#48- April 2016

APRIL 2016

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MILLIONS FOR MUMZWORLD

In our part of the world where the cost of starting up and growing is so tremendous, [funding] really is a maker or breaker of businesses. – Mona Ataya, CEO, Mumzworld

millions for

MUMZWORLD + Cover Issue 48.indd 1

INSIDE

In good taste Guilt-free ice cream

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his issue focuses heavily on SME financing and our cover story features Mumzworld CEO Mona Ataya, who has recently closed a series B funding round, where the company secured a multi-million dollar investment from a number of parties (Pg 20). This issue of fundraising for SMEs is a much-discussed topic within the sector and our feature on SME financing takes a closer look at this (Pg 24).

Another question raised recently was whether the UAE would de-peg from the US dollar in favour of a flexible exchange rate, though ratings agency S&P has said this is unlikely. Doruk Acar, Partner and Office Manager of Value Partners, Istanbul and Y. Sudhir Kumar Shetty, Vice Chairman, Foreign Exchange and Remittance Group (FERG), discuss the implications of a fluctuating exchange rate on small businesses (Pg 32). This issue also covers saving considerations that need to be made by smaller businesses to soften the financial blow when having to pay end of service benefits (Pg 14) as well as preparing for the unknown by putting a good succession plan in place (Pg 16).

Our final feature for this issue takes a look at renewable energy initiatives as GCC countries plan to diversify their economies as they move away from their reliance on hydrocarbons. Martin Haupts, CEO, Phanes Group, and Bakr Abdel-Wahab, Managing Director and Head of Infrastructure, EFG Hermes, look at the opportunities for growth within the region, particularly in light of the roles SMEs can play (Pg 28).

Finally, we take a look at some of the highlights FinanceME’s first Business Vision Awards held towards the end of March, where we celebrated and acknowledged people who have developed and grown businesses, whether a start-up or a mid-sized corporate, in the region.

I hope you enjoy this issue!

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38 42

Jessica Combes

Read my blog at: http://www.cpifinancial.net/blog/author/112/jessica-combes Follow us on Twitter: @FinanceMidEast

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PUBLISHED BY

5

NEWS ANALYSIS SMEs in times of uncertainty

6

32 FEATURE

Appreciating currency risks

FAST FACTS Tech start-up sector grows ten-fold

36 CASE STUDY

8

Expanding the entertainment sector

5 TOP TIPS Five tips to engage a busy customer

38 FACETIME

Chief Executive Officer ROBIN AMLÔT robin@cpifinancial.net Tel: +971 4 391 4681

Managing Editor GEORGINA ENZER georgina@cpifinancial.net Tel: +971 4 391 3728

42 START-UP

Editor JESSICA COMBES jessica@cpifinancial.net Tel: +971 4 364 2024

ADVERTISING sales@cpifinancial.net

44 AWARDS 48 ADVERTORIAL

Editors SARAH OWERMOHLE sarah@cpifinancial.net Tel: +971 4 375 2527

40 FRANCHISE

10 OPINION

14

Ingredients for success

OPINION Collective savings schemes level the playing field

16 LEGAL FOCUS

Chairman SALEH F. AL AKRABI

Design in d3

Succession planning for SMEs

Picture perfect Painless gains

Thumbay Laboratories

18 CHALK TALK

50 BANK FOCUS

WILLIAM MULLALLY William@cpifinancial.net Tel: +971 4 391 3718

20 CEO CHAT

54 TECH FOCUS

NABILAH ANNUAR nabilah.annuar@cpifinancial.net +971 4 391 3718

56 TECH FOCUS

Contract Publishing Editor SARAH SPENDIFF sarah.spendiff@cpifinancial.net Tel: +971 4 3913729

Manhal Nasr

Millions for Mumzworld

24 FEATURE

Financing SMEs

Smooth sailing into the new digital economy

28 FEATURE

Bank of Sharjah

Going green in the GCC

Handling hackers

58 LAST WORD

Chief Designer BUENAVENTURA R. JALUAG, JR. jun@cpifinancial.net

Health matters

Senior Designer FLORANTE MAGSAKAY florante@cpifinancial.net

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WWW.FINANCEMIDDLEEAST.NET ISSUE 47 | MARCH 2016

In our part of the world wher the cost of startinge up and growing is so tremendous, [funding] really is maker or breakera of businesses.

ISSUE 46

We have received orders to fabricate several historical replicas such as spears, swords, helmets and accents for the Scandinavian Museums.

MILLIONS FOR MUMZWORLD

HEAVY METAL

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Heavy METAL

– Mona Ataya, CEO,

– Oddvar Lönnerkrantz, CEO, Viking MRM

ALL THAT GLITTERS

“Dubai is a much easier place to do business–time has more value in Dubai. We have grown because our international operations started in Dubai.”

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Shamlal Ahamed, Managing Director, ds Malabar Gold & Diamon

+ All that GLITTERS

+ INSIDE

Setting up an SME Analysing information

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Mumzworld

In good taste Guilt-free ice cream

Art with a function Improving online commerce

Cover Issue 48.indd

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21/04/2016 12:27

NEWS ANALYSIS

SMEs in times of uncertainty

In spite of the state of the global economy, experts are optimistic that SMEs can still thrive, provided they exercise prudent risk management “In fact, recessionary periods can often make way for out-of-thebox thinking and innovation from determined entrepreneurs, helping them to build better thought-out businesses that can withstand the adverse effects of slow growth periods,” said Choucair.

Although banks may be cautious about lending to SMEs, peer-to-peer lending is growing which means solid, alternative sources of funding are starting to be made available to small businesses. However, this is not to say that SMEs shouldn’t exercise caution.

“The existing economic environment necessitates better risk management by SME’s to ensure they are able to survive a period of slower turnover and more constrained liquidity in the market. Focus should be on prudent cost and financial risk management.

Some areas that need focus in this environment are avoidance of excessive leverage and inventory/ receivable management to retain cash flows in

the business. Focus should be on cash flows as opposed to profitability,” said Kazim Ali, Head of Corporate Banking, Noor Bank.

Couchair added that SMEs should prepare their business for times of uncertainty by managing their cash flow to ensure they do not run out of working capital, especially during times when funding is less abundant.

“Companies need to be more cautious in protecting their receivables and their open credit trade using appropriate solutions. We recommend companies to outsource due diligence processes to expert agencies that could support those taking informed decisions. It is also important for SMEs to mitigate risks in doing business by seeking companies that could provide them with precise information, access to funding as well as proper protection for their receivables and payment defaults,” said Falcioni.

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ubai SME, part of the Department of Economic Development, estimates that the number of small and medium-sized enterprises jumped by 18 per cent last year compared to 2014; with more than 22,000 small businesses established in Dubai last year.

However, Dubai’s economy began to shrink in February 2016 for the first time since 2010, according to The Dubai Economy Tracker, provided by Emirates NBD, which recorded a score of 48.9 last month. Any score below 50 indicates that the economy is contracting.

In addition, the IMF confirmed that the global economy has been slowing down for the past four months. Projected global GDP growth for 2016 now stands at 3.4 per cent, which is lower than the 3.8 per cent GDP growth forecast only months ago.

“What is happening specifically in the UAE is that some small-and medium-sized enterprises (SMEs) have a very fragile financial structure that makes them susceptible to being greatly affected by the economic slowdown”, said Massimo Falcioni, CEO, Middle East trade credit management firm, Coface.

Despite this an economic downturn is not necessarily a time of concern for SME owners, according to Samer Choucair, Vice President of incubator Crescent Enterprises Ventures.

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FAST FACTS

MASDAR FREE ZONE ENCOURAGES ENTREPRENEURSHIP Masdar City in Abu Dhabi, one of the world’s most sustainable urban developments, is increasingly associated with the private sector.

In line with its expansion plan, Masdar City will grow its net leasable area, currently at about 5,000 square metres, by approximately 32 per cent each year for the next four years, allowing it to expand its tenant base almost four-fold.

It will also offer information and commercial technology (ICT) infrastructure and administrative support to set up new businesses swiftly and efficiently.

“Masdar City offers both flexibility and scalability to prospective tenants and investors, which reflects the needs of the market and supports Abu Dhabi’s efforts to promote economic diversification,” said Ahmed Baghoum, Director of Masdar Free Zone.

TECH START-UP SECTOR GROWS TEN-FOLD

Since the emergence of the venture capital industry four years ago, allowing for better quality investments in start-ups, the tech entrepreneur sector has grown tenfold, according to BECO Capital, a venture capital firm.

New investments in the GCC are triggering a shift towards a knowledge economy, with angel and accelerator funds supporting the tech start-up ecosystem from the incubator stage through to government initiatives. The UAE recently ranked 19th in the 2016 Global Entrepreneurship Index, placing it at the top of the MENA region.

Dany Farha, Co-Founder and CEO, BECO Capital, said more needs to be done at the angel, incubator and accelerator levels because unless the full investment cycle matures in the MENA start-up sector, the business cycle for SMEs will suffer.

BANK MUSCAT AND ZUBAIR SEC PROMOTE ENTREPRENEURS Bank Muscat and Zubair Small Enterprises Centre (Zubair SEC) signed a Memorandum of Understanding (MoU) to support owners of small businesses to promote entrepreneurial initiatives in the Sultanate.

Waleed Al Hashar, Deputy CEO, Bank Muscat, said the partnership with Zubair SEC marks a clear progression of the strategy in place by the bank in line with the directives of His Majesty Sultan Qaboos bin Said to support the SME sector.

“In light of the business environment in Oman which offers tremendous opportunities and challenges for the SME sector, Bank Muscat remains committed to creating self-employment opportunities for citizens across the Sultanate,” said Al Hashar.

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FAST FACTS

SHUTTERSTOCK.COM

SHUTTERSTOCK.COM

BOOK TO BUILD ACE BU EF S SIN SU ES E S SM

MILLION GLOBAL SMES ACTIVELY USE FACEBOOK

2,5

BILLION COMMENTS ARE MADE ON SME PAGES EVERY MONTH

DUBAI SME AND SHUAA PARTNER FOR THIRD CYCLE OF SME100 Dubai SME and SHUAA Capital psc, a UAE investment bank, have extended their partnership to support Dubai SME100 companies for a third year.

Abdulrahman Al Hareb, Chairman of SHUAA said that the UAE has seen the emergence of a thriving SME sector that accounts for a large proportion of employment in the country and SHUAA is pleased to extend their partnership for another cycle.

The Dubai SME100 programme ranks SMEs in Dubai based on financial and non-financial criteria, which include human capital development, innovation, corporate governance and international orientation.

Ranked SMEs are offered capability development programmes in areas such as corporate governance, business valuation, human capital development, investment development, risk management, and innovation over a two-year period.

EMIRATES NBD ANNOUNCES INITIATIVES FOR UAE WOMEN Emirates NBD Group announced its Women of Tomorrow programme to support female entrepreneurship in the UAE, reinforcing its commitment to women’s empowerment.

Entries will be shortlisted by a panel of industry practitioners and winners will be selected by a public vote.

The winner will receive funding for their proposal, along with marketing support provided by Expatwoman.com, the official partner of the initiative.

