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FROM THE EDITOR’S DESK

MAKING OF THE OER TOP 20 No 106

May 2009

EDITORIAL Editor-in-Chief HH Sayyid Tarik Bin Shabib Editor Mayank Singh Principal Correspondent Visvas Paul D Karra DESIGN Creative Director Armando L. Buenagua Art Director Sandesh S. Rangnekar 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

U

mpteen cups of coffee, toiling in office over weekends, sleepless nights and an editorial and design team that is a bundle of nerves by the time it all ends is what goes into producing our biggest issue of the year and the gold standard of business journalism in the Sultanate – The OER Top 20. Creating a cover that is befitting for this iconic issue is a challenge that keeps Chanjeet Singh, creative director-art, UMS Advertising, occupied for months. Numerous renditions of the cover are made before one passes muster. This

Senior Business Support Executive Radha Kumar Distribution United Media Services LLC

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. Copyright © 2009 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

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May 2009

Akshay, Visvas and Sunil (L to R)

company that is redefining the rules of the food industry with its innovative approach. Sunil Fernandes delves into what makes Al Hassan Engineering successful. Akshay Bhatnagar looks at the remarkable turnaround of Oman Textile Mills. And six CEOs give their take on how to make greatness endure.

CORPORATE Chief Executive Officer Sandeep Sehgal Executive Vice President Alpana Roy Vice President Ravi Raman

OER Presentations – Dossier – Signature – Oil & Gas Review

Apart from the design what sets this issue apart is top draw stories from our finest journalists. I would like to draw your attention to a few – Visvas Paul D Karra’s captivating piece on Areej Vegetables Oils – a

Armando, Balagopalan and Chanjeet (R to L)

year, he has used sleeker fonts with a dash of yellow and red to create a cover that is captivating in design and resplendent in feel. The design team led by creative director, Armando L Buenagua and senior designer, M Balagopalan have crafted pages that stand out without losing out on the spirit of erstwhile Top 20 issues.

Had it not been for the best team in financial journalism in the Sultanate, this issue would have been an impossible feat to pull off. Fortunately for our readers and us, all these talented people exist under one roof and the OER Top 20 brings out the best in them.

Mayank Singh


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NEW PUBLICATION

AL MAR’A IS SIX YEARS YOUNG Al Mar’a celebrated its sixth anniversary at a party hosted by BreadTalk

W

e had every reason to celebrate! Oman’s favourite women’s magazine Al Mar’a completes six glorious years with its latest Anniversary issue! And the occasion was a do hosted by BreadTalk especially for the Al Mar’a team. Needless to add, it was one of joy, camaraderie and warmth, in the complete essence of team spirit. A huge pink cake in the shape of the

KUDOS! Thanks for the banking survey, it gave a birds eye view on the competitiveness of the sector in Oman. BankMuscat came on top as expected, but the surprise of the pack was the performance of Oman Arab Bank and Bank Dhofar. Going by the results of the last few years and the first quarter results of 2009, the banking industry in the sultanate seems to be well poised to take on the challenges posed by the global financial meltdown. The strict regulatory structure put in place by the Central Bank of Oman has been another contributor in insulating the sector from the pains that the international banks have gone through. Mohammed Shafi, Seeb

GREAT WORK I am a regular reader of your wonder4

May 2009

number six greeted the team. The sweet gesture took everyone completely by surprise. Once the cake was cut and the cheering stopped, everyone sat down to savour the delicacies that the team at Bread Talk had especially prepared. Team Al Mar’a totally enjoyed some Hot Chic Floss

(spicy chicken strips on bread), Leek Buns, Sausage Standard (Sausage in a bun), Cheese Boats (Bread with cheese strips and sugar), Gula Melaka (bread with coconut) and Green Garlic Bread and washed them down with some cool lime and strawberry soda drinks.

ful magazine and find it to be a storehouse of knowledge. The April issue was a stellar issue with power packed stories. The interview with H E Ahmed bin Abdulnabi Macki made for insightful reading. The tenor of his answers indicate that Oman has little to worry about the global financial meltdown, as the government will continue to spend money on infrastructure projects. This will then percolate down to the lowest levels giving momentum to the entire economy.

China relations and how it is paving the way for the international business community to profit from this new found friendship between the two countries. It is high time that Omani entrepreneurs took advantage of the technical and technological capabilities of Taiwan and generated more two way trade. These may help local businesses to upgrade their technical prowess by getting into technology transfer agreements. Cheap but skilled labour is other advantage that Taiwan offers, and companies can look at getting into manufacturing tie ups with their counterparts to take competitive advantage of this skilled resource base. Taiwan’s expertise in aquafarming and solar energy can be utilised to the Sultanate’s advantage.

Ramesh Kumar, Ruwi

TURNING A NEW LEAF Taiwan is promoting itself in a big way, and the catalogue exhibition held at the OCCI in April will help in further disseminating information about the country’s capabilities and abilities as a business and investment destination. The article in OER’s April issue was very timely and topical. It gave a bird’s eye view of the thaw in Taiwan

Mohammed Omar, Seeb

Write to us with your comments/feedback at: editor@oeronline.com


I N SI D E

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REAL ESTATE

PASSING BY

Interior finesse Martina Starke, Head of Design, BMW Individual speaks about the interior design of the new BMW 7 series

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FACE TO FACE Asian flavour

Malaysia has pulled out all the plugs to attract attention to itself not only through its tourism but also by offering the best in education and banking

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Credibility is the key Al Habib & Company has seen a four -fold increase in its professional property valuation business over the last five years

VIEWPOINT

60 MINUTES

Time for a rethink Montek Singh Ahluwalia, Deputy Chairman, Planning Commission, India, in an exclusive chat with OER

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A business haven Malta offers international investors a highly advanced telecommunications network, skilled professionals and a strategic location

COVER STORY

34

Annual ranking of the Sultanate’s Top 20 listed companies of 2008

BY INVITATION Oman: The fruits of a modern Renaissance

Mohsin Al Busaidi’s feat of circumnavigating the globe in ‘Musandam’ is symptomatic evidence that Oman is a nation “whose time has come ”

47

CASE STUDY – 80

Success rests ‘lightly’

– Areej Vegetable Oils and Derivatives

NEW W ENTRANNT – 82

Experience counts

– Al Hassan Engineering Co.

FEEATTUREE – 88

How to build enduring companies

TEXTILE INDUSTRY

104 6

Turnaround mode

After three continuous years of losses, Oman Textile Holding is on the road to recovery under a new leadership

May 2009

– Adil Ghouse, CEO, Consumer Products Group, Khimji Ramdas – Richard P Russell, MD & CEO, Blue City Company 1 – P Chandrasekhr, Group General Manager, Jawad Sultan Group – Ross Cormack, CEO, Nawras – Krishnakumar Gupta, CEO, Al Anwar Holdings – Giles Cunningham, CEO, Zubair Corporation


For every opportunity in our land

For you. For our Nation. Everything we do at National Bank of Oman we do for you, and for our Nation. Our products turn your dreams into reality – Personal and Home Loans, innovative Credit Cards and chances to win life-changing prizes. Our services make banking easier for you – Internet banking, SMS banking and 24-hour call centre. And our commitment brings banking closer than ever – through our network of branches across Oman with many more to come.

www.nbo.co.om


R E G U L A RS

138 AUTO TALK

SERVICES

Absolutely Rocking

102

Creating innovative solutions Jose Lora, CEO, Juthoor Development Services talks about key differentiators in the market

ECONOMY

106

The name’s bonds, sovereign bonds A good step in addressing dwindling external finance

From the Editor’s Desk

2

Close Up

114

Economy Watch

10

Spotlight

121

Debate

12

Market Watch & Gizmos

136

Business Briefs

14

Executive Wellness

137

In the News

20

Auto News

140

Periscope

26

Billboard

144

Market View

108

Browsing Corner

146

Golf Update

110

Gaming

147

Event

112

Newsmakers

148

CARTOON CORNER By Kannan Murali

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May 2009

118

CONSUMER DURABLES

Life’s Good… and getting better H S Paik, president, LG Electronics Gulf

149

BEYOND BOARDROOMS

Adrenaline rush Khalid Mohammed Zaman, Director, Al Zaman Investments


ECONOMY WATCH

NUMBERS Talk Time The telecom market in Sultanate has seen a health growth rate over the last year. The mobile telephony market has grown by three per cent while the fixed line subscribers grew by 0.8 per cent. 3.5

3.21mn

3.31mn 2.98mn

2.89mn

3.0 2.5 2.0 1.5 1.0

1

2

7

5 8

*

0

2008

2008

Feb 2009

Feb 2009

#

C

0.5 0.0

C

4

3 6

9

Pre-paid fixed line service subscribers

Mobile service subscribers

300000

267,475

269,596

250000

267,475

267,475

2008

Feb 2009

200000 150000 100000 50000 0

2008

Feb 2009 Fixed line subscribers

10

May 2009

Post-paid fixed line subscribers


OAB card OER ad.eps

4/22/09

11:25:33 AM


DEBATE

Is the global financial crisis coming to an end? Ravneet Chowdhury CEO Standard Chartered Bank, Oman

Ramesh Mani General Manager and Board Secretary Majan Glass Company

IS THE GLOBAL SLOWDOWN EASING OFF? I believe that the full impact of the economic slowdown has rapidly unfolded throughout the world. Oman, like most of the Middle East and North Africa region, is very much part of the global economy; it has shown a high degree of resilience, but it is not isolated, and businesses and the economy have been impacted by global challenges.

The next quarter expectations globally are subdued compared to earlier quarters, but remain fairly optimistic. General projections as of now expect increase in volume of sales and net profits, indicating that that the demand levels in the economy are likely to stay firm. However, certain sectors are showing signs of cautiousness in light of deep fall in global prices which will affect their margins. But overall, I expect the economy to withstand the crisis.

ARE THERE SIGNS OF A SUSTAINABLE RECOVERY IN THE MARKET? It is too early to call for a sustained recovery in the market. However, we must have genuine confidence in the recovery and long-term development of our economies. The global economic crisis, which started in the West and migrated to the Middle East and other regions, will need a sustained recovery plan that restores financial stability, economic reform, debt relief and sound government policies while at the same time bringing appropriate risk management systems into place. These are all proactive and practical signs of sustained stability.

Businesses are becoming more cautious. It is noticeable that most businesses say their sales price will remain flat, rather than increase and more businesses have put their investment and recruitment plans on temporary hold until the situation becomes more clear. The results show a very balanced and mature approach to the recent market disturbances.

HOW CAN GOVERNMENTS, COMPANIES AND INDIVIDUALS CONTRIBUTE TO THE RECOVERY PROCESS? Standard Chartered is absolutely committed to playing its part in restoring confidence in the industry and has been involved in many of our markets throughout the world, advising governments and international institutions on how to respond to the crisis. We believe that banks, regulators and governments need to work together speedily to restore financial stability and resume normal business practices. Banks and financial institutions need to participate in shaping the new regulation of international financial markets, working with governments and commentators to support and explain the benefits of well-managed banks, enabling payments, securing savings and providing credit. Sustainable economic development can simply not continue without a healthy banking sector and this will be crucial to restoring economic growth and confidence.

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May 2009

Government/Banks need to look at increasing money supply and improving financing conditions making it attractive. Individuals and organisations should again remind themselves that they are the same team which has achieved success in the past and can repeat the same again and again. They need to benchmark themselves with global standards, invest in the best technology, implement a quick decision making process and most importantly permit and encourage liberalisation i.e. set up free zones in the country allowing 100 per cent ownership of foreign companies, which will make the local industries pull up their socks and compete with them. Competition can only improve ourselves. If you see success stories in some companies, that is because they have been successful in identifying and converting opportunities into successes at all times.


LIVING FAST. B I G S I LV E R S T O N E S T O W E R A C I N G L I M I T E D E D I T I O N O F 5 0 0 AUTOMATIC BI-COMPAX FLYBACK CHRONOGRAPH IN STAINLESS STEEL AND CARBON FIBRE WITH SECOND TIMEZONE AND BIG DATE AT 6. HANDCRAFTED IN SWITZERLAND.

Qurum Shopping Area, Opposite to Al-Araimi Shopping Centre – Al Bustan Hotel – Muscat City Center Qurum City Center – Bareeq Al-Shatii Complex Opening soon at: Barr Al Jissah Resort Tel.: +968-24797786, E-mail: argan@omantel.net.om, Website: www.galleryargan.com


BUSINESS BRIEFS

SOHAR PLAZA LAUNCHED PDO supports the Association for Early Intervention Petroleum Development Oman (PDO) has agreed to support a key training programme run by the Association for Early Intervention. A Memorandum of Understanding (MoU) to this effect was signed by Mohammed bin Abdullah Al-Kindi, the Chairperson of the Association for Early Intervention and PDO’s Managing Director John Malcolm at a ceremony held recently. Under the terms of the MoU, PDO will fund a training programme for volunteers who undertake house visits. The programme is aimed at supporting young disabled people and their families. “PDO is pleased to help the Association for Early Intervention carry out its work in support of disabled children and their families,” Malcolm said.

Good response to Origin Oman’s ‘ Meet-the-Buyer’ seminar Many of Oman’s top companies turned out to attend Origin Oman’s Meet-the-Buyer seminar held at the Grand Hyatt Hotel under the patronage of HE Eng. Ahmed Al Dheeb, Undesecretary, Ministry of Commerce & Industry. With panelists from Muscat Municipality; The Wave; PDO; Shell Oman Marketing; Reem Batteries; R&D; and The Nejd, the event attracted over 20 ministries as well as a host of manufacturers, retailers, wholesalers and distributors. “It was more than apparent from the panel discussion and the questions from attendees that buyers are keen to discover new local suppliers. Indeed, this type of event offers both businesses and government departments an excellent opportunity to network with domestic producers and suppliers. In my book, it was a resounding success,” says HE Al Dheeb.

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May 2009

Jawad Sultan Group, with interests in real estate, retail and cinemas has launched Sohar Plaza, a mall in the Batinah region, with state-of-the-art multiplex cinemas, food courts and shopping outlets. On the occasion of the opening of the mall, Aqeel Jawad Sultan, Group Managing Director of Jawad Sultan Enterprises said, “Sohar Plaza is one of the finest and maximised development projects of Jawad Sultan Enterprises that provides both leisure and entertainment at a single stop. It also marks a milestone among the development accomplishments of the Group. As a step ahead in the business of entertainment and real estate, we extend opportunities to retailers to join in the venture and establish success both in returns and customer satisfaction.” “The expected high foot falls arising from the multiplex will benefit the shopping arena significantly, thereby creating an atmosphere for retail businesses to flourish,” he added. Sohar Plaza hosts City Cinema, a multiplex with four large cinema screens with a total seating capacity of 860 people. These screens are the first in the country to have a digital projection technology. The cinemas have a lobby with food kiosks and other activities that provide for a perfect ambience for entertainment. The ground level at Sohar Plaza has 12 exquisite retail stores dedicated to some of the world’s most premium brands of clothing, accessories, home appliances and more. Sohar Plaza has a restaurant serving international cuisines and a Food Court hosting six counters serving a variety of delicacies and cuisines.

BM’S RO60MN SUBORDINATED BOND ISSUE

BankMuscat, has launched a subordinated bond issue carrying eight per cent annual yield. The bond issue targeting to raise RO60mn will be open for subscription until May 7. The face value of the bond is RO1.000 each with the issue price pegged at RO1.010, including 10 baisa towards issue expenses. Investors can apply for a minimum of 100 bonds and in multiples of 100 thereafter. The bond will have a maturity of seven years from the allotment date with returns of 8 per cent per annum. The interest will be payable semi-annually in arrears. The bank will apply for the bonds to be listed on Muscat Securities Market (MSM). The listing of the bond on MSM is aimed at facilitating easy liquidity for investors.


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BUSINESS BRIEFS

HAYA STARTS WORK ON MAIN SPINE LINE

Oman Mobile introduces the latest handsets with BellTel Oman Mobile has teamed up with BellTel to bring a variety of compatible 3G handsets. New Nokia mobile phones are now available at Oman Mobile and Omantel stores throughout Muscat. “We’re excited to bring our subscribers a range of the latest handsets at competitive prices. In addition to our usual range of telecom services and products, our stores in Muscat will now have great 3G mobile phones. Our professional staff will be ready to help customers to choose the best handset for their needs,” Saleem Abdullatiff, Oman Mobile’s GM Direct Sales said.

Singapore Airlines increases capacity to the Gulf Singapore Airlines has increased its capacity to the Gulf region, by consolidating its services via Dubai and adding new flights to Abu Dhabi and Kuwait, a release issued by the Airline has stated. With the recent changes in its flight schedule, Singapore Airlines now operates 28 flights from UAE to Singapore with three daily flights from Dubai and a daily flight from Abu Dhabi, offering the largest frequency of flights from UAE to Singapore and vice versa.

Arab British Economic Forum to be held in November The Arab British Chamber of Commerce has announced that the first Arab British Economic Forum (ABEF) would be held from November 2-3, 2009, at the InterContinental Hotel Park Lane, London. The ABEF will be an important Arab-British business event in London. The event will be addressed by Ministers and business figures from the Arab world and the United Kingdom. The presentations are expected to stimulate discussion by participants on the key topics in six sector-focused sessions over the two days, addressing agriculture, financial services, education & training, it & telecoms, renewable energy and the role of women in the global economy.

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May 2009

Abdullah Al-Hashemi, Director General of Projects at Haya Water Company, announced that the company assigned the task of implementing the Main Spine Line project started work on the installation of the main line by using the technology of micro-tunneling for a total length of 19 kms. in the Wilayet of Seeb. He added that the work had started on the implementation of the first phase of the installation of the main transportation line, and that the new technology depends on the laying of wastewater networks without the need for digging open trenches. The new technology involves the fixing of modern and giant excavation equipment at specified points where horizontal excavation work will take place at such points. About the advantages of using this new technology, Al-Hashemi said that the use of this method in excavation works ensures free traffic and pedestrian movement and reduces any sound arising from conventional excavation machinery and trucks, in addition to reducing pollution from flying dust and without the need to cut down any trees and green patches that obstruct the course of the network.” The company has started the project by using a single piece of excavation machinery with another piece expected to be brought to the site by the end of this month and three more by the end of August so that the number of giant and modern excavation machinery would total five. About the radius of the pipelines, Al-Hashemi mentioned that the radius of the main pipeline would range between 1.3 to 2.5 meters and that 67 manholes would be constructed along the route of the pipeline in order to facilitate maintenance in future.

NPA REBRANDS ITSELF AS OXYGEN

One of Oman’s oldest advertising agencies, National Publishing & Advertising (NPA), has undergone restructuring and rebranding, with the agency’s creative services being christened Oxygen. Roopesh Bhatnagar, Chief Operating Officer at Oxygen said, “Oxygen is not just a new name but a whole new philosophy for communication engagement to endear brands to consumers. Our endeavor at Oxygen is to find and fuel the vital connects that are inherent in a brand – its oxygen – through every interaction, expectation and experience that the consumer has.” Oxygen has also strengthened its team to offer clients more dedicated service through independent groups. The team at the agency has extensive experience in international markets adding to NPA’s own considerable experience in Oman.


BUSINESS BRIEFS

GRAND HYATT CELEBRATES EARTH DAY Nawras SMS link to Municipality Nawras has launched a new SMS service to help its customers easily access Muscat Municipality service centre information by conveniently using a mobile phone or handset. Customers can check the status of building permits, rent contracts, technical inspections, parking violations and other services by simply sending an SMS to the Municipality rather than needing to pay a visit in person. Nawras Product Manager, Mohammed Al Najwani, said, “We are always looking for ways to make life easier for our customers and this new service certainly helps to do that. We are delighted to work with Muscat Municipality to enable our customers to get closer to the information they need.”

BankDhofar Al Heson winner announced Mohammed Khalfan Obaid Al-Malki, a new customer at Quraiyat branch of BankDhofar is the winner under the Bank’s Al Heson scheme. The lucky winner, is in his thirties and has two children. “Mohammed did not believe his luck even after he received a call from the Quraiyat branch manager, and immediately rushed to the branch to confirm the news of his win,” a release from BankDhofar stated.

Oman Arab Bank’s Growth Account offers high interest rates Oman Arab Bank (OAB) has tailor-made a wide range of products to fulfill the financial requirements of individuals. The growth account, from OAB offers high interest rates, and was set up as an initiative to help customers to save and earn. “All the clients at OAB enjoy benefits of high interest rates of up to four per cent credited to their account on monthly basis, as well as 24-hours free cash withdrawal. Rashad Al Shaikh, head - retail marketing & business development, Oman Arab Bank, said, “At OAB, we are constantly innovating to give our customers value-added products and services. The growth account is a unique product which enables customers to earn high rates of interest while at the same time, giving them easy liquidity.”

It was ‘Environment First’ at the Grand Hyatt Muscat when the hotel’s guests and staff got together to raise environmental awareness on April 22 that is celebrated all over the world as ‘Earth Day’. On this occasion, the hotel organised a beach cleaning activity, which was led by their enthusiastic General Manager, Christoph K Franzen. Hotel staff and enthusiastic guests gathered on the beach in front of the hotel ready with trash bags and rakes and cleared the beach of rubbish in little under half an hour. This is just one of the many steps that the Grand Hyatt has taken to raise the issue of environmental awareness in Oman. “I believe that it is our shared responsibility to combine a ‘Green Management Approach’ with a passionate commitment to genuine and strategic stewardship of the environment,” said Franzen. “We have removed all plastic from our rooms, laundry now comes in a cellulose kind of material, and we have reused old bed linen by shaping them into shopping bags. We have reduced usage of paper, by switching to a centralised network system, make internal presentations on screens, and use leftover water in rooms to water plants. We are also holding discussions on whether solar energy can be a feasible concept,” he added, elaborating on the various ‘green initiatives’ at the hotel. Guests staying at the hotel also received a jute shopping bag to remind them to keep the environment and the Earth clean.

BIG BUSINESS IDEA CONTEST KICKS OFF

The Knowledge Mine – Ernst & Young Big Business Idea Competition 2009, Oman’s annual nationwide business plan competition opened for entries on April 22. The competition, now in its fourth year, is viewed by many as a launch pad for participating entrants to successfully raise investment for their commercial ventures. The competition has a top prize of RO6,000 and rent free accommodation in the Knowledge Mine business incubator programme. The competition is limited to Omani nationals and welcomes entries from individuals, teams, students and entrepreneurs – anyone with a good, innovative idea for a technology-driven business should think about participating in the competition. The idea should be original or a significant improvement on an existing business. Four free workshops will be held on Knowledge Oasis Muscat (KOM) covering issues ranging from how to write a business plan, marketing your business, sourcing seed capital through to managing risk. These sessions offer entrants an opportunity to learn more about the competition, the enterprise culture and what it means to create a start-up.


BUSINESS BRIEFS

ALARGAN TOWELL UNVEILS MOCK-UP VILLA

Mirbat Beach makes presence felt at ITB Mirbat Beach Resort & Spa enjoyed a successful presence at the International Tourism Bourse (ITB) Berlin, the world’s largest travel trade show. The prestigious billion-dollar valued integrated tourism project was represented by project developer Dhofar Tourism Company under the umbrella of Ministry of Tourism, Sultanate of Oman. With more than 180,000 visitors and over 10,000 exhibitors from 180 countries, ITB Berlin is the leading B2B-Platform for the tourism industry.

EXECUTIVE MOVEMENTS National Bank of Oman announced that election of the Chairman of the Bank was held during the Board of Directors Meeting held on April 14, 2009. The Board Members unanimously elected Omar Hussain Al Fardan as Chairman of the Board and Sheikh Ahmed Suhail Bahwan as Deputy Chairman of the Board. Omar Hussain Al Fardan who was the Deputy Chairman and Acting Chairman, holds a bachelor’s degree in business administration and a master’s degree in finance from Webster University, Geneva. He is the Director of two well reputed banks in the Gulf namely the Commercial Bank of Qatar, Doha and United Arab Bank, Sharjah, UAE. Sheikh Ahmed Suhail Bahwan who has been elected as Deputy Chairman is a graduate with a degree in Business Management from University of Evansville, Florida, USA. He is an independent Director representing Suhail Bahwan Group (Holding). He is the Managing Director of Suhail Bahwan Group (Holding) and Chairman of Suhail Bahwan Automotive Group. Sheikh Ahmed Suhail Bahwan is also Director of Ports Services Corporation and Member of the Board of Lamnalco.

Qurm Gardens project, a recipient of the CNBC Arabian awards for the best architectural design, has completed its Mock-Up Villa. “This provides an excellent opportunity for the company to demonstrate to discerning clients, the superior quality of its offering,” a release from Alargan Towell stated. Inspired by the traditional architectural style of Oman, Al-Qurm Gardens offers harmony between heritage and modernity. The project is located in Al Qurm Area, and comprises 41 exclusive residential units, commercial, retail and office space. The residential units offered are in seven unique designs, and have built-up area varying between 259 to 350 sq meters with plot area of 194 – 284 sq meters. The units have excellent quality construction, exquisite finishes, duct-type split units, dedicated car-park with electronic gate, fitted kitchens, branded appliances, audio-video security system, sound system etc. Construction of the project is expected to end in early 2010.

OMAN AIR RENEWS IOSA CERTIFICATION

The existing image of Oman Air, the national carrier of the Sultanate of Oman that recently announced its expansion plans, has received a boost with the successful renewing of its IOSA registration. The renewal is an outcome of the IOSA audit the airline underwent, whereby the carrier remains among the airlines which reached this internationally recognised standard, after a thorough evaluation in all areas of organisation and management system. Talal Al Riyami, head of quality and safety, Oman Air, said that the objective of the IATA developed IOSA programme was to reach an internationally recognised and comparable standard in operation and safety management.

COMEX 2009 IS HERE

COMEX 2009, Oman’s largest IT, Telecom and Technology Expo is to be held from May 25-29, at the Oman International Exhibition Centre. Driven by Oman’s digital strategy, COMEX 2009 integrates new and enriched concepts such as e-governance – a showcase of e-payment gateway and e-tendering, as well as e-health, e-learning, e-gaming, consumer electronics and high-end products. COMEX 2009 Business Area is open from May 25-28, showcasing the latest IT, Telecom, Technology and Solutions especially designed for businesses and demonstrated for decision makers. Shopper Area, a one-stop shop offering the latest in technology, hardware, software, gadgets and consumer electronics for end users runs from May 25-29. OMAN’S ONLY COMPREHENSIVE B2B REPORT

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May 2009

OER Dossier is the official B2B publication for COMEX 2009.


IN THE NEWS

OER GREEN AWARDS 2009 – TOGETHER WE CAN “We must be the change we wish to see in this world. There is enough for everyone’s need but not for everyone’s greed.” – Mahatma Gandhi

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lobal warming, acid rain, ozone depletion, coral life degradation, carbon emissions, draughts, wildlife fires… the catastrophic consequences of human apathy and neglect towards the environment can go on and on. As the world wakes up to the follies of mankind, Going Green has become the global metaphor to save the world from the deleterious effects of industrialisation and modernisation. Economic experts have suggested that creating a green economy is going to top the agenda of most corporates by the turn of this decade as every company worth its salt strives to contribute its mite to

protect and restore what is left of the Earth and our environment.

Breaking new ground Oman Economic Review Green Awards (OERGA) 2009 is an effort to raise consciousness about environment protection and sustainable development in the Sultanate. As the country’s first Environmental Awards, OERGA is a call to action for behavioural change to save planet earth for the generations to come. Born out of the unwavering belief that our Earth is a shared resource and therefore a shared responsibility, these awards will recognise and promote voluntary contributions across a broad spectrum of activities both from individuals and companies. Says Sandeep Sehgal, CEO, United Media Services, “OERGA will raise awareness about the green issues facing the Sultanate

and will provide a good opportunity to showcase the positive commitments of Oman’s corporate world to this country and its people, culture and environment. It will also highlight the moral responsibility being shared by every company and individual towards this precious planet that we call earth.” Businesses – large and small; institutions – educational, health, or governmental; and individuals – independently or as leaders of a collective whole, all play a crucial role in environmental protection and preservation. OER Green Awards 2009 is a platform to honour and appreciate such outstanding environmental vision, endeavours, initiatives and achievements. While the misdeeds of the past cannot be undone, we can certainly join hands to save our future. For further information visit www.oeronline.com/ greenawards

‘OMAN CHEF’S SOCIETY’, FINALISES ITS NAME

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he Culinary Guild of Oman held its second ever meeting at the Crowne Plaza hotel on April 18. Present at the meeting were some of the best chefs in Oman from various leading companies and restaurants, including Al Bustan Palace Hotel, Intercontinental Muscat, Oman Air and more. The primary objective of the conference was to set the foundation for the first ever Chefs Guild in Oman. United Media Services is a strategic partner of Oman’s Chef Society. One of the key points discussed was the way chefs were viewed by society at large. The consensus was that chefs were seen as mere cooks and 20

May 2009

it was imperative that they got the recognition they deserved. It was felt that this would go a long way to help smaller restaurants gain respectability. Another key point was to involve

the guild strongly with various colleges and institutions and to assist them in bridging the gap between a professional chef’s expectations and the college curriculum.


PASSING BY

INTERIOR FINESSE Martina Starke, Head of Design, BMW Individual speaks about the interior design of the new BMW 7 series. Visvas Paul D Karra reports

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t takes about six years to design the interiors of a BMW before the actual production begins. It involves two clay models, four-five designers who have to spend time finding ways to combine form, functionality and design. Then the last two years are spent on finalising the design. The end product should be describable in four words – sportiness, elegance, modernity and presence. Design is a critical and overriding factor when it comes to a car’s popularity and if it is a BMW, which epitomises elegance and class of the owner, then certainly you need to talk the language of forms which is best understood by an exclusive set of people who have a taste for the finer things of life. It is no wonder that such attention to detail is invested in the interior of a BMW.

An eye for design If the latest BMW 7 series strikes you with its attractive and enigmatic interiors, then the credit goes to Martina Starke, Head of Design, BMW Individual, who has been with the premier carmaker for the last eight years. Starke started her profession as a textile pattern maker, where she first ex22

May 2009

plored her great passion for materials and textiles, Oman Economic Review caught up with Starke during her brief visit to Oman to find out more about her role in the latest BMW 7 series. Starke, has been an essential member of colour and material department at BMW Design in Munich since 2001. She joined the company as a colour, material and seam pattern designer. Three years later, Martina took over the position of colour and material project manager, her first lead project being the development of the BMW 3 Series Coupe and Convertible (E46) colour and material options. More recent work includes colour and material design for models such as the new BMW 7 Series and the BMW Concept CS. Currently, Starke is leading the colour & material development at BMW Individual, which offers both packages and bespoke colour and trim combinations created for customer wishes. Says Starke: “The process of transforming natural materials such as silk, cotton or leather through various steps into a textile with great tactile feel and appearance that can be used in interior spaces is a great fascination

for me. This process has had shown a compelling magnetism for me since early in my career and has become an overall driving force.” Starke’s greatest sources of inspiration have been designers such as Li Edelkoort and Angelo Donghia who not only challenged the traditional way of thinking about textiles, but they have also explored the possibilities of bridging tradition and modernity.

Exploring possibilities Talking about her work, Starke informs that they design everything in the interior, from the ceiling to the seats. Right from the material to the stitching, everything is taken into account. We develop for every car, a new colour concept that is based on the factors that distinguishes it from others, she says. While crafting the interiors, the design team also bears in mind the changing styles and demands and incorporates many technical innovations like the driver orientation and ceramic idrive options in the new BMW 7 series, for instance to convey a new interpretation of modernity. A particularly eye-catching feature of the cockpit is the instrument cluster with black panel technology.


REAL CLOSE ESTATE UP

CREDIBILITY IS THE KEY

AL HABIB & COMPANY HAS SEEN A FOUR-FOLD INCREASE IN ITS PROFESSIONAL PROPERTY VALUATION BUSINESS OVER THE LAST FIVE YEARS. A LOOK AT THE REASONS BEHIND ITS SUCCESS AND DIFFERENTIATORS By Hassan Adnan Al Lawati

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e assist our clients such as banks, courts, heirs and b e n e fi c i a r i e s etc to obtain a correct estimate as to the current market value of a particular property. Such valuation is required for various reasons - the most important of which being that banks and financial institutions lend against real estate collateral and they need to be reassured of a propertyâ&#x20AC;&#x2122;s real value before advancing a loan. Companies also value property for balance sheet purposes and families need to know the exact value of their assets to distribute amongst their heirs. Finally, both a buyer and seller of a property require a completely independent valuation of worth before negotiating a final contract.

Methodology applied Al Habib follows the International Valuation Standards. There are three methods of valuing property. First is comparables â&#x20AC;&#x201C; this infers the price of an asset based on the value that a similar property has fetched in the vicinity. For example, if there were identical houses in an area, and one of them fetched a certain value, then one can conclude that the other houses in the area would be of a similar value. Comparable does not mean identical but establishes a base figure for that type and size of property. 24

May 2009

The second is the income method, people generally buy real estate as an investment and expect to get a return. At any given time the market fetches a particular yield (return on investment). For example if the income from a building is RO100,000 a year. Then one may say that it is worth ten times that value and is giving a yield of 10 per cent. Depreciated cost is the third method employed to arrive at a valuation. If a buyer is offered a property, he has a choice of either purchasing it or alternatively buying some land and then constructing a similar building upon it himself. The buyer may be willing to pay a premium for the existing building because it saves him the time and effort to build and hedges him against any increase in construction costs. In boom times the sale premium over cost is very high, while during a downturn it is low or negative. The value of a property is arrived at by factorising in all these variables. The process is methodical as the results of all these three methods need to converge and if there is a variance there should be justifiable reasons for it.

