off our feet. Just two months back Audi launched two more iterations of the A5, the cabriolet and the Sportback. Malcolm Xavier Crasta managed to snag a Sportback for a test drive to see how good it really is
rom the outside it shares much of its look with the handsome A5 coupe, with identical nose and tail sections, but stretched to accommodate an extra pair of seats and doors. With its short overhangs, wide track, frameless doors and a gently sloping rear windscreen it makes for a very elegant design that is pleasing to the eye from practically any angle. Just like the exterior, the interior is also identical to that of an A5, which is to be expected. And as you have come to expect from Audi, the interior is lush and purposeful. Quality is topnotch and it feels special, just like a car of this type should. The seats are some of the most comfortable we have ever sat in and it is as spacious as an A4 in the front and rear, although really tall people may find the rear headroom slightly limiting, but this is something that we have found to be a common issue with every car of this type. The driving position is near perfect as well and visibility as good as that of the coupe, which also means slightly restricted rear visibility.
SPECIFICATIONS FOR AUDI Engine – 2.0L I4 TFSI Power – 211hp @ 4300-6000rpm Torque – 350Nm @ 1500-4200rpm Transmission – 7-speed S tronic Dimensions (l x w x h) – 4711mm x 1854mm x 1391mm Acceleration 0-100kmph – 6.6s
As far as equipment is concerned, there isn’t anything special to pay attention to but there isn’t anything notably missing either. You get all the regular bells and whistles that you can expect from a car such as this and at this price range. A good
sound system, cruise control, power sunroof, front and rear parking sensors, dual-zone air conditioning and more are all available. And it is the same case with safety equipment as well. Front, side and curtain airbags, ABS and traction control are all available as standard. Under the bonnet lies a 2.0 litre turbocharger four-cylinder engine producing 211hp. Mated to Audi’s 7-speed S-tronic transmission and Quattro all-wheel-drive system, the results are impressive. In a straight line the Sportback feels a lot faster than it actually is and through corners the grip and stability is incredible by any standards. The chunky steering is precise and full of feel but feels a bit rough. A little more smoothness would be welcome. On the highway the ride is competent and the cabin is well refined, an impressive feat considering the frameless doors. On the whole the A5 Sportback makes for a great and sportier alternative to an A4 or a family friendly alternative to an A5. While some may argue that the ride is a bit hard and exhaust too loud to make it a family saloon, you should not look at it like one. It is more of a four door sport grand tourer and in that respect it is near perfect, especially when you consider the performance and the practicality that accompanies it.
Increasing market share
A good showing The first edition of Mazda road show organised by Towell Auto Centre for the year 2010 has begun on a thunderous note. Held at the Al Masa Mall on the 13th and 14th of January, the two day event witnessed a huge turnout. The road show was loaded with action packed entertainment and interactive games for the visitors and prospective customers. On display were all the stunning Mazda models. It was also an opportunity for Mazda to promote its special offer on the entire range of Mazda models.
Searching for leopards Land Rover, the 4x4 automotive manufacturer, will once again provide LR3 vehicles to support Biosphere Expeditions with their ongoing Arabian Leopard research project in Oman. This is the fifth consecutive year that Land Rover has extended its support to this project. Biosphere Expeditions’ Arabian Leopard search project began in January 2006 in the Musandam area, with the aim to see whether the endangered Arabian leopard, the last surviving species of the big cats in the region, was still present. 72
Mercedes-Benz successfully defended its position as the leader in the luxury segment in the Middle East & Levant in 2009, despite facing very difficult market conditions. In December, the company delivered 1,237 vehicles up nine percent on the same period in 2008 helping raise its annual market share in the luxury vehicle segment to
just over 23 percent when the market itself was down some 22 percent. In 2009, MercedesBenz Middle East & Levant delivered 15,370 vehicles helped by increased luxury SUV sales which rose to 2,816 (2008: 2,327) and included a 65 per cent rise in deliveries of the evergreen G-Class and a massive 499 per cent increase in sales of the entry level GLK.
During the year as a whole, Mercedes-Benz delivered 1,012,300 vehicles to customers worldwide (2008: 1,121,700 - minus 9.7 per cent) and, in many cases, performed better than the total market in many countries including the US, China, Canada, Russia, the UK, South Korea, and Brazil.
unrelenting terrain, it was a triple victory for Volkswagen after winning the Dakar in 1980 and 2009. Carlos Sainz came first ahead of his team
mate Naseer Al-Attiyah (VW) ahead of US driver Mark Miller (VW). Ranking fourth place behind the winner was Stephane Peterhansel (BMW).