"The Women of Tomorrow initiative aims to bring to fruition sustainable business proposals from female entrepreneurs. While we will provide the initial funding and marketing support for the business plans, we hope that in the long run, their growth will contribute to an increase in women-led small and medium businesses in the country and foster female entrepreneurship," said Lubna Qassim, Executive Vice President, Group General Counsel and Company Secretary, Emirates NBD.

51% OF UAE FACEBOOK USERS ARE CONNECTED TO SMES

120

MILLION PEOPLE IN MENA USE FACEBOOK TO CONNECT WITH BUSINESSES

100

MILLION

PEOPLE CONNECT WITH BUSINESSES VIA MOBILE DEVICE

Source: STEP 2016

WWW.FINANCEMIDDLEEAST.NET

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TOP TIPS

Five tips to engage a busy customer

Alexander Rauser, Chief Executive Officer, Prototype, offers advice on getting around customers’ saturated attention spans

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Make it personal

Build relationships

Create advocacy

SHUTTERSTOCK.COM/RAWPIXEL.COM

onsumers today are constantly bombarded with information, and as a result of this their attention spans are getting shorter. According to a report released

by Oracle, your brand has 30 seconds or less to capture consumers’ imaginations. This is a very small margin of opportunity. Here are some ways in which you can take this obstacle and turn it into an opportunity.

Nowadays you need to build relationships, not email lists.

Spamming consumers with irrelevant emails twice a day is not going to fool today’s digital audience. You need to get to know your audience, what products they have previously purchased, what gets them out of bed on a Saturday morning, what coffee they drink and more. Once you know them, target them with relevant information, at the right time, on the right device, in the right place.

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Chances are your consumer will be more likely to return and convert if you have managed to offer a personal experience. The challenge is how to do this, knowing the diverse audience your brand can interact with these days. The answer lies in the data you receive about your audience and how you can manipulate that data as efficiently as possible.

Nothing is more powerful than being in a position as a marketer where your brand is shared amongst your target audience via word of mouth and social media. Yet, many companies still focus on frequency rather than quality. The challenge with producing quality content is that the initial investment is higher, and therefore the risk is also higher in case it doesn’t perform as expected. However, by spamming customers with low quality content, the risk of losing them is even higher.

Invest in the power of nurturing

Your happy customers can become your biggest advocates and can keep bringing you repeat revenue.

There are many ways you can nurture relationships with loyal customers.

Take, for example, coffee shops which offer loyalty programmes whereby after purchasing a certain amount of cups, customers get one free.

Focus on the moment

The most important thing in today’s digital age is to focus on the right moment in time. If you are disrupting people at the wrong time you will fail to get any attention and worst case make them upset. The right strategy is to be there when they need you through promotion, search, engagement or delighting them.

Engaging with customers today means understanding how they are, how best to interact with them and how do this all at the right time, through the right channel. As the media landscape becomes more complex, it also offers a lot of opportunities for the brands that can get it right.

30 Seconds is all a brand has to capture its audience’s attention.

21/04/2016 13:41

A track record of long-term growth.

An award-winning reputation.

Since launching in 2006, Gulf Capital has become one of the region’s largest and most successful alternative investment firms. Today, we celebrate 10 years of delivering long-term returns and industry leading results. Our award winning performance has made us the firm of choice for regional and global investors.

Gulf Capital – Celebrating 10 years of achievements and proven results. www.gulfcapital.com

Firm of the Year MENA 2014

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Best SME Credit Fund 2015

Best Private Equity Firm in the Middle East, 2011, 2012, 2013, 2014 and 2015

14/04/2016 12:04 4/17/16 10:28 AM

OPINION

Ingredients for SUCCESS Vikram Pradhan, Head of Corporate and Institutional Banking, National Bank of Fujairah discusses rebuilding trust between banks and food traders

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Vikram Pradhan says foodstuff traders that provide transparent records will be more likely to receive support from banks.

acked crowds at the recent Gulfood fair and a number of culinary enthusiasts that participated in the Dubai Food Festival reveal how big the food trade has become in the UAE and the broader GCC. With food consumption expected to continue increasing due to the Gulf’s rapid demographic growth, it is clear that there will continue to be ample demand for this industry.

Nonetheless, over the past few months we have seen that wider macroeconomic headwinds have made its impact on the sector, with 40 to 50 traders in Dubai’s Al Ras wholesale market defaulting on their loan obligations in September last year. A tightening of liquidity caused by various factors, and no doubt facilitated by banks adopting a more cautious approach to the foodstuff sector, has triggered expressions of frustration from food traders, many of whom bristle at what they see as a deterioration of trust from the local banking sector.

Indeed, the recent Dubai Food Trade Finance Forum, in which NBF was a participant, was organised by the Dubai Multi Commodities Centre (DMCC) precisely to discuss ways to address how traders and banks can restore trust and confidence and move forward together.

SEALING PARTNERSHIPS As far as reconciliatory platforms go the DMCC-led forum was a good start and gave both sides a chance to air their concerns. cont. on page 12

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STAY AHEAD is not just a statement.

It’s our way of exceeding expectations.

with world-class customer service. Industry recognition for our service, products and campaigns is testament to this commitment and our position as one of the leading consumer finance companies.

UAE’s Choice 2016

Best Consumer Finance Company

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OPINION

cont. from pg. 10

For the foodstuff companies, their most common feedback is that banks do not have sufficient knowledge of their business to adequately support their needs. Foodstuff companies have unique business cycles and trading flows; and companies require lenders that understand their business to support them especially in times of stress.

This is a valid point and one I’m sure banks here have already been actively addressing. NBF, for instance, has long embraced a service model predicated on investing in dedicated corporate banking teams with industry segmentspecific expertise. This relationshipdriven approach has allowed us to respond and adapt effectively to the needs of clients from industries as diverse as oil and gas, services and manufacturing, precious metals as well as the foodstuff sector.

Just as banks have started introducing specialised client servicing teams, I would also suggest that food traders complement their expansion plans with initiatives that upgrade their talent pool, especially in areas like financial and product expertise, which would be beneficial not only for their long-term growth but facilitate greater understanding and consensus with their lenders.

As for the feedback that banks should not tar the food industry with the same brush as the errant few who default and skip town or misuse bank limits for non-core activities, I believe that it is never in any bank’s interests to turn away a genuine customer.

Nor is it productive for banks to force beleaguered clients to a corner during difficult times. That is why transparency is the key to restoring confidence and ensuring that no one panics and resorts to knee-jerk reactions that are counterproductive for everyone.

Foodstuff traders that proactively provide transparent and timely information about their businesses,

A tightening of liquidity has triggered expressions of frustration from food traders, many of whom bristle at what they see as a deterioration of trust from the local banking sector. – Vikram Pradhan, Head of Corporate and Institutional Banking, National Bank of Fujairah

say quarterly financial performance reports or details about buyers and suppliers, will not only have an easier time convincing banks to support them in their growth, but should the need ever arise, allow financial institutions to proactively work with them to restructure their repayment plans before it is too late. And if any company is facing pressure from more than one of its banks asking for immediate repayment, the best course of action is to call for a joint lenders meeting to negotiate terms that will have minimal impact on its cash flows.

Such efforts at open communication and rebuilding of trust will go a long way towards bringing traders and banks closer together. Stronger ties with the sector will also make it easier for banks to do reference checks on potential customers.

MOVING FORWARD There have been some good suggestions thrown up at the DMCC forum on how to forge a way forward.

The most crucial of them is to establish a joint body for dialogue to be mediated by an independent third party, such as the DMCC. From there, a set of mutually-agreed rules of engagement, from accounting standards to dispute resolution guidelines for joint lenders faced with a trader under stress, can increase comfort levels on both sides.

Furthermore, it was discussed at the forum that the DMCC could also help facilitate the development of a common collateral financing mechanism that allows for the development of structured products that are bettertailored to the needs of food traders.

The foodstuff industry is one of the key pillars of the local economy, and banks are fully committed to helping genuine traders grow their businesses.

Whilst a lot still needs to be done to bring food traders and banks closer, the recent DMCC food forum is a good beginning. With both sides willing to come forward to engage in meaningful dialogue and rebuild trust, I am optimistic that there is a lot that we can achieve together.

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OPINION

Collective savings schemes level the PLAYING FIELD Bobby Rakhit, CEO and Founder, Inside Consulting, looks at how SMEs can side-step strains on their cash flows when paying out end of service benefits

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Bobby Rakhit says a saving scheme can help companies pay gratuities when they fall due.

imilar to the animal kingdom, the GCC Small Medium Enterprise (SME) market is fraught with many perils and environmental changes. New regulatory changes and rising costs, along with the dismal economic outlook are putting significant strains on working capital. Although there are number of new safeguards in place, the dangers of 2008 are still looming as many of the SMEs are inadequately prepared to handle downturns.

As a result, company pension and savings schemes primarily for the expat population, in most cases, have been put on the back burner while only being addressed at the time of necessity such as potential layoffs, termination or voluntary leave.

The current statutory requirement for SMEs is only to pay employees end of service benefits (ESBs) which is equivalent to 21 calendar days’ salary for each year of service in the first five years of employment and 30 calendar days’ salary for each year of service worked beyond five years. The maximum payment is two years’ basic salary.

Under this scenario, SME ESB liabilities continue to escalate putting further strain on cash-flows. This in turn has had a negative impact on employee morale and retention. Currently, the number of SME companies offering an employee retirement savings scheme in the UAE is likely to be around three to five per cent. What’s more alarming is that more than 80 per cent of the employers don’t fund gratuity until it is due.

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THERE ARE A NUMBER OF REASONS WHY EMPLOYERS DO NOT FUND GRATUITY UNTIL IT IS DUE: •

COSTS

Historically only costly options and structures in place were primarily offered by insurance companies and independent financial advisors, which also require significant upfront assets to manage.

•

EDUCATION

•

REGULATION AND INCENTIVES

•

WORKING CAPITAL FUNDING

• •

The ESB is a defined benefit plan, therefore the return objective is very different. In addition, the external talent pool is small to initiate these schemes.

These have been limited for expats because of transient nature of the population segment, but this is changing. In 2008, the average length of service was four years and seven months in the UAE, according to the Ministry of Labour, and that has risen to six years and 10 months today.

ESBs are primarily funded from operational cash-flows.

OPTIONS

There are very few collective schemes available by free zones.

INDEPENDENCE

There are currently few initiatives in place and there is a lack of third-party providers for infrastructure support.

Source: Bobby Rakhit, CEO and Founder, Inside Consulting

In the short term, a collective company savings scheme (CSS) is the ideal solution. A collective scheme allows all its members to benefit from lower costs and greater expertise.

Independence is the key and therefore a structure that is agnostic to the service provider works in the best interest for both the plan sponsor and plan member. Any administrative rebates can be used to initially fund the gratuity liability. Contributions can be then increased or decreased based on capital requirements.

There are three vital components in the company savings scheme (CSS) that are interchangeable which an independent party manages and monitors to ensure optimal performance of the plan.

The first is asset management. The chosen asset manager along with an independent investment committee will make the investment decisions.

The second is scheme administration with member administration, and segregation of the employer and

employee accounts. The trust structure achieves some important objectives, namely the separation of employee assets from employer assets, good corporate governance, reduce balance sheet implications, reduce risk, and increase transparency and long-term efficiency.