In most other companies there is a single person carrying out valuations. At Al Habib we have a committee to do valuations with representatives from our broking, renting and construction divisions. They each bring an expert opinion to the table. One needs to be very active in the broking, rental and construction market to arrive at the correct comparable, income and cost figure. As Al Habib has expertise in broking, renting (being the largest renting agency in the Sultanate) and the construction business, our professional valuations carry much credibility in the market. As a result today we are doing four times the number of valuations than what we were doing five years ago. This is partly because the market has grown and partly because we have strengthened our position. Al Habib is the only valuer with a branch in Nizwa and Sohar. Obtaining the right valuation is very important as bank loans running into millions of rials, are based on such data. As the market grows there will be an increasing demand for such professional services. (As told to Mayank Singh)

The author is manager, valuation division, Al Habib & Company. http://www.alhabibonline.com/)


OER TOP


PERISCOPE

MAKING MONEY IN ASIAN CURRENCIES EMERGING MARKETS WERE VICTIMS OF THE CREDIT CRUNCH, THE ICE AGE IN WORLD TRADE AND HIGHER BORROWING COSTS. AS THE FEDERAL RESERVE SHIFTED TO A ZERO INTEREST RATE POLICY, EMERGING MARKETS CENTRAL BANKS BEGAN TO EASE RATES AND SOVEREIGN DEBT CREDIT RISK SPREADS COMPRESSED THINGS MAY BE CHANGING FOR THE BETTER

T

Turkish shares are extremely cheap at only seven times earnings with Istanbul a natural magnet for fund managers disillusioned with Russia and Central Europe. 26

May 2009

he London G-20 has changed the rules of international finance. The worldâ&#x20AC;&#x2122;s heads of state have committed to fiscal stimulus, aggressive monetary easing, reinvigorated IMF and a $250bn fund to boost trade finance. The aggressive policy moves by the Fed, the Bank of England and the European Central Bank (ECB) have reduced deflation risk and put a safety net under the international banking system. This means that panic buying of the Japanese yen as a safe haven no longer makes sense. The Treasury-Eurodollar (TED) spread, a proxy for global banking risk, has fallen from 450 basis points last October to only 95 now, its preLehman level. Global equity indices have surged one third since early March. The Chicago Volatility Index (VIX) has fallen from 80 to below 40. The Bank of Japan made it clear that it would intervene in the currency market if the yen rose above 88 to the dollar. The gnomes of Tokyo have therefore given the currency bazaar a

By Matein Khalid

green light to sell the yen against the dollar, particularly since the Tankan, a plunge in export orders and industrial production all show the Japanese economy is in deep distress. The volatility in the Japanese yen option market has fallen to 15, the lowest since Lehman. This is a compelling argument for carry trades where investors borrow in the yen money market to buy risk assets abroad. Japanese capital outflows also pressure the yen while exporter demand for yen has plunged with the shrinking trade surplus. The Japanese yen is headed for 104-106 against the dollar in the next six months.

Financial support Emerging markets were victims of the credit crunch, the ice age in world trade and higher borrowing costs in the sovereign debt new issue markets. However, as the Federal Reserve shifted to a zero interest rate policy, emerging markets central banks began to ease interest rates, sovereign debt credit risk spreads compressed after the London G-20 pledge to tre-


PERISCOPE ble IMF funding and the fall in commodities. All of the above has profound implications on the behaviour of emerging markets currencies. One, the G20 London conclave rem oves the contagion risks that so gutted the asset class after the Russia/Asia crises of 1998. Two, external financing gaps in most markets, apart from the Baltics/Ukraine, are not systemic. Three, the cross-border plunge in global capital markets took place in late 1998 as hedge funds unwound their offshore, leveraged bets. This was the reason that correlations between emer ging markets FX, debt and equities tripled to 0.9, a telltale sign of distress selling. The Turkish lira is an extremely attractive emerging market opportunity. One, Recap Tayip Erdogan’s government won the recent municipal elections and reinforced its parliamentary majority in Ankara.

Opportunities Turkish Lira

An extremely attractive emerging markets opportunity and the Turkey Fund could rise from five to seven in the next six months as the lira surges from 1.60 now to 1.44-1.48 Indian Rupee

Modest global cross-border capital flows and the high risk of a sovereign debt downgrade means that the Indian rupee could well depreciate to 54 against the dollar by end 2009

Indonesian Rupiah

The parliamentary poll results are bullish for President’s Yadhoyono reelection, reforms, FDI, bank support and sovereign risk appetite. The Indonesian rupiah could well appreciate to 10,000 in the next six months South Korean Won

Two, the Justice and Development Party (AKP) will accept a $40bn IMF letter of credit in exchange for fiscal discipline. This is a huge boost for investor confidence in Turkey as it eliminates refinancing risk. Three, Turkish real interest rates remain among the highest in EMEA even though the central bank has slashed nominal rates by more than 600 basis points. Four, Obama’s visit demonstrates the strategic value of Turkey in the Middle East if the US exits from Iraq or mediates in the Palestine peace process. Five, Turkish shares are extremely cheap at only seven times earnings with Istanbul a natural magnet for fund managers disillusioned with Russia and Central Europe. This suggests that the Turkey Fund (symbol TKF on the New York Stock Exchange) could rise from five to seven in the next six months as the lira surges from 1.60 now to 1.44-1.48. This is a cheap, undervalued emerging market. 28

May 2009

The 15 per cent rise in the South Korean won demonstrates that financial markets no longer anticipate an economic free fall. The South Korean won’s strength coincides with the government’s three billion bond issue, the first sovereign deal since 2006. However it is not advisable to buy the won as the risk reward calculus no longer favours the dollar bears

Factoring in a victory It is evident that the financial markets have priced in a Congress victory in the Indian elections, with a thirty per cent rise in the Sensex in the past month and the Indian rupee below 50 against the dollar. Yet the Sensex rally is living on borrowed time as profits will plunge in 2009 across sectors and the election outcome can well lead to a weak, fragmented parliamentary coalition.

Indian Rupee will fall to 54-56 against the dollar by the end of 2009. Indian GDP growth cannot accelerate beyond 4.5 per cent amid a global recession, a squeeze in domestic borrowing costs, a crowded out private sector and an imminent property crash. Congress’s populist, pre-election fiscal profligacy has also bequeathed India with the all too real possibility of a downgrade of Indian sovereign debt below the BBB minus assigned by S&P.

While a Congress win will lead to a short term snapback to 48 on the dollar-Indian rupee FX rates, the bearish case for the INR will resume and the

It was reckless, if politically expedient, for the government to increase the pay of government civil servants, waive farmers’ loans, slash excise du-


ties and services/VAT amid a global financial crisis, which makes a one digit government fiscal deficit inevitable. As remittances from the Indian diaspora plunge, India’s current account deficit (ex remittances) could rise to four per cent. With modest global cross-border capital flows and high risk of a sovereign debt downgrade, the Indian rupee could well depreciate to 54 against the dollar by end 2009. Indonesia under President Yadhoyono is one of the clear economic success stories of Southeast Asia and the incumbent government will probably win the imminent July election. The President’s Democratic Party tripled its vote in legislative election and will easily lead a credible governing coalition. Indonesia, though slammed by the plunge in commodities markets and Wall Street risk aversion, is primarily a domestic economy, with exports a mere 10 per cent of GDP. However, Indonesia’s financial Achilles heel is a $150bn external debt,

thrice the hard currency reserves of the Jakarta central bank. The Indonesian central bank lost $12bn trying to defend the rupiah in the immediate aftermath of the Lehman Brothers crisis and was even forced to arrange swap lines with the US, China, Japan and South Korea. As Hillary Clinton’s visit to Jakarta suggests, the Yudhoyono government is allied to Washington and has attracted $6bn from the World Bank, the ADB and even the Islamic Development Bank. The parliamentary poll results are bullish for the President’s reelection, reforms, FDI, bank support and sovereign risk appetite. The Indonesian rupiah could well appreciate to 10,000 in the next six months.

Mixed signals The election in Malaysia are a clear vote of no confidence against the new Prime Minister Najib Razzak even though he replaced a quarter of the cabinet to highlight his commitment to economic reform. Like Abdullah Badawi, the new Barisan coalition

government leader will face political gridlock and will be forced to accelerate an economic stimulus. This means the Singapore dollar will outperform the Malaysian ringett in the currency market. The South Korean won has strengthened to 1300 against the dollar for the first time since January on funds inflows attracted by cheap Korean shares and corporate debt. The 15 per cent rise in the South Korean won demonstrates that financial markets no longer anticipate an economic free fall. The South Korean won’s strength coincides with the government’s three billion bond issue, the first sovereign deal since 2006. However, I am reluctant to buy South Korean won against the dollar as the easy money has been made and the risk reward calculus no longer favours the dollar bears.

The author is a renowned investment banker based in Dubai


FACE TO FACE

ASIAN FLAVOUR Malaysia has pulled out all the plugs to attract attention to itself not only through its tourism but also by offering the best in education and banking, writes Visvas Paul D Karra after a free-flowing animated chat with HE Dato Mohd Zamri Mohd Kassim, the Malaysian Ambassador

30

May 2009


I

f there is one country, which has become famous as a tourist destination, then it has to be Malaysia. The slogan “Malaysia, truly Asia” has catapulted Malaysia from being just another south-east Asian nation to ‘the’ country which every tourist worth his salt would have on the top of his most-visitedplaces list. The march of Malaysia from a British colony to its present ‘Malaysia, truly Asia’ stature has been dramatic and worth emulating. And if there is one person who has played the major role in effecting this change, then it is Dr Mohammed Mahathir, who guided the country through the late 80s, 90s and into the 21st century. No discussion about Malaysia is complete without the mention of this charismatic personality.

the country’s tourism attractions have become the byword for leisure activities; Proton car is manufactured here; and it has the world’s tallest tower – the Petronas Tower – a symbol of the country’s all round prowess. The articulate HE Kassim says, Malaysian leaders have always believed in people development and therefore today more than 60 per cent of the national budget is spent on educa-

ships to come and study in Malaysia. Proton car is already on the roads of Oman and some energy companies are already eyeing the Omani market, says Dato Mohammed, while speaking about the bilateral trade between Oman and Malaysia. Apart from Proton and Petronas, some of the world’s best think tanks are located in Malaysia, says the ambassador while disclosing that Malaysian expertise in soft-

MALAYSIA-OMAN TRADE Exports (Jan - Oct 2008) Manufactured goods

RO37mn

Agricultural goods

RO28mn

Others

RO0.26mn

Total

RO65.26mn (approx)

Import (Jan - Oct 2008)

Mahathir momentum

Manufactured goods

RO12mn

“Dr Mahathir’s visionary and revolutionary thinking has helped Malaysia to transcend the traditional setbacks and change the landscape of the country by eliminating government inefficiency and encouraging the private sector in nation building,” says HE Dato Mohd Zamri Mohd Kassim, Malaysian Ambassador.

Agricultural goods

RO0.13mn

Oil & Gas

RO238mn

Total

RO250.13mn (approx)

“In any country there is resentment against transformation. In order to overcome this, Dr Mahathir began the ‘leadership by example’ campaign. He began the “Islamisation” of the civil service to inculcate honesty and sincerity among government workers and introduced the punch card system to regulate their working hours. He would conduct spot inspections to assess the efficiency of workers. Now the results are there for everyone to see,” the ambassador said while talking about the fourth prime minister of Malaysia since it became an independent nation in 1953. Today, Malaysia is the epitome of a modern Islamic nation. It is the global hub of Islamic finance; the F1 calendar has the Malaysian Grand Prix;

tion. Malaysia has some of the world’s finest education institutes, says the ambassador while talking of Malaysian social development. More than 200,000 students pass out annually from a number of colleges and universities thus generating a huge talent pool penetrating all sectors of the economy and giving Malaysia a cutting edge over the rest of the south east Asian nations. The Malaysia Centre of Excellence and the Malaysia Technical Education Institute continue to draw foreign students and Omanis are also enrolling themselves in these two facilities. The Malaysian government has plans to attract more number of students by offering scholarships and incentives. Prosper thy neighbour and thou shalt prosper. This is the premise on which the Malaysian government operates. Therefore, a number of foreign students get sponsorships and scholar-

ware and hardware is also unmatched. The world’s smallest microchip is also produced in Malaysia.

Correcting the imbalance Presently, the balance of trade (see box) is in favour of Oman mainly due to the bulk import of oil from Oman, which constitutes about 90 per cent of the total trade volume while the other notable items include agriculture products. Exports from Malaysia to Oman include palm oil, machinery and electronic items like televisions, and automotive parts. Apart from the Proton cars, which are already plying on the Omani roads, other exports from Malaysia to the Sultanate include technology transfer in oil and gas; oats; herbal drinks; and construction equipment. The Malaysian ambassador said that he is trying to normalise the trade imbalance by widening the scope of 31

May 2009


FACE TO FACE collaboration between the Sultanate and Malaysia. “I am going across the board and trying to push all the ministries and the private sector companies to come here to Muscat and explore the opportunities in this beautiful country. Malaysian businessmen must come and offer their expertise in construction of roads, IT solutions, real estate and mining,” HE Kassim said. The ambassador is aware of the massive development path, which Oman has embraced and the resultant business and investment opportunities that have been created by this Renaissance under the wise leadership of His Majesty Sultan Qaboos bin Said. “I don’t want Malaysia to miss the opportunity boat which the Sultanate of Oman has set sailing. But we would like to start small, with one or two companies. If one company spreads the word about Oman then it will continue to spread,” he said.

Bilateral activities The Oman-Malaysia Business Forum, which was held in 2008, has been a revelation to both sides. HE Ahmed bin Abdulnabi Macki, Minister of National Economy and Deputy Chairman of the Financial Affairs and Energy Resources Council; and HE Khalil Al Khonji, Chairman of OCCI attended the forum. Their Malaysian counterparts, headed by YB Dato Seri Rafidah Aziz, MITI minister, represented a plethora of economic interests and included the State governors of Malacca and Perlis; and a number of parliamentarians. An interactive session was held between 227 Omani private sector companies and 197 Malay counterparts. As a followup to the 2008 business forum, a flurry of Malaysian visits also ensued. Oman and Malaysia are expected to sign memorandums of understandings for avoidance of double taxation and institutionalisation of a legal framework on investment guarantee agreement on trade by the end of this month. A number of MoUs on education, civil aviation (signed in 1993), information (1998), social develop32

May 2009

I don’t want Malaysia to miss the opportunity boat which the Sultanate of Oman has set sailing. But we would like to start small, with one or two companies. If one company spreads the word about Oman then it will continue to spread ment and women, private investments are already in place. Speaking about other bilateral activities that are happening between the two countries, HE Kassim said that more than 19,000 Omani tourists visited Malaysia from January-November, 2008. The embassy is working with its Dubai-based tourism office to encourage more Omanis to visit Malaysia. The Malaysian government has also increased its tourist spend, disclosed the ambassador while saying that aggressive promotion of their country is being done through the media. Malaysia is also promoting medical tourism in a big way and once direct

air links between Muscat and Kuala Lumpur are established, travel activities between the two countries will get enhanced leading to an increase in visitor numbers. Malaysia’s Labwa region is also fast turning into an offshore financial centre with all established banks setting up their branches there. People of every race, culture and creed can feel immediately at home in Malaysia because of its mixed demographic profile. Besides the ethnic Malays, the country has a large number of Indians, Chinese and other nationalities who all make Malaysia, the melting pot of cultures.


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BY INVITATION

Musandam and Masirah, two flagship boats of Oman Sail

By Stephen Thomas MOHSIN AL BUSAIDI’S SUCCESS WITH FELLOW CREW MEMBERS OF ‘MUSANDAM’ CIRCUMNAVIGATING THE GLOBE NONSTOP UNDER SAIL IS SYMPTOMATIC OF A MOUNTING BODY OF EVIDENCE THAT OMAN IS A NATION “WHOSE TIME HAS COME” 34

May 2009

OMAN: THE FRUITS OF A MODERN RENAISSANCE

R

enaissance means ‘re-birth’. In Oman, we associate the term ‘Renaissance’ with the period of outstanding change and development that has galvanised the country since the accession of His Majesty Sultan Qaboos bin Said in 1970. Oman’s Renaissance has witnessed transformational positive change in all fields of life, including education, health, commerce, security and infrastructure. One of the truly remarkable achievements of this era is that the dazzling acceleration of modern progress has been achieved alongside the preservation and deepening appreciation

of Oman’s rich heritage and culture. Deep in the Omani psyche lies, not only a love of the beauty and wilderness of the desert, but also a yearning for the high sea. Throughout history, Oman has produced skillful seafarers who have been the interlocutors for Oman’s exchanges of culture and knowledge with the outside world and the perpetrators for trade and prosperity through the ages. That is why the Oman Sail project is so important, with its aim to rekindle Oman’s maritime heritage. At 15:43:12 local time (11:43:12 GMT) on March 25, 2009 Oman Sail’s 75-foot Trimararan Musandam crossed the finish


Mohsin Al Busaidi and the Musandam crew line in Muscat and Mohsin Al Busaidi became the first Arab to sail non-stop around the world. As a member of a 5-man crew, including skipper Loik Gallon, Charles Darbyshire, Thierry Duprey Du Vorsent and Nick Houchin, Mohsin had completed this most arduous of seafaring challenges in 76 days, 1 hour, 12 minutes and 42 seconds. As a team and as individuals this is a rare and tremendous life-changing achievement. But the entire Oman Sail team recognises the significance of the collective achievement lies in Mohsin’s and Musandam’s specific success and what it means for Oman.

caption goes here caption goes here

Taking on challenges While Mohsin was on his journey round the world Oman’s national football team won its first ever Gulf Cup. On 18 January 2009 a 6-5 win in the penalty shoot-out sent a football-crazy and expectant nation into a frenzy of joy. It had been a long climb, including the pain of two final defeats in the previous two competitions losing to the respective hosts in Qatar 2004 and UAE 2007. It was fitting that Oman’s

Nabil Al Busaidy on his expedition to the North Pole 35

May 2009


BY INVITATION captain Mohamed Rabia should be the one to slot home the winning penalty. Oman’s free-scoring midfielder Hassan Rabia had been instrumental in the team’s success throughout the competition, as had the parsimonious top-class goalkeeper Ali Al Habsy, who did not concede a single goal in open play throughout the competition. Ali had already brought great recognition to the nation as the first Omani goalkeeper to play in the benchmark English Premier League as a member of the Bolton Wanderers squad over the past 4 years. But this was not the isolated success of individual stars who made up the Oman team. Just like Mohsin and the crew of Musandam, Oman’s footballing heroes had the support of all the backroom staff and indeed the whole nation behind them, Omani and Expatriate alike. How we cheered those moments of glory! Yet this was not simply the euphoria of fleeting success, but a deepening sense that these very public successes are a reflection of the lower profile but equally important achievements of Omanis in all walks of life. A sense that Oman’s remarkable Renaissance has reached a tipping point: That all the effort of the last 39 years, standing on the shoulders of a rich heritage and culture passed on over centuries by the nation’s forefathers, is leading to the fact that Oman is a nation whose time has come.

Role models Such a nation needs role models to epitomise its success and successful adventurers and sporting heroes do just that. Sailing round the world and winning major football tournaments are one thing; but look around us at Omani doctors, nurses, teachers, cooks, lawyers, carpenters, plumbers, welders, scientists, soldiers, policemen, masons, cleaners, engineers, waiters, pilots, dentists, painters, sculptors, photographers, travel agents, journalists, tour guides, writers, poets, aid workers, supervisors, managers, electricians, businessmen and many more. Every day young Omani men and women graduate into employment 36

May 2009

or service in society at every level and in all walks of life. This is their Everest. Omanis are being tested in fire and they are not found wanting. Just one example: When we fly safely in and out of Muscat International Airport the control tower is manned exclusively by Omanis. This is the new watchtower of a modern nation on the move. This is not to say that expatriates do not have a role to play. On the contrary, expatriates are needed to take up jobs where there are, as yet, an insufficient number of Omanis to meet demand. But the most important role of the expat must be to pass the torch on

lective successes of Oman’s people. So ignore the critics. It is not the critic who counts. It is the man or woman who stands up to be counted: The person who is willing to work hard and have a go. We now read with great anticipation of another emerging role model with Nabil Al Busaidy’s ongoing attempt to become the first Omani to walk to the North Pole. ‘Attempt’ is the optimum word, because success in any such endeavour is never guaranteed. The North Pole is a position, not a place. It sits in a moving frozen sea and any one of a number of factors can thwart his brave attempt. So we must see heroism and inspiration

Omani players celebrate their victory in the 19th GCC Cup to a new generation of Omanis. The expat who understands that is worth his or her weight in gold. There is little room for those who simply choose to mock the faults and errors of the progress. We all stumble. We all make mistakes. Not every industrialisation, real estate, or economic diversification project will run smoothly. The market could actually do with a lot more openness on failure and shortfalls. Not everything is a runaway success. But what is undeniably successful is the forward momentum of Oman’s economy, the leadership in standards of its oil & gas industry, and the individual and col-

in the very fact that he is willing to try in the glare of public view. As Mohsin al Busaidi will tell you, no journey is without peril; or as Ali Al Habsy and his team-mates will confirm, no victory in any game or competition is guaranteed. If it was that easy, where is the interest, and where the satisfaction? But there comes a moment when time, effort, preparation and commitment pays off. 39 years into an extraordinary Renaissance, Oman is a nation whose time has come. The author is CEO of Renaissance Services


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EXCLUSIVE 60 MINUTES

TIME FOR A RETHINK

Time magazine listed him as one of India’s most influential people in 2008 stating, ‘Ahluwalia’s fingerprints can be found in policies from economics to education reform, and he has been a driving force in the liberalisation programme of the past 16 years.’ Montek Singh Ahluwalia, Deputy Chairman, Planning Commission, India was on an official visit to the Sultanate to discuss bilateral economic relations recently. He takes time out from his busy schedule to talk to Mayank Singh 38

May 2009


Is the global financial meltdown a crisis of confidence more than anything else? I would say that it’s a genuine financial muck up, which is compounded by a crisis of confidence, resulting from the fact that people are not very clear whether a solution is being found. I am persuaded that the authorities in the US are aware of the seriousness of the crisis and the need to take strong action. You have seen a financial crisis which is a reflection of the failure of a certain approach to financial regulation that till now has been well recognised. I think people know what went wrong and they are determined to set it right. Governments are prepared to recapitalise the banks, the uncertainty lies in whether the methods being found will be politically acceptable and once people see that all has fallen into place, then will they be able to overcome the pure confidence problem.

Globally, an unprecedented amount of work has gone into tackling this crisis. Is that working? Well, there are different things that require global action. There are four areas globally which are important – action to fix the financial system right now, you cannot do it globally, but each country has to do it individually. I am persuaded that the US is aware of what the scale of the problem is and the lead that they have to give domestically and they said it so categorically at the London G-20 meet, so I assume that they are going to do it. I think once the Americans fix the problem, then nobody will tolerate the Europeans not fixing their problem, so they will follow suit. Point number two, is are we putting in place a regulatory structure for the future. The answer is yes, we are as best as we can, but in future there will be smarter people who will avoid these regulations better than the people who maintain them and this is not the important thing. This is important but not important urgently. As it is, I do not think that any bank will do anything risky for the next two years. So even if you did nothing it is going to be difficult to per-

suade banks to lend. The discussion on implementing financial regulations is going on well and the convergence that they have got on ideas is good, the global financial framework is getting democratised -- the Financial Stability Forum and the Basel Committee on Banking Supervision have been expanded to include the BRIC countries. The next thing is money for the financial institutions to help developing countries and there the performance of the G-20 summit has been very good. They have never done this much before, some may argue that there has never been such a big crisis before. If any individual country had fallen into a crisis there would have been

G-20’s London Meeting Highlights Stimulus package to IMF: $500bn Special drawing rights for developing countries: $80-$90bn Asian Development Bank’s capital goes up by: $250bn Trade Finance by banks: $250bn Total injection of liquidity globally: $1.1trn homilies about how their individual systems are at fault. Overall, there is a recognition that this problem was caused by the industrialised countries so there is a moral willingness to do something more than the minimum and in term of numbers it is pretty much the maximum. In Davos, I was on a panel with John Lipskey, the first deputy managing director of IMF, and he said that the funding sources (for developing countries) should be doubled by another $250bn and I said that it should be trebled to $500bn and that’s what they have done, so how can we complain. The last thing is protectionism. It is very tough and no single communiqué can solve the

problem but they have put in place a monitoring system and these are steps in the right direction. In a global crisis of this magnitude, you cannot think of a global conference as a pre-surgery to solve the problem, it is more a meeting of minds. Most people think that the recovery that the IMF has postulated for 2010, requires the same order of stimulus in 2010 as 2009. But at this moment that is not on, as they are going to withdraw stimulus on the grounds that they have done enough. But the agreement is that governments will watch the situation and if by September 2009 there is a feeling that things are bottoming out then there is no need for a stimulus, but if things do not improve then there is a chance they will be willing to do more.

When the G-20 Summit began people went in with few expectations, but by the time it ended there seems to be a meeting of minds of sorts? When people went in, nobody had major expectations, Sarkozy was quoted as saying that if I do not get a global regulator, I will walk out. Whether newspapers are building up these stories or whether he said these things I am not sure, but when leaders reach there, then they sense a certain mood and reposition themselves. No leader wanted to be isolated, even those who wanted to do. Nothing substantive has been done to reform the Bretton Woods institutions. The fact that the leaders of these institutions are going to be chosen from an open process is an important step forward. There is also a rethink of their mandate seeing what kind of a role they will be performing, Gordon Brown, the chairman of G-20 has been authorised to speak to people and come back. The summit has provided money to the system as it stands, without any real reform of the system, but they recognise that a major global crisis is going on and the first priority is to tackle the crisis. Once you tackle the crisis then you get a moral credibility to do reforms and the reforms should be done stating that what made it more difficult to tackle the crisis and what was it that 39

May 2009


60 MINUTES

actually triggered the crisis. Everybody has shown flexibility â&#x20AC;&#x201C; industrialised countries by providing money, developing countries by holding back a demand for immediate reform, everybody by talking about protectionism in a way that it sounds right. A very important thing is that, in the past, crisis affecting the developed world never involved the developing world around the table, how effective our presence was, only history will tell but the very fact that we are sitting there and talking about fiscal crisis and getting into the discussion on the global side reflects a huge mindset change. In the old days if there was a global problem of this kind then the G-7 would have had a discussion. The western view on financial systems was that developing countries should completely integrate their financial systems with the rest of the world. And as foreign banks were more efficient than your (developing countries) banks, you did not have to build your own financial system and just let the Citibanks and Chase Manhattans to take care of that. We (in India) never accepted this view â&#x20AC;&#x201C; we wanted to build our own financial systems and let foreign banks be there to compete 40

May 2009

and that was the right strategy, if we had completely relied on foreign banks then we would have had a massive credit squeeze right now. Even today,Ă&#x; foreign banks are actually contracting credit to preserve the risk to their capital. Our banks are also looking at risk aversion, but that is something that we can take care of.

What led to the global crisis in your opinion? The basic Anglo Saxon economic model was light regulation and relying on market discipline and enlightened risk management and this would provide you with all the incentives for innovation without running any risks. This model has proved to be comprehensively wrong. The crisis has shown that the financial markets are different from actual markets and they need stricter regulation. There was a lot of regulatory arbitrage with some guys being subject to regulation while the others were not subject to regulation, wings of the same institution were regulated here and not regulated there. The originate and distribute model, which was supposed to distribute risks to those who were better able to manage it turned out to be only disguising risk and reconcen-

trating them in the banks themselves. They were meant to go out of banks but they got concentrated in other vehicles which involved the reputational and balance sheet risk of the bank so it was a huge mistake. The new regulatory structure that they are thinking about will take care of that. The leverage in the system was far too high and in future it will be less. Whether that will hurt developing countries is an open question. In one way you could argue that by creating these complicated structures, these guys were fooling the world by stating that you could achieve good returns and low risk returns by investing in the US. Without these structures it would be very clear that the returns in the US are low. The other side of the coin is that if you want returns then go for FDI and things like that in the developing world, of course there is a little bit of more risk there, but what was happening here was that they were saying that we can give you the returns without the risk, which was not the case. So I do not think in net terms developing countries which are capable of growth will lose out. If India can project itself as a safe and attractive destination then it will benefit from future capital flows.


VIEWPOINT

A BUSINESS HAVEN A DIVERSIFIED FREE-MARKET ECONOMY WITH A DEVELOPED TOURISM, MANUFACTURING AND FINANCIAL SERVICES INDUSTRY MALTA OFFERS INTERNATIONAL INVESTORS A HIGHLY ADVANCED TELECOMMUNICATIONS NETWORK, SKILLED PROFESSIONALS AND A STRATEGIC LOCATION By Sridhar Sridharan

Business environment The Maltese Archipelago, made up of Malta, Gozo and Comino, are located 93 kilometers off the southern coast of Sicily and 290 kilometers north of the shores of North Africa.

The incentives available under the Act include access to finance, investment aid, SME development, research and development programmes, enterprise support, and employment and training

Malta joined the EU in 2004, and subsequently adopted the euro on January 1, 2008. The euro adoption has made Malta more attractive for investment purposes through reductions in transaction costs and international trade barriers. Given Maltaâ&#x20AC;&#x2122;s membership in the EU, its legislation is reflective of EU legislation and directives, providing foreign investors in Malta with the assurance of the quality and consistency synonymous with the EU. Over the last few years, Malta has adopted and established a comprehensive legislative and regulatory framework for financial service activities based on standards of best practice. FinanceMalta, a foundation formed between the government and the industry, was founded with the aim of further improving Maltaâ&#x20AC;&#x2122;s profile as a finance centre on a worldwide basis. FinanceMalta strives to maintain a modern and effective legal, regulatory and fiscal framework.

Economic overview Malta has a diversified free-market

42

May 2009

economy which mainly relies on tourism, manufacturing and financial services. The government encourages foreign investment and Malta enjoys good industrial relations. Malta also provides numerous financial incentives and maintains a low tax regime encouraging economic growth. The island offers international investors a highly advanced telecommunications network, skilled professionals and a strategic location. Malta has a number of key features which make it attractive for foreign investors, including: a. A stable macroeconomic environment, and taxation and financial infrastructure b. A broad and advantageous double taxation treaty network c. A fast and approachable regulatory authority d. Central time zone which facilitates global coverage

Incentives The Malta Enterprise Act has introduced a new set of incentives for the promotion and expansion of business, covering a wide range of sectors and activities. The incentives available under the Act include access to finance, investment aid, SME development, research and development programmes, enterprise support, and employment and training.


VIEWPOINT Structure of business entities

SICAV or INVCO, or as a limited partnership, mutual fund or a unit trust.

1. Corporate forms The most common form of business entity in Malta is the limited liability company. These may be either public or private companies, and are governed by the Companies Act. Upon submission of the Memorandum and Articles, and if all legal requirements are satisfied, a company is registered. A private company has restrictions on the extent to which it can transfer its shares. It prohibits any invitation to the public to subscribe to its shares, and the number of shareholders cannot exceed 50. A public company may offer shares or debentures to the public. A Partnership En Nom Collectif has its obligations guaranteed by the unlimited and joint and several liability of all the partners. A Partnership En Commandite has its obligations guaranteed by the unlimited and joint and several liability of its general partners, and by the liability, limited to the amount of their contribution, of one or more limited partners. 2. Partnerships and Sole Traders Sole proprietorship and partnership are generally subject to lesser statutory requirements than companies, but the partners and the proprietors do not have the protection of limited liability. 3. Joint ventures Joint ventures are usually formed using the company structures described above. 4. Branches of foreign companies Overseas companies establishing a place of business in Malta should, within one month of the establishment of the place of business, deliver to the Registrar an authentic copy of the charter of the company, a list of the officers of the company, and the names and addresses of one or more individuals resident in Malta authorised to represent the overseas company in Malta.

Structures used by foreign investors A Collective Investment Scheme is an 44

May 2009

Tax implications applicable to forms of business structures

Quick Facts Area: 316 sq km Coastline: 196.8 km Population: 405,165 (July 2008 est.) Life expectancy: 79.44 years Literacy rate: 92.8 per cent Labour force: 24.72 million (2008 est.) Industries: tourism, electronics, ship building and repair, construction, food and beverages, pharmaceuticals, footwear, clothing, tobacco Legal system: based on English common law and Roman civil law Currency: Euro = EUR (At 12 April 2009, US$ 1 = 0.7577 EUR)

Companies resident in Malta are subject to income tax on their worldwide income. Companies registered outside Malta are considered residents of Malta if management and control is exercised in Malta. Companies that are neither resident nor domiciled in Malta are subject to income tax only on their Malta source income and Malta source capital gains. Foreign source capital gains derived by persons who are not domiciled or ordinarily resident are not taxable in Malta at all. Income tax is the only tax imposed on the profits of companies. The standard rate of income tax is 35 per cent. Tax losses incurred in a trade or business may be carried forward indefinitely to offset future income. Unabsorbed capital allowances may also be carried forward indefinitely, but may only offset income derived from the main source. A carry back of losses or capital allowances is not allowed.

Languages: Maltese, English Government type: Republic

entity licensed under the Investment Services Act. Gains or profits derived by Collective Investment Schemes are exempt from tax (except for income derived from immovable property situated in Malta and investment income from Maltese sources). The most common corporate structure of a Maltese fund is the company with variable share capital (SICAV - openended fund). The Companies Act also provides for the setting up of a company with fixed share capital (INVCO - close-ended fund). There are also hedge funds which are usually in the form of Professional Investment Funds (PIF) which are ultimately forms of Collective Investment Schemes and are incorporated as a

The refundable tax credit system In 2007, a refundable tax system for all companies distributing dividends to shareholders was introduced. The tax paid by a company is essentially treated as a prepayment of tax on behalf of the shareholder. The new refundable tax system applies both to profits allocated to a companyâ&#x20AC;&#x2122;s Maltese Taxed Account and to profits allocated to its Foreign Income Account and is available both to residents and non-residents. The refundable tax system is extended to shareholders of foreign companies that have Maltese branches. Tax paid in Malta by branches on profits attributable to activities performed in Malta is refunded when such profits are distributed. Persons must register with the Commissioner of Inland Revenue to benefit from the tax refunds described above.