Gruelling victory Volkswagen Touregs driven by Carlos Sainz, Naseer Al-Attiyah and Mark Miller, triumphed in this year’s Dakar Rally held in South America. Toureg drivers completed a clean sweep of the first three places in the world’s toughest rally event as the team emulated its success in winning the 2009 event. After 16 days of racing across the mountains and desert landscapes of Argentina and Chile, covering 9000 kilometres of challenging and
OER CEO Golf 2010: Tee off on March 11
One of the most awaited events on the corporate calendar of Oman, the OER CEO Golf, is going to be loaded with fun and surprises for both golfers and non-golfers
he most anticipated corporate event in Oman – OER CEO Golf – the networking event of the year, will be played on Oman’s premier green golfing venue – the 18-hole Par 72 PGAstandard championship golf course at the Muscat Hills Golf & Country Club on March 11. Much is happening in the business world here, and Thursday golfing, CEO golfing – as the event is now referred to by participants, is more than just golf. The OER CEO Golf event has been, traditionally, the unique networking opportunity every year for the crème-de-la-crème of Oman’s corporate society. This year too, the day-long event is designed to provide much nail-biting action for CEO golfers. The main competition is an 18-hole affair on a golf course that has been delicately crafted around the natural Omani mountain ranges to produce the first course of its kind in the Middle East. Players in this competition will be able to experience, for the first time in Muscat, what it feels to compete on a course designed by internationally renowned golf course designer Paul Thomas of Dave Thomas Associates, and constructed by Southern Golf UK. The word has spread around, and the corporate world is excited and abuzz about the 6th edition of OER 74
CEO Golf. “OER CEO GOLF has always been an exclusive event. It is Oman’s biggest & unique golfing-cum-business networking extravaganza,” says Sandeep Sehgal, CEO, United Media Services, the publishers of OER, Oman’s leading business magazine. “For us, it’s exciting that Oman’s most awaited corporate golfing championship will see everybody in the ‘who’s-who-of-Oman’ out there together on the greens.”
Nawras business solutions is Corporate Presenter of OER CEO GOLF 2010 Speaking about Nawras’ decision to be the official presenters of OER CEO GOLF last year, Nawras CEO, Ross Cormack said, “On this occasion we are delighted to sponsor the 2009 OER CEO Golf event which provides the opportunity for many senior business people to gather and network in a less formal environment than they might usually meet in.” About the day’s programme, Cormack said, “The OER CEO Golf day has become more and more popular with each passing year and this time promises to be the best so far with Nawras Business Solutions sponsoring the interesting and varied programme from dawn to dusk.” Oman’s customer-friendly mobile communications service provider, Nawras, is committed to enhancing people’s daily lives, making life more versatile and always a pleasingly different experience. For real corporate mobility, and enhancing business efficiency,
Hills, players will have to study the positions of a floating green, and aim to get their golf ball onto it. Got it? Great! Missed? Try retrieving your golf ball from the lake bed. Yes, there’s much fun even for golfers-to-be this year. Highlights of the day’s programme include a golf clinic for golfers-to-be over a four-hole round, conducted by golf professionals. Nawras Business Solutions has been the right choice for many organisations. With their vision to enrich the lives of people in Oman, Nawras constantly strives to be caring, excellent and pleasing, striving to build close relationships. They believe that people should have the time to focus on the important things in life. For this reason, they are always on the lookout for avenues that significantly enhance the quality of people’s lives. Considering their corporate ethos, it is not difficult to understand why they have agreed to be the Corporate Presenters of the 6th Edition of OER CEO GOLF too.
For golfers-to-be, OER CEO Golf presents an exciting opportunity to be on the greens for a whole day, with no hefty charges to be paid!
Green is not the only unique facet about this year’s OER CEO Golf
New, exciting and fun-filled activities have been planned to fill the day’s calendar, ending with the grand finale at the awards dinner – an evening that’ll be loaded with enthralling performances and mesmerising music. “This is the opportunity for real topflight brands to be associated with a high-profile event in Oman. It’s become the most anticipated up-market event of the year in Oman, and every year, we try to make it bigger, more exciting. Throughout the day, and well into the night, it is going to be the best anyone has seen here in a long time,” says Alpana Roy, executive vice president of UMS.