The third component in the Company Savings Scheme Trust Service is to ensure transparency and segregation of the scheme assets from the corporate balance sheet. The assets of the scheme will be housed in an offshore trust.

More expats are making the GCC their home and therefore to accommodate for this growth a number of structural changes need to take place from both the private and public sectors. Over the past five years the average gratuity payments have increased by 66 per cent.

This is primarily caused by the average length of service exceeding five years. According to a recent survey of 1,000 UAE residents conducted by multi-line insurer Zurich, just 22 per cent will use the gratuity payment for their retirement. A majority of those surveyed by Zurich, 83 per cent, said they believe the end of service gratuity is an ‘inadequate’ method of saving for their later years. More importantly most of the residents in this survey believed that their existing company may not be able to pay their gratuity payment.

Currently, the number of SME companies offering an employee retirement savings scheme in the UAE is around three to five per cent.

– Bobby Rakhit, CEO and Founder, Inside Consulting WWW.FINANCEMIDDLEEAST.NET

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LEGAL FOCUS

Succession PLANNING for SMES Iain McIntyre, Managing Partner, AUS Business Solutions discusses how SMEs can brace their business for the unknown

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here is a great myth that SME owners can see through all the eventualities that may occur in business. The truth is that while they may run a very successful organisation, they may not have considered the most important issue that they will inevitably face retirement or death.

Do SME owners consider the risk to their organisation if they were no longer able to work due to injury, early retirement or death?

The SME sector accounts for 95 per cent of all firms registered in Dubai, representing 42 per cent of the workforce and 40 per cent of the nominal GDP. A large number of SMEs are family-owned businesses and are often organised around a set of emotionally charged interpersonal arrangements that have the potential to produce both positive and negative outcomes. This can be the organisations greatest strength but also its greatest weakness.

The succession process in familyowned businesses involves a number of stakeholders; family members, executives within the business,

bankers, suppliers and customers who all have a say in the behaviour and expectations of the SME owner. For the succession process to run smoothly, key stakeholders must be comfortable with one another.

Succession planning should be focused on ensuring the survival of the business in a form that maintains or improves its level of operation and therefore its ability to create value.

This would involve a change in thinking about the business, from an entity that provides personal wealth to the owner, to an entity that benefits everyone associated, including the economy in which it operates.

The starting point for succession is to start planning early, develop a written plan by consulting with colleagues, friends and family. This allows business owners

Iain McIntyre says by knowing the end goal of a business, a strong succession plan can be put in place.

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24/04/2016 08:48

For the succession process to run smoothly, key stakeholders must be comfortable with one another.

– Iain McIntyre to have a procedure to cover planned and unplanned events that could affect the organisation and should be viewed as part of the organisations risk management arrangements.

The benefits of planning for succession include making improvements to the organisations operations, ensuring departments are more keenly managed, identifying weaknesses within the business to be addressed, outsourced or closed down, identifying areas of growth that can be identified and pursued, identifying funding or growth objectives, and enabling business valuations to be conducted easier, helping business owners to understand how to reward shareholders or passing down to family members.

PROTECTING ASSETS Once the planning for succession has been agreed and put in place, it is then advisable to look at how succession will actually take place. Unfortunately due to the number of businesses with no contingency plans the majority end up with the worst case scenario where the owner dies before succession takes place. To protect assets there are two distinct options.

The first is to have a clearly defined ‘last will and testament’. DIFC Wills can protect Dubai assets.

The second is that expat company owners should hold assets in an offshore company, such as the British Virgin Islands (BVI), for estate planning and hold all personal bank accounts in an offshore banking destination such as the Isle of Man, Jersey or Guernsey.

Muslim owners who wish to distribute personal assets as per their wishes, not standard Shari’ah law distribution, should use a power of attorney to achieve the desired inheritance outcome.

If an onshore LLC is owned, a security agreement should be put in place with the local partner/sponsor to protect the company shares.

A power of attorney should be put in place for the spouse of the company owner to ensure succession takes place immediately. The board structure is very important within an LLC and suitable legal advice should be sought.

Successful chess players, such as grandmaster Maurice Ashley, suggest using retro-grade analysis and said, 'To look ahead, it pays to look backwards'.

This is useful for chess players because in the first four moves there are a potential 318 billion ways to play.

They use various strategies to guide their opponent towards a simpler board with fewer pieces where they know they can win.

In business it can be similarly complicated with micro- and macroeconomics pulling you from pillar to post, but the end game is simple; to continue operating the company at a profit. If a business owner’s endgame is at some point to exit, sell, hand-over or retire then we take this point in time and work backwards to set the milestones and achieve the objectives.

The moral of this story is if the endgame is known, put in place a robust contingency or succession plan, and all the hard work as an SME owner will not have been in vain.

A GLOBAL GLANCE AT SIMILAR ISSUES: • A study by Nexus Group in

2015 found that 92 per cent of Dubai businesses lack a solid succession plan, or any form of contingency plan.

• According to the MGI

Australian Family and Private Business Survey in 2010, some 80 per cent of all small business owners did not have a succession plan in place, while 85 per cent did not have any documented buy-sell agreements which provided clarity on fair ownership and exit options.

• Following an earlier survey in

2009, the Clarkson Centre for Board Effectiveness in Canada ran a survey in 2011 which found that only 54 per cent of Canadian SMEs had succession plans in place for the CEO with a suitable candidate identified, compared to 75 per cent of large firms, helped by the 82 per cent of publically traded firms that had plans in place.

• In 2012 the New Zealand

Institute of Economic Research looked at business implications of ageing and found that most employers had no succession plans in place.

Source: Iain McIntyre, Managing Partner, AUS Business Solutions

WWW.FINANCEMIDDLEEAST.NET

pg 16-17 Legal.indd 17

17 13/04/2016 10:07

CHALK TALK

MANHAL NASR The CEO of food and beverage holding group, AWJ Investments, talks about developing good taste

Manhal Nasr, CEO of AWJ Investments, is passionate about food.

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M

y family has different businesses in Jordan.

We started in construction then moved to retail and restaurants, so I had this working knowledge of the businesses because I used to visit the restaurants and retail outlets we had.

I got my passion for business from my dad. He used to be my icon and who I always looked up to. I always wanted to be like him. But I also wanted to work independently from my family, because I wanted to build myself and my career, without the support of the family.

My career started during my first years in university, in Jordan.

I worked in retail in shops like Levis, Diesel, and Tommy Hilfiger. I started as a salesman then became a floor manager. I learned that money does not come easily and satisfying customers is never something you can do 100 per cent—they will always have something to complain about. So I learned to be patient.

I did my undergraduate degree in Jordan. My majors were economics and finance and I got my MBA from Washburn State in Kansas in Washburn state university where I majored in marketing and minored in finance.

I learned to respect time. When I was a student, my time was my own. I went to university whenever I wanted, I skipped class, and I would spend time with my friends. But when I went to work, I knew I had to get in at a certain time and leave and a certain time. If I had to stay and do overtime, then I had to stay, regardless of the plans I had with my friends. Those things that governed me made me more controlled.

This time in retail created my passion to be an entrepreneur.

When you work at a lower level, you see things and how things can be made better. I wanted to make a change.

But I realise that you never have all the knowledge. Now I know how to deal with people who used to be like me.

I see people with the same passion to change things and I’m in a place where I can help them in a way that the person who used to manage me did not help me.

My hobby is business and this is something I’m trying to change.

I love business. I wake up and I want to do business and face new challenges. Some people do business for the money; I do it for the thrill and the sense of achievement. When I look at challenges, I see it them as opportunities.

I was always a picky eater. When I was a little boy I had a problem with food because I didn’t eat everything.

My mum had problems convincing me to eat because I was fussy about everything. So my passion for food and flavour came from my mum. She always tried to find ways to make me like food.

I remember when I was seven or eight she would bring me into the kitchen and get me more involved. She’d let me cut some food and do taste tests.

Today I am a pain in the neck for my Operation Falafel chefs. When I taste a dish I can identify the spices and can tell what needs to be reduced or increased. I use my taste buds for other people, not me. When I take a bite, I close my eyes and I think about a five year old, a fifteen year old, a woman, a man, 50 years, British, Arabic, how they would perceive the flavours.

You have to keep the taste neutral for all of them.

I have three kids. My eldest son is 15, my daughter is 11 and my youngest son is two. My daughter is very picky and she tries to help me with developing flavours. She likes to be a secret shopper with my restaurants.

The other day she used a friend’s phone to place an order at Operation Falafel and I came home and she told me the chicken shawarma was really good, so I asked her what she meant and she said, “I did my check”. My eldest son goes with the flow; he likes junk food at the moment. If I ask him he’ll give me an opinion but my daughter will go out of her way to give her advice.

I see people with the same passion to change things and I’m in a place where I can help them in a way that the person who used to manage me did not help me.

– Manhal Nasr WWW.FINANCEMIDDLEEAST.NET

pg 18-19 - Chalk Talk.indd 19

19 24/04/2016 08:06

CEO CHAT

Millions FOR

MUMZWORLD Mona Ataya, CEO, Mumzworld, discusses closing the most important investment round the company has done so far and the funding challenges that face start-ups

20 pg 20-23 CEO Chat 48.indd 20

24/04/2016 08:59

O

nline shopping platform Mumzworld has just secured a multi-million dollar investment in its series B funding round. The website, dedicated to giving mothers a wide choice of quality products for their children and themselves, saw investments from Wamda Capital, twofour54, and Endeavor Catalyst, with further investments made by Precinct Partners and WSB Holding as well as increased stakes in the company by several pre-existing investors. The round closed with Mumzworld exceeding its original target by 40 per cent.

“This was our most important round to date, both financial and strategic, where we got some strong regional investors in, including sellers from Lebanon, Turkey and Saudi. This round was about making sure we were reaching out to investors who can take us to the next level, which is about quick, quick growth,” said Mumzworld CEO, Mona Ataya.

While the growth of the e-commerce platform has been steady since the business plan was written in December 2011, Ataya was wary of too much growth, too quickly.

The seed round, which involved her friends, family and her partners in bayt.com, which Ataya founded in 2000, was closed within weeks of finalising the business plan. Within a year, she opened it up for the A-round of investment, where she wanted either local or regional investors that could add value in terms of opening certain doors or assisting with legislation, as she felt that that the company was too young and it was too early for strategic investment. She added that the A-round was oversubscribed within a week, so she was able to consider carefully with whom she wanted to partner in the long term.

“Shortly after the A-round, we opened a strategic round for women investors, which tied back to the vision of Mumzworld of empowering mothers to make informed decisions for their

families; and we thought that given that this was a brand that was founded by women and led by women, it made sense to get the investment of women who want to contribute back to the region,” said Ataya.

Ataya said that entrepreneurs build businesses to make a change or create an impact and what that meant for her, when developing the idea for Mumzworld, was to empower mothers.

She wanted to create a platform where mothers could feel they were buying the best products for their children.

However the truth is, investors invest in businesses because they want to get their money back with interest and the A-round of funding is typically

easier because the entrepreneur is selling the vision of the business; and generally investors do not have a lot to lose as they are not putting in a substantial amount of capital.