VIEWPOINT

Relevant tax exemptions The Income Tax Act exempts from tax interest, discount, premium or royalties accruing to or derived by nonresidents.

Withholding taxes A final withholding tax of 15 per cent is imposed on dividends paid out of untaxed income to Maltese resident individuals and bodies of persons, other than companies. Dividends, interests and royalties paid to non-residents are not subject to withholding tax regardless of whether they are paid out of taxed or untaxed. The Parent Subsidiary Directive applies to parent companies and their subsidiaries which are incorporated in member states of the European Union. This directive ensures fiscal neutrality between the parent company and its subsidiary by exempting from withholding tax the profits which a subsidiary distributed to its parent company.

Individual income tax Different progressive tax rates apply to married couples resident in Malta, individuals’ resident in Malta and non46

May 2009

resident individuals with a maximum marginal rate of 35 per cent.

Other taxes Value Added Tax (VAT) is the main indirect tax in the Maltese tax system. The other significant taxes include duty on documents and transfers and property transfers tax.

Double tax relief Malta has signed a number of Double Tax Treaties. Malta has signed a Double Tax Agreement with Oman but the agreement is not yet ratified. Individuals who are residents of Malta are eligible to benefit from Malta’s double taxation treaty network.

Labour availability The Maltese workforce is known for their productivity and outstanding work ethic. The Maltese are wellversed in the English language, multiskilled and familiar with technology.

Social security All employed and self-employed persons are required to pay Social Security Contributions. The amount of Social Security Contribution (SSC) to be remitted to the Inland Revenue

Department depends on the employee’s salary. The SSC amount is to be paid by both the employee and the employer.

Exchange control There are no exchange control restrictions.

Import regulations In general, Malta does not impose restrictions on the import of goods from other countries or groups of countries. Goods imported from non-European Union countries may be subject to import duties in addition to VAT (when applicable). An export licence is required for specified goods. Malta’s membership in the EU, its strategic location and its growth as a financial centre make it a premier starting point for companies seeking business development in the region. A highly advanced telecommunications network, a skilled workforce and numerous financial incentives makes Malta favourable to international investors and exporters. The author is a Tax Partner at Ernst & Young.


OER presents its annual ranking of the Sultanateâ&#x20AC;&#x2122;s Top 20 Listed Companies of 2008


THE OER TOP TWENTY – YEAR 2008 Oman Economic Review presents its annual report on Oman’s Top 20 listed companies for the year 2008

F

or the sixth consecutive year, 2008 has been fairly positive for Oman’s economy in general due to the growth in the first half of 2008. The price of oil continued to increase during the earlier part of the year 2008. Oman crude realised an average price of $101.06 per barrel in 2008 compared with an average price of $65.15 for 2007 and the budgeted price of $40 per barrel for 2008. The original total appropriations for the year 2008 of RO5,800mn were substantially increased by a further RO603mn to implement a number of development and basic infrastructure projects. Due to the higher oil prices the actual budget was projected to close with a budgetary surplus of RO1,581mn as against a projected deficit of RO400mn.

Suhail Salim Bahwan Ex-chairman, NBO

Market meltdown However, due to the global financial meltdown, 2008 has been quite challenging for the Muscat Securities Market (MSM). You may recall from our statement last year that due to the bursting of the ‘Credit Bubble’ in a

The top five by revenue – 2008 Rank

Company

year that was full of bad news for developed markets, emerging markets spent 2007 on another planet, with returns of 35 per cent to 40 per cent. This phenomenon continued till the middle of 2008 but hit home with a vengeance in the second half of 2008. The MSM ended the year as the fourth best performing stock market in the GCC with an overall decline of 40 per cent. Two successful IPOs were launched during the first half of the year with unprecedented oversubscription of more than 25 times. Trading volumes amounted to RO3,710mn in 2008 compared to RO2,321mn in 2007, an increase of 59.8 per cent. The benchmark MSM 30 index ended the year at 5,441 points, a loss of 39.78 per cent for the year. The top performer was the services and insurance sector which was down 28 per cent followed by the industry sector which lost 45 per cent and the banking

The top five by profit – 2008 Revenue RO Mn

Growth % from 2007

Rank

Company

Profit RO Mn

Growth % from 2007

1

Oman Telecommunications Co

411.49

12.74

1

Omantel

119.24

5.93

2

Galfar Engineering & Contract

364.36

35.45

2

Bank Muscat

93.73

11.24

3

Bank Muscat

338.15

27.13

3

National Bank of Oman

45.38

1.71

4

Shell Oman Marketing

326.36

31.60

4

Oman International Bank

29.47

4.98

5

Oman Cables

304.57

39.62

5

Raysut Cement Company

27.10

(10.00)

48 OMAN ECONOMIC REVIEW May 2009


COVERSTORY STORY COVER period found that those that made the biggest leaps in profitability were often the ones that increased their spending on acquisitions and innovation the most amid recessions.

Sultan Bin Hamdoon Al Harthy Chairman, Omantel and investment sector was the worst hit ending with a decrease of 46 per cent. Foreign participation in the capital of the listed joint stock companies also reduced during the year to 23.84 per cent compared to 27.55 per cent last year, a decrease of about 13 per cent. Due to higher oil prices in the first half of the year, increased non-oil exports and strong demand, the GDP growth rate for 2008 is estimated at 10 per cent. Oil production increased in 2008 by about seven per cent. The government’s continued emphasis on diversifying the economy away from dependence on oil gained further momentum during 2008. Non oil exports grew by 27 per cent. Most of the real estate development projects started in 2007 continued and the

tourism sector grew by 22 per cent. Performance of western world financial markets continued to be greatly affected due to the worldwide recession. MSCI AC World index was down 43.5 per cent in 2008 as global equity markets finished 2008 down 43.5 per cent. Japan (-30.5 per cent) was the best performing region followed by the USA (-38.5 per cent) and Europe (-48.2 per cent). The worst performing regions were Global Emerging Markets (-54.5 per cent) and Asia Pac ex-Japan (-53.3 per cent). Recessions are historically times when companies make the biggest competitive strides or fall behind. A 2002 survey by McKinsey of the performance of 1000 companies during an 18 year

The top five by growth of profit – 2008 Rank

Company

During the year 2008, the revenues of Oman’s 20 largest companies showed a handsome growth. Total revenues for the OER Top 20 went up by 25 per cent to RO3,220mn. Corporate performance of the year 2008, overall, was also slightly positive in spite of the global recession. The profits for the year 2008 increased by four per cent to RO480mn from the figure of RO462mn last year. The total market cap of the OER Top 20 on December 31, 2008 was RO3,975mn, which was down by 44 per cent compared to 2007. On April 2, 2009, the market cap of the top twenty has once again gone down to RO3,281mn. The OER Top 20 companies represent 68 per cent to the total market cap of the MSM of RO5,829mn at the end of 2008. The average P/E ratio of the OER Top 20 based on the profits of the year 2008 and the share price on April 2, 2009 is 6.84 times earnings.

Who is out and who is in We have two new comers on the list this year. Oman Flour Mills comes into the number 18 spot and Al Hassan Engineering is back in the number 20 slot after missing out last year. These companies have made it to the OER Top 20 this year at the expense of AES Barka and Oman Refreshment. The ranking of Oman’s 20 largest companies in order of revenue produces a

The top five highest capitalised – 2008 Growth % from 2007

Rank

Company

Shareholders Equity RO Mn

1

Al Anwar Holdings

99.86

1

Bank Muscat

715

2

Oman Flour Mills

91.97

2

Omantel

373

3

Oman Holdings International

51.21

3

National Bank of Oman

245

4

Renaissance Services

51.06

4

Bank Dhofar

188

5

Areej Vegetable Oils

24.50

5

Oman International Bank

173

49 OMAN ECONOMIC REVIEW May 2009


COVER STORY list, which includes the seven companies from the banking and investment sector, six from the services sector and seven from the industrial sector.

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 2008. Bank Muscat has achieved this position by recording growth in profit for the year of about 11.24 per cent.

There has been no change in the top ten companies in Oman by revenues. Omantel continues to be the largest public company in Oman with a growth in revenue of 12.74 per cent compared to last year. The Chairman of Omantel Eng. Sultan Bin Hamdoon Al Harthy in his report to the shareholders explains that the main reason for good growth in net profit is the continuous double digit revenue growth. Al Harthy states that the total group revenue rose by 12.6 per cent. Al Harthy outlines that the total group net profit after tax rose by 5.9 per cent to RO118.6mn. Al Harthy adds that the total subscriber base has recorded a growth of 13.4 per cent. The total number of subscribers has increased to 2.119mn compared to 1.869mn last year. Al Harthy goes on to state that due to the global financial crisis and the deteriorating market conditions in Pakistan, the value of their strategic investment in Worldcall Telecom has been affected and the group has recognised an impairment loss of RO18.88mn. Without this impairment the net profit would have been RO137.5mn, a growth of 22.8 per cent. Al Harthy cautions that during the year 2009 the sector liberalisation is likely to intensify with the TRA announcement of awarding Omanâ&#x20AC;&#x2122;s second fixed line

Abdul Malik al Khalili Chairman, BankMuscat network and possible award of more Internet service providers in 2009. He adds that the government plan to sell 25 per cent of its stake in Omantel to a strategic investor has been called off because of the current conditions in the global capital markets.

Profit index Similar to last year, three 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 a small growth in profits for the year whereas one is showing a decline. There is one change in the top five companies by profit. Raysut Cement, which was in the fourth place last year, has moved down to the number five position and OIB is up from five to four. Omantel continues to remain at the number one spot, Bank Muscat at the number two spot and NBO at number three.

The top five largest market capitalisation â&#x20AC;&#x201C; Apr 2, 2009 Rank

Company

The Chairman Abdul Malik bin Abdullah al Khalili states in his yearend report to the shareholders that despite the global financial crisis the key business lines of the bank continued to turn in an impressive performance in 2008. Khalili adds that during 2008, the return on average assets was at 1.8 per cent compared to 2.3 per cent in 2007. The return on average equity was 14.8 per cent in 2008 compared to 25.8 per cent in 2007 and the basic earnings per share was RO0.087 as against RO0.090 in 2007. Khalili explains that their strategic shareholding in Saudi Pak Commercial Bank was impaired due to the deteriorating economic situation in Pakistan and even though this investment is strategic in nature as a measure of prudence the bank has provided for an impairment loss of RO17mn for this investment. Khalili goes on to say that the Board has proposed a dividend of 50 per cent, 20 per cent in the form of cash and 30 per cent in the form of mandatory-convertible bonds. He advises that the 2009 financial market environment appears to be challenging for business with tight liquidity conditions, weak equity market and tightened lending norms by banks. Khalili is confident that the bank

The top five returns on equity â&#x20AC;&#x201C; 2008

Market Capitalisation RO Mn

Rank

Company

Profit as a % of Equity

1

Omantel

881

1

Shell Oman Marketing

46.62

2

Bank Muscat

629

2

Omantel

31.99

3

National Bank of Oman

299

3

Oman Oil Marketing

30.06

4

Bank Dhofar

269

4

Al Anwar Holdings

28.14

5

Oman International Bank

258

5

OMINVEST

28.09

50 OMAN ECONOMIC REVIEW May 2009


AFFORD ABL PRICES E


COVER STORY will sail through these turbulent times.

Tops turvy Al Anwar Holdings has shown the highest growth in profits by an enormous 99.86 per cent and has remained in the number one spot for the second year running. Three of the top five companies showing highest growth of profit from last year being Oman Flour Mills, Renaissance and Areej Vegetable Oil are new on the list. Al Jazeera Steel, OMINVEST and Al Maha Petroleum have all dropped off this list. The Chairman of Al Anwar, Masoud Humaid Al Harthy in his report to the shareholders for the year ended March 31, 2008 has stated that new business strategies; investment policies and procedures; and risk management tools introduced by the management in the second half of the year has contributed in the continued sustainable growth of the company. The group has recorded 100 per cent growth in profits over last year achieving its highest ever net profit of RO4.33mn for the year ended March 31, 2008. He points out that out of this profit RO1.13mn is generated from disposal of 31 per cent shareholding in NAPCO. The board has recommended a cash dividend of eight per cent and a stock dividend of 12.93 per cent. Al Harthy adds that the group’s subsidiaries Voltamp Manufacturing and Sun Packaging are all performing well as are its associates NAPCO, Al Anwar Blank, Falcon Insurance, Al Maha Ceramics and Addax Securities Saudi Arabia. Al Harthy explains that the group contin-

Samir Fancy Chairman, Renaissance Services ues to focus on the financial services and real estate sectors. Four of the top five companies that have the highest amount of equity employed are banks. Four of the companies in this category remain the same as last year. BankMuscat continues to remain number one in this category. Omantel and NBO continue to remain in the same position as they were last year. Bank Dhofar, a newcomer on the list, comes in at number four knocking OIB down to the number five position. Oman Cement which was number five last year is no longer on this list. The then chairman of NBO Suhail Salim Bahwan in his report to the share-

The top five earnings per share – 2008 Rank

Company

holders states that the bank’s net profit of RO45.4mn exceeds last year’s record net profit of RO44.6mn despite a very turbulent fourth quarter and after impairment charge of RO3.7mn on investments. Bahwan adds that the profit from operations grew by 49 per cent from RO36mn to RO54mn reflecting the bank’s clear emphasis on sustainable growth. He explains that the bank has diversified its income as reflected in ratio of other operating income to total income which increased from 37 per cent in 2007 to 46 per cent in 2008. Business efficiency remained an important focus and the improvement in cost to income ratio continues to improve. The recoveries and releases against the provisions for 2008 were at RO16.6mn.

The top five by share price growth – 2008 Earnings per share growth %

Rank

Company

Share price growth %

1

Oman Flour Mills

91.76

1

Oman Oil Marketing

16.03

2

Al Anwar

63.33

2

Shell

10.53

3

Renaissance Services

32.05

3

Al Hassan

8.26

4

Oman Holdings International

31.02

4

Omantel

(8.56)

5

Shell

13.02

5

Al Maha

(9.09)

52 OMAN ECONOMIC REVIEW May 2009


Total assets ended the year at RO1.9bn. This growth was linked to the growth in deposits by RO406mn (43 per cent) and growth in net advances by RO494mn (54 per cent). Bahwan goes on to say that 2009 will pose significant challenges in the international debt and capital markets. The global economy is expected to continue to suffer under the impact of a prolonged recession. In the GCC region, lower oil prices are expected to slow the growth in the region. Bahwan states that the bank will continue to grow in a prudent and profitable manner by targeting quality assets in Oman and the UAE with the overall objective of enhancing shareholder value.

Sea change This year, only one of the top five companies that have the highest market capitalisation on the MSM is not a bank. Omantel has taken over from Bank Muscat as the number one this year; BankMuscat has slipped to the number two spot in this category. NBO is a newcomer to this list straight into third place, Bank Dhofar has jumped up one place to the fourth position and OIB is a newcomer in the number five position. Raysut Cement and Galfar who were number three and four last year are both knocked out from this list. The chairperson of Oman International Bank, Reem Omar Zawawi in her annual report to the shareholders states that 2008 was another successful year for the bank with record profitability. Zawawi

Andrew Wood, Chairman, Shell Oman Marketing adds that the business philosophy of the bank is to continue to deliver consistent returns to the shareholders backed by a determination to pursue growth with prudent risk management. Zawawi explains that the bank achieved a net profit of RO29.47mn for the year 2008 compared to RO28.07 for 2007, an increase of 4.97 per cent. The bank commands a market share of 8.23 per cent for deposits and 7.4 per cent for loans and 7.77 per cent for total assets as at December 31, 2008 as per the consolidated statistics from the Central Bank of Oman. In the light of these results the board of directors has proposed a cash dividend of 27 per cent. Zawawi states that the bank looks to the

The best five by dividend yields â&#x20AC;&#x201C; 2008 Rank

Company

Dividend Yield per cent

1

Oman Flour Mills

121.95

2

Oman Holdings International

25.00

3

Oman International Bank

12.27

4

Al Hassan Engineering

11.01

5

Raysut Cement

9.07

54 OMAN ECONOMIC REVIEW May 2009

future with conservatism, confidence and optimism. The government policies continue to focus on strong economic growth with expenditure up 11 per cent and revenue by four per cent. In the future the bank will increase its delivery channels in terms of new state of the art branches, ATMs, PoS (point of sales) and customer friendly mobile banking services. She adds that the bank will make optimum use of these channels to redefine customer convenience and thereby acheive continous sustainable growth. Interestingly, only one of the top five companies showing the best return on equity employed comes from the banking sector. Four of the companies in the top five are newcomers to the list. Shell steps up to the number one spot from being No.2 last year; Omantel, Oman Oil, Al Anwar and OMINVEST take the two to five positions knocking out Oman Cables, AES Barka, OHI and Raysut Cement who appeared in this table last year. Andrew Wood, Chairman of Shell Oman Marketing, in his report to the shareholders states that overall the company remained the market leader amongst oil marketing companies op-


COVER STORY erating in Oman. Wood adds that the company achieved unprecedented financial results recording a historically highest ever net profit of RO12.5mn compared to previous year’s net profit of RO11.06mn. Despite the uncertainty surrounding the major economies and Oman’s economy, proactive management as well as sound operational performance were the principal drivers of the commendable financial performance in 2008. Wood explains that the retail business remains the most important segment for the company. Total retail volumes sold was in excess of 1.3bn litres. The aviation business saw over 50 per cent increase in volumes in 2008. The market penetration in the lubricants market also registered record level of sales volume. The board has recommended a final dividend of 115 per cent for the year continuing the recent trend of year on year dividend growth. Wood adds that the fuels market normally follows the economic trend of the country and is

Reem Omar Zawawi, Chairperson, Oman International Bank thus expected to see some uncertainty due to the volatility of the global oil prices. The Sultanate will not be entirely immune from the current global

recession and demand, especially in the commercial and aviation sectors which, may be affected as tourism and development projects slow down. The

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Main Branch OfÀce – Tel: 24483606 • Fax: 24483717 Muscat City Center – Tel: 24558606 • Fax: 24558505 Email: oman@eqarat.com


retail segment on the other hand is not expected to be affected. Three of the top five earnings per share growth companies are newcomers on this list. Oman Flour Mills jumps straight into number one spot pushing Al Anwar down to the second position. Renaissance comes in at the number three position, OHI continues to remain in the number four position and Shell comes into the number five spot. Al Jazeera Steel, OMINVEST and Al Maha Petroleum are all out. Samir Fancy, Chairman of Renaissance, in his report to the shareholders states that Renaissance has achieved record results for the seventh consecutive year. The consequence of continued focus on values-driven operating model is, yet another year of growth and record financial performance. Revenues of RO234mn are up from RO199mn in 2007. Revenue increased by 17.6 per cent, operating profit has increased by 35.8 per cent and operating margins improved from 13.8 per cent in 2007 to 16 per cent in 2008. The net profit of 2008 includes a capital gain of RO4.8mn from the divestment of the group’s former technology business.

businesses, with the right customers, in the right markets and have the right assets and above all the right people.

For the current fiscal year the board has recommended a cash dividend of 10 per cent and a stock dividend of 15 per cent. Looking ahead, Fancy states that it is clear that the prognosis for Renaissance is good for continued growth in 2009, in spite of the recession. As usual, performance will not be even across each quarter. The first quarter of the year we have usual seasonal effect of winter downtime in the northern Caspian and in Q1 and Q2, 2009 we have a major programme of dry-docking that will ensure Q3 and Q4 will likely record the best financial performances of the year ahead. Going into 2009, Fancy states that the company does not underestimate the challenges of the recession but is taking all prudent measures necessary to avert its dangers. He further states that they have the right

Salim Abdullah Al Rawas, Chairman of Oman Oil Marketing in his report to the shareholders states that 2008 was another successful year for the company. The total revenue increased by 11 per cent to RO170mn from the previous year’s 152.7mn. The revenue growth was due to improved sales recorded for most products as well as higher product prices in line with the international prices. As a result the company’s pre-tax profit rose by 12 per cent to RO7.2mn.

56 OMAN ECONOMIC REVIEW May 2009

Manal Mohammad Al Abdawani, Chairperson, Oman Flour Mills

Role reversal All of the five companies on the shareprice growth list are newcomers with Oman Oil taking the top position. Shell Marketing comes in second followed by Al Hassan Engineering, Omantel and Al Maha Petroleum. Al Anwar Holdings, Renaissance Services, Oman Cables, Bank Dhofar and Raysut Cement from last year have all been knocked out.

The board of directors recommended a final dividend of 35 per cent for the financial year 31 December 2008. Al

Rawas states that the outlook for the coming year appears to be positive with the demand for petroleum products expected to grow in line with Oman’s projected economic growth. He adds that the company has placed itself in a strong position for the future. Nonetheless competition in all business sectors particularly in the retail business will continue to persist. With ever increasing competition in the market and aggressive efforts by the competitors, the company will remain focused on expanding its network of facilities, improving quality of its products and services, optimising costs and developing its human capital even further. Three new companies have entered the ranking of the best five dividend yield companies. Oman Flour Mills, Al Hassan and Raysut Cement are newcomers in number one, four and five slots. OHI jumps up to number two from number five last year and OIB retains the third position. Manal Mohammad Al Abdawani, Chairperson of Oman Flour Mills in her report to the shareholders for the year ended June 30, 2008 states that while there has been remarkable improvement in


COVER STORY the demand for their flour products, which increased by six per cent in the local market compared to last year, the company’s fodder sales fell by eight per cent compared to previous year because of the shortage of fodder raw material. The total sales amounted to 324,000 metric tons which covers 65 per cent of the flour market in the Sultanate. Al Abdawani adds that the company exerted relentless efforts to improve its operating performance. The com-

pany achieved impressive results for the year ended June 30, 2008. The net profit for the year was RO7.5mn compared to RO4mn for the previous year an increase of 87 per cent. The company along with its subsidiaries made a net profit of RO8.1mn compared to RO4.2mn in the previous year. Based on the good results achieved, the board has recommended a dividend of 25 per cent for the year. Al Abdawani explains that the company is continu-

ing to improve operating efficiency through diversifying its investments in equipment like the ship un-loader that increases the discharge capacity thereby reducing cost. The company is also working to add other equipment in order to improve overall production efficiency. The company has also established a subsidiary ‘Bread House’ to market frozen bakery products and will establish an industrial bakery, the commercial production of which is expected to commence in 2009.

METHODOLOGY The figures and the lead analysis for the listing 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 of Canada. Currently, he is on the board of several public companies, including Gulf Investment Services, Gulf Mushroom and Muscat Thread Mills in Oman.

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 31 December 2008, unless otherwise stated.

The data has been verified by KPMG – a global network of professional firms providing audit, tax, and advisory services. They operate in 144 countries and have more than 137,000 professionals working in member firms around the world. KPMG is one of the leading accredited accounting firms in Oman and has more than 100 employees including 3 Partners, 3 Directors, and 21 Managers. KPMG Oman has 23 Omanis who are currently training for ACCA. KPMG has many years of experience in the Middle East. They have a reputation for providing quality professional services to well-diversified client portfolio, both in public and private sectors.

Shareholders’ Equity

Profits Profits are shown after taxes and all charges including extraordinary charges. Figures in brackets indicate a loss. All losses and negative growth are also ranked where possible.

Assets 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.

Shareholders Equity is the paid up capital of the company, retained earnings, and 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 April 2, 2009.

Earnings per share 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

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 2008 against the share price at close of business on 31 December 2008.

Price Earnings ratio This ratio has been calculated by dividing the price per share by the earnings per share as at December 31, 2008. 57 OMAN ECONOMIC REVIEW May 2009


THE OER TOP 20 COMPANIES FOR 2008 Rank Company

Revenue

Profit as % of revenues

Profits

Growth 2008 2007 2008 2007 Growth % % from Rank Rank (RO MN) (RO MN) (RO MN) (RO MN) from 2007 2007

2008 2007

Profit as % assets

Profit as % equity

%

Rank

%

Rank

%

Rank

1

1

OMAN TELECOMMUNICATIONS CO.

411.49

365

12.74

119.24

113

1

5.93

10

28.98

6

20.19

3

31.99

2

2

2

GALFAR ENGINEERING AND CONTRACTING *1

364.36

269

35.45

23.11

22

8

4.31

13

6.34

13

6.23

11

27.73

6

3

3

BANK MUSCAT * 2

338.15

266

27.13

93.73

84

2

11.24

8

27.72

7

1.55

20

13.11

17

4

4

SHELL OMAN MARKETING COMPANY

326.36

248

31.60

12.50

11

11

13.04

6

3.83

16

21.41

2

46.62

1

5

5

OMAN CABLES INDUSTRY

304.37

218

39.62

6.13

15

16

(59.48)

20

2.01

19

4.46

14

19.02

13

6

6

RENAISSANCE SERVICES *3

234.26

199

17.72

26.19

17

6

51.06

4

11.18

10

7.04

10

20.91

11

7

7

AL MAHA PETROLEUM

191.65

175

9.52

7.34

7

14

7.08

9

3.83

15

15.76

5

26.64

9

8

8

OMAN OIL MARKETING COMPANY

170.04

153

11.14

6.32

6

15

11.31

7

3.72

17

15.59

6

30.06

3

9

9

NATIONAL BANK OF OMAN

130.83

101

29.54

45.38

45

3

1.71

15

34.68

3

2.29

17

18.49

14

10

10

OMAN HOLDINGS INTERNATIONAL * 4

91.10

73

25.07

8.80

6

12

51.21

3

9.66

11

9.71

8

27.54

8

11

16

AREEJ VEGETABLE OILS & DERIVATIVES *5

90.67

53

71.08

1.50

1

20

24.50

5

1.66

20

4.88

12

23.20

10

12

11

RAYSUT CEMENT COMPANY

89.08

63

41.37

27.10

30

5

(10.00)

17

30.43

4

23.04

1

27.64

7

13

13

BANK DHOFAR * 6

80.57

65

23.96

23.68

23

7

3.93

14

29.40

5

1.79

19

12.57

18

14

17

AL JAZEERA STEEL PRODUCTS COMPANY

78.43

45

74.30

1.71

2

19

5.42

11

2.19

18

2.15

18

5.53

20

15

15

OMAN CEMENT COMPANY

63.52

50

27.05

12.54

17

10

(27.38)

19

19.74

8

9.43

9

10.63

19

16

12

OMAN INTERNATIONAL BANK

59.31

68

(12.77)

29.47

28

4

4.98

12

49.69

1

2.89

15

17.08

16

17

14

OMINVEST * 7

54.41

59

(7.78)

20.37

27

9

(24.24)

18

37.45

2

2.60

16

28.09

5

18

N/A OMAN FLOUR MILLS COMPANY *8

50.74

35

45.64

8.06

4

13

91.97

2

15.89

9

17.22

4

19.59

12

19

19

45.37

37

22.62

4.33

2

17

99.86

1

9.55

12

12.89

7

28.14

4

20

N/A AL HASSAN ENGINEERING COMPANY

45.03

35

27.89

2.02

2.1

18

(4.58)

16

4.49

14

4.48

13

17.14

15

AL ANWAR HOLDINGS *9

NOTES 1. Galfar has issued a 20% stock dividend, which has not been taken into account in the calculation of the dividend yield. 2. Bank Muscat has issued a 30% convertible bonds as dividend, which has not been taken into account in the calculation of dividend yield.

58 OMAN ECONOMIC REVIEW May 2009

3. Renaissance Services has issued 15% stock dividend, which has not been taken into account in the calculation of dividend yield. 4. The financial statements of OHI are as at 31 March 2008, which is their financial year-end. OHI has issued 5.56% stock dividend, which has not been taken into account in the calculation of dividend yield.


COVER STORY

Earnings per share

Dividend yield

Dividend per share

Share price Sector

2008 (RO)

2007 (RO)

Growth %

Rank

2008 %

2007 %

Growth %

2008 (RO)

2007 (RO)

Rank

0.158

0.149

6.04

7

6.30

5.80

8.56

0.100

0.100

9

Services

1.588

1.724

(8.56)

4

1.175

7.44

0.092

0.103

(10.68)

14

4.32

2.74

57.45

0.020

0.040

12

Services

0.463

1.458

(214.90)

16

0.464

5.04

0.087

0.090

(3.33)

10

2.51

2.70

(7.10)

0.020

0.050

17

Banking & Inv

0.797

1.851

(132.25)

13

0.584

6.71

0.125

0.111

13.02

5

6.44

6.88

(6.46)

0.115

0.110

8

Services

1.786

1.598

10.53

2

1.751

14.01

0.068

0.169

(59.76)

19

2.23

1.50

48.94

0.020

0.040

18

Industry

0.896

2.669

(197.88)

14

0.739

10.87

0.103

0.078

32.05

3

1.61

1.15

40.65

0.010

0.015

20

Services

0.620

1.308

(110.97)

12

0.463

4.50

1.065

1.140

(6.58)

12

4.13

3.03

36.36

0.500

0.400

13

Services

12.100

13.200

(9.09)

5

9.006

8.46

0.098

0.088

11.36

6

2.89

4.68

(38.13)

0.035

0.048

15

Services

1.210

1.016

16.03

1

1.175

11.99

0.042

0.049

(14.29)

15

4.79

23.31

(79.43)

0.018

0.175

11

Banking & Inv

0.365

0.751

(105.67)

11

0.277

6.60

0.735

0.561

31.02

4

25.00

4.88

412.50

0.250

0.200

2

Banking & Inv

1.000

4.100

(310.00)

17

1.000

1.36

0.436

0.525

(16.95)

16

8.00

1.78

350.00

0.080

0.080

6

Industry

1.000

4.500

(350.00)

18

1.000

2.29

0.136

0.151

(9.93)

13

9.07

5.01

80.87

0.100

0.100

5

Industry

1.103

1.995

(80.87)

8

1.026

7.54

0.044

0.043

2.33

9

4.07

3.72

9.27

0.015

0.025

14

Banking & Inv

0.369

0.672

(82.11)

9

0.380

8.64

0.014

0.023

(39.13)

17

2.65

0.00

2.65

0.007

0.000

16

Industry

0.264

0.432

(63.64)

7

0.220

15.71

0.022

0.532

(95.86)

20

7.31

4.22

73.11

0.022

0.270

7

Industry

0.301

6.395

(2024.58)

20

0.352

16.00

0.032

0.031

3.23

8

12.27

51.84

(76.33)

0.027

0.210

3

Banking & Inv

0.220

0.405

(84.14)

10

0.283

8.84

0.046

0.096

(52.08)

18

2.04

3.89

(47.48)

0.010

0.030

19

Banking & Inv

0.490

0.772

(57.55)

6

0.273

5.93

0.512

0.267

91.76

1

121.95

8.00

1424.39

0.250

0.200

1

Industry

0.205

2.500

(1119.51)

19

0.315

0.62

0.049

0.030

63.33

2

5.67

1.14

395.89

0.008

0.005

10

Banking & Inv

0.141

0.437

(209.93)

15

0.172

3.51

0.027

0.028

(3.57)

11

11.01

12.00

(8.26)

0.012

0.012

4

Industry

0.109

0.100

8.26

3

0.190

7.04

5. Areej Vegetable has declared a stock dividend of 33.3% which has not been taken into account in the calculation of dividend yield. 6. Bank Dhofar has issued a stock dividend of 4.5%, which has not been taken into account in the calculation of dividend yield. 7. OMINVEST has declared a stock dividend of 11.1%, which has not been

31-Dec-08 31-Dec-07 (RO per sh) (RO per sh)

Growth %

P/E ratio

Rank 2-Apr-09 2-Apr-09

taken into account in the calculation of dividend yield. 8. The Financial statements of Oman Flour Mills are as on June 30, 2008, which is their financial year end. 9. Al Anwar has declared a stock dividend of 12.93%, which has not been taken into account in the calculation of dividend yield.

59 OMAN ECONOMIC REVIEW May 2009


Looking forward to become the best communicator in Oman

OMAN TELECOMMUNICATIONS COMPANY

1 Dr Amer Al Rawas CEO, Omantel “As the leading telecom company in the Sultanate, Omantel possesses a strong network infrastructure that covers all the regions in the Sultanate. This enables Omantel to provide diversified solutions and services to suit the country’s geographic variations and respond to customers requests and expectations. Coming up is a bunch of new services which will be rolled out to customers in time. This places Omantel in a strong position and will enable it to compete with new operators in the fixed line segment.”

THE CLEAR LEADER

Omantel maint maintains its pole position on the charts for anot another year running The company’s management during 22008 embarked on a series of steps and initiatives to enhance its operating efficiency both administratively and ttechnically. A new milestone was achieved by the implementation of the Competitive Readiness Programme (CRP) which w was designed and rolled out by a leading international consultant in 2008

Milestones 1. The ADSL (Fixed Line Broad band service) new service portfolio, the new fixed line unified tariff, which offers a simple and easy to understand flat rate pricing structure, and new Jibreen Cards were launched. 2. The Mada-On package, which offers cheaper on-net national calls at 19 bz per minute for post-paid mada subscribers. 3. The BlackBerry service, along with a number of new BlackBerry handsets, was added to the product lineup. 4. Oman Mobile launched ‘Sammani’, the ‘My Travel Mate’, the Push-To-Talk and Educational portal SMS Services in 2008. 5. Omantel and Oman Mobile have introduced international call promotions to 5 selected destinations, which offered 67 per cent discount, with the call rates as low as 100 bz/minute. 6. Dr Amer Al Rawas won the BIZPRO Award 2008. 7. Oman Mobile won the rank of the Best Brand among 50 best brands covering 14 different services. 8. Omantel Group received the Golden Gear from the Ministry of Sports Affairs during the ministry’s annual ceremony as a token of appreciation for its continued support to the Omani sports activities during the year 2008.