Apart from the 18-hole main event, Water Golf is on the cards. It’s an exciting event for golfers, golfers-to-be and their spouses. At the Serenity Lake at Muscat
For further information, contact Kush on 99253729
Rolex from Khimji’s Watches will also be partnering OER CEO Golf 2010.
Nawras offers Collect Call service A resounding success The successful completion of the first Oman Open Championship, organised by the Oman Golf Committee, has helped further Oman’s claim as a premier golfing destination in the region. In all 160 golfers competed in the championship that was held at the Muscat Hills grass course, over January 21 and 22. One of the highlights of the championship was The Oman Open’s first recorded hole-in-one, hit by Latif Razek. Later in the evening, the Minister of Sports Affairs, H. E. Ali bin Masoud al Sunaidy awarded trophies and medals to the winners.
In the Men’s Gross, Ian Morrison recorded a score of 147 to beat stiff competition from the first and second runners up, Bahrain’s Mohammed Al Noami and Nasser Yaqoob. In the Ladies’ Gross, Okkie van Rossem (174) won after fighting off a spirited challenge from the runners up Jameela Daud and Minke Gijselman. The Men’s nett title was won by Nasaruddin Mohamad, while the Ladies’ Nett title went to Rachel Connor. In the Junior Division I, Damian Jilan was the winner and the Junior Division II winner was Sam Battersby.
Bank Sohar’s Big Cheque draw
The New Year began on a cheerful note for 15 Bank Sohar customers. Fourteen of them won a prize of RO1,000 each. The 15th was the big cheque winner, Jamal Mahtouq Mohammed al Ajmi a customer from the Bank’s Saham Branch who took home the prize of RO250,000. Bank Sohar’s Grand Draw for the Big Cheque was conducted at the 76
Sohar Creative Centre, in front of a large audience. HE Said Bin Ghanim Al Moqbali – member of A’Shura Council in Wilayat of Sohar, and the chief guest presided over the event and conducted the computer draws for the prizes. The bank had issued an open invitation for the draw and several people had come to witness and experience the event.
Nawras became the first telecom service provider in Oman to offer customers a ‘Collect Call’ service. The service is conveniently designed to make it easier to get closer to friends and family even if they happen to be temporarily out of credit. The ‘Collect Call’ service, can also be used when it is simply preferable for someone else to pay for the call. Said Al Shanfari, team leader – voice services, explained, “As we live the customer experience, we are constantly looking for new and exciting ways to enhance our
delivery of pleasingly different service. We are confident that this ‘Collect Call’ feature will be seen by many customers as particularly helpful as the service is giving an opportunity for friends, family members and business colleagues to maintain communication even if they should run out of credit.”
Four Stars conferred on Park Inn Muscat The Ministry of Tourism committee recently presented the Park Inn Muscat with its star classification plaque. It was received by Park Inn general manager, Francois Galoisy. The four golden stars on it notably stand for the hotel’s categorisation based on specific industry criteria and reliable standards. “We are a four-star hotel and the plaque from the Ministry is a daily reminder of the
standards that we are expected to live up to and hopefully exceed. It is our desire to maintain our facilities and continue to provide great service that will contribute, in our own small way, to upholding the country’s reputation for remarkable hospitality,” said Francois. “For our guests it means that they have chosen a hotel that prides itself on affordable hospitality,” he added.
Book on Greatest Brands published “Oman’s 130 Greatest Brands: Special Focus on Digital Media”, a new book containing a brand survey and study of top-notch brands has been published.
PDO wins CSR Award Petroleum Development Oman (PDO) has been recognised with a major corporate social responsibility (CSR) award at a special ceremony held recently under the auspices of HH Sayyid Faisal bin Turki Al Said CEO, Oman Brand Management Unit (OBMU) at the Muscat Diplomatic
Club. PDO won the “Best Social Investment Programme for 2009” at the Civil Society Leaders Award ceremony organised by Tawasul International, in cooperation with Sablat Oman. The award was accepted
on behalf of the Company by PDO human resources director Mundhir bin Salim al Barwani. PDO won the award in recognition of its support for Oman’s first ‘Interactive School’ at Al Zahya village near Adam in Al Dakhliya Region. The new Saih Al Salam School was inaugurated in December 2009. “This award following an independent voting process shows that Omanis recognise the importance of PDO’s intensive social investment programme,” Mundhir al Barwani said.