“When talking to investors, it is all fine and well to be fluffy with your vision but you also need to show the investors that if they put in $10 today, they are going to get $1,000 tomorrow and your numbers have to tell that story. We had to show momentum and a track record of consistency of growth,” she said.

Ataya was frank about the biggest challenge facing any start-up being funding, because a business simply cannot be built without money. cont. overleaf

Mona Ataya is looking forward to what 2016 has in store for Mumzworld.

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21 21/04/2016 14:19

CEO CHAT

cont. from pg. 21

“In our part of the world where the cost of starting up and growing is so tremendous, [funding] really is a maker or breaker of businesses and that applies to us too. If Mumzworld does not have any money tomorrow, then Mumzworld is irrelevant. Cash is very important,” she said.

The other factor working against start-ups is the risk-averse nature of the region, where investors tend to

shy away from unproven business models. Ataya added that investors tend to ask if a model has been executed in the US or Europe and will ask entrepreneurs to prove that they can launch a similar model in the Middle East successfully.

“In the past year I’ve seen things shifting quite significantly where funds such as Wamda are really paving the way for other funds to come on

board and take greater risks. I think now is potentially a great time for entrepreneurs with good ideas and good teams. I think in the next year we are going to see some fantastic things being executed with the more sophisticated funds in the market,” she said.

RIGHT PEOPLE, RIGHT TIME Ataya said that at every stage in a brand’s life, the team’s makeup changes as the

When starting an e-commerce enterprise, all the behind-the-scenes infrastructure should be in place before promoting the business.

22 pg 20-23 CEO Chat 48.indd 22

21/04/2016 14:19

In our part of the world where the cost of starting up and growing is so tremendous, [funding] really is a maker or breaker of businesses.

– Mona Ataya, CEO, Mumzworld

needs of the organisation change. When she founded bayt.com in 2000, Ataya said putting the founding team together was a lot easier than putting the founding team together for Mumzworld.

Bayt.com had professionals with long-term expertise from day one. The head of operations had experience in starting three different businesses, and two other team members each had a decade’s worth of experience in marketing and IT respectively.

“The founding team of Mumzworld are smart and have fantastic track records but did not have the functional expertise in e-commerce, as it was so new. But what they did have, what I consider to be invaluable when you do not have functional expertise, is that intangible that you hear about all the time–the notion of ‘grit’ and the ability to do anything and everything and keep on going,” said Ataya.

DIFFICULTIES: Mumzworld was started four years ago when e-commerce was still in its early stages and the industry was valued at approximately $2 billion–mostly due to online ticket and hotel reservations, as opposed to consumable purchases.

“When we started the entire ecosystem wasn’t set up to cater to e-commerce. Basic things like quality payment gateways were very difficult to find and at the time there were only one or two, and these were not very

reliable. So consumers would place an order online and maybe one out of every three orders would fail. That has changed now with many more payment gateway options available online,” said Ataya.

While Mumzworld had different payment options, cash on delivery (COD) became very popular because of the issues the company was having with credit cards. PayPal and money transfers were also options in an effort to address the problems with payment gateways, but looking back on the first year and a half, Ataya said that they lost a lot of sales due to credit card failures.

“E-commerce does suffer, traditionally, from high return rates when it comes to cash on delivery. We are very fortunate that we are operating in a vertical that is a necessity more than a luxury, so mothers who are buying car seats need them. We also had very strict checks and balances when COD orders came through. Any order that was AED 1,000 or more was qualified by our customer care and via email. These steps would minimise the rate of return,” said Ataya.

She added the other problem was the courier or last mile service because these companies were used to delivering smaller packages, such as documents, and they were used to delivering them over extended delivery periods.

Ataya said addressing the concern of speed-to-customer was, and still is, a challenge. Larger e-commerce players who have the available revenue are building

their own last mile ecosystems with their own drivers, bikes and cars, which is not a model that can be replicated by smaller companies. Mumzworld addressed this challenge early by finding courier and lastmile partners to help deliver their goods faster and more effectively.

LOOKING FORWARD At this stage Ataya’s focus involves market growth and improving consumer offerings, which include optimising the features on the website as well as increasing the company’s presence in the 20 countries to which it shipped products last year. She added that a consumercentred initiative will be launched on the site around the end of April.

“I think 2016 is going to be a very exciting year for us. We are moving to bigger warehouses and offices and we are hiring actively. We are paving the groundwork for the next phase starting in the next couple of months,” she said.

WALK BEFORE YOU RUN Ataya warned against e-commerce players promoting their business too fast as the priority should be on putting the required infrastructure to accommodate the growth in place first, otherwise there may be a detrimental effect on the brand.

“For every order what’s happening behind the scenes there are pickers, packers, quality checkers, workers doing data entry, customer care, inbound and outbound logistics, and marketing. There are about 10 resources for every product that is ordered on the website and that is why e-commerce is so logistically complex. If any one of these 10 touch points fails or is late, then you have a failed consumer experience. So before you scale up, you need to make sure that all these touch points are automated and operating in a streamlined fashion,” said Ataya.

WWW.FINANCEMIDDLEEAST.NET

pg 20-23 CEO Chat 48.indd 23

23 21/04/2016 14:19

FINANCING AND LOANS

Financing SMES Financial institutions need to take many factors into consideration when weighing up whether or not to approve a loan. A number of contributors look at what business owners need to consider before making an application and what they can do to increase the odds of their loan being approved

O

ne of the biggest mistakes the UAE banking sector faces is in its lending procedure, according to Vishal Mahtani, CEO, Price Global Group. He said banks have a set list of documents they require and if the company meets these criteria, the banks will lend them money.

“All of these criteria are based only on the past performance of the companies. Nobody looks at the future and where the money will go. Most of the time the money goes into servicing old issues with the company and not into business growth opportunities, with financial institutions not raising the alarm until there is a default,” he said.

DEFAULTS AND ‘SKIPS’ Mahtani added that everyone became so afraid of the cheque law and possible imprisonment, that running away seemed to be the only way out.

However, an announcement was made at the end of March that UAE banks

have agreed, effective immediately, to cease prosecutions for bounced cheques by SMEs. This is part of an initiative to address the levels of payment defaults in the SME sector.

While there have been a higher number of skips, banks have simply become more selective on financing specific industry sectors, according to Usman Khakwani, Head of Business Banking, Noor Trade.

“There are many sectors where growth is happening, with education, tourism and health being some examples. At the same time, banks are cautious in other sectors where volatility has been seen, such as oil and its related industries, commodities, scrap metal and certain foodstuff segments,” said Khakwani.

He added that applying for finance is one of the most important decisions an individual can make because it involves a process that can financially bind an individual to a bank or financial institution.

Usman Khakwani, Head of Business Banking, Noor Trade, says banks are cautious in lending to volatile sectors

24 pg 24-26 - SME financing.indd 24

21/04/2016 14:34

An honest audit will give the lenders a true picture of the SME, allowing them to make a more informed decision on whether or not to approve loans to the company.

– Vishal Mahtani, CEO, Price Global Group

Khakwani said that business owners need to consider their business models and their needs and ask themselves if they really want the money. They need to have clear answers to the questions of where they will invest the capital, what the advantage to the business will be by putting in the additional investment, if they have the capability of repaying the money as per the payment plan with the bank, and what their backup plan will be in the event that they experience financial instability during the repayment process.

Khakwani added that from an applicant’s perspective, it is important for the financial institution to understand the reason for which the business owner is applying for finance and whether the financial requirement of the business meets the business model.

“As the bank is providing capital to the business, the primary consideration that is factored into

the decision-making process is the ability of the applicant to honour the commitment and return the money to the bank. In addition, there are various other factors considered like business stability, global and domestic market dynamics, forecasted growth in the specific industry, current level of borrowing, past repayment history, strength of bank statements and audited financials, which are some of the important elements that a lender will assess in deciding whether an applicant deserves to get the desired finance amount,” he said.

AUDITING Auditing is essential as it will reflect the true financial status of a company, said Mahtani. But unfortunately in the UAE there are many auditors who will present a company’s books to reflect what banks and lenders like to see, although this may not always be a true reflection of the company.

Vishal Mahtani, Group CEO, Price Global Group, says banks need to reconsider their lending procedure.

cont. overleaf

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25 21/04/2016 15:27

FINANCING AND LOANS

cont. from pg. 25

“Most banks and government bodies prefer to use ‘approved auditors’ as they know that the standards and procedures will be followed. An honest audit will give the lenders a true picture of the SME, allowing them to make a more informed decision on whether or not to approve loans to the company,” he said.

An internal audit can help a company or an external auditor to identify any risks which may lead a company to fail in attaining its profitability targets. Internal audits can also assist in preventing a loss of funds, by safeguarding reliable financial reporting, and in conforming to laws and regulations.

Khakwani added that both internal and independent auditors contribute to a company’s audit system in different, but important, ways; and maintaining an effective system of internal controls is vital for achieving a company’s business objectives, obtaining reliable financial reporting on its operations, preventing fraud and misappropriation of its assets, and minimising its cost of capital.

He added that having independent and unbiased auditors confirm that an organisation’s claims about its financial position, and the processes behind these claims, are true and fair are useful for a wide range of reasons.

“As banks rely more and more on audited financial statements of a company to assess applications, it becomes more important for businesses to get their accounts and processes audited by independent and wellrenowned auditors,” said Khakwani.

Mustafa Muhammad Hussain, CFA, Society Emirates, says submitting the correct documents does not guarantee loan approval.

DOCUMENTS TO PREPARE BEFORE MAKING A LOAN APPLICATION: • •

• • •

BRIEF COMPANY PROFILE

This should include the owner’s name and experience, industry in which the company operates, and product information.

AUDITED FINANCIALS UNTIL THE END OF THE PREVIOUS QUARTER

To be granted a loan a company must have at least three years’ worth of audited financials. To apply for a long-term loan, a company must submit projections as well.

RECEIVABLES AGEING REPORT

This report categorises a company’s accounts receivables in terms of how long an invoice has been outstanding, be it 30, 60, 90, or more days.

INVENTORY AGEING REPORT

This report gives an indication of how stock moves and whether there is any obsolete stock in the current inventory.

OTHER BANKS’ LOAN EXPOSURE AND AMOUNTS OUTSTANDING

If a company is already availing credit facilities from other banks, this information is also required as bankers have to calculate the leverage position of a company before applying for any new facilities. The information includes any loan which could be in the form of working capital financing, short-term business loans, vehicle or mortgage loans.

The overview details may be acquired from Central Bank Reports which are available to bankers.

Submission of the above information doesn’t guarantee loan approval. The bank will assess securities against the loan, depending on how strong the financials are and other related factors such as the amount of the loan required, the industry in which the company operates and its reputation in the market.

Source: Mustafa Muhammad Hussain, CFA, Society Emirates

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24/04/2016 09:26

RENEWABLE ENERGY

GOING GREEN in the GCC Martin Haupts, CEO, Phanes Group, and Bakr Abdel-Wahab, Managing Director and Head of Infrastructure, EFG Hermes, look at how countries in the GCC can develop renewable energy and what that means for their economies

A

s the region’s consumption is expected to grow exponentially over the next two decades, renewable energy has become an essential consideration in governmental strategies to diversify energy production, according to Renewable Energy Market Analysis—the GCC Region report

by International Renewable Energy Agency (IRENA).