Numbers at glance Revenue (in million)

Growth - 12.74%

500 450

RO411.49

400

RO365

350 300 250 200 150 100 50

2007

0

Profit (in million)

2008

Growth - 5.93%

150

Looking Ahead Omantel has started implementing the ministerial committee recommendations to integrate Omantel and Oman Mobile organisations. The implementation of the new operating model is in its final stages, which would allow Omantel to compete effectively in the evolving marketplace. Implementing this programme would result in attracting the best of talents, while retaining the competent work force, as the telecommunication market is increasingly competing to attract good competent and experienced human resources across the globe. 60 OMAN ECONOMIC REVIEW May 2009

135 120

RO113

RO119.24

105 90 75 60 45 30 15 0

2007

OER TOP 20 RANK

2008 2007 - 1

2008 - 1


Standing tall in the midst of a global crisis which has hit the construction sector too

GALFAR ENGINEERING & CONTRACTING

ROCK STEADY

Strong fundamentals and a promising track record helps Galfar to clock another record year Galfar is one of the largest multi-disciplinary engineering and contracting companies in the Sultanate. The company restructured its organisation in the second half of 2008 to improve the functional and operational efficiency of the organisation. These measures along with a good order book helped Galfar to post good numbers in 2008

Milestones Hans Erlings CEO, Galfar Engineering and Contracting “If the production of oil increases and the price of oil stays above the budgeted price, then it is good news. At the moment though, Galfar has the same workload even for 2009 because of our earlier contracts. The 2009 budget allocations for infrastructure will only begin taking effect next year as bidding for government contracts takes time. The present infrastructure spending may turn into source of income for companies only after 2010,”

2

1. Al Khalij Heavy Equipment & Engineering, a subsidiary of the company, has achieved turnover of RO2.53mn during the year as compared to RO2.50mn in 2007. 2. The company is considered as one of the largest in the private sector, employing Omani nationals with an Omanisation percentage of 22.50 per cent and is the leading employer in the construction industry. 3. During the course of the year Galfar drove 115 million kms and has worked 92 million man-hours across all the units of the company. 4. The two training centres of Galfar at Sohar and Al Hail are involved in training young Omanis to meet its requirement and that of other companies mainly in the areas of heavy duty drivers, operators and technicians.

Numbers at glance Revenue (in million)

Growth - 35.45%

500 450 400

RO364.36

350 300

RO269

250 200

Looking Ahead Galfar is very much part of Oman’s developmental plans and is extensively involved in construction of infrastructure projects. The company’s order book ensures continued growth in revenue and foresees a stable performance in the coming year despite the current global financial crisis, through its cost control measures and prudent spending.

62 OMAN ECONOMIC REVIEW May 2009

150 100 50

2007

0

2008

Growth - 4.31%

Profit (in million) 25

RO22

RO23.11

20

15

10

5

0

2007

OER TOP 20 RANK

2008 2007 - 2

2008 - 2


A vision to reach every Omani house has helped BankMuscat to retains its position

BANKMUSCAT

STREETS AHEAD

A proven track record and a well-defined growth strategy sets its apart

3

BankMuscat’s diversified income and asset base from corporate banking, consumer banking, wholesale banking and international operations is contributing to its strong performance. With assets worth over $15bn, BankMuscat is thrice the size of its next competitor, with a comprehensive array of exclusive products and services

Milestones 1. BankMuscat uses state-of-the-art profitability systems for in-depth analyses of profit contribution from business lines, products and customers. The bank follows the best practices in disclosure requirements of the International Financial Reporting Standards and regulatory authorities. 2. The bank considers its human resources as the most important asset and has initiated efforts to renew its Investor in People (IiP) UK recognition by June 2009.

Numbers at glance Revenue (in million)

Growth - 27.13%

500 450 400

RO338.15

350 300

RO266

250 200 150 100 50

2007

0

2008

Growth - 11.24%

Profit (in million) 150

120 105

RO84

RO93.73

75 60 45 30 15 0

“The vision to reach every household in the country has helped BankMuscat to grow its customer base, mainly by growing the number of retail customers. The Bank is focussed on its vision of having over one million satisfied customers by 2010.”

4. A multi-award winning organisation, the bank’s performance has been lauded by the international financial and banking community. The ratings assigned to BankMuscat by the four international rating agencies – Fitch, Standard & Poor’s, Capital Intelligence and Moody’s – are the highest ratings assigned to an Omani bank.

Looking ahead

135

90

3. It has the largest network of 121 branches as well as a multi-channel distribution network comprising of 320 ATMs, 94 CDMs and 3500 PoS terminals spread across the Sultanate. Overseas it has a branch in Riyadh, Saudi Arabia, and a representative office in Dubai (UAE).

Abdulrazak Ali Issa Chief Executive, BankMuscat

2007

OER TOP 20 RANK

2008 2007 - 3

2008 - 3

The bank has begun 2009 on an impressive note. According to the preliminary results of Q1,2009 there has been an 82 per cent increase in net profit at RO48.4mn as against RO26.5mn during the same period in 2008. Customer deposits, including CDs, increased by 21 per cent to RO3.2bn as against RO2.6bn in Q1 2008. Net loans and advances increased by 27 per cent to RO3.7bn in Q1, 2009 as against RO2.9bn in 2008. BankMuscat is confident about keeping up the winning streak in the years ahead. 63 OMAN ECONOMIC REVIEW May 2009


Customer focus, operational excellence will steer the company forward

SHELL OMAN MARKETING COMPANY

INVESTING IN THE FUTURE The company ringed in its 50 years in Oman with a robust performance

The year 2008 was a year of consolidation and building for the future for Shell Oman Marketing. The company invested in its people, helping the oil marketing major to sustain its business performance. Improving logistics and better customer service helped the company to increase its reliability in the market

Milestones Faisal Al Hashar Managing Director, Shell Oman Marketing Company â&#x20AC;&#x153;We plan not just for a year, but for the next five years. As we move forward we are going to improve our value proposition by investing in the future of our organisation and people. We are well placed to take on the challenges of the global economy as we go ahead.â&#x20AC;?

1. The retail business repeated its excellent performance with retail sales growing by 13 per cent to 1.3bn litres. 2. In August 2008, Shell Oman recorded its highest ever monthly sale of 120mn litres in retail. 3. A record number of eight new-to-industry sites were commissioned in 2008 taking its network to 132 sites. 4. The average throughput per site increased to 10.2mn litres as against 9.3mn litres in 2007, the highest in the industry. 5. Shell Oman was able to increase its aviation business marketshare up to 55 per cent. 6. Fleet card products had an outstanding performance in 2008, registering a growth of seven per cent over 2007. 7. A Brand Tracker Survey in 2008 conducted by a reputed and independent international research agency reports that Shell continues to be the preferred brand amongst all fuel brands in the Sultanate.

Looking ahead

4

The company takes a long term view of things and is working on a five year plan. For a start it is looking at better credit management so that its cash flow remains unaffected, in the short and medium term. Network rollout, operational excellence and lubricants have been identified as the key thrust areas for 2009 by Shell Oman Marketing. In the aviation business it expects its struct structural cost management, customer value proposition to customer focus and enhanced custom help it maintain its clear lead over co competitors.

64 OMAN ECONOMIC REVIEW May 2009

Numbers at glance Revenue (in million)

Growth - 31.60%

500 450 400

RO326.36

350 300

RO248

250 200 150 100 50

2007

0

2008

Growth - 13.04%

Profit (in million) 25

20

15

RO12.50 RO11

10

5

0

2007

OER TOP 20 RANK

2008 2007 - 4

2008 - 4


Despite negative global influences, OCI is wired into many new markets

OMAN CABLES INDUSTRY

ON HIGHER GROUND

Oman Cables has set a new benchmark in the cable business across the region

5

Oman Cables Industry has completed 21 years of operations with an incredible growth. OCI’s commercial production started in 1987. The company started in a very humble way and has overcome its challenges with dedication, patience and display of consistent faith and trust. This unique combination of team work is sure to propel OCI further on its growth path and will ensure that it will stay on top for many years to come

Milestones

Hussain Salman al Lawati Vice Chairman and Managing Director

1. A subsidiary company Oman Aluminium Processing Industries (OAPIL) has been formed and is expected to commence operations by the 1st quarter of 2010. 2. An all time high sales of RO304.4mn has been achieved in 2008 against RO217.4 mn achieved in 2007 -- an increase of 40 per cent.

Numbers at glance Revenue (in million)

Growth - 39.62%

3. The expansion of the manufacturing facility in Rusayl has been completed and is now operational. OCI also invested in process technology to improve production processes with a high focus on quality and material yields as well as improved lead times through manufacturing. 4. OCI is well equipped to supply the total demand for cables in Oman with only 30 per cent of OCI manufacturing capacity.

500 450 400 350

RO304.37

300 250

RO218

200 150 100 50

2007

0

2008

Growth - (59.48%)

Profit (in million) 20

“We are one of the top cable companies in the GCC and we are probably amongst the top 20 cable companies in the world. We would like to come amongst the top five cable companies in the world. The year 2008 saw us change from one platform to another. We reengineered our structure and are looking at achieving our future dreams.”

5. Omanisation stands at 52 per cent against the statutory requirement of 35 per cent. Also, a fast track programme for further Omanisation is being implemented. 6. A total of RO348,968 has been donated to the local community organisations. Specific organisations that were supported are the Nizwa Social Centre for Handicapped, Association for Early Intervention for Children with special needs and various others.

18 16

RO15

Looking Ahead

14 12 10 8

RO6.13

6 4 2 0

2007

OER TOP 20 RANK

2008 2007 - 5

2008 - 5

The company is poised for continued growth by reorganising the business structure and by placing increased emphasis on talent management, state-of-the-art machinery and increased focus on new markets. OCI has taken new initiatives on each of these fronts to accelerate growth and to ensuring sustainability. For the future OCI aims to outperform its previous records despite the macro economic factors that are influencing global markets. 65 OMAN ECONOMIC REVIEW May 2009


Exceeding customer expectations safely and profitably

RENAISSANCE SERVICES

TRUE BLUE MNC

Renaissance Services results reflects the group’s strengths and resilience The numbers speak for themselves – Renaissance Services has revenues in excess of $0.6bn, employs over 10,000 people, operates in over 16 countries and has shown an outstanding growth record in all economic cycles. It owns and operates a combined Offshore Support Vessel (OSV) fleet of 96 vessels – one of the largest in the world.

Milestones 1. The operating margins of the company improved from 13.8 per cent to 16 per cent in a year hampered by severe inflationary pressure.

Stephen Thomas CEO, Renaissance Services “2008 has been a year of exceptional achievement for Renaissance, as the group responded to the powerful global forces shaping the world economy and took decisive action to secure and sustain our growth path through turbulent economic times in the years ahead. Our company has achieved record financial results for the seventh successive year and a fourth consecutive year of improved safety performance.”

2. Topaz Marine acquired Doha Marine Services for $127mn thereby increasing its OSV fleet size by 14 vessels and strengthening its spread in the Northern Gulf. Topaz Marine has kept its entire fleet 100 per cent operational during the recession. 3. The Contract Services Group was awarded two major contracts by Petroleum Development Oman to build, own and operate new Permanent Accommodation for Contractors facilities in Oman’s interior oilfields at Marmul and Bahja. The long term contracts run until 2044 with an initial 5-year value of $91mn. 4. BUE Marine was awarded a 10-year $225mn contract for three support vessels for BP Azerbaijan. 5. Strategic divestment of the Technology business for $41mn, strengthening the group’s core oil & gas focus.

Numbers at glance Revenue (in million)

Growth - 17.72%

250 225

RO234.26

200

RO199

175 150 125 100 75 50

Looking Ahead

6

The year 2008 proved that Renaissance Services is on the track of both stellar and sustainable growth. The company is proving its resilience to the global recession and credit crunch, citing its ‘customer-centric’ philosophy as its hook line, and its alignment with blue chipp industryy clients in keyy markets for its long term success strategy. Renaissance Service Services is one of the very few Omani companies that bring in profits from outside Oman as development within the country. well as from its continued developme Renaissance is built on values of integ integrity and transparency that is manifest in its distinct corporate personality. pe

66 OMAN ECONOMIC REVIEW May 2009

25

2007

0

2008

Growth - 51.06%

Profit (in million) 50 45 40 35 30

RO26.19

25 20

RO17

15 10 5 0

2007

OER TOP 20 RANK

2008 2007 - 6

2008 - 6


Expanding confidently all across the country with new-found enthusiasm

AL MAHA PETROLEUM PRODUCTS MARKETING

7

RIDING THE BOOM

Enhanced eco economic activity translated into gains for A Al Maha Petroleum The first half of the year was a period of great success for Al Mahaâ&#x20AC;&#x2122;s operations due to the execution of major infrastructural development projects by the government, leading to increased demand for petroleum products. The later part of the year witnessed globa global recession and economic uncertainty. Despite this, Al Maha registered another operation. successful year of operation

Milestones: Ibrahim Salim Managing Director Al-Maha will continue applying successful policies in preserving the health, environment and safety in line with international health and safety standards. Efforts are in place to enhance our customersâ&#x20AC;&#x2122; portfolio by attracting new customers and improving our services to our customers

1. 11 new filling stations were opened in 2008, to take the total number of filling stations to 160 till date. 2. Five new car service centres were set up. 3. The new head office in Ghala was constructed and became operational in May 2008. 4. By the end of 2009 Al Maha will open more than 167 filling stations. 5. To improve the lubricant business, Al Maha joined hands with TOTAL to promote their products in Oman. 6. Al Maha registered record sales of RO191.7mn, an increase of 10 per cent (RO16.9mn) over 2007. Al Maha also reported a net profit of RO7.35mn in 2008 (2007: RO6.86mn), a growth of 7 per cent over 2007. Due to this increase in net profit, earnings per share have grown to RO1.065 in 2008 (2007: RO0.995), up by 7 per cent.

Numbers at glance Revenue (in million)

Growth - 9.52%

250 225 200

RO175

175

RO191.65

150 125 100 75

Looking ahead Al Maha expects its retail business to be unaffected by the current global recession. Accordingly, they plan to move ahead with their planned construction of new filling stations and improvement of their retail business marketshare. Al Maha continues to participate in various charitable events in addition to adopting extra measures to ensure health and safety of the people and the environment. Al Maha is pioneer in fuel smart cards. The company also achieved Omanisation of 86% by the end of 2008, thus indicating its priority for training and development of human resources.

50 25

2007

0

Growth - 7.08%

Profit (in million) 10 9 8 7

RO7

RO7.34

2007

2008

6 5 4 3 2 1 0

OER TOP 20 RANK

68 OMAN ECONOMIC REVIEW May 2009

2008

2007 - 7

2008 - 7


Growing comfortably by securing a place in the economic boom

OMAN OIL MARKETING COMPANY

PARTNER IN GROWTH

Despite being a young company, OOMCO has taken rapid strides in the last five years Oman Oil Marketing Company (OOMCO) has come a long way since the nationalisation of its foreign assets in 2003 and the listing of the company shares in the Muscat Securities Market. OOMCO has geared its operations to cater and support the needs of the nation’s growth. As the sultanate diversifies its economy from its dependence on hydrocarbons to services, tourism and manufacturing, the company is positioning itself to be the preferred service provider in ‘fuelling the nation’

Milestones 1. Oman Oil Marketing Company celebrated its fifth anniversary in 2008.

Omar Ahmed Salim Qatan CEO, OOMCO

2. The company is now 100 per cent owned by Omanis. 3. As on December 31, 2008, the company had 111 service stations and its retail network will continue to expand it services. 4. Oman Oil introduced the new corporate brand of convenience stores at their service stations called “Ahlain.”

Numbers at glance Revenue (in million)

Growth - 11.14%

5. The unit turnover of the lubricant sector has grown by 22 per cent while the volume reflected a modest increase of approximately three per cent.

RO170.04

6. The company won the tender to fuel the nation’s ferries to Musandam in August 2008. This achievement is the beginning of a new chapter in the company’s marine business.

250 225 200 175

RO153

150 125 100 75 50 25

2007

0

7. OOMCO achieved an 87 per cent Omanisation rate by the end of 2008.

2008

Growth - 11.31%

Profit (in million) 10 9 8 7 6

RO6

RO6.32

2007

2008

5 4 3 2 1 0

OER TOP 20 RANK

2007 - 8

“Operational efficiency, convenience and best in class customer service will remain the integral focus of the company and its growth in the future. Our journey into achieving total customer satisfaction will continue by ensuring all basic services and requirements are met with the utmost care and consideration.”

2008 - 8

Looking ahead The outlook for the coming year appears to be positive with the demand for petroleum products expected to grow in line with Oman’s projected economic growth. The company has placed itself in a strong position for the future. With ever increasing competition in the market and aggressive marketing efforts by the competitors, the company will remain focused on expanding its network of facilities, improving the quality of its products and services, optimising costs and developing its human capital even further.

8

69 OMAN ECONOMIC REVIEW VIEW May 2009


The government’s sound fiscal measures drive NBO’s business strategies

NATIONAL BANK OF OMAN

9

CONSOLIDATION MODE NBO has made impressive gains in a number of areas thus sstrengthening its position

NBO continues to be a leading player in the banking space in Oman. During the year, NBO was appointed as the local Financial Advisor along with Citigroup as Lead Financial Advisor for the divestment of 25 per cent stake by the Ministry of Finance in Omantel. NBO is also th the Investment Advisor to Oman Integrated Tourism Projects Fund. Despite the market, NBO managed to open five new branches at strategic locations. downturn in the market

Milestones Murray Sims CEO, NBO “There has been an intense focus on all key business income drivers, which has reaped rewards in the improvements noted at the operating profit level. As markets return to stability, we see project finance as being an important continuing source of both fee and interest income for the bank in the years to come.”

1. NBO was rewarded “The Best bank in the corporate region for 2008” by the Institute of Corporate Governance (Hawkamah) and the Union of Arab Banks (UAB). 2. A significant launch in 2008 by NBO was the “Platinum Credit Card,” aimed at high net worth individuals (HNIs). 3. NBO has been successful in recovering most of its impaired loans. As a result its loan rates are likely to come down soon. 4. NBO launched the “Tijarati Banking” to fulfill its commitment to the development of the SME segment. 5. Profit from operations increased by an impressive 49 per cent in 2008, reflecting the bank’s diversification of revenues. 6. NBO launched the retail Internet banking facility in 2008 based on CBQ’s proprietary product. 7. The bank has made generous donations to various local charities and earned the accolade of being the “Best Bank in corporate social responsibility in Oman for 2008”by the World Financial Magazine, UK. 8. A “Personal Development Plan” for the entire bank staff was introduced in 2008.

Looking ahead NBO’s risk management techniques have been enhanced to meet the challenges that lie ahead. A number of projects have been planned in conjugation with NBO’s strategic partner, Commercial Bank of Qatar for better customer value services. The bank remains devoted to management trainee programme and Omanisation. The bank is determined to combat money laundering and terrorist financing by improving control measures. Since the budget for 2009 focuses on sustainable and broad based economic development, NBO is well positioned to take advantage of the various economic measures of the government. 70 OMAN ECONOMIC REVIEW May 2009

Numbers at glance Revenue (in million)

Growth - 29.54%

200 180 160

RO130.83

140 120

RO101

100 80 60 40 20 0

2007

2008

RO45

RO45.38

2007

2008

Growth - 1.71%

Profit (in million) 50 45 40 35 30 25 20 15 10 5 0

OER TOP 20 RANK

2007 - 9

2008 - 9


Diversification into real estate and hospitality sector has helped

OMAN HOLDINGS INTERNATIONAL

TESTING NEW WATERS OHI is looking at breaking new ground in sunrise sectors of Oman’s economy

OHI is a diversified business group which operates through its various subsidiaries and associates. The operating subsidiaries registered good organic growth during 2008. This, together with the attractive investment income generated, aided the group to post good numbers. The company diversified further into the hospitality and financial services sector. The financial performance of the various subsidiaries of OHI was ahead of its budget in 2008.

Milestones 1. OHI’s construction company carried out major projects during the year like Sohar Industrial Port Container Phase 1 and 2, Sohar Aluminium Smelter Power Plant, Oxy Mukhaizna facilities and PAC in Qarn Alam, Fahud and Nimr. 2. Its telecommunications company executed several important projects in the areas of outside plant, work involving fiber optic cable and copper cable, satellite telecom works etc.

Numbers at glance Revenue (in million) 100

Growth - 25.07% RO91.10

90 80

RO73

70

50 40

5. OHI made financial contribution to several worthy causes aggregating to RO16,818 during the financial year 2008.

30 20 10

2007

0

2008

Growth - 51.21%

Profit (in million) 10

RO8.80

9 8

6

RO6

5 4 3 2 1 0

“OHI has invested over the years in developing important and prestigious partnerships. These partnerships have served it well over the years and are expected to aid its sustained growth in the years to come.”

4. The company’s luxury resort in Bidiya became operational.

60

7

3. OHI acquired a 45.8 per cent equity in Oman Hotels & Tourism Co. (OHTC) as it believes that the hospitality sector will offer attractive opportunities, given the growth of the tourism industry in the sultanate.

Behram Divecha CEO, OHI

2007

OER TOP 20 RANK

2008 2007 - 10 2008 - 10

Looking ahead OHI subsidiaries have drawn up a reasonable organic growth plans for 2008-09. Some of the subsidiaries also have diversification and expansion plans. The company is looking at investing resources to optimise the return from the investment made in the real estate and the hospitality sector. Oman Hotels and Tourism has plans to upgrade its properties to improve the overall yield. A modest investment has been made in the financial services sector, which will be augmented during 2009.

10

71 OMAN ECONOMIC MIC REVIEW May 2009


AREEJ VEGETABLE OILS & DERIVATIVES

11

BREAKING THE MOULD

As an essential item of food, the overall market for vegetable oils and fats is stable, and is not very dependent on macro-economic factors. On the other hand, it is an extremely competitive market environment with nine other manufacturers in the GCC with duty free access into Oman. Despite this the company’s markets and sales volumes have been growing steadily. In fact, Areej’s turnover grew by 72 per cent in 2008, which is quite an achievement.

SPREADING ITS WINGS Raysut Cement, the largest cement produ producer in Oman has placed a floating cement terminal at the Port of Sohar to fa facilitate imports and increased the domestic sales to an average of 8,800 to tonnes per day during the first quarter of the year to ease the apparent shortage of cement in the market. The company is currently working on revising its busin business plan upto 2013. It is looking at pursuing organic growth opportunities in investment projects for capacity expansion both in the domestic and over overseas market and in downstream industries.

Numbers at glance Revenue (in mn) Growth - 41.37% 100 90

Milestones 1. Areej launched its new premier brand Khafeef – the lightest frying oil, in Oman during 2008. 2. Areej commissioned its first phase of the project to expand and upgrade its production facilities. The second phase of the project is in progress and is expected to be fully commissioned in 2009. 3. Areej continued its programme of training Omanis at all levels including factory, staff and management. The company also sponsors Omanis for professional courses, and has 51 per cent Omani staff covering all areas of operations. 4. The Board of Directors reviewed and updated the effectiveness of the company’s internal control systems and risk management systems during the year.

Looking Ahead Following the successful launch of Khafeef, plans are in place for extending Khafeef to tap export markets in 2009. In addition to this, the ongoing upgrade to the production facilities should help Areej cater to the growing and changing market requirements and to become more cost-competitive. The company launched a high visibility campaign for Khafeef in 2008, which helped it attract a lot of eye balls and Areej plans to keep up the marketing tempo in 2009.

Numbers at glance Revenue (in mn) Growth - 71.08% 100

RO90.67

90 80

Profit (in mn)

Growth - 24.50%

5

40 35

RO63

60

30

50

25

40

20

30

15

20

10

10 0

Growth - 10.00%

45

80 70

Profit (in mn) 50

RO89.08

2007

RO30

5

2008

2007

0

OER TOP 20 RANK

RO27.10

2008 2007 - 11 2008 - 12

Milestones 1. Total production of cement increased from 2.00mn tonnes to 2.12mn tonnes in 2008, while production of its clinker went up from 1.92mn tonnes to 2.04mn tonnes. 2. Domestic market sale has witnessed a growth of 55 per cent during the year absorbing additional sales volume of 0.7mn tonnes. 3. Raysut Cement Company formed a new subsidiary named Raysea Navigation in October, 2008. 4. The 100 per cent subsidiary has been registered in Panama with a nominal capital of R03,850 with the objective of facilitating the shipping needs of the company. The company has financed a vessel by the subsidiary.

Looking ahead The company remains confident that it will meet the challenges of the future, given the economic turmoil all over the globe, by pursuing growth focussed objectives and economic opportunities in the changing global milieu. Raysut Cement is planning to expand its operations in neighbouring countries. It also aims to meet higher demand of cement in the traditional export market, particularly in Yemen and other African countries.

4

70 60

3

RO53

50 40

2

30 20 10 0

1

2007

2008

0

OER TOP 20 RANK

72 OMAN ECONOMIC REVIEW May 2009

RO1.50 RO1 2007

2008 2007 - 16 2008 - 11

RAYSUT CEMENT COMPANY

12


A home for life the new heart of Muscat Designed and built by the best in the business From the earliest stages of planning to the construction underway today, the developers of The Wave, Muscat have focussed on a single principle: quality. Bringing together superb materials, the finest minds and a collective passion for excellence, The Wave, Muscat is setting new standards in Oman. Architects Tombazis, Triad, Santini and OBM are world renowned for the buildings they design, and the homes at The Wave, Muscat are true classics in the collection. Take a tour of the show villas and apartments today, and experience the quality for yourself.

300 berth Marina | Greg Norman Golf Course | 6km pristine beach Call today! +968 24 54 54 28 - email:info@thewavemuscat.com - www.thewavemuscat.com The Wave, Muscat, is being developed through a joint venture comprising Waterfront Investments S. A. O. C. (representing the Government of the Sultanate of Oman), National Investment Funds Company (representing the Omani Pension Funds), and the UAE-based Majid Al Futtaim Group.


13

BANK DHOFAR

LONG TERM STRATEGY

On the retail front, Bank Dhofar grew its network and low cost deposits. An understanding of the local environment, local laws and regulations and other peculiarities of the market gives Bank Dhofar an edge in the market. Bank Dhofar continued to achieve good results during the year 2008 inspite of the global financial crisis. The financial indicators reflected remarkable growth as the total assets increased by 39 per cent.

EXPLORING NEW VISTAS Al Jazeera currently has an operating capacity of 300,000 MT of pipes per annum. Through continuous modern modernisation and expansion of its production facilities, the company has focussed its product mix to meet the high standards of customers. Al Jazeera saw substan substantial growth over the previous years but for the last three months of 2008, there was a drop in demand/sales. It is expected that with a strong infrastructure as it has, the company will be able to bounce back to an advantageous position on once the economies improve. Al Jazeera has a low cost base, as it has an easy access to the port in Oman and Sohar. Al Jazeera is listed in the Dubai Financial Market making it the only Omani company to be listed there.

Numbers at glance Revenue (in mn) Growth - 74.30% 100

Profit (in mn)

Growth - 5.42%

5

90

RO78.43

80

Milestones

4

70

1. The bank completed a review and adopted a new five-year corporate strategy in 2008 reaffirming its commitment to customers 2. It introduced a new organisational structure

60 50 40

3

RO45 2007

RO2

2

RO1.71

30

3. Bank Dhofar successfully accomplished one of largest rights issues in the local market to raise RO70.77mn from the existing shareholders.

20 10 0

1

2007

4. The gross loans and advances improved by a healthy 42 per cent. The customer deposits raised by the bank recorded an impressive growth of 44 per cent. 5. The net interest and non-interest income increased by 31 per cent and 19 per cent respectively.

Future Plans The bank has chosen Finacle Universal Banking Solutions from Infosys. It will implement a new core banking system which will cover all banking activitiescustomer relationship management, treasury, Internet Banking and mobile banking solutions for its operations and channels for its customers. It is looking at a host of lending opportunities in the infrastructure, oil and gas, construction and tourism sectors taking into account the large government sponsored projects on the anvil as well as those that are privately sponsored.

2008

2007

0

OER TOP 20 RANK

2008 2007 - 17 2008 - 14

Milestones 1. The addition of the API certification has opened up a lucrative segment to their oil field applications.The Aramco certification and the movement into the API market are the two targets to be fulfilled in 2009. 2. The introduction of the Merchant Bar Mill will increase the companyâ&#x20AC;&#x2122;s production capacity to 600,000 tonnes per year.

Future Plans 1. The Company expects to slow the fall in production and sales by the introduction of the Merchant Bar Mill. The challenge for the company is to speed up the process of putting this mill into full operation. This will make up for part of the shortfall in pipe demand. The plant will go into commercial production in the Q2, 2009. 2. The company plans to get an ISO- 9001 certification for quality in 2009. 3. Al Jazeera will be working with a low inventory level to curb costs.

Numbers at glance Revenue (in mn) Growth - 23.96% 100 90

RO80.57

80 70

Profit (in mn)

RO65

45 40 35

60

30

50

25

40

20

30

15

20

10

10 0

Growth - 3.93%

50

2007

2008

5 0

OER TOP 20 RANK

74 OMAN ECONOMIC REVIEW May 2009

RO23

RO23.68

2007

2008 2007 - 13 2008 - 13

AL JAZEERA STEEL PRODUCTS CO

14


OMAN CEMENT CO.

15

INVESTING IN THE FUTURE Oman Cement Company is an ISO 9001-2000 and ISO 1400 –2004 (Environment) certified company. It also has an API SPEC.10A (American Petroleum Institute) quality monogram certification for manufacturing and sale of oil well cement.

BANKING ON A LARGE NETWORK Oman International Bank (OIB) has hhad a long-standing track record in the banking sector in Oman. Established in 1984, it was the first 100 per cent Omani owned commercial bank in th the Sultanate. OIB has been innovative, with a long list of firsts to its name. It was the first bank in the Gulf region to offer mobile banking service; the first Omani bank to issue a Visa Card etc. The Bank has a very large presence in Oman with as many 83 branches in the country and five branches abroad. Financials of the bank have been mixed, with main concerns on the non-performing assets front. For the financial year 2008, OIB reported a net profit of RO29.47mn, as against RO28.08mn in 2007.

Numbers at glance

Milestones 1. The company’s sale soared by 14.6 per cent in 2008.The increase is due to an increase in the volume of sales and improvement in average selling price of cement in the later half of 2008. 2. Cement production by the company went up by 7.4 per cent to 264,728 tonnes, as per the instructions of the ministry of commerce and industry to meet the strong demand in the local market. 3. It entered into discretionary portfolio management agreements with two companies appointing them as portfolio managers to handle part of its investments in shares. 4. Oman Cement Company expanded its share of the oil well cement market in MENA region, as more and more drilling companies demanded the company’s products. This is due to high quality and consistent performance in cementing operations of oil wells.

Future Plans A contract for execution of civil works of the project for upgradation and modernisation of packing plant has been signed with China National Building Material Equipment Corporation, China (CNBMEC). The project is expected to be completed in the second quarter of 2009. The company has signed a contract with CNBMEC for their second expansion project to install a new production line of A- rated capacity of four TPD clinkers. The project is expected to be completed by the first quarter of 2010. The process of liquidation of Sohar Praton Concrete Products (SPCP) is in progress.

Numbers at glance Revenue (in mn) Growth - 27.05% 100

Profit (in mn)

Growth - (27.38%)

25

20

70 60 50

15

RO50

RO12.54

10

30 20 10 0

5

2007

2008

90

45

80 70

40

RO68

35

RO59.31

60

30

50

25

40

20

30

15

20

10

10 0

Growth - 4.98%

2007

5

2008

0

OER TOP 20 RANK

R28

RO29.47

2007

2008 2007 - 12 2008 - 16

Clocking good numbers Net profits in the last four years (2005 to 2008) have grown by 10.2 per cent, while customer deposits during the same period have witnessed a growth rate of 3.4 per cent. The bank’s fee income in the last four years has grown by a healthy 14.6 per cent, on compounded annual growth rate basis. The average non-performing assets to gross loans, during the four year period have been around 11.6 per cent. The bank, over the last few years, has shown resolve to improve asset quality and thereby reduce the provision for loan impairment. The net interest margin for the bank has come down to 3.34 per cent in 2008, from 3.65 per cent in 2007, showing a marginal decline. All in all, it seems a steady performance over the last few years. OIB is continuing to reduce its non-performing assets, and the same has witnessed a decrease in 2008, as compared to the previous year. With a large branch network in Oman, OIB is expected to continue to have a strong presence in the country.

RO17

RO63.52

40

Profit (in mn) 50

The bank has been conservative in its lending policy and it may probably look at loosening its purse strings.

90 80

Revenue (in mn) Growth - (12.77%) 100

0

OER TOP 20 RANK

76 OMAN ECONOMIC REVIEW May 2009

2007

2008 2007 - 15 2008 - 15

OMAN INTERNATIONAL BANK

16


17

OMINVEST

TIMING IS THE KEY

Oman International Development and Investment Company (Ominvest), was established by a ministerial decree in 1983. The company’s stated objectives are to provide its shareholders a consistent annual cash return on their capital, together with an opportunity to participate in the long-term gains from its investments in and outside the sultanate. The company has interests primarily in banking and financial services in Oman, manufacturing companies in Oman and overseas marketable and non-marketable investments.

SUSTAINED GROWTH Oman Flour Mills (OFM) markets its flou flour products under the brand name ‘Dahabi’ – which means 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 und under the brand name ‘Barakat.’ The company also holds about 86 per cent sshareholding in a poultry company, Modern Poultry Farms which produces iin excess of 100 million table eggs a year. These are marketed under the bran brand name ‘Dana.’

Numbers at glance Revenue (in mn) Growth - 45.64% 10

90

9

80

8

70

1. During the first half of 2008, Ominvest successfully exited from its two large positions in Oman, namely National Aluminium Products Company and Muscat Finance Company. 2. Realisations from these two investments contributed RO9.68mn to the cash flow and RO7.11mn to its realised profits. 3. During the first half, the parent company also received cash dividends to the tune of RO6.56mn as strong cash distributions were made from good results in 2007. Of this, RO4.90mn was from subsidiaries, namely Oman Arab Bank and RO250,000 from Oman Investment Services.