OIB MasterCard promotion held at Al Araimi OIB along with MasterCard Worldwide recently held a usage promotion drive on OIB MasterCard Product in recognition of customer loyalty. The theme of the promotion was, “Spend on your OIB MasterCard and win instantly a Scratch-nWin coupon.” The OIB MasterCard Credit Card Promotion was held for 15 days at the Al Araimi complex in December, 2009 and got a good response. The person who spent 10 rials at any of the outlets of Al Araimi complex got a scratch-nwin coupon and a chance to enter the raffle draw. The draw was
The brand survey, aimed at finding out brand preferences of consumers and their loyalty to national brands in Oman, was conducted via the Internet, telephone and face-to-face interviews. For the brand survey, 130 top-notch brands were short listed from an initial list of 300 brands. To facilitate the process a ‘Brand Council’ for formed, which is an independent and voluntary body made up of nine experts. Only brands that are rated highly
by the council have been included in the brand survey. The survey titled Top-of-mind Brand Awareness Survey polled 1000 Omani and expatriate consumers including CEOs and marketing executives. Honouring the great and the good in 26 different categories, the book brings together the cream of the Sultanate’s industry and presents an overall list of 130 greatest brands as well as a list of Top 30 brands with leadership in their own categories. The book has been written by Hasan Kamoonpuri, a senior Oman Observer journalist.
‘Together for a Happier Eid’ wins Best CSR initiative award A landmark social project launched by BankMuscat in association with Omantel has been adjudged the best Corporate Social Responsibility (CSR) initiative in the first Civil Society Awards announced by Tawasul Global Connections. The awards in recognition of valuable contributions to development of society by institutions, companies and individuals were based on an online voting process in which over 16,000 voters participated. Conceived
as the biggest private-public charity partnership under the auspices of the Ministry of Social Development, the BankMuscat-Omantel-led ‘Together for a Happier Eid’ initiative was aimed at benefiting underprivileged children by unleashing the culture of donation. The Ramadhan campaign generated a whopping donation of RO 250,000 from individuals, corporates and institutions and the funds were distributed among 26,561 needy children in different parts of Oman.
held in the presence of staff from Muscat Municipality, Uttam Kotian, marketing manager of Al Araimi Complex and Faryal Mohammed, manager OIB Card Centre. The first prize winner was Prakash Nair who won 32” Samsung LCD and the second prize winner was Ashit Asthana who won a diamond gift. 77
Dell’s Mini 3 smart phones create an easy-to-use mobile Internet experience. The Android-based platform gives the Mini 3 optimal power, flexibility and customisation opportunities for both users and operators. It will provide today’s social media mavens with the ability to simultaneously Tweet friends, post Facebook updates, share pictures and browse the Web.
Its soft curves are a pleasure to the touch as its rigid bracelet slips neatly into the case. Piccolina’s original gem-set patterns add to a glamorous, sensual design hiding elaborate mechanical developments. Its streamlined silhouette and rigid, curved bracelet demand fine and patient adjustments to fit together smoothly and sleekly. Their flawless integration ensures both total comfort and perfect geometric harmony on the wrist. 78
Style and technology
Giorgio Armani, Samsung Electronics and Microsoft are proud to present the new Giorgio Armani-Samsung smartphone. Personally designed by Giorgio Armani, the new smartphone makes its debut with Microsoft’s Windows Mobile 6.5 operating system, a unique two step tilt hinge form factor with both full touch screen and QWERTY keyboard hybrid, and a stunning 3.5 inch ultra brilliant AMOLED display.
Raising the bar
Yamaha has introduced its innovative YHTS400 two-piece home theatre audio package. The system, which consists of an ultra-slim “sound bar” front speaker and a first-of-its-kind subwoofer-integrated receiver, provides HD Audio compatibility, three 1080p-compatible HDMI inputs (and one output), the company’s exclusive AIR SURROUND XTREME, UniVolume and Extended Stereo technologies for immersive audio for movies, sports and music experiences.
TV on the move
VIZIO will be one of the first manufacturers to enter the new mobile television market. It will offer three Razor LED models with a depth of less than 1”, including one capable of receiving broadcasts using the new ATSCM/H mobile/handheld platform that can operate in moving vehicles. The VMB070 has a 7” display, the VMB090 has a 9” display and the VMB100 has a 10” display.