The IRENA report said that by achieving green energy targets the GCC has already set, they could save as much as $87 billion by 2030 by diversifying their economies.

Around 74 per cent of the expected 69 gigawatts of the renewable energy produced in the GCC will be generated in Saudi Arabia, according to Martin Haupts, CEO, Phanes Group. He added that if these targets are reached, the result would mean saving 11 trillion litres of water withdrawal, 200, 000 jobs created and an eight per cent per capita reduction in carbon footprint by 2030.

Bakr Abdel-Wahab, Managing Director and Head of Infrastructure, EFG Hermes says renewable energy markets offer huge potential for growth.

Martin Haupts, CEO, Phanes Group, is optimistic about the role SMEs will play in developing renewable energy.

28 pg 28-30 Feature - renewable energy.indd 28

21/04/2016 15:38

Solar technology are not new to the region, with bodies such as King Abdul Aziz City for Science and Technology (KACST) in Saudi Arabia and the Kuwait Institute for Scientific Research (KISR) investigating projects as far back as the 1970s and 1980s; though the costs outweighed domesticallysourced fossil fuels, making investing in solar technology financially unviable.

There have been renewable energy developments in the last decade as the continuous fall in their costs suggests a market with potential for growth, according to Bakr AbdelWahab, Managing Director and Head of Infrastructure, EFG Hermes.

“Renewable energy investments provide visibility in cash flows and have regularly stable profit margins.

Regulatory frameworks, such as favourable tariffs and risk-adjusted returns, are attractive to investors.

Governments also demand that these projects be connected to the state grid prior operations, offering a high certainty of cash yield. Finally, investors also have the opportunity to develop these projects into larger platforms to promote development of further capacities,” said Abdel-Wahab.

This means participation by the private sector on a larger scale, which according to Haupts, bodes well for small- and medium-sized businesses as the SME sector generally responds quite quickly to a social or market need.

He added that introduction of Dubai Electricity and Water Authority’s (DEWA) Shams Dubai smart initiative, the net metering programme that allows and encourages residential property owners to install photovoltaic (PV) panels to generate electricity from solar power, represents a shift in the domestic clean energy policy. The IRENA report said that developers in the region are leading the cost race in solar PV.

GCC RENEWABLE ENERGY TARGETS: UAE:

24% clean energy by 2021 7% capacity produced in Abu Dhabi by 2020 5 GW of solar power produced in Dubai by 2030 Kuwait:

5% Generation by 2020 15% Generation by 2030 Bahrain:

5% Capacity produced by 2020 Qatar:

20% Capacity produced by 2030 Saudi Arabia:

9.5 GW produced by 2022 Source: Renewable Energy Market Analysis – the GCC Region International Renewable Energy Agency (IRENA)

cont. overleaf

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RENEWABLE ENERGY

cont. from pg. 29

“The Shams initiative recognises that governments cannot realise these renewable energy targets alone and while the power sector has traditionally been controlled by state utilities, we are seeing a greater appreciation for public-private collaboration. For this reason I believe 2016 will be a big year for solar in the UAE, with a strong level of participation from SMEs,” said Haupts.

Haupts added that the transparency of the regulations is attracting participation from smaller businesses that are not only demonstrating they can compete with larger companies on price and quality, but they bring local expertise to the table as well as they are firms that know the region, understand the market and have the experience and expertise to deliver.

“For the most part, the cleantech industry is a hotbed of start-ups and medium-sized tech firms investing time and resources to identify better, more efficient and sustainable ways to store power and bridge efficiency gaps in solar technology. No industry could survive without the innovation presented by the SME sector, and global energy systems are no different. Beyond technology, the region must continue to foster an environment that invites participation from the private sector,” said Haupts.

While solar energy tends to be focus of green energy development, as the GCC is situated in the Global Sunbelt, an area characterised by high solar irradiation, with 59 per cent of the GCC’s surface area potentially being suitable for solar PV deployment, the IRENA report expanded on the resources of the GCC as well as its potential to produce renewable energy.

Kuwait, Oman and Saudi Arabia all have significant potential for wind deployment, both in the coastal areas as well as the central regions, and that covering a mere one per cent of this area would equate to approximately 60 gigawatts of capacity.

GCC ENERGY EFFICIENCY TARGETS: UAE:

30% decrease in power consumption in Dubai by 2030 Kuwait:

5% increase in generation efficiency 10% decrease in energy consumption in buildings Qatar:

20% decrease energy consumption per capita by 2017 35% decrease water consumption per capita by 2017 Saudi Arabia:

14% decrease in peak demand by 2021 8% decrease in electricity consumption by 2021 Oman:

5% decrease in average gas consumption per kilowatt hour (kWh) of generation by 2015 Source: Renewable Energy Market Analysis – the GCC Region International Renewable Energy Agency (IRENA)

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FOREIGN EXCHANGE

Appreciating CURRENCY RISKS Doruk Acar, Partner and Office Manager of Value Partners, Istanbul and Y. Sudhir Kumar Shetty, Vice Chairman, Foreign Exchange and Remittance Group (FERG), look at the impact of a fluctuating exchange rate on small businesses

Advanced currency services provided to SMEs could provide several options to limit risk associated with foreign exchange fluctuations.

(PHOTOCREDIT: BANKOO/SHUTTERSTOCK.COM)

32 pg 32-34 foreign exchange.indd 32

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T

he global economy experienced some key challenges towards the end of 2015 which rippled into 2016, according to The global economy in 2016 report issued by business advisory firm Grant Thornton.

It added that key global changes around the world will no doubt impact economies such as the UAE, which is recognised as one of the most dynamic business hubs in the Middle East.

Speculation increased earlier this year about GCC states ending the dollar peg in favour of a flexible exchange rate regime owing to the divergence between slowing GCC economies and the US economy, according to ratings agency S&P. It said de-pegging from the dollar is unlikely, at least in the medium term as GCC states have sufficient funds available to defend their currencies.

Small- or medium-sized companies that rely on resources from abroad or who have to export their products can feel an impact on their profits owing to fluctuations in the exchange rate. SMEs are also said to experience access to finance as a constraint on growth, given recent liquidity issues and increasing regulations on lending and funding, added the Grant Thornton report.

While larger corporates can typically manage these fluctuations better due to their large treasury departments and strong CFO offices, SMEs would experience real risks in this scenario, according to Doruk Acar, Partner and Office Manager of Value Partners, Istanbul.

“SMEs of GCC would really need to think of long-term planning on input costs, especially on imported raw materials, and their export pricing.

Cash flow management, hedging and other foreign exchange risk management tools, stock control mechanisms and supply chain-related levers will come into the daily life of SMEs,” he said.

He added that the SMEs that will be able to run these tools efficiently and choose the correct strategic bets can even improve their economic performance. However, an SME that doesn’t meet its business requirements due to deficiencies in the core business cannot eventually blame the exchange rates for their performance.

FOREIGN EXCHANGE RISKS Acar added that if there is a single currency in place for all the cost items and all the revenue items, whether it is a local currency or a foreign currency, the exchange rate risk will not be a factor. A company sourcing

100 per cent locally and selling 100 per cent locally would have nothing to do with exchange rates same as an entity having 100 per cent dollarbased sourcing, including labour, energy and other selling, general and administrative expenses with 100 per cent dollar-based revenues.

SMEs could face various kinds of foreign exchange risks such as interest rate, currency, equity, commodity, liquidity, refinancing, country, legal, model, political, valuation, reputational, volatility, settlement, and profit risk, according to Y. Sudhir Kumar Shetty, Vice Chairman, Foreign Exchange and Remittance Group (FERG).

HOW BUSINESSES CAN PROTECT THEMSELVES AGAINST FLUCTUATIONS There are many ways for SMEs to protect themselves from foreign exchange risks. Not all banks support small business but many independent foreign exchange firms do. They offer advanced currency services to small- and medium-sized businesses and provide several options to limit risk. The below mentioned are some of the simple options to be considered.

CONTRACTS Simple contracts with independent foreign exchange firms, whereby you can choose an exchange rate lock facility that enables you to buy or sell currency at a fixed rate on a future date, thus locking the profit. You can choose between forward and future contracts to ensure you get the right margins.

CURRENCY HEDGING Complex yet structured hedging deals, setting lower and upper limits to buy currency over a time period. The margin of profit on the deal can be locked now by fixing the exchange rate of the future. Hedging should be done to protect the profits and not be tempted to speculate.

TOOLS Along with a good hedging policy, you need some common tools like stoploss orders, limit orders etc., which will allow you to provide boundaries for upper and lower rates, thus avoiding shocks Source: Y. Sudhir Kumar Shetty, Vice Chairman, Foreign Exchange and Remittance Group (FERG)

cont. overleaf

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FOREIGN EXCHANGE

cont. from pg. 33

In order to manage foreign exchange risks, businesses need to negotiate fixed exchange rate contracts or exchange rate caps with vendors, employees and customers.

Alternatively, contracts could be shifted into a single currency, said Acar.

“As long as payables and receivables are closely aligned to a single currency, no one will have a shock failure due to foreign exchange rates,” he said.

The Gulf Cooperation Council is unlikely to abandon currency pegs to the US dollar despite a slump in oil prices putting an approximate $250 billion squeeze on the region’s finances, according to Moody’s Investors Service at the end of March 2016. The ratings firm added that currency de-pegging would raise uncertainty about the prices of imported goods in the region, adding to inflationary pressures, and trade gains brought with depegging would be limited.

Had the UAE de-pegged from the dollar, or should it do so in the future, Acar said in both appreciation and depreciation scenarios there would be worries and advantages. He added that there would be numerous scenarios on which to speculate and that a strong or weak currency is not bad or good per se; it was why the currency was strong or weak that was important.

“If the currency is strong due to strong economic fundamentals in a growth period, it is good for the economy and its participants, both corporate and individual citizens. The costs of imports are lower, exporters will be looking to increase efficiency, the purchasing power of locals abroad would be higher and the inflationary pressures in the local economy would be reduced,” he said.

He added, however, that if the currency becomes overvalued in a slowdown period, then the situation would be risky and that the drivers of the de-coupled valuation of the currency will define if there would be advantages or disadvantages.

He cited the example of how the in the UK or Switzerland the local currencies appreciated because investors preferred those locations as safe havens; but that it lead to non-competitive exports and a fall in

demand for goods and services from both local and international consumers.

On the other hand, he said, the strong Euro has made the recession in Greece feel even worse as the country cannot enable fiscal expansionary measures.

HOW TO PROTECT SME ASSETS FROM FOREIGN EXCHANGE FLUCTUATIONS •

HEDGE YOUR BETS With the USD rising, experts suggest that investors should remove as much of their currency risk as they can. By hedging foreign assets in their portfolio, they won’t lose if the currency their investment is in falls. Similarly, there won’t be any gain if it appreciates. There are two ways to hedge: - Buying a currency-hedged mutual fund.

- Investing in an exchange-traded fund. These funds remove the risk, so one has to worry only about stock market returns.