Looking ahead The company’s strategy has been to remain invested with longer term growth objective provided the underlying business model, growth opportunity and management characteristics of the investee companies remain positive. Ominvest is looking at opportunities to increase and diversify its investment portfolio within and outside the Sultanate with an objective of growth in earnings and to mitigate volatility in its portfolio of investments.

Numbers at glance Revenue (in mn) Growth - (7.78%)

Profit (in mn)

100

50

90

45

80

40

70 60

RO54.41

30 25

40

20

30

15

20

10

0

3

20

2

0

2007

RO4

4

1

2008

2007

0

OER TOP 20 RANK

2008 2007 - NA 2008 - 18

Milestones 1. The demand for its flour products increased by six per cent in the local market in 2008 compared to the last year. 2. Its fodder sales fell by eight per cent compared to 2007 because of the shortage of fodder raw material. The total sales amounted to 324.000 metric tonnes. 3. The company accounts for around 65 per cent of the requirements of the flour market in the Sultanate. 4. OFM established a subsidiary limited liability company “Bread House “ in order to market frozen bakery products. The company expects this market to develop with increased demand for such products in future.

Looking ahead The demand for flour in local market is expected to grow in the coming years. Keeping this in mind the company is planning to set up a 300 Mt per day mill in Port Sohar. The mill will be operational in a couple of years. The company also plans to establish an industrial bakery, the commercial production of which is expected to commence by the end of 2009. OFM has worked relentlessly on improving its operating efficiencies. OFM is trying to diversify its investments into equipments like the ship unloader to increase the discharge capacity. This is expected to reduce costs.

35

RO59

50

10

Growth - (24.24%)

5

RO35

30

10

RO8.06

6

RO50.74

50 40

Growth - 91.97%

7

60

Milestones

Profit (in mn)

100

2007

2008

0

OER TOP 20 RANK

RO27 RO20.37

2007

2008 2007 - 14 2008 - 17

OMAN FLOUR MILLS COMPANY

18

77 OMAN ECONOMIC OMIC REVIEW May 2009


19

AL ANWAR HOLDINGS

CHANGING ITS MODEL

Al Anwar Holdings vision is to be a leading private equity investment company in the Middle East with primary focus on financial services. The company had set itself a target of growing its investments by 100 per cent in five years to RO20mn with 60per cent in the financial services sector including insurance, but the company successfully achieved its mission much earlier and its current book size is in excess of the set target.

EXPANDING HORIZONS Al Hassan Engineering Company (AH (AHEC) with its considerable market knowledge, long experience and the implementation of commercial production and cost control strategies is a form formidable player in its own industry. The cornerstones for AHEC’s continuous success in project execution are its excellent capabilities in resource ma management and mobilisation, HSE, quality, procurement, fabrication and engine engineering.

Numbers at glance

Revenue (in mn) Growth - 27.89% 50

RO45.03

45 40 35

Profit (in mn)

Growth - (4.58%)

     

5

 

4

RO35

30

3

25 20

Milestones

10

1. Al Anwar realised a profit of RO2.24mn by divesting its stake in Voltamp Energy in 2008. 2. Sun Packaging Company expanded its capacity to 85 per cent in 2008. Its turnover has since recorded substantial growth, but its margins have been under strain due to a steep increase in raw material prices. 3. Al Anwar International Investments, a subsidiary of Al Anwar Holdings has made investments in a financial services company in Saudi Arabia, by acquiring a 25 per cent stake in a company under incorporation – Addax Securities. The company has obtained a license from CMA of Saudi Arabia for starting a securities business.

Originally promoted for investments in industrial ventures and invested in power sector, oil and gas, glass and paints, computer stationery, investment castings, construction and infrastructure and packaging catering to the FMCG industry. The business focus and business model both have taken a shift since 2006. The primary focus has since been on the financial services sector and insurance. The business model now adopted is that of a private equity firm. Al Anwar’s present geographical focus is on the Middle East, North Africa and South Asia (MENASA) region, but the company is not averse to looking at other emerging economies.

Numbers at glance Revenue (in mn) Growth - 22.62% RO45.37

45 40

RO2.1

RO2.02 

5 0

1

2007 2007

2008

2007

0

OER TOP 20 RANK

2008 2007 - NA 2008 - 20 

Milestones 1. Al Hassan Eng received its maiden order in Dubai, for civil works, for a 400/132 kV substation project from Siemens, UAE. 2. The Burhan West–Harmal Pipeline project on EPC was given to AHEC by PDO. The project involves DSS pipeline and OHL work. 3. AHEC was awarded the ASME (American Society of Mechanical Engineers) “S” and “U” Stamps for the Ghala facility in October, 2008.

Looking ahead

50

2

15

Profit (in mn)

RO4.33

4

RO37

Growth - 99.86%

5

4. AHEC successfully completed a number of key projects including the Mukhaizna Power Plant Project for PDO and the energisation of Alwasit Power Transmission Project for OETC. In addition to these the Alstom Power Plant Project for Sohar Aluminium at Sohar is being completed. The Sohar Aromatics Project, which has so far achieved LTI-free nine million man hours, is likely to be completed in early 2009.

Looking ahead Since there is no interconnecting transmission grid in existence in Oman, various new power plants are being planned. AHEC has decided to participate in some of these projects. Apart from these, due to depletion of producing well pressures, many compression projects are expected to emerge to sustain the present production levels. One such project is the Saih Nihayda Depletion Compression Project, the tender for which is already announced and AHEC is participating in it. In the neighbouring UAE, AHEC has been bidding for projects in oil and gas sector as well as substation and transmission distribution areas.

35 30

3

25 20

2

RO2

15 10 5 0

1

2007

2008

0

OER TOP 20 RANK

78 OMAN ECONOMIC REVIEW May 2009

2007

2008 2007 - 19 2008 - 19

AL HASSAN ENGINEERING CO.

20

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CASE STUDY

It was the light frying oil Khafeef that gave a new dimension to the concept of cooking oil and helped Areej Vegetable Oils and Derivatives to jump five ranks on the OER Top 20 list. Visvas Paul D Karra catches up with Prem Maker, Executive Director of the company for a tète-à-tète

T

he year 2008 was a roller coaster year for all commodities. Like the prices of oil, the prices of vegetable oils also shot through the roof during the first half of 2008, peaking in July just as the US sub-prime effect began to extend its vice-like grip on the global economy. But beginning in September 2008, the commodity prices started tumbling and troughed by almost 45 per cent by December. While companies slowed down in line with changing market dynamics, Areej Vegetable Oils & Derivatives (AVOD) moved smoothly ahead like a well-oil production machine. “The vegetable oil market followed the petroleum oil story and other commodities. Therefore the key was to manage purchasing and buyings to suit the market rather than the interests of speculators. I think we managed it extremely well and finished 2008 with good topline and bottomline results,” says Prem Maker, Executive Director of AVOD. The company’s revenues soared to RO90.68mn in 2008 as compared to RO53mn showing a year-on-year growth of more than 71 per cent.

The ‘Khafeef’ storm Apart from the high commodity prices, there are many factors that have contributed to the phenomenal growth of AVOD. One of the most significant features was the launch of corn-oil based frying oil Khafeef Oil in August 2008. 80 OMAN ECONOMIC REVIEW May 2009

Prem Maker, Executive Director, Areej Vegetable Oils & Derivatives


COVER STORY

Areej Vegetable Oils was established in 1980 with a majority shareholding of the OMZEST Group. It has a modern hygienic plant located at Rusayl Industrial Estate to manufacture and market top quality cooking oils, ghee, margarine, specialty fats and butter products. The company’s leading brands Minara, Sohar, Khafeef, Jabal Akhdar and Muscat Margarine are trusted names in every Omani home. Areej Vegetable Oils enjoys a 65 per cent market share in Oman and current exports are 70 per cent of the total business. The company exports to 23 countries around the world. Says Maker: “We have done better than our competitors basically because we do not speculate. We follow the basic economics of supply and demand and that is why when the crunch period came, we were not affected seriously. We are manufacturers of a product not speculators.”

Innovation is the key Success has followed AVOD mainly through its innovative products and packages which have attracted the customers. Some of the innovations done by the company include the bag-

Net N t profit profit fit after aft fter ttax

30.0%

30.0%

30.0%

2007

2005

2004

41.3% 2007

2008

1.00mn 2004

0.87mn 2005

2007

2006

1.00mn

1.2mn

58.0%

1.5mn N t equity Net equity it

2008

4.4mn

4.21mn 2004

2005

2006

4.69mn

6.4mn 5.17mn 2007

Market leader

AVOD’s financial performance (2004-2008)

2008

At about the same time as the global financial crisis began hitting companies hard, Areej Vegetable Oils took the northern route by introducing its revolutionary product innovation – Khafeef – the lightest frying oil in the GCC. This specialised frying oil was packed in a stylised bottle, which typifies the image of a woman, who is the ultimate user of the product. Explains Maker: “It began with extensive consumer research and evaluation of different oils in actual frying tests conducted with breaded chicken fillet in research labs. Then we invested RO4mn in plant and packaging machinery to deliver on the new technology for this new oil. The finished product, Khafeef, packaged in a beautiful PET bottle, took the market by storm.”

Divid Di Dividend idendd Graph not to scale

in-carton cooking oil that was a huge success in Oman and UAE. ‘Sohar’ was the first blended oil in the GCC to suit Omani frying habits. ‘Minara’ was the first cooking oil in a crystal clear bottle to make an entry in the GCC market. Furthermore, Minara was the first PET bottle in the GCC with a handle. Exports also got a major fillip with the manufacture and sale of private label brands in PET bottles with handles. Maker attributes the success of the company basically to a market hunch or in other words matching your business plans to market realities. “We have controlled our cash flows and stocks and we have always been realistic in our expectations, as I had said earlier. Khafeef is a prime example of catering to the market realities and we have achieved tremendous success with this product,” says Maker.

Cost, price effective The company continues to grow in new

markets with products such as ghee in tins, bag-in-box; polyjars cooking oil in tins; blended oil in clear pet bottles; specialty oils and shortenings etc. Multinationals like Pepsico (Snacks), Unilever and Emborg source their requirements for the Gulf from Areej Vegetable Oils. Besides product innovations, AVOD has increased its investments in modernisation of plant and upgrading of technology in order to deliver cost effective products to the customers thus delivering more returns to the shareholders. Riding high on its new-found euphoria, Areej Vegetable Oils tasted sweet success again. While the world shrank into recession, the company expanded its geographical reach to the non-GCC markets and made inroads into Iraq in 2008 itself and increased its market share there by 35-40 per cent. In Oman, AVOD has six major brands of cooking oils, two brands of ghee, and two margarines. 81 OMAN ECONOMIC REVIEW May 2009


NEW ENTRANT

A

L Hassan Engineering Co (AHEC) is a company that has had a stellar track record in executing projects across industries. In fact, in the field of power generation, the company has installed approximately 40 per cent of the generating capacity of Oman. AHEC provides electrical, mechanical, instrumentation and civil contracting services to an array of industries. Over the years, the company has performed well, completing a number of major projects. “In 2008, the company saw its turnover increasing by 28 per cent in comparison to 2007 and strong and significant order intake. In fact, the order intake will take us through 2009,” says Peter Hall, CEO of the company.

Healthy order book In the oil, gas and petrochemicals sector, the company was awarded at the beginning of 2008, an EPC contract from Petroleum Development Oman (PDO) for their Full Field Water Injection project at Nimr. AHEC is on schedule for the project which is approaching 50 per cent completion and it has successfully completed one year without a ‘Lost Time Injury Incident.’ For Korean company, GS Engineering, AHEC is in the closing stages of completing two major civil, mechanical and pipework contracts, one on the Sohar Aromatics plant and the second at Salalah Methanol plant. In the early part of the year, AHEC secured a multi-million dollar contract for the Burhan West and Harmal Pipe82 OMAN ECONOMIC REVIEW May 2009

Peter Hall, CEO, Al Hassan Engineering Co.

Despite talks of a recession and economic slowdown, Al Hassan Engineering has sizeable projects to execute. Sunil Fernandes reports line project from the government gas department. The project which will be managed by PDO, further strengthens AHEC’s reputation as one of the few contractors in Oman having capabilities to handle exotic materials such as duplex stainless steel (DSS). As far as the power sector is concerned, AHEC has an extraordinary record in the field, having installed approximately 40 per cent of the generating capacity of Oman. AHEC is currently in the closing stages of completing what will be the largest power plant in Oman.

Working with the French manufacturer Alstom, the 1,000 MW gas turbine combined cycle power plant for Sohar Aluminium will be fully commissioned in the coming months. During 2008, AHEC completed work on the installation of the largest power plants on the PDO system at Mukhaizna (250 MW) & Qarn Alam (125 MW). In addition, AHEC is currently executing the job of once-through heat recovery steam generators (HRSG) contract for Gulf Steam Generators – a subsidiary of NeM Netherlands and a leader in the field of


COVER STORY

AHEC is also undertaking other systemic improvements. It has expanded the existing Oracle based ERP to include areas and departments that have hitherto not been covered. It has seen significant savings in the areas where this system is currently operational. In order to further streamline its procurement function, AHEC moved part of its procurement processes online via ‘Tejari Transact’, a Business-to-Business (B2B) electronic marketplace. Omanisation has always been a strategic priority for AHEC. Continuing the drive of inducting quality Omani manpower, qualified engineers were recruited in different disciplines of the business. AHEC’s key corporate social responsibility initiatives in 2008 include sponsoring International Confer-

6,715

6,715

6,715

2005

2004

7.521 2006

7,521

2007

Income (RO’000) Income (RO’0 (RO’0 O 000) 00)

12%

12%

12%

2007

2006

2004 334

2005

2006

2007

2008

2004

809

2008

2,020 21,749

2,117

2,867

45,427 30,021 2005

2006

2007

2008

In 2009, AHEC made its entry into the regional market, securing an order from Siemens to undertake civil works associated with a new Dubai Electricity and Water Authority’s substation in Dubai. In the water sector, AHEC secured the civil work contract from Korean company Hyundai Rotem for the Seeb Wastewater treatment plant which will be completed for Haya Water over the next two years. AHEC has implemented several initiatives in the areas of communications, IT, quality, procurement, human resources and corporate social responsibility in 2008. “The company went in for a major revamp of its website keeping in mind its global audience of potential partners, job seekers, customers, journalists and investors. Google analytics reports have shown a 150 per cent increase in the number of unique website visitors,” says Hall.

35,552

Tapping the regional market

2008

Scaling new heights: Al Hassan Engineering Co. (2004-2008) 45,248

steam generation. Another project involving steam generating equipment is the cogeneration plant being executed for Hirbodan-HICO at ORPC in Mina Al Fahal, which includes two heat recovery steam generators and one auxilliary boiler.

Profit Profit aft after fter tax tax (RO’000)

EEquity Equi quity ity (R (RO’0 (RO’000) O 000) O’0 00)

Dividend Divid Div Di idendd (%) Graph not to scale

ence on Harnessing Technology and BG Energy Challenge.

An enviable track record From a small construction office in 1982, to the first contracting company listed on Muscat Securities Market in 1998, AHEC has come a long way in being recognised as a major EPC (engineering, procurement and construction) company in Oman. Execution experience of around 100 contracts for some of the leading companies in Oman in oil, gas, petrochemicals, power, water and wastewater sectors and its credentials as a member of the Al Hassan Group are amongst the reasons for AHEC being considered the preferred partner for nation-building projects. The cornerstones for AHEC’s continuous success in project execution are its excellent capabilities in resource management and mobilisation, HSE, quality, procurement, fabrication and engineering. Health, Safety and Environment (HSE) is a top priority for AHEC. The

company’s HSE standards are legendary for which it has won numerous awards from customers, industry associations and international EPC contractors. During 2008, AHEC has set new benchmarks in HSE. The company has driven 12.8 million kms and have worked 13.4 million man-hours for all projects without any Loss Time Injury (LTI). AHEC’s Quality Management System has been accredited with ISO 9000 since 1996. It is currently ISO 9001:2000 certified. The company has executed many projects as joint ventures (JVs) with international EPC contractors like SNC Lavalin, Stone-Webster and BHEL. The company has its own full fledged fabrication facility at Muscat which allows it to pre-fabricate a number of items in a controlled environment, thereby, saving time and cost. The company continues to build upon its already enviable reputation in the construction and EPC industry by being able to utilise skilled and experienced design and engineering people. 83 OMAN ECONOMIC REVIEW May 2009


ASSET SIZE

BREAKING IT DOWN A ranking of companies on individual parameters throws up a different perspective highlighting the individual strengths of various companies *All figures are for 2008 except where it is specified.

Rank

Oman Flour Mills Company

In % 91.76

2

Al Anwar Holdings

63.33

3

Renaissance Services

32.05

DIVIDEND YIELD

EPS GROWTH

1

Company

In RO Mn

1

Bank Muscat

6028.23

2

National Bank of Oman

1984.48

3

Bank Dhofar

1323.82

4

Oman International Bank

1018.19

5

OMINVEST

784.33

6

Oman Telecommunications Co.

590.68

7

Renaissance Services

372.16

8

Galfar Engineering and Contracting

371.14

9

Oman Cables Industry

137.52

10

Oman Cement Company

132.98 117.64

11

Raysut Cement Company

12

Oman Holdings International

13

Al Jazeera Steel Products Company

80.08

14

Shell Oman Marketing Company

58.40

15

Oman Flour Mills Company

46.80

16

Al Maha Petroleum

46.62

17

Al Hassan Engineering Company

45.05

Oman Oil Marketing Company

40.55

18

Rank

Company

90.71

19

Al Anwar Holdings

33.61

20

Areej Vegetable Oils & Derivatives

30.82

Rank

Company

In %

1

Oman Flour Mills Company

121.95

2

Oman Holdings International

25.00

3

Oman International Bank

12.27 11.01

4

Oman Holdings International

31.02

4

Al Hassan Engineering Company

5

Shell Oman Marketing Company

13.02

5

Raysut Cement Company

9.07

Areej Vegetable Oils & Derivatives

8.00

6

Oman Oil Marketing Company

11.36

6

7

Oman Telecommunications Co.

6.04

7

Oman Cement Company

7.31

8

Shell Oman Marketing Company

6.44

8

Oman International Bank

3.23

9

Bank Dhofar

2.33

9

Oman Telecommunications Co.

6.30

10

Al Anwar Holdings

5.67

10

Bank Muscat

(3.33)

11

Al Hassan Engineering Company

(3.57)

11

National Bank of Oman

4.79

Galfar Engineering and Contracting

4.32 4.13

12

Al Maha Petroleum

(6.58)

12

13

Raysut Cement Company

(9.93)

13

Al Maha Petroleum

14

Galfar Engineering and Contracting

(10.68)

14

Bank Dhofar

4.07 2.89

15

National Bank of Oman

(14.29)

15

Oman Oil Marketing Company

16

Areej Vegetable Oils & Derivatives

(16.95)

16

Al Jazeera Steel Products Company

2.65

Bank Muscat

2.51

17

Al Jazeera Steel Products Company

(39.13)

17

18

OMINVEST

(52.08)

18

Oman Cables Industry

2.23

OMINVEST

2.04

Renaissance Services

1.61

19

Oman Cables Industry

(59.76)

19

20

Oman Cement Company

(95.86)

20

84 OMAN ECONOMIC REVIEW May 2009


Company

In RO Mn

1

Oman Telecommunications Co.

119.24

2

Bank Muscat

93.73

3

National Bank of Oman

45.38

4

Oman International Bank

29.47

5

Raysut Cement Company

27.10

6

Renaissance Services

26.19

7

Bank Dhofar

23.68

8

Galfar Engineering and Contracting

23.11

PROFITS AS A % OF ASSETS

Rank

Rank

Company

In %

1

Raysut Cement Company

23.04

2

Shell Oman Marketing Company

21.41

3

Oman Telecommunications Co.

20.19

4

Oman Flour Mills Company

17.22

5

Al Maha Petroleum

15.76

6

Oman Oil Marketing Company

15.59

7

Al Anwar Holdings

12.89

8

Oman Holdings International

9.71

9

OMINVEST

20.37

9

Oman Cement Company

9.43

10

Oman Cement Company

12.54

10

Renaissance Services

7.04

11

Shell Oman Marketing Company

12.50

11

Galfar Engineering and Contracting

6.23

12

Oman Holdings International

8.80

12

Areej Vegetable Oils & Derivatives

4.88

13

Oman Flour Mills Company

8.06

13

Al Hassan Engineering Company

4.48

14

Al Maha Petroleum

7.34

14

Oman Cables Industry

4.46

15

Oman Oil Marketing Company

6.32

15

Oman International Bank

2.89

16

Oman Cables Industry

6.13

16

OMINVEST

2.60

17

Al Anwar Holdings

4.33

17

National Bank of Oman

2.29

18

Al Hassan Engineering Company

2.02

18

Al Jazeera Steel Products Company

2.15

19

Al Jazeera Steel Products Company

1.71

19

Bank Dhofar

1.79

20

Areej Vegetable Oils & Derivatives

1.50

20

Bank Muscat

1.55

Rank

Company

In %

1

Shell Oman Marketing Company

46.62

2

Oman Telecommunications Co.

31.99

3

Oman Oil Marketing Company

30.06

4

Al Anwar Holdings

28.14

5

OMINVEST

28.09

6

Galfar Engineering and Contracting

27.73

7

Raysut Cement Company

27.64

8

Oman Holdings International

27.54

PROFITS AS A % OF REVENUE

PROFITS AS A % OF EQUITY

PROFITS

COVER STORY

Rank

Company

In %

1

Oman International Bank

49.69

2

OMINVEST

37.45

3

National Bank of Oman

34.68

4

Raysut Cement Company

30.43

5

Bank Dhofar

29.40

6

Oman Telecommunications Co.

28.98

7

Bank Muscat

27.72

8

Oman Cement Company

19.74

9

Al Maha Petroleum

26.64

9

Oman Flour Mills Company

15.89

10

Areej Vegetable Oils & Derivatives

23.20

10

Renaissance Services

11.18

11

Renaissance Services

20.91

11

Oman Holdings International

12

Oman Flour Mills Company

19.59

12

Al Anwar Holdings

9.66 9.55

13

Oman Cables Industry

19.02

13

Galfar Engineering and Contracting

6.34

14

National Bank of Oman

18.49

14

Al Hassan Engineering Company

4.49

15

Al Hassan Engineering Company

17.14

15

Al Maha Petroleum

3.83

16

Oman International Bank

17.08

16

Shell Oman Marketing Company

3.83

17

Bank Muscat

13.11

17

Oman Oil Marketing Company

3.72

18

Bank Dhofar

12.57

18

Al Jazeera Steel Products Company

2.19

19

Oman Cement Company

10.63

19

Oman Cables Industry

2.01

20

Al Jazeera Steel Products Company

5.53

20

Areej Vegetable Oils & Derivatives

1.66

85 OMAN ECONOMIC REVIEW May 2009


Company

In RO Mn

1

Oman Telecommunications Co.

881

2

Bank Muscat

629

3

National Bank of Oman

299

4

Bank Dhofar

269

5

Oman International Bank

258

6

Raysut Cement Company

205

7

Shell Oman Marketing Company

175

8

Galfar Engineering and Contracting

116

PROFIT GROWTH

Rank

Rank

Company

In %

1

Al Anwar Holdings

99.86

2

Oman Flour Mills Company

91.97

3

Oman Holdings International

51.21

4

Renaissance Services

51.06

5

Areej Vegetable Oils & Derivatives

24.50

6

Shell Oman Marketing Company

13.04

7

Oman Oil Marketing Company

11.31

8

Bank Muscat

11.24

9

Renaissance Services

108

9

Al Maha Petroleum

7.08

10

Oman Oil Marketing Company

76

10

Oman Telecommunications Co.

5.93

11

Oman Cables Industry

66

11

Al Jazeera Steel Products Company

5.42

12

Al Maha Petroleum

62

12

Oman International Bank

4.98

13

OMINVEST

49

13

Galfar Engineering and Contracting

4.31

14

Al Jazeera Steel Products Company

27

14

Bank Dhofar

3.93

15

Al Anwar Holdings

15

15

National Bank of Oman

1.71

16

Al Hassan Engineering Company

14

16

Al Hassan Engineering Company

(4.58)

17

Oman Cement Company

12

17

Raysut Cement Company

(10.00)

18

Oman Holdings International

9

18

OMINVEST

(24.24)

19

Oman Flour Mills Company

5

19

Oman Cement Company

(27.38)

20

Areej Vegetable Oils & Derivatives

3

20

Oman Cables Industry *S

(59.48)

Rank

Company

In %

1

Oman Oil Marketing Company

16.03

2

Shell Oman Marketing Company

10.53

3

Al Hassan Engineering Company

8.26

4

Oman Telecommunications Co.

(8.56)

5

Al Maha Petroleum

(9.09)

6

OMINVEST

(57.55)

7

Al Jazeera Steel Products Company

8

Raysut Cement Company

SHAREHOLDERS EQUITY

SHARE PRICE GROWTH

MARKET CAP AS ON APRIL 2, 2009

COVER STORY

Rank

Company

In RO Mn

1

Bank Muscat

714.75

2

Oman Telecommunications Co.

372.79

3

National Bank of Oman

245.38

4

Bank Dhofar

188.43

5

Oman International Bank

172.59

6

Renaissance Services

125.31

(63.64)

7

Oman Cement Company

117.93

(80.87)

8

Raysut Cement Company

98.05

9

Bank Dhofar

(82.11)

9

Galfar Engineering and Contracting

83.32

10

Oman International Bank

(84.14)

10

OMINVEST

72.53 41.14

11

National Bank of Oman

(105.67)

11

Oman Flour Mills Company

12

Renaissance Services

(110.97)

12

Oman Cables Industry

32.23

13

Bank Muscat

(132.25)

13

Oman Holdings International

31.97

14

Oman Cables Industry

(197.88)

14

Al Jazeera Steel Products Company

31.06

15

Al Anwar Holdings

(209.93)

15

Al Maha Petroleum

27.58

16

Galfar Engineering and Contracting

(214.90)

16

Shell Oman Marketing Company

26.81

17

Oman Holdings International

(310.00)

17

Oman Oil Marketing Company

21.03

18

Areej Vegetable Oils & Derivatives

(350.00)

18

Al Anwar Holdings

15.39

19

Oman Flour Mills Company

(1119.51)

19

Al Hassan Engineering Company

11.78

20

Oman Cement Company

(2024.58)

20

Areej Vegetable Oils & Derivatives

6.48

86 OMAN ECONOMIC REVIEW May 2009


FEATURE

COVER STORY

Since the Fortune 500 rankings started in 1955, only 71 companies have survived on the list till date, 2000 companies having come and gone off the ranking. How to build an enduring company is the biggest challenge facing CEOs across the globe. We pose the question to six CEOs of Omani companies

‘Maintaining a heritage calls for concerted effort’ – Adil Ghouse, CEO, Consumer Products Group, Khimji Ramdas and product profile of these stores have made them destination markets in most of these smaller towns. To cite another example, over the last five years, KR has gone from distributing 500 stock keeping units (SKUs) from P&G to 1500 SKUs. This has necessitated a change in the process systems followed by the company. “There are several elements involved in managing the supply chain like the accuracy of forecasting, technology, collecting and analysing the data and communication channels with the principals,” says Ghouse.

People make the difference

Enduring mantras z Managing financial discipline z Keeping pace with the times z People are the key

T

here are several fundamental elements that make for a successful company,” says Adil Ghouse, CEO, Consumer Products Group, Khimji Ramdas (KR). Managing ones finances is the first pre-requisite of any successful company. Financial discipline is important, as successful businesses are based on profits. Sustainability of a business is another key factor – this may require changing products or variants to suit the changing

dynamics of the market and customer tastes. Says Ghouse, “You cannot deal with new issues in old ways in a competitive environment.” KR, a company that dates back to 1830 is itself a living testament of adapting to change. For instance, the group has in the last few years repositioned Khimji Mart (K-Marts) as a neighbourhood store, to differentiate it from the large format stores. The other part of the strategy has been to focus on towns outside the Capital area, like Bahla, Sur, Nizwa etc. In the last six years the number of K-Marts have gone up from four to 16. The quality of service

The importance of people can hardly be overstated, as it is their efforts and passion that are the bedrock of any institution. Instilling the right values and guiding them is a pre requisite for going from good to great. KR follows a stringent selection process to ensure that it is recruiting the right talent. Recruits are then put through an induction programme at the Khimji Training Institute, which is followed by an on-the job training. The company also carries out regular ‘People Development Programmes.’ Apart from skill sets, these programmes are geared to instil the KR values of Trust, Care and Commitment amongst its people. “One of the elements of having a 138 year old heritage is that our stakeholders have a lot of faith in the KR name, this puts on us the responsibility of ensuring that this heritage is not compromised at any given point,” avers Ghouse

88 OMAN ECONOMIC REVIEW May 2009

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FEATURE

COVER STORY

‘Start focusing on your priorities’ – Richard P Russell, MD & CEO, Blue City Company 1

G

oing back to the basics namely our core values helps a lot during a downturn as we can deliver on these same set of values to the customers,” says Richard P Russell, MD & CEO, Blue City Company 1, which oversees the Phase I of Al Madina A’Zarqa. “When the going gets tough, customer focus is important because this is where our core business is as we are a real estate company,” adds Russell. Different companies adopt different strategies in a downturn. There are many companies, which rise fast, and then they ‘unexpand’ rapidly. Blue City is in a better position because it has been going through a steady expansion and on the other side, the company has been filling its organisational chart with professionals.

Russell’s recipe to beat the downturn z Get back to basics

The Omani example

the impact of the financial slowdown, Oman is well positioned to weather the economic storm as its policies of prudent spending, conservative outlook and sound financial regulations have stood the country in good stead. If you add up the short term five-year policies and the long term ‘Vision 2020 development policy’ crafted by the government, lo and behold, you have the perfect ingredients to last any kind of financial crisis, Russell opines.

Russell points out that we don’t need to go far to look for examples as Oman itself is a perfect analogy on how to beat the downturn. Oman, under the wise leadership of His Majesty The Sultan, is like a large well-managed company. While many other neighbouring countries are reeling under

A company also has to make sure that its foundations are right because form follows function and not the other way round. Again this is going back to the basics. A downturn is actually a catalyst for expansion into new horizons and brings out new ideas and innovations.

z Surround yourself with true professionals z Look after your priorities z Provide value added services to your customers

Focus on priorities

z Make long term flexible strategies

Thus, as a first step in a downturn, you start focusing on your priorities and look at the value added propositions that you can make for your customer. Then you need to cut out all the unnecessary action and it may vary from company to company. The most important is the efficient use of your manpower. Sometimes it is cost effective to outsource your jobs while at other times, the proper utilisation of manpower and talent is extremely important.

z Deliver on your promises

90 OMAN ECONOMIC REVIEW May 2009


THE BOND OF COMMITMENT

A country rich in its history... and in the strength of its tradition, culture and heritage.. Sultanate of Oman. At a unique junction of ancient trade routes, Oman held the centre stage of commercial exchanges, spanning from the East to the West. Harmonious trading relations with the neighbouring states necessitated Oman

participate in highly advanced construction activities - from aflaj and forts to ports and roads. A glittering tradition was initiated. Today, Raysut Cement Co. has maintained that tradition as the central philosophy of its mission, creating value additions which have greatly strengthened the basis for further future growth.

RAYSUT CEMENT COMPANY (S.A.O.G.) website: www.raysutcement.com.om Corporate Office: P.O. Box 1020, Salalah - 211, Sultanate of Oman, Tel: 968-23219137, Fax: 968-23219291, e-mail: raycemco@omantel.net.om Muscat Office: P.O. Box 662, Jibroo - 114, Sultanate of Oman, Tel: 968-24790126, Fax: 968-24789371, e-mail: mctcemtr@omantel.net.om Terminal Office: P.O. Box 662, Jibroo - 114, Sultanate of Oman, Tel: 968-24712737, Fax: 968-24711871, e-mail: mctcemtr@omantel.net.om

SINCERITY. DEDICATION. INTEGRITY. INNOVATION.


FEATURE

COVER STORY

‘One of the fundamental philosophies of our group is to be conservative’ – P Chandrasekhr, Group General Manager, Jawad Sultan Group

T

here are three or four significant aspects of building successful companies,” says P Chandrasekhr, group general manager, Jawad Sultan Group of Companies (JSG), he adds, “CEO’s need to stay focussed on their strategy whether it is a period of buoyancy or crisis, one should not let emotions run riot.” A stable senior management team helps in building an enduring company, by providing leadership, vision and keeping in view shareholder objectives.

The purse strings Managing finances and maintaining cash flow is important for any company. “One of the fundamental philosophies of our group is to be conservative. We do not want to diversify into unrelated areas by leveraging. Mostly, we try to use our profits to expand the business.” The group is thus less dependent on external funding. A look at JSG’s core businesses underscores the point. Capital Store, their flagship 92 OMAN ECONOMIC REVIEW May 2009

Enduring values z Stay focussed on your strategy z Cash is king z Core competence retail brand has been around for 30 years. Counting shop-in-shops there are ten Capital Store outlets in Oman. Its telecom business (Jawad Sultan Technologies) has migrated from selling products to providing technology solutions. In the entertainment business, the company owns a number of large screen cinema halls under the City Cinema brand name. The group recently forayed into Sohar opening an entertainment complex. Plans are afoot to expand the business to Salalah and Buraimi. As a policy the group has focussed on businesses that generate a daily cash flow. Being in the same business for years gives a manager domain knowledge. This comes in handy while taking a decision. Says Chandrasekhr, “After a point all

decisions are taken on gut feel or by the rule of thumb and detailing and factual information can take you only so far.”

Devil in the details Compensations should be steady and evenly distributed, so that salary structures are seen as being fair. Attention to detail is important as it sends a signal that the CEO has his hands ‘on the pulse’ of the company. The unique feature of businesses in the Gulf is that even in listed companies, the family culture is dominant. So though, there are professionals, the patriarch runs the show in most cases. “Decisions are taken by consensus between family members with the advice of professional mangers. It is a good business model because it has endured over time,” says Chandrasekhr.