While not truly a gizmo, the new screen from Pixel Qi is definitely worth a look. These screens rival the best epaper displays on the market today but in addition have video refresh and fully saturated colour. The epaper mode has three times the resolution of the fully saturated colour mode allowing for a high resolution reading experience without sacrificing the colour fidelity for graphics. In addition these screens are perfectly useable in sunlight.
illionaire business magnate, socialite, author and television personality Donald Trump is the last person one would associate with dispensing ‘business advice’. For the man seems to be so sure of himself, what with his roaring ‘You’re Hired! or You’re Fired’ lines in his hit show The Apprentice or his generally sweeping statements like ‘I don’t make deals for the money. I’ve got enough, much more than I’ll ever need. I do it to do it’ or even the more cocky or rather self-indulgent ‘Love him or hate him, Trump is a man who is certain about what he wants and sets out to get it, no holds barred.” Well, as millionaires make their money, they need to write their books too. Not that Trump has done much writing in this one. The Way To The Top – The Best Business Advice I Ever Received is a compilation, or rather a collection of wellgrounded, hard-hitting advice on business success from top people in the American business world. As Trump says in the introduction, ‘You can’t know it all. No matter how smart you are, no matter how comprehensive your education, no matter how wide-ranging your experience, there’s simply no way to acquire all the
wisdom you need to make your business thrive.” He’s right... and that’s why this book is an intelligent read. The insights are wise, witty, outspoken, thoughtprovoking but never dreary
trump knows best In these days of doubts and uncertainties, getting sound advice through real life anecdotes and instances is like water to parched throats, says Rekha Baala
The publication featured in Browsing Corner is provided by Turtle’s Bookstore www.turtlesoman.com
or preachy! There are anecdotes and stories that take you through both sides of the business coin. The mistakes made and the lessons learnt... all contribute to how you should look at your own business in
the long run or aspire to be a successful professional. Featured in this book are familiar names like Jim Cantalupo, Chairman and CEO of McDonald’s Corporation, Rick Goings, Chairman and CEO of Tupperware Corporation and others with thoughts coming in from companies, large and small and some even from the Fortune 500 list. The top business people in the book offer both inspiring and practical advice. Everything you need to keep in mind to run a successful business right from making good decisions, conducting yourself, the importance of communication, team leadership along with a few home truths make the ‘business ideas’ diverse and interesting. Some are even downright amusing. Like for example, what Peter J Rose, chairman and CEO of Expeditors International has to say. “Friendly competition is an oxymoron. Use the delete button often and yes, the oft-repeated Be Patient!” Well, in conclusion, Donald Trump has successfully done a ‘how-to’ book again. And coming from him, we’re sure the advice will be taken much more seriously. He’s been there... and done it all! And become super-successful in the process!
Cut out this coupon from OER and present it at Turtle’s Bookshop to claim 10% discount on the book featured in the February 2010 issue, or 5% discount on all other books* (except the Airport outlet). *This coupon cannot be combined with any other in-store promotions. Offer valid until April 30, 2010. Free one hour parking on purchases of RO5 or more.
Changing The Face Of Business - 'Women As An Economic Force' 29th & 30th March 2010, Intercontinental Hotel Muscat
Under the patronage of Her Highness Sayyida Aliya bint Thuwaini Al Said “Interact with internationally acclaimed businesswomen and experience workshops and lectures to inspire a new calibre of women in business.”
H.E Angelika Storz Chakarji
Ms. Ashley Hunter
Mrs. Lydia Roux
German Embassador to Oman
President of HM Risk Group based in Texas, USA
Founder of Gauteng Talent Management Solutions
More speakers to be conﬁrmed...
Why Attend? Enjoy the following beneﬁts of participating: • Create partnerships with top organizations. • Develop leadership and management skills. • Build your network and connections. • Gain knowledge, insight, and strategic thinking. • Explore career paths and opportunities. • Get involved with new business opportunities. • Meet potential mentors and advisors. • Discover opportunities in Best Practice • Join this unique and powerful community of the next generation of business women.