•

SHORT AN OVERVALUED CURRENCY

•

LOOK FOR HIGH INTEREST RATES

•

BUY UNDERVALUED CURRENCIES

Adventurous investors short currencies which they think will fall in value. They sell a currency for a predetermined price on a future date.

Since currencies trade in pairs, one has to buy another currency for this strategy to work. Essentially, it is an exchange of currencies. If you think that GBP is going to depreciate, then you’d sell it and buy USD. After the GBP falls, you buy it back at a lower rate. The difference between your purchase and sale is your profit.

One should buy the currency of a country that has a higher interest rate.

While the strategy is good, it is a risky one. Only those who can digest the risk should go for it.

Purchasing undervalued currencies is a good idea, like buying undervalued stocks. If the economy’s current account deficit is huge, then it means the currency is overvalued and will fall. If inflation is high, the currency will lose its competitiveness, pushing it down. Market dynamics also have an impact on currency valuations. Sentiment about the US currency is that it is most undervalued. It invariably means that others are overvalued. Be it for mitigating currency risk or taking advantage of fluctuations, the foreign exchange world isn’t for the faint hearted. Unless invested in the same country, one has to be alert about how world’s money is behaving.

Source: Y. Sudhir Kumar Shetty, Vice Chairman, Foreign Exchange and Remittance Group (FERG)

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CASE STUDY

DESIGN IN d3 Samar Habayeb, CEO and Creative Director of Silsal Design House, discusses relocating the brand to d3 and plans for product development in 2016

S

ilsal Design House produces dinnerware, tableware and accessories for the home and is centred on the theme of contemporary Middle Eastern design.

The company was set up in Amman, Jordan in 1989 by sisters, Reem and Rula Atalla, as there was a demand for Middle Eastern tableware that offered good quality and was affordably priced. Eighteen years later, when the sisters decided to step down, Reem’s daughter, Samar Habayeb, current CEO and Creative Director of Silsal Design, stepped up.

“Our inspiration for our designs combines historic calligraphy, floral motifs and geometric patterns associated with the arts of the Islamic world with the minimal functionality found in simplistic Scandinavian design,” said Habayeb.

Habayeb credits the growth of the company, which offers a number of collections, to her team of designers; who responded well to customer demand always introduced new styles to the different collections in an attempt to cater to different tastes.

She added that the team has also focused quite heavily on stocking sufficient inventory to cater to customer demand.

MOVING IN THE RIGHT CIRCLES In January this year, Silsal Design House opened in d3 (Dubai Design District) and Habayeb said associating with the district was important for the company’s image, given the infrastructure and proximity to other members of the creative industry.

However, what was even more appealing about the district was the ease with which the company could be set up and grown. According to Habayeb, the day-to-day operations in Dubai are relatively easy compared to other countries within the GCC region.

“Having online access to almost all governmental institutions and being able to process transactions

Samar Habayeb hopes to see the company expand throughout the Middle East.

and payments online, as well as having access to a large number of third-party logistics (3PLs) offering competitive rates, really helped to optimise our operations. Most importantly, it allows us to focus on the growth of the

Our inspiration for our designs combines historic calligraphy, floral motifs and geometric patterns associated with the arts of the Islamic world.

– Samar Habayeb, CEO and Creative Director of Silsal Design House

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company rather than tackling problems that may get in our way,” she said.

She added that the ease of hiring people from different nationalities has also been a plus for the company, owing to the healthy competition in the labour market and access to a large pool of human resources.

Silsal’s products have recently undergone a rebrand, chosen from a palette of 12 colours which can be mixed and matched to suit their requirements.

Their logo has also been completely changed to be more eye-catching and interesting than their previous logo.

“When brainstorming the new look for Silsal Design House, we knew we wanted to steer clear of the typical Arabesque look that everyone has gotten used to over the years. We wanted a look that was more relaxed, something that appeals both to the East and West. Our name is in Arabic but it now looks more like a design or a pattern. It has been an interesting exercise,” said Habayeb.

THE BRAND IN 2016

Silsal Design House creates pieces influenced by Middle Eastern design.

Silsal Design House will focus on launching a larger variety of tableware, dinnerware and serveware to fill a perceived gap in the market, by offering their customers rich and thoughtful designs with a minimalist Middle-Eastern feel.

“We have two new collections coming out, both designs are calligraphybased, however their colour palettes and styles are completely different. We aim to launch our brand within large department stores, both in the Middle East and in Europe. We are launching the Arabic version of our website this February, and we are positive that this will have a great impact on our online sales in the region,” she said.

Furthermore, Habayab said she hopes to see the company strengthen its presence around the Middle East and in Europe as a leader in tabletop fashion.

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FACETIME

EXPANDING THE ENTERTAINMENT SECTOR

Dubai and Abu Dhabi are well placed to compete with international entertainment destinations.

(PHOTOCREDIT: SYDA PRODUCTIONS/SHUTTERSTOCK.COM)

Ali Haidary, Founder and CEO of Sport & Entertainment Solutions (SES), talks about the rapid development of the UAE as an international hub for entertainment

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he UAE has seen a shift in its entertainment sector, most recently seen by both Disney on Ice and Disney Live! brought to Dubai in April this year, according to Ali Haidary, Founder and CEO of Sport & Entertainment Solutions (SES).

“I’ve lived here for almost 15 years and over a decade ago, we could see some so-called copycat events, which are not true to the original brands or superior in quality. However, now we can now see some of the world’s leading sport and entertainment concepts and events, which you would find in major cities like London and Vegas, coming here,” he said.

The UAE Government is creating a platform for large-scale public and private investments into tourism enablers such as airports, hotels, transport infrastructure, new attractions and theme parks. It is also setting the foundation to support the expected doubling of tourist arrivals over the next six years to over 30 million visitors, according to UAE’s transformation into a world-class leisure and entertainment destination report by PwC, released mid-2015.

In spite of stringent government regulations regarding entertainer and event permission, Haidary said there is great support from Dubai’s Department of Tourism and Commerce Marketing to bring events, such as the recent Disney showcases, to Dubai, as arts and culture are important to the region and central to the UAE’s national identity.

Coordination between Dubai Government departments responsible for infrastructure, tourism authorities, hospitality owners and operators and the destination management companies is crucial to optimise the wide diversity of leisure assets in place already and those being built, according to the PwC report, as businesses need to collaborate and develop partnerships to provide visitors with a seamless and effortless experience to enjoy the multiple attractions.

Haidary said the private sector is also thriving as young Emiratis are laying claim to their artistic future, expressing themselves in a way that reflects and promotes the enormous cultural diversity of the UAE and the region.

He added that HH Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Dubai Executive Council has made a concerted effort to translate his principles and visions into a tangible reality aiming to boost the sports movement not only in Dubai but in the UAE in general.

“The UAE has invested in sustainable facilities that not only attract elite sports events but also contribute to sports participation, which is an important part of its national health and wellness agenda. With the creation of extreme sports company, X Dubai, HH Sheikh Hamdan has encouraged everyone to experience the best sporting activities and events in the region,” added Haidary.

PROJECTS UNDERWAY Construction on the Al Qana Project, an AED 850 million tourist and entertainment project in Abu Dhabi, is already underway. Developed by the Municipality of Abu Dhabi and AlBarakah International Investments, the project

will feature the city’s largest cinema, a 5,000 square metre aquarium, and will cover an area of 150,000 square metres along a 2.4 kilometre waterfront.

It is expected to be completed in the first quarter of 2018.

The Al Qana project, located in the Khor Al Maqta area in Abu Dhabi, is designed to be one of the new urban landmarks of the emirate, according to a statement issued by AlBarakah International Investments. The project will also feature designated areas for indoor and outdoor sports, such as running and cycling tracks as well family-friendly facilities such as picnic areas and restaurants.

Looking forward, towards Expo 2020, Haidary said the increase in travellers, both for tourism and business, will have an impact on the UAE’s leisure and entertainment sector. He cited the The Opera House as one example of developments in the arts at a government level.

“The Opera House is a massive benefit to us and this is going to bring Dubai even closer and more in line with the global arts and entertainment capitals. As demand is increasing for entertainment and theatre shows in the market, we are seeing more venues being built. The Opera House will be an amazing venue for hosting shows,” he said.

GROWTH OF THE LEISURE AND ENTERTAINMENT SECTOR: • • • •

Five additional theme parks completed in the UAE by 2018.

Three theme parks developed by Dubai Parks and Resorts by 2018.

30 million expected visitors in the UAE by 20121.

20 million annual passengers expected through Al Maktoum International Airport by 2020.

Source: UAE’s transformation into a world-class leisure & entertainment destination report, PwC

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FRANCHISE

Picture PERFECT Hamad Al Shirawi, Co-Owner, Picture People, talks about importing the concept from the US and what makes them different from other studio services

Hamad and Abdullah Al Shirawi felt that the Picture People concept would be ideal for Dubai, and eventually the MENA region.

P

icture People the US-based portrait studio concept which specialises in family and child photography, was opened in Dubai in September 2015 by brothers Hamad and Abdullah Al Shirawi.

“Abdullah and I were on a casual trip to the US and we saw one of the studios in one of the malls with the concept and we found it really intriguing. We saw how organised it was because the studio follows preset steps,” said Picture People Co-Owner, Hamad Al Shirawi.

What impressed the brothers was that their photos were available immediately. Al Shirawi said that in comparison to photo sessions available in Dubai, the Picture People model was far superior in that it offers a same-day service on prints, canvasses, images to share on social media, and high resolution images.

Collecting photo albums requires a return visit, but the photos can be selected immediately after the shoot.

Negotiations began at the Picture People headquarters in Texas around September 2014 where the Al Shirawi brothers were able to learn the ins and outs of the model, and finally bring the concept to Dubai with the sole licence to the franchise across the entire MENA region.

“Dubai never ceases to amaze me as it gets all the good ideas and concepts, especially if it is a leading concept,” said Al Shirawi.

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SLOW AND STEADY The flagship store opened in Jumeirah in September 2015 without any marketing done beforehand. Al Shirawi said this was to confirm everything was in place to ensure the store ran smoothly and to take any feedback on board so they could make the necessary adjustments. The location of the store was another consideration.

“This is a community concept, so having one store in each community makes sense. Parking is an issue as well. If I were to open my store in a big mall where it takes customers 25 minutes to park their car, it wouldn’t be convenient. I want the experience to be easy where customers can be in and out, with their product, within an hour and a half,” he said.

In terms of expanding the franchise, sub-franchising is an option, but not something being considered at present.

“This is the first studio to open outside the US and there have been small model changes to the concept, even though the look and feel is identical. We wanted to ensure we maintained that because we are not just selling a product, we are selling an experience and the service is crucial,” said Al Shirawi.

One of the main draw cards to the Dubai-based model is the Picture People staff. As families in Dubai are quite conservative, the entire Picture People team is female. Al Shirawi said it was just more appropriate for women to work with mothers and children, and the feedback from clients was this made them extremely comfortable.

While photography is the core of what they do, studio associates are hired based on their personality.

“They are dealing with children and families; we want someone who will put a smile on the children’s faces. They have to be willing to go to their level and speak to them or use finger puppets or any means to communicate,” said Al Sirawi.