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FEATURE

COVER STORY

‘It is only the people-focus that will keep a telecom company afloat whether it is a boom or bust time’, – Ross Cormack, CEO of Nawras

T

he telecommunications business is not majorly affected by a downturn, nevertheless new strategies are chalked out because people need to communicate with each other. Therefore, living out the customer experience is the most important thing for a company like Nawras as it is the customer who gives the reward, says Ross Cormack, CEO of Nawras. “Actually, our industry can be the contributor for turnaround during the difficult times like these because we are actually growing. We would like to hire 100-200 new people for direct employment in our company. Further, our point of sales and distribution network is being expanded to nearly 1000 by the end of 2009. Thus we are also generating thousands of indirect employment,” Cormack says. Nawras follows its motto of being ‘pleasingly different’ whether it 96 OMAN ECONOMIC REVIEW May 2009

Nuances for a downturn z Layer in new technologies z Invest in new infrastructure to improve customer experience z Be focused on customer’s needs z Equip employees with right tools is a downturn or not, says Cormack. An important thing is the quality of service that we provide which is again determined by the quality of people that we employ as our staff. Therefore Nawras is all about people. Therefore the selection of people is very important because a company should have capable employees who know the technical requirements and most importantly these employees should be able to live the customer experience, says Cormack.

Innovative style of working Another factor which, differentiates companies like Nawras, is the style of working, points out Cormack. “We have an open and inclusive style of work-

ing and this helps in making decisions quicker. You can share information as and when you require it. A working environment should have the element of fun and managers should not spend their time minding their subordinates but they should manage the people in such a way as to create motivation. This is one of the key elements of our success,” he says. Nawras also encourages team-work vigorously and people are asked to form virtual teams to help them solve the customer’s problems. The fourth but not the least component of the success of Cormack’s company is that it is a people based company and as such those who commit mistakes are not discouraged but on the contrary they are motivated to do better. They are encouraged to quickly fix their mistakes and learn as a company. By doing this, they create a climate of erasing the guilt and build an ever greater quality of service.


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FEATURE

COVER STORY

‘A CEO has to be futuristic in his outlook and should not ignore modernisation and innovation’ – Krishna Kumar Gupta, CEO of Al Anwar Holdings global financial crisis. Although no one can predict the future, it is important to look at the future and make the necessary adjustments now. The Abu Dhabi government, for example, has abundant reserves of oil but they are still investing heavily in renewable sources of energy although it is not a preferred source of energy at the moment, points out Gupta.

Evolve yourself

M

etal Box India, was the market leader of tin packaging in India around 50 years ago. But the company never thought that it would fold up and eventually vanish from the market. In the face of stiff competition from modern packaging methods and alternative packing materials like plastic, Modern Box India lost out and today it’s no longer remembered.

Outdated thinking “The problem with companies like Modern Box India is that they don’t see the writing on the wall. Similar is the case with General Motors of the US, which was thought of to be ‘the company’ that could outlast any situ98 OMAN ECONOMIC REVIEW May 2009

“A CEO of an efficient operation has to be futuristic all the time even though his business is doing well because you never know what the next decade holds for you. Never ignore innovation, new techniques, new alternatives to keep up the development process going on. Be a leader in all the departments mentioned above,” advises Gupta.

Success principles z Identify opportunities during a downturn and encash on it z Conserve resources for investing at a more opportune time z Keep your organisation lean and mean even in boom-time z Identify risks and mitigate them ation. GM went on building bigger cars when the price of gasoline was shooting up. Then what happened?,” asks Krishna Kumar Gupta, CEO of Al Anwar Holdings. Gupta cites these examples to highlight the importance of modernisation and innovation in order to build an enduring company during a downturn like the present

Situations like the present global downturn, segregates the men from the boys because those who can do successful risk mitigation in the present circumstances are those who will emerge the strongest. Risk management is important because there is always risk in every aspect of life, whether it is financial, political, for a country or an individual. Therefore, identifying the risks and knowing how to mitigate it is very essential and if you do it carefully, you cannot fail, Gupta says. Actually, any problem also presents an opportunity and the challenge for CEOs is to convince the board of directors that ‘here is the problem and here is the opportunity’. If any manager can achieve that it opens the door to build an enduring company come what may.


FEATURE

COVER STORY

‘Our 40 year legacy inspires us’ – Giles Cunningham, CEO, Zubair Corporation

Enduring values z Customer centricity z Keeping up with the times z Training human resources

H

ow to build enduring companies? If we had certain answers to the question we would be wanted by every company in the world,” says Giles Cunningham, CEO, The Zubair Corporation. On a more serious note he thinks it is about espousing certain values – the paramount amongst these being customer centricity – which is an ability to understand the changing needs of customers overtime. There are numerous instances of how successful companies went down only because they were not able to keep up with the times.

A new sensibility Keeping up with the times requires an entrepreneurial streak of being open to change. “Some of the most successful companies have had to let go of what made them successful and change, this 100 OMAN ECONOMIC REVIEW May 2009

requires a lot of courage. Companies need to look forward rather than looking back,” says Cunningham.

appointed to oversee this exercise. “Our 40-year old legacy inspires us but does not weigh us down,” says Cunningham.

The four decade old, Zubair group is preparing itself for the future as exemplified by its advertising tagline – ‘Future Ready.’ The operational functioning of the company has been handed over to professionals. Says Cunningham, “We are investing in our key markets but we recognise the fact that we need to create an investment mindset. Traditionally we have tended to grow our business over the long term, but now we are being pro active about return on investments.”

HR focus

The company is also working on getting a better understanding of the market. This is being done by stepping up its research efforts. The exercise is expected to give the management a better understanding of how to position the company. A chief strategy officer has been

Developing people capabilities is the other important ingredient of building a robust institution. The Zubair group has rolled out the, ‘Gold Programme for Graduates’ to train Omanis. Managing both for the long term and short term is one of the biggest challenge faced by CEOs. Cunningham avers, “Developing a long term strategy, but delivering profits in the short term is a dilemma.” Luckily, the tyranny of quarterly numbers is not as intense in Oman. Apart from financial parameters, the group measures success on three other parameters – the satisfaction of customers and employees and return to shareholders. As told to Mayank Singh and Visvas Paul D Karra


SERVICES

Jose Lora, CEO, Juthoor Development Services sees its comprehensive development services like project feasibility, implementation and develo pment control as being key differentiators in the market. Mayank Singh reports

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he real estate sector has been in the news globally for all the wrong reasons. What started as a mortgage problem (the infamous sub prime) snowballed into a financial crisis of historical proportions. While, the GCC real estate market has not witnessed anything similar – with the exception of Dubai, there have been projects that have run into problems for a number of reasons. Say Jose Lora, CEO and Development Director, Juthoor Development Services, “A number of projects are in trouble because the management of these projects are not good.” Juthoor, a recent entrant to the market tries to address this problem. The company provides turnkey solution to its clients. “Juthoor was formed because 102

May 2009

there was a specific need for development services – we take a project from the stage when it is an idea and see whether it make financial sense. Once a client decides to go ahead with the project we then get through the feasibility part, get the contractors, asset managers, engineers, planners, bankers, sales and marketing people making the project profitable,” says Lora.

own brand for these related services.” Naysayers may argue that floating numerous companies dilutes a brand but Lora dismisses such speculation, “The needs in terms of real estate in Oman are global and so we are developing service companies that will make us stronger. They will also have the opportunity to act on their own and become viable companies.”

Tentative steps

Though based in Oman, Juthoor is looking at the GCC region for projects. It is presently evaluating a few projects in Abu Dhabi and Saudi Arabia apart from the Sultanate. “Juthoor has just been launched so we need to wait and see what the future brings. For every ten projects that we look at, we recommend only a couple. So we spend a lot of time looking at projects across the GCC, but they will not tie up all our time.”

Juthoor is an arm of REO or Real Estate Opportunities an organisation that was set up to look at the needs of the Oman market and then to start building projects to suit these demands. The company is looking at introducing other services like broking, construction etc. “We have to take a decision about either bringing an existing brand or developing our


Catering to local needs The strength of Oman’s market in terms of real estate development is that it is still a nascent market. This has shielded it from the financial storm that what other developed markets have weathered. Says Lora, “Oman is in an enviable situation, wherein there are not many large projects except The Wave. When you look at Oman it is really at the bottom, so there is no where that it can go but up and the opportunities are immense. We see this as an opportunity rather than a drawback.” The Sultanate has a number of factors fuelling the market. The demographics of the country being the foremost among them – over 20 per cent of Oman’s population is between the age of 20-30. “This means that they need to get serious about owning a house. There is virtually no housing available for the middle and lower income sections of the population.” Second, Oman is encouraging industrial activity which raises the need for office space. Presently, there is a shortage of good office space. Lora feels that rentals are high for office space that is not classy and this is the reason why a number of businesses are operating out of villas. Third, the retail end of the market holds a lot of potential as fashion centres and entertainment complexes mushroom. “There is a great opportunity for shopping centres, hotels and retail space.” Lastly, the country needs mega distribution and logistics centres. In geographical terms Oman is a gold mine. It is considered to be the most beautiful country in the GCC, with a strong culture and hospitable people. Salalah with its hospitable climate, is a big draw for the moneyed classes. “There is a need to let the world experience Oman and there is sure to be great demand.”

Real Estate Growth Drivers Demographics Economic activity Retail developments Tourism Affordable housing Till now, Dubai has been on everyone’s radar as the emirate with its biggest, tallest, most luxurious and iconic buildings attracted widespread attention and gave developers the biggest profit margins. The financial crisis though has led to a rethink on the realities of the real estate market. “Oman needs affordable residential houses for the middle income strata. The reality is that residential projects like The Yiti are not meant for the average Omani, who does not have enough choices and it is just a matter of time when they start asking what about us,” says Lora. This calls for a detailed analysis of land prices, construction costs and creation of affordable houses for these demographic groups. “It is going to take a lot of thought to make that happen,” says Lora.

Global crisis Looking at the global crisis, Lora says, “We as developers look upto the government and financial institutions – looking back greed overpowered the financial institutions and there was a lack of control on the part of the government and this affected the world. The financial markets in the US have had the need for better returns and profits and the government did not focus on what needed to be done before it was too late. The end consumer is not free of culpability

because there was a lack of saving and overstretching their financial abilities.” Despite the crisis, the GCC region is better placed than most parts of the world. While the US and Europe expect to post negative growth, the GCC countries are looking at posting positive numbers. Oman has projected a GDP growth of over 2.5 per cent in 2009. Says Lora, “We sometimes concentrate on one issue and fail to look at the total picture, the price of oil has gone down from over $140 to under $50 a barrel, the reality is that value of all the commodities that Oman imports has gone down drastically, so we are not as badly hit as some countries in the western world.” Lora has worked extensively in the US, Mexico, South America and in the GCC. In the US he was the design and construction head for the entire East Coast at Homart Development which at one time was the third largest multi-use and shopping centre developer in North America. He then joined Sears Organisation and moved to Mexico to head the company’s Latin America operations. At Sears, he was instrumental in expanding the business in Latin America. His real estate consultancy firm called Arlo grew into one of the most prominent real estate consultancies in the region. He has also managed projects for the Hyatt chain. In all, Lora boasts of over 30 years of real estate experience. Having studied architecture at the University of Illinois he went onto read real estate investment and finance at Harvard University. “I am one of those rare characters who understands the design process, construction process and the business side of development,” says Lora. Juthoor has chalked out an impressive blue print, now it needs to walk the talk.

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TEXTILE INDUSTRY

After three continuous years of losses, the Sultanate’s only textile mill ‘Oman Textile Holding’ is on the road to recovery under a new leadership. Akshay Bhatnagar reports

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hen the whole world is reeling under the pressure of economic slowdown, Rusayl based Oman Textile Holding is quietly working towards making a successful comeback. It is not an easy task for the company that has reported a net loss for the last three financial years and accumulated losses of RO1.79mn by the end of 2008. Despite the quota regime in place and having the first mover advantage, the company couldn’t get its act together on a sus104

May 2009

tainable basis in the past. So what gives it the confidence that the current spark will not be a flash in the pan?

Road to recovery Last year Yousuff Ahmed, a well qualified professional with well-rounded global experience in the textile sector, was brought on board as the new chief executive officer. In the last one year, he has managed to reduce the bleeding. The net loss has been brought down to RO671,450 in 2008 compared to a high of RO966,599 in 2007. “We have improved our yield per work-

er and machine, increased unit value realisation. The product mix has been rationalised, product lines trimmed and focused on markets and segments such as special supplies business. We are now getting our supplies on credit instead of cash basis from almost the same vendors. To a large extent, this has taken care of our working capital requirement,” informs Ahmed. The company imports raw material from markets including India, Indonesia and certain parts of Europe. It sells fabrics in the GCC region with 30 per cent of the business coming from


The market in the GCC is huge. Look at the requirements from defence forces segment alone. We are looking at 40-50 per cent offtake of our fabrics from this segment alone. The demand for Arab clothing such as dishdashas and female wear is extremely high. Currently, the demand in this segment is met by imports from rest of the world,” informs Ahmed.

Road to recovery h Reduce losses h Improve capacity utilization h Introduce contemporary products h Strengthen institutional sales h Penetrate new markets Oman. Its fabrics are consumed mainly by institutions such as defence forces and manufacturing industries. The company has obtained approval from SGS, the UK based global quality lab, for the specifications mainly catering to the institutional market segment.

Moving forward The CEO of Oman Textile Holding is a picture of complete confidence when it comes to the future of the company. The company has an annual production capacity of 20 million meters of fabric but currently its capacity utilization is just 40-50 per cent. The global industry average is around 90 per cent. “We plan to increase our capacity utilisation to 60-70 per cent by the end of this year. In 2010, we aim to achieve 95-100 per cent mark,” says the CEO. But how? “It is not very difficult. The key is to upscale our operations and bring in economies of scale.

The implementation of Oman-US free trade agreement (FTA) has also opened a vast new business opportunity for the company. “The FTA has provided relaxation for five years in the ‘Rule of Origin’ in the case of textiles imported from Oman. Look at developing nations such as Sri Lanka and Bangladesh. They have emerged as a major force in the textile industry in the world. Oman has a much superior infrastructure and development level, and logistics advantage due to its proximity to US (and Europe too). I see no reason why we can’t penetrate into US and Europe markets,” says Ahmed.

Challenges ahead Oman Textile Holding’s objective to bounce back is not impossible but Ahmed has a difficult task on his hand. Many textile companies from the Indian subcontinent are looking at setting up base in Oman to take advantage of the Oman-US FTA. With stronger financial muscle, industry networking, latest machinery and assured supply of raw material, they can hit the prospects of OTH severely. “We are aware of the impending competition but we are on a strong footing as we have a very well established base in Oman and the market in US is big enough to accommodate many companies like OTH. But we need to be focused on upscaling our operations to optimise on the opportunity,” replies Ahmed. The company may find it difficult to raise the funds for the expansion, if needed, as the banks in Oman have become more stringent in granting loans when it comes to companies with not an impressive track record.

We plan to increase our capacity utilisation to 60-70% by the end of this year. In 2010, we aim to achieve the 95-100% mark – Yousuff Ahmed CEO, Oman Textile Holding Ahmed says that, if required, funding will not be an issue for them. With the global economy expected to register a negative growth this year and prevailing intense competition in the textile industry, the going is not expected to be easy for the sole Omani textile mill. The product prices are moving southwards, margins are getting squeezed and large manufacturers from Asian countries facing the dilemma of excess capacity; OTH will have a tough task to further improve its bottom line in 2009. It will be interesting to see how the company’s strategy to introduce superior quality, new and contemporary products, brand loyalty, greater penetration in more profitable segments such as special supply business is going to result in expected growth. So far the company has performed reasonably well in 2008 to give the confidence that it is on the right track but the road to recovery is long and circumstances adverse. 105

May 2009


ECONOMY

THE NAME’S BONDS, SOVEREIGN BONDS BONDS ARE A LOGICAL STEP IN ADDRESSING DWINDLING

EXTERNAL FINANCE SOURCES AND THE REALITY OR PROSPECT OF A BUDGET DEFICIT. CONSIDERING THE EXTRAORDINARY ECONOMIC CONDITIONS THOUGH, ANY TABOO ON BOTH BONDS AND DEFICITS HAS NO RIGHTFUL PLACE IN 2009

A

Bond market – getting active z The Sharia compliant bond market or sukuk showed a year-on-year decrease of 62.4 per cent to $18.1bn in 2008. z The Central Bank of Kuwait, for instance, received KWD1.261bn worth of bids for an announced tender of KWD200m ($680.7m) worth of one-year treasury bonds. z On April 8, BankMuscat, announced the launch of a RO60m subordinated bond issue carrying an eight per cent yield. 106

May 2009

s it does every year, Q2 heralded the arrival of spring and, as if by seasonal cue, the GCC bond market awoke itself from a quarterlong hibernation. Several governments have either issued, or announced plans to issue, sovereign bonds of considerable size, including Kuwait and Abu Dhabi, which had by April made clear their intentions to release bonds over the coming months. They follow in the footsteps of Bahrain and Dubai, both of whom announced or issued bonds in February, and Qatar, which issued bonds at the beginning of April. While Oman has yet to make any official declaration, at the March gathering of GCC central bank heads, H E Hamoud Sangour Al Zadjali, Executive President of the Central Bank of Oman (CBO), suggested bonds could be a possibility later in the year. Rather than signs of weakness, the recent swathe of bond activity signals a prompt response to challenges not seen in the region since the recession of the early nineties. Leading up to 2008 the shariah-compliant, or sukuk, bond market showed much promise and was viewed by many as the ‘next big thing’ in the Gulf. Since then, the market has sof-

By Oliver Cornock tened, due in large part to doubt over the instrument’s true compliance with Islamic law. Bahraini cleric Sheikh Taqi Usmani warned in late 2007 that as much as 85 per cent of sukuk on the market were not halal due to the sharing of risk. Overall, the aggregate bond market, which includes both conventional and sukuk bonds, showed a year-on-year decrease of 62.4 per cent to $18.1bn in 2008.

The gold rush Bonds have been a relatively littleused financial instrument on the part of both governments and local corporations, in large part because until very recently they were not necessary in a region flush with capital and hydrocarbon wealth. The latest raft of sovereign bonds is notable for two reasons. First, it is yet another indication of the troubled state of the world economy (as if anyone could forget). A five-year bull run on oil left the GCC with a fiscal surplus estimated at 30 per cent of GDP in 2008. Now, as international credit lines wither and revenues decline on the back of lower oil prices, most of these same states are looking for project financing and face the possibility of posting a deficit – a novel problem for most Gulf states in recent years.


Interestingly the bonds received a spirited reception on the world market, in a sign that risk appetite may be returning. The Central Bank of Kuwait, for instance, received KWD1.261bn worth of bids for an announced tender of KWD200m ($680.7mn) worth of oneyear treasury bonds. Such exuberance reflects positively on the GCC, which is perceived as a bastion of relative stability amidst the enfeebled global economic landscape of 2009. Bonds are a logical step in addressing dwindling external finance sources and the reality, or prospect of, a budget deficit. Considering the extraordinary economic conditions though, any taboo on both bonds and deficits has no rightful place in 2009. This year fiscal deficits are not only expected but also “necessary,” as Marios Maratheftis, regional head of research at Standard Chartered Bank told local press after several bond announcements at the March central banks’ meeting. Indeed, from the US to Japan, governments are adopting a Keynesian approach to the crisis, aiming to ward off the worst of the recession with generous state spending. The GCC is particularly well poised to do this. As a point of comparison, the budget deficit of the United Kingdom is predicted to near 13 per cent this year, according to research by Ernst & Young; most GCC states are expected to register a deficit of around five per cent of GDP.

Budget deficit For now Oman has declined to jump on the sovereign bond bandwagon, perhaps because it has maintained a relatively low ratio of external financing. From 2005 to 2007 external financing as a percentage of GDP was just below 20 per cent, compared to over 45 per cent in Qatar and over 50 per cent in Bahrain in 2007. The Sultanate is currently running a deficit of about five per cent of GDP, or $2.1bn. The likelihood of Oman substantially adjusting its fiscal policy in the near future is largely dependent on the price of oil. Minister of National Economy, H E Ahmed bin Abdulnabi

Macki, has remarked on several occasions that should the price remain low, officials may trim the $16.6bn (RO6.4bn) in public spending pledged in the 2009 budget. Sovereign bonds could also provide a way to bridge the financing gap. The Sultanate’s budget is based on a per barrel oil price of $45. Depending on the measure used, the record of the price of crude oil throughout 2009 is slightly different, though no index produces a price chart comforting to government officials of oil-exporting nations. According to the reference basket of 12 crude blends used by OPEC (to which Oman is not party), oil was selling above $45 per barrel (pb) for only 15 days since the start of this year.

Reasons for bonds being issued z An indication of the troubled state of the world economy. z As international credit lines wither and revenues decline on the back of lower oil prices, most GCC states are looking for project financing and face the possibility of posting a deficit. The spot price of Oman crude on the Dubai Mercantile Exchange paints a slightly rosier picture, with 23 days of oil priced at or above $45, though only four of these days saw oil trading at $50 or more. At the time of Oman’s budget announcement on January 1, an assumed oil price of $45pb looked somewhat cautious. Just a few months later, some within the region were taking a more conservative stance. Qatar has based its budget, which came into effect on April 1, on $40pb while Sultan Nasser Al Suweidi, central bank governor of the UAE recently said he does not expect oil prices to average more than $40 to $44 this year. In spite of the new reality, Oman has to date announced no high-profile project cancellations, nor has it made any serious cuts to planned projects. In

fact, the overall economic picture for the Sultanate has remained essentially positive amidst the gloom elsewhere. Moody’s latest annual country credit report, released in mid-February, maintains a stable outlook for Oman’s A2 investment-grade sovereign ratings, citing the government’s extensive offshore financial assets as a major cushioning factor against the global credit fallout. Moreover the government’s gross financial assets plus the central bank’s foreign exchange reserves amounts to around 75 per cent of GDP and government debt is low, said the report. Should the government go ahead with a bond issuance, the inroads laid by its neighbours in the market will help develop a strong base from which to launch. As sovereign bonds are a relatively undeveloped mechanism in the region, recent issuances will begin to generate a benchmark yield curve by which investors can more accurately weigh risk and value – an especially important mandate in the current cautious environment.

Companies get into the act In Oman the private sector has already begun to release corporate bonds, kick-starting the establishment of a widespread debt market. On April 8, BankMuscat, of which the government is a minority shareholder, announced it will launch a RO60mn subordinated bond issue carrying eight per cent yield. As in the past, the question of ‘conventional or sukuk’ will remain an issue for consideration in both corporate and sovereign issuances. While the tests of 2009 are not likely to be remembered fondly by government leaders and investors, or anyone for that matter, they do present the opportunity for the fiscal tactics of all GCC states to mature as they attempt to manage the twin challenges of declining revenues and increased public spending. So far, it appears they are up to the test. The author is Regional Editor, Oxford Business Group 107

May 2009


MARKET VIEW

MARKET RALLY A spurt in oil prices and good quarter one 2009 results helped the MSM to break a 10-month long bear run

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he MSM30 benchmark index rose 8.2 per cent for the month ended 15th April 2009, after nearly ten months of consecutive losses. The rally was lead by the banking and industrial sector stocks. Service sector index somewhat offset the significant gains recorded by the other two sectoral indices. Market activity improved as volumes increased by 59.3 per cent while average turnover per day increased by 112 per cent for the same period, to RO9.33mn. The market rose on the back of stable oil prices and greater visibility in earnings of the listed companies. Investor’s confidence seemed to have picked up given attractive valuation of blue chip stocks. Market breath was favourable with an advance decline ratio of 1:1.

Leading the charge The index heavy weights that lead the rally were ONIC holding (104 per cent) Bank Muscat (+31.7 per cent) and Oman Emirates (+37.89 per cent). In key corporate events, Bank Muscat informed the market that it has sold approximately 81 per cent of its stake in HDFC Bank, India. The pre-tax profit on the sale of this stake is approximately RO39mn and will be reflected in the first quarter results. Majan Glass announced that the company has started commercial production of its fifth production line.

GCC markets rebound The month ended April 15, 2009 was a positive month for the GCC markets and the benchmark MSCI GCC index increased by 15.94 per cent. The Saudi stock exchange was the top gainer and the index increased by 25.60 per cent

TOP GAINERS AND LOSERS (Period – March 16 - April 15, 2009)

ONIC HOLDING> -45.45% GULF INV. SERV> -25.50% OM. EMIRATES> -21.15% OMAN INV. & FIN.> -18.04% AL ANWAR HOLDING> -18.00% BANK MUSCAT> -14.23% OMAN FLOUR MILLS> -13.23% TRANSGULF HOLDING> -12.91% OMAN FISHERIES> -11.84% AL HASSAN ENGG> -11.76% 108

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104.70% <ABRASIVES MANUFACTUR 40.00% <MUSCAT THREAD MILLS 37.89% <PORT SERVICE CORPN. 35.38% <DHOFAR CATTLEFEED 33.82% <OMAN TEXTILE HOLDING 31.47% <DHOFAR INSURANCE 31.37% <DHOFAR POWER 30.88% <GULF MUSHROOM 30.00% <OMAN CABLE INDUSTRY 25.88% <UNITED POWER


GCC MARKET INDEXES Saudi

16.3.09 Close 4,281.26

15.4.09 Close 5,377.24

Monthly Return 25.60%

YTD 2009 1.96%

Kuwait

6,586.40

7,355.70

11.68%

-5.49%

Dubai

1,525.60

1,688.20

10.66%

3.17%

Abu Dhabi

2,328.32

2,646.45

13.66%

10.73%

Qatar

4,591.55

5,233.84

13.99%

-23.99%

Bahrain

1,580.97

1,662.85

5.18%

-7.83%

MSM INDEXES Index Type

16.3.09 Close

15.4.09 Close

Monthly Return

YTD 2009

General

4,676.55

5,060.54

8.21%

-6.99%

Banking

6,048.34

6,638.93

9.76%

0.27%

Industry

4,371.33

4,694.66

7.40%

8.63%

Services

2,253.27

2,292.94

1.76%

-9.29%

during the month. The banking and petrochemical counters among other boarder indices were the top gainers during the month. Rise in oil prices coupled with encouraging announcements by petrochemical companies led to the positive sentiment among investors. The Qatar and Abu Dhabi exchanges too ended on a positive note with the respective indices gaining 13.99 per cent and 13.66 per cent. The industrial and banking counters were among the top gainers on both the exchanges. The Kuwaiti stock exchange rose by 11.68 per cent with the broader sectoral indices ending mixed. Banking counters were among the top gainers on the exchange. The Emir approved an injection of KWD4bn into the banking sector as deposits, which should boost the lending capacity of banks. The Dubai Financial Market saw a rise of 10.66 per cent with the construction and real estate counters ending up on the exchange. The Bahrain Stock exchange was a slow mover among the rest of the GCC markets and the general index ended up 5.18 per cent during the month. Rising oil and commodity prices coupled with various government initiatives to boost investorsâ&#x20AC;&#x2122; sentiments was the prime reason for the surge in the GCC markets. Moreover, investors created new positions in anticipation of strong 1Q09 results. Going ahead, Q1 results and global news flow should provide direction to the GCC markets. Data and analysis by Vision Securities Co. LLC, a Member of EFG Hermes. While utmost care has been taken in preparing the above report, neither Vision nor Oman Economic Review makes any guarantee, representation or warranty, whether express or implied, and accepts no responsibility or liability as to its accuracy or completeness of the data being provided.


GOLF UPDATE

NETWORKING MAGNIFICENCE

The OER CEO Golf 2009, held on March 5, at Ghalla Wentworth Golf Club was a great success judging by the overwhelming response to the event

HARPREET SINGH SHERGILL GM, Gulf Additives It was truly a memorable event and is something which has now become an annual event for both golfers and non golfers of Oman. Every year its getting’ bigger and better. Its one of the most prestigious competitions of Oman. This event provides an excellent opportunity to network with senior executives in a very informal manner. Also winning this tournament was a great feeling for me and I now look forward to participate in this prestigious event next year. I wish the tournament great success in the years to come.

ANDREW POTTS Dealer Principal, Wattayah Motors I didn’t play due to another engagement but did attend the evening event. The setting for OER CEO Golf 2009 was great and the event was well organised. The compere for the evening was entertaining and kept the tempo going throughout what was a long programme. I have played regularly in the UK and Europe, until recently when I was presented with two daughters who have insisted that I dedicate every waking hour to them – naturally of course. So I intend to take the sport up once I get my clubs out here. am sure that the event lifted spirits – people certainly seemed to enjoy it and it demonstrates that people have the will and spirit to go forward with positivity albeit the global financial crisis.

SANDEEP MISHRA COO, Shanfari Group of Companies OER CEO Golf 2009 has become one of the important annual rituals for the corporate world in Oman. One always looks forward to be part of this event to come on common platform, to be 110

May 2009

with the peer group, customers, clients, competitors and friends. Meeting in such a forum gives an opportunity not only to discuss business, but beyond it. OER CEO Golf is certainly a good networking event. The whole day event, with full of fun agenda, gives ample opportunity in a very conducive atmosphere, to interact with one and all.

ROSS CORMACK CEO, Nawras OER CEO Golf 2009 provided an excellent opportunity to meet other business professionals in a relaxed environment and also to enjoy playing some golf. The event ticked all the right boxes in terms of organisation, entertainment, hospitality and networking. Oman Economic Review as a brand OER offers great brand visibility and awareness. It was a well organised day out from breakfast right through to dinner. Nawras Business Solutions was proud to be the presenter and to contribute to such a successful event! I must say how much I admire what the irrepressible Sandeep Sehgal has built up with this superb competition and I applaud the inspiring leadership Brandon de Souza displayed with his great coaching skills.

NIKHIL SAMPAT Director, Naranjee Hirjee I was surrounded by business leaders, but weren’t sitting across a table in an air conditioned office. This topic of discussion were birdies, bunkers, swing plane and fairways. This was my third year participating in the recently concluded OER CEO Golf Event and as always it has been a grand success. After the 9 hole game, it was great to team with three non golfers for a few holes and later on with my wife Minita for

the Snakes and Ladders game. I look forward to the same event in 2010.

MADHURSINH JESRANI Incharge, Khimji Watches OER CEO Golf is one of the most sought after event for the corporates of Oman and this year’s edition was par excellence, with so many top honchos under one roof. It was quite good to see so many CEOs, ambassadors all rubbing shoulders with each and making goods use of OER CEO Golf 2009 for networking with new people as well as strengthening old relations. Besides the regular tee off, the other events including the cultural programmes were a treat for everyone. The entire event was meticulously organised and every single details was planned to the tee, as it were. And it seems that there couldn’t be a perfect antidote to dispel the gloom of the global financial crisis than this golfing event which is considered to be the CEO sport. I must admit that all the supporters of the OER CEO Golf 2009 got excellent visibility and mileage.


EVENT

“WINNERS DIDN’T DO DIFFERENT THINGS, THEY DID THINGS DIFFERENTLY!”

these turbulent times, given the present economic slowdown and the overall negative sentiments that is prevalent. Khera deftly explained this through a series of analogies, real-life examples, and stories to drive home his point that the “bigger the problems, bigger the opportunities.” The motivational speaker also emphasised through many examples how experience reveals throughout history that success has resulted from overcoming problems. The more problems a person solves the greater the reward he receives either in money or in goodwill. Today, recession lends itself to one of the greatest opportunities to those who are solution focused. Those who can answer how it can be done rather than why it cannot be done. Also other interesting concepts on ‘performance’ and ‘leadership’, the differences between ‘authority’ and ‘influence’ and how to bring ‘personal values’ and ‘ethics’ at work were discussed and debated. Group exercises that were conducted helped in making the concepts easy to assimilate by the participants.

Shiv Khera’s one-day workshop ‘Blueprint for Success – Turn Setbacks Into Comebacks’ elicits a grand response

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hiv Khera the internationally acclaimed author and management guru recently held a self-improvement and personality development interactive workshop in Muscat. The session covered topics such as leadership, management, ethics and integrity among others. The event that was brought to Oman by NPA Events. Held at the Al Bustan Palace Hotel the day-long experience was supported by Oman Mobile 112

May 2009

and Omantel. The event titled ‘Blueprint For Success - Turn setbacks into comebacks’ - Inject New Vitality In Your Organisational Culture Based on Ethics and Integrity – attracted over two hundred senior level opinion and business leaders, top and middle-level executives, and entrepreneurs from Oman’s leading public and private sector enterprises and various business houses.

Taking on challenges The focus areas of this seminar was on how to manage and triumph over

Through this seminar, participants were also introduced to the many concepts of how to get lasting results through positive behavioural changes. By learning how to develop a culture that creates trust not only the participant, but also his/her colleagues and the organisation itself can benefit immensely through them. Sections that would be of great use to the organisation, through the participants, are about ‘empowering people and making them accountable’. At a more personal level, ‘inspiring, influencing and getting results’ and the knack of ‘building powerful teams that go the extra mile’ would make this seminar not just a useful one, but one that leaves the participants transformed for the better. Khera put to practical use his wideranging experiences in human psy-


chology and in boosting people’s sagging morale and confidence. By analysing the issues and by showing the participants the way to come up with workable solutions, that can be drawn from within oneself, this oneday workshop provided that muchneeded relief to the participants. The thrust area of Khera’s message was on focussing on the positive aspects more, rather than dwelling on the negatives. Bringing the speaker at this time greatly helped in boosting the spirits of the beleaguered business leaders of the Sultanate, who could well use some professional help shared by someone of Khera’s calibre and stature.