To Register | Tel +968 24693133| Fax +968 24607717| Email email@example.com| Website www.enventoman.org | Media Partners
tephen R Thomas, Renaissance Services CEO, has been given recognition for his work in Oman that has spanned over 22 years and countless responsibilities. Her Majesty Queen Elizabeth II has graciously awarded Thomas an OBE (Officer of the Most Excellent Order of the British Empire) in the UK New Year’s Honours List published on December 31, 2009. The OBE medal is awarded for a national order of merit and valuable service is the sole criteria for the award. Thomas has been instrumental in the development and progress of Oman’s business and public community, as well as a fundamental leader in the direction and growth of Renaissance Services, for the past two decades. Thomas joined the Tawoos Group as general manager of TISCO in 1988 and was appointed CEO of Renaissance Services in 1998. He has also sat on the Boards of National Hospitality Institute SAOG, Renaissance Hospitality Services SAOG and Topaz Energy and Marine and Oman Society for Petroleum Services (OPAL). He also helped found OPAL in 2001, Oman’s first society for oil and gas operators, that promotes Omanisation, quality, HSE and operational excellence in the industry. Similarly, Thomas holds integrity and moral values in the highest regard, and has consistently championed Omanisation and education across industrial sectors. Beyond a long list of contributions to the business community, he is also involved actively in various community service including theatre and educational charity organisations. Thomas was quick to explain that the award was the result of years of support from colleagues and his family. “I feel very humbled rather than aggrandised by it. Lots of people, from my wife and family, my work colleagues, my friends, people from the commercial world through to OPAL
and the theatre group I am part of have contributed to this honour. I hope that this honour is a positive reflection on our whole community and the Omani British relationship.” He also thanked Oman for presenting him opportunities worthy of recognition in the UK honours list, “I work for an Omani public company and the main body of my career has been in Oman, so thanks must go to Oman for the opportunities it has given me. I am very proud of Oman and thank it for what I have done in my commercial life and personal life. I am also very pleased that the UK honour system recognises people here. It happens every now and then, as a few people in Oman over the years have been honoured. It is great when it happens here in Oman.” The OBE was created in 1917 during the First World War by King George V who saw a need for a new award of honour which could be widely awarded in recognition of distinguished service to the arts and sciences, public services outside the Civil Service and work with charitable and welfare organisations of all kinds. The Order includes five classes in civil and military divisions, and the recipients may be British nationals as well as citizens of other countries.
A befitting honour Stephen R Thomas, Renaissance CEO awarded Order of the British Empire
Within 14 years of joining Raysut Cement Company, Mohammed Al Deeb has reached the position of CEO. Malcolm Xavier Crasta reports
Born to win Favourite Sports: Football and Tennis Favourite places to visit: Countries with a rich cultural history Always on the lookout for: Honest, loyal, hard working and sincere people
he Raysut Cement Company (RCC) was formed in 1981 with a 210,000 tonne capacity four-stage suspension pre-heater kiln. Today, Raysut Cement’s total cement capacity has reached to 3 million metric tonnes per annum (MMTPA) and counts among the biggest producers in the Middle East. Throughout these years the company has maintained its pace for growth through cost efficient management, with an enhanced product range. The RCC won ‘His Majesty Cup’ for the best five factories in Oman nine years in a row, from 1991 to 1999, and the ‘Environmental Cup’ in the years 1986, 1993, 1994, 1995, 1996, 1998 and 1999. Today, some 1,500 customers in the oil well exploration and construction industry in Middle-east, Asia and Africa look to Raysut Cement for top quality cement and services. Many major infrastructure projects are being constructed
using Raysut Cement. The RCC also currently holds ISO 9001-2008, ISO 14001-2004 and API 10A-0006 certificates. At the helm of the prestigious company sits Mohammed Ahmed Al Dheeb, its current Chief Executive Officer.
Down memory lane Mohammed Al Dheeb studied at Al Saidiya School in Salalah. In 1981, he completed his school education and scored the third highest rank in Oman. As a result the Ministry of Education had offered him a scholarship and sent him to the US for further education. In the year 1986 he completed his bachelor’s degree in Business Administration from the University of Arizona. After completing his degree he joined the Ministry of Education and worked in various departments such as planning, administration and finance at the executive levels. In 1996 he joined the Raysut Cement Company in Salalah as a deputy general manager. He was later promoted to the
general manager position and finally as CEO. A very positive thinking person, Al Dheeb, is a strong believer in forgiveness and respect for all people in society as well as in his organisation. He is always on the lookout for honest, loyal, hard working and sincere people. In spite of work pressures he always tries to make time for his family. He says, “Even though work pressure is there, I always try to manage to make time for my family members and I am confident that I can fulfill the task in my work place as well as in my family life.” After work hours he usually spends time playing sports, reading, social obligations or with family members. An avid traveller, his favourite travel destinations are countries with a rich cultural history. With such an impressive background and such strong values Al Deeb is sure to lead the RCC through to many more successful years.