Dubai never ceases to amaze me as it gets all the good ideas and concepts, especially if it is a leading concepT. – Hamad Al Shirawi Staff members are then given two weeks’ intensive Picture People training so they can deliver the product within a 90-minute window without compromising service or quality. They are also trained to work with children of different ages in terms of the right poses and what to expect from each age group.

Al Sirawi added they also gather a lot of data before each shoot such as the size of the family, number of children, their ages and who the family would like to send the photos to. All this information helps the studio associates determine how the session should go.

They then sit with the child for about five minutes to build a rapport and make them feel comfortable.

While the head office in the US is hands-on in terms of making sure the Dubai studio has what it needs to operate, Al Shirawi said they have the freedom to develop the brand in line with cultural standards.

“Aside from an all-female team, which is not the norm in the US, each studio is completely sealed, and has its own changing room, so the clients can enjoy their session in private. Another adaption we had to make was giving our clients private viewing stations, which they really like,” he said.

Picture People is also able to cater to the personalised needs of their clients, whether they would like to bring in something from home or if they have a request for a specific backdrop or a prop, the company will try to accommodate them.

“We have a great client who attends many weddings and she comes to us for a portrait session once she is dressed, instead of taking a selfie at home. We are not competing with selfies; we are embracing them. We even have a selfie wall because people love taking them,” said Al Shirawi.

THE FUTURE IN FOCUS Al Shirawi said that in light of the fact that Dubai is an event-heavy place with so many things happening, company plans involve making Picture People available to the community.

“We have a portable studio with backdrops and lighting allowing us to be completely mobile, so if there is an event where children and mothers will be, such as at a school or a nursery, we can be there,” he said.

He added that the studio hosts coffee mornings for mothers where they can have coffee and canapés and at the same time have portraits done with their group of friends and their children.

ALL IN THE LIGHT Picture People uses a patented lighting system that is incredibly soft on the skin and doesn’t reflect off the eyes the way a regular flash does. The lighting system maintains a natural look.

Source: Hamad Al Shirawi, Co-Owner, Picture People

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START-UP

painless GAINS

Managing Partners Naz Noor and Faten Kaddoura discuss how their idea for a healthy snack has taken the UAE by storm

W

hey2go, a sugar-free protein ice cream, was developed in Dubai in April 2015 by Managing Partners Naz Noor and Faten Kaddoura and launched in December 2015.

Noor said she and Kaddoura wanted a product that could combine health and food that was ‘grab and go’, and that complemented the climate. She added that they decided that the snack should be a protein ice cream as an alternative to the available variety of protein shakes. The product uses whey isolate protein which is absorbed by the body easily, and each serving contains 23 grammes of protein.

Noor said flavour was one of the challenges faced when developing the product as there is a preconception about health food not tasting good.

The priority was that it should taste good. She added the toughest part was constantly taste-testing the product and making sure the texture was right

to ensure a consumer would not to have to fight their way through the first spoon in order ‘to get used to the taste’.

Funding, as far as start-ups go, was straight forward. There are two independent investors, each with a 25 per cent share, and the remaining 50 per cent belongs to the Aseel Group, of which Noor and Kaddoura are senior management.

Noor attributed the success of the product to the cooperation of the parties involved in its production. As start-ups generally do not product high volumes, the chef and the factory were very supportive in making the product in the sample sizes they wanted by the deadlines set before them.

According to Kaddoura there were certain logistical considerations that had to be made in terms of putting the nutritional information on the label, which involved sending the product to a laboratory for testing. After seven working days the laboratory provided

Naz Noor and Faten Kaddoura asked their staff to taste-test countless batches of ice cream until they got it right.

a stamped document stating that the ingredients in the product were the same as what was disclosed by the factory.

“From there, the documentation was sent to the municipality, where after about four working days, a further document was stamped and the barcode was issued and we were able to start packaging,” said Kaddoura.

What comes next?

One aspect that has surprised Noor is the product demand. She said they expected the product to enter the market and grow quickly, but not as quickly as it has. The home-grown brand has grown exponentially since its launch, with 200 outlets stocking the product in the UAE, putting the company on track to reach its goal of being stocked in 500 outlets by the end of 2016. There are plans to develop more flavours and export the brand further into the GCC and internationally as well.

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AWARDS

FinanceME BUSINESS VISION T Awards

he inaugural FinanceME Business Vision Awards kicked off on 23 March at the Jumeirah Emirates Towers, Dubai. The event saw a great turn out with all seats accounted for, giving small business owners the chance to network.

The evening started with an interesting panel discussion that focussed on how SMEs can secure their lines of finance. It was led by Robin Amlôt, CEO of CPI Financial and featured guest speakers, Farah Aslam, Managing Director, Dimara International, Fidaa Haddad, Managing Director, Gulf Credit Partners and Arif Qureshi, Unit Manager Business Banking, Mashreq.

The floor was opened for a Q&A between the guests and panellists, which led to some interesting discussion on the needs of small business owners and how they could better be met.

The stage is set for the panel discussion and Q&A session.

FEEDBACK FROM SOME OF OUR WINNERS… Being awarded the Top Trader in the recently held Business Vision Awards 2016 was another milestone achieved by Emirates Pearl. Awards are proof of growth and recognition and Emirates Pearl is proud to demonstrate such growth in the exports sector.

The Business Vision Awards event was an excellent opportunity to network with other successful SMEs and Bank Representatives. It gave an insight on how other SMEs are using technology and banking support to grow towards being a larger organisation and playing a vital role in the UAE economy.”

We are honoured to be recognised. We feel a huge responsibility to our region, to prove that startups in this region can be truly innovative at the core as opposed to copy-cat models. We hope that with our success, we can shine a light and perhaps open doors to international investors, showing them that we have great talent in the Middle East and it’s worth investing in.”

– Husain Arif Akhtar, Director, Emirates Pearl Trading LLC

– Joy Ajlouny, Co-Founder, Fetchr

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This is a real honour for Dubomedy, when you set up a comedy company you don’t really think about being considered for a Business Vision Award.

Mina and I are stoked and very grateful to the judging committee.”

Winning at the Business Vision Awards is a significant landmark for Beehive, as it demonstrates the growth of fintech and the importance of alternative funding platforms in the UAE. Over the past year and a half, Beehive has taken great strides in connecting investors with SMEs, bringing funding to some of the UAE’s most innovative young businesses, and supporting the growth of the local economy. This award is testament to the strength of the Beehive community.”

– CEO and founder of Beehive Craig Moor

– Ali Al Sayed, Partner, Dubomedy

We’ve done it before and we do it now. We see a lot of positive possibilities in this business haven. We redirect the substantial energy of our frustration and turn it into positive, effective, unstoppable determination.

This award for business well done is the opportunity to do more.”

–Gopu Nair, CEO and Founder, Tablix Technologies

We are very proud of what Genero has accomplished in the past five years. Being recognised as the Best Business Advisory Service from CPI Financial’s Business Vision Awards is a testimony of how the market views our firm and its achievements.”

– Tamer Bazzari, Founder and CEO, Genero Capital LLC

We are thrilled to be presented with such an honourable accolade and to be recognised for our hard work and expertise as an SME. At JPd, we are committed to supporting our fellow SMEs, entrepreneurs and start-ups through creating strong brand identities and building brand awareness through our services; which helps to differentiate them from others in their often saturated markets. The FinanceME Business Vision Awards is a fantastic platform to help promote Dubai SMEs across the region and a great opportunity to celebrate the entrepreneurial spirit” – James Pass, Managing Director and Creative Principle, JPd

Winning our category for Best Giving Back Initiative acknowledges our aim of offering an authentic and quantifiable approach to CSR in the F&B industry.

We’ve been making green business good business by supporting our clients with marketing their shifts to our biodisposables and plant-based packaging, utilising their shifts to ultimately sell the message of better practises.

Our products have also created tangible changes in ecosystems such as the beaches of Malé in the Maldives, and we are diligent with approaching educational institutions and putting our message out there there through the next generation. We appreciate FinanceME’s vision with the awards and various categories to encompass our approach to giving back through business.”

– Lamis Bin Harib, CEO and Founder, BioD Packing & Packaging cont. on page 30

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AWARDS

cont. from pg. 29

SOME HIGHLIGHTS FROM THE CEREMONY… Robin Amlôt, CEO, CPI Financial moderates the discussion with panellists Farah Aslam, Managing Director, Dimara International, Fidaa Haddad, Managing Director, Gulf Credit Partners and Arif Qureshi, Unit Manager Business Banking, Mashreq.

Robin Amlôt, CEO, CPI Financial, Chantalle Dumonceaux and Elissa Freiha, Co-Founders, WOMENA, and Georgina Enzer, Managing Editor, CPI Financial

Robin Amlôt, CEO, CPI Financial, Yulia Klimacheva, Client Manager and Partner, JPd, James Pass, Managing Director and Creative Principle, JPd, Georgina Enzer, Managing Editor, CPI Financial

Robin Amlôt, CEO, CPI Financial, Mona Ataya, CEO, Mumzworld, and Georgina Enzer, Managing Editor, CPI Financial

Robin Amlôt, CEO, CPI Financial, Fathia Ahmed, CEO, Heritage for Henna, Georgina Enzer, Managing Editor, CPI Financial

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Robin Amlôt, CEO, CPI Financial, Tamer Bazzari, Founder and CEO, Genero Capital LLC, and Georgina Enzer, Managing Editor, CPI Financial

Robin Amlôt, CEO, CPI Financial, Samer Chehab, COO, Compareit4me. com and Jon Richards, CEO, Compareit4me.com, and Georgina Enzer, Managing Editor, CPI Financial

Robin Amlôt, CEO, CPI Financial, Idriss Al Rifai and Joy Ajlouny, CoFounders, Fetchr, and Georgina Enzer, Managing Editor, CPI Financial

Robin Amlôt, CEO, CPI Financial, Lamis Bin Harib, CEO & Founder, BioD Packing & Packaging, and Georgina Enzer, Managing Editor, CPI Financial

Robin Amlôt, CEO, CPI Financial, Mina Liccione and Ali Al Sayed, Partners, Dubomedy, and Georgina Enzer, Managing Editor, CPI Financial

Robin Amlôt, CEO, CPI Financial, Mohamed Sharif Al Zarooni, CEO, Dimara International, and Georgina Enzer, Managing Editor, CPI Financial

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ADVERTORIAL

THUMBAY LABS, THE BIGGEST

PRIVATE LAB CHAIN IN THE UAE ANNOUNCES ITS ADVANCED TESTING CAPABILITIES AT ARABLAB 2016

Thumbay Labs is one of the most trusted names in diagnostic testing.

T

humbay Labs, the leading network of private diagnostic labs in the region, owned and operated by Thumbay Group, UAE, has launched a wide portfolio of advanced tests, making it one of the most trusted names in diagnostic testing. It is today the largest chain of diagnostic labs in the private sector in the UAE as well as the fifth largest standalone lab in the country. Considering the region as a whole, Thumbay Labs are among the largest service providers in terms of the range of tests available, the number of diagnostic tests done and revenue.

The UAE has a vibrant laboratory sector, with approximately 1500 medical centres, 41 standalone laboratories and 95 laboratories attached to hospitals out of which 33 are in the government sector.