Everyone is a winner Apart from the seminar itself, the participants of the workshop were treated to many goodies – two BlackBerry Smartphones, sponsored by the event presenters Omantel and Oman Mobile, a gift hamper from Muscat Pharmacy, a grand buffet lunch ar-

ranged at The Gulf of Oman Ballroom, at the Al Bustan Palace InterContinental, and more usefully each participant received a welcome pack that contained an autographed copy of Khera’s international best seller ‘You Can Win’ which has sold over one-and-half million copies worldwide, and is translated into 14 different languages. Khera was himself gifted a BlackBerry Smartphone by the presenter of the event Oman Mobile and Omantel’s senior manager, training and career development, Anwar Masoud Al Kindi. After the successful completion of the event, Ashok Suvarna, executive director, NPA Events, said, “We are delighted at the way the day unfolded. It not only left the participants asking for more, but it also provided them with various tools and techniques that they could employ in bettering themselves both personally and professionally. For the sponsors, it was a great opportunity to connect with the right target

group in a setting that was plush and ideal, to share with them the features and highlights of their different products and services. We are truly pleased to see how well this event was received by the participants, and we have already got many more such requests to conduct programmes of this nature in the future”. The associate sponsors of the event were Khimji’s Watches; Muscat Pharmacy; Oman Orix Leasing Company; New India Assurance and the National Bank of Oman. The event’s media partners were the Times of Oman; Alam Aliktsaad Wala’mal and Oman Economic Review. The decor partner was Al Turki Enterprises and Ruwi Modern Printers were the Print Partner.

OER and Alam Aliktisaad Wala’mal were media partners for this event.

113

May 2009


CLOSE UP

BAHRAIN: AMBITIOUS BUT A REALISTIC BUDGET PUBLIC EXPENDITURE HOLDS A SPECIAL SIGNIFICANCE FOR BAHRAIN AS ONE THIRD OF THE COUNTRYâ&#x20AC;&#x2122;S GDP IS ACCOUNTED FOR BY GOVERNMENT SPENDING. THE GOVERNMENT IS AWARE THAT STEADY SPENDING IS VITAL TO AVERT THE THREAT OF A FINANCIAL CRISIS TURNING INTO AN ECONOMIC CHALLENGE By Dr Jasim Husain Ali

BD100mn ($265mn) has been allocated to help needy families to cope with living expenses due to inflationary pressures. Around 83,000 families will receive $132 every month in 2009 and 2010 114

May 2009

S

teady spending is vital to avoid turning the financial crisis into an economic one. At least this was the message of the parliament during the process of budgetary approval for several months. In fact, the parliament delayed its approval of the two-year budget by some 70 days after the start of fiscal year 2009 to secure specific legislations pertaining to higher spending. Amongst others, legislators insisted the inclusion of an appropriation of Bahrain Dinar 100mn ($265mn) to help needy families to cope with living expenses due to inflationary pressures. Some 83,000 families will receive $132 every month in 2009 and 2010 to help deal with the consequences of inflationary pressures and liquidity crunch. Members of parliament argued convincingly that the economy was experiencing a unique situation characterised by the absence of growth in prices on the one hand and continuation of adverse effects of inflation on the other. In

other words, MPs pointed out to the phenomenon of prices of many goods remaining high though not increasing further. For fiscal year 2009, total expenditure amount to $5.5bn versus an income of $3.7bn leaving behind a projected deficit of $1.7bn. The statistics for 2010 suggests a spending of $5.8bn, income of $3.9bn and a shortfall of $1.9bn. The figures compare favourably with actual spending of $4.8bn in fiscal year 2007 (actual statistics for 2008 were not available at the time of preparing this article).

Oil dependency The budget assumes an average price of $40 per barrel, in turn a reasonable figure in current circumstances. Originally, the authorities submitted the budget with an assumed oil price of $60 per barrel. However, legislators pressed officials for a more realistic oil rate in the light of prices in the first two months of 2009. Eventually, the authorities used $40 per barrel for 2009 and 2010, the same price as in fiscal year 2007 and


CLOSE UP Overcoming deficit

2008. However, such an assumed price was regarded conservative in 2007. The petroleum sector accounts for 76 per cent of the total income in both fiscal years, confirming the significance of the hydrocarbons sector despite all the claims of economic diversification. Bahrain generates its petroleum revenue from sale of crude oil from both offshore and onshore fields plus gas. Abu Saafa field, which is shared with Saudi Arabia, accounts for around 80 per cent of the total oil revenue. Bahrain’s own onshore field plus sale of gas accounts for 10 per cent apiece. The balance state income (24 per cent) is generated from the sale of utilities, customs on imports, return on investments and grants extended by friendly countries.

The statistics point out to serious budgetary deficit, comprising about eight per cent of gross domestic product (GDP) in each fiscal year. Yet, the planned monetary union in 2010 involving all Gulf Cooperation Council (GCC) countries except for Oman limits budgetary deficit to three per cent of the GDP.

Spending matters Compared to 2008, projected expenditures are down by eight per cent in 2009 and four per cent in 2010, reflected solely in funds allocated for projects. However, the matter partly reflects policy changes. Unlike earlier budgets, allocated amounts for projects in 2009 and 2010 do not include figures for electricity and water. The matter relates to setting up of an authority for electricity and water, which in turn depends on its own (generated) income to help financing its infrastructure projects such as setting up substations (the other source of spending on utility projects are private sector investors who are interested in developing power plants). In other words, for the first time, electricity and water commission (no longer a ministry) keeps its generated income for spending on projects (but not manpower). It is believed that spending on electricity and water projects would be more than $265mn in each of 2009 and 2010. Not surprisingly, the utilities authority has started the process of collecting delayed bills even if it meant disrupting the service from households and businesses. Separately, for the first time, the budget sets aside three per cent of current spending for emergency 116

May 2009

REAL SPENDING AS A PERCENTAGE OF ACTUAL SPENDING

COMPARATIVE CHART – 2009

COMPARATIVE CHART – 2010

purposes that arise during the fiscal years. The legislation is meant to ensure availability of funds to deal with emerging problems including disasters without having to resort to unplanned borrowing. It remains to be seen whether the authorities end up spending funds set aside for development projects or repeat the practices of the past few years. In 2007, officials spent merely 73 per cent of appropriated funds for capital projects. The whole fiasco relates to the fear of causing further inflationary pressures through stronger demand. Another restriction concerned capacity problem, namely shortage of supplies and qualified contractors.

Anyway, the deficit can be addressed in several ways. Chances are that the actual deficit would be less than that projected in both fiscal years. This assessment relates to the traditional practice of real spending being lower than planned. Actual spending on projects comprised 73 per cent, 76 per cent and 53 per cent of total allocated figures in 2007, 2006 and 2005, respectively. The authorities attributed relatively low actual spending in 2005 to delayed parliamentary approval of the budget for fiscal years 2005 and 2006 (it was approved in May 2005). Still, the parliament approved the budget for 2009-2010 in March 2009, thereby providing one such reason for potentially lower than projected expenditures. Still, the authorities could partially rely on reserves accumulated during the height of relatively high oil prices (2003 to mid 2008) to partially finance the shortfall. Yet, officials have the opportunity to increase debt level, which currently stands at about 18 per cent of GDP. The planned monetary union limits public debt to 60 per cent of GDP. The authorities have not disclosed specific instruments for financing the deficit, though this is expected to include a draw on accumulated reserves. Public expenditures are uniquely significant in Bahrain on the back of accounting for nearly one third of the country’s GDP. Clearly, steady spending is vital to avert the threat of turning the financial crisis into an economic challenge with untold consequences. The author is an eminent economist and Member of Parliament, Bahrain


Alam Aliktisaad Walaâ&#x20AC;&#x2122;mal


CONSUMER DURABLES

LIFE’S GOOD…AND GETTING BETTER H S Paik, President, LG Electronics Gulf, believes in the LG slogan (Life’s Good) to the hilt. The electronics and appliances giant is hiring, gaining marketshare, and is not cutting on R&D and marketing expenditure, despite the global economic conditions.

T

he first question that comes to mind, when any top executive from a global monolith visits Oman is: Is the global downturn affecting your performance? For some executives the question may be tricky; but not for H S Paik, President, LG Electronics Gulf. “For the countries that I handle in the Gulf, I believe that the first quarter will be better than last year. Oman is a country that will witness growth. I have high respect for our partners, OTE, and what they are doing in Oman,” he says.

Market leader With a marketshare of 35 per cent in air conditioners, 40 per cent in washing machines, and 30 per cent in appliances, LG dominates the consumer durables market in Oman. Going forward, Paik expects LG to continue to dominate the market and consolidate its position. “With a continuous focus on innovative products and a spate of launches, I believe we would be ahead 118

May 2009

Sunil Fernandes reports in the market place. We have proven that time and again, and would do so in the future as well. We could be headed for double digit growth here,” he says. An aggressive marketing strategy and a constant focus on Research and Development(R&D) have been important attributes in LG dominating the market. Interestingly, Paik believes that R&D and marketing expenditure would continue despite the global problems, while the company would look at other areas to cut costs. “We will not decrease our investment in marketing or Research and Development, despite a contraction in the global economy. If we invest now, we will reap rich dividends when good times are here, which will only help accelerate our progress. We currently spend in excess of $1bn in R&D and I only expect that to grow,” he says. On areas that are seeing improved cost efficiencies, Paik points to the

supply chain management. “There is a potential to save on the supply chain side. We are constantly striving to improve cost efficiencies in this area. But allocation for R&D and marketing are going to only grow,” he says. While LG has been a leader in several of the businesses it operates, there are also certain areas of business, that are challenging and Paik would like to see grow. “We would like to grow in the mobile phone market. LG is amongst the dominant players in the CDMA segment, however, we would like to be amongst the top three globally,” says Paik. As far as the Gulf market is concerned, there are certain areas that have been affected by the global economic downturn. “On average our performance in the Gulf is good, except for the system air conditioning market in the UAE. We are the leaders in the market there, and there is an adjustment that is taking place, which obviously affects a leader like us,” says Paik.


Alam Aliktisaad Walaâ&#x20AC;&#x2122;mal


SPOTLIGHT

STAYING COOL!

A comprehensive guide on air-conditioners including the history, design and style trends developed to help you endure the sunshine

The History

the business breakdown of air condi-

to cool their luxurious houses. Even

The Middle East isnâ&#x20AC;&#x2122;t exactly known

tioners, let us explain how it all began

as far back as the 2nd century china

for its pleasant summers. But thank-

and how the modern air con came

there have been records of some

full we can more than cope with the

into existence.

form of air conditioning. It is recorded that inventor Ding Huan, of the Han

heat thanks to an, often overlooked, invention called the air conditioner.

While air conditioning itself is a rela-

Dynasty, invented a rotary fan for air

But how did they come into existence

tively new invention, the cooling

conditioning, with seven wheels 3 m

and who was the true inventor of the

of buildings is not. It is known that

in diameter and was manually pow-

air conditioner? Read on to find out.

wealthy ancient Romans used aque-

ered. In 747, Emperor Xuanzong of

First and foremost, before we go into

ducts to circulate water through walls

the Tang Dynasty had a Cool Hall,

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May 2009


SPOTLIGHT

AIRCONDITIONING

called Liang Tian, built in the imperial

er. As the cistern water evaporated it

tients in his hospital. He hoped even-

palace and was said to have water-

cooled the air inside the building.

tually to use his ice-making machine to regulate the temperature of build-

powered fan wheels for air conditioning as well as a rising jet streams

In 1200AD, Abd al-Latif al-Baghda de-

ings and even envisioned centralised

of water from fountains. During the

scribed the use of ventilators in vari-

air conditioning that could cool entire

subsequent Song

written

ous households in Egypt. He reported

cities. Although his prototype leaked

records mentioned the widespread

that almost every house in Cairo has

and performed irregularly, Gorrie was

use of rotary fan as a means of air

a ventilator, and that they cost any-

granted a patent in 1851 for his ice-

conditioning.

where from 1 to 500 dinars depend-

making machine. Unfortunately, any

ing on their sizes and shapes. In fact

hopes for its success soon vanished

Even medieval Persia was said to

it is said that Ventilators were actually

with the death of his chief financial

have some sort of cooling system

invented in medieval Egypt.

backer; without the money he need-

Dynasty,

ed there was no way to develop the

for buildings during hot weather seasons. They used cisterns, which were

But it was only in 1820 that Brit-

machine commercially. According to

large open pools in the central court-

ish scientist

and inventor Michael

his biographer, Vivian M. Sherlock,

yards used to collect rain water, in

Faraday discovered that compress-

he blamed the “Ice King”, Frederic

conjunction with impressive wind tow-

ing and liquefying ammonia could

Tudor, for his failure, suspecting that

ers. These wind towers had windows

chill air when the liquefied ammonia

Tudor had launched a smear cam-

to catch the wind which was then

was allowed to evaporate. In 1842, a

paign against his invention. Dr. Gorrie

directed, using internal vanes, down

Florida physician John

Gorrie used

died impoverished in 1855 and the

into the building, over the cistern and

compressor technology to create ice,

idea of air conditioning faded with

out through a downwind cooling tow-

which he used to cool air for his pa-

him for the next 50 years.

Cool, Stylish and Energy-Saving

P

rojects & Engineering Division (PED) of OMASCO, the company with diverse interests in Oman has created a dynamic platform for Oman’s engineering needs. The division offers total Air-Conditioning Solutions for residential, commercial & industrial projects and promotes complete range of Panasonic Air-Conditioning products. PED has a highly qualified team of engineers to look after the design & sales activities. And an efficient after sales service network all over Oman to ensure complete customer satisfaction. This has resulted in Omasco being the market leaders in solution business. Panasonic’s new air conditioners are more attractive than ever. Cool and stylish, the distinctive, beautifully curved form is designed to complement today’s modern interiors. What’s more, advanced technology assures efficient operation so you can also enjoy energy savings. Add to this a high-performance air purifying function and you have a revolutionary air conditioner. The range include wall mounted, floor standing & ceiling mounted split air conditioners and ducted & cassette type air conditioners from a selectable range of 1ton to 5 tons. Panasonic air conditioners are equipped with ‘advanced-plus’ 122

May 2009

e-ion air purifying system with newly designed patrol sensor. This high-performance air purifying system removes contaminants from the air, so your family can enjoy a cleaner, fresher, and more pleasant home environment. Cooling is possible even when the outside temperature is 55ºC. In consideration of the severe temperature conditions in desert regions of the Middle East, units feature a highly durable compressor and fan motor to maintain room comfort even under the hottest conditions. The performance and quality of air conditioning greatly depends on compressor, the heart of air conditioning, and its conditioner. Panasonic has been supplying Super Tropical compressor for improvement of living environment since 2001. This compressor has a high efficiency compared to reciprocating type compressors and therefore achieves high efficiency under high load conditions. Also, Panasonic has found a way to triple the life of their condensers, using a layer of their original anti-rust coating. This special coating lets you enjoy more years of reliable comfort plus extra economy over the long run. Panasonic’s condenser has 3 times higher resistance against corrosion. This special coating assures longer condenser live for years of reliable comfort.


SPOTLIGHT

AIRCONDITIONING

In 1902 the first modern electrical air

known as evaporative cooling) and

rofluorocarbon gas, Freon, in 1928.

conditioning

was invented by Willis

change the air in the factories, con-

The refrigerant was much safer for hu-

Haviland Carrier. Designed to improve

trolling the humidity so necessary in

mans but was later found to be harm-

manufacturing process control in a

textile plants. Willis Carrier adopted

ful to the atmosphere which resulted

printing plant, his invention controlled

the term “air conditioning” and incor-

biological

not only temperature but also humid-

porated it into the name of his com-

an increase in skin cancer, damage

ity. The low heat and humidity were

pany. Early commercial applications

to plants, and the reduction of ocean

to help maintain consistent paper

of air conditioning were primarily to

plankton.

dimensions and ink alignment. Later

provide cool air for industrial process-

Carrier’s technology was applied to

ing rather than personal comfort but

Freon is a trademark name of DuPont

increase productivity in the work-

over time air conditioning came to be

(an American chemical company) for

place. This led to the formation of The

used to improve comfort in homes

any Chlorofluorocarbon (CFC),

Carrier Air Conditioning Company of

and later in automobiles. In fact it

drogenated

America to meet rising demand. In

wasn’t until the 1950s that Residential

drofluorocarbon (HFC) refrigerant. The

1906 Stuart W. Cramer was exploring

sales expanded dramatically.

blend most used in direct-expansion

consequences

CFC

including

(HCFC),

Hyor Hy-

home and building comfort cooling is

ways to add moisture to the air in his textile mill. Cramer coined the term

The first air conditioners and refrig-

an HCFC known as R-22. It is to be

“air conditioning”, using it in a patent

erators employed toxic or flammable

phased out for use in new equipment

claim he filed that year. He combined

gases like ammonia, methyl chloride,

by 2010 and completely discontinued

moisture with the ventilation to “con-

and propane which could result in fa-

by 2020. Several non-ozone depleting

dition” (This evaporation of water in

tal accidents when they leaked. Tho-

refrigerants have been developed as

air, to provide a cooling effect, is now

mas Midgley, Jr. created the first chlo-

alternatives, including R-410A, invent-

Samsung range of commercial air conditioners

S

amsung offers wide range of Commercial Air conditioners in Ducted Split and Cassette type units. In Ducted Split type segment, Samsung offers 18k~72k Btu/h Capacity which is consisting of Side and Top discharge unit and in Cassette type, 18k to 48k Btu/h capacity 4 way type. Among all these products, Samsung Top discharge outdoor unit provides more flexibility for installation with piping of maximum 50 metres between indoor and outdoor unit. Further, it occupies the lowest installation space. Its foot print area is 43% smaller, in comparison to competitor’s outdoor units of the same capacity. In addition to this Samsung’s top discharge out door unit is adapting a flare type connection. As a result it doesn’t require welding when it is installed and because of its flare type service valve, installation time is faster than the welding type and there are no impurities and oxides in the pipes caused by welding. Also, in order to fit your building requirements, you can choose either the top discharge outdoor unit or the side discharge outdoor unit. Recently Samsung Electronics has announced commercial airconditioning business as one of the 8 major future growth Engines. To achieve leadership in the market samsung will con124

May 2009

tinuously invest on this business in terms of R&D which will provide superior technology and quality to customers The Duct, which is a kind of Samsung indoor unit, reduces time and maintenance costs by keeping parts easily accessible. And Samsung’s MSP Duct air conditioners offer different solutions for any shape room allowing for specific air flow requirements. Samsung’s ducted split air conditioners are equipped with static pressure control to ensure efficiency and silent operation. All Samsung ducted split air conditioners are equipped with antibacteria filter system to provide cleaner and healthier air. The anti bacteria filter traps dust particles and suppress proliferation of molds and bacteria. The Samsung DVM plus III (Digital Variable Multi system: website - www.dvmsystem.com) is a module multi system air conditioner that has the world’s largest capacity ( 8 ~ 64HP ) with the application of a DVI ( Digital Vapour injection) compressor and can connect up to maximum 64 indoor units regardless of type of indoor unit. The Samsung DVM plus III also boasts the highest COP levels, more compact size with larger capacity and more flexibility for installation with the longest piping of up to 220 meters between the indoor and the outdoor unit.


SPOTLIGHT

AIRCONDITIONING

ed by Honeywell in Buffalo NY and

bounds, in countries such as the Mid-

trend has received added impetus in

sold under the Genetron AZ-20 name.

dle East the segment has witnessed

recent years with the lack of sufficient

enormous growth. In the GCC for in-

generation, transmission and distribu-

Innovation in air conditioning tech-

stance, massive construction drives

tion infrastructure to meet projected

nologies continue, with much recent

spurring the development of numer-

power demands.

emphasis placed on energy efficien-

ous residential and commercial real

cy and improving indoor air qual-

estate projects and high population

The Middle East has been a major

ity. As an alternative to conventional

growth have fuelled demand for air-

market

refrigerants, natural alternatives like

conditioners and cooling systems.

ants and refrigerators, chiefly due to

for

air-conditioners,

cool-

the region’s arid climatic conditions.

CO2 (R-744) have been proposed. We only have to wait and see what

The boom in real estate development

However, in recent times, other fac-

comes of it.

together with the growing emphasis

tors have been reinforcing the mar-

on greater cooling facilities and the

ket’s growth in the segment. These

The Current Business of Commer-

resultant increase in power demand

include improvements in lifestyle, the

cial Cooling

have all contributed to creating huge

mushrooming of numerous malls and

While globally the air-conditioning

opportunities for manufactures and

hypermarkets all over the region and

market is growing by leaps and

distributors in district cooling. This

other developmental activities, all of

Opportunity to bring home a General Air Conditioner

T

he Air Conditioning division of Khimji Ramdas has announced the exchange offer wherein the customers can get their old window ACs replaced by brand new General air conditioners. The customers can give back their old window ACs of any brand, working or non working condition and buy ‘General’ brand of air conditioners and get a good trade off value. The scheme is available at Khimji’s Bait Al Ahlam showrooms across Oman. The scheme is drawing a lot of interest among people as it bears a sense of up grading their homes, Says Mr. V. Jayachandran, the divisional manager of AC division. The customer gets a brand like “General” and the assurance of Khimji’s AC Division’s prompt and effective services, he adds.

al’ is leading the way in terms of performance, reliability and design. “Khimji’s wide distribution and services network is another factor which has helped ‘General’ reach this milestone” Says V. Jayachandran, Divisional Manager Khimji’s Air Conditioning Division. Our state of the art showrooms known as Khimji’s “Bait Al Ahlam” at MBD, Ghubra, Ruwi, Al Khoudh, Sohar, and other showrroms in Nizwa, Sur and Salalah too ensure the reach to all corners of Oman, he adds. “Bait al Ahlam” which means House of Dreams, is a concept store which caters the needs to build your dream house. Here you can select from many premium brands of building materials, electrical, paints, furniture, kitchens, appliances and air conditioners.

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 and ventilation, Khimji’s professionals are ready to provide quality products, technology and installation expertise.

With breakthrough innovations ‘General’ has come up with products with unique features. One of the latest innovations is VRF (Variable Refrigerant Flow) technology. This is a high performance system utilizing innovative triple high efficiency compressors and advanced refrigerant flow control technology. This system is capable of connecting upto 16 indoor units to one outdoor unit. The result is better energy savings and low operating noise.

The areas of operation include: Pre construction designing; Products; Cost estimates; Installation; Commissioning; After sales services. The overwhelming success of the ‘General’ brand is the result of its extraordinary quality to perform in extreme climatic conditions and Khimji’s Air Conditioning Division’s capabilities to handle air conditioning jobs of diverse nature with utmost attention. ‘Gener126

May 2009

Having pioneered mobile service stations to facilitate wide reach of its service support, Khimji’s focus has been not only ‘just services’ but “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.


TO AVAIL THE OFFER PLEASE CARRY THIS COUPON


SPOTLIGHT

AIRCONDITIONING

which has spurred demand for air-

a world’s first from SAMSUNG,” says

design accent to turn the air-condi-

conditioning products.

Ajay Ganti, General Manager, SARCO

tioner into a piece of art, to make it a

distributors for SAMSUNG in Oman.

part of your interior decor. So basically, the AC is a lifestyle product rather

“Air conditioners have come a long

than just a cooling product”.

way from being just a cooling ma-

He goes on to add that newer models

chine. Today we have models that

of air-conditioners “incorporate what

can detect and eliminate deadly dis-

is called GOOD SLEEP MODE, which

In Oman, the air-conditioner and refrig-

ease causing agents like SARS and

senses your body temperature to reg-

erator market account for a whopping

bird-flu virus and other harmful patho-

ulate the room temperature. There is

65 to 70 per cent of all business in the

gens this is done through a technol-

a lot of focus on hygiene and health.

white goods market. “The market size

ogy called MPI [Micro Plasma Ion],

There is also a lot of impetus on the

of air-conditioning products is around

DAIKIN: Reliable solutions provider in ACs

D

aikin Industries Ltd, Japan established in 1924, is a pioneer in the field of air conditioning with a clear motto of producing high quality air without harming the environment for people all over the globe.

Daikin holds top position in Japan and second position in the world (turnover wise) and is expected to reach top with more than USD13 billion turnover. Daikin has a well-established presence in eight major markets in the world, operating with 7 factories & more than 25 regional offices across the globe. Daikin’s seamless research and innovation have led to the invention of many air conditioning systems, compressors, refrigerants and components .The success story goes back to 1987 when the group invented VRF system, patented under the name VRV (Variable Refrigerant Volume). VRV redefined the conventional air conditioning system with its numerous advantages like 40 per cent saving in electricity, 100 per cent Japanese origin, light weight, compact and low noise out-door units, Ideal for partial load requirements etc. Daikin introduced the high ambient VRV+ in 1999, subsequently VRVII system was introduced in 2006 with environment friendly R410A green gas and now VRVIII with various enhanced features suiting the complex requirements of the customers. VRVIII allows 58 indoor units to be connected to a single system. The new Daikin VRV III pushes the limits to deliver advanced solutions and even more flexibility for your engineered and design-build projects. Reliability is assured throughout, with high ambient specifications, worry-free design and function. And our proprietary Double Backup Technology ensures constant operation. Muscat Electronics LLC is associated with Daikin Industries Ltd., Japan for the past 30 years as their Sole Distributor for the Sultanate of Oman and has an excellent presence and repu-

128

May 2009

tation in the market having installed all large projects consisting different types of ACs like split, Cassette, Ducted, Package, chillier & VRV systems. ME has successfully commissioned 50 VRV projects in Oman and has even received an award from Daikin Industries Ltd, Japan for achieving the largest number of VRV system in Middle East during the year 2006. Within the last 5 years ME has installed more than 25,000 ton of VRV in Oman, which also includes the single largest VRV installation in the world. Few major Daikin VRV Projects in Muscat are as below. Sohar Palm Garden Residential Project (6000 TR); Residential Project Wadikabir (1976 TR); PDO various projects (1800 TR); Bareeq Al Shatti Commercial & Residential Project, Shatty Al Qurum (528 TR); Space Designers Commercial Building @ Ghoubra (458TR); SSF Salalah (221 TR); SSF Muscat (218 TR); Oman Refinery 205 TR); Sohar Fertilizer 428 TR); Kobe Steel-Sohar (82 TR); Oman Medical College-Sohar(144 TR); SQU Nursing College (256 TR); VIP villas (various); Shell Rep Office Oman Muscat Electronics boast of highly skilled design team for VRV and conventional air conditioning systems including ducting and piping. All installations are supervised by own Engineers and commissioned by factory trained engineers. Muscat Electronics brings about an exceptionally efficient customer support facility with its advanced computerized system analysis. All calls are attended within 2 Hrs. 24 Hr service is available on prior arrangement / Annual Maintenance contract. The company’s fully equipped service team takes care of the capital and the suburbs, Batna Coast, and other regions from bases in Nizwa, Sohar and Salalah. Efficient after sales service, preceded with the above facts, is itself an advertisement and a display of the strength of Daikin -Muscat Electronics team in Oman.


SPOTLIGHT

AIRCONDITIONING

200 K units a year in Oman. The mar-

split and ducted air-conditioners. This

friendly and reliable cooling solutions.

ket size for Refrigerators is around

is in line with global trends. Apart from

The Omani government, in keeping

80 K units a year. Also due to a very

lifestyle changes and economic devel-

with these trends and demands, has

fertile commercial / industrial projects

opment, price reductions in split units

established the highest standards

scenario,there is also a great business

have driven demand for these mod-

in setting requirements for all new

opportunity for different air-condition-

els of air-conditioners. What’s more,

projects being developed for both the

ing concepts like chiller, ducted type or

the air-conditioner which was earlier

tourism and real estate sectors.

DVM(digital Variable Multi),” says Gan-

regarded as a seasonal product now

ti. Traditionally, the Sultanate has been

boasts decent sales figures even dur-

In order to meet these requirements

a market for window ACs. That trend

ing off-season. In Oman extreme tem-

and to reduce the demand on the gov-

is rapidly changing as improved stand-

peratures and high levels of humidity

ernments for energy the District Cool-

ards of living and more sophisticated

have spurred the demand for high

ing solution has been developed and

lifestyles push customer preference to

quality, energy efficient, environment

implemented throughout the GCC.

Hot brands for cooler life-style from OMEC-SBNAH

O

man Modern Electronic Co.(OMEC) & Saeed Bin Nasser Al Hashar (SBNAH), the consumer products division of Al Hashar Group, is the distributor of many leading air-conditioner brands in the Sultanate

proven against bird flu virus. 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 at all the company outlets, authorized dealers, chain stores and hypermarkets.

SHARP Air Conditioners – Healthy Lining. Sharp 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. One of the factors that saves 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 Asthma Society of Canada and British Allergy Council. Sharp’s PlasmaCluster Ions are the combination of positive and negative ions. The positive Ions deactivate viruses, bacteria, molds and undesirable odours. In contrast, negative ions have the effect of only refreshing the air in a room.

VOLTAS Voltas, a member of the TATA Group, is India’s largest and most respected business conglomerate. Innovation (means value for the consumer) continues to be the guiding light for Voltas Limited. Over the year, Voltas has progressed from just an air conditioner manufacter to provider to one that offers comprehensive solutions across categories. Voltas provides a wide range of products in the cooling segment such as air-conditioners, water dispensers and chest freezers. The innovative technology of Voltas offers a wide range of features for each category. Voltas’s ‘Vertis’ window and split air-conditioners “with power of intelligence” are the range of future tech air-conditioners that virtually redefine conventional air-conditioning. Vertis ACs are compact in design, user friendly, saves power and cools efficiently – that makes a perfect buying sense. The Voltas air conditioning solutions caters both the institutional and the retail segments.

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

FRIZAIR ‘FRIZAIR’ air-conditioners are a well known brand from India. The air-conditioners are manufactured by Frizair Corporation, India who also manufactures air-conditioners for well known international brands being sold in India. Frizair brand of ACs have been sold in Oman for many years now and the qualities of Frizair units have proven themselves in Oman’s climate. These units are a value for money for any customer looking for a quality product at an affordable price.

of Oman.

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May 2009


SPOTLIGHT

AIRCONDITIONING

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

T

he maintenance of an AC is

maintained at a nominal cost with little

hygienic and prevent birds from mak-

an area that most consum-

hassle. The following few tips will help

ing their nests in air gaps, rodents

ers and commercial clients

one maintain an air-conditioner in an

creeping in and air from leaking.

need to learn about. It is

easy simple way: Clean the filter of your AC once a fort-

not always necessary to order dealer service when a little bit of care and

Understand that an air conditioner,

night, or when the indicator lamp on

maintenance on your part will go a

apart from cooling, also conditions

the front panel lights up. Dirty air fil-

long way in improving the working life

the air inside your room like humidity,

ters force your system to work harder

of your air conditioner

dust, order, fungus, bacteria, etc. All

to push cool air through your home.

good quality ACs have cooling, hu-

This uses more energy and places

Simple things such as regular clean-

midity control, dust removal, anti fun-

extra strain on the air conditioning

ing of the filters, helps increase the

gal and anti-bacterial functions and

system. Take the filter(s) out and hold

life of your AC. However, it is more

these need to be used properly.

it to the light. If the dust on the filter is so think that you can’t see much

prudent for you to enter into an annual maintenance contract with the

Split ACs are now affordable, very

light shining through the filter, it’s time

authorised service centre of your

quiet and energy saving as compared

for new filters. A clean air filter, unob-

brand of AC, so that the units are

to window ACs. They are also more

structed by the dirt and other debris,

GENETCO – Tops brands under one roof

G

eneral Electric and Trading Co. (GENETCO) is the sole distributor of popular brands of air-conditioning products like Sanyo, Videocon, York and Gree in Oman

reputed brands and sells over 25,000 units per year in Oman under various brand names. Gree air-conditioners are sold in more than 100 countries and have offices and distributors in more than 60 countries.

GREE GREE air conditioners and splits are the fastest growing brand in Oman today. Within a very short span GREE air conditioners are seen as reliable and trouble free. This relatively new brand has the best word of mouth recommendation from both, end users and sellers, equally. Excellent value for money is also making it a popular brand.

Gree has four large production plants at Zhuhai, Danyang, Chonqing and Brazil with an annual production capacity of 10,000,000 units.

Gree Electric Appliances Inc. of Zhuhai, the largest manufacturer of air-conditioners in the world, was founded in 1991 with employee strength of 25,000. Today it has an installed capacity of over 13 million units. It is also the OEM supplier to many 132

May 2009

Gree was launched in Oman by Genetco in January 2006 and has already become a household name and is easily available at all Genetco showrooms and hypermarkets across the country. Gree air-conditioners are available in window (1.5 tons and 2.0 tons), splits (1.5 ton and 2.0 tons) and floor standing (2 ton and 4 ton) with both compressor types. Gree is also into chillers and ductable (package units) besides manufacturing air-conditioners.


SPOTLIGHT

AIRCONDITIONING

will save you money on energy costs

the drainpipe be connected properly

the room, you can adjust the temper-

and prolong the life of your air condi-

to prevent foul smell from entering

ature settings. Your electricity bills will

tioner. If you do not know where your

through the pipe.

not be high as the compressor will shut down on reaching the set tem-

air filters are or how to replace them, ask your HVAC technician to show

Keep the exhaust fan of your bath-

perature. At such times, the AC can

you during an inspection.

rooms ON when you are at home.

be turned off after 10 PM as the room

Keep the doors of your rooms open

Keep the split AC ON even when

degree C and a ceiling fan running at

for a few minutes every day to allow

you are out of home at a tempera-

slow speed will give you comfortable

some fresh air to enter. Do not spray

ture of 27 degree C. This will keep

sleep.

any type of deodorant or perfume into

your home cool and healthy, espe-

your split ACs. Doing so will result in

cially when the outside temperature is

If you own a villa, plant trees around

foul smell, necessitating a cleaning of

above 42 degree C, with high humid-

the building, as these can help you

the indoor unit.

ity. A good quality AC is meant to be

save on your electricity bills.

temperature will remain at around 25

ON 24 hours a day. Insulate your rooftop professionally

Avoid smoking in an AC room as indirect smoke can harm other family

In Oman today, an AC is needed for

and use good quality insulated bricks

members and it is very difficult to re-

not more than seven months a year.

for the walls. Use thick curtains so

move the odour even by servicing.

Using the AC when indoor tempera-

that the heat rays do not enter the house / flat. Keep the

always

outdoor unit of your

turn the thermostat

split air conditioner

and outdoor unitâ&#x20AC;&#x2122;s

in a shaded area or

breaker

For

doing

safety,

off

before

place it in such a

any

work

way that afternoon

around that outdoor

sunlight does not hit

unit. The coil can

it directly.

be cleaned using a soft-bristle brush to gently sweep the

ture is less than 25 degree C is a

Get the AC checked and serviced by

fins. Always brush in line with the fins,

waste of energy. Between November

your distributor once a year for any

and be gentle because the fins can

and March, do not switch ON the AC

gas leak and get the outdoor unit

bend easily. Because the fan pulls

in fan mode, instead use a ceiling fan

washed using high pressure water.

air through these fins, you can ex-

that will give you comfortable and

This will help you save on your elec-

pect to find dust clinging to the fins.

natural sleep.

tricity bills. Cleaning the filter every fortnight is very important to save en-

Removing this dust and other debris will reduce resistance and increase

When the outside temperature goes

ergy. Users themselves can do filter

efficiency.

above 42 degree C, keep the bed-

cleaning and use service centres for

room and living room ACs ON at a

other routine services.

If you smell bad odour, it normally

temperature setting of 27 degree C

will not be from your AC but from

even if you are out of the room. This

Try to select energy-efficient ACs

your carpet, curtains, linen, exces-

will prevent the room walls and roof

Electricity bill of a three-bedroom

sive sweat, etc. However, if the filter

from becoming excessively hot. Hot

villa or apartment with five occupants

is not cleaned routinely or the drain-

walls and roof lead to continuous run-

under above conditions will not ex-

age is clogged and water remains in

ning of the ACâ&#x20AC;&#x2122;s compressor, resulting

ceed RO45 per month in peak sum-

the drain pan for long, it can cause

in excessive power consumption and

mer, even as one stays fresh and

foul smell. Here, it is essential that

inefficient cooling. When you re-enter

comfortable.

134

May 2009


SPOTLIGHT

UNDERSTANDING INDUSTRY JARGON You may have heard of terms like BTU, tonne, etc., when you talk about ACs, but do not know what they mean? Get to know industry jargon that will help you select an AC or refrigeration product that best meets your needs What size air conditioner do I need?

than one large unit. Your dealer will

measures an air conditionerâ&#x20AC;&#x2122;s energy

The cooling capacity of an air condi-

have additional details.

consumption and efficiency. A higher EER rating means that your AC is

tioner is measured in British Thermal

consuming less energy.

Units (BTU) and the capacity you re-

How often should I clean the filter?

quire depends mostly on the size of

To ensure maximum cooling capacity

the room you need to cool. If you buy

and efficiency, you should keep the

What is the tonnage in ACs?

an air conditioner that is too small, it

filter clean. During peak usage times,

The unit of measure used in air condi-

will not cool adequately. If you buy

the filter should be inspected on a

tioning to describe the cooling capac-

one that is too large, the air condition-

weekly basis to make sure that it is

ity of a system. One ton of cooling is

er will cool the room before it dehu-

not clogged with dust.

based on the amount of heat needed to melt one ton (2000 lbs) of ice in a

midifies and this can leave you feeling clammy. For larger areas, sometimes,

What does EER mean?

24 hour period. One ton of cooling is

two smaller units are more efficient

The EER, or Energy-Efficiency Rating,

equal to 12,000 Btu/hr.


GIZMOS

MARKET WATCH LIPSTICK FOR YOUR HAND Irresistibly feminine, eminently sophisticated, Lipstick boasts the sheer splendour of fine gemstones, sparking a new direction in jewellery terms. The sharp design of this jewel-watch is based on a slim, oblong case, with square or round section, slightly or opulently set with gemstones. The case is secured with twin fastenings to a galuchat strap, featuring a cylindrical or a square decorative end piece on the opposite edge to match the symmetry of the case. Made of red or white gold, the end piece bears the engraved brand and logo of de Grisogono Geneva.

GET INTO THE GROOVE Sony Ericsson has quite a good reputation for bringing out great multimedia smart phones. The latest to join its ‘walkman’ range is the W205. With it you can get the most out of your music and favourite radio channels with Walkman player, FM radio and TrackID music recognition. The slider mobile phone comes with a complete package of entertainment features and the power to set up playlists to ensure you have the right music no matter the occasion. You can also tune into the FM radio to listen to the latest news, music, sport commentary and talk shows.

KEEP IN TOUCH As the newest flagship edition to the Ultra range, UltraTOUCH is a truly beautiful full-touch mobile, boasting touch screen technology and a sophisticated design packed with multimedia features. Centre stage is the 2.8” AMOLED antiscratch full touch screen, which offers bright and vivid colours. Its embedded 8 mega pixel camera with dual power LED flash and a smile shot mode. It also offers GPS navigation and geo-tagging via the GPS chip enables the user to tag photos with geographic information. The UltraTOUCH is also powered with HSDPA 7.2 Mbps, offering speedy internet access. 136

May 2009

A LIVE REVOLUTION Feast your eyes on the next generation of home entertainment – the Onlive Service. OnLive is a revolutionary, on demand video game platform delivering the latest and most advanced games instantly, on any TV via a sleek, inexpensive MicroConsole, or on almost any PC or Mac by streaming it through the net. Even entry-level computers will play the highest performance games! The OnLive Game Service even supports a live community. A revolutionary user interface allows fans to watch thousands of live games in action, join in at any point, share their exploits with friends through social networking tools, or make Brag Clips to showcase their skills.

WATERPROOFING MUSIC Ever wanted to listen to your favourite tracks while taking a swim? Here’s your solution in the form of the AquaBeat – a waterproof audio player. You can store songs, audio books, podcasts and other audio files for listening on the go and in, under or near the water. It can be used safely in up to 10 feet of water, comes with 1GB memory and supports MP3 and WMA files. A very thoughtful feature is the player’s capability to float in the water, enabling quick recovery if dropped and to prevent from falling altogether it can be easily attached to swimwear, goggles or any other apparel.

IONIZE YOUR LIFE Presenting the Acer AspireRevo - the world’s first PC to feature NVIDIA ION graphics, which are 5-10x faster than typical integrated graphics. Despite being no larger than a typical hardcover book, the AspireRevo is a fully capable desktop with advanced graphics and impressive multimedia features. Equipped with NVIDIA ION graphics, the system features outstanding 1080p HD video with true-fidelity 7.1 audio, DirectX 10 graphics with advanced digital display connectivity, sharing digital photos, surfing the web, and other tasks consumers expect from full-size systems. It even supports Blu-ray movies, provided you connect an external Blu-ray movie player of course!


EXECUTIVE WELLNESS

DE-STRESSING

Meditation is a scientific method to de-stress yourself to achieve a better work life balance and better output

T

he value of meditation to mitigate day-to-day stress related pains and pressures is doubtless. Today most of the medical community is prescribing meditation as an easy and risk free alternative way to get rid of blood pressure, diabeties, and coronary ailments. Not only this but meditation also relieves asthma, insomnia, and numerous nervous disorders born due to extreme stress in physical, mental, and emotional states. With its origin in the ancient religious and spiritual traditions and practices, meditation has an astounding capacity to wipe off stress. Meditation works scientifically. Researchers have realised that when one is meditating many changes take place in the human body.

What happens during stress? When one is stressed the sympathetic nervous system causes the heartbeat and the breathing rate to increase, the blood vessels to narrow, which restricts the flow of blood. This creates an unseen havoc in our system making us feel tired. On the other hand the parasympathetic nervous system brings the heart and the breathing rate

to slow down and the blood vessels to dilateâ&#x20AC;&#x201D;improving the blood flow. Meditation strengthens our parasympathetic nervous system. It controls the uneven flow of blood and oxygenates the mind thereby making it more alert and agile

What is meditation? Meditation is learning to focus attention, remaining at the same time, mindful of thoughts, feelings, sensations and to observe them in a nonjudgmental way. The regular practice results in a calm and composed mind, which can relate lackadaisically to its own flow of emotions and thoughts as well as to the othersâ&#x20AC;&#x2122; without qualms.

Open attitude During meditation one has to have an open attitude. This means letting distractions visit you naturally without judging them. When the practitionerâ&#x20AC;&#x2122;s attention digresses he gently brings it back to focus. Regular practice empowers a person with mental balance and inculcates benign thinking.

Types of meditation There are many types of meditations such as mantra meditation, relaxation response, mind full meditation and Zen Buddhist Meditation. Mindful Meditation comes to us from Buddhism. The transcendental Meditation technique is a legacy of the Hindu tradition. It uses a mantra (a word, sound or phrase repeated silently) to prevent distracting thoughts from entering the mind.

137

May 2009


AUTO TALK

ABSOLUTELY ROCKING

VOLKSWAGEN HAS FINALLY REVIVED ITS CULT CLASSIC BUT DOES THE THIRD-GENERATION SCIROCCO LIVE UP TO THE FAMILY NAME? MALCOLM XAVIER CRASTA FINDS OUT

S

ometime during the early 1970s, Volkswagen began work on a car that they internally designated as the ‘Type 53’. It had the underpinnings of the Golf but was re-engineered to be far sportier and the styling was penned by legendary automobile designer Giorgetto Giugiaro. Soon after going on sale in 1974 the car, now called the Scirocco achieved cult status. This was primarily due to the fact that the Scirocco was an affordable sports car with everyday utility. A heavily re-designed “Mark II” variant went on sale in 1982 and continued to do so until its production stopped in 1992. Then finally, at the 2006 Paris motor show, it was back in the form of the stunning IROC concept. But, it was not until late 2008 that we got our chance to see it in showrooms, and what a sight it was! From the front it has a very aggressive and imposing design followed by a very prominent character line running down the side of the low slung vehicle and ends in a rather controversial, and quite wide, rear end.

138

May 2009

Roomy feel Open the rather large doors and sink yourself into the very supportive leather sport seats and you will find yourself right at home. The seating position is just perfect and there is more than enough articulation of the seats and flat-bottomed steering wheel to make anyone comfortable regardless of their height. But the same cannot be said about the rear passengers. While the generous legroom is never an issue, unless someone really tall sits up front, getting in and out can be really tricky because of the low roofline. Aside from this the interior is the regular fare most of us have come to expect from VW. The cabin is tastefully designed, beautifully built and very user friendly and those triangular door handles are a great touch. The touch screen navigation and entertainment system is intuitive, responsive and a breeze to master. Overall it is a great place to be especially when you consider how devoid of wind noise it is. Although the same cannot be said about


the engine noise, it can easily be excused simply because it just sounds so good.

Drawing parallels On the road the Scirocco feels very much like a GTI, which is great because the GTI is quite easily one of the best hot hatches money can buy. This comes as no surprise when you consider that the two share the same gearbox, have similar engine output figures and weigh nearly the same. The aforementioned gearbox is of the DSG (Direct Shift Gearbox) variety. It is a dual-clutch sequential manual system and, just like in the GTI, is an absolute dream to use. The shifts are smooth and extremely fast and can even shift as fast as eight milliseconds as long as the onboard computer (the ECU for tech savvy people) is expecting it! The Scirocco is lower, slightly lighter and has a stiffer suspension system which makes it feel sportier and improves handling in exchange for some of its ride quality. The steering is predictable, sharp and full of feel. This is further complemented by its incredible high-speed stability. Combine these and it instils a sense of confidence in the driver that just seems to get better the faster you go, in a way it spoils and coaxes you into driving faster. On the equipment side you get the standard fare of equipment, which includes leather, touch screen entertainment system with navigation, bi-Xenon headlamps, 18â&#x20AC;? alloys and more. Even on the safety front it follows the same trend and comes with all the standard bells and whistles that cars in this class share such as ten airbags, ABS, TCS, and ESP etc. So, to summa-

SPEC SHEET

Torque: 240Nm@1700-5000rpm

Engine: 2.0L I4 TSI

Compression Ratio: 9.6:1

Displacement: 1984cc

Transmission: 6-speed DSG

Power: 200hp@5100-6000rpm

0-100kmph: 7.1s

rise everything, the Scirocco looks good, drives great, is well equipped and is reasonably priced. It is slightly more expensive than a GTI and not as practical either but then again it is more of a sports car than the GTI. As such it is slightly faster, sharper and definitely handles and looks better. So, if you are in the market for a good hot hatch then the Scirocco is a no brainer but if you want a little more practicality then there is always the GTI.

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May 2009


PORSCHE PANAMERA REVEALED TO THE WORLD

Porsche’s new, fourth model series – following the 911, the Boxster/Cayman, and the Cayenne sports utility – is of great strategic significance to the Company. Introducing the four-door Panamera, Porsche is making a strong move into the luxury performance segment. In this way Porsche is reaching brand-new groups of customers while at the same time offering existing customers of the marque a whole new range of options. Apart from the PDK (Porsche-Doppelkupplungsgetriebe) or Double-Clutch Gearbox and the first Start-Stop system in conjunction with automatic transmission, the technical innovations the Panamera is introducing for the first time in the luxury performance class include Porsche’s new adaptive air suspension with additional air volume on-demand in each spring as well as active aerodynamics featuring a rear spoiler with multi-dimensional adjustment moving up at the appropriate speed.

KIA OPIRUS TOPS US RESEARCH STUDY

Kia Opirus topped the large car segment in the Strategic Vision Total Value Index (TVI). “In a tough economic climate it is good to see that consumers are recognising the Opirus for everything that it has to offer,” said Michael Sprague, Vice President of Marketing, Kia Motors America. “Knowing that the Total Value Index considers not only the overall ownership experience but also what buyers feel the economic impact of their purchase will be is a testament to Opirus’ quality and value.” Strategic Vision 140

May 2009

SAYARTI: UNIQUE CUSTOMER CARE Sayarti’s unique combination of professional yet personal customer service allows it to recognise the individual requirements of its customers and cater to each one of them. Assessment clinics were put in place to evaluate and recruit ideal candidates for a totally new role within the conceptual Sayarti Autocare business. From a total of 30 candidates, eight people were selected to undergo a structured and carefully managed and monitored development programme. These candidates are now referred to as Sayarti sales advisors and they will be the customer interface personnel at the new, unique state-of-the-art Azaiba location. Hailing from various Omani backgrounds, this team has overcome varying degrees of education, communication skills and confidence levels to demonstrate a true enthusiasm for their roles in a new business that could rival any worldwide.

calculates the TVI by taking into consideration statements that owners make about value, including expected reliability, expected fuel economy, price paid and expected resale value. They then incorporated the importance of the variables that make up the ownership experience.

TAC LAUNCHES TEMSA’S SUPER BUSES

Safari SD, the stunning new super bus from TEMSA which is rolled out from TEMSA GLOBAL’s manufacturing fa-

cilities in Egypt is all set to redefine luxury and take bus travel in Oman to the next level. After its resounding success in Europe as the leading brand for high-end buses and coaches, Temsa surges ahead with the vision to become a world class global brand in the highend segment. This high-end coach offers superior luxury along with exceptional performance and enhanced safety. With an overall length of 12 meters, the coach is designed for more relaxing long-distance journeys offering ergonomically reclining seats with adjustable pitch, excellent air-conditioning and reduced noise levels. Thanks to the comfortable seating and state-of-the-art technology, TEMSA Safari SD transforms any journey into a pleasure trip. A high perfor ming vehicle supported by modern security applications, guaranteeing a safer travel, it provides the least operational cost on short distances thanks to its long lifespan and low fuel consumption.


NEW MINI CABRIO MAKES ITS DEBUT IN THE MIDDLE EAST The new MINI Cabrio has made its much anticipated debut in the Middle East. The small car with substance in abundance enters this market the same year the MINI brand celebrates its 50th birthday. The new edition to the MINI family boasts of some of the most advanced and sophisticated suspension technology. Tougher bodyworks, an invisible rollover bar behind the rear seats, which can activated in the event of a possible rollover and strengthened A-pillars make for the best protection possible in the event of a collision. Even while driving at a speed of up to 30 km/h, the soft top folds back fully automatically in just 15 seconds. This is a car simply cut out for open air driving in any weather condition. It provides the driver with an unique Openometer which records the time spent by the owner driving with the top down.

HYUNDAI TUCSON – EVERYDAY SUV

complement to a diverse lifestyle, the Tucson proves to be an ideal blend of form and functionality. For city drivers, the Tucson easily accommodates varied space requirements. In addition to city driving, the Tucson is well prepared for spontaneous off-road getaways as well.

DAIHATSU TERIOS 7-SEATER WOWS ALL Whether you feel like heading across town or cross-country, the ready-foranything Hyundai Tucson will get you there. Its standard safety technology, versatile cargo space and long list of amenities will make your journey even more comfortable. In fact, Tucson is so well-thought-out that it was named Highest Ranked Compact Multi-Activity Vehicle in Initial Quality by J.D. Power and Associates’ Initial Quality Study. Designed as the ideal

With an exterior combining sophisticated style with the dynamism of an SUV, the Terios fits perfectly whether you’re out in nature or in the heart of the city. The interior accommodates seven in supreme comfort in all seating positions. Whether you’re driving,

or a passenger, Terios will ensure you a pleasurable ride. The 1.5 Litre, 4 Cylinder DOHC petrol engine of the Terios has more than enough power to deliver a spirited, satisfying ride. You can expect a peppy 103hp@6000rpm.

NEW E 63 AMG ADDS POWER FOR DAILY USE

Mercedes-AMG, the high-performance brand within Mercedes-Benz Cars, has just released information on the new E 63 AMG which is due to arrive in the Middle East in the third quarter of 2009. The E 63 AMG accelerates from standstill to 100 km/h in just 4.5 seconds and has a top speed of an electronically limited 250 km/h. The newly designed interior of the E 63 AMG is an exciting blend of high-grade materials and functional sportiness. Other features include the dedicated, electrically adjustable AMG sports seats and the AMG sports steering wheel with AMG shift paddles.

‘SUMMER SENSATION’ WITH FORD

The Ford Fusion offers class-leading fuel economy and low cost of ownership. The vehicle’s value is further bolstered by stronger residual values, according to Automotive Leasing Guide (ALG), a California-based consulting and data-gathering firm. And now, it has become even easier to own a Ford Fusion. With Ford’s ‘Summer Sensation’ offering exciting prices and benefits, this is in fact the best time to own one. There’s also a Special Offer for Teachers and Bankers. Every visitor to the showroom would be eligible to participate in Ford’s Walk-in & Win Raffle, which offers high value gifts every fortnight.


BIL

D R A LBO

First of its kind vessel to watch underwater life

Her Excellency the Minister of Tourism, Dr. Rajiha bint Abdulameer bin Ali, announced at Marina Bandar AlRowdha the start of a brand new tourist attraction. The semi-submersible vessel Al-Khayran will take visitors on an ‘underwater tour’ of the coral reefs of Bandar Al-Khayran. Visitors will sit in air conditioned comfort 2 meters below the water line and watch fish, turtles and other sea creatures which inhabit the coral reef, through large viewing ports in the underwater hull. Passengers will embark in a fast transfer boat at Marina Bandar Al-Rowdha for the half hour trip to Bandar AlKhayran where they will board the semi-submersible. They will then experience the wonders of the underwater world in air-conditioned comfort for about 1 hour before re-embarking in the fast transfer boat for the return trip to the marina. The whole round trip will take just over two hours.

Omantel to establ establish special rates for handicapped The Chief Executive Officer O of Oman Telecommunications Company (Omantel) Dr. Amer Bin Awadh Al-Rawas said that the company is currently studying the creation of a special price for the use of the 3.5G network by to enable them to interact with their peers in the the deaf and dumb segment seg Sultanate and abroad through video calls in sign language. In a statement to the press following patronising the celebration marking the 14th anniverfor the Disabled, the 34th Arab Deaf Week sary of the Oman Association Ass and the Gulf Disabled Week held at the Omani Women’s Society in Muscat said, “Omantel Group looks after the disabled and individuals with special responsibility. It supports their activities and needs as part of its corporate co programmes with the objective being to integrate them into the society and individuals of the society.” make them equal to other o

nesses of Omani women through sale of wares. Visitors could shop for clothing, food, traditional items, handmade jewellery, perfumes and much more. Fun activities included games for kids, horse riding, henna, face painting and others.

FRiENDi mobile goes live in Oman

Bank Muscat conducts charity fair for women Bank Muscat Hearts, an informal society of the Bank employees who conduct voluntary social work, organised a Charity Fair in support of women entrepreneurs on 23rd April 2009 at the football field next to Children’s Museum in Al Qurum. The event was aimed at promoting home-based busi142

May 2009

FRiENDi mobile, The Sultanate of Oman’s new mobile telecommunications provider went live on Tuesday 28 April, marking the much antici-

pated official launch of the first mobile reseller/MVNO next generation mobile telecommunications provider to launch service in Oman and the MENA region as a whole. The launch saw the release of FRiENDi mobile starter packs across hundreds of shops across Oman.

Samsung sells half a million TouchWiz phones Samsung Electronics announced that it has sold more than half a million units of its TouchWiz Phone otherwise known as F480 in 10 months and created a stir in the global market for touch screen mobile phones. With riding strong sales of the TOUCHWiZ phone, Samsung sold more than 10 million units in its touch screen lineup, which is equivalent to achieving a 25 per cent share of the global market for full touch screen phones estimated at 37 million units.


BI Nawras supports Nab’s attempt Nawras is supporting Omani Nabil Al Busaidy in his attempt to be the first Arab and the first Omani to reach the North Pole. As official telecommunications partner for this expedition, Nawras is to ensure that Nabil - known as Nabs - can communicate with the rest of the world while he is making this trip. Daily bulletins from Nabs are being posted on BawaBaty for customers to read all about each step on the journey. Nawras has also contributed to the production of a film which is being made to record the ground breaking attempt to the North Pole. “This adventure is charting new territory for Oman and the Arab world and everyone at Nawras is thrilled to support this momentous attempt by Nabs to be the first Omani to reach the North Pole,” said Hussein Al-Fadhill, Team Leader Corporate Affairs at Nawras. “We are known for our trendsetting style at Nawras so I am sure no-one will be surprised that we have taken the initiative to support Nabs Al Busaidy as he embraces this ground-breaking polar challenge,”Al-Fadhill added.

D R A LLBO

Poultry Farms recently sponsored the ‘Environment Week’ in various schools at Suwaiq. Through this sponsorship A’Saffa aimed to help educate the sultanate’s young ones about the effects of environmental degradation, and its effect on climate changes as a whole. Educational institutions such as Abutalha Al Ansari, Fatma Bint Anabi and Jabir Abdullah Al Ansari held the well put together ‘Environment Week’ in their respective schools. With the advent of environmental degradation, climate change is one of the greatest threats facing our planet today, A’Saffa’s prime aim in sponsoring this event has been to help young pupils understand the importance of preserving their natural environment, and increasing their social awareness and responsibility towards protecting the environment.

MPH hosts bariatric surgery seminar

Oman’s first grass golf course ready for play

Muscat Hills Golf & Country Club officially unveiled Oman’s first grass championship golf course on Thursday 30th April 2009 at a launch event attended by senior Omani dignitaries, Government ministers, sports and media representatives. Anticipated to be the most unique and breathtaking golfing experience in the Gulf, it is

set to be the dawn of a new sporting era for the Sultanate of Oman, placing the country on the regional and international golfing map. The event celebrated the opening of its first nine holes by the ceremonial first drive down the fairway struck by leading local golfer, Azaan Al Rumhi, who plays for the Oman National Golf team. Al Rumhi, who is currently based in Thailand, was flown in for the exclusive occasion. The nine holes course was opened to the public from 2 May 2009.

A’Saffa sponsors eco-week in Suwaiq In doing its bit for the environment and its upkeep, the Sultanate’s leading poultry products producer A’Saffa

Muscat Private Hospital (MPH) recently conducted a seminar on Bariatric Surgery for the Women’s Guild in Oman. The insightful seminar, held at the hospital itself, highlighted the various facts and myths surrounding Bariatric Surgery. The seminar also provided the attendees with diet tips on maximising weight loss after surgery and maintaining it. The two-fold seminar was conducted by Dr. Ladha el Zaqui, Consultant General Surgeon, MPH and Mona Moghrabi, Clinical Dietician, MPH. The first part of the seminar highlighted the many forms of weight-loss surgery: laparoscopic and open bypass; laparoscopic placement of the adjustable gastric band/ lap band; and the laparoscopic gastric sleeve procedure. The second part of the seminar focused on the diet do’s and don’ts post Bariatric Surgery. 143

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BROWSING CORNER

INSPIRING SUCCESS FROM THE TOP DOWN In her book, “The Visionary Leader – How to inspire success from the top down”

leadership coach and consultant Susan Bagyura gives useful tips for leaders on how to inspire success in their team members, writes Raj Shekhar Chandola

S

usan Bagyura has over 25 years of sales, marketing and entrepreneurial experience. Having experienced corporate America and having lived and worked in Zambia, New Zealand, Ireland, England and Austria, she represents a viewpoint that covers several perspectives. And it comes through forcefully and clearly in this book. The world today is changing rapidly and if someone is doing business the way they were five years ago, they are obviously not doing it the right way. In her book Bagyura provides op-point, insightful, inspiring and actionable tips on how to grow and what it takes to lead in today’s times. Susan points out that thought affect attitude and attitude affects behaviour. Thus the organisation becomes a refection of its leadership and direction it provides to the organisation. Fear can hinder success and therefore the leader’s approach makes a difference in the bottom line results.

THE VISIONARY LEADER How to inspire success from the top down Author: Susan Bagyura Published by: LifeSuccess Publishing, USA

Team player Bagyura also points out that mindsets affect the level of success so the leader should know his leadership style, whether it is authoritarian, democratic or delegating. She says that the best leader flex between all three. She says team building requires several

The publication featured in Browsing Corner is provided by Turtle’s Bookstore www.turtlesoman.com

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basic skills including listening, questioning, persuading, sharing and participating. She advises that we should learn from our mistakes and move on. Bagyura reminds that there is a difference between goal-setting and goal achievement and advises we aim high and set goals that reach beyond regular performance even suggesting the goals leader set should either excite or scare him. Bagyura advises not to settle for limited expectations because it will only create limited results and not to get too hung up on the “how” of achieving the goal. Her advise is to set BIG goals, stay focused and believe you will reach the goal.

Action orientation Lastly, Bagyura points out that indecision results in disintegration so the leader should not make excuses and take action; be willing to take intelligent risks; should remember that resources and circumstances should not limit the outcome; use fear as a motivator rather than letting it paralsze progress; and remember, once a decision is taken, conditions change. Bagyura’s book is loaded with valuable concepts and practical applications. It provides a roadmap for leaders who want to be more inspirational and is a must read for all who manage other people. It shows how inspiring others is the way forward to top performance and becoming a strong leader.

Cut out this coupon from OER and present it at Turtle’s Bookshop to claim 10% discount on the book featured in the May 2009 issue, or 5% discount on all other books* (except the Airport outlet). *This coupon cannot be combined with any other in-store promotions. Offer valid until July 31, 2009. Free one hour parking on purchases of RO5 or more.


Resident Evil 4 was a stellar experience introduced an entirely new control scheme and was regarded as one of the best survival horror titles of all time. Is Resident Evil 5 worthy of filling these shoes? Malcolm Xavier Crasta tries his hand at some Majini slaying to find out

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he Resident Evil series has come a long way since its debut on the PlayStation in 1996. From introducing the ‘Survival Horror’ genre, with the first Resident Evil, till the entire shift in perspective in RE4, the series has always delivered in terms of gameplay, terror, characters and story... except maybe for the lacklustre side-story titles. Now, with the release of Capcom’s latest RE title, Resident Evil 5, they hope to build on this success. To put it

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simply – the game is no longer the terrorinducing zombie-slaying game that you are used to. What Capcom has done is to replace this ‘edge of the seat’ terror to ‘edge of the seat’ action and tension. But this is also where the good news comes in. From the very first moment you put the game disk till you see the credits this game is a nonstop action-packed thrill ride and then some. It is just one action sequence to the next with a few thoughtful, albeit a bit too simple, puzzles thrown in for good measure.

Sticking to the knitting It doesn’t reinvent the concept of the series like RE4 did. Instead, it evolves and builds on an already impressive game mechanic that the latter introduced. The game is still played in the same way as RE4, in an over the shoulder perspective, and just like in the previous title when you aim you can no longer move and you use the laser sight as guide to aim. This control scheme seems a bit clunky in this day and age and may not be liked by all.

But the way the gameplay is tailored around this control system is quite impressive and helpful. The game’s visuals are incredible with strikingly realistic textures, detailed environments and aweinspiring lighting to keep you gawking for hours on end and to complement this; the animations are some of the very best you will find in the industry. While the voice acting in general is good, there are times where it seems in need of improvement. The story itself is decent and blends in well with the rest of the series (there are some very interesting story components that RE fans will adore but we will not spoil them for you). But the best and the most impressive aspect of the game is the multiplayer. This is the first game in the series to feature a proper, working multiplayer component.

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NEWSMAKERS

WOMEN POWER

HE Rajiha bint Adul Ameer bin Ali wins the Middle East Award for Woman Leadership Personality

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er Excellency, Dr Rajiha bint Adul Ameer bin Ali, Minister of Tourism, has received the Eighth Middle East Award for Excellence this year, which is granted to women leaders with the best achievements. An honouring ceremony at Arab Tower in Dubai was held to celebrate this occasion. The ceremony was attended by Sheikha Hessa bint Khalifa bin Ahmed Al Khalifa and a large number of leaders and officials from various governmental sectors in the Middle East Region.

Dr Rajiha in a statement of thanks and appreciation expressed her happiness on receiving the award. She confirmed that this award is an evidence of the prominent place given to Omani women on the international and local level. Omani women have been able to attain various achievements and contribute to the development of the Sultanate due to the benevolent leadership of His Majesty Sultan Qaboos bin Said. The minister added: “My nomination among many women personalities from the Middle East region makes me proud of it, especially the fact that these awards are for a personal ability to bring about radical change and this will inspire other women to assume leadership positions.” The Middle East Institute in Dubai grants several annual awards to honour specialised entrepreneurs and leaders who play a prominent role in fostering leadership amongst women.

GREEN CRUSADER

HH Sayyida Tanya Al Said has emerged as a mascot of environmental sensibility

H

H Sayyida Tanya Al Said, founder and president of the Environment Society of Oman (ESO), is one of the six winners of ‘Environment Personalities of the Year Awards’ given by the GCC this year. Since her return from the UK, where she studied Marine and Freshwater Biology, HH Tanya has been an untiring and consistent fighter for preservation of the environment. HH Tanya’s enterprise, the ESO, set up in 2004, is the only environment NGO in Oman. Sayyida Tanya feels that it is imperative to educate the public about the detrimental effects of plastic bags, littering and wastage of water in Oman. She also believes that it is just changing one’s behaviour and habits for saving the environment that is needed. HH Tanya calls for making full use of our natural resources and intelligence to conserve water and energy. She advocates the use of solar energy for heating the overhead water tanks on all new buildings, recycling plastic bags and bottles and conserving water by planting native plants (which require less water) by the roads. The water saved in this way could be used for other things. She would very much like to see more information to be included in the school curriculum on environment – this could include local case studies. Her NGO the ESO has been undertaking projects with schools such as recycling plastic bottles along with Masafi and the National Mineral Water Company. Combined with environmental awareness drive, HH Tanya hopes to garner help from the various governmental bodies to spread her ideas for a more eco friendly and secure environment.

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W

hen we walked into Khalid Mohammed Zaman’s unmarked cabin at his office, we found an unassuming young man in his late 20s sitting behind a large working table. As Zaman begins to talk about his company, little do we get an inkling that he is a man who would be a perfect Page 3 material with his modern zeitgeist. However, as director of Al-Zaman Investments, Zaman does not throw caution to the winds and has steered the family owned business safely enough in these turbulent times, but when he is out on a weekend, he is a different personality – a Formula 3 racing driver, a diving enthusiast and a footballer all rolled into one.

BEYOND BOARDROOMS

ADRENALINE RUSH Khalid Mohammed Zaman, Director, Al-Zaman

Investments, literally lives life in the fast lane and the excitement that comes with extreme sports is part and parcel of his weekend routine, says Visvas Paul D Karra

Finer things And if you throw in his love for exotic food and a game of tennis, you could be forgiven for thinking that Zaman’s passion for life borders on epicurean proportions. Zaman also likes many other finer things of life, like a precision Swiss timepiece for instance. And it is no surprise considering that one of the group company of Al Zaman Investments is the premium Gallery Argan, which deals in jewellery, watches, writing instruments, hi-luxe crystal, silver, leather and Murano products. “A watch has always been a luxury item and not really to tell or keep time. There are 500 mechanisms in a single Swiss watch and that is quite fascinating,” observes Zaman while commenting that he likes a watch because of the complications of the mechanisms involved to keep it ticking.

Ace racer Talking about what he does while he is not managing premium brands and ultra luxury items during office hours, Zaman matter of factly states he is a Formula 3 racing driver for the BMW Series, taking part in atleast 10 races at the Bahrain International Circuit. He has obtained an international license as a racing driver and has been

Passions: Car racing, diving, football Likes: Exotic food Principles: Family values, educating yourself Best quote: “The complications of the mechanisms involved to keep a watch ticking fascinates me” on the winning podium two times. Diving is another passion of Zaman, who takes out his Fishing Cruiser boat every Friday in the company of six to seven of his friends for underwater exploration. He has feasted his eyes on some of the rarest underwater life that anyone could ever think of at all the popular dive sites in Oman like Bandar Khairan, Demaniyat Islands, Halaniyat Islands etc. It is a very calming and invigorating experience to watch rare fish like sea

snakes, the menacing leopard sharks etc, he says. “Family values are very dear to me and I believe that education is utterly important for an individual’s growth and helps him to explore new horizons,” says Zaman on a more serious note when asked about what he cherishes most in life. Carrying forward his love for exotic food, Zaman also hopes to start concept restaurants like a sushi bar etc. 147

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