Head Office: Tel.: 24709171/73/74, Fax : 24795583, Showrooms: Ruwi: Tel: 24795503/4, Digital Showroom(Sabco Centre) Tel.: 24566727 Sohar: Tel: 26845975/6, Fax: 26845977, Salalah: Tel: 23202706, Fax: 23294588.
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OE
No 118
May 2010
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 OER Presentations
ELEPHANTS CAN DANCE
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tatistics can either fascinate or frustrate depending on whether you have a penchant for them or not. While there is no single prism through which companies can be evaluated – size is one the most definitive indicators of a company’s success. Companies across the globe have worked on growing their size both organically and inorganically. Arcelor merged with Mittal Steel in 2006 to form ArcelorMittal, the largest steel company in the world; Tata Steel shelled out $12bn to acquire Corus in 2007; Tata Motors acquired the British American Jaguar Land Rover for $2.3bn in 2008 and Oman Mobile merged with Omantel to form a single entity. It’s no surprise that the Fortune 500 ranking – on which the OER Top 20 is modelled – has become such an internationally accepted benchmark for success. Big is indeed beautiful. OER’s Top 20 issue is all about tables and data. Starting in 2003 the Top 20 has evolved into an annual barometer of Oman Inc’s performance. In executing this much sought after issue, our challenge is how to add more rigour for those who like numbers while retaining its appeal for others. The solution that we found this year was to do more and to do things differently. While the companies have been evaluated and ranked on revenue, we further slice and dice them on 11 other parameters to find out hidden gems. Which are Oman’s most profitable companies? Which ones use their capital most effectively? Which have given the biggest dividend yield? You will find all this and more in our cover package of this issue. In addition to the master tables we provide charts and illustrations that give you quick, easy and interesting insights. This should hopefully whet your appetite to dig deep into the tables to spot trends. Our hope is that the more you understand the data, the more you will enjoy them. Data tell infinite stories – restricted only by imagination and in the case of a magazine space. Of course we do not leave every story to be told through data. In the set of features that interpret the OER Top 20 universe, we look at the significant achievements of companies and the way ahead. In addition, we take an in-depth look at the reasons for the success of companies like Omantel and Shell Oman Marketing Company.
– A Special Report on Ahli Bank Published by United Press & Publishing LLC PO Box 3305, Ruwi, Postal Code - 112 Muscat, Sultanate of Oman Tel: (968) 24700896, Fax: (968) 24707939 Email: publish@umsoman.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.
Mayank Singh
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: editor@oeronline.com Website: www.oeronline.com
OER -magazine
To read, click on link at: www.oeronline.com
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DEEP INSIGHT The cover story titled Best Banks in Oman and the OER-GBCM survey on Sultanate’s banking sector in April issue of OER provided an in-depth analysis on the banking sector in Oman which is of immense benefit to bankers, investors and all those who are connected with Oman’s banking sector. It is really assuring to learn that the banking sector in Oman tided over the economic crisis unlike banking sectors in some other countries. The ranking you gave to banks provided a deep insight to the inherent strengths of different banks. The interview with Hamood Sangour Al Zadjali, executive president of CBO gave details of the policy measures taken by the CBO to face the challenge of financial meltdown, to regulate the banking industry and impart strength to the system. Matein Khalid, investment banker from Dubai, and Sridhar Sridharan of Ernst and Young impartially scrutinised the present scenario and the impact of financial slowdown on the future health of banking industry and gave tips as to what needs to be done by banks in the future. Kudus to OER. Ravindran M.K, Salalah
ALL IS WELL The lead article (Stable and mature) in the last issue of your esteemed magazine gives a comprehensive view of the banking sector of Oman. It is heartening to read that the performance of the Omani banking industry is sound and the sector is resilient to the economic downturn experienced by countries all across the globe. The credit undeniably goes to the Central Bank of Oman (CBO). The acute global credit squeeze resulting from the global meltdown, may have affected the liquidity and credit conditions in Oman at the beginning of the crisis, but CBO’s proactive response to the crisis and banks’ efficiencies have nonetheless saved the situation. A good compilation and analysis help readers to get the full picture and this is what this article does. It is insightful and authors’ effort and rigour is praiseworthy. Salem Tabook, Al Ghubra
LEADERSHIP SECRETS An avid reader of autobiographies in 4
May 2010
general, I find your column ‘Beyond Boardrooms’ in the last page of OER pretty much interesting. There is a human angle to it. It gives its readers an understanding of the personality of the top guns ‘beyond boardrooms.’ Their everyday life and the balancing act that they do to maintain equilibrium are clear reflections of the time we are living in. Their insightful comments are sometimes worthy of note, all the more because they speak from their experience. I feel if this genre of articles can bring out or highlight the leadership styles of different industry captains – that would make them all the more interesting. Radhika Joshi, Al Khuwair
CANDID TALK The interview with KC Chakrabarty, deputy governor, Reserve Bank of India in the April issue of OER provided a very interesting read. Obviously, an interview with a top official of India’s central bank is of much relevance in Oman which has a large
presence of expatriate Indians and strong trade ties with India. The questions were to the point and so were the replies. Sharp observations, candid admissions, logical replies all contributed to the readability. It gave a true picture of the potential of Indian economy, which is one of the fastest growing economies in the world. The importance which India gives to the GCC region and NRIs is reassuring. The answers on RBI’s stand on interest rates and inflation are reassuring words to Indian expatriates. The resolve to bring down inflation rates is evident in the reply of Chakrabarty. On capital account convertibility, Chakrabarty is candid that total convertibility will not happen in the present. The answer on the impact of economic crisis gave the true picture of the situation in the country. Ahmed Ghalib, CBD
Write to us with your comments/feedback at: editor@oeronline.com
VIEWPOINT
BY INVITATION
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Bonding with the bonds The lack of popularity of the bond for fund raising, minimal government borrowing programmes and the tendency to hold on to it till maturity have created a demand- supply gap
Oil and gas companies are reassessing their operating practices and capital allocation and have understood the need to maintain capital expenditure on projects that will deliver growth
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Partnering for progress
Sayyida Rawan Ahmed Al-Said shares her views on ONIC Holding’s partnership with RSA and the prospects of the insurance sector in Oman
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Contagion, risk and currencies There are so many unanswered questions about how the financial markets are showing an upswing despite negative economic indicators emerging from many global quarters
C O V E R
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TELECOM
VoIP telephony: Free or fair
Telecom companies in Oman can no longer dismiss VoIP as an illegal service but instead have to find ways to offer customer convenience
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HOSPITALITY
Salalah gets its due share
Osama Mariam talks about his expectations from the recently opened world-class five-star Salalah Marriot Resort 6
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Lessons From Change
May 2010
S T O R Y
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SPOTLIGHT
Staying Cool A comprehensive guide on airconditioners including the history, design and style trends developed to help you endure the sunshine
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• Grand Moon Tourbillion • Power Reserve of 96 hours • 48 blue Saphires 4.7 cts on bazel • Limited eddition of 30 pieces
Opening Soon: Shangri-La Barr Al Jissa, Muscat Grand Mall
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AUTO TALK
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Pure Refined Performance
137 Editorial
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Auto News
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Economy Watch
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Billboard
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Business Briefs
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Executive Movements
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Golf Update
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In the News
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Browsing Corner
137
Legal
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Market Watch
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Event
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Gizmos
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CARTOON CORNER By Kannan Murali
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NEWSMAKERS
Raising the bar Majan consolidated is planning to set up a college of international standards for media studies
BROWSING CORNER Timely advice
This classic is a beginners guide to the financial crisis and in light of the recent sub-prime fallout its postulates are more valuable than ever before
BEYOND BOARDROOMS
Fairplay is the key Ali Suleym Al Junaibi is using his wide experience in the government and private sectors to make a meaningful contribution
NUMBERS
Banking sector’s performance in the GCC Loan loss provisions still increasing in 2009
Banking Group Revenue Growth 2005-09
Source: The Boston Consulting Group
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May 2010
CROWNE PLAZA SALALAH WINS AWARD Crowne Plaza Resort Salalah was presented with InterContinental Hotels Group Revenue Management award for the year 2009 by its President Kirk Kinsell in a gala ceremony held at the InterContinental Festival City Dubai on March 21, 2010. This is the fourth Presidents award that Crowne Plaza Resort Salalah has earned during the past five years, being recognised for best renovation, quality achievement, community involvement and now revenue management. Corporate responsibility is an integral part of IHG’s business strategy, as well as a way of demonstrating our philosophy of doing what is right.
NAWRAS LADIES WIN BOWLING COMPETITION Nawras ladies recently took first place in the fifth annual women’s bowling competition held in Muscat. Nawras entered two teams; Nawras B finished in the number one position and Nawras A finished in sixth place. Nine different organisations competed in the thrilling competition organised by the women’s sports department of the Ministry of Sports. The event took place over a period of two weeks at the Al Masa bowling centre. For the second year running, Team B was proudly captained by Manal Al Kiyumi, Nawras customer service management coordinator. This year saw greater teamwork in action which paid off with participants coming together from different departments within Nawras. Competing customer service champions were joined by their colleagues from human resources and marketing.
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Muscat Hills hands over first apartment Having lived and worked in Oman for the last 20 years, the Sultanate is a home away from home for Dr William Jeans and his wife Maggie Jeans. On April 18, they became the owners of a real home in Oman when they formally received their apartment at Muscat Hills Golf and Country Club. Jeans’ apartment was the first one to be handed over by the Muscat Hills to a buyer.
At a solemn function, the couple received keys of their apartment from HH Sayyid Rawy bin Kais Al Said son of HH Sayyid Kais bin Tarik Al Said who visualised the project and made it a reality. Speaking to OER, Maggie Jeans said she felt very proud and happy to own a home in Oman. “I love the apartment and it looks good. I also love
the panoramic view of the mountains and the green golf course from my home,” she said. Kathryn Ring, customer care manager at Muscat Hills said the project has a total of 135 apartments and 80 villas of which 115 apartments and 79 villas have been sold. “The sale of majority of our properties proves that the recent economic slowdown has not affected us.”
Oman Mobile launches new Mada packages Oman Mobile has launched Oman’s first ever “unlimited” price plans with the introduction of its Mada Liberty and Mada Infinity packages that will give customers the freedom to speak and interact with friends and relatives for longer and more often than ever before. Mada Liberty is Oman’s first ever pay per call service with the plan priced at just RO4 per month and offering unlimited duration of calls made to Omantel and Oman Mobile numbers at a fixed price. Customers can
now speak for as long as they want for a flat rate per call of 59bz a call with the new post paid service. The Mada Infinity price plan enables subscribers to enjoy unlimited telephone calls, SMS, MMS, and video calls to other Omantel and Oman Mobile numbers; and up to 3GB of 3.5G mobile broadband for the fixed price of RO39 per month. An additional benefit for subscribers will be a reduction in the SIM card price for Mada from RO7 to RO2 and the removal of the RO3 connection fee that used
to apply for Mada products. Introducing “pay per call” instead of “pay per minute” with the launch of Mada Liberty allows customers the freedom to speak to friends and relatives across the country with the peace of mind of knowing they pay the same price for the call if it is just for one minute or for an hour or more. The new post paid service has a flat rate per call of 59 bzs. The pioneering Mada “unlimited” price plans were officially launched by Omantel CEO Dr Amer Al Rawas at a press conference.
RAYMOND WEIL BOUTIQUE Sabco Commercial Centre Al Qurum - 1st Floor Muscat - Oman Tel: 24567638, 92802128
BankMuscat’s special package for teachers SADOLIN PAINTS IMPRESS AT INTERIORS AND BUILDEX Sadolin Paints Oman (SPOL) is known for its spectacular line of the most beautiful and environmental friendly colours one can possibly imagine. In keeping with their motto of ‘adding life to colour’, Sadolin exhibited an engaging and edifying stall at the recently held Interiors and Buildex 2010. The main aim of the stall at this year’s exhibition was to promote and showcase the eco-friendly Sadolin products. To reiterate the fact that Sadolin is a pro-environment paints company in the sultanate, the stall was decorated with a variety of plants, all of which were potted in Sadolin Paint tins.
TESSIDE UNIVERSITY TO VISIT OMAN Teesside University has been awarded the title of University of the Year by the Times Higher Education magazine and its director of International Development, Dr Keith Brown, will be in Oman to participate at the Ghedex 2010 exhibition from 20 - 22 April 2010. The award of University of the Year is one of the most prestigious in the national higher education calendar. Times Higher editor, Ann Mroz said, ‘Teesside is a fantastic example of an institution that has put itself firmly at the heart of its community, embracing with zeal its mission of working with both individuals and businesses to help them achieve their full potential’. Apart from Teesside The University of Nottingham will once again be among the most prestigious exhibitors at the Ghedex exhibition this year at the Oman International Exhibition Centre.
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BankMuscat, has launched a special banking package for Ministry of Education (MoE) teachers. The gesture takes forward an exclusive BankMuscat card launched for teachers, which has already evoked a strong response. The new package significantly enhances the value proposition offered to teachers alongside the exclusive Visa card which entitles them to a world of special benefits and convenience. Said al Badai, AGM – branches, said: “In appreciation of teachers who are pursuing one of the noblest vocations, BankMuscat is offering the special package aimed at enhancing their role as builders of society. The BankMuscat gesture is part of its social commitment.” As part of the package, all MoE
teachers will be given special consideration for consumer loans. They will receive specially designed welcome kit; free two specially designed cheque books; free online banking and mobile banking; special rates for money remittance. They will also be entitled to special al Mazyona
draw for MoE account holders on Teacher’s Day besides competitive rates for Hayatuna Family protection Plan; special benefits with regards to Sayyarati and baituna loans and special price for purchase of laptops with zero per cent interest for 12 months at specific merchants.
Oman Air increases capital The Oman Air EGM and AGM meeting held on March 31, 2010 brought to light the landmark year that 2009 was a year when Oman Air repositioned itself from being a regional carrier to a truly international airline. HE Ahmed Bin Abdulnabi Macki, minister of National Economy, deputy chairman of Financial Affairs & Energy Resources Council and the chairman of Oman Air Board, announced that the authorised capital of Oman Air has been increased from RO300mn to RO500mn. “We are confident that over a period of time when the airline has established its presence in the industry and
its network has matured, we will see positive returns on investment,” Macki said. “As per the recent data released by IATA, 2009 was one of the most difficult years for the airline industry in which the airlines collectively lost in excess of $11 bn. Globally passenger travel contracted by 3.5 per cent while cargo movement declined steeply
by 10.1 per cent. The industry is expected to show improved results in 2010 as passenger travel is picking up especially in the premium cabins. It will however take time for the business to return to the levels seen before the economic crisis. Financial results of Oman Air too were impacted by adverse economic conditions. Going forward Oman Air will commence flights to Kuala Lumpur, Kathmandu, Dar-EsSalaam, Islamabad, Lahore, Ras Al Khaima, and Al Ain in the summer schedule of 2010, with Milan joining the network in the Winter Schedule,” the minister added.
HOME DELIVERY OF FRIENDI MOBILE CARDS The Khimji Ramdas group, one of Oman’s prestigious corporate group’s, today announced that it has entered into an agreement with FRiENDi mobile and halafoni, two of Oman’s leading mobile resellers. As a result of this agreement, FRiENDi mobile and halafoni customers can now order their recharge cards by calling the nearest Khimji’s Mart and having the cards home delivered. If today a customer is looking to buy a FRiENDi mobile or halafoni recharge card, the procedure is simple as they need not step out of home anymore; all they need to do is call the nearest Khimji’s Mart to have it delivered at their doorstep within 45 minutes.
SAVILLS ADVISES INVESTORS ON BUYING REAL ESTATE A recent study by Savills Oman showed that The Sultanate was continuing to lead the way in the region through the development of its Integrated Tourism Complexes such as Barr Al Jissah Residences, Muscat Hills Golf & Country Club and The Wave, Muscat, and while these developments did not escape totally unscathed from the global economic downturn of 2008 they have fared well compared with their regional counterparts. Chris Steel, managing partner of Savills Oman said, “There is no doubt in my mind that now is an opportune time to buy real estate in Oman, if investors wait too much longer they will almost certainly miss the boat. With projects such as the expansion of Muscat International Airport, the emerging Royal Opera House etc, now is without a doubt a unique time for investors to maximise their returns.”
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Injaz Telecom launches Apna Mobile Amid great excitement and under the auspices of the Indian Ambassador to Oman, H E Anil Wadhwa, Injaz International Telecom Co, Oman’s newest mobile telecommunications company launched the first ever mobile phone service designed and aimed exclusively at the Sultanate’s Indian population.
The new mobile phone service named Apna Mobile is unique as it is the first mobile brand exclusively dedicated to the large Indian community in Oman. Apna Mobile is offering unprecedented value for money tariffs, free calls to India as well as content and exclusive value-added services designed specifically
for Indians. Darren True, CEO of Injaz Telecom said, “It is with great pride that we launch Apna Mobile in Oman. As a company we focused on customer service and we promise mobile consumers in Oman a tailored approach to services designed to meet personal and professional needs.”
Milcris’ tie-up with Cyril Sweett International
Milcris Private Limited (Oman), a chartered quantity surveying company has entered into a strategic alliance with Cyril Sweett International. This alliance will allow Milcris and Cyril Sweett International to
jointly deliver an exceptional level of services across the Sultanate of Oman where there is a growing demand in the market for a more comprehensive service delivery. Milcris, incorporated in Sri
Lanka in 1968, is guided by a singular vision that addresses important issues relating to contract and cost management and the increasing need for value that customers face against today’s rapidly transforming construction industry. Commenting on the alliance, Millan De Silva, CEO of Milcris, said, “We are pleased to have partnered with a reputed firm like Cyril Sweett. We were particularly drawn to their expertise in the transport and infrastructure, healthcare, education and the hospitality sectors.”
Energy saving campaign targets companies GRAND HYATT MUSCAT CELEBRATES 2010 EARTH DAY Grand Hyatt Muscat celebrated Earth Day recently by cleaning up the beach in front of the hotel. Employees, guests and friends joined in cleaning the beach in an effort to try and raise awareness for this cause. The ages of the participants ranged from 16 months old to 73. Armed with “Hyatt Earth” caps and “Go Green Bags” made by the hotel’s tailors from recycled linen, the clean-up team began on the shores of Shatti Al Qurum Beach and spent approximately 45 minutes clearing the surrounding area. In addition Oman International Group has donated a number of trees to be planted within the hotel vicinity to support the event.
A’SAFFA FOODS URGES PARENTS TO PACK A NATURAL LUNCH FOR KIDS Oman’s leading foods producer, A’Saffa Foods, is encouraging parents across the Sultanate to pack a “natural lunch” for their children as hundreds of thousands of children are going to schools. As part of its continuous commitment towards social responsibilities, A’Saffa has recently sponsored the Healthy Eating Symposium conducted in Sumail. The Symposium was held by the Ministry of Education in Sumail in order to encourage healthy eating among the students in Dakhilya region. The company produces a wide range of natural, healthy and tasty products that are perfect as part of a “natural” lunch box for youngsters to give them the nutrition and energy they need for the classroom and the playground.
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A conservation campaign to encourage consumers and commercial organisations to reduce their electricity usage during summer was launched in Oman recently. Pioneered by the Electricity Holding Company (EHC), the campaign will be targeting high users such as businesses and the wider Omani population. It will primarily aim to considerably reduce electricity usage in this year’s peak summer months, with a particular focus on air conditioning. Karl Matacz, CEO of EHC said, “In very simple terms we are urging everyone to turn their air-conditioning from 18 degrees to 23 degrees. By
doing this across the country we will save huge amounts of energy and help to reduce demand during the peak hot
weather periods.” Through its launch to business leaders and heads of organisations across the Sultanate, organisers are hoping to ‘recruit’ this influential, select group of individuals to take responsibility for the cause. By enforcing immediate changes and becoming campaign ambassadors, these leaders will help raise consciousness of air conditioning use in Oman. “The idea is to start our initial communication with industry ‘influencers’, who will help us lead the campaign,” said Salman Al Hattali, customer service manager of the Muscat Electricity Distribution Company.
WHSmith to open four stores in Oman The launch of the new WHSmith store took place at Jawarat Al Shatti in Muscat on April 17. It was inaugurated by HE Dr Noel J. Guckian, The British Ambassador to Oman in the presence of Rishi Khimji, managing director, Business Development, Ajit Khimji Group and Ajit Singh, general manager, retail, Asha Enterprises, members of the media and other delegates. Three new WHSmith outlets will also open at the Muscat international airport by the end of April. The new stores are a result of a partnership between The Ajit Khimji Group and WH Smith. WHSmith is Europe’s No.1 retailer of English Language books, newspapers and magazines. Khimji commented ‘we are very pleased to be able to
bring the WHSmith brand to Oman, working with WHSmith we have been able to greatly extend the product offer in all of the former Turtles book store outlets.’Simon Smith, chief operating officer,
WHSmith Travel, commented ‘we are delighted to be working in partnership with Ajit Khimji Group and we look forward to bringing WHSmith’s products to Omani customers for the first time.’
Kenya Airways commences flights to Nairobi PDO TO SUPPORT TWO ECO FRIENDLY PROJECTS PDO is to support two important environmental initiatives by the Ministry of Environment and Climate Affairs (MECA) to plant new mangroves and replace harmful trees in Wilayat Al-Jazir. A memorandum of understanding (MoU) was signed by Ali bin Amer Al-Kuyumi, director general of Nature Conservation and Mundhir bin Salem Al-Barwani, PDO human resources director.
Kenya Airways will launch direct flights from Muscat to Nairobi, Kenya’s capital city from May 6, 2010. The airline will operate three weekly flights every Tuesday, Thursday and Sunday to Nairobi. Kenya Airways will offer its seamless connection to passengers travelling from Muscat to major destinations including Nairobi, Zanzibar, Dar-Es Salaam, Mombasa, Johannesburg, Bujumbura, Comoros, Lagos and Kigali. Kenya Airways is promoting
Oman Air has appointed Ejaz Khan as the regional manager - Gulf, Middle East & Africa based in Muscat. A highly motivated, results-oriented and energetic individual who leads his team through today’s business challenges, Ejaz has over 28 years of experience in international sales, customers’ service and airport operations in the aviation industry in various parts of Middle East, Africa and Pakistan, having worked with the leading European and regional airlines. Prior to this posting he was working as country manager for Oman Air in Pakistan based in Karachi. Abdulrazaq Alraisi, GM, Worldwide Sales, says that Oman Air is pleased to welcome an experienced person like Khan into the team.
Oman Air has appointed Don Hunter as chief officer, Airport Operations. Don has spent the last 41 years in aviation, of which 19 years with Cathay Pacific 20
May 2010
Airways where his responsibilities included running both airport and ground handling subsidiaries in Hong Kong and also Cathay’s commercial operation in South Africa. Don also spent 4 years with Virgin Atlantic, heading their Airport Services department, responsible for Virgin’s 31 airports worldwide. Most recently, he held the position of vice president with Dnata, both in Dubai and the Philippines. In his current position with Oman Air, Hunter will be responsible for running the ground handling elements of Oman’s airports, including check-in, passenger, baggage handling and airport services.
its new flights by offering special launch fares including a unique Buy 3 get 1 free’ promotion to Nairobi and select destinations beyond. There are also a number of activities planned in Oman to promote its new flights
to Nairobi. The introduction of flights from Muscat to Nairobi brings to 48 the number of destinations that Kenya Airways flies to. “The new flights will enable residents of Oman to enjoy the magnificence of African safaris by taking advantage of stopovers and safari packages to passengers going on their vacation to Europe and India as well,” says Abraham Joseph, Kenya Airways area manager, GCC, Middle East and Pakistan.
United Finance Company has promoted K T Ramasamy as assistant general manager. K. T. Ramasamy joined United Finance Company in 2003 as manager – finance and accounts. In 2008, he was promoted as divisional manager – finance and accounts. as assistant general manager, he will be heading the Finance and IT teams.
United Finance Company has promoted Omar Mohammed Saleh Al Alosi as the assistant general manager cadre. Omar Mohammed Saleh Al Alosi joined United Finance Company in 2003 as manager – recovery. In 2008, he was promoted as divisional manager of sales and marketing. As assistant general manager, he will be spearheading marketing and collection teams.
IN THE NEWS
OGWA 2010 sees overwhelming response The continued growth of the vibrant oil and gas industry in Oman and the wider region was showcased at the exhibition providing industry professionals the opportunity to get in tune with equipment and technologies
OGWA 2010 featured the national oil and gas companies from the GCC, international oil and gas majors, leading local companies, service providers, equipment suppliers and 22
May 2010
The accompanying SPE EOR Conference at OGWA, which was organised by the Society of Petroleum Engineers, was also the biggest ever conference in the Middle East that focused on enhanced oil recovery (EOR) methods and technologies. Held at the Golden Tulip Hotel, right next to the Oman International Exhibition Centre, the conference attracted hundreds of delegates from all over the world and featured 14 technical sessions under the
“OGWA 2010 prominently highlighted the continued growth of the vibrant oil and gas industry in Oman and the wider region, providing industry professionals the opportunity to inspect the equipment and technologies required in exploration and production activities while discussing new developments that can shape the future of the industry,” said Nasser Diab, general manager of Omanexpo. He stressed that the strong local and international participation in OGWA 2010 clearly reflected the massive potential and opportunities in Oman’s oil and gas industry and it also
indicated the vibrancy of the regional market as all countries in the Middle East continues to boost their upstream, midstream and downstream operations. Diab added that by getting together industry professionals from within the region and other parts of the world, OGWA 2010 effectively served as a vital forum for assessing the current state of the industry and charting its course for the future. The media sponsors of OGWA 2010 included Sabco Media as the official media company, Pipeline Magazine as the official publication, Al Wisal FM as the official radio station, and Zawya as the business community partner. The media partners were Oil & Gas Review and Oman Economic Review. OER and Oil & Gas Review were the official media partners for the event
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theme “EOR Challenges, Experiences and Opportunities in the Middle East.”
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Dr Zaid Khamis Al Siyabi, chairman of the conference and director general of exploration and production, Ministry of Oil and Gas, informed that there were more than 250 companies showcasing their products and knowhow. If there was more more space another 250 companies could have been added. “On the conference side we had 400 delegates representing 92 companies from 51 countries. We received around 250 papers for the conference, out of which we could accommodate only 60 papers,” Dr Siyabi added.
other companies directly serving the industry’s growing requirements. Held under the patronage of Oman’s Ministry of Oil and Gas, the 2010 event was the biggest ever and set records in terms of the number of participating companies, countries represented, the total exhibition space covered (over 4,000 square metres), and number of visitors (8,232).
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GWA 2010, the three-day oil and gas exhibition and conference saw an overwhelming response from guests and speakers, making it one of the largest oil and gas exhibitions in the region. Organised by Omanexpo, the event was formally inaugurated by HE Nasser bin Khamis Al Jashmi, undersecretary of the Ministry of Oil and Gas, in the presence of VVIPs and other dignitaries, ministry officials, ambassadors, the top management of participating companies, and other distinguished guests.
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Sayyida Rawan Ahmed Al-Said, Board Member and group CEO, ONIC Holding shares her views on the company’s partnership with RSA and the prospects of the insurance sector in Oman in an interview with Mayank Singh RSA Insurance Group and ONIC Holding recently entered into an agreement in accordance with which RSA Oman acquired Al Ahlia from ONIC Holding. Can you give us details of this partnership? The strategic partnership with RSA will further consolidate our leadership position in the insurance sector in Oman. The combined Al Ahlia Insurance Company (AAICO)-RSA Oman entity will be the largest insurance player in Oman in terms of net written premium. ONICH with a sizable 20.03 per cent stake in the combined entity stands to benefit as well. The fact that a reputed international player like RSA has tied up with ONICH is a testimony to our strength in this sector. We value the international repute and the best practices of RSA and hope to adopt the same in ONICH. This will be a major contributor to the development and growth of the insurance sector in Oman. It also gives ONICH the opportunity to grow outside Oman by building a strong relationship with RSA.
What was the idea behind this partnership? You could have gone in for an outright sale but did not? Could you explain why? This is indeed a unique transaction. You are correct in saying that this is not a sale, it is a strategic partnership. If you look at the general insurance market in Oman over the years, there have been a number of new entrants and the market has been very price sensitive. We think that there is a need for market consolidation and consolidation need not necessarily mean sale. I am confident that going forward this combined entity will create a world class insurance company in Oman with RSA bringing in its international best practices coupled with AAICO’s strong brand, customer relations and knowledge of the local market, all of which are key ingredient to success. ONICH considers insurance as its core sector and believes there are growth opportunities both within Oman and the region. Acquiring
a 20.03 per cent stake in the combined entity is an indication of this belief and commitment to the growth of this sector.
How did ONIC Holding manage to get a good value in such difficult times? Also the economies worldwide have seen a downturn in the last two years? So what motivated you to have this merger at this juncture? We were looking for a partner who was conservative and who would take a long term view on the investment as we did.
It will probably not be right to say that Oman has not seen joint ventures. Oman has witnessed a number of joint ventures. I however agree with you that this has probably not happened in the insurance sector. I believe, we being the market leaders are setting new trends and pioneering this concept in the insurance sector.
What is the new direction for Al Ahlia? We will work with RSA Oman closely once the transaction is complete. Until such time RSA Oman and Al-Ahlia will
NATIONAL LIFE & GENERAL PERFORMANCE HIGHLIGHTS – 2009 Gross written premium crossed RO21mn, a 13 per cent growth in top line The net underwriting result is RO1.6mn, excluding the one-off item of RO1.7mn earned in the previous year Life and medical insurance book contributed significantly to the company Investment income at RO1.5mn showed a remarkable improvement compared to a loss of RO2.7mn in 2008 Became the first insurance company to launch online retail sales in Oman
As I understand, RSA Oman was also looking for a good general insurance business which would add value and help them grow in these markets, and AAICO was a perfect fit. While the negotiations were tough as in most deals of this nature and size, we are extremely satisfied with the outcome. I believe it’s a win-win situation for both RSA Oman and us. The insurance market in Oman has about 21 players. We have been the leaders in the market for a while now and felt that consolidation was the key to retain our leadership position. An association with a reputed and insurance focused name like RSA Oman makes sense.
Why do we not see more joint ventures in Oman as opposed to the West, where it is a more common phenomenon?
continue to operate as they have been in the past, it will be business as usual. We see enormous synergies between the two companies going forward given the brand name, network, management and the Omani workforce of Al Ahlia. We are confident that the organisation will, as in the past set benchmarks in the insurance sector. As I had mentioned earlier, this strategic partnership is a perfect blend of local expertise and international best practices.
Post the RSA Oman deal, what do you propose to do with the money? Do you plan to re-invest it? Besides the approximate RO6.5mn that we will pay for acquiring the 20.03 per cent stake in RSA Oman, we are evaluating suitable investment opportunities in the insurance sector in the region and outside May 2010 25
to add to our sustainable income. A part of the cash will be used to strengthen our existing businesses and for repayment of existing debts. All these measures will further enhance and strength ONICH’s balance sheet whilst providing a growth platform for the future.
levels (debt: equity of less than 0.5 per cent). This has helped us during the challenging market conditions during 2008 and 2009, when a number of peer companies in the region faced serious problems related to debt. We will continue using these policies in the future as well.
You have been chosen as a Board Member of ONICH recently. What are your first reactions?
How do you anticipate the growth in investment revenue for 2010?
I thank all the stakeholders of the company for reposing their faith in me and giving me the opportunity to represent them on the Board, in addition to my existing role as group CEO of ONICH Holding. While it means additional responsibilities, it further strengthens my resolve to implement the long term strategies of the company and take it to greater heights.
Can you tell us about ONIC Holding’s group strategy for 2010? ONICH’s strategy is to retain its position as a premier holding company with core focus on the insurance sector and supplemented by its market investments. We will continue to enhance our sustainable income streams by growing organically and inorganically (acquisitions) in core areas. This according to us is the most suitable approach to retain and enrich stakeholders value and mitigate earnings volatility. Other market investment opportunities will be continuously explored as per their merit.
We had a very good year in 2009 despite the challenging times, largely due to our efficient asset allocation and risk measures. The inherent nature of the stock markets makes it a difficult task to forecast accurately, more so given the lingering overhang of the financial crisis. Given the fact that oil prices are above the $70 per barrel range, we feel that the GCC economies should witness continued growth momentum. Investment expenditure and government support will be the key drivers for our markets. Moreover Oman offers political and economic stability with relatively strong macroeconomic fundamentals, thus enabling sustainable growth. We feel the markets would reflect these factors and should be positive for the rest of the year in turn having a positive impact on earnings.
How are your performing?
other
associates
Our major exposure is within the GCC
Do you leverage to invest? ONICH only leverages for strategic acquisitions and not for market investments. The company has always had a very prudent leverage policy and maintained its leverage at manageable 26
May 2010
Why is ONIC Holding so unique? ONICH prides in being a premier holding company with a niche in the Insurance business. Our insurance subsidiaries are market leaders and the fact that a reputed international player like RSA has tied up with ONICH is a testimony to our strength in this sector. We are a dynamic organisation which believes in adjusting to the changing market conditions and that has always been our strength. This has turn has helped all our stakeholders benefit over the long term.
What is the key strength of ONIC Holding? Insurance In house technical skills in insurance and investment activity Corporate governance Brand image Sustained track record of creating value for all stakeholders
What does the AAICO RSA transaction mean for your other subsidiary National Life & General (NLG)? NLG will focus on the life and medical insurance business which is its core strength. As a market leader with over 60 per cent market share in life business in Oman and given the relatively low penetration levels in this segment, we see immense growth potential for NLG.
Are there any plan to further increase your investments in overseas companies? As an investment company, we are always on the lookout for suitable opportunities offering us value in core sectors. The MENA and the GCC regions predominantly remain our target markets with a focus on insurance. Given our base in Oman, we consider ourselves better positioned in terms of business relations and understanding of markets, to benefit from the growth in this region. We will continue to seek opportunities to expand and grow strategically.
and predominantly in the insurance and financial services. Given that the region has been affected to a lesser extent in the global financial crisis of 2008, most of our affiliates have performed well despite the extremely challenging times. Core operations in most of the companies in Oman and outside have been stable.
Will its growth trajectory be impacted?
We value the international repute and the best practices of RSA and hope to adopt the same in ONICH
NLG’s life business is profitable and has the potential to drive growth given the relative under-penetration in Oman. The general business was relatively new and not generating profits. As a result, we did not see an adverse impact on the growth or bottom line of NLG.
What are the future plans for NLG? NLG will be a key driver of growth for our insurance business. Besides focusing on life and medical insurance business, we would also aggressively look to expand its operations outside Oman.
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BY C. B. GANESH
BY INVITATION
Bonding with the bonds The lack of popularity of the bond for fund raising, minimal government borrowing programmes and the tendency to hold on to it till maturity have created a demand- supply gap
The author is deputy CEO, Ahli Bank
T
he bond market, also known as debt market or fixed income securities market, provides an important source of funding for government and the corporate sector across the world. However, it is in various stages of development in different economies - countries such as Japan, Korea and US have a robust bond market whereas in GCC countries it is still in a developing stage. Oman though is yet to witness the growth of a vibrant fixed income securities market. The issue of bonds by corporates in the Sultanate of Oman is regulated by the Capital Market Authority (CMA). Any company that is planning for a bond issue needs to apply to CMA for approval along with the necessary information as prescribed under the regulations. Further any bond issue of more than 24 months maturity requires compulsory credit rating (also applicable for unsecured bond issue of more than 12 months). If the bond issue size is more than RO10mn, rating by at least two credit rating agencies is mandatory. All issues of bonds of maturity exceeding 24 months needs to be secured
28
May 2010
by company assets and a trustee needs to be appointed within six months of the issue of the bonds. The CMA regulations are not restrictive in nature and are in line with international practices on bond issues with a view to develop a healthy market. BONDS ARE FOREVER! I was always fascinated by James Bond movies for its high tech gadgets and the powerful screen dialogues he delivers like this one – “You can’t hold the Bond for ever.” But when it comes to the bond market in Oman, it doesn’t hold true! There is enough demand for bonds from banks, pension funds (PFs), mutual funds (MFs), insurance companies and high net worth individuals (HNIs). Banks can invest up to 10 per cent of their net worth in fixed income securities under Central Bank of Oman (CBO) regulations. For all the seven local banks in Oman, the total amount which can be invested in fixed income securities (based on their net worth as on December 31, 2009) works out to RO167mn approximately. Against this backdrop, the total value of bonds listed in MSM (excluding bank bonds
and government bonds) is less than five million rials. Since the investments in these bonds by banks are not considered for the calculation of their lending ratio (LDR), it releases more bank credit for lending to mid-level corporates and the SME sector, thus reducing the crowding out of bank credit by the so called “Big Boys”. After the Global meltdown and the crisis in some of our neighbouring countries, pension funds with large resources at their disposal are also looking for more investment opportunities within the Sultanate. Considering the political stability of the country and its currency being pegged to US dollars, investors from other GCC countries would also be keen to invest in the bond market in Oman. Now let us have a look at the supply side story. Oman government development bonds (GDBs) have been issued in the past with the latest being the 36th issue of GDBs issued on August 6, 2009, for a maturity period of three years with a coupon rate of four per cent p.a. These will mature on September 6, 2012. The demand for these bonds was so much that the
BY INVITATION
BANKS HAVE AN IMPORTANT ROLE TO PERFORM IN THIS ENDEAVOUR BY EDUCATING CORPORATES AND PLAYING THE ROLE OF A FACILITATOR. CMA MAY CONSIDER INCREASING THE CUT OFF LIMIT FOR MANDATORY REQUIREMENT OF TWO CREDIT RATINGS final yield on competitive bids worked out to around two per cent. However, the number of corporate bond issues have been far and few. Since 2007, there were only four corporate bond issues in the market. As per the CMA website, the number of bonds listed on the MSM as on date is only 10 out of which government bonds are four with a total value of RO252mn and corporate bonds (including Banks) are six with a total value of RO172mn. However, hardly any secondary market trading happens in these bonds since the existing bond holders are not willing to sell for want of alternate investment opportunities. In other words, the bondholders are wedded to their bonds at least until maturity, if not forever. AN ENCOURAGING TREND In 2010, if the market reports are to be believed, many corporates, both in the private sector and in the public sector, are planning to raise huge long-term debt in the form of project loans or long-term loans from the banking system. The issuance of bonds need to be encouraged for raising at least a portion of these long term debts since bonds can be 30
May 2010
BOND MARKET IN OMAN Since 2007 only four corporate bond issues have hit the market Only 10 bonds are listed on the MSM There are four government bonds with a total value of RO252mn and six corporate bonds with a total value of RO172mn
a successful source of funding for corporates, which can be clearly seen from the Indian experience. By issuing a fixed rate coupon bond, companies can cap their interest costs which is very important for long term project funding, and by keeping a call option at the end of a certain Tenor, the company can have the flexibility of redeeming the bond in an interest rate falling scenario or in case of unexpected cash inflows. For banks, this will be an additional window for participating in the long term infrastructure development of the country, over and above their single borrower limits. By classifying these investments in long dated bonds as ‘Held for Trading”, banks can mitigate the problem of maturity gaps in their long term buckets. Moreover, for investors
like PFs, MFs, insurance companies and HNIs in the market, these bonds can be an additional investment opportunity. A well developed secondary market can provide ample liquidity to all investors in these long dated bonds. Another strong argument in favour of developing a strong bond market is its ability to create yield curves and transparency. This assumes added significance in the GCC context where government borrowings are minimal. There is a strong case for developing the fixed income securities market in Oman. There is enough demand especially from the banks, PFs and MFs whose presence are essential for developing a vibrant bond market. The supply side constraints need to be removed for ensuring steady supply of good papers in the market and thus
developing an active debt market in Oman. By doing so, it can provide an important additional source of funding for the corporate sector. Liquidity in the secondary market can be improved by the banks undertaking market making (by giving two way quotes) in bonds which will also be a good source of income for the banks. Such a market making exercise will ensure adequate supply and provide liquidity to the bonds and help in popularising them among the investors. An increase in the investment limit of banks on fixed income securities may be considered by the CBO. Local banks and large corporate houses along with the support of CMA need to take the active role in this endeavour. A developed bond market assumes added significance in the context of Oman going in for lot of large infrastructure developmental projects (power, water, airports, roads etc) which requires huge long term project funding. NOTE: The views expressed in this article are the personal views of the writer and may not necessarily be the views of the organisation he represents
TELECOM
VOIP TELEPHONY: T FREE OR FAIR
he term Voice over Internet Protocol (VoIP) or internet telephony denotes a transmission technology for delivery of voice communications over the Internet. When VoIP service was introduced over broadband, Internet users were able to make and receive calls as they would over a normal telephone (PSTN).
Telecom companies in Oman can no longer dismiss VoIP as an illegal service but instead have to find ways to offer customer convenience, writes Visvas Paul D Karra
The popularity of VoIP grew because it afforded cheap international calls and PSTN users switched to VoIP in increasing numbers. Consequently, authorities in a number of countries where telecommunications was a state monopoly began to impose restrictions on the use of VoIP as telecommunication companies began to experience reduced traffic. Suddenly, the term VoIP became an illegal thing. However, there are a number of dimensions to the use of VoIP and how it has a broader definition than just being an illegal international phone service being provided by unauthorised cyber cafes. In Oman, the state-owned Oman Telecommunications (Omantel) Company which till date has the only international gateway discovered that the international traffic was going down even though there was no decrease in the number of population, chiefly the Indian subcontinent expatriates who make the bulk of international calls. The main cause was that 80 per cent of international telephone calls were going through VoIP, which in Oman’s case, was offered by cyber cafes who were not licensed to provide international telephone services.
Cheap alternative The reasons for this are easy to find. The illegal VoIP calls to India, for example, used to range between 25bz to 50bz per minute any time of the day in comparison to the regular and legal calls which ranged anything from 75-99bz (off peak) to 175200bz (peak). With such a huge price cut, people were willing to compromise on the voice quality.
Rao K Chagarlamudi, VP Consumer Business Unit, Omantel 32
May 2010
According to Rao K Chagarlamudi, VP Consumer Business Unit, Omantel, customers who want to make international calls always look for cheap rates and this is why the illegal
TELECOM VoIP service providers were booming. But the cybercafés were not licensed to offer telecom services, and therefore the authorities promptly clamped down on them in November last year with the help of Royal Oman Police (ROP). It is altogether another story that the people found other means to make their ‘low-cost’ calls, but the fact remains that Oman is only following what many other countries are already doing to protect the telecom monopoly. Antti Arponen, CEO, FRiENDi Mobile opines that when a big part of any country’s telecom revenues comes from calls made to international destinations and there is a monopoly it is very natural to have that status quo maintained for as long as possible. One way of doing that is by blocking VoIP services. FRiENDi Mobile, which is a Class II licence operator using the network of Omantel’s subsidiary Oman Mobile, has a number of products that cater exclusively to the people in need of international calling. For example, with the promise of “Lowest International Call Rates”, and international call prices as low as 69bz per minute, FRiENDi Mobile is the closest to match the VoIP calls. The other pressing issue at hand for the authorities was related to security concerns as VoIP calls went through internet data lines and could not be supervised. “Monitoring the voice traffic over internet is more difficult than tracking the voice calls. This may have contributed to authorities deciding to stop VoIP through cybercafés,” adds Arponen.
Get the customer back And since customers are increasingly turning to the internet to find alternate ways to make their calls, telecom companies are being forced to do a rethink on their strategies. The first off the block is Omantel, which plans to introduce fullfledged VoIP services, which can be used with the regular mobile handsets. “We are trying to fulfil our customers’ needs, especially those from India, Pakistan, Bangladesh, Sri Lanka and Philippines who want to call their loved 34
May 2010
Antti Arponen, CEO, FRiENDi Mobile ones and are simply trying to maximise value for their money. We are going to come up with a service that offers convenience and at a reasonable price,” says Rao, highlighting what Omantel intends to offer to its customers. “Reasonable quality of voice, reasonable price and reasonable convenience will be the three pillars of the new service. But it will not be like our premium service and it may be limited to certain international destinations. Our aim is to win back our customers who were using the illegal VoIP services and that is why we will be launching it on the mobile handsets to provide convenience to them,” adds Rao. Talking about the pricing factor, Rao says that it will not be exactly as cheap as the rates offered by the illegal internet café operators because as an incumbent telecom operator, they have to pay royalties to the Government, charges to foreign operators where the calls are ending unlike the cyber cafes, which had no such responsibility.
Opening up Market
experts,
however,
feel
that
blocking of VoIP services provided by cyber cafes and trying to win back customers is a wrong way of trying to sort out the problem. One better way of doing it is to open up the competition and allow all the existing telecom companies
VOIP TELEPHONY OMANTEL International VoIP calls will be available on mobile phones Voice clarity will not be like a regular service Call rate of VoIP to be lower than existing tariffs
NAWRAS Fixed line national services will be delivered in a combination of fixed and Wi-Max using VoIP platform International VoIP calls will be made available in customer’s telephone systems
TELECOM to negotiate their own international agreements, which would bring down the call rates. If the international traffic is opened to competition, that will make everybody select the best technology to route their traffic and find the most cost efficient way of doing it. Inevitably, the prices will go down and ultimately the companies will benefit because the consumers will use the regular telecom services doing away with the necessity of VoIP services altogether. The regulator will also be happy because they will not have security issues. From a consumer’s perspective, if there is a cheaper way of being in touch with families and friends back home and that facility is blocked, they feel deprived. All telecom companies should try to bring down the cost of their international calls as far as possible without breaking rules and regulations, emphasises Arponen. “We at FRiENDi Mobile are going out of our way to offer international calls with low rates. We have tied up with IDEA mobile company in Kerala in India and Dialog Telekom in Sri Lanka, as well as Globe in Philippines, to provide more benefits to our subscribers. This way, FRiENDi Mobile has been able to offer a more convenient, similarly priced, much higher quality, and a 100% legal way to make international calls, compared to illegal internet traffic,” Arponen points out.
Future is VoIP Cracking down on illegal VoIP service providers and introducing VoIP on mobile phones are all the visible aspects but there are invisible factors of VoIP, which need to be considered as well. Because, technology has advanced to such an extent that VoIP is no longer just an illegal call making facility but it is a technology that directs a voice call through a PC to the end user. With Internet speeds becoming faster, transferring an international call via VoIP is usually cost effective than old school telephony. In fact, it is said, but not proven, that many a regular legal calls from a mobile handset could in all probability be routed through an internet data cable to UK or the US and a consumer may not be able 36
May 2010
Tore Solberg, Chief Commercial Officer, Nawras to notice it. The voice quality will be bad or good depending upon the telecom operator’s pricing strategies and the infrastructure. They could use VoIP and pocket the revenue margins. Nawras, the second Class I mobile operator in the country, wants to ensure complete transparency with the issue of VoIP when it launches its fixed line services. Giving details of this, Tore Solberg, chief commercial officer, Nawras says that because of the way they are building their fixed network, its fixed line national services will be running on VoIP technology with the help of Wimax. Subscribers of Nawras fixed line network will, basically, be using VoIP technology to make calls. “This will give us a possibility to offer our customers subscription-based calling products. Presently, you pay per minute or call but with Nawras fixed line services, the customer will get a subscription package to call any other Nawras fixed
line subscriber for free the whole month for a certain sum of money,” informs Solberg. Then the customer will actually be paying to access the network which will be Wimax based on VoIP technology. Eventually, a customer will also get a choice of making international calls from a fixed line using either the PSTN or VoIP technology both from the same fixed line phone by using a prefix number. When you make a regular international call, normal tariffs will apply and you will have your high-quality voice as it will be a PSTN call. But if you want to take the risk and make low-cost calls, it will be routed through VoIP, Solberg explains. Since the time the industrial revolution began with the invention of the steam engine, technology has been used as a tool to usher convenience to mankind. In that light, any telecom company that implements technology as a solution to its customers’ needs will be the winner.
Our assurance is a golden trust.
LIFE INSURANCE • MARINE CARGO & HULL INSURANCE • HEALTH INSURANCE • ENGINEERING INSURANCE • FIRE & GENERAL ACCIDENT INSURANCE • PERSONAL LINES INSURANCE • LIABILITY INSURANCE • OIL & GAS • ENERGY • AVIATION • MOTOR • PERSONAL ACCIDENT • TRAVEL INSURANCE
Branch OfÀce: P.O. Box 1201, Postal Code 114 Jibroo, Muscat, Sultanate of Oman Tel.: +968 2478 9232 Fax: +968 2478 9283 E-mail: oicmuscat@tameen.ae Website: www.oicem.com A M Best “A” (Excellent) Financial Rating, A M Best Insurer Credit Rating “a” and Standard & Poor’s BBB+ Financial Rating ISO9001:2000 certiÀed, Investors in People (UK) certiÀed, winner MRM Award (Finance Category)
LEGAL
CORPORATE GOVERNANCE TAKING STRIDES
The Sultanate of Oman, under the auspices of the Capital Market Authority has demonstrated continued support for best practices in corporate governance
I
not oversee the routine functions of the company on a day-to-day basis. Nonexecutive directors therefore introduce a separation between the day-to-day management of the company and the policy-setting role which is entrusted to the board.
n 2002, the Sultanate implemented a model corporate governance system applicable to joint stock companies listed on the Muscat Securities Market (MSM) by endorsing the ‘Code of Corporate Governance for MSM Listed Companies’ (the Code). Endorsement of the Code went hand in hand with a series of amendments to the Commercial Companies Law to tighten, amongst other things, the requirements for the board of directors and the management of a company, while at the same time safeguarding the interests of shareholders and ensuring minority shareholder protection and full and frank disclosure. In putting together the Code, the CMA drew from global best practices which it tailored to satisfy local market requirements. The Code is viewed as a pioneer in its area and represents regional best practice. To emphasise its commitment to best practices of corporate governance, the Code requires that the annual report of each MSM listed company contains a separate chapter on corporate governance which highlights non-compliance with any requirement of the Code. This is generally known as the “comply or explain” rule. The company’s auditors are also required to certify that the corporate governance report contained in the annual report is free from any material misrepresentation. More recently the CMA issued an administrative decision establishing a Corporate Governance Centre (CGC) in 38
May 2010
By Dr Caroline Bolle Senior Associate, Al Alawi & Co., Advocates & Legal Consultants Oman. The purpose of the CGC is to train and guide directors on the best practices in corporate governance.
Non-executive directors and independent directors The Code requires that the board of directors be comprised of a majority of nonexecutive directors and that at least one third of the directors (with a minimum of two) are independent directors. To be a non-executive director a director shouldn’t draw a fixed salary from the company in his capacity as director. The CMA has clarified that a non-executive director must not be a regular employee of the company and therefore should
An independent director in turn is a nonexecutive director which should not, be it directly or indirectly (through his next in kin), have occupied any senior position (such as CEO, GM or similar) in the company for the preceding two years. In addition, there should not be any relation between an independent director and the company, its parent company or any of its affiliates which may result in financial transactions. Thus, not only should an independent director be free from any influence of management (as is the case for non-executive directors), he should neither have entered into any material pecuniary relationship or transaction with the company. It should be noted that the rules issued by the CMA set further conditions to the nomination of members to the board of directors (such as a minimum age, the absence of any conflicting board position with another listed company, acknowledgment that if one is a shareholder then he shall continue to be a shareholder of the company during the term of his mandate, etc.). The general meeting determines the annual remuneration and sitting fees of the members of the board of directors within the limits set by the Commercial
LEGAL
Companies Code (such limits are set as a percentage of the net profits which are in no event to exceed the cap of RO200,000 with a sub-cap of RO10,000 for sitting fees per director per annum). Any fees paid or other benefits given to the directors must be disclosed in the report of the board of directors to the annual general meeting of shareholders.
Audit Committee The board of directors must constitute an audit committee from amongst its members. The majority of the audit committee must be composed of independent directors and the chairman ought to be at all times an independent director. The role of the audit committee is one of ensuring compliance with rules and regulations applicable to the company. The audit committee also plays a critical role in mandating the external auditors as advisors to the company, and in this capacity it has to ensure that the exter-
nal auditor’s independence is at no times compromised.
Auditor The general meeting appoints the company’s external auditor from among the persons licensed to practice the accountancy and auditing profession. The CMA has a veto in respect of the appointment of the external auditor. It is mandatory that the auditor is at all times independent. In this regard the Code provides for a rotation system: where one firm of auditors has served as auditor of the company for four consecutive years, such firm cannot be appointed for a fifth term unless a two-year cool-off period has elapsed. Although absolute independence from the company must at all times be guaranteed, the company’s external auditor is allowed to perform certain advisory services, but stringent conditions apply. In Circular No. E/12/2009 of December 28, 2009, the CMA clarified its position and issued a list of non-audit services that can be conducted by the auditor subject
to putting in place adequate safeguards (such as Chinese walls) and other measures necessary or appropriate so as to avoid any conflict of interest that arises or may arise between the management of the company and its audit function, and to ensure that the auditor’s independence is not compromised. As indicated above, the audit committee plays a vital role in this respect and it has to approve any performance of any non-audit services by the external auditor.
Conclusion Corporate governance continues to be a hot topic in the Sultanate of Oman as it directly affects the performance of any MSM listed company and therefore contributes to the stability and success of the capital markets. The CMA’s continued efforts to improve best practices and to educate directors of MSM listed companies about corporate governance are impressive and underpin investors’ confidence in the Omani capital market.
OER’s annual ranking of the Sultanate’s Top 20 listed companies May M ayy 20 20100 4411
COVER STORY
THE OER TOP TWENTY YEAR 2009
OER presents its annual presentation of Oman’s Top 20 leading listed companies for the year 2009
T
he year 2009 will be remembered as a challenging year for the world economies due to the recession caused by the global financial crisis which started half way through 2008. During 2009, an increasing number of countries registered positive quarterly growth of gross domestic product (GDP), along with a notable recovery in international trade and global industrial production. World equity markets have also rebounded and risk premiums on borrowing have fallen. Oman’s consistent policy of economic diversification, with a developing economy together with continued government spending for major projects, assisted Oman in riding through this storm quite successfully. The price of oil declined substantially during the year 2009. Oman crude realised an average price of $56.7 per barrel in 2009 compared with an average
price of $101 for 2008 and the budgeted price of $45 per barrel for 2009. Due to higher oil prices than what was budgeted it is expected that most of the estimated fiscal deficit of RO810mn would be covered.
Market performance For the year 2009, the MSM index has advanced by 17.05 per cent. This is compared to a negative performance of (39.12 per cent) in the previous fiscal year. The industry sector was the outperformer of the year as the sector advanced by 72.31 per cent for the year 2009. Next was the banking and investment index which appreciated by 41.59 per cent for the year. The service and insurance index closed the year with a total gain of 6.89 per cent. A total of 6.09 bn shares got traded during the year amounting to an aggregate turnover of RO2.28bn. The MSM30 index hit a low of 4,187.81 points during the year while the high of the year
The top five by revenue – 2009
was 6,785.92 points. With a return of 17.05 per cent for the year, the MSM has been the second best performing market in the GCC region after Saudi Arabia which advanced by 27.46 per cent for the year. UAE (DFM) ended the year up by 10.22 per cent and Qatar ended up by 1.06 per cent. Kuwait and Bahrain ended the year down by 9.99 per cent and 19.17 per cent respectively. The substantial decline in oil prices during the year was overcome partly by increased oil production and increased non-oil exports which resulted in a GDP growth rate of 3.7 per cent in 2009. Oil production increased during the year by about of 7.7 per cent to 810,000 barrels per day. The government’s continued emphasis on diversifying the economy away from dependence on oil gained further momentum during 2009. Non oil exports grew by 2.9 per cent. The government launched several major projects in-
The top five by profit – 2009
Rank
Company
Revenue RO Mn
Growth % from 2008
Rank
Company
Profit RO Mn
Growth % from 2008
1
Oman Telecommunications Co
412
0.19
1
Oman Telecommunications Co.
125.23
5.02
2
Galfar Engineering & Contract
41 1
13.01
2
Bank Muscat
73.71
(21.35)
3
Bank Muscat
396
17.11
3
Raysut Cement Company
28.68
5.81
4
Shell Oman Marketing
298
(8.58)
4
Renaissance Services
28.51
8.83
5
Renaissance Services
247
5.69
5
Bank Dhofar
25.39
7.21
42
May 2010
cluding extension of the Seeb and Salalah airports, roads and highways. Performance of world financial markets after a scary 2008 revived thanks in part to aggressive central bank policies. Emerging market equities, which led 2008 equity markets down (-45.7 per cent), also led global equities back up in 2009 (62.8 per cent) as risk came back into vogue and US investors deployed funds abroad. The MSCI AC World index was up 58.7 per cent in 2009. Global equity markets finished 2009 up 62.8 per cent. Emerging Markets were the best performing region (index) followed by Asia Pacific at 58.7 per cent, US 26.5 per cent, Europe 25.6 per cent and Japan 17.3 per cent. During the year 2009, the revenues of Oman’s 20 largest companies showed a modest decline. Total revenues of the OER Top 20 went down by two per cent to RO3,126mn. Corporate performance of the year 2009, overall, was also down primarily due to the global recession. The profits for the year 2009 decreased by 12 per cent to RO425mn from the RO480mn last year. The total market cap of the OER Top 20 on December 31, 2009 was RO4,514mn, which was up by 11 per cent compared to 2008. On March 31, 2010, the market cap of the top twenty has once again gone up to RO4,684mn. The OER Top 20 companies represent 72 per cent of the total market cap of the MSM of RO6,303mn at the end of 2009. The average P/E ratio of the OER Top 20 based on the profits of the year 2009 and the share price on March 31, 2010 is 11.03 times earnings.
Sultan Bin Hamdoon al Harthi, Chairman, Omantel
Who is out and who is in We have two newcomers on the list this year. Sohar Ports Services Company comes at the number 19 spot and Sohar Power Company is in the number 20 slot. These companies have made it to the OER Top 20 this year at the expense of Al Jazeera Steel Mills and Al Anwar Holdings.
There has been one change in the top five companies in Oman. Renaissance Services has climbed from number six to five this year, replacing Oman Cables which was at number five last year. Omantel continues to be the largest public company in Oman with a growth in revenue of 0.19 per cent compared to last year.
The ranking of Oman’s twenty largest companies in order of revenue produces a list, which includes the six companies from the banking and investment sector, eight from the services sector and six from the industrial sector.
The chairman of Omantel Eng. Sultan Bin Hamdoon al Harthi in his report to the shareholders explains that the main reason for growth in turnover is because of the consolidation of its subsidiary Worldcall Telecommunications (WTL)
The top five by growth of profit – 2009 Rank
Company
The top five highest capitalised – 2009 Growth % from 2008
Rank
Company
Shareholders Equity RO Mn
1
Oman Cement Company
93.22
1
Bank Muscat
711
2
Sohar Power Company
72.77
2
Omantel
421
3
Al Hassan Engineering Co.
30.74
3
National Bank of Oman
250
4
Areej Vegetable Oil & Derivatives
28.79
4
Bank Dhofar
204
5
OMINVEST
11.49
5
Oman International Bank
171 May 2010 43
COVER STORY compared to 2.08mn last year. He goes on to state that to enhance the internal efficiency and achieve right sizing of the group, Omantel has implemented a Voluntary End of Service programme covering 134 employees amounting to RO9.5mn. Al Harthi states that the sign of gradual economic recovery has started reflecting in the Omani economy. With Oman set to grow at 6.1 per cent in 2010 and government commitment on increased spending on infrastructure projects, it is expected to stimulate the telecom sector well. He however cautions that commencement of operations by the second fixed line operator, five mobile resellers and other new service providers for internet services will increase the competitive landscape in the telecom sector. Al Harthi is confident that with the integration of Omantel and Oman Mobile as a single operating entity and the enhancement of operational synergy, branding and other programmes, Omantel would continue to retain its leading position among the telecom service providers in the Sultanate.
Hassan Bin Ali Salman, Chairman, Al Hassan Engineering Company revenues. The revenue from the domestic market was lower by four per cent. One of the main reasons for the decline was lower consumer spending resulting from the economic downturn. Al Harthi states that the total group net profit after
tax rose by 5.5 per cent to RO125.2mn, the highest net profit ever recorded by Omantel. Al Harthi adds that the total subscriber base has recorded a growth of 46 per cent. The total number of subscribers has increased to 3.03mn
The top five by market capitalisation – March 31, 2010 Rank
44
Company
Unlike last year, only two of the top five most profitable companies in Oman are banks. As expected in the current economic climate four of the five companies are showing single digit growth in profits for the year whereas one is showing a decline. There are three changes in the top five companies by profit. Raysut Cement, which was in fifth place last year, has moved up to the number three position, Renaissance comes into the number four position
The top five returns on equity – 2009
Market Capitalisation RO Mn
Rank
Company
Profit as a % of Equity
1
Omantel
962
1
Shell Oman Marketing
45.95
2
Bank Muscat
906
2
Omantel
29.78
3
Bank Dhofar
569
3
OMINVEST
27.43
4
Raysut Cement Co.
320
4
Raysut Cement Company
26.87
5
Oman International Bank
292
5
Areej Vegetable Oils
23.78
May 2010
COVER STORY from six last year and BankDhofar comes in at number five from number eight last year. NBO and OIB are out of the list of the top five. Omantel continues to remain at the number one spot, Bank Muscat at the number two spot. Bank Muscat is the second most profitable company in Oman as well as the third largest company in Oman based on turnover for the year 2009. Although Bank Muscat has retained this position from last year, it has recorded a decline in profit for the year of about 21.35 per cent. The chairman Abdul Malik bin Abdullah al Khalili states in his yearend report to the shareholders that despite the global financial crisis the bank’s core business income during the year 2009 was strong and stable. He explains that the bank achieved a net profit of RO73.7mn as against a net profit of RO93.7mn in 2008. The impairment charge of RO98.2 mn was substantially higher than last year as the bank decided to consider full provision for certain large exposures in its overseas branch. Khalili adds that during 2009, the return on average assets was at 1.2 per cent compared to 1.8 per cent in 2008. The return on average equity was 10.8 per cent in 2009 compared to 14.8 per cent in 2008 and the basic earnings per share was RO0.068 as against RO0.087 in 2008. Khalili explains that since the bank is not participating in the rights issue of Silkbank and thereby substantially diluting its stake from an associate status to non-strategic available for sale
Hani bin Muhammad Al Zubair, Chairman, OMINVEST
Khalili goes on to say that the Board has proposed a dividend of 45 per cent, 20 per cent in the form of cash and 25 per cent in the form of stock. Khalili advises that the
The top five earnings per share growth – 2009 Rank
46
Company
year 2010 with the Sultanate’s strategic economic policies, anticipated increase of oil prices and favourable financial, economic and monetary policies augur well for the national economy which is expected to record a growth rate of 6.1 per cent at constant prices and 18.4 per cent at current prices.
investment, the Silkbank investment was marked to market in the bank’s books as on December 31, 2009. This resulted in impairment losses of RO20.3mn including the loss on depreciation of the Pakistan rupee amounting to RO9.6mn which was earlier adjusted in equity.
Oman Cement has shown the highest growth in profits by an enormous 93.22 per cent and comes into the number one
The top five by share price growth – 2009
Earnings per share growth in %
Rank
Company
Share price growth in %
1
Oman Cement Co.
93.14
1
Al Hassan Engg
269.72
2
OMINVEST
35.71
2
Oman Flour Mills
211.71
3
Al Hassan
29.63
3
Oman Cement
148.50
4
Areej Vegetable & Deriv
28.75
4
Bank Dhofar
98.10
5
Oman Cable Industry
8.82
5
Oman Cables Ind
62.28
May 2010
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COVER STORY spot from number six last year. Four of the top five companies showing highest growth of profit from last year being Oman Cement, Sohar Power, Al Hassan and Ominvest are new on the list. Al Anwar, Oman Flour, OHI and Renaissance have all dropped off this list. The chairman of Oman Cement, Qahtan bin Yarub Al Busaidi in his report to the shareholders for the year ended December 31, 2009 has stated that the increase in profit of 93.2 per cent is mainly due to improvement in the average selling price, lower procurement cost of imported clinker, discontinuation of import of cement and increased investment income. He points out that the company continues to be a ISO 9001-2000 and ISO 140012004 certified company. It has also APISPEC 10A quality monogram certification for manufacturing and sale of oil well cement. The Board has recommended a cash dividend of 37 per cent. Al Busaidi cautions that major increase in supply of cement at low prices from neighboring countries is likely to put the prices under strain in the coming year. He adds that the demand for cement in Oman for the year 2010 as per report of a study done for the company indicates a marginal decline over the 2009 level. Al Busaidi also states that the new production line which is expected to be in operation in the second quarter of 2010 will help the company to reduce the procurement level of imported clinker thereby resulting in a major cost reduction. Four of the top five companies that have the highest amount of equity employed
made against two specific distressed real estate exposures. Al Fardan goes on to say that 2010 will continue to pose challenges in global, regional and local markets. It is possible that the global economy has avoided a prolonged recession but recovery is likely to remain weak and prone to further sharp corrections. However, given the significant progress that has been made globally to avoid a prolonged recession, Al Fardan remains cautiously optimistic about prospects for 2010.
Market performance
Omar Al Fardan, Chairman, NBO are banks. All five of the companies in this category remain the same as last year in exactly the same positions. The chairman of NBO, Omar Al Fardan in his report to the shareholders states that the bank achieved a net profit of RO21.1mn for the year compared to RO45.4mn for 2008 however, on a liketo-like basis the operating income was broadly flat. Al Fardan states that the results have been negatively impacted by factors relating to the global economic crisis. The bank has taken impairment provisions against the investment portfolio of RO4.1mn and provisions of eight million rials against three specific bank exposures. He adds that since the publication on the draft audited financials on January 26, an additional provision of five million rials has been
The best five by dividend yields – 2009 Rank
48
Company
Dividend yield in %
1
Areej Vegetable Oils
25.0
2
Omantel
7.70
3
OIB
7.41
4
Sohar Power
6.97
5
Raysut Cement
6.71
May 2010
This year, two of the top five companies that have the highest market capitalisation on the MSM are not banks. Omantel remains as the number one this year; BankMuscat remains in the number two spot in this category. BankDhofar has moved up one place to the number three spot. Raysut Cement is back in the number four slot and OIB continues to remain in the number five position. NBO that was number three on this list last year has moved out. The chairman of BankDhofar, Eng. Abdul Hafidh Salim Rajab Al Aujaili in his annual report to the shareholders states that the bank has been prudent with a clear and focused strategy to develop core activities coupled with cautious diversification and striking a healthy balance between risk and return. This simple approach has enabled the bank to achieve better results in 2009 than the previous year in spite of regional and global economic and financial turmoil. Al Aujaili explains that the bank achieved a net profit of RO25.39mn for the year 2009 compared to RO23.69mn for 2008, an increase of 7.18 per cent. In the light of these results the board of directors has proposed a cash dividend of 15 per cent and a bonus share issue of 10 per cent. Al Aujaili states that in line with the strategic plan, the bank has made significant investment on a new core banking solution, ATM and internet banking systems to further enrich the services provided to the customers. The implementation of the new core banking
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COVER STORY solution by the third quarter of 2010 with advanced banking features would elevate customer services to a new level and further enhance the bank to be more competitive in the local market. Interestingly, only one of the top five companies showing the best return on equity employed come from the banking sector. Two of the companies in the top five are newcomers to the list. Shell remains at the number one spot and Omantel continues to remain in the number two slot. Ominvest jumps to the number three slot from being five last year. Raysut Cement at the number four position and Areej Vegetable at the number five position are the two new comers on the list knocking out Oman Oil from the number three slot and Al Anwar Holdings from the number four slot last year. John Blascos, chairman of Shell Oman Marketing, in his report to the shareholders states that amidst a still unsettled global economic environment the company continued to deliver outstanding results in 2009. During the year the company focused on cost cutting initiatives that included areas such as distribution, lubricants blending as well as administrative and other operating expenses. Blascos adds that the company achieved unprecedented financial results recording a historically highest ever net profit of RO13.02mn compared to previous year’s net profit of RO12.5mn. Despite the uncertainty surrounding the major economies, proactive management as well as sound operational performance were the principal drivers of the commendable financial performance in 2009. Blascos explains that the retail business remains the most important segment for the company. Total retail volumes sold was in line with 2008. The aviation business continues to be highly competitive and the company continued its presence at both the major airports in the country in addition to customers’ owned fields. The market in lubricants also achieved higher penetration. The board has recommended a final dividend of 120 per cent for the year continuing the recent trend of year on year dividend growth. 50
May 2010
Abdul Malik al Khalili, Chairman, BankMuscat Blascos adds that the fuels market normally follows the economic trend of the country and is thus expected to be stable, growing in tandem with the economic activities. New development in road network and residential area will open up opportunities for addition of new retail sites. Major infrastructure projects announced by the government will see some activities in 2010, and the company will ensure that it is ready to handle stiff competition to get its share of the new business by investing in new systems and business redesign.
Focus is the key All of the top five earnings per share growth companies are newcomers on this
list. Oman Cement jumps straight into the number one spot. Ominvest comes in at the number two position, Al Hassan at number three, Areej Vegetable at number four and Oman Cable at number five. Oman Flour Mills, Al Anwar, Renaissance, OHI and Shell who were on this list last year have all disappeared from this list. Hani bin Muhammad Al Zubair, Chairman of Ominvest, in his report to the shareholders states that the company has an enviable track record of 25 years of uninterrupted profits and dividends. Established in 1983 with a paid up capital of RO8mn the company has achieved an IRR of 16.45 per cent since inception. Market capitalisation on December 31,
COVER STORY 2009 was RO99mn. Al Zubair advises that the group recorded a consolidated profit of RO22.72mn for 2009 compared to RO20.38mn in 2008, an increase of 11.48 per cent. For the current fiscal year the board has recommended a cash dividend of 10 per cent and a stock dividend of 15 per cent.
Crystal gazing Al Zubair adds that there are indications that 2010 is likely to be a year with much sideways movement in the world stock markets. Interest rates appear likely to rise in the latter part of the year. Al Zubair also expects to see a significant shift in GCC corporations towards debt reduction. The outlook for Oman is stable with an increase in GDP growth over 2009. He adds that the company would continue to further build its asset base with high quality principal investment during 2010.Four of the five companies on the share price growth list are newcomers. Al Hassan has jumped from number three to the number one position. Oman Flour, Oman Cement, BankDhofar and Oman Cables have replaced Oman Oil, Shell, Omantel and Al Maha who were on the list last year. Hassan Bin Ali Salman, chairman of Al Hassan in his report to the shareholders states that continuing the planned and focused approach in core strength areas the year 2009 has produced the desired results and has given improved market share in spite of the economic turmoil of 2008 continuing into 2009. Contract income increased in 2009 by RO8.9mn (20 per cent) when compared to 2008. This increase was mainly due to the healthy order backlog from 2008 and the timely and successful completion of a number of major projects. As a result the company’s profit after tax rose to RO2.64mn. The board of directors recommended a final dividend of 14 per cent for the financial year December 31, 2009. Salman states that in order to sustain the production level both for oil and gas, the industry is expected to continue to make significant investments. The company is well positioned to acquire a significant 52
May 2010
John Blascos, Chairman, Shell Oman Marketing share of this market in the future. Salman adds that due to increased activity in the oil and gas sector in the UAE the company is confident of securing more such jobs in this market as well. Three new companies have entered the ranking of the best five dividend yield companies. Areej Vegetable Oils, Omantel and Sohar Power are newcomers in number one, two and four slots. OIB remains in the number three spot and Raysut Cement remains at number five as last year. Nasser Bin Muhammed Bin Nasser Al Hadhramy, chairman of Areej Vegetable Oils in his report to the shareholders for the year ended December 31, 2009 states that the company’s new premier brand Khafeef – the lightest frying oil is doing well in Oman and the company has started to tap export markets in 2009. Sales have been stable in 2009 but turnover dropped by 27 per cent due to the impact of lower input cost
and consequent lower sales realizations. Al Hadhramy adds that the company managed the price fluctuations in the international vegetable oil market very well and has earned a record net profit after tax of RO1.937mn. Based on the good results achieved, the board has recommended a dividend of 25 per cent for the year. Al Hadhramy explains that the company has modernised and expanded its oil processing facilities to meet market requirements. The company has also set up a subsidiary in the UAE to handle its direct distribution operations. In addition with increasing market requirements in the related fields of mayonnaise, sauces and dressings, the company plans to diversify its product range and cater this growing market segment. Overall corporate Oman has put up a commendable performance in a difficult year and this holds promise for 2010.
METHODOLOGY The rankings for the OER Top 20 and the introductory write-up was done by Mukhtar Hasan. He is a Fellow of the Institute of Chartered Accountants in England and Wales and holds a Corporate Finance qualification issued jointly by this Institute together with the Securities Investment Institute and the Chartered Accountants Institute of Canada. He graduated as a Bachelor of Commerce in 1970 and qualified as a Chartered Accountant in 1974. He is also a member of the Corporate Finance Faculty of the Institute of Chartered Accountants in England and Wales. Hasan has local and international experience in banking, finance, senior management, private equity, corporate finance and investments. Hasan is the managing partner of Al Barij International LLC, which is a corporate finance firm specialising in corporate turnarounds. He has served on the Board of several companies including Omani public companies United Power, Renaissance Services, Renaissance Hospitality, National Hospitality, Muscat Finance and Oman Textiles. He also served as the Chairman of the American British Academy, an IB World School in Muscat for a number of years. He is currently a director of Gulf Investment Services Holding, the Chairman of the Investment Committee of the First Mazoon Fund, Chairman of Muscat Thread Mills, Managing Director of Gulf Mushroom Products Company SAOG and Vice Chairman of Oman Dental College as well as several other local and foreign private companies. He may be contacted by email at mukhtar@albarij.com The numbers and rankings for OER Top 20, 2009 were verified by KPMG. KPMG is a leading professional services firm, providing audit, tax and advisory services to meet the demands of its clients. We have more
KPMG
than 100,000 professionals throughout the world, offices in 800 cities and 7,000 partners in over 150 countries. KPMG Oman currently has a staff compliment of approximately 100 in audit, tax and financial advisory services, including 3 partners, 4 directors and 22 managers. KPMG Oman has 25 Omanis who are currently training for ACCA. KPMG has been the premier provider of professional services in Oman and has a reputation for providing quality professional services to a well-diversified client portfolio, both in the public and private sectors.
DEFINITIONS AND EXPLANATIONS Revenues: All companies on the list are derived from the published accounts submitted to the Muscat Securities Market (MSM). Therefore, closed joint stock companies and private companies and establishments are excluded from this list. These companies are, in the first instance, ranked by revenues. All the other rankings shown on the table do not consider any other companies that do not make the list on the basis of revenue. In the case of banks the gross interest income as well as other operating income together is considered as their revenue for this purpose. In the case of insurance companies, the gross premium written as well as investment income together is considered as their revenue for this purpose. All figures are for the year ended December 31, 2009, unless otherwise stated.
Profits: Profits are shown after taxes and all charges including extra-ordinary charges. Figures in brackets indicate a loss. All losses and negative growth are also ranked where possible.
Assets:
statutory and all other reserves as well as share premium.
Market Cap: Market Capitalisation figure has been arrived at by multiplying the total number of outstanding shares of the company by the price per share as of close of business on March 31, 2010.
Earnings per share: The earnings per share are as declared by the company in its published financial statements.
Dividend Yield: The dividend yield figure is calculated on the basis of dividend declared in the financial statements for 2009 against the share price at close of business on December 31, 2009.
Price Earnings ratio: This ratio has been calculated by dividing the price per share by the earnings per share as on December 31, 2009
NOTES: 1. Galfar has issued a 10 per cent stock dividend, which has not been taken into account in the calculation of the dividend yield. 2. Bank Muscat has issued a 25 per cent bonus shares dividend, which has not been taken into account in the calculation of dividend yield. 3. The financial statements of OHI are as at March 31, 2009, which is their financial year-end. OHI has issued 10 per cent stock dividend, which has not been taken into account in the calculation of dividend yield. 4. BankDhofar has issued a stock dividend of 10 per cent, which has not been taken into account in the calculation of dividend yield.
Assets shown are as per the balance sheet at the end of the year. It is the total of fixed as well as the current assets.
5. OMINVEST has declared a stock dividend of 15 per cent, which has not been taken into account in the calculation of dividend yield.
Shareholders’ Equity:
6. The financial statements of Oman Flour Mills SAOG are as on June 30, 2009, which is their financial year end.
Shareholders Equity is the paid up capital of the company, retained earnings, and
May 2010 53
COVER STORY
THE OER TOP TWENTY OMANI Rank
Revenue Company
2009 2008
2009 2008 (RO Mn) (RO Mn)
Profit as % of revenues
Profits Growth Growth 2009 2008 % from Rank % from Rank (RO Mn) (RO Mn) 2008 2008
¾
1
1
OMAN TELECOMMUNICATIONS CO.
412.297 411.498
0.19
¾
2
2
GALFAR ENGINEERING AND CONTRACTING *
411.773 364.367
13.01
3.754
¾
3
3
BANK MUSCAT *
396.027 338.157
17.11
¾
4
4
SHELL OMAN MARKETING COMPANY
298.351 326.367
¿
5
6
RENAISSANCE SERVICES
¿
6
7
¿
7
À
Profit As % Equity
%
Rank
%
Rank
%
Rank
1
5.02
10
30.37
5
18.05
3
29.78
2
23.110
16
(83.76)
20
0.91
20
1.02
20
4.58
20
73.718
93.731
2
(21.35)
14
18.61
7
1.26
18
10.37
17
(8.58)
13.021
12.504
10
4.13
11
4.36
14
21.61
2
45.95
1
247.590 234.260
5.69
28.510
26.197
4
8.83
6
11.52
9
6.36
9
19.26
9
AL MAHA PETROLEUM
171.927 192.344
(10.61)
5.670
7.349
12
(22.85)
15
3.30
16
11.49
5
19.02
10
8
OMAN OIL MARKETING COMPANY
169.054 170.540
(0.87)
5.360
6.323
13
(15.23)
13
3.17
17
10.87
6
22.21
7
8
5
OMAN CABLES INDUSTRY
155.603 304.377
(48.88)
6.625
6.132
11
8.04
7
4.26
15
6.62
8
16.42
12
¾
9
9
NATIONAL BANK OF OMAN
127.406 130.835
(2.62)
21.105
45.380
9
(53.49)
18
16.57
8
1.17
19
8.43
18
¾
10
10
OMAN HOLDINGS INTERNATIONAL *
110.763
88.988
24.47
1.759
8.805
20
(80.02)
19
1.59
19
1.51
17
5.37
19
¿
11
13
BANK DHOFAR *
94.184
80.574
16.89
25.393
23.686
5
7.21
8
26.96
6
1.71
15
12.45
14
¾
12
12
RAYSUT CEMENT COMPANY
89.346
89.080
0.30
28.682
27.107
3
5.81
9
32.10
4
23.25
1
26.87
4
¿
13
15
OMAN CEMENT COMPANY
68.284
63.523
7.49
24.232
12.541
6
93.22
1
35.49
3
15.79
4
17.83
11
¿
14
16
AREEJ VEGETABLE OILS & DERIVATIVES
65.846
90.674
(27.38)
1.937
1.504
19
28.79
4
2.94
18
6.26
10
23.78
5
¿
15
17
OMINVEST *
58.084
54.410
6.75
22.720
20.378
7
11.49
5
39.12
2
2.57
13
27.43
3
¿
16
20
AL HASSAN ENGINEERING COMPANY
53.957
45.031
19.82
2.641
2.020
18
30.74
3
4.89
13
5.17
11
19.47
8
À
17
16
OMAN INTERNATIONAL BANK
51.434
59.315
(13.29)
21.522
29.474
8
(26.98)
16
41.84
1
2.07
14
12.57
13
¾
18
18
OMAN FLOUR MILLS COMPANY *
51.333
50.744
1.16
4.879
8.061
14
(39.47)
17
9.50
10
10.14
7
11.59
15
¿
19
N/A SALALAH PORT SERVICES COMPANY
47.669
41.446
15.01
4.495
4.528
15
(0.73)
12
9.43
11
3.33
12
11.32
16
¿
20
N/A SOHAR POWER COMPANY
45.201
44.099
2.50
3.255
1.884
17
72.77
2
7.20
12
1.62
16
23.51
6
* Please see notes on previous page.
54
May 2010
125.233 119.248
Profit As % Assets
COMPANIES FOR 2009 Earnings Per Share 2009 (RO Mn)
2008 (RO Mn)
Growth %
0.167
0.158
0.013
Dividend Yield
Dividend Per Share
Share Price
2008 Rank (RO Mn)
Sector
31-Dec-09 31-Dec-08 (RO per sh) (RO per sh)
Growth %
P/E Ratio 31-Mar-10
Rank
2009 %
2008 %
Growth %
2009 (RO Mn)
5.70
6
7.70
6.30
22.34
0.100
0.100
2
Services
1.298
1.588
(18.26)
17
1.283
7.68
0.092
(85.87)
18
3.46
4.32
(19.90)
0.020
0.020
12
Services
0.578
0.463
24.84
8
0.455
35.00
0.068
0.087
(21.84)
13
2.43
2.51
(3.28)
0.020
0.020
14
Banking & Inv
0.824
0.797
3.39
12
0.841
12.37
0.130
0.125
4.00
8
5.87
6.44
(8.87)
0.120
0.115
6
Services
2.045
1.786
14.50
10
2.000
15.38
0.094
0.103
(8.74)
10
1.57
1.61
(2.75)
0.012
0.010
19
Services
0.765
0.620
23.39
9
0.786
8.36
0.822
1.065
(22.82)
14
5.43
4.13
31.38
0.550
0.500
7
Services
10.131
12.100
(16.27)
16
9.700
11.80
0.083
0.098
(15.31)
11
3.80
2.89
31.38
0.035
0.035
9
Services
0.921
1.210
(23.88)
18
0.979
11.80
0.074
0.068
8.82
5
2.06
2.23
(7.57)
0.030
0.020
15
Industry
1.454
0.896
62.28
5
1.401
18.93
0.019
0.042
(54.76)
16
3.74
4.79
(22.03)
0.012
0.018
10
Banking & Inv
0.321
0.365
(12.05)
15
0.320
16.84
0.012
0.069
(82.61)
17
0.00
25.00
(100.00)
0.000
0.250
20
Banking & Inv
0.304
1.000
(69.60)
20
1.000
83.33
0.034
0.042
(19.05)
12
2.05
4.07
(49.52)
0.015
0.015
16
Banking & Inv
0.731
0.369
98.10
4
0.770
22.65
0.143
0.136
5.15
7
6.71
9.07
(26.02)
0.100
0.100
5
Industry
1.491
1.103
35.18
6
1.600
11.19
0.073
0.038
93.14
1
4.95
7.31
(32.32)
0.037
0.022
8
Industry
0.748
0.301
148.50
3
0.677
9.25
0.421
0.327
28.75
4
25.00
8.00
212.50
0.250
0.080
1
Industry
1.000
1.000
0.00
14
1.000
2.38
0.057
0.042
35.71
2
2.02
2.04
(1.01)
0.010
0.010
17
Banking & Inv
0.495
0.490
1.02
13
0.490
8.60
0.035
0.027
29.63
3
3.47
11.01
(68.44)
0.014
0.012
11
Industry
0.403
0.109
269.72
1
0.434
12.40
0.024
0.032
(25.00)
15
7.41
12.27
(39.64)
0.022
0.027
3
Banking & Inv
0.297
0.220
35.00
7
0.320
13.33
0.031
0.512
(93.95)
20
3.13
12.20
(74.33)
0.020
0.025
13
Industry
0.639
0.205
211.71
2
0.675
21.77
0.025
0.025
0.00
9
1.75
12.00
(85.41)
0.010
0.120
18
Services
0.571
1.000
(42.90)
19
1.000
40.00
0.012
0.090
(86.67)
19
6.97
5.79
20.30
0.100
0.080
4
Services
1.435
1.381
3.91
11
1.465
122.08
Rank 31-Mar-10
May 2010 55
COVER STORY
OMAN TELECOMMUNICATIONS COMPANY
Consolidating its position
Dr Amer Al Rawas
Omantel continues to buck the trend and remain at the top of the charts for the third time in a row
CEO, Oman Telecommunications Company “We realise that there are still opportunities to increase customer base and penetration levels in Oman especially by targeting underpeneratred segments or new development areas/ zones. As the leading telecommunications service provider in Oman, Omantel Group is strongly placed not only to compete with newcomers in the fixed line and mobile business segment but also to benefit from the same through providing wholesale services to new telecom operators, which would position Omantel as ‘carrier of carriers’”
Omantel management is implementing strategies aimed at enhancing its revenues, operational efficiencies, profitability, and the most important, customer experience through five pillars namely growing customer base and revenues, retaining customers and revenue, enhancing customer experience, optimising costs and transforming the culture of the organisation.
Milestones 1. Launch of 3.5G mobile services and Mobile TV by Oman Mobile. 2. Oman Mobile launched new services such as E-top up service for Hayyak subscribers as well as new services such as corporate ring back tone aimed at corporate clients 3. Oman Mobile and eBuddy, the world’s leading independent web and mobile instant messaging (IM) service, announced the launch of online instant messaging services on Oman Mobile WAP portal via eBuddy’s instant messaging platform. 4. Oman Mobile has offered series of value promotions like Hayyak bonus rewards, Hayyak starter kit promotions (Hayyak starter kit RO2 with RO2 talk time), Mobile broadband post-paid package promotion (3 GB download for only RO19 instead of 1 GB), Hayyak Internet broadband offer at RO1 for 24 hours (1 day) and RO3 for 72 hours (3 days) access as permanent tariff and Ramadan MMS push channels offers. 5. New international call super off-peak rates to India, Bangladesh and Pakistan from 9 pm to 7 am at 98 Baizas/ minute for calls originated from mobile services and reduction of 10 per cent on retail rates to Pakistan and Bangladesh from fixed line services. 6. The company has launched credit transfer services from its post-paid (Mada) to pre-paid (Hayyak).
Looking ahead The telecom sector is poised for further market liberalisation. Commencement of operations by second fixed line operator, five mobile resellers and other new service providers for internet services will change the competitive landscape in the telecom sector. The decision to integrate both Omantel and Oman Mobile as a single operating entity to enhance the operational synergy, branding, programmes to enhance customer experience, etc, would undoubtedly retain Omantel’s position as the leading telecom service provider in the Sultanate. 56
May 2010
1 Numbers at a glance Revenue (in million)
Growth: 0.19%
500 450
RO411.498
RO412.297
2008
2009
400 350 300 250 200 150 100 50 0
Growth: 5.02%
Profit (in million) 250 225 200 175 150 125
RO119.248
RO125.233
2008
2009
100 75 50 25 0
OER TOP 20 RANK
2008 - 1
2009 - 1
GALFAR ENGINEERING & CONTRACTING
Infrastructure: Leading the way
Hans Erlings
With a huge experience in major economic sectors of the Omani economy, Galfar had an exceptional year
CEO, Galfar Engineering & Contracting “Galfar will continue to maintain its market position as the largest contracting company in Oman and expects to consolidate and maintain its market position in 2010 and beyond with numerous projects. With one of the regional airports already awarded to Galfar, the company is looking forward to more such prestigious projects coming its way”
Galfar’s initiative to restructure the organisation came into effect in 2009. This has helped in improving the functional and operational effectiveness of the organisation and augmented its capability to take up much larger EPC projects in order to serve its client’s upcoming projects.
Milestones 1. Construction of National Heart Centre at the Royal Hospital for RO25.96mn 2. Construction of 132/33 KV Grid station at Muttrah & Associated 132 KV Transmission Line for RO8.73mn
2 Numbers at a glance
3. A 100 per cent subsidiary in India ‘Galfar India Limited’ was formed with a share capital of RO8,000 to explore opportunities in India. 4. Galfar India Limited was awarded a four lane road construction job of 24.50 km valued at RO10.99mn 5. EPC of Nimr Compressor Station by Oman Gas Company. 6. Awarded contract for the construction of new jetty at Wudam for the Ministry of Defence for RO19.34mn. 7. Civil works contract related to the construction of 9 MTPA pelletising plant at Sohar with Vale do Rio Doce (Vale) of Brazil.
Looking ahead The appreciably healthy order book during the beginning of 2010 is indicative of further significant order booking prospects for the year and Galfar is confident of acquiring many more contracts during the year. The EPC segment will remain one of the key focus areas for growth in the coming years and with enhanced capabilities Galfar believes it can accomplish significant achievements in the EPC business sector. The company has an active presence in all the sectors namely oil and gas, roads and bridges, civil, utilities and services including operation and maintenance, and have the preparedness to take up any challenge whether in roads, ports, airports, power, water and wastewater sectors. Galfar is also exploring the North African region and in particular Libya with a view to acquire projects in the Oil and Gas sectors.
Revenue (in million)
Growth: 13.01%
500 450 400
RO411.773 RO364.367
350 300 250 200 150 100 50
2008
0
Growth: (83.76%)
Profit (in million) 25
2009
RO23.110
20
15
10
RO3.754
5
0
2008
OER TOP 20 RANK
2009 2008 - 2
2009 - 2
May 2010 57
COVER STORY
BANK MUSCAT
Big is beautiful Strategic initiatives and qualitative achievements over the years have enabled BankMuscat to maintain its position as the leading financial service provider in the Sultanate
Chief Executive, BankMuscat
BankMuscat has been an unequivocal leader in the banking sector for the last 25 years. It’s wide network of 125 branches, 362 ATMs, 112 CDMs and 4200 PoS terminals has helped it to reach every nook and cranny of Oman. Renowned for adopting innovative ways to raise capital and enhance stakeholder value, the bank has launched myriad initiatives to maintain its tempo. The bank views the industrial development of Oman as a strategic opportunity, especially in Sohar, Salalah and Duqum.
“While the current economic environment presents numerous challenges, BankMuscat is focused on adopting strategic initiatives that will help sustain its growth trajectory. With several initiatives in place, the bank’s priority is on strengthening the balance sheet and preserving the capital. In the coming months, the focus will be on making our customers feel the most delighted with our superior services, as the bank launches the ‘Total Customer Experience’ project”
Milestones 1. BankMuscat financed a number of prestigious projects in Oman in 2009. Notable among them were the RO100mn term loan for Salalah IWPP (mandated lead arranger, onshore account bank), RO76mn term loan for Sohar Port Special Projects (financial adviser, facility agent and account bank) and RO77mn term loan for Oman Refineries and Petrochemicals Company (ORPC). 2. The RO60mn eight per cent subordinated bond issue launched by BankMuscat successfully closed on May 7, 2009, accepting qualifying subscriptions of RO115.6mn. The encouraging response to the issue led the bank to exercise the Green Shoe option of RO15mn, thereby increasing the issue size and allotment to RO75mn. 3. BankMuscat’s impressive performance in financial advisory business was ranked 18th globally by both the Infrastructure Journal (IJ) and Project Finance International (PFI). This is by far the highest ranking achieved by a regional bank in the global arena. 4. The bank’s decision to issue Certificates of Deposit (CD) worth RO250mn through auction over a one-year time-frame marked a major milestone in 2009. From nine rounds of CD auctions, BankMuscat accepted a total of RO152.40mn of bids against the subscription of RO301.1mn.
Looking ahead In general, the year 2010 will be a period of consolidation for the banking sector in Oman. As the economic activities are expected to pick up, the banking sector is expected to witness better growth in 2010 than 2009. In view of the increasing competition, the banks emphasis will be on competitive channels and new products to adapt to the various new and growing sectors. Domestic mobilisation of funds will be the key to facing the challenges in the medium term.
58
May 2010
Abdulrazak Ali Issa
3 Numbers at a glance Revenue (in million)
Growth: 17.11%
500 450
RO396.027
400 350
RO338.157
300 250 200 150 100 50
2008
0
Growth: (21.35%)
Profit (in million) 100
2009
RO93.731
90 80
RO73.718
70 60 50 40 30 20 10 0
2008
OER TOP 20 RANK
2009 2008 - 3
2009 - 3
COVER STORY
SHELL OMAN MARKETING COMPANY
One for the record books Shell Oman Marketing Company ended 2009 with its highest-ever net profit, remarkably this performance comes in a year where bottomlines were under pressure all around Shell Oman Marketing Company (SOMC) has surprised analysts and market watchers with its sterling performance in 2009. The company notched up unprecedented financial results amidst the unsettled global economic environment and recorded the highest-ever net profit in its history. A proactive approach and a good operational performance helped SOMC to post good numbers.
Milestones 1. A project to repackage lubricants to attract both existing and new customers was completed by the end of Q3, 2009. In addition, the inland lubricants team managed to renew key contracts as well as gain new contracts that have greatly contributed to business growth. 2. It’s growth initiatives were led by investments in new-to-industry (NTI) sites; rebuilding of old sites, focussing on consistently delivering excellence in site operations and sustained marketing efforts. 3. Four old sites were rebuilt while six NTI sites were commissioned taking the network number to 139 till date. 4. SOMC’s retail market share remains the highest and is fairly stable in the face of an ever-growing number of new sites being introduced in the market. 5. The average throughput per site (ATP) stands at 9.72 million litres in 2009 and the company’s retail sales grew by one per cent year-on-year. August 2009 saw the highest-ever Shell Oman monthly sale of 122 million litres.
Faisal Al-Hashar
Managing Director, Shell Oman Marketing Company “We stand for reliability and best value. Further investments will help us to drive operational efficiency and provide exceptional service to all our stakeholders. All this will make Shell Oman the best place to develop talent and do business with”
4 Numbers at a glance Revenue (in million)
Growth: (8.58%)
500 450 400 350
RO326.367
300
RO298.351
250 200 150 100 50
2008
0
2009
Growth: 4.13%
Profit (in million) 25
Looking ahead Shell Oman’s Board has proposed an investment in excess of RO6mn in a new project. This is designed to review its operational processes and deliver ‘exceptional basics’ for all its stakeholders. Complimenting these operational initiatives, the company aims to install the latest IT based solutions. The initiative will set a new benchmark in the industry enabling the company to further consolidate its leadership position and tap growth opportunities.
0 20
15
RO12.504
RO13.021
2008
2009
10
5
0
OER TOP 20 RANK 60
May 2010
2008 - 4
2009 - 4
COVER STORY
RENAISSANCE SERVICES
Scaling up A solid performance puts Renaissance on the threshold of potential on a greater scale Stephen Thomas
The fundamentals of the Renaissance business model have set the company on an assured growth path that has delivered nine consecutive years of record growth. Today, Renaissance Services has the scale and scalability to be a multi-billion dollar enterprise; each of its three core oil and gas services businesses in marine, engineering and contract services has the competence and potential to multiply in size exponentially in their own right.
CEO, Renaissance Services “Our strategy is to build a multi-billion dollar enterprise in oil and gas services that enhances the economic well-being and quality of life of all Renaissance stakeholders. We believe in the resilience of our business model, and as a direct consequence of our values-driven management, we look forward to delivering good performance again in 2010.”
Milestones 1. In 2009 the company invested a total of $224mn in new fixed assets, while delivering an increased cash dividend to shareholders, and completed a threeyear investment programme of $700mn. It also grew its human resources to over 11,000 people, at the same time generating more income per capita in each of the businesses. Strategic restructuring within the group’s largest subsidiary, Topaz Energy and Marine, increased scalability, operational efficiency and streamlined customer service. 2. The company’s Marine division was awarded a 10-year, $100mn contract for six custom-built vessels for Agip KCO in Kazakhstan, and a $42mn contract for two vessels with supermajor Total in Qatar. The division expanded its Caspian foothold into Turkmenistan with a $14mn spot contract win for seven vessels. Overall the division’s Offshore Support Vessel (OSV) fleet crossed the 100 vessel mark, raising its profile among the top 10 OSV providers in the world. 3. Engineering division’s infrastructure was strengthened with the opening of a new 30,000 sqm fabrication facility and developments in its emerging ship building unit which delivered 14 vessels in 2009, while the fabrication unit continued to deliver major projects to LNG customers and the marine repair unit expanded into Qatar and Kazakhstan. 4. Contract Services Group achieved new contract gains and contract retention in Oman, Angola, Iraq and Norway, and progressed construction of two major accommodation facilities for operations in 2010 completing 4.5mn man-hours with no Lost Time Incident.
Looking ahead The company’s prudent control over the key ratios on its balance sheet has prepared the group for a high-investment growth phase with further disciplined investments of up to $1.4bn over the next three years. While the company has no immediate acquisition target in view, it sees potential of both vessels and businesses as possible targets for acquisition in 2010. Renaissance is confident in the overall resilience of its business model, supported by its alignment with blue-chip customers and a mix of long and short-term contracts, as well as geographic spread and clear market leadership positions in key hydrocarbon markets with a very long-term future. 62
May 2010
5 Numbers at a glance Revenue (in million)
Growth: 5.69%
500 450 400 350 300 250
RO234.260
RO247.590
2008
2009
200 150 100 50 0
Growth: 8.83%
Profit (in million) 50 45 40 35 30 25
RO26.197
RO28.510
20 15 10 5 0
2008
OER TOP 20 RANK
2009 2008 - 6
2009 - 5
AL MAHA PETROLEUM PRODUCTS MARKETING
Braving the storm Improved services at filling stations and dedicated customer satisfaction helped to steady the fall in revenues
Ibrahim Salim
MD, Al Maha Petroleum Products Marketing “The positive growth trend created by the reactivation of many sectors of the economy makes the future more promising. Al Maha plans to capitalise on most of the opportunities provided by the government’s continued initiative on the development of major infrastructural projects”
A number of factors like increase in licensing fees and purchase prices of petroleum products resulted in the cost of sales going up but were compensated by the increase in sales.
Milestones 1. Seven new filling stations were opened in 2009 taking the total number of filling stations to 163. 2. Total sales during the second half of 2009 increased by 13 per cent over the first half of the same year, due to the increase of retail sales, commercial sales and aviation fuel sales. 3. Cash donations were made to various charitable events in addition to adopting vigorously additional measures to ensure health and safety of the community and the environment. 4. The association with TOTAL, one of the world’s leading lubricant manufacturing companies, to promote their products in Sultanate of Oman through an agreement signed with their distributor in the Sultanate, has also brought successful results in terms of increased revenue from sale of lubricants mainly in the commercial sector. 5. Al Maha also signed up with a leading and reputed retail chain, to operate some of the convenience stores in the filling stations, which is expected to add new dimension to its objectives of Omanisation and customer service.
Looking ahead The economic recovery witnessed during the later part of 2009 has reactivated many sectors of the economy thereby promising a better year ahead, with the government already initiating continuation of ongoing projects and promoting new basic infrastructure projects and the growth in the non-oil sectors mainly tourism, will also significantly increase demand for Al Maha products. The unplanned charges, severe competition and tough profit margins continue to be the main challenges in the year ahead.
6 Numbers at a glance Revenue (in million)
Growth: (10.61%)
250 225 200
RO192.344 RO171.927
175 150 125 100 75 50 25
2008
0
2009
Growth: (22.85%)
Profit (in million) 10 9 8
RO7.349
7
RO5.670
6 5 4 3 2 1 0
2008
OER TOP 20 RANK
2009 2008 - 7
2009 - 6
May 2010 63
COVER STORY
OMAN OIL MARKETING COMPANY
Expansionary mode The retail business continues to form the foundation of OOMCO’s growth momentum
Omar Ahmed Salim Qatan CEO, OOMCO
“We expect to maintain our current sales growth, while delivering added value to our shareholders and customers. With the available resources, capabilities and experience within the company, we are well poised to grow further and improve our operational efficiency”
Oman Oil Marketing Company (OOMCO) is continuously exploring new and potential business activities to further strengthen the retail network and its offerings. The focus in the coming year is to further improve, upgrade and enhance the image of fuel stations.
Milestones 1. Network expansion continued in 2009 with six new filling stations being opened, increasing the total of service stations nationwide to 113. 2. Four more filling stations are also currently under construction and are expected to open in Q1 of 2010.
7
3. Nine new stores, five new car wash centres and two Quick Service Restaurants (QSR) were opened in 2009. 4. Omanoil’s new brand C-Store under the name ‘ahlain’ has been introduced and rolled out since March 2009. 5. The fuel card business grew by more than 10 per cent in 2009 with the sale of super grade fuel through fuel cards also increasing by 11 per cent over the previous year whilst diesel fuel grew by more than nine per cent. 6. OOMCO also successfully retained the Jet Airways fuel supply contract for a period of one year. The company has also been successful in securing Gulf Air (100 per cent), Air Arabia, Turkish Airlines, Thai Airways, Kuwait Airways, Jordanian Airlines, Saudi Airlines, Tunis Air and Novel Air Tunisia during this financial year.
Numbers at a glance Revenue (in million) 225 200 175
The retail sector will remain the backbone of the company and a major revenue contributor in the coming year. At the same time, new constructions and upgrading of roads and highways will contribute to higher demand for diesel as well as new business opportunities in the marine sector. Despite the favourable prospects, there will be numerous challenges that need to be faced. The continued uncertainty in the global economy, volatility in crude oil prices and the high cost of borrowings in Oman may weaken consumer demand. This would definitely affect the investment plan and profitability of the company.
RO170.540
RO169.054
2008
2009
150 125 100 75 50 25 0
7. Overall export lubes has grown by 40 per cent against 2008
Looking ahead
Growth: (15.23%)
Profit (in million) 10 9 8 7
RO6.323
6
RO5.360
5 4 3 2 1 0
2008
OER TOP 20 RANK 64
May 2010
Growth: (0.87%)
250
2009 2008 - 8
2009 - 7
COVER STORY
OMAN CABLES INDUSTRY
Exploring new markets Oman Cables Industry’s multiple strengths built over the years helped it to tide a challenging market environment Oman Cables Industry (OCI) has undergone a structural shift in its operations that enhanced its market leadership and deliverable capabilities. While the external environment was challenging in the short-term the company is confident that the medium and the long term business prospects are promising and OCI is better positioned to meet them. The company’s customer support systems, strong customer relationship, unmatched technology, renewed business strategies, loyal employees, extremely well experienced management team have been the main strengths of the company over the years.
Hussain Salman al Lawati
Vice Chairman and Managing Director “The demand for electricity in the GCC is expected to grow, albeit at a slower pace due to the current situation. OCI will focus on all the opportunities that this market offers to stimulate the demand for all OCI products. The company will further focus on the opportunities for cable related products, both in land and sea transportation systems to build on its success that was achieved in the GCC region”
8
Milestones 1. During 2009, in the aftermath of the global financial crisis, commodity (Copper) prices tumbled, affecting many sectors and regions in the World, this impacted OCI’s results. The company has strategically diversified its product range and has built strong customer relationships in global geographical regions. This has stood OCI in good stead as a company during the global downturn. 2. OCI manufactures a variety of specialised cables and is the only Omani cable company to offer a comprehensive range of power cables and overhead line conductors used by various sectors of the economy for power generation, electricity distribution, mass transportation, oil and gas exploration, petrochemicals and various other industries at large. 3. The company is strongly positioned in Oman and well established in the GCC and MENA markets as well as in select international markets. During the year under review, OCI successfully entered the South East Asian market and developing countries to capitalize on emerging economies in this region.
Looking ahead OCI is expanding its footprint in the GCC region as well in new global markets. The export turnover continues to grow at a faster pace than the domestic turnover as it entered select international markets and new market segments such as oil and gas and mass transportation. OCI is examining a strategic thrust into near-Asian markets, to capitalise on OCI’s existing customer and manufacturing base.
Numbers at a glance Revenue (in million) 450 400 350 300
RO304.377
250 200
RO155.603
150 100 50
2008
0
Growth: 8.04%
Profit (in million) 9 8 7 6
RO6.132
RO6.625
5 4 3 2
0
2008
OER TOP 20 RANK May 2010
2009
10
1
66
Growth: (48.88%)
500
2009 2008 - 5
2009 - 8
COVER STORY
NATIONAL BANK OF OMAN
Service differentiation
Salaam Said Al Shaksy
NBO upgraded its customer offerings and negotiated a difficult international financial climate with resolve and resilience NBO continues to work closely with its strategic alliance partner, Commercial Bank of Qatar, in many areas including cross-border business and the sharing of global best practice in terms of products, processes and systems. Despite a challenging economic environment, the bank continued to make significant strides in 2009. The bank invested substantially in customer facing initiatives which included increasing its distribution footprint in terms of both intensity and spread.
Milestones 1. NBO underwent an innovative rebranding exercise on March 21, 2009, the corporate communications department spearheaded the launch of NBO’s new brand. 2. NBO invested substantially in customer facing initiatives, which included its distribution footprint in terms of both intensity and spread, its network increased from 54 branches at the beginning of the year to 64 branches in December 2009. Additionally the ATM and CCDM network grew from 133 to 162 machines during the same period. 3. The bank’s wealth management proposition, Sadara, continued to expand with five new centres being established in the following areas; CBD, Shatti Al Qurum, Mina Al Fahal, Sohar and Salalah. Besides the increased number of branches and ATMs, NBO also embarked on a significant refurbishment programme of all its branches, to ensure that all its customers experience the new image of NBO. This project will continue throughout next year with completion being targeted for the end of 2010. 4. Al Kanz, a powerful savings account scheme, was launched by NBO in 2009 and continues to set new records with a significant growth in marketshare.
Looking ahead In line with its growth strategy, NBO has drawn up ambitious plans for 2010. At the forefront will be an increased focus on delivering superior customer service. On the product side Al Kanz will remain a key focus area, followed by the Cards business, wealth management and insurance. Al Manzel, the bank’s popular mortgage product, will continue in its pursuit to increase marketshare.
CEO, National Bank of Oman
“The year 2010 will see the consumer banking business continue to focus on booking quality assets, gaining market share in low cost deposits and improving the quality of our distribution channels. Most importantly, the bank will strive to establish service leadership by delivering significantly improved customer service in 2010, whilst at the same time building an aggressive performance culture throughout the franchise”
9 Numbers at a glance Revenue (in million) 225 200 175 150
RO130.835
RO127.406
2008
2009
125 100 75 50 25 0
Growth: (53.49%)
Profit (in million) 50 45
RO45.380
40 35 30 25
RO21.105
20 15 10 5 0
2008
OER TOP 20 RANK 68
May 2010
Growth: (2.62%)
250
2009 2008 - 9
2009 - 9
OMAN HOLDINGS INTERNATIONAL
Variegated presence The diversified nature of OHI’s business gives the group unmatched strength and resilience The OHI group enjoys a presence in various sectors like energy and Infrastructure, information technology, telecommunications, construction, marine, services, real estate, hospitality and retail electronics. The diversified nature of OHI’s business helped the company to tide over a difficult external environment in no uncertain terms.
Behram Divecha
CEO, Oman Holdings International “We are cautiously optimistic about our results. The long term future of the OHI group is bright, as the core businesses are sound and have long term growth potential. OHI has entered the new financial year with a strong order book, and therefore the outlook is bright”
Milestones 1. The Energy and Infrastructure group had another successful year, with continued business in different sectors. The execution of several large orders secured in the previous year yielded significant revenue during the year. 2. Its telecommunications company executed several important projects in the areas of outside plant work involving fiber optic cable and copper cable, satellite telemetry system, ground to air communication system, public address system, rapid deployment units (RDU), VHF radios, etc. These projects were executed for prestigious clients like Omantel, Oman Mobile, Nawras, MOD, ORPC, RYS, Ministry of Regional Municipalities and Environment and others. 3. OHI’s information technology company continues to be a market leader in the country and carried out many significant projects during the year. Some of its customers include Omantel, Information Technology Authority, Ministry of Defence, Sultan Special Forces, Ministry of Education, PDO, Royal Court Affairs etc. 4. During the course of the year it’s construction company handled several prestigious projects like the general building and EPC building work for Sohar Aromatics, Oxy Muhaizna and Barka 2 Power & Desalination project. 5. The Marine company had a satisfactory year. The outboard motors moved well during the year with support from Oman Development Bank and Ministry of Fisheries. The spares/accessories and the pleasure market registered a growth.
Looking ahead With the population growth expected in Oman, the local demand for products and services should remain healthy. The government has prudently based its budget on the basis of $50 per barrel of oil price. Oil continues to be the main driver of the economy. In the last few years, when the oil prices reached unprecedented heights, significant amounts have been put away as financial reserves. These factors provide us with optimism when we look at the likely business environment during 2010. The diverse nature of OHI’s operations is also a source of strength.
10 Numbers at a glance Revenue (in million)
Growth: 24.47%
250 225 200 175 150 125 100
RO110.763 RO88.988
75 50 25
2008
0
2009
Growth: (80.02%)
Profit (in million) 10 9
RO8.805
8 7 6 5 4 3
RO1.759
2 1 0
2008
OER TOP 20 RANK
2009 2008 - 10 2009 - 10
May 2010 69
&
Joint venture of
US$ 245,000,000 Syndicated Term Loan Facility & Commodity Murabaha
US$ 100,000,000 Term Credit Facility
Acquisition of Strategic Equity Stake By
&
US$ 200,000,000 Syndicated Facility
US 18 US$ 80,000,000 Me ium Term Cre Med Credit dit Fa Facil cility it
Connecting you with the right opportunities. Debt Advisory • Mergers & Acquisition Advisory • Equity Advisory • Credit Ratings Advisory
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Best Investment Bank – Alpen Capital Alpen Capital was established in the Dubai International Financial Centre in 2005 along with Bank SarasinAlpen. It expanded to Qatar and Oman in 2008 and India in 2009. At Alpen Capital, we provide our clients with innovative investment banking advisory solutions, drawing on expertise from across the full spectrum of services such as Equity placements, mergers and acquisitions, Ratings advisory, Debt Syndication and Investment Research to Institutional and Corporate clients in the GCC and South Asia. Our approach focuses on understanding our client requirements and providing tailor made solutions to meet their investment banking needs. Over the last Àve years, we have executed Debt Advisory / Joint Ventures / Mergers and Acquisitions transactions worth over USD 4.5 Billion for some of the largest business groups in the GCC, working closely with some of the regional / international banks.
Our dedicated team has proven execution capabilities and has been successful in placement through a wide network of investors demonstrating our excellence. We are proud of our latest achievement – that of winning the “Best Investment Bank” at the Banker Middle East Industry Awards 2009. In the GCC and India, Alpen Capital is present along with its private banking associate – Bank Sarasin-Alpen and function through unique business proposition that of providing value added services in private banking through the investment banking advisory business. Over the last few years both Alpen Capital has made great strides in the banking industry. As a result, Alpen Capital has been involved with a wide variety of innovative investment banking transactions and has succeeded in carving out a niche as a boutique investment banking advisory Àrm par excellence for both private and institutional clients.
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Secure + Strong + Swiss = Perfect Formula for Private Banking Sarasin-Alpen is a subsidiary of Bank Sarasin & Co. Ltd, Switzerland - an organization which is known for Sustainable Swiss private banking since 1841. Established in Dubai in 2005, Sarasin-Alpen expanded to Qatar and Oman in 2008 and to India in 2009. Sarasin-Alpen functions in all these locations with its investment banking associate, Alpen Capital which forms a unique business model wherein the private banking activities of Sarasin-Alpen are complemented by the Investment Banking advisory business of Alpen Capital. At Sarasin-Alpen, we provide a complete range of investment advisory and private banking solutions to private and institutional clients in GCC and South Asia. We have witnessed tremendous success in this short period and have been voted as the “Best Private Bank� for two years in succession, by the Banker Middle East Industry Awards. Bank Sarasin’s majority shareholder, ‘AAA’ rated Rabobank puts us in a strong position. The Dutch Rabobank is considered one of the safest banks in the world and has been rated ‘AAA’ by prominent international credit agencies like Standard & Poor and Moody’s.
To our clients we offer a comprehensive investment management and investment advisory service. Our diversiĂ€ed range of products include structured notes, private equity, mutual funds, stocks, bonds and portfolio management. With our in-house expertise and the intellectual and technical support offered by Rabobank, we offer clients bespoke solutions that reĂ ect diversiĂ€cation, Ă exibility and increase their overall earning potential while keeping a tight rein on risk exposure. Our theme oriented investment strategy for equity investments has also fetched us the Best Structured Products Award in 2008, 2009 and 2010 at the Banker Middle East Product Awards. As part of a leading Swiss private bank with a 169 year history, we are conĂ€dent of our position. Sustainability has been important principle for us long before it became a fashionable term. We at Sarasin-Alpen don’t chase quick proĂ€ts – we aim at long-term growth. We try to make a difference not only with our Swiss sustainable nature but also by the safety and security provided by our positioning in the region. These together we believe combine to form the “Perfect formula for Private Bankingâ€?.
COVER STORY
BANK DHOFAR
Steely determination Prudence and consolidation helped BankDhofar to negotiate the fallout of the global financial crisis with equanimity and success Anticipating an adverse economic environment BankDhofar strengthened the fundamentals of its business coupled with strict risk management practices. The bank’s approach to the challenges thrown up by the financial crisis was to take stock and consolidate its position in order to reduce the adverse effects of any potential fallout.The bank continued its growth and expansion strategy, focusing on its distribution channels with the addition of more branches, ATMs and deposit and bill payment machines.
Milestones 1. There was an addition of three new branches at Quriyat, Jalan Bani Bu Hassan and Raysut, a relocation of two branches – Al Amirat and Al-Buraimi and renovation of four branches in Sur, Seeb Airport, Saada and Salalah main branch. 2. Twelve new ATMs were installed (10 offsite ATMs) and eight Deposit and Bill Payment Machines. The year ended with 54 branches, 98 ATMs and 30 DBPMs. 3. The year witnessed a growth in BankDhofar’s flagship Al Heson savings scheme offering competitive prizes to its customers. The Al Heson savings scheme is a popular savings schemes in the market with a unique proposition; it gives customers the opportunity to open an account, save and the chance to win prizes every week. 4. In 2009 its consumer assets grew by RO120.5mn (28 per cent), growing the book to RO544mn and the savings base grew by 18.5 per cent 5. Over the years the bank has participated in almost all major infrastructural projects including the projects of Oman India Fertiliser Company, Sohar Aluminum, Oman LNG, Oman Gas, Salalah Port, Oman Refinery (expansion), Octal Petrochemicals and six power and water projects.
Looking ahead The bank plans to focus on providing better service for retail customers by diversification and expansion of delivery channels. It has plans of opening up six new branches, adding 26 ATMs and 18 CDM’s this year. In addition it will launch dedicated Priority Banking Centres within the capital area and the Dhofar region to provide privilege services to its customers.
72
May 2010
Kris Babicci
CEO, BankDhofar “The year 2010 will be a year of consolidation for the industry and will lay the foundation for a paradigm shift in the approach to risk evaluation and determining capital needs. Therefore our approach to business would be to strengthen internal controls and practices in line with the developing trends and to take a cautious stance towards business growth. The focus will be on developing a quality lending portfolio rather than on aggressive growth”
11 Numbers at a glance Revenue (in million) 100 90 80
Growth: 16.89% RO94.184
RO80.574
70 60 50 40 30 20 10
2008
0
2009
Growth: 7.21%
Profit (in million) 50 45 40 35 30 25
RO23.686
RO25.393
20 15 10 5 0
2008
OER TOP 20 RANK
2009 2008 - 13 2009 - 11
RAYSUT CEMENT COMPANY
Back to the drawing board A combination of effective cash management and reallocation of production helped Raysut Cement to increase its sales volume and revenues
MOHAMMED AL DHEEB CEO, Raysut Cement Company
“Company management has proposed to explore substantial expansion in capacity through acquisition of facilities outside the country as well as adding facilities to existing set up. For full utilisation of its clinker capacity, addition to grinding facilities is likely to take place in the third quarter of 2010�
Raysut Cement performed well in an extraordinary economic environment impacting countries across the globe with slower demand, restrained export opportunities and price competition from various external markets. The company has managed cash flow effectively throughout the period and parked available funds beyond immediate requirements, in call and time deposits.
Milestones 1. Sales volume of cement and clinker increased by 5.5 per cent to 2.92mn tonnes. Sales revenue increased by 0.3 per cent to RO89.35mn from RO89.08mn. Gross profit margin stood at RO28.35mn a decline by 10 per cent due to price competition from UAE and emerging markets, as well as higher import content in sales volume.
12
2. The recession in the export market as well as the need for diversion of cement for domestic requirements, resulted in a decline in the export volume by 12 per cent to 0.64 million tonnes. However the overall sales volume of cement has grown by three per cent during 2009 to 2.78 million tonnes. 3. The sales volume of cement increased from 2.71 million tonnes to 2.78 million tonnes during 2009, an increase of 2.6 per cent. The company was able to sell 136,825 tonnes of clinker in 2009 against 55,623 tonnes in the previous year. 4. The net assets per share have increased during the year from RO0.490 to RO0.534, an increase of nine per cent.
Looking ahead The global recovery is taking place with a stronger start than previously foreseen, due to the unprecedented support by respective governments. In consequence the world wide negative growth of 2009 is likely to turn positive in 2010. The output in the Middle East is expected to grow from two per cent in 2009 to 4.5 per cent in 2010 and 4.8 per cent in 2011. The higher expenditure plan by government and lower inflation than before, coupled with the positive trends elsewhere will pave the way for better growth in the near future in general. However the competition in cement industry is expected to continue for some time.
Numbers at a glance Revenue (in million) 100 90
Growth: 0.30%
RO89.080
RO89.346
2008
2009
80 70 60 50 40 30 20 10 0
Growth: 5.81%
Profit (in million) 50 45 40 35 30
RO27.107
RO28.682
2008
2009
25 20 15 10 5 0
OER TOP 20 RANK
2008 - 12 2009 - 12
May 2010 73
COVER STORY
OMAN CEMENT COMPANY
Beyond profits Oman Cement is helping the Sultanate’s efforts in creating a world class infrastructure Jamal Shamis Al Hooti
Since 1983, Oman Cement Company (OCC) has symbolised Oman’s drive for selfreliance in core industries. The company has given new strength to the construction industry, consolidated the nation’s efforts for infrastructure development and created resources to achieve self-sufficiency.
CEO, Oman Cement Company
“The global recession impacted the export market with a decline in sales volume. We do not depend on the export of cement except for oil well cement and hence the recession did not affect us. Oman Cement company managed to perform well inspite of the global recession”
Milestones 1. Commodity prices have been firming up particularly steel which is one of the main constituents for construction. With the cost of basic construction raw material like cement and steel rising over the past few months, many independent house constructors and real estate developers are feeling the heat. Despite this OCC has been able to keep its prices stable and its profit for the year 2009 has shown an increase of over 90 per cent over the previous year. 2. Government spending on infrastructure projects will definitely help OCC in 2010. The government has announced projects totalling $268.5mn to give a boost to the Sultanate’s infrastructure.
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3. The second expansion project to install a new production line of a rated capacity of 4000 TPD clinker is in progress and the project is expected to be completed by the second half of 2010.
Numbers at a glance Revenue (in million) 90
4. With a world class ISO 9001 certified manufacturing facility operating on quality management system and an ISO 14001 for environment, OCC’s products meet global standards in performance and quality reflecting the company’s enduring commitment to customer satisfaction and a stronger foundation for tomorrow.
80
Looking ahead
30
The demand for cement in the Sultanate of Oman has been growing and the company has installed an additional cement mill of 3000 TPD. It is in the process of further expanding the plant’s capacity by installing a new production line of 4000 TPD clinker capacity. However, over supply situation created by inflow of large quantity of cement from neighbouring countries at lower prices is a threat and has created strain on the company’s selling price. OCC is confident of maintaining a good performance in the year 2010 adopting a strategy of dynamic pricing and effective measures of cost control.
Growth: 7.49%
100
70
RO63.523
RO68.284
60 50 40
20 10
2008
0
2009
Growth: 93.22%
Profit (in million) 50 45 40 35 30
RO24.232
25 20 15
RO12.541
10 5 0
2008
OER TOP 20 RANK 74
2009 2008 - 15 2009 - 13
May 2010
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COVER STORY
AREEJ VEGETABLE OILS & DERIVATIVES
Segmented approach Taking advantage of volatile vegetable oils prices, Areej Vegetable Oils passed on the benefit of lower prices to its consumers Areej Vegetable Oils and Derivatives caters to the needs of the individual and institutional customers in the region. Hence the company’s development efforts are geared towards products tailored to the different segments of the market.
Prem Maker
Executive Director, Areej Vegetable Oils & Derivatives “The company operates in an industry characterised by high raw material content. The international prices of vegetable oils are volatile and can potentially have a significant impact on the company’s profitability. But the management took steps to actively monitor and manage these price fluctuations and mitigate the price risk.”
Milestones 1. Areej Vegetable started to tap export markets in 2009 for its new brand Khafeef – the lightest frying oil which began to do well in Oman 2. Price fluctuations in the international vegetable oil market were managed very well.
14 Numbers at a glance
3. During 2009, the company modernised and expanded its oil processing facilities to meet market requirements. 4. The company also set up a subsidiary company in UAE to handle its direct distribution operations. 5. Diversification of products is being contemplated by Areej Vegetable.
Looking ahead Areej Vegetable had embarked on a two phase programme to enhance its production capacity in 2007. Both phases of this expansion are now complete and additional capacity became available for part of the year. This has allowed Areej Vegetable to improve its coverage of current and new market segments and market niches. The increased production capacity shall help it to meet the anticipated growth in sales in the next few years. The company plans to extend its product range to cover mayonnaise, sauces, ketchups and ice creams in the future.
Revenue (in million) 100 90
Growth: (27.38%)
RO90.674
80
RO65.846
70 60 50 40 30 20 10
2008
0
2009
Growth: 28.79%
Profit (in million) 5
4
3
2
RO1.937 RO1.504
1
0
2008
OER TOP 20 RANK 76
May 2010
2009 2008 - 16 2009 - 14
COVER STORY
OMINVEST
Steady sailing Ominvest has built up an enviable business over two and a half decades with uninterrupted profits and dividends
SHARIQ AZHAR CEO, Ominvest
“At Ominvest our vision is clear. To continually grow and develop our multi-faceted business with a clear objective to become an acknowledged leader among top tier investment companies in our home region. We are confident that we can achieve this vision based on our proven track record of consistently delivering high returns on a spectrum of investments and as we start to diversify and expand into promising new areas of business”
Ominvest, (Oman International Development and Investment Company) is among Oman’s longest established investment companies and one of the first to be listed both in Oman and the region. It has built its success on the solid foundations of consistent performance from its portfolio of investments within and outside the Sultanate of Oman over 25 years of its existence. Up to 70 per cent of the company’s shares are open to foreign ownership and Ominvest has around 1,000 shareholders comprising both institutional and individual investors mainly from Oman and the GCC region.
Milestones 1. The company has an enviable track record of 25 years of uninterrupted profits and dividends. Established with a paid-up share capital of RO8mn which was increased to RO12mn through rights issue in 1994, the company has distributed total cash dividends of RO53.6m and stock dividends of RO8m during its existence. 2. Considering the market value of 200 million shares on December 31, 2009, Ominvest has achieved an internal rate of return (IRR) of 16.45 per cent since inception. Market capitalisation as on December 31, 2009 was RO99m. 3. Ominvest recently announced a 37 per cent rise in profits for 2009 recording profits of RO11.41mn. Group revenue grew over the same period to RO50.53mn from RO41.79mn. 4. Ominvest has a portfolio of investments in banking, financial services, commerce and industry. Its main investments in Oman include Oman Arab Bank, Oman Investment Services, National Finance Company, National Biscuit Industries, The National Detergent Company, Modern Steel Mills.
Looking ahead Ominvest’s stated objectives are to provide its shareholders with a consistent annual cash return on their capital, together with an opportunity to participate in the long-term gains from its investments within and outside the Sultanate of Oman. The objective is to enhance shareholder value by generating above market returns on share capital with sustainable long term growth. To achieve these objectives, the company’s current strategy consists of the following four major categories of business: direct investment in companies (private equity) and projects, real estate investments, capital markets (listed securities) investments and advisory, placement and asset management services.
15 Numbers at a glance Revenue (in million) 90 80 70 60
RO54.410
May 2010
RO58.084
50 40 30 20 10
2008
0
2009
Growth: 11.49%
Profit (in million) 50 45 40 35 30 25 20
RO20.378
RO22.720
15 10 5 0
2008
OER TOP 20 RANK 78
Growth: 6.75%
100
2009 2008 - 17 2009 - 15
AL HASSAN ENGINEERING COMPANY
In growth mode A focus on quality and timely delivery has seen Al Hassan Engineering Company gaining marketshare in a short span of time Peter Hall
CEO, Al Hassan Engineering Company
The company concentrated on a planned and focused approach in its core strength areas in the year 2009. The strategy produced the desired results giving Al Hassan Engineering an improved marketshare despite the economic turmoil of 2008 continuing into 2009.
“Due to increased industrial activity in the oil and gas sector in the UAE, we expect additional investments to be made in power generation, electrical transmission and distribution. With the experience gained on previous projects we are confident of securing more such jobs in the market”
Milestones 1. The company won two major project contract awards – one, the 260 MW Amal Power Plant Project , an EPC contract from PDO – this is a notable achievement as it is the first time that a power plant project has been awarded on an EPC basis to a local Omani company. 2. Second, a full construction package contract including civil works, structural, mechanical, piping, electrical and instrumentation erection work for a gas Depletion Compression facility being constructed for PDO at their Kauther site by the main international EPC contractor, Petrofac. This is a significant contract not just by its value as it continues to build on the company’s long standing relationship with PDO and opens new business opportunities with the internationally acclaimed EPC contractor Petrofac.
16
3. Al Hassan quality assurance procedures have been ISO qualified since 1997. In 2009, it has successfully been accredited with the latest version, ISO:9000: 2008 certification. 4. The company has been successfully carrying out its daily business activities without any Lost Time Injury (LTI) incident. As in 2008, this year was also a year in which we achieved an unblemished record of “zero LTI”. During the course of the year, the company has driven 14.6 mn kms and has achieved 12.3mn manhours for various projects without any LTI.
Looking ahead For the year 2010, we will continue and take forward the strategy developed and being implemented since 2008. In addition we will look to further develop and refine our business portfolio and operational effectiveness to include – greater utilisation of our considerable experience and expertise with further concerted efforts in securing EPC contracts by forging strategic alliances, further development into related areas in the UAE, cost reduction initiatives, synergisation of operations and improved procurement strategies to maintain and enhance our competitive position.
Numbers at a glance Revenue (in million)
Growth: 19.82%
100 90 80 70 60 50
RO53.957 RO45.031
40 30 20 10
2008
0
2009
Growth: 30.74%
Profit (in million) 5
4
3
2
RO2.641 RO2.020
2
0
2008
OER TOP 20 RANK
2009 2008 - 20 2009 - 16
May 2010 79
COVER STORY
OMAN INTERNATIONAL BANK
Conservative approach
Reem Omar Zawawi
Oman International Bank has been able to tide over the financial crisis due to its strong liquidity position and its extensive network Oman International Bank’s (OIB) total interest income for the year 2009 stood at RO40.2mn compared to RO44.1mn for the previous year. However, the bank’s net interest income showed a seven per cent growth to reach RO31.8mn compared to RO29.7mn in 2008. The banks total income was RO43mn in 2009 compared to RO44.9mn for last year. Operating costs increased by four per cent. Its operating profit before provision for the year 2009 was RO23.6mn compared with RO26.2mn in 2008.
Milestones
Chairperson of the Board
“In the wake of diminishing liquidity in financial markets across the globe, OIB has maintained one of the strongest liquidity positions by a bank in the Sultanate of Oman” – From the Board of Directors’ Report for 2009
17
1. The bank’s Indian operations achieved a net profit of RO811,000mn in 2009 compared to RO637,000mn in 2008. 2. OIB is committed to following the highest standards of corporate governance and has complied with international best practice and norms set by various regulatory bodies. The bank conducted the quality assessment review of its internal audit function and was certified by an external firm as ‘Exceptional.’ 3. The banks Internal Audit function obtained an ISO 9001:2008 Quality Management Certification. This confirms the high quality standards of the bank. 4. The bank provided significant sponsorships to various cultural, athletic and social activities around the country. In particular the bank supported major initiatives of the Ministry of Education and the Information Technology Authority. These include the gold sponsorship of Muscat Festival 2009, the main sponsorship of the Muscat International Book Fair, sponsorship of Khareef Tourism Festival in Salalah, Higher Education Exhibition 2009 and an exclusive two year sponsorship to Oman TVs Channel 2. The bank also contributed RO100,000mn to the Oman Charitable Organisation. 5. In 2009 the bank provided 288 training courses both in-house and external which were local and overseas and had 2,887 staff participants.
Numbers at a glance Revenue (in million) 90 80 70 60
RO59.315 RO51.434
50 40 30 20 10
2008
0
The bank looks to the future with conservatism, confidence and optimism. The government policies continue to focus on strong economic growth with expenditure up by nine per cent and revenues by 14 per cent. And OIB is sure to ride high on the crest of this economic growth.
80
May 2010
2009
Growth: (26.98%)
Profit (in million) 50 45 40 35 30
RO29.474
25
Looking ahead
Growth: (13.29%)
100
RO21.522
20 15 10 5 0
2008
OER TOP 20 RANK
2009 2008 - 16 2009 - 17
COVER STORY
OMAN FLOUR MILLS COMPANY
Value addition Oman Flour Mill is diversifying its product offerings to tap into emerging marketing opportunities Manal Abdawani
Oman Flour Mill (OFM) was established in 1977 as a joint stock company with a modest flour milling capacity of 150 tonnes per day (tpd), which has increased through expansions to the current 800 tpd. The company markets its flour products under the brand name, ‘Dahabi’ meaning gold. More than 20 varieties of flour and allied products are produced under this brand name. The company also produces more than 20 different animal feeds under the brand name ‘Barakat.’
Chairperson, Oman Flour Mills “The Company’s diversification strategy of being the premier food company is progressing smoothly. During the year, the Company launched Atyab Investments which will oversee all investment like the industrial bakery, the proposed flour mill in Sohar and the poultry farm project. Work on the setting up of the industrial bakery under the name Atyab Bakery has commenced. The initial challenges have now been overcome and we expect commercial production to commence by October 2010”
Milestones 1. The year 2008-09 proved to be a good year for the company with the operational profits being one of the highest since the inception of the company. The good results were achieved mainly due to clever purchasing of wheat and government subsidy. 2. OFM have worked hard at reducing costs and improving operational efficiency and it has been successful in these endeavours.
18 Numbers at a glance
3. The company’s subsidiary (MPF) revenue was RO5.1mn as compared to RO4.9mn in the previous year. 4. Gross profit margin was 21 per cent in the current year as compared to 14 per cent in the previous year. The margin was higher due to the higher net realisation per metric tonne. 5. The company has undertaken steps to improve efficiency and reduce cost. The various measures undertaken and being considered are – increasing capacity of its discharge equipments in an effort to reduce shipping cost, modernisation of the milling equipments, and adding new products lines.
Looking ahead The Company will continue to strengthen and develop its core businesses of flour and feed, respectively. This will continue to hinge on its proven strategy of comprehensive marketing tactics combined with technical know-how in order to respond to market opportunities. The management recognises that the company has to diversify its operations into related fields to increase profitability. Keeping this in mind, the company launched Atyab Investments during the year. Atyab will manage the diversification strategy and investment plans of OFM.
Revenue (in million)
Growth: 1.16%
100 90 80 70 60 50
RO50.744
RO51.333
2008
2009
40 30 20 10 0
Growth: (39.47%)
Profit (in million) 10 9 8
RO8.061
7 6
RO4.879
5 4 3 2 1 0
2008
OER TOP 20 RANK 82
May 2010
2009 2008 - 18 2009 - 18
COVER STORY
SALALAH PORT SERVICES COMPANY
Smooth sailing all the way Salalah Port Services enters the charts with a strong performance, which points to the sustained success of the company Salalah Port Services also called the ‘Port of Salalah’ is the second largest transshipment hub in the West Central Asia region engaged in leasing, equipping, operating and managing a world-class container terminal and general cargo terminal under a thirty-year concession agreement with the government of Oman. The company is managed by APM Terminals, a global terminal operator with interests in more than 50 terminals spanning 31 countries and five continents via a management agreement.
Milestones 1. During 2009, the company handled 3.49mn TEUs (twenty foot equivalent units) and 3.72 tonnes at its container terminal and general cargo terminal respectively. 2. The container terminal operates with a total quay length of 2,581 after the company converted berth 31 into a full fledge container terminal. This conversion has made it possible for the terminal to add one million TEUs to the existing capacity. 3. The company signed a terminal services agreement with CMA CGM in November 2009 and the port witnessed the liners first call at the port in Nov 2009. 4. The company plans to consolidate its position in 2010 after registering a 14 per cent growth in volumes on the container terminal in 2009 as compared to the previous year. 5. An impetus provided on improving the productivity levels at the terminal resulted in the company registering an average GMPh (gantry moves per hour) of 26.6 in 2009 as against 22.4 in 2008.
Looking ahead The addition of a new shipping line, CMA CGM visiting the Port of Salalah Container terminal during 2009 has resulted in furthering business opportunities with smaller feeder service companies. This has helped in changing the trend in the way middle-east regional shipping lines operate. Based on the high level of service and productivity currently delivered to the customers and Salalah’s prime location for transshipment, the management is optimistic on marketing Port of Salalah to more shipping line customers in the long run.
84
May 2010
Martijn Vandelinde
CEO, Salalah Port Services “Salalah Free Zone has attracted a number of potential investors who are keen on setting up various light, medium and heavy industries within the zone. The Port of Salalah plays a key role in the development of the Free Zone as it is and will be the gateway for all a major portion of the cargo imported to and exported from the Free Zone. The port and the free zone will therefore play a symbiotic role for each other for their development”
19 Numbers at a glance Revenue (in million)
Growth: 15.01%
100 90 80 70 60 50 40
RO41.446
RO47.669
30 20 10
2008
0
2009
Growth: (0.73%)
Profit (in million) 10 9 8 7 6 5
RO4.528
RO4.495
2008
2009
4 3 2 1 0
OER TOP 20 RANK
2008 - NA 2009 - 19
SOHAR POWER COMPANY
Consistent performer A young population and enhanced power demand from the residential and commercial sectors is helping companies like Sohar Power Sohar Power Company was incorporated in 2004 and the plant reached commercial operation on May 27, 2007. The company sells its total production capacity to Oman Power and Water Procurement Company (OPWP) under a 15-year power and water purchase agreement (the ‘PWPA’), guaranteed by the government of Oman. In August 2008 the company reached a significant milestone, by offering 35 per cent of its shares to the public in Oman.
Milestones 1. The company exported a net power of 2,366.5 GWh during the nine months of 2009. A total of 26 million m3 of distillate was produced of which 24.3 million m3 of potable water was delivered to the drinking water reservoir as per LDC requirement and 0.88 million m3 of distillate water was delivered to MISC under a temporary supply agreement.
Arnand de Limburg
CEO, Sohar Power Company “The decrease in finance costs during the current nine months period of 2009 can be attributed to lower long term loans in 2009. The company is confident about doing better in the coming year”
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2. The plant power dispatched 64.96 per cent of the available capacity. Water produced was 66.37 per cent of the available capacity. There was no substantial increase in potable water demand during the last nine months of 2009. All key performance parameters achieved by the company were positive. 3. Overall reliability was 99.52 per cent for power and 99.74 per cent for water. The cumulative forced outage rate of the plant for 2009 was 0.48 per cent for power and 0.26 per cent for water versus f projected of 2.3 per cent for power and 2.1 per cent for water. As regards safety, the company has completed 180,656 man hours in the third quarter of 2009 without any lost time accident.
Looking ahead Direct cost was higher in the third quarter of 2009 as against the third quarter of 2008. The increase in direct cost was mainly due to the higher fuel cost, which is directly proportional to fuel revenue, and higher variable operations and maintenancße fee due to higher power and water output. The trade creditors balance, at the close of the third quarter of 2009, was significantly higher as compared to the same at December 31, 2008. The increase in the trade creditors was due to unsettled liabilities during the nine month period of 2009, which shall be settled in due course.
Numbers at a glance Revenue (in million)
Growth: 2.50%
100 90 80 70 60 50
RO44.099
RO45.201
2008
2009
40 30 20 10 0
Growth: 72.77%
Profit (in million) 5
4
RO3.255 3
2
RO1.884
1
0
2008
OER TOP 20 RANK
2009 2008 - NA 2009 - 20
May 2010 85
INTERVIEW
GETTING CLOSER TO CUSTOMERS
In February this year, Omantel, the largest company on the MSM, unveiled its new enhanced brand with new colours and a new tagline, ‘Together’. Dr Amer Rawas, CEO, Omantel says it is an important step in the transformation of their unified business and reflects the new vision, mission and values of the corporation. In a candid interview with Visvas Paul D Karra, Dr Rawas talks about Omantel’s evolution in a competitive environment. Excerpts: 88
May 2010
W
hat is the secret behind Omantel’s good performance in the past year despite tough economic conditions?
I think the rule is that the ability of large companies to respond to disruptive phenomena or technologies becomes slim and I am very proud to say that as a large company we were still able to respond quite rapidly and with some agility to the global slowdown in 2009. When consumer’s confidence declines their behaviour also gets affected. Therefore, when they are not sure of the future they call less and spend less. Therefore, we have seen the consumer’s trend of fewer calls and more SMS, which costs less but is a more efficient method of communication. We were able to recognise this very early in the game and were able to respond through a number of promotions to stimulate the market. We believe that internal efficiency measures and cost rationalisation combined with promotional offers to stimulate the usage are the reasons why we were able to arrest the declining trend and increase our profit margins by 5.5 per cent unlike many other companies around.
Can you tell us more about the Omantel-Oman Mobile integration process? As a result of the operational and management behaviour that was acquired over the last 40 years, there were some operating inefficiencies in the way we worked. The new operating model eliminated all that with some emphasis on culture change and that has added to our efficiencies. The merger process has been built into the internal efficiency and cost rationalisation measures that I spoke about. Instead of two companies and two operating models, we joined resources to work as one. Like for example, sales people will now sell both Omantel and Oman Mobile products. This is by far the single biggest contributor to the efficiency and there are other procedures that have been simplified.
We did cost cutting in the area of operational maintenance of the older network. Of course, in 2009, we added a completely new network of 3G and that has introduced new costs. The new network will bring in depreciation and operation and maintenance (O&M) costs but its like an oil well exploration. It is costly in the short term but your future is secured.
How did people react integration process?
to
the
Like any organisation, which is undergoing an integration, there will be people who will support the move and those who will resist. This is why such programmes take a long time. We have taken steps through a programme called ‘waiana’ (together with us) cutting across the whole organisation. Basically, it meant listening to the views and ideas of the staff and their aspirations and criticism about the merger process. This has increased the acceptance of the process.
Did the company face challenges in the form of employees who felt they were not given a fair deal and decided to move on? If that was the case, one would be defeating the whole purpose of integration. Every company has a normal attrition process and the rate of attrition increased marginally because of the merger process. However, it was fuelled by the sudden increase in the number of new telecom companies, which went up from two to seven. This created new job opportunities. The
attrition
process
affected
We have chosen our verticals that are focussed around our customers in what is called as customer centric hierarchy
both
companies but because most of the new operators were mobile companies, Oman Mobile got affected more. This is something we were expecting and we had planned for, which in turn limited the damage.
Please explain about the new hierarchy after the restructuring process. As per international norms, telecom companies have vicepresidents managing various verticals of the company. However, where telecom companies differ around the world is on the type of verticals and how you divide them. Some companies divide their verticals functionally, while some divide it based on products. Our verticals centred around our customers are known as customer centric hierarchy. So we have three different VPs managing different verticals like corporate, consumers and wholesale consumers. It takes time to show the desired fruit but we are further consolidating the operating model with resources, process and tools to get more results out of this.
Omantel is the largest listed company. Is the size of a company a benchmark for its performance? I would always link size to revenues and I think that is perhaps the best judge. And large companies around the world have gone through various cycles of splits and mergers to control size and grow their bottom line and top line. Omantel has gone through two cycles and both were timely and came at a time when the dynamics of the market demanded these moves. This reflects the ability of the organisation to respond to the environment around it. And I do not think the size in terms of the revenues or the capitalisation has been a problem for us. The size in terms of the number of staff who were hired over the last 40 years remains a challenge for us. We are working on an option wherein we are going to increase our productivity to offset any inefficiencies due to the size.
How do you critically evaluate your company? May 2010 89
INTERVIEW Considering the level of market liberalisation that has has happened in a short span of time, I think the company has done well. In the last ten years, we have moved from being a government organisation (GTO) to Omantel, which is a government owned closed company. Then it became two companies, a public company; and now it is a unified organisation again. Six major transformations and all were necessary because of the changing environment and because of the government policy to first privatise and then to liberalise. But that is all compounded by a very fast liberalisation process. So within the same ten years we have seen how the market has changed from a monopoly operator six years ago to three operators and now seven telecom operators. For any company this is a tough journey within ten years but I think we have done well.
The criticism against Omantel is that it wer unable to serve its customers better than its competition Omantel was a monopoly company until Nawras came along in 2004. And all monopolies around the world act alike. Right? Then when competition came up, Omantel was able to spring up with its mobile arm – Oman Mobile, which was able to deal with its customers in line with competition. That is why they were able to protect our market. Meanwhile, the other part of the company (Omantel) started to transform itself anticipating enhanced competition. One of the most important driver for our transformation stems from the recognition that for a monopoly to transform into a competitive environment, you need to transform into a customer-centric organisation. And that’s what we have been doing over the last one year.
Perhaps with the status of a monopoly and the fact that you have to deal with competition, the victim has been customer service When Nawras was awarded the second fixed line licence in September 2008, we stopped being a monopoly. By then, the company had merged its operating model into a customer centric model 90
May 2010
CEO-SPEAK Internal efficiency measures and cost rationalisation measures combined with promotional offers helped to increase our profit margins by 5.5% Recognise challenges, communicate it well to the team and then work with them on a mitigation or a solution policy The customer service challenges in the fixed line area are more to do with the topography of the country
with a view to offset its perceived weakness. But that is not a weakness that is peculiar to Omantel. It is something that all monopolies suffer from. But the good monopolies are those who transform themselves and we have done that successfully in Omantel and I have no doubt that we will succeed in the fixed line area as well. The customer service challenges in the fixed line area are more to do with the topography of the country. You have an urban development philosophy that is based on villas than high-rise buildings so if you get to the foot of high-rise building you would get 600 accounts. But here in the villas you have a 50-50 chance of getting a customer. But what we have done during the last one year is we have come closer to customers to basically improve our return on investments by expanding our fixed network through what is called MSANs – a neighbourhood exchange centre where you bring the capacity closer to the customer.
As a CEO, how did you keep up the morale of your staff in the troubling days of the past year? One of the main characteristic of a leader is to understand the situation,
recognise its challenges, communicate it well to the team and then work with them on a mitigation or a solution policy. And that is what I did. This is a new form of engagement. By intensifying the engagement with the stakeholders, namely the board, the management, staff and key customers, we were able to win their confidence. This worked well for me.
You were an academician earlier in your career. Has that grounding helped you in Omantel? There are two types of academicians. Those who are teaching and those involved in management. I have been involved in leading teams. I had a dean and director’s role. As a dean I was managing six centres, which means a large population of staff. I brought in leadership and managerial skills from the academia. I also brought in my technical expertise from teaching and supervising projects. If you are a teacher of three subjects, which I was, I had hundred per cent attrition every three months. And every time they come with a new set of challenges, thinking, and attitudes. A lot of people management is required and most often a teacher’s role in managing people is not recognised. All this helped me.
With over 140 per cent market penetration, the telecom market has become highly competitive. How do you look at the future? In a market that is fully saturated with more than 140 per cent penetration it is challenging for all players. You can continue to fight the game of adding subscribers, announcing new market shares etc. Or you can do what we are trying to do and that is to give better service to our customers. It is very important for us to remain the market leader therefore we are not going to withdraw from the competition for new subscribers. However we are laying more emphasis on satisfying our existing customers who are our bread and butter. But it is going to be very challenging for everyone, and not just Omantel.
Adding the strength of steel to the Sultanate
Quality Billets, High strength reinforcement bars, Welded wire mesh, Epoxy coated rebars
CASE STUDY
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May 2010
SPARKLING EFFICIENCY The year 2009 was full of challenges but Shell Oman Marketing Company found opportunities in this environment by focussing on cost reduction, delivering its plans and fostering a performance driven culture. All these helped the company to achieve good results, writes Visvas Paul D Karra
S
hell Oman Marketing Company (SOMC) achieved unprecedented financial results amidst an unsettled global economic environment and recorded the highest-ever net profit in its history after tax of RO13.02mn compared to the previous year’s net profit after tax of RO12.5mn. Despite the uncertainty surrounding major global economies, the company’s proactive management, as well as sound operational performance were the principal drivers of SOMC’s commendable financial performance in 2009. As a result of higher net income, the earnings per share for 2009 moved upwards to 130 bzs, compared to 125 bzs in 2008. The final dividend of RO12mn i.e. 120 bzs per share represents an increase of 4.4 per cent over the previous year’s total final dividend of RO11.5mn.
Effective initiatives Such outstanding results have stemmed from the company’s focus on costcutting initiatives that included all areas of its business, in areas such as distribution, lubricants blending as well as administrative and operating expenses. The credit position has been monitored with more stringent policies in place to manage any credit exposure and this has further improved SOMC’s cash flow positions while minimising any credit issues. SOMC’s turnover comes
mainly from its retail business, which contributes 53 per cent, while the rest is from commercial fuels (21 per cent); lubricants (14 per cent); and aviation (12 per cent). An upbeat Faisal Al Hashar, managing director, SOMC says that the script for this success story was planned much before the actual impact of the global economic crisis. “In a team of both Senior and middle management, we began by working on the Vision 55 goal in which the company envisioned two different scenarios in the middle of 2008 itself. One is what if oil prices collapse and the other was what if the oil prices went up. And where would the organisation be in these two situations and how to manage the situations,” says Al Hashar. Continuing further he says, “I believe as an organisation, we have once again exceeded our targets and in a number of
Sound operational performance were the principal drivers of SOMC’s commendable financial performance in 2009
areas too. First, the team had delivered on a massive cost reduction that covered all the areas of our businesses. This has greatly influenced our ability to compete in an ever increasingly competitive market but also allowed us the flexibility to manoeuvre our business in accordance to the prevailing market.”
Anticipatory measures This has been more specific to SOMC’s lubricants blending plant where the exports were around 80 per cent. For example, in 2008 the plant achieved a production of around 100 million litres of lubricants while in 2009, the plant production was scaled down to near 77 million litres. The cost base required to service a 100 million is far greater than 77 million and at the same time it was easier to build and invest to meet increased demand rather than having to adjust costs in a market that is shrinking. The reputation for high quality lubricants has enabled the company to achieve higher penetration in both the local and export markets despite the volatile economic conditions. A project to repackage lubricants to attract both existing and new customers was completed by the end of Q3, 2009. In addition, the inland lubricants team has managed to renew key contracts as well as gain new ones that have greatly contributed to business growth.
May 2010 93
COVER STORY The company also initiated cost-cutting measures, and as Al Hashar mentions, it was fantastic how the people reacted and began to contribute to these measures. First of all, while other organisations cut down on salaries, SOMC did not cut down on HR benefits as it believes that people are its most important assets.
RECIPE FOR SUCCESS A company needs to look for cash in its balance sheet in order to fuel its growth Credit positions have to be monitored and more stringent policies should be in place to manage any credit exposure
Sound credit management “Another important thing which I also mentioned in last year’s top OER Top 20 Debate and Awards Presentation function in 2009, at CMA, is that our company will be focusing on the generation of cash from its balance sheet, will focus on costs reduction and will further focus on enhancing our services to our customers.. We tightened the belt by reducing the credit days, and it was amazing to see how much cash was there in our hands. Moving forward, we want to maintain these measures because the efficiency was so great like for example we realised how fast an invoice can be prepared. So our credit management showed a major improvement with significant reduction in sales outstanding,” adds Al Hashar.
The reputation for high quality lubricants has enabled Shell Oman to achieve higher penetration in both the local and export markets The company enhanced its customer service like efficiencies in delivery, invoicing and filling on time etc which helped to gain more customers While other organisations cut down on salaries, Shell Oman did not touch its people
On the retail business side, SOMC focussed on three areas – network development, operational excellence and marketing – which produced the desired results. The growth initiatives were led by investments in new-toindustry (NTI) sites; rebuilding of old sites, focussing on consistently delivering excellence in site operations and sustained marketing efforts.
Reliability pays
Four old sites were rebuilt while six NTI sites were commissioned taking the network number to 139 till date. Here again, the company wisely took advantage of the decline in construction costs to build the sites and was able to reduce costs. The retail marketshare remains the highest and is fairly stable in the face of an ever-growing number of new sites introduced in the market. The average throughput per site (ATP) stands at 9.72 million litres in 2009 and the company’s retail sales grew by one per cent year-on-year. August 2009 saw the highest-ever Shell Oman monthly sale of 122 million litres.
Nevertheless, he adds the company has important customers like Royal Air Force of Oman (RAFO); Ministry of Defence etc who want a company like SOMC that delivers on its promise with reliability and enhanced customer value proposition. The company continues to supply its fuel and services to RAFO four bases in Masirah, Thumrait, Musandam and Salalah. Further, in 2009, SOMC also bagged a contract to supply fuel to all airlines that fly from India into Muscat International Airport till April 2012.
94
May 2010
Many business factors changed in the aviation market in the year 2009, and in early 2010 SOMC lost Oman Air contract to its competitor. “We offer value to our customers that is supported by outstanding service “end-to-end” and we try to avoid offers that are based on price undercutting” says Al Hashar.
Drawing customers Al
Hashar
says
that
the
company
enhanced its customer service like efficiencies in delivery, invoicing and filling on time etc which helped Shell Oman to gain more customers. That created a barrier for customers to move out and in fact the company gained more customers. “If you look at our toplines the reductions in sales were not that big, whereas if you look at the bottom lines we had huge growth in terms of NIAT (net income after taxes) because of all the processes that were put in place to manage and serve the customers better.” All the sites have also been modernised, involving significant investments, right from the underground tanks, to toilets and all the way to the canopy to make sure that customers see Shell Oman as the best. At the time of filling also, we enhanced the customer experience in simple ways like how the customer is greeted, cleaning the windshield etc. All of this helped in drawing a lot of motorists to Shell sites. There was an acceptable volume of increase at the sites and this way the retail business has contributed significantly to the results of the company.
Downstream One Shell Oman is excited about a new project, Downstream One, which has been supported by the Board and approved by the company’s shareholders at the last AGM. The project will be costing around RO6mn over a 2 year period. Downstream One works through a process known as ESSA, which in other words means eliminate, standardise, simplify and automate. The strategy is to differentiate itself from the competitors right from the fuel the company offers, to a whole new customer experience. This would put the company in a different league altogether. Although this programme may affect the company’s bottomline in the short term, it will deliver more value to shareholders in the long run. Note: This interview was done before Faisal Al Hashar’s resignation as the managing director of Shell Oman Marketing Company.
COVER STORY
A DIFFERENT PRISM A ranking of companies on individual
Profits as a % of Revenue Rank
Company
In %
1
Oman International Bank
41.84
2
OMINVEST
39.12
3
Oman Cement Company
35.49
4
Raysut Cement Company
32.10
5
Oman Telecommunications Co.
30.37
6
Bank Dhofar
26.96
7
Bank Muscat
18.61
8
National Bank of Oman
16.57 11.52
9
Renaissance Services
10
Oman Flour Mills Company
9.50
11
Salalah Port Services Company
9.43
perspective highlighting the individual
12
Sohar Power Company
7.20
13
Al Hassan Engineering Company
4.89
strengths of various companies
14
Shell Oman Marketing Company
4.36
15
Oman Cables Industry
4.26
16
Al Maha Petroleum
3.30
17
Oman Oil Marketing Company
3.17
18
Areej Vegetable Oils & Derivatives
2.94
19
Oman Holdings International
1.59
20
Galfar Engineering and Contracting
0.91
parameters throws up a different
Asset Size
EPS Growth Rank
Company
In %
Rank
Company
In RO Mn
1
Oman Cement Company
93.14
1
Bank Muscat
5850.736
2
OMINVEST
35.71
2
National Bank of Oman
1798.213
3
Al Hassan Engineering Company
29.63
3
Bank Dhofar
1486.924
4
Areej Vegetable Oils & Derivatives
28.75
4
Oman International Bank
1039.330
5
Oman Cables Industry
8.82
5
OMINVEST
885.174
6
Oman Telecommunications Co.
5.70
6
Oman Telecommunications Co.
693.621
7
Raysut Cement Company
5.15
7
Renaissance Services
447.939
8
Shell Oman Marketing Company
4.00
8
Galfar Engineering and Contracting
368.254
9
Salalah Port Services Company
0.00
9
Sohar Power Company
201.008
10
Renaissance Services
(8.74)
10
Oman Cement Company
153.480
11
Oman Oil Marketing Company
(15.31)
11
Salalah Port Services Company
135.152
12
Bank Dhofar
(19.01)
12
Raysut Cement Company
123.337
13
Bank Muscat
(21.84)
13
Oman Holdings International
116.607
14
Al Maha Petroleum
(22.82)
14
Oman Cables Industry
100.068
15
Oman International Bank
(25.00)
15
Shell Oman Marketing Company
60.254
16
National Bank of Oman
(54.76)
16
Al Hassan Engineering Company
51.081
17
Oman Holdings International
(82.61)
17
Al Maha Petroleum
49.341
18
Galfar Engineering and Contracting
(85.87)
18
Oman Oil Marketing Company
49.317
19
Sohar Power Company
(86.67)
19
Oman Flour Mills Company
48.097
20
Oman Flour Mills Company
(93.95)
20
Areej Vegetable Oils & Derivatives
30.957
96
May 2010
COVER STORY Profit as a % of Equity Rank
Profits 2009
Company
In %
Rank
1
Shell Oman Marketing Company
45.95
1
Company Oman Telecommunications Co.
In RO Mn 125.233
2
Oman Telecommunications Co.
29.78
2
Bank Muscat
73.718
3
OMINVEST
27.43
3
Raysut Cement Company
28.682
4
Raysut Cement Company
26.87
4
Renaissance Services
28.510
5
Areej Vegetable Oils & Derivatives
23.78
5
Bank Dhofar
25.393
6
Sohar Power Company
23.51
6
Oman Cement Company
24.232
7
Oman Oil Marketing Company
22.21
7
OMINVEST
22.720
8
Al Hassan Engineering Company
19.47
8
Oman International Bank
21.522
9
Renaissance Services
19.26
9
National Bank of Oman
21.105
10
Al Maha Petroleum
19.02
10
Shell Oman Marketing Company
13.021
11
Oman Cement Company
17.83
11
Oman Cables Industry
6.625
12
Oman Cables Industry
16.42
12
Al Maha Petroleum
5.670
13
Oman International Bank
12.57
13
Oman Oil Marketing Company
5.360
14
Bank Dhofar
12.45
14
Oman Flour Mills Company
4.879
15
Oman Flour Mills Company
11.59
15
Salalah Port Services Company
4.495
16
Salalah Port Services Company
11.32
16
Galfar Engineering and Contracting
3.754
17
Bank Muscat
10.37
17
Sohar Power Company
3.255
18
National Bank of Oman
8.43
18
Al Hassan Engineering Company
2.641
19
Oman Holdings International
5.37
19
Areej Vegetable Oils & Derivatives
1.937
20
Galfar Engineering and Contracting
4.58
20
Oman Holdings International
1.759
Share Price Growth Rank
Company
Shareholders Equity In %
Rank
Company
In RO Mn
1
Al Hassan Engineering Company
269.72
1
Bank Muscat
2
Oman Flour Mills Company
211.71
2
Oman Telecommunications Co.
420.520
3
Oman Cement Company
148.50
3
National Bank of Oman
250.391
4
Bank Dhofar
98.10
4
Bank Dhofar
204.007
5
Oman Cables Industry
62.28
5
Oman International Bank
171.179
6
Raysut Cement Company
35.18
6
Renaissance Services
148.016
7
Oman International Bank
35.00
7
Oman Cement Company
135.938
8
Galfar Engineering and Contracting
24.84
8
Raysut Cement Company
106.736
9
Renaissance Services
23.39
9
OMINVEST
82.844
10
Shell Oman Marketing Company
14.50
10
Galfar Engineering and Contracting
82.016
11
Sohar Power Company
3.91
11
Oman Flour Mills Company
42.086
12
Bank Muscat
3.39
12
Oman Cables Industry
40.354
13
OMINVEST
1.02
13
Salalah Port Services Company
39.711
14
Areej Vegetable Oils & Derivatives
0.00
14
Oman Holdings International
32.752
15
National Bank of Oman
(12.05)
15
Al Maha Petroleum
29.805
16
Al Maha Petroleum
(16.27)
16
Shell Oman Marketing Company
28.340
17
Oman Telecommunications Co.
(18.26)
17
Oman Oil Marketing Company
24.138
18
Oman Oil Marketing Company
(23.88)
18
Sohar Power Company
13.843
19
Salalah Port Services Company
(42.90)
19
Al Hassan Engineering Company
13.564
20
Oman Holdings International
(69.60)
20
Areej Vegetable Oils & Derivatives
8.144
98
May 2010
711.104
Dividend yield Growth Rank
Profit Growth
Company
In %
Rank
Company
In %
1
Areej Vegetable Oils & Derivatives
25.00
1
Oman Cement Company
93.22
2
Oman Telecommunications Co.
7.70
2
Sohar Power Company
72.77
3
Oman International Bank
7.41
3
Al Hassan Engineering Company
30.74
4
Sohar Power Company
6.97
4
Areej Vegetable Oils & Derivatives
28.79
5
Raysut Cement Company
6.71
5
OMINVEST
11.49
6
Shell Oman Marketing Company
5.87
6
Renaissance Services
8.83
7
Al Maha Petroleum
5.43
7
Oman Cables Industry
8.04
8
Oman Cement Company
4.95
8
Bank Dhofar
7.21
9
Oman Oil Marketing Company
3.80
9
Raysut Cement Company
5.81
10
National Bank of Oman
3.74
10
Oman Telecommunications Co.
5.02
11
Al Hassan Engineering Company
3.47
11
Shell Oman Marketing Company
4.13
12
Galfar Engineering and Contracting
3.46
12
Salalah Port Services Company
(0.73)
13
Oman Flour Mills Company
3.13
13
Oman Oil Marketing Company
(15.23)
14
Bank Muscat
2.43
14
Bank Muscat
(21.35)
15
Oman Cables Industry
2.06
15
Al Maha Petroleum
(22.85)
16
Bank Dhofar
2.05
16
Oman International Bank
(26.98)
17
OMINVEST
2.02
17
Oman Flour Mills Company
(39.47)
18
Salalah Port Services Company
1.75
18
National Bank of Oman
(53.49)
19
Renaissance Services
1.57
19
Oman Holdings International
(80.02)
20
Oman Holdings International
0.00
20
Galfar Engineering and Contracting
(83.76)
Market capitalisation as on March 31, 2010 Rank
Company
Profits as a % of Assets
In RO Mn
Rank
Company
In %
1
Oman Telecommunications Co.
962
1
Raysut Cement Company
23.25
2
Bank Muscat
906
2
Shell Oman Marketing Company
21.61
3
Bank Dhofar
569
3
Oman Telecommunications Co.
18.05
4
Raysut Cement Company
320
4
Oman Cement Company
15.79
5
Oman International Bank
292
5
Al Maha Petroleum
11.49
6
Oman Cement Company
224
6
Oman Oil Marketing Company
10.87
7
Renaissance Services
222
7
Oman Flour Mills Company
10.14
8
Shell Oman Marketing Company
200
8
Oman Cables Industry
6.62
9
Salalah Port Services Company
180
9
Renaissance Services
6.36
10
Galfar Engineering and Contracting
137
10
Areej Vegetable Oils & Derivatives
6.26
11
Oman Cables Industry
126
11
Al Hassan Engineering Company
5.17
12
Oman Flour Mills Company
106
12
Salalah Port Services Company
3.33
13
Oman Holdings International
100
13
OMINVEST
2.57
14
OMINVEST
98
14
Oman International Bank
2.07
15
Al Maha Petroleum
67
15
Bank Dhofar
1.71
16
Oman Oil Marketing Company
63
16
Sohar Power Company
1.62
17
Sohar Power Company
41
17
Oman Holdings International
1.51
18
National Bank of Oman
35
18
Bank Muscat
1.26
19
Al Hassan Engineering Company
33
19
National Bank of Oman
1.17
20
Areej Vegetable Oils & Derivatives
5
20
Galfar Engineering and Contracting
1.02 May 2010 99
BY SRIDHAR SRIDHARAN
VIEWPOINT
Lessons From Change – Oil & Gas Industry Oil and gas companies are reassessing their operating practices and capital allocation and have understood the need to maintain capital expenditure on projects that will deliver growth
The author is a is a tax partner with Ernst & Young (sridhar.sridharan@ om.ey.com). This article is extracted from Ernst & Young’s publications on Lessons From Change
I
n the last article, we looked across a broad analysis and established a broader agenda for action that would be relevant for all businesses — in every sector, in every country. As a consequence, we believe that a new performance agenda is emerging as companies respond to the downturn and prepare for a different future. In this article, we will look at the Lessons From Change for the oil and gas industry. MANAGING THE CYCLE The oil and gas sector is accustomed to commodity price fluctuations and the need to respond quickly to changing market conditions. However, the speed and severity of the current downturn took many by surprise and the degree of uncertainty about the level of future demand is probably at its highest in decades. UNEVENLY AFFECTED The oil and gas industry features a wide range of participants and different subsectors of the industry have been unevenly affected by the economic downturn. When oil prices were above $100 per barrel and demand was outstripping supply, the top priority for most companies was
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maintaining and increasing production, with cost control taking a secondary role. A year later, the new market reality is forcing many oil and gas companies to reassess their operating practices, investments and capital allocation. The need to maintain capital expenditure on projects that will deliver long-term growth is understood by all players. CAPITAL AND DEBT Reduced availability of capital and tougher credit terms will impact the ability of junior companies to fund ongoing operations and bring assets into production. They are prioritising their most advanced or promising projects to minimise investment risk and increase revenue streams. Many of the smaller oilfield services companies have also found it difficult to raise funds. They have seen a drop in demand for their services and have also come under intense pressure from customers to reduce costs. Consequently, they are responding to the lower margin outlook and reduced activity levels by reducing headcount, deferring new equipment orders and being more selective in bidding for projects.
NEW CHALLENGES The oil and gas industry is sophisticated and mature in terms of its approach to both risk management and governance. Most companies are already engaged in reviewing the effectiveness of their procedures on a regular and ongoing basis and have used existing risk management and governance mechanisms to good effect during the course of the downturn. MANAGING INFLUENCES Much of the world’s remaining oil and gas reserves are located in countries perceived to be riskier due to the lack of stability in their political, regulatory and fiscal regimes. As a result, oil and gas companies are well versed in preparing for, and proactively responding to, external challenges, particularly the risk of new regulatory and compliance mandates. COST REDUCTION With global demand falling for both oil and gas over the past year, they are focusing on trying to improve the bottom line through cost-cutting with areas of particular focus being headcount reduction, working capital management and supplier costs. Companies have scruti-
VIEWPOINT
THOSE COMPANIES WITH OPERATIONS MORE FOCUSED TOWARDS INTERNATIONAL MARKETS WITH GREATER GROWTH POTENTIAL HAVE FARED BETTER DURING THE DOWNTURN
nised their relationships with customers and suppliers more closely over the past 12 months without jeopardising the commercial viability of their key suppliers to deliver on their commitments and keep work programmes on track. ORGANISATIONAL STRUCTURE The headcount reductions announced by some oil companies are not purely about removing people from the payroll. In a number of cases, it is part of a wider strategy to simplify the organisation, to speed up the decision-making process and get the right people in the right types of jobs. The downturn is prompting companies to accelerate the rollout of transformation programmes that have identifiable cost savings. WAITING FOR THE UPTURN To date the sector has not seen a significant increase in transaction activity as considerable uncertainty still exists around the shape, speed and sustainability of economic recovery. Distressed assets abound but the oil majors are likely to proceed cautiously with any acquisitions. In the downstream sector, the focus for the oil majors has continued 102
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WHEEL OF PERFORMANCE The new performance agenda has the following eight action points. These are interlinked to form a wheel of performance objectives and, typically, progress on all of them is required to optimise a company’s position. Reevaluate your business model Optimise the flexibility of your operations Utilise capital availability and deployment properly Maximise your market reach Accelerate your decision-making and execution Revitalise the way you manage risk Improve your management talent Strengthen stakeholders’ confidence
to revolve around the disposal of assets in noncore markets and differential investment in markets with superior growth potential. The financial crisis has constrained the ability of private equity and independent players to fund further acquisitions. ALLIANCES INCREASING The economic slowdown, lower oil prices and the new economic environment have made the benefits of partnership more compelling for some companies and governments are becoming increasingly active in encouraging
and brokering alliances in the oil and gas sphere. The downturn is also likely to increase the appetite for joint ventures as they provide the opportunity for companies to share the operational and financial risks of so-called megaprojects. THE ROAD TO RECOVERY According to our survey, respondents from international oil and gas companies are slightly more optimistic about industry prospects than respondents from other industries, and envision an outlook for increased strategic acquisitions and alliances over the
next 12 months. However, there is considerable uncertainty around the likely timing, shape and sustainability of any recovery. Any recovery is widely predicted to be slow and uneven. In the long term, the overall structural issues surrounding location of reserves and achievable levels of production have not changed. Oil and gas companies must not allow today’s difficult operating environment to prevent them from addressing the need to replace reserves, nor from preparing themselves for the time when growth resumes. The industry has a long and successful history of coping with volatile prices and difficult operating environments; that experience will serve companies well in coping with the challenges that lie ahead. Executives who show ingenuity, have the courage to make tough decisions and demonstrate the foresight to apply lessons from change will guide their companies to success in the oil and gas sector. And they will be the leaders who establish the foundation upon which the new global economy will rise.
HOSPITALITY
SALALAH GETS ITS DUE SHARE
Osama Mariam, CEO, Dhofar Tourism Company talks about his expectations from the recently opened world-class five-star Salalah Marriot Resort in a conversation with Akshay Bhatnagar
W
hat do you think about the pressure on the tourism sector in Oman as a direct impact of the global economic downturn? It is correct that tourism has been affected however Oman has not been affected much compared to the other GCC countries‌
But the occupancy ratio and room rates have gone down considerably in Oman? Dhofar region is different compared to Muscat. Dhofar has a different business mix than Muscat. In Salalah, there are just two international hotels and ours is the third one. The market has appetite for three international hotels. We receive tourists from Europe in the period October to May. Whereas in July to August we have the Khareef season which is a big attraction for the residents from Oman as well as GCC countries. Due to this business mix, the tourism sector in Dhofar region has not been impacted as we have seen in Muscat and other tourism destinations.
What is your vision for the newly opened Salalah Marriot Ressort? Our objective is to position the property as an upmarket resort. It has a number of unique selling propositions. Salalah Marriot Resort is set in a premium location. It offers a wide variety of restaurants and lounges. It provides a good range of accommodations with different configurations to meet the various requirements of guests from different markets. Then we have the best location for diving. Mirbat is known for diving. This will appeal majorly to our guests from the European market (Germany, Switzerland, France, Italy etc.). In addition, we are the only spa centre (from Bali) available in the Dhofar region. We are an ideal destination for honeymooners as well.
What are your expectations on the business front? In terms of business, we are targeting leisure as well as the MICE segments. In the first year, we are expecting about 50 per cent occupancy with an average room rate of RO45.
How much investment has been made in the making of this resort and when do you plan to breakeven? 104
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It is RO20mn excluding the land cost. We hope to breakeven in 10 years.
What makes you think that Salalah Marriot will be successful as a MICE destination? Most of the regional corporate giants have hubs in Dubai and Saudi Arabia. We offer a good destination to them for their business related events. We offer a broad range of MICE facilities. Our largest banquet hall can accommodate upto 350 persons. We also have a large number of rooms to accommodate very large groups. The guests can do business and relax in the resort. We are close to the city so people can visit it to enjoy other attractions as well. Our location, price and the combined package makes us quite attractive in the MICE segment.
How do you plan to offer the high standards of customer service for which Marriot is globally renowned? This is the first Marriot property in the sultanate. This is an ideal opportunity for Marriot to spread awareness about their hospitality and brand values in the market. A significant number of 160-strong staff at Salalah Marriot has the experience of working in Marriot properties in other markets. Marriot has provided adequate training to local staff in maintaining international quality standards. In terms of infrastructure, we have a good variety of offerings to cater to the needs of our guests. For example, we have chalets for guests especially from the GCC market who prefers privacy.
What needs to be done to grow the tourism sector in the Dhofar region? Dhofar region has improved a lot on the infrastructure front. However, we need to have an international airport in place to provide direct flights for people coming from the GCC region or Europe and other international destinations. It is always more convenient to fly in directly rather than coming via Dubai or Muscat. With an international airport, it will be easy to promote the destination and grow tourism in the region. We are expecting the first phase of the international airport to be over by 2013 as per the plan.
What about the initiatives on the marketing side? I must say that the Ministry of Tourism for the last 3-4 years have really worked very hard to ensure its presence at the major exhibitions and trade shows to promote the destination. Unfortunately, many hotels have not been supportive enough and did not participate in such promotions. We have to work very hard with the Ministry of Tourism to support their initiatives. We have to be present in all the major exhibitions to create awareness and sell our product.
What is your game plan to promote the property in the Middle East and international market? We will be promoting different packages to different tourist segments and markets as per their unique requirements. With the Internet, the world has become smaller. Through Marriot’s website,
database, global network, regional offices and sales teams, our property will get the required push. We will also do joint promotions to create visibility. Few FAM groups have already visited us. We are trying to bring in large tour operators from European countries such as Germany, France etc. where Oman Air has direct flights to Oman. The idea is to create awareness so that they are better positioned to sell the destination. For this, we are tying up with Oman Air so that they could sponsor the air travel and we sponsor the accommodation.
What is the status of rest of the parts of Mirbat project? According to the master plan, we have finished the first phase with the launch of Salalah Marriot. We were supposed to open it in December last year but we opened in February this year. The other phases will be taken up gradually. This year we will start the detailed design and specifications for the second phase, the largest phase in the development of the plan. It will include the second hotel, furnished apartments, golf course, water park etc. We will start with some of the infrastructure work say roads, water, sewage and the marina. This second phase development will be done over the next five years.
Have you made any changes in your original master plan with the changing global market dynamics? So far we have not made any change up to the second phase. We may reduce the scale of the water park.
SALALAH MARRIOT RESORT – FACTS AT A GLANCE LOCATION: Mirbat, ACCOMMODATION: BANQUET: 80 kms from Salalah 237 deluxe and 350 people International Airport executive rooms with banquet hall sea and mountain views, 51 Chalets
RESTAURANT & LOUNGES: Arabic café, English bar, seafood restaurant, Cigar lounge, pool bar, all-day dining restaurant
RECREATION: 2,000 sq m outdoor swimming pool, Frankincense spa, diving & snorkeling
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BY MATEIN KHALID
Contagion, risk and currencies There are so many unanswered questions about how the financial markets are showing an upswing despite negative economic indicators emerging from many global quarters
The author is a renowned investment banker based in Dubai
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reece has taught us that contagion risk can never be underestimated in global currencies, for those who failed to learn the lessons of the sterling ERM carnage (1992), the Mexican peso devaluation (1994), the Russian rouble default (1998) and the Asian currency meltdown (1997- 1998), the sovereign default in Argentina (2000) and currency collapses in Turkey (2001). I cannot forget these crises because I lived and traded them all, even as I trade the Greek
TROUBLING SIGNS OF THE TIMES There are profound disagreements in the Eurozone about Greece. This is not bullish for the Euro Oil prices are $85 despite the fact that US gasoline and crude inventories are at record levels and OPEC compliance is 53 per cent Excessive bullishness in world’s financial markets Wall Street is overbought in the short run. The world’s emerging markets show clear signs of a valuation bubble A Fed tightening or a hard Chinese landing (rate hikes, inflation, NPL, yuan reval, property crash, banking crisis) could mean the world bull market is living on borrowed time Risk aversion will mean the Australian dollar can drop 700 points from 0.93 to 0.85 this summer 106
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tragedy in real time now. Chancellor Merkel’s grudging EU-IMF financial lifeline does not inspire confidence. Greek, Italian, Portuguese and even German bond auctions have been poorly received by investors. Even in the US, with $2trn in Uncle Sam paper (US Treasury bills, notes and bonds, thanks to Obama’s epic budget deficits), needed to be financed in 2010, government bond markets are an accident waiting to happen. There are profound disagreements in the Eurozone about Greece. This is not bullish for the Euro, particularly since US private payroll growth has finally resumed after three years. In short, I believe 1.25-1.28 Euro is not at all unrealistic by the end of 2010. The Conservative lead has widened even as UK economic data has improved. This is the reason for the impressive sterling rally from 1.48 to 1.55 in the first half of April. Sterling- Euro is clearly the natural winner if David Cameron moves into Downing Street. AN FX DISASTER There are also FX risks brewing in the commodities markets. I am troubled that oil prices are $85 despite the fact
that US gasoline and crude inventories are at record levels and OPEC compliance is 53 per cent, down from 86 percent last March 2009. How long can Saudi Arabia, UAE and Kuwait tolerate open quota cheating from other OPEC members? Why is the Baltics Dry Freight Index falling if the world economy has so convincingly recovered from the worst recession since the 1930’s? What happens to crude oil if Saudi Arabia boosts production to defend market share in a glutted market? What happens to $8000 copper if Chinese hoarding demand evaporates, the Fed tightens, copper warehouse inventories in London and Shanghai are bloated? Does this not mean that emerging markets commodities currencies are a clear short against the dollar? Absolutely. Who? The South African Rand (ZAR) is overvalued at 7.25 against the dollar. So is the Brazilian Real at 1.76 against the dollar. A global commodities crash is coming. It is only a matter of time. Fasten your seatbelts. Equities can also shift the calculus of risk in global foreign exchange. I am troubled by the excessive bullishness in world’s
PERISCOPE
THE LOW TRADING VOLUMES ON THE NYSE IS A TESTAMENT TO THE RISK OF A MAJOR SUMMER BEAR PANIC ATTACK ON WALL STREET. THIS COULD CAUSE RISK AVERSIONS TO SPIKE financial markets. Markets bottomed last March when the world indices priced financial Armageddon. Markets could well top when the world prices complacency, as the Chicago Volatility Index (VIX) at 15 and pre-Lehman credit risk spreads demonstrated. If Lord Keynes taught me to buy fear and sell greed, it surely makes sense to take risk off the table with the American index at 11,000 Dow, 2,450 NASDAQ and 1,200 on the S&P. BUBBLE IN THE MAKING With almost all index shares above their 50-day moving averages, I am convinced Wall Street is overbought in the short run. The world’s emerging markets show clear signs of a valuation bubble. Does Sensex 18,000 really deserve to trade at above three times book value and 20 times earnings at a time when the Reserve Bank of India (RBI) will tighten monetary policy to combat inflation, when the repo rate will rise another 300 points? Does it make sense to own a property in Brazil when China could be on the eve of history’s next global property bubble and financial crash thanks to the hot money tsunami attracted to the Middle Kingdom by the yuan revaluation.
After all, did this not happen to Japan in the 1980s after the revaluation of the yen at the Plaza Accords (US diktat actually) attracted the world’s hot money to Japan? Economic textbooks tell us that a currency revaluation dampens imported inflation. Wrong. Not in China, as it imports oil, copper, nickel, iron ore, electronic components and software. The low trading volumes on the NYSE is a testament to the risk of a major summer bear panic attack on Wall Street. This could cause risk aversions to spike. The result? A yen rally. A higher dollar against emerging markets. A $300 drop in gold and $50 crude oil. UNDERSTANDING RISK AVERSION It amazes me that so few market oracles in the Gulf understand that global risk aversion is the kiss of death for highly indebted, MENA/ GCC markets. A VIX at 15 was last witnessed in May 2008 and October 2007, two bull market and panic peaks. At 12-13 VIX, the risk of a global stock market crash will become too compelling to ignore. The biggest asset bubble in the world is now in Chinese properties and commodities like copper.
NIGGLING QUERIES What happens to: ¾ Crude oil if Saudi Arabia boosts production to defend market share in a glutted market? ¾ $8000 copper if Chinese hoarding demand evaporates, the Fed tightens, copper warehouse inventories in London and Shanghai are bloated? ¾ Does Sensex 18000 really deserve to trade at above three times book value and 20 times earnings at a time when the Reserve Bank of India (RBI) will tighten monetary policy to combat inflation, when the repo rate will rise another 300 points? ¾ Does it make sense to own a property in Brazil when China could be on the eve of history’s next global property bubble?
A Fed tightening or a hard Chinese landing (rate hikes, inflation, NPL, yuan reval, property crash, banking crisis) could well mean the world bull market is living on borrowed time. If I am right, risk aversion will mean the Australian dollar can drop 700 points from 0.93 to 0.85 this summer. This is a potential profit prospect of $700,000 on a $10mn forward FX position. The risk? Lord Keynes also warned us that financial markets could stay irrational a lot longer than we can stay solvent. As they say on Wall Street, life is lived
forwards, but only understood backwards! So is global macro trading themes! The SEC lawsuit against Goldman Sachs could have ominous implications for risk. It is no coincidence that the VIX shot up, stock exchanges fell worldwide and gold plunged $20. A spike in risk and a fall in commodities meant the kiss of death for the Australian dollar and the Brazilian real. Lehman’s failure was the black swan event of 2008. Could Goldman Sachs’s shame be the black swan event of 2010? May 2010 107
OER WAS GIVEN A CHANCE TO DRIVE A RANGE OF BENTLEY’S RECENTLY. MALCOLM XAVIER CRASTA REPORTS
PURE REFINED PERFORMANCE
B
entley hasn’t exactly had it easy with the entire credit crunch situation that took place last year, for obvious reasons. Thankfully, though things seem to be improving greatly and they are nearly back in full swing. They even have their latest creation on the Horizon – The Mulsanne, but more on that later. For now we would like to introduce you to the current family including the latest addition – the Supersport. It is not everyday that one gets to drive a Bentley, let alone more than one on the same day. This is exactly what we were offered at a recent event organised by the local dealer held at the Barr al Jissah. We were to drive from the resort all the way to Sifah Beach and back in a Bentley of our choice So while there were quite a few present at the event, we managed to drive two of them – the Flying Spur and the Continental Supersports. This was more than enough to give us an impression of what to expect from the other cars. The Flying Spur is a handsome and good-looking vehicle by any standard but doesn’t stand out as much as the price suggests. Inside and out the vehicle, at first glance, looks as plush and classy as most hi-end luxury vehicles but it is when you look a little closer that it truly comes into its own. It’s restrained looks wonderfully mask its most striking features – the beautifully handcrafted interior and immaculate attention to detail. Every inch of the vehicle feels like it was specially built to please you and if you order one it definitely is. This is because Bentley is more than willing to customise the vehicle exactly to your liking, even including custom fittings and furnishings if you should so desire (with just a few exceptions), making nearly every vehicle unique. If you are the sort of person that is looking for a top-class luxury vehicle but would rather drive himself as opposed to being chauffeured around, then the Flying Spur, or maybe even one of the other models, is definitely the car for you. Power is available in abundance with 552hp and 650Nm of torque at your disposal from the twin-turbo W12, the latter of which is available from as low as 1600rpm. And if you feel that this is not enough, there is always the Flying Spur Speed with 600hp on tap and an additional 100Nm of torque to give you the extra edge you desire. The vehicles allwheel drive system helps get this power to the road effectively and cleanly and, working with the adjustable suspensions, it tunes the vehicle behaviour exactly to your liking. Aside from the expected sky-high price and running costs, and the fact that we can’t afford one yet, there is little else to complain about. May 2010 111
The Continental Supersports on the other hand is an entirely different beast. One look at this vehicle and you just know you are in for something special. The vehicle began as an under the radar project to explore the possibilities of reducing weight to realise the full potential of the regular GT’s formidable W12 power unit. The result was astounding to say the least. The cars weight was reduced by around 110kg and it was reengineered, retuned and remapped to achieve phenomenal supercar potency. Power was raised to 621hp while torque was raised to 800Nm, the result – 100kmph is cracked in just 3.9 seconds and it never lets go till it hits max velocity somewhere north of 320kmph. From the first time you sit behind the wheel and plant you foot on the gas pedal, its sheer power and torque demands immediate respect. The grip and agility levels of the ‘regular’ Bentley models are good especially considering their weight, but the Supersports is in a whole different league. In no other model in the family will you see the true potential of the W12 power plant. Hit the first corner and you will realise just how much more a ‘Driver’s car’ the Supersports is. It corners are flatter and harder than any other Bentley and with max torque available nearly throughout the rev-range picking up speed is never an issue. But one key aspect to keep in mind at all times is – although lighter and more nimble than its GT counterpart, it is still a rather heavy vehicle and it is only once you take this into account can you truly appreciate the full potential of the Supersports. 112
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The Bentley Mulsanne The Mulsanne, designed and engineered at Crewe from the ground-up, reaffirms the marque’s intent to create a new flagship Bentley with refined performance, unparalleled levels of interior luxury and coach building skills to the fore. The design of the new Mulsanne is a unique fusion of sportiness, coachbuilt elegance and solidity. Echoing the Bentley S -Type of the 1950s, the Mulsanne features a bold frontal design dominated by the traditional Bentley matrix grille and highly prominent, classic round inner headlamps with chrome surrounds, flanked by two, smaller outboard lamp clusters, all featuring the latest in lighting technology. The iconic ‘Flying B’ retractable radiator mascot is available as an option. The long bonnet, short front overhang and long rear overhang help to convey a sense of power and movement, reinforced by muscular haunches and sharply sculptured lines which flow gracefully from the front wings to the rear. Uniquely designed 20-inch wheels reinforce the Mulsanne’s powerful, sporting stance. The Mulsanne’s design team set itself highly challenging targets for key interior characteristics such as material design, smell, colour harmony and handcrafting. Similar targets were set for the operational refinement and robustness of all control mechanisms. The result is a handcrafted interior that fully reflects traditional Bentley values, executed to the highest possible standards. In the new vehicle, the 6.75 litre V8 develops 512hp while the massive torque of 1020 Nm is now delivered even earlier at 1750rpm. This dramatic improvement in torque delivery from just above idle and right across the rev range ensures that with a mere tap of the accelerator the driver is immediately rewarded with that characteristic deep, muffled V8 burble and phenomenal acceleration.
EVENT
Cerebrate Oman
C
erebrate Oman, the event for Achievers is scheduled to be held in Muscat in June 2010. This will be the first international edition of cerebrate after three successful editions in India. Cerebrate is also being carried to the USA and the UK. Cerebrate is the brain-child of Kiruba Shankar, CEO of Business Blogging, based in Chennai, India. More information on Cerebrate can be found on www.cerebrate.in which carries complete details on earlier and upcoming editions of Cerebrate.
The achiever would be someone who has excelled in his or her field, along with having a country and society centered perspective, created new trends, worked to bring back and keep alive traditions and essence of Oman and someone who wishes to connect their success story to the society. Unlike a traditional conference, there will be no audience. Participants bring their ideas, enthusiasm, sense of humour and experiences to share with the rest of the team. Cerebrate is all about enriching oneself with inspiring life lessons from each other. Many of those who have attended earlier have said it
has been among their best experiences. Cerebrate Oman will help to highlight the achievers, bring up less-known achievers, share the thoughts and paths of the achievers and serve as an inspiration for the youth and society. The Cerebrate Oman team is enthusiastic to hear from Achievers who wish to be part of the energy, learning and sharing. Cerebrate respects not only achievers, but also those who make the achievers stand out in society by giving them the big thumbs up. Nominations for participation are welcome. Please call on 95255614 for more details and to propose names of Achievers.
OER and Alam Aliktisaad Wala’mal are the official media partners for the event.
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Cerebrate is an initiative to get the best thinkers and achievers from different fields together for two days of brainstorming and bonding. It is a hybrid between an invite-only event and an unconference – self-organised, unstructured, fun, yet intellectual. The beauty of the event lies in its diversity and excellence. Each of the achievers will be from a unique field. From entrepreneurs to change leaders, artists
to writers, theatre personalities to movie makers, these are the kind of personalities that will enrich Cerebrate Oman. Participants from business, media, education, advertising, law, theatre, technology, entrepreneurship, movies will be spending time together, sharing their experiences, challenges and best practices.
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RESPONSIBILITY FOR THE FUTURE
KYOCERA MITA’S COMMITMENT TO THE ENVIRONMENT
At Kyocera, environmental care is so much more than following the latest trend. Ever since the introduction of our unique ECOSYS technology,we have reduced the environmental impact of our devices to an absolute minimum. The extreme durability of our printer components ensures that the only consumable you'll need to replace is toner. Take care the world continues to be a place we can all live in. Count on Kyocera.
Mustafa Sultan OfÀce Technology Co. LLC.
P.O. Box 3340, P.C. 112, Ruwi, Sultanate of Oman. Tel: (Sales: 00968-24636818, Service: 00968-24709363) Fax: 00968-24636801 Email: msot@mustafasultan.com Website: www.mustafasultan.com
COUNT ON US.
A stunning convertible
Improve your driving skills
Infiniti, the luxury automotive brand from Japan, revealed its ninth model for the Middle East market. The all-new 2010 Infiniti G37 Convertible has been designed from the outset with one goal in mind: to excite the senses. The stunning silhouette is perfectly proportioned, looking just as beautiful with the threepiece folding hard-top roof up or down, while the performance promised by the potent 3.7-litre V6 engine is guaranteed to delight. The G37 Convertible comes equipped with a standard 3.7-liter VQ-series V6 rated at 328 horsepower. The engine is backed by a standard electronically controlled 7-speed automatic transmission with magnesium paddle shifters and downshift rev-matching technology which delivers fast, smooth and satisfying downshifts for the enthusiastic driver.
The Audi driving experience is expanding its portfolio by offering new courses, fresh challenges and new prices. Based at the Dubai Autodrome since early 2008, the Audi driving experience has already allowed hundreds to challenge and improve their driving skills in a safe environment under direct supervision of qualified instructors. The existing performance driving course and advanced safety course have now been expanded to cover further safety and accident prevention measures and several new courses have been added. The programme also offers individually tailored team building courses. In addition to new courses and challenges the Audi driving experience also features a new fleet of Audi A4, R8 and Q7. Prices start at $250 for the half-day Audi advanced safety driving course and gift vouchers are also available.
Fixing the fault Toyota Motor Corporation announced its remedy for the problem concerning the Vehicle Stability Control (VSC) programme in its Lexus GX 460 and certain Land Cruiser Prado vehicles. In circumstances in which advanced driving skills are required, such as when a driver of the involved vehicle sharply turns the steering wheel in high-speed conditions, or when the driver negotiates a curve at excessive speeds, the vehicle could slide sideways, due to the insufficient activation of the VSC. The following conditions combine to cause the problem: y In the GX 460 and Land Cruiser Prado, heavy components, such as the fuel tank, are located on the left side, and in left-hand drive versions, the left side is made even heavier because of the presence of the driver. y For vehicles with certain tires (on 18-inch wheels) and equipped with the Kinetic Dynamic Suspension System (KDSS) and VSC, the activation of the VSC may not be sufficient in certain circumstances due to the setting of the VSC programme. y Circumstances may require advanced driving skills, such as sharp turns of the steering wheel in high-speed conditions or negotiating a curve to the right at excessive speeds. 114
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As a remedy, Toyota will update the VSC programme to enhance the effectiveness of the VSC so that the risk of the vehicle sliding, even to the point that it is almost sideways, will be reduced. Vehicles involved are as follows: y GX 460: Approximately 13,000 units in total. Approximately 9,400 units in the US, approximately 1,000 units in Russia, approximately 1,000 units in Oman. y Land Cruiser Prado: Approximately. 21,000 units in total (only left-hand drive vehicles with KDSS and VSC). Approximately 4,400 units in Oman, approximately 4,000 units in Russia, approximately 1,500 units in the UAE. No right-hand drive units have this problem. In total, approximately 34,000 units worldwide are involved. In North America, Toyota Motor Sales, U.S.A., Inc. (TMS) and Toyota Canada Inc. (TCI) each announced a voluntary recall on April 19. As for other regions and countries involved, such as in Europe and the Middle East, TMC will work to implement similar measures as soon as possible.
The 5-Series quartet The Oman debut of the new BMW 5 Series sedan marks the epitome of aesthetic design and supreme driving pleasure in the upper midrange segment. With its sporting and elegant design, excellent comfort and the highest standard in efficiency in its class, the sixth generation of this immensely successful executive sedan is expected to continue the success story.
Lotus is back Shanfari Lotus has joined Lotus at a very exciting time with the fabulous new multi-award winning Lotus Evora joining the iconic Lotus Elise and Lotus Exige in its product portfolio together the ultra-light weight track use only Lotus 2-Eleven. Andreas Prillmann, chief commercial officer for Lotus Cars said, “We consider Shanfari Lotus with its passion for, and experience in, hand built British sportscars as the ideal organisation to develop a prosperous business together with Lotus Cars in Oman.”
Sheikh Nizar Said Ahmed al Shanfari, Vice-President, Sports Division, Shanfari Automotive, commented: “Our strategy for the Lotus brand is to capitalise on its heritage and the unique product offering. We aim to satisfy a niche of customers in the market for whom the Lotus brand will have huge appeal.” Shanfari Lotus is based in Muscat and will have dealership and service facilities in Al Khuwair, with further locations in the future.
Pure bred racer
Honda Motor Co announced the arrival of its iconic Civic Type R in the GCC, including Oman. This premium pure sports car with a distinctive, stylish form and performance truly represents the DNA of Honda. The sporty Type R is specially tuned to highlight its performance and pursue the joy of driving with a racing-like 115
feel. With its stunning and futuristic looks, exiting performance and a refined ride, the Civic Type R is sure to stir up driving enthusiasts. With yet another class leading model like Civic Type R, Honda continues to deliver the joy of driving and the satisfaction of superior performance for its customers in GCC.
The new BMW 5 Series will enter the Oman market with one eight-cylinder and three six-cylinder petrol engines. The top model is the BMW 550i powered by a V8 with BMW TwinPower Turbo featuring High Precision Injection (407 hp).The straightsix with BMW TwinPower Turbo, high precision injection and VALVETRONIC in the BMW 535i delivers maximum output of 306 hp. While the two straight-six power units featuring High Precision Injection and lean-burn operation develop 258 hp in the BMW 528i and, respectively, 204 hp in the BMW 523i. Some of the wide range of sophisticated driving and comfort features offered in the new BMW 5 Series include Dynamic Drive Control with three modes: comfort, normal, sport and sport +; Comfort Start; Head-Up Display; Multi-Channel Audio System, Rear Seat Entertainment; Four-Zone Automatic Air Conditioning and BMW iDrive control.
Omantel offers enhanced customer experience
Capital store reopens at Sabco Capital Store at The Sabco Commercial Centre reopened with a brand new luxurious look. Haider Jawad Sultan, managing director stated that the newly refurbishes store offered a very attractive modern shopping experience for customers. World renowned brand of perfumes such as Dior, Guerlain, Clairns, YSL, Issey Miyake, Narciso Rodiguez, Thierry
Mugler and cosmetics are ranged in this bright and attractive store.
The head of Omantel’s Consumer Business Unit, Rao Chagarlamudi has outlined his commitment to ensuring that the more than 2.3 million customers of Omantel and Oman Mobile will receive a significantly enhanced customer experience in the future. Speaking at a media briefing, Chagarlamudi said that since Omantel launched its new enhanced brand and “Together” tagline the company has announced a number of new initiatives to benefit its customers across the Sultanate. He outlined the massive range of high quality services and products that Omantel, as the leading telecommunications
company in Oman, was providing for its fixed, mobile and internet customers. “We have already launched a number of exciting customer offers this year including changes to our Hayyak pre-paid service, the introduction of the first “pay per call” scheme with Mada Liberty in the region and a new 500MB package for mobile broadband internet,” explained Chagarlamudi.
The store now offers a wide range of handbags and wallets from luxurious brands such as Lancel, Givenchy, Thierry Mugler and Paris Hilton. Capital Store Sabco offers customers unmatched shopping pleasure.
NBO promotes Al Kanz 2010 In order to create mass-scale awareness about its biggest ever prize scheme ‘Al Kanz’, in Oman, National Bank of Oman (NBO) conducted 17 road shows in various localities of Muscat recently. These road shows were conducted by NBO’s Direct Sales Team in collaboration with the respective branch managers, regional managers and branch staff. NBO’s senior management members too, actively participated in all the road shows to boost morale and drive the spirit of staff. The road shows were conducted at various localities like CBD, MBD, Hamriya, Al Araimi Complex, Al Khuwair, MAF, Wattaya, Shatti Al Qurum, Azaiba, 116
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Samsung introduces new AC range
Al Khoud, Seeb town and Mabella, to name a few. Smartly clad in Al Kanz T-Shirts and caps, NBO’s direct sales team members made every attempt to reach out to customers, by explaining to them the benefits and advantages of depositing in NBO’s Al Kanz Scheme.
Samsung has launched its new Crystal airconditioner series and the advanced Ceiling Air Conditioner (CAC) top discharge outdoor unit. Combining unsurpassed technology, powerful cooling capacity and ease of installation, both these airconditioners improve the quality of air while cooling to provide the utmost in comfort. Both the ranges will be available in Oman through Samsung’s authorised distributors, Al Seeb Technical Est. (SARCO). Built for the discerning individual and powered by comfort care tech-
nology, the Crystal airconditioner range strives to keep the environment of the home perfect in every way. It features a multi-step filter which dramatically improves air quality to protect health. Comfort care adjusts humidity while cooling in conjunction with an Ideal comfort index, to ensure cool comfort all the time. The smart saver function automatically operates the AC in the least amount of time necessary to cool the room, saving upto 31 per cent electricity while protecting the environment.
First Nawras store in Al-Dhahra
Nawras launched its latest store at Ibri with an opening ceremony attended by HE Sheikh Hilal Said Hamdan al Hajri, Wali of Ibri as well as senior managers of this customer friendly communications provider and VIP guest Sheikh Ahmed Bin Suwaidan al Balushi, who performed the official ribbon cutting ceremony. Nawras CEO Ross Cormack, chief strategy officer, Abdulla Al-Rawahy and chief finance officer, Jorgen
Latte led the celebrations as the 23rd Nawras store was declared open for business. After thanking His Excellency and Sheikh Ahmed for officiating, Cormack announced, “We are thrilled to be opening our 23rd store here, right in the heart of Ibri. We are looking forward to serving the many customers we already have in this area and to welcoming many more new customers to the fastest growing family in Oman.”
Truckoman goes tracking In order to improve logistics support service for PDO, Truckoman has just installed IVMS (In Vehicle Monitoring System) to cover fleet operations in South Oman. IVMS provides real time tracking of vehicles via satellite or the GSM network. Apart from simply confirming the precise location of all vehicles this data can also be used to monitor driver performance and measure improvements following training. With IVMS,
transport operators can improve their safety and operational efficiency. Manish Doshi, general manager of Truckoman, stated that “Truckoman has been moving PDO’s oil rigs for many years and IVMS will further enhance quality and efficiency of our services.” Commenting on the occasion, Chris Fidler, group general manager of Truckoman, added that “Truckoman strives to be Oman’s best logistics company.”
Eqarat.com sets new benchmarks
Since commencing operations in Oman in September 2007, Eqarat.com has enjoyed unique success in the country’s real estate sector. One of the many prestigious properties exclusively listed with eqarat.com is the Oman Development Company (ODC) Tower, located on Baushar Street 500 metres from the new highway and close to several universities of Muscat as well
as Muscat International airport and many prominent business locations. The commercial tower comprises of 35 apartments and showrooms/ offices. Eqarat.com sales division has successfully sold most of the units in the tower. Sheikh Salim Ahmed al Kathiry, CEO, ODC says, “We are delighted at the outcome of this partnership. Eqarat.com’s energetic sales and marketing team has dynamically and proactively sold our project ahead of the sales plan.” Asim al Zadjali, general manager, eqarat.com Oman, adds, “It is extremely rewarding to witness a growth such as this. Eqarat. com has, since inception, consistently worked on improving processes and training our employees in order to bring better quality and experience to our customers.”
Lipper award for First Mazoon Bait Al Ahlam opens Bagno showroom The Italian Ambassador to the Sultanate of Oman, HE Cesare Capitani, inaugurated the 6th ‘Bait Al Ahlam’ outlet at Al Ghubra on April 19, 2010. This new outlet will feature a very comprehensive range of creative bathroom solutions under the Bagno Design concept from Italy. ‘Bagno’ in Italian means ‘Bathroom.’ Bagno Design is a new concept for medium and high-
end bathroom solutions; it brings together an array of products from different manufacturers from across Europe, providing customers with a unique opportunity to choose the best of designs and products from top class sanitary ware manufacturers. Bagno Design is a name synonymous with luxury bathrooms and tiles around the Middle East and Asia regions.
The First Mazoon Fund managed by the Gulf Baader Capital Markets -Asset Management Division (GBCMAM) has won the prestigious Lipper Fund Award 2010 for the Best Fund in GCC under the five years category. The First Mazoon Fund was the only fund to receive a Lipper Award for 2010 under this category. Lipper Fund Awards, the ultimate recognition for the global fund management industry, highlight funds that excel in delivering consistent and strong risk-
adjusted performance. The awards showcase fund managers’ investment expertise and recognise funds with outstanding track records. Lipper, a wholly-owned subsidiary of Reuters, is the world’s leading fund research and analysis organisation. Lipper’s credible and objective recognition of outstanding performance of the First Mazoon Fund reaffirms the expertise of GBCM-AM team. The award vindicates the trust of investors who rely upon its abilities. May 2010 117
GOLFUPDATE
THE LEGEND
Tiger Woods return to golf at the Masters Golf Tournament cheered his fans and saw the resumption of one of the greatest careers in golfing history
Woods’s decision to return to playing will see him resume one of the greatest careers in golfing history.
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isgraced golfer Tiger Woods returned to his professional golfing career at the Masters golf tournament in Augusta (Georgia)on April 8, 2010. Anticipation had been ripe about the troubled golfer’s comeback in competitive golf, as he made a triumphant return to his professional career. The fans of the ace golfer could not have asked for more as the play that the World No.1 golfer displayed was something that can be best described as stunning as the golfer delivered a four-under 68. The feat achieved by Woods was indeed special as this was the first time in his sixteen appearances at the Masters tournament that he was able to break 70 in the first round of the competition. Moreover, the champion golfer also managed to include in his round two eagles, which was another record that he achieved at the Masters golf tournament 2010. The amazing feat showcased by Woods in his comeback game enabled him to finish just two strokes behind Fred Couples. Although the troubled golfer might have been a bit perturbed about the kind of reception that he would be receiving from the crowds, the boisterous applause and unending cheers from the golf fans must have given him the boost that he required. Woods later added that the reception that he received by the crowd at the Masters golf tournament 2010 was something that was almost unbelievable as he had never heard the crowd cheer so loudly for him at the venue. Woods’ ease in the golf course at the Masters golf tournament 2010 highlighted his dominance over the game despite the problems confronting his personal life. 118
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professional, I think Augusta’s where I need to be, even though it’s a while since I last played,” he said earlier. Following the storm of publicity about his personal conduct at the end of last year, Woods made his first public appearance in February to apologise for his actions. The 34-year-old revealed he had been having ongoing therapy for his extramarital affairs, but added he did not yet know when he would be ready to return to competitive golf.
TIGER WOODS FACT FILE Age: 34 Turned professional: 1996 PGA Tour wins: 71 (Third-highest number of career victories in history) Total career wins: 92 Major victories: 14 (Masters 1997, 2001, 2002 and 2005; US Open 2000, 2002 and 2008; Open 2000, 2005, 2006; US PGA 1999, 2000, 2006 and 2007)
In limbo The world number one’s last tournament appearance was on November 15, 2009 – when he won the Australian Masters. Less than a fortnight later he crashed his car outside his Florida home, an incident that led to revelations about his private life and a break from golf. “As a
The American is third in the all-time PGA tour rankings in terms of career victories, with only Sam Snead (83) and Jack Nicklaus (73) having done better than his 71 successes. And he ranks second behind Nicklaus’s record of 18 major titles. Woods has twice come into a major after a long lay-off, with mixed results – he missed the cut in the 2006 US Open at Winged Foot after his father died, and he won the 2008 US Open at Torrey Pines while playing on a seriously injured left knee. Following the Masters, the US Open in June is at Pebble Beach, where Woods won by a major record 15 shots in 2000, while the Open in July returns to the Old Course at St Andrews where he won by eight strokes 10 years ago and by five in 2005.
SPOTLIGHT
AIR CONDITIONING
HOW IT BEGAN A comprehensive guide on air-conditioners including the history, design and style trends developed to help you endure the sunshine
The History The Middle East isn’t exactly known for its pleasant summers. But thankfull we can more than cope with the heat thanks to an, often overlooked, invention called the air conditioner. But how did they come into existence and who was the true inventor of the air conditioner? Read on to find out. First and foremost, before we go into the business breakdown of air conditioners, let us explain how it all began and how the modern air con came into existence. While air conditioning itself is a relatively
new invention, the cooling of buildings is not. It is known that wealthy ancient Romans used aqueducts to circulate water through walls to cool their luxurious houses. Even as far back as the 2nd century China there have been records of some form of air conditioning. It is recorded that inventor Ding Huan, of the Han Dynasty, invented a rotary fan for air conditioning, with seven wheels 3m in diameter and was manually powered. In 747, Emperor Xuanzong of the Tang Dynasty had a Cool Hall, called Liang Tian, built in the imperial palace and was said to have water-powered fan wheels
for air conditioning as well as a rising jet stream of water from fountains. During the subsequent Song Dynasty, written records mentioned the widespread use of rotary fan as a means of air conditioning. Even medieval Persia was said to have some sort of cooling system for buildings during hot weather seasons. They used cisterns, which were large open pools in the central courtyards used to collect rain water, in conjunction with impressive wind towers. These wind towers had windows to catch the wind which was then directed, using internal vanes, down May 2010 119
SPOTLIGHT into the building, over the cistern and out through a downwind cooling tower. As the cistern water evaporated it cooled the air inside the building. In 1200AD, Abd al-Latif al-Baghda described the use of ventilators in various households in Egypt. He reported that almost every house in Cairo has a ventilator, and that they cost anywhere from 1 to 500 dinars depending on their sizes and shapes. In fact it is said that Ventilators were actually invented in medieval Egypt. But it was only in 1820 that British scientist and inventor Michael Faraday discovered that compressing and liquefying ammonia could chill air when the liquefied ammonia was allowed to evaporate. In 1842, a Florida physician John Gorrie used compressor technology to create ice, which he used to cool air for his patients in his hospital. He hoped eventually to use his ice-making machine to regulate the temperature of buildings and even envisioned centralised
air conditioning that could cool entire cities. Although his prototype leaked and performed irregularly, Gorrie was granted a patent in 1851 for his ice-making machine. Unfortunately, any hopes for its success soon vanished with the death of his chief financial backer; without the money he needed there was no way to develop the machine commercially. According to his biographer, Vivian M. Sherlock, he blamed the “Ice King”, Frederic Tudor, for his failure, suspecting that Tudor had launched a smear campaign against his invention. Dr. Gorrie died impoverished in 1855 and the idea of air conditioning faded with him for the next 50 years. In 1902 the first modern electrical air conditioning was invented by Willis Haviland Carrier. Designed to improve manufacturing process control in a printing plant, his invention controlled not only temperature but also humidity. The low heat and humidity were to help
AIR CONDITIONING maintain consistent paper dimensions and ink alignment. Later Carrier’s technology was applied to increase productivity in the workplace. This led to the formation of The Carrier Air Conditioning Company of America to meet rising demand. In 1906 Stuart W. Cramer was exploring ways to add moisture to the air in his textile mill. Cramer coined the term “air conditioning”, using it in a patent claim he filed that year. He combined moisture with the ventilation to “condition” (This evaporation of water in air, to provide a cooling effect, is now known as evaporative cooling) and change the air in the factories, controlling the humidity so necessary in textile plants. Willis Carrier adopted the term “air conditioning” and incorporated it into the name of his company. Early commercial applications of air conditioning were primarily to provide cool air for industrial processing rather than personal comfort but over time air conditioning came to
Effective cooling solutions from Panasonic
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ir-conditioning Projects Division (ACPD) of OMASCO (Oman Marketing and Services Company), the sole dealer and distributor for Panasonic and its range of air conditioning products. They even showcase the premier brand’s larger capacity air conditioners for residential and commercial buildings. OMASCO has provided Panasonic products to the Omani market for over 30 years. Their ACPD consists of a team of qualified and dynamic Sales staff and engineers who are more than capable of giving estimates, designing, engineering and executing high value projects. ACPD even has an in house CAD facility which speeds projects by conveniently providing clients with a shop floor drawing facility under the same roof. ACPD has offices at Muscat, Sohar and Salalah. They are even coming up with many more in near future to cater to every part of the country. Omasco’s countrywide efficient after sales service network ensures complete customer satisfaction. Customers are always on the lookout for air-conditioners capable of working in more demanding conditions. The large capacity air conditioners offered by Panasonic provides excellent cooling, even when outside temperatures exceed 55ºC, courtesy of new ‘super tropical compressors’. The cooling capacity of the air conditioners is further enhanced by Blue Fin Condensers, which lasts three times longer. The large capacity air-conditioners also have a space saving outdoor unit which makes it possible to install the unit into
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spaces where conventional models cannot be installed. Such freedom during installation also contributes to easier piping. And as an added bonus, higher efficiency is attained without sacrificing quietness. Unique Features: Panasonic’s new range of air conditioners comes with inbuilt air purifying system and eco patrol sensors, which utilizes e-ions to effectively cool and clean the air, reducing viruses by 99.5% and allergens by 99%, while saving 20% on energy consumption. Detects the dirt: As soon as the sensors detect unhealthy levels of dust in the air, e-ions are released trapping dust, bacteria, and viruses and effectively cleaning the air. Removes unwanted odors: Positively-charged e-ions also help reduce common house hold odors, such as cigarettes smoke and cooking. Purifying the air: Panasonic air conditioners with their inbuilt air purification system are ideal for protecting children and the elderly. Increases airflow: The units also come with a larger cross flow fan, which dramatically increases air flow. The powerful breeze rapidly cools the room to a comfortable temperature while it cleans the air. And as the breeze reaches a wider area, the temperature inside the room is evenly distributed.
Powerful cooling for big spaces.
Light commercial range of Panasonic ACs specially designed for large scale cooling. Upto 4 Tons capacity
Ceiling Type • Wide air discharge • Odour wash • Auto restart function
Upto 4 Tons capacity
Cassette Type • 3 airflow patterns for extra comfort • Flexible installation • Low noise
Upto 9 Tons capacity
Hide-away Type • Group control • Self diagnostic function • Gold fin anti-corrosion
Oman Marketing & Services Co. PO Box 2734, Ruwi, Muscat 112,Sultanate of Oman Tel: +968 24563762 / 24565596 Fax: +968 24568985, Web: www.omasco.com For project enquiries, contact : Sunil: 99315110 (Muscat), Nilesh : 92124672 (Sohar), Johnson : 99282910 (Salalah)
SPOTLIGHT be used to improve comfort in homes and later in automobiles. In fact it wasn’t until the 1950s that Residential sales expanded dramatically.
refrigerants have been developed as alternatives, including R-410A, invented by Honeywell in Buffalo NY and sold under the Genetron AZ-20 name.
The first air conditioners and refrigerators employed toxic or flammable gases like ammonia, methyl chloride, and propane which could result in fatal accidents when they leaked. Thomas Midgley, Jr. created the first chlorofluorocarbon gas, Freon, in 1928. The refrigerant was much safer for humans but was later found to be harmful to the atmosphere which resulted biological consequences including an increase in skin cancer, damage to plants, and the reduction of ocean plankton.
Innovation in air conditioning technologies continue, with much recent emphasis placed on energy efficiency and improving indoor air quality. As an alternative to conventional refrigerants, natural alternatives like CO2 (R-744) have been proposed. We only have to wait and see what comes of it.
Freon is a trademark name of DuPont (an American chemical company) for any Chlorofluorocarbon (CFC), Hydrogenated CFC (HCFC), or Hydrofluorocarbon (HFC) refrigerant. The blend most used in directexpansion home and building comfort cooling is an HCFC known as R-22. It is to be phased out for use in new equipment by 2010 and completely discontinued by 2020. Several non-ozone depleting
The Current Business of Commercial Cooling While globally the air-conditioning market is growing by leaps and bounds, in countries such as the Middle East the segment has witnessed enormous growth. In the GCC for instance, massive construction drives spurring the development of numerous residential and commercial real estate projects and high population growth have fuelled demand for air-conditioners and cooling systems.
AIR CONDITIONING The boom in real estate development together with the growing emphasis on greater cooling facilities and the resultant increase in power demand have all contributed to creating huge opportunities for manufactures and distributors in district cooling. This trend has received added impetus in recent years with the lack of sufficient generation, transmission and distribution infrastructure to meet projected power demands. The Middle East has been a major market for air-conditioners, coolants and refrigerators, chiefly due to the region’s arid climatic conditions. However, in recent times, other factors have been reinforcing the market’s growth in the segment. These include improvements in lifestyle, the mushrooming of numerous malls and hypermarkets all over the region and other developmental activities, all of which has spurred demand for airconditioning products. ‘Air conditioners have come a long way from being just a cooling machine. Today we have models that can detect and eliminate deadly disease causing agents
LG launches Titan Air Conditioner
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G Electronics Air Conditioning Company (LG AC) has released a powerful new air conditioner designed to combat the Middle East’s relentlessly hot, humid conditions and address the needs of the region’s households by providing optimum hygiene in the home. Launched at an industry roundtable attended by both medical professionals and media, the dual-unit appliance ‘Titan’ includes a range of consumer-friendly features including high-grade health and safety measures, a more comfortable airflow and an inbuilt high degree of reliability even in the most extreme conditions.
Thanks to its cutting-edge technology, the Titan is as safe and hygienic as any air conditioner on the market. Its advanced proprietary ‘virus and allergy-safe’ filters help eliminate dust mite allergens and viruses such as Influenza A, a major worldwide health concern in recent months. LG’s virus-safe filter, according to tests conducted by the Kitasato Research Center of Environmental Science in Japan, eradicated about 99.9 percent of Influenza A viruses in 24 hours; while the allergy-safe filter has been certified by the British Allergy Foundation (BAF) for its anti-allergenic properties. In addition, the Titan’s cyclotron plasma filter, a feature common to LG air conditioners, collects up to 30 percent more dust than conventional plasma filters. 122
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As well as providing an unparalleled range of health-conscious features, the Titan gives consumers the utmost comfort in their homes. Boasting an airflow of up to 10 meters, enough to cover practically any large room in the house, its dynamic double vanes have six horizontal and five vertical swing modes, ensuring that the air conditioner can target pretty much any spot in the room, at almost any power. Better still, the Titan does all this while operating at very low noise levels: at 34dB, the Titan is only slightly noisier than an empty studio (20dB) and quieter than the average public library (40dB). The world’s first air conditioner to boast dual units, the Titan’s unparalleled cooling system works by placing the main unit on one wall, and the second, called the air cruiser, on the opposite wall. This set up cools the room up to 40 per cent faster than with regular air conditioners, and disperses cool air 70 per cent more equally around the room. Also equipped with a humidifier to counter the bone-dry air, the air cruiser uses completely sanitized water, meaning humidity with up to 99.9 percent less germs and bacteria. Oman Gulf Enterprises (of OTE Group of companies) are the authorized distributors of LG products in Oman. Titan Air Conditioners are available across the Sultanate at all LG Showrooms, Hyper Markets & select dealers.
SPOTLIGHT like SARS and bird-flu virus and other harmful pathogens this is done through a technology called MPI [Micro Plasma Ion], a world’s first from SAMSUNG,’ says Ajay Ganti, CEO, SARCO distributors for SAMSUNG in Oman. He goes on to add that newer models of air-conditioners “incorporate what is called GOOD SLEEP MODE, which senses your body temperature to regulate the room temperature. There is a lot of focus on hygiene and health. There is also a lot of impetus on the design accent to turn the air-conditioner into a piece of art, to make it a part of your interior decor. So basically, the AC is a lifestyle product rather than just a cooling product”.
different air-conditioning concepts like chiller, ducted type or DVM(digital Variable Multi),” says Ganti. Traditionally, the Sultanate has been a market for window ACs. That trend is rapidly changing as improved standards of living and more sophisticated lifestyles push customer preference to split and ducted airconditioners. This is in line with global trends. Apart from lifestyle changes and economic development, price reductions in split units have driven demand for
AIR CONDITIONING these models of air-conditioners. What’s more, the air-conditioner which was earlier regarded as a seasonal product now boasts decent sales figures even during off-season. In Oman extreme temperatures and high levels of humidity have spurred the demand for high quality, energy efficient, environment friendly and reliable cooling solutions. The Omani government, in keeping with these trends and demands, has established the highest standards in setting requirements for all new projects being developed for both the tourism and real estate sectors. In order to meet these requirements and to reduce the demand on the governments for energy the District Cooling solution has been developed and implemented throughout the GCC.
In Oman, the air-conditioner and refrigerator market account for a whopping 65 to 70 per cent of all business in the white goods market. “The market size of air-conditioning products is around 200 K units a year in Oman. The market size for Refrigerators is around 80 K units a year. Also due to a very fertile commercial / industrial projects scenario, there is also a great business opportunity for
General ACs – The infallible machine
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he overwhelming success of the ‘General’ brand is the result of its extraordinary quality to perform in extreme climatic conditions and Khimji’s Air Conditioning’s capabilities to handle air conditioning jobs of diverse nature with utmost attention. ‘General’ is leading the way in terms of performance, energy saving, reliability and design. “Khimji’s wide distribution and service network is another factor which has helped ‘General’ reach this milestone of being the largest installed base in Oman,” Says V. Jayachandran, Divisional Manager Khimji’s Air Conditioning Division. A dedicated direct sales team, company showrooms and dealer network all maximize the reach to customers wherever they are. Khimji’s flagship showroom, ‘Bait Al Ahlam’ which means ‘house of dreams’, displays a range of offerings under the ‘General’ brand. These showrooms provide easy access to customers in Muscat, Sohar, Nizwa, Sur and Salalah. Besides the showrooms, ‘General’ is also distributed through a strong network of dealers to cover up every nook and corner of Oman. With breakthrough innovations ‘General’ has come up with products with unique features and customized solutions like VRF (Variable Refrigerant Flow) technology for large buildings. This is a high performance system utilising innovative triple
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high efficiency compressors and advanced refrigerant flow control technology. The result is better energy savings and low operating noise. This system is capable of connecting upto 16 indoor units to one outdoor unit. Khimji’s Air Conditioning Division has pioneered mobile service stations to facilitate the wide reach of its service support to customers. It’s round the clock complaint logging system has further enhanced customer confidence. The focus has not only been ‘just services’ but also ‘customer’s delight’. ‘General’ today is perceived as a brand which is not only a hallmark of quality, durability and value for money but also a de facto ‘infallible machine’ which is every owner’s pride. For over 30 years Khimji’s Air Conditioning has provided solutions to residential, commercial and industrial establishments in Oman. Be it a shop, a villa, an apartment, shopping mall, office, hospital, school or any other civil structure which needs air conditioning & ventilation, Khimji’s professionals are ready to provide quality products, technology and installation expertise. The areas of operation include – pre construction designing, products, cost estimates, installation, commissioning and after sales services.
SPOTLIGHT
AIR CONDITIONING
Buying Smart Before purchasing an air conditioner, it is important to know the basics about them and the differences between the various choices available to us and how they work
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ne of the most common type of air conditioner that we com across on a day-to-day basis is the room air conditioner. This is an enclosed cooling unit that can be mounted in a window, through a wall or in a portable cabinet on a floor near a window. Its job is to cool the air in a small, confined area as directed by the unit’s controls. Some window air conditioners have other functions as well. For example, reverse intake air conditioners also work as heaters, making them a home appliance that is
useful nearly year-round, not that it would be of much use here. Window air conditioners work similarly to central air conditioning systems, but are contained in one compact unit. When the room air conditioner unit is on, the condenser pulls in the refrigerant gas and pressurises it, raising the temperature of the gas. The heated high-pressure gas then travels to the condenser coils on the outdoor side of the unit where fins distribute the collected heat. The cooled gas then condenses into a liquid that
Samsung introduces two new AC ranges
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amsung, always looking to push the boundaries of consumer experience, is bringing in the cool factor to Oman with the launch of its new Crystal air conditioner series and the advanced Ceiling Air Conditioner (CAC) top discharge outdoor unit. Combining unsurpassed technology, powerful cooling capacity and ease of installation, the both these air-conditioning solutions improve the quality of air while cooling to provide the utmost in comfort. Both the ranges will be available in Oman through Samsung’s authorised distributors, Al Seeb Technical Est. (SARCO). Built for the discerning individual and powered by Comfort Care technology, the Crystal air conditioner range strives to keep the environment of the home perfect in every way. It features a Multi-Step filter which dramatically improves air quality to protect health. Comfort Care adjusts humidity while cooling in conjunction with an Ideal Comfort Index, to ensure cool comfort all the time. The Smart Saver function automatically operates the AC in the least amount of time necessary to cool the room, saving up to 31% electricity while protecting the environment. The S-Inverter aids this energy saving by ensuring less fluctuation and motor running time, while maintaining the optimum temperature. With health becoming such a primary concern these days, 126
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the Crystal range incorporates a Micro Plasma Ion (MPI) feature that eliminates bacterial content in the air. The bacteria eradication technique used by MPI removes biological contaminants like viruses, moulds and allergenic agents. Apart from ensuring good health on the inside, its dazzling looks mean that the Samsung Crystal range even helps from the outside. With a high gloss panel in refreshing colours, the Crystal range adds glamour to every room, giving it the feel of a luxurious work of art. The new ergonomic remote control is innovative in its easy view display, soft touch buttons and superior grip, making it feel more comfortable in your hand. The Samsung top discharge outdoor unit provides more flexibility for installation with then longest piping of 30 meters vertically between the indoor and the outdoor unit. Further, it occupies the lowest installation space with a 43% smaller foot print, compared to competitors. The indoor units available from Samsung vary from Slim duct, MSP duct, 4 way cassette, and Ceiling. The CAC range will complement Samsung’s other System Air Conditioner line up: DVM plus. The Samsung DVM III uses a unique Digital Hybrid System technology, which is a combination of Digital Vapour Injection Compressor, Turbo Intercooler and Vapour Injection, to ensure most energy efficient operations. This summer is all set to be cooler than ever, only with a Samsung.
SPOTLIGHT moves indoor to the evaporator coils where it absorbs heat from the room. A fan moves the air through the unit and expels the cooled air into the room. For the most part split-unit air conditioners are almost the same as window air conditioners, their primary difference being that the cold side, consisting of the expansion valve and the cold coil, is split from the hot side of the system, which is placed outside the building. These are more effective at cooling larger rooms that basic window ACs. A thermostat controls the unit’s operation. Many units now have advanced electronic controls that can adjust one degree at a time, rather than the primitive “cool” or “cooler” dial settings that were once common. The electronic controls also may regulate the fan speed, operation mode, timer and other settings. In addition, many room air conditioners at a variety of price points even include a remote. Split-unit air conditioners are
even more advanced, offering a number of features, some even including bacterial control systems. An air conditioner unit’s cooling power is measured in British Thermal Units or Btu per hour. One Btu can raise or lower the temperature of one pound of water one degree Fahrenheit. All window air conditioners are rated by the maximum Btu/hr. Keep in mind that even the smallest window air conditioners may have thousands of Btu per hour. To keep these numbers is the proper perspective; remember to compare the Btu between systems. Generally, the more Btu, the larger an area the air conditioner can cool. Another important factor is quietness. A window air conditioner in a bedroom, for example, should be extremely quiet so that it does not interfere with sleep cycles. The quieter air conditioners are well insulated to minimize rattling when the fan is running. A window air conditioner that has little support – or that
AIR CONDITIONING is not installed correctly -- also can rattle within a window frame. Warranties also vary by a fair degree on all air conditioners. Many manufacturers offer a 1-year full warranty, while some offer a 5-year warrant to cover the air conditioner’s sealed system or major components such as the condenser, evaporator, fan and controls. Many have a 5-year limited warranty on the condenser (no moving parts) and 1-year warranty on everything else. A few models have in-home warranties, which mean the manufacturer will send a service person to your home if there are problems with your air conditioner, but these warranties are not common. To summarise, there are four key questions you have to answer before purchasing an air conditioner: How big is the area you want to cool and where to place the air conditioner?
SHARP Air Conditioners – Healthy Living
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harp has always been an innovative brand. Their Plasmacluster air conditioners is just another from the host of other innovations. By releasing cluster ions in the room, Sharp’s Plasmacluster air conditioners replicate the nature-like situation as they have been adapted by studying nature. Plasmacluster ions enable the creation of an environment very close to that found in nature. One of the factors that save the mother earth from toxic elements being bombarded from atmosphere is the presence of Plasmacluster ions in the stratosphere which detoxify the toxic air. This technology exclusively used by Sharp is certified worldwide by various institutions including the Asthma Society of Canada and the British Allergy Council. Sharp’s Plasmacluster Ions are the combination of positive and negative ions. The positive Ions deactivate viruses, bacteria, molds and undesirable odors. In contrast, negative ions have the effect of only refreshing the air in a room. Current medical practice to fight the influenza virus involves treatments using inactivated vaccines and/or anti-influenza drugs that prevent infection by the virus by inactivating it in the body, and a great deal of research is being conducted in this area. In contrast, Sharp has developed the world’s first technology to inactivate the Influenza virus (which spreads by aerial infection) directly in the air. It is now possible to prevent influenza infections at homes that may cause serious health problems. Furthermore, the effectiveness of this technology is proven against bird flu virus. 128
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Hot brands for cooler life-style from OMEC-SBNAH Oman Modern Electronic Co. (OMEC) and Saeed Bin Nasser Al Hashar (SBNAH), the consumer products division of Al Hashar Group, is the distributor of many leading air-conditioner brands like Sharp, Voltas, Onida and Nikai in the Sultanate of Oman.
Sharp Plasmacluster ion generator never loses its effectiveness by becoming dirty and never needs replacing like other technologies which are filter based. Sharp’s Plasmacluster air-conditioners have super quiet operation, high quality and high-energy efficiency which creates an ambience of peaceful quiet comfort. This is possible because of its advanced technology and the tough body. Even at soaring mercury levels, Sharp’s powerful compressor and advanced heat exchanger creates a quick, cool and comfortable feeling. Oman Modern Electronics Company, a member of Al Hashar Group of companies is the sole distributor of Sharp products in the Sultanate. The Sharp ranges of products are available through company showrooms, authorized dealers, chain stores and hypermarkets.
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SPOTLIGHT Air conditioners are rated in Btu capacity. For a small room (100 to 300 square feet), select an air conditioner of 5,000 to 6,000 Btu/hr. For a medium-size room (300 to 600 square feet) choose a unit of 8,000 to 9,000 Btu/hr. For larger rooms (600 to 1,000 square feet) the best choice is an air conditioner of 10,000 to 15,000 Btu/hr. These are guidelines. If the insulation in your home is minimal or the air conditioner sits in a window facing the sun for most of the day, opt for a unit with higher Btu. Also remember that these calculations are for standard room heights; if the room you are cooling has a taller ceiling, you’ll need about 10 percent more Btu to adequately cool the air in the room. If possible, avoid installing the cooling unit in a window that gets lots of sunlight as it reduces the unit’s efficiency. The same goes for split-units as well. Keeping the outdoor unit in mostly shaded areas improves their efficiency. Keep in mind that if you buy an air conditioner with a higher Btu rating than you really need, it will cycle on and off too quickly. This means it will use more energy, cost more to operate and remove
less humidity from the air, which is a key factor here in Oman. Alternatively, if you use an air conditioner with a low Btu to cool a too-large room, it will run continuously and cost more to operate. Can an air conditioner do more than just cool a room? Yes, some also act as dehumidifiers and some do double-duty as heaters. Depending on where you live, humidity may be a problem or a necessity. For arid summer climates, an air conditioner with a built-in humidifier can add moisture to the air to make the room more comfortable. For other areas, hot days are exacerbated by humidity. An air conditioner with built-in dehumidifier can remove moisture from the air. Some models can also serve as heaters to warm the air if needed. This means that they can stay in place year-round and serve multiple purposes. Keep in mind what you require and purchase one that adequately serves your purpose. How important are controls? Older window air conditioners were
AIR CONDITIONING controlled by a single dial that was set based on an estimate of the result: Set it most of the way to the left, for example, to keep the room at as cool as possible. Today’s air conditioners are much smarter; you can set the temperature accurately and it will maintain the air temperature within one degree of that point. For convenience, many window air conditioners and nearly all split-units now have wireless remote controls that let you change settings -- even the direction of the airflow -- from across the room. Many units even have timers to program the unit to start or shut off, so you can set the AC to turn on just before you get home or turn off when you go to sleep. Another important feature of most air conditioners is the filtration system. Nearly all units have a cleanable foam filter. Some use electronic air filtration to remove dust and pollens from the air. Make sure that the filtration system is adequate and easy to maintain. It’s important to check that extra features, such as a heater or dehumidifier, have adequate and easy-to-use controls. What is your cooling budget?
DAIKIN – Total Air-Conditioning Solution
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uscat Electronics LLC (ME) the sole distributor of the Daikin brand of air-conditioners has over the years earned the trust of people of the Sultanate of Oman in air-conditioning solutions and for excellence in customer support services amongst others. As a world leader in air conditioning solution and the largest manufacturer of air conditioners in Japan, Daikin is trusted to control the temperature, airflow and air quality in a broad range of environments, from homes to high rises, from hospitals to hotels, from offices to industries; Daikin’s airconditioning solutions provide superior comfort. Daikin is committed to bringing climate-controlled comfort to places where people live, work, meet and relax for over 80 years. Innovation and quality have always been the keystones of Daikin philosophy and Daikin strongly believe that by offering the best products/solutions success can be maintained throughout. With operations across the globe Daikin has invested more than 80 years and billions of dollars in research and development in the fields of mechanics, electronics and chemistry to produce air conditioning products that are energy efficient, quiet, simple to use and reliable. Air-conditioning systems that use new refrigerants and save 130
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energy are the norm, however Daikin has gone much further by maximising technological development in these fields to not only provide top-level air-conditioning performance but also offer minimal space utilisation, efficient building management and a multitude of other value added services. ME along with Daikin offers a wide range air-conditioning solutions in the form of wall/ ceiling mounted split, ducted, package, chiller units and the intelligent air-conditioning system the VRVIII (variable refrigerant volume) to mention a few. VRVIII with Daikin’s proprietary inverter technology and cutting edge control system operates with outstanding efficiency. Daikin offers a compact design by further optimising equipment functions, exceeding the norms for air-conditioning systems thereby facilitating easy installation in limited areas and take up less effective space. These contribute to high energy and space saving, which greatly reduces the running costs and facilitates far better building management. Daikin’s constant efforts have been devoted towards developing and using the latest and the most revolutionary technologies in the development of it’s air-conditioning solutions to offer customers larger outdoor capacities, greater energy saving, minimal space utilization and above all comfortable air environment.
SPOTLIGHT How much can you invest in cooling a room? If the selected room only gets hot during a couple of weeks in the summer, you probably want to invest in a less expensive model. If the cooling season is long and the room is frequently populated, you should invest in a more expensive and more powerful unit. For the most part though, considering our climate, investing in a good air conditioner is never a bad idea. How to Shop Window air conditioners are typically a doit-yourself project. You will buy it in a box, unpack it and install it yourself. The model you select can be “shopped” among numerous retailers, searching for the best price and after-sale service. On the other hand split-units need to be professionally installed so keep that in mind before purchasing one and try to make sure that the service is provided for. At what time of the year you shop is also very important. The selling season for air conditioners is obviously just before or during the first few months of summer.
AIR CONDITIONING
Understanding industry jargon How often should I clean the filter? To ensure maximum cooling capacity and efficiency, you should keep the filter clean. During peak usage times, the filter should be inspected on a weekly basis to make sure that it is not clogged with dust. What does EER mean? The EER, or Energy-Efficiency Rating, measures an air conditioner’s energy consumption and efficiency. A higher
In fact most units are sold between late May and August. Shopping for an air conditioner late in the summer season means you can find reduced prices on units by as much as 25 percent. An excessively hot local summer can quickly drain the stores of units that won’t be reordered until next year, while a coolerthan-normal summer can leave many units on the shelves that retailers need to
EER rating means that your AC is consuming less energy. What is the tonnage in ACs? The unit of measure used in air conditioning to describe the cooling capacity of a system. One ton of cooling is based on the amount of heat needed to melt one ton (2000 lbs) of ice in a 24 hour period. One ton of cooling is equal to 12,000 Btu/hr.
sell on clearance, so make sure to plan ahead in order to pay less. Window air conditioners are comforting low-maintenance home appliances that can serve the cooling needs of a room for many years at a relatively low price. When it comes to air conditioners, knowing what, when and how to buy can make all the difference.
TEMPSTAR - the environment friendly ACs
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ahwan Electronics LLC, in association with AHI Carrier FZCO, launched the environment friendly range of Tempstar commercial airconditioners. The Tempstar brand is owned by United Technologies Corporation, USA, who also own brands like Carrier, Otis, Pratt & Whitney, Skikorsky etc. They are manufactured by International Comfort Products (ICP), located in Tennessee, USA. The products were presented to a large gathering of airconditioning specialists from Oman at seminar held in Muscat recently. Tempstar Corporate history can be traced back over 140 years. Manufacturing started in Lewisburg Tennessee USA with wood burning stoves in the 1800’s. Tempstar manufactured its first airconditioning unit in 1962 and have been present in the Gulf region for over 25 years. Bahwan Electronics have been distributing Tempstar products in Oman for over 4 years. “The new range of airconditioners use green gas refrigerants that cut ozone depleting emissions by over 30%,” said Mr. Colin Perkins, Manager- Export Sales – RLC, Carrier Corporation North America, while addressing the participants in the seminar. Mr. Perkins gave a detailed presentation on the manufacturing capabilities of ICP, along with technical
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features of the new range of airconditioners. He laid emphasis on the need for industry and commercial establishments to be aware of the risk to the environment from HVAC products using conventional refrigerants, and explained how the new Tempstar airconditioners could help preserve the environment due to lesser emissions of harmful gases. The new Tempstar products are also highly energy efficient, leading to savings in operational costs and reducing dependence on energy generated from conventional fuels, further protecting the environment. Earlier, while welcoming the guests, Mr. Jayaprakash Menon, General Manager – Bahwan Electronics, took the opportunity to remind the guests of the importance of preserving the environment for future generations. The seminar was also attended by Mr. Jafar Imam, Regional Manager – RLC, AHI Carrier FZCO. Climate Control, the leading HVAC publication in the Gulf region, covered the seminar through its senior editorial and management personnel. Interviews conducted with some of the well known airconditioning consultants & specialists at the event revealed that most of them had been eagerly awaiting the introduction of such a range of HVAC products in Oman. All of them were of the view that the launch of this Tempstar range by Bahwan Electronics was timely, and that this signaled a paradigm shift within the HVAC business in Oman.
Powerful cooling, absolute comfort.
Toshiba airconditioners are designed to make life better in every way. With super compressors that keep you cool even in the most extreme temperatures. And multiple filters to keep out harmful particles. Airconditioning that truly is perfect. This summer, demand more than just cooling from your airconditioner. Ask for comfort, ask for Toshiba.
Toshiba Daiseikai Split Air Conditioners • 6-in-1 Filtration • Complete Climate Control • Plasma Air Purifier • Air Ionizer • Self Cleaning • Perfect Purificatiion • Zeolite-Plus Deodorizing Filter
Toshiba Window Air Conditioners • 8 in 1 Filtration to guard against viruses, bacteria and other airborne contaminants. • Flat panel design
Showroom: Al Rawdha Building, Al Noor Street, Near Sultan Qaboos Mosque, Ruwi. Tel : 24796629 Also available at all leading electronics and appliances stores.
SPOTLIGHT
AIR CONDITIONING
Getting the best from your A/C Increase the life and improve the efficiency of your air-conditioner with these few handy tips. Also see how you can make you A/C more energy efficient so that it doesn’t run up huge electricity bills each month
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he maintenance of an AC is an area that most consumers and commercial clients need to learn about. It is not always necessary to order dealer service when a little bit of care and maintenance on your part will go a long way in improving the working life of your air conditioner Simple things such as regular cleaning of the filters, helps increase the life of your AC. However, it is more prudent for you to enter into an annual maintenance contract with the authorised service centre of your brand of AC, so that the units are maintained at a nominal cost with little hassle. The following few tips will help one maintain an air-conditioner in an easy simple way: Understand that an air conditioner, apart from cooling, also conditions the air inside your room like humidity, dust, order, fungus, bacteria, etc. All good quality ACs have cooling, humidity control, dust removal, anti fungal and anti-bacterial functions and these need
to be used properly. Split ACs are now affordable, very quiet and energy saving as compared to window ACs. They are also more hygienic and prevent birds from making their nests in air gaps, rodents creeping in and air from leaking. Clean the filter of your AC once a fortnight, or when the indicator lamp on the front panel lights up. Dirty air filters force your system to work harder to push cool air through your home. This uses more energy and places extra strain on the air conditioning system. Take the filter(s) out and hold it to the light. If the dust on the filter is so think that you can’t see much light shining through the filter, it’s time for new filters. A clean air filter, unobstructed by the dirt and other debris, will save you money on energy costs and prolong the life of your air conditioner. If you do not know where your air filters are or how to replace them, ask your HVAC technician to show you during an inspection. Keep the doors of your rooms open for a few minutes every day to allow some
fresh air to enter. Do not spray any type of deodorant or perfume into your split ACs. Doing so will result in foul smell, necessitating a cleaning of the indoor unit. Avoid smoking in an AC room as indirect smoke can harm other family members and it is very difficult to remove the odour even by servicing. For safety, always turn the thermostat and outdoor unit’s breaker off before doing any work around that outdoor unit. The coil can be cleaned using a softbristle brush to gently sweep the fins. Always brush in line with the fins, and be gentle because the fins can bend easily. Because the fan pulls air through these fins, you can expect to find dust clinging to the fins. Removing this dust and other debris will reduce resistance and increase efficiency. If you smell bad odour, it normally will not be from your AC but from your carpet, curtains, linen, excessive sweat, etc. However, if the filter is not cleaned
Chigo – an affordable luxury
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higo is one of the largest Chinese Air-conditioner manufacturers, exporting to over 160 countries and with a designed annual output of 10,000,000 sets. With its All-in-one production strategy Chigo is able to meet the ever growing and changing demands of it’s customers. As a leading enterprise in Chinese AC industry, CHIGO engages constantly in R&D to offer customers affordable highquality and energy efficient air-conditioners. Chigo’s pursuit for high-quality and environment friendly products have been globally recognised and led it to be awarded over 200 certifications , including the ISO9001 Quality System Authentication, the ISO14000 Environmental Management System Authentication,
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China Inspection-free Product Certificate, China Energysaving Product Certificate, China Compulsory Certificate (CCC), UL certificate of the USA, CE certificate of EU, GS certificate of German and SAA safety certificate of Australia, to mention a few. Chigo has also won the award of “Global Green Environment-Protection Energy-Saving Air-conditioning” from the United Nations. Muscat Electronics LLC (ME) the sole distributor of the Chigo brand of air-conditioners has over the years earned the trust of people of the Sultanate of Oman in energy-efficient and affordable high-quality air-conditioners and for excellence in customer support services amongst others. ME offers a wide range of air-conditioners including window, wall split, floor-standing, portable ACs and dehumidifiers.
routinely or the drainage is clogged and water remains in the drain pan for long, it can cause foul smell. Here, it is essential that the drainpipe be connected properly to prevent foul smell from entering through the pipe.
Keep the exhaust fan of your bathrooms ON when you are at home. Keep the split AC ON even when you are out of home at a temperature of 27 degree C. This will keep your home cool and healthy, especially when the outside temperature is above 42 degree C, with high humidity. A good quality AC is meant to be ON 24 hours a day. In Oman today, an AC is needed for not more than seven months a year. Using the AC when indoor temperature is less than 25 degree C is a waste of energy. Between November and March, do not switch ON the AC in fan mode, instead use a ceiling fan that will
give you comfortable and natural sleep. When the outside temperature goes above 42 degree C, keep the bedroom and living room ACs ON at a temperature setting of 27 degree C even if you are out of the room. This will prevent the room walls and roof from becoming excessively hot. Hot walls and roof lead to continuous running of the AC’s compressor, resulting in excessive power consumption and inefficient cooling. When you re-enter the room, you can adjust the temperature settings. Your electricity bills will not be high as the compressor will shut down on reaching the set temperature. At such times, the AC can be turned off after 10 PM as the room temperature will remain at around 25 degree C and a ceiling fan running at slow speed will give you comfortable sleep. If you own a villa, plant trees around the building, as these can help you save on your electricity bills. Insulate your rooftop professionally and
use good quality insulated bricks for the walls. Use thick curtains so that the heat rays do not enter the house / flat. Keep the outdoor unit of your split air conditioner in a shaded area or place it in such a way that afternoon sunlight does not hit it directly. Get the AC checked and serviced by your distributor once a year for any gas leak and get the outdoor unit washed using high pressure water. This will help you save on your electricity bills. Cleaning the filter every fortnight is very important to save energy. Users themselves can do filter cleaning and use service centres for other routine services.
Try to select energyefficient ACs Electricity bill of a three-bedroom villa or apartment with five occupants under above conditions will not exceed RO45 per month in peak summer, even as one stays fresh and comfortable.
Advanced Air Conditioning Technology to suit your requirements ...
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NEWSMAKERS
Raising the bar Majan consolidated is planning to set up a college of international standards for media studies
Pudney and Majan Consolidated are also planning to organise media related events like a ‘Global Cultural Award Programme’ in the Sultanate which is expected to attract international media, celebrities and high end tourists to the Sultanate. HH Sayyed Nawaf Barghash Said al Said vice chairman of Majan Consolidated told OER that Pudney will be the chairman of advisory board and Professor Gary Allen English, a well known name in media studies, will be the CEO of the college.
(From Left): Anvwar Hussain al Balushi, Group CEO Majan Consolidated, Gary Allen English, CEO of the college, HH Sayyed Nawaf Barghash Said Al Said Vice Chairman of Majan Consolidated and Gary L Pudney Chairman Advisory Board of the college
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man is likely to become the preferred destination of those who aspire to go for media studies of international standards. A university college for media studies of global standards owned by Majan Consolidated is expected to come up in the Wilayat of Seeb in the Sultanate next year.
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“Strategic partnership means a high level of cooperation and the university will be completely owned by Majan Consolidated,” said group CEO of Majan Consolidated Anvwar Hussain Al Balushi. On the courses planned, English and Al Balushi explained that the curriculum was in the development stage. “Broadcasting will be a major,” Al Balushi said. “Several TV networks have requested for such a course. We want to discuss with media companies in the region on whether they want us to start a minor in print journalism,” noted English.
The college named University College of Media Arts and Sciences will have in its faculty and governing body some of the globally known names in journalism and entertainment industry, like the popular TV producer from the US, Gary L Pudney. It is likely to attract students from abroad also thereby reversing the current trend of students going abroad from Oman for studies. Pudney, who is the president of Gary L Pudney Company, a production company, is acclaimed as the highest ranking talent executive in the history of broadcasting. His TV projects and specials have won over 50 Emmy awards and he is known to be close to celebrities, royalty and other dignitaries.
HH Al Said mentioned that the idea of establishing a university was the brainchild of Professor Gary English who visited the Sultanate a few months back. “More importantly, His Majesty Sultan Qaboos bin Said’s vision encompasses media and arts and he loves them and supports them. It also inspired me to start the college,” he noted. He also informed that two globally renowned universities have evinced interest in having strategic partnership with the media college.
The Majan Consolidated officials along with Gary L Pudney paid a visit to HE Salem bin Nasser Al Maskari, secretary–general of the Council for Higher Education and discussed about the college. HE Al Maskari welcomed the idea, said Al Balushi.
The college named University College of Media Arts and Sciences will have in its faculty and governing body some of the globally known names in journalism and entertainment industry
On the mega cultural event, Pudney said it will be a unique programme to honour great personalities for the contributions made in their career. The event will bring a new concept of honours. The event will include performances and renowned hosts and will be broadcasted live globally by the international media.
BROWSINGCORNER
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his short book, examines the causes of such runaway speculative binges as Holland’s Tulipomania in the mid-1630’s, France’s sale in the next century of shares in Louisiana gold that could not be unearthed, Britain’s debacle in 1720 when shares in the joint-stock South Seas Company rose to ten times their value in nine months, only to collapse ignominiously before year’s end, and Florida’s disastrous landscams of the heady 1920’s.
the underlying means of payment,” Galbraith cautions. Leveraging is a profitable business as long as no one rocks the boat, but once investors begin to demand
“All crises have involved debt that...has become dangerously out of scale in relation to
monotonous regularity of the moon’s monthly phases, although over a period of two or more decades. The time between panics equals the time it takes for economic amnesia to be complete. Galbraith states that there are few references in life so common as that to the lessons of history. Those who know it are not doomed to repeat it. He states that for practical purposes, the financial memory should be assumed to last, at a maximum, no more than 20 years. The sub-prime mess started to take of around 2003, so counting from 1987 that would be 16 years. This was not a bad prediction.
Galbraith is not sanguine about the public’s ability to resist the quick and easy money that spawns speculative fever. Economic amnesia, it seems, hits the financial world with every new generation of financial gurus, what hot-shot broker today remembers in any vivid way the go-go 1920’s, the brutal 1930’s that followed them, the market-dull 1960’s, or even the panic of 1987? Add to this forgetfulness the allure of Ponzi schemes that reward early speculators handsomely as a means of attracting the unwary, who jump onto the reverse pyramid just as it nears the saturation point.
Short term memory
what has been promised them, the disorderly market that ensues often generates panic. Financial panics, as Galbraith documents in lucid detail, occur with the
TIMELY ADVICE THIS CLASSIC IS A BEGINNERS GUIDE TO THE FINANCIAL CRISIS AND IN LIGHT OF THE RECENT SUB-PRIME FALLOUT ITS POSTULATES ARE MORE VALUABLE THAN EVER BEFORE
The publication featured in Browsing Corner is provided by WHSmith Bookstore
This classic by Galbraith is a beginner’s guide to financial crisis. The book is only a little above 100 pages and suitable for all readers. It focuses on the euphoria of booms, not on the pathology of busts. Galbraith dives into history to reveal the circumstances of the different financial crises. He concludes -- fools, as it has long been said, are indeed separated, soon or eventually, from their money. So, alas, are those who, responding to a general mood of optimism, are captured by a sense of their own financial acumen. Thus it has been for centuries; thus in the long future it will also be.
Cut out this coupon from OER and present it at the WHSmith’s bookstore in Jawarat Al Shatti to claim a 10% discount on the book featured in the May 2010 issue, or 5% discount on all other books.
*This coupon cannot be combined with any other in-store promotions. Offer valid until July 31, 2010.
WRITING IN COLOUR
Who better than Caran d’Ache to create a line of writing instruments in the most dazzling shades? The “Couleurs du Léman” line is a product of the company’s expertise in fine arts; a true celebration of colour that reveals the harmonies of extraordinary pigments. Flamboyant red, pink, saffron, midnight blue, carbon black all with a brilliant lacquer finish beautifully set off by the sparkle of silvered and rhodium-coated fitments. This new line offers everyone a writing instrument that allows them to express all their emotions and extend their elegance to include the choice of pen and co-ordinated accessories.
APPLE’S NEW TOY
Apple’s new iPad is a revolutionary device for browsing the web, reading and sending email, enjoying photos, watching videos, listening to music, playing games, reading e-books and much more. iPad’s responsive high-resolution Multi-Touch display lets users physically interact with applications and content. iPad is just 0.5 inches thick and weighs just 1.5 pounds – thinner and lighter than any laptop or netbook. iPad includes 12 new innovative apps designed especially for the iPad, and will run almost all of the over 140,000 apps in the App Store.
PERFECT FIT
Inspired by the soccer world cup, the Prolific Lace from Clarks replicates a classic soccer boot construction using premium quilted leathers and a stylish performance that lasts. It kicks back at tradition through a high level design.
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ONE-SIDED
The OnBike by Cannondale is the first production bike inspired by the ON Concept bike shown at Eurobike 2007. The ON makes use of the “System Integrated Chain Case Technology”, where the chain case is a single sided, fully enclosed, structural part of the bike frame. This result in a maintenance free, clean and efficient drive system with 9 speed internal gears and disc brakes. The unique chain case structure is machined from billet, making the structure extremely stiff yet light at the same time. Cables are internally routed in the frame and the tube shapes are edgy and aggressive. The fork is the Cannondale specific HeadShok Solo which makes this bike truly single sided. The bike is the first of its kind, very unique, innovative and limited to just 250 pieces.
DESIRE THE BEST
The HTC Desire takes Android 2.1 to the next level with the latest HTC Swense user experience. It also utilises a fast 1 GHz Snapdragon processor and an advanced 3.7 inch, WVGA AMOLED display to deliver the performance and visual experience needed for the best smartphone experience possible. HTC Sense is a user experience focused on putting people at the centre by making phones work in a more simple and natural way. This experience revolves around three fundamental principles that were developed by observing and listening to how people live and communicate.
NEW KID ON THE BLOCK
HP has unveiled the final specifications of the new Compaq AirLife 100. It is all set to deliver a new way of connecting to the Internet, email, social networking, photos, music and more. It will feature a 1GHz Qualcomm Snapdragon processor, 512MB RAM, 512MB Flash memory, a 16GB SSD and a 10.1-inch resistive touch screen. It will run on the Android platform but will feature a ‘Compaq touch experience’ skinned on top of the OS. May 2010 139
implementing international methodologies and standards. The company has successfully completed ministry contracts and prestigious orders from various multinational companies. It currently has contracts from the Ministry of Finance, PDO, Occidental Mukhaizna, ORPC etc.
Leisure pursuits
Fairplay is the key Ali Suleym Al Junaibi is using his wide experience in the government and private sectors to make a meaningful contribution to society at large. Malcolm Xavier Crasta reports
Places visited: Australia, Azerbaijan, Lebanon, Egypt, India, Thailand, Pakistan, Bangladesh Spends his free time: Watching news or reading newspapers and business magazines 140
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li Suleym Al Junaibi, now aged 41, hails from the Wilayat of Duqm in the Al Wusta Region. In his early years he aspired to be a police officer. Despite such aspirations, his first job opportunity came in the form of an administrative clerk in the Ministry of Health. Although it wasn’t what he initially desired, this post enabled him to develop his skills and capabilities. It even helped him to learn and master the English language before moving to Royal Hospital, where he got a job as an assistant administrative officer. Soon after in 1987, he was chosen as an administrative officer at the Haima Hospital in the central region. Although he was only 18 years of age at the time, he effectively managed a cadre of doctors and nurses of more than 40 members. He served for 22 years in the government and then
turned to serving the nation through the private sector. He looked at starting his own company, so that he could apply his own ideas for the development of the society.
Entrepreneurial streak His decision to resign from his government position and concentrate on developing a self sufficient company in the oil and gas field, proved to be a turning point in his career. The company, called ‘Al-ghalbi Trading and Contracting’, started with less than five employees in 1998 in a small rented building. Today, it employs more than 500 employees, with a very good Omanisation percentage. The company got an ISO 9001:2000 certification in 2003 and recently renewed it with an ISO 9001:2008. It changed to an international setup, both by changing the name to Al-ghalbi International Engineering and Contracting and by adopting and
Apart from work Ali’s main interests include travelling, both domestic and international. He uses travelling as an excuse for monitoring business developments and opportunities. He has travelled throughout the Sultanate by road and has visited Australia, Azerbaijan, Lebanon, Egypt, India, Thailand, Pakistan, Bangladesh and nearly every major country in the Middle East. “I like to travel outside Oman to discover new business ventures. I regularly meet with international business heads to share ideas and jointly expand the scope of our business,” says Ali. Even during weekends, one will normally find him driving to the interiors to meet his employees and client representative. While there, he also makes it a point to visit his friends. A firm believer and practitioner of charity, Ali always takes the initiative to provide assistance. These include educational assistance, help in building houses, assistance for treatments and more. In spite of all that he does and his busy schedule, he gives importance to his family life, spending as much time with them as possible and sparing good hours for his family, by properly managing his travel and official plans. According to him, the most important quality for success is to be fair at work. He adds, “If we have a fair mind to work, all things will come our way, including concentration, sincerity, quality etc.”