These laboratories test approximately 20,000 samples a day, indicating a yearly market of AED 470 to 550 million. Thumbay Labs, from its facilities in hospitals, clinics and standalone units, registers an income approximately one fifth of the yearly market of the country.

The current year will see several aggressive initiatives from Thumbay Labs, in its quest to further widen its tests portfolio, as well as to increase market share. Thumbay Labs is eyeing major hospitals, both in the private and government sectors, to expand its clientele. It has plans to further expand to new locations in the UAE as well as abroad. A key strategy is to focus on ‘specialised segments’ targeting key specialties like diabetotology, genetics and women and child health.

An example is NeoScreen, which is a 57 parametre assay for new born screening priced aggressively at AED 320, the lowest in the country. It uses multiple technologies like liquid chromatography mass spectrometry (LCMS), highperformance liquid chromatography (HPLC), and time resolved flourimetry.

Dr. P. K. Menon, Director of Thumbay Labs, said that the brand was poised to be an important player in the diagnostics industry of UAE and the MENA region.

“We are undertaking our next phase of expansion by introducing new technologies like MALDI-TOF, ICPMS, FTIR which will position us as the bestequipped lab in the MENA region. We are looking for collaboration so as to enhance lab quality and productivity of client laboratories. We also are keen to enhance innovation in medical research,” he added.

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Thumbay Labs is the only College of American Pathologists (CAP) accredited lab in the Northern Emirates of the UAE. It operates under the Centre for Advanced Biomedical Research and Innovation (CABRI), a state-of-the-art facility established at the Gulf Medical University, Ajman, for research and diagnostics. Thumbay Moideen, Founder President of Thumbay Group said, “CABRI plays an important role in enhancing the quality of training for students undergoing a Master’s degree at Gulf Medical University. It also plays an important part in enhancing student/ faculty research and coordinates contracted research through Thumbay Group’s hospitals.”

Thumbay Labs operating in UAE and Hyderabad, India, will soon have more outlets with comprehensive clinical testing facilities like Imaging, cardio/ neuro tests, occupational health related tests, allergy and intolerance testing and a wide array of preventive health panels. It also plans to add many more advance diagnostics tests to its impressive list.

Thumbay Labs had showcased its latest offerings at the ARABLAB 2016 exhibition held at Dubai International Convention and Exhibition Centre, from 20 to 23 March 2016. Visitors were briefed about its most comprehensive modern facilities offering unique advantages such as complete end-to-end automation, online report availability, automated email report dispatch, research and referral facilities, QMS expertise, etc. Thumbay Labs also undertakes hospital lab management and has entered into acquisitions / mergers in a big way, with plans to further expand its presence in these areas.

Thumbay Moideen, Founder President of Thumbay Group

Dr. P. K. Menon, Director of Thumbay Labs, along with Prof. Gita Ashok Raj, Gulf Medical University - Ajman, at the Centre for Advanced Biomedical Research and Innovation, with the CAP accreditation certificate.

Thumbay Labs will soon have more outlets with comprehensive testing facilities.

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49 21/04/2016 16:40

BANK FOCUS

B The best

OF BOTH

Rami Sayegh, Head of Private Banking Wealth Management, Bank of Sharjah discusses how the partnership with Commerzbank AG strives to provide the best management solutions to clients

ank of Sharjah and Commerzbank AG, one of the leading banks in Germany, signed a cooperation agreement in 2012 to offer the best in wealth management and investment solutions.

Bank of Sharjah Private Banking Wealth Management division has been created by experts to find and deliver the right products to individual and corporate investors with customised advice and unique solutions tailored to their needs and adjusted according to local demands and market requirements. The entity gives the opportunity to open an offshore account at Commerzbank AG and access the diversified offering of sophisticated financial products it provides, as well as a complete onshore private banking and wealth management platform with a specially trained and dedicated team to ensure the highest level of service.

INVESTMENT SOLUTIONS

Rami Sayegh says investors need to focus on the long term.

It is part of our philosophy to offer comprehensive all-around advice and to provide innovative solutions that are tailored specifically to clients’ needs.

We have structured our approach into Advisory Solutions and Investment Solutions which could be used separately or combined.

With our cooperation partner, Commerzbank, we are able to offer German-quality wealth management with a strong Emirates heritage and provide full access to our integrated capabilities at Bank of Sharjah.

Commerzbank AG is famous as one of the world’s leading precious metals and foreign exchange dealing banks. Physical gold, coins and bars, can be purchased offshore with Commerzbank in Luxembourg at a guaranteed competitive pricing, as Commerzbank is a major shareholder of Argor Heraeus, one of the biggest gold refiners in Switzerland. Through the partnership with Commerzbank we can cont. on page 52

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HEALTHCARE PARTNERS

Advancing Healthcare for a Better Future

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BANK FOCUS

With Commerzbank, we are able to offer Germanquality wealth management with a strong Emirates heritage and provide full access to our integrated capabilities at Bank of Sharjah.

– Rami Sayegh, Head of Private Banking Wealth Management, Bank of Sharjah

cont. from pg. 50

ensure procurement and sale of large quantities of gold. A UAE based client can also benefit from Commerzbank’s storage facilities in Europe. Physical gold exposures of clients can also be managed by Commerzbank or used as collateral, giving clients access to the very attractive European interest rate environment.

MARKETS Major trends definitively include the search for purchase power preservation as easy monetary policy becomes a global phenomenon and the search for diversification, geographically and via asset allocation, and through the partnership, we can respond to these concrete needs. By utilising Commerzbank’s international locations we can offer geographical diversification, with Bank of Sharjah being a local direct contact. Physical gold still remains the asset class in connection with purchase power protection.

Attractive opportunities in global stock markets are still there, but investors may need to adapt to higher volatility and focus more on the long term. While equity market volatility will remain high in 2016, investors need adequate exposure to this asset class. Equities still offer satisfactory upside potential on the back of attractive valuations, growing

money supply, the absence of a lot of attractive investment alternatives in fixed income and attractive dividend yields.

We recommend continuing 2016 with a regional focus on European equities and German equities in particular due to their low valuation. In addition, the US market with its defensive qualities, is an important performance stabiliser for any portfolio.

Clients have to get used to these levels of volatility in the medium term. Reducing risk, diversification and waiting for opportunities is a good strategy. Moderating exposure to equities in sectors that are

fundamentally expensive such as the technology and automotive sectors and building exposure in less risky assets such as precious metal will help the diversification process, in addition to real estate opportunities in attractive markets such as in Germany.

Oil prices will remain low in 2016 and will have an impact on liquidity and the business of our institutional clients and oil related companies.

Increasing volatility in the capital markets will also affect negatively our clients’ businesses. We will see less liquidity, more cautious investing and high volatility.

THE BANK OF SHARJAH-COMMERZBANK AG OFFERS RANGE OF BENEFITS: • Access to traditional and alternative investment opportunities tailored by a German bank.

• Exclusivity to open an offshore account in Europe, while managing the client relationship at Bank of Sharjah.

• Onshore advisory service and access to all major worlds’ capital markets.

• Direct access to physical and non-physical gold and other precious metal assets.

• Attractive equity release and Lombard loans to utilise fixed assets and existing portfolio.

• Bespoke company structuring and succession planning.

Source: Rami Sayegh, Head of Private Banking Wealth Management, Bank of Sharjah

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Our Competence. Our Partnership. Your ProďŹ tability.

At Bank of Sharjah, we offer you a comprehensive range of premium investment solutions through our Private Banking Wealth Management division, in partnership with Commerzbank International S.A. This distinctive partnership brings together a committed team of professionals who take time to understand your requirements so you receive the personalised international and local asset management services you require.

We have many years of expertise in onshore and offshore banking, and knowledge of the precious metal investment market. We also provide equity release and Lombard loans, as well as company structuring and succession planning.

At Bank of Sharjah, we are your partner in progress.

Private Banking Wealth Management, Dubai Motor City, PBWM@Bankofsharjah.com, www.bankofsharjah.com

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TECH FOCUS

Smooth sailing

INTO THE NEW DIGITAL ECONOMY Andrew Calthorpe, CEO, Condo Protego, says the next nine months are vital for information management and cybersecurity

W

ork-site occupational safety was a priority for a small, UAEbased construction company, which had a wide range of projects across the country. But when hackers launched ransomware that encrypted and held hostage some of its vital data, the company’s lack of cybersecurity protection was exposed.

The company took the risk of paying the hacker to gain back its data, illustrating how advanced cybersecurity attacks–from ransomware to spam emails–can be devastating for any organisation, especially SMEs operating on thin margins. And more importantly, those organisations should be proactive about their cybersecurity, and not wait until after they have been attacked.

As the digital economy continues to grow, business and IT models have changed rapidly over the past three to five years, and will continue to accelerate over the next five years.

Middle East organisations, especially SMEs, need the digital strategies to succeed, centred on high performance

Andrew Calthorpe said finding the right channel partner is essential for increased cybersecurity.

information management, especially data consolidation and backup and advanced cybersecurity solutions, which could have prevented the disaster facing the construction company.

In an increasingly mobile-connected region, employees and customers are using smartphones and tablets at work, machines are increasingly connected to networks, and social media and video are creating a staggering amount of data that organisations need to sort, store, analyse, and protect.

Demonstrating the growth, one recent industry report shows that by 2020 the global amount of data generated will grow tenfold to 44 zettabytes, with one zettabyte equal to one billion terabytes.

With emerging markets like the Middle East set to generate 60 per cent of the total data by 2020, organisations, and particularly SMEs, face increasing urgency to launch a ‘technology refresh’ to upgrade their IT infrastructure to meet tomorrow’s business demands.

STARTING AT THE C-LEVEL Middle East SMEs should start their digital strategies by holding a combined meeting of C-level executives, especially with the CEO or COO and IT manager

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laying out the emerging business challenges, and the IT solutions that can help them solve these challenges. These can range from customer engagement, supply chain enhancement, talent development, and social media strategies.

Often, organisational technology decisions are based on compliance regulations, such as those described by the UAE’s National Electronic Security Authority, which require public sector organisations to have robust cybersecurity infrastructure.

Private sector organisations are under increasing pressure to be more transparent about their cybersecurity, with the European Union, for example, recently requiring Internet service providers, online retailers, and search engines to declare data breaches.

But Middle East organisations are largely unprepared for the new digital economy, sinking IT spending into essential services rather than innovation.

For example, one recent global survey showed that organisations have an average IT budget of about $250,000, with most spending centred around standard web and email hosting and productivity. In the current environment of financial and economic caution, IT budgets are often the first slashed.

SMEs need visionary leaders who understand that IT can drive business innovation and will choose the right channel partners that can support their digital strategies.

SPECIALISED PARTNERS Once SMEs have their business challenges, frequently they will consult with their channel partners’ expertise in developing a robust digital strategy and advice on which solutions to adopt.

In turn, experienced channel partners frequently go to existing customers to expand their range of solutions.

Like buying a new car or house, choosing the right channel partner may not be an easy process. In the Middle East, organisations are faced with a

Once a channel partner is chosen and a digital strategy developed, SMEs need to adopt the right solutions.

–Andrew Calthorpe, CEO, Condo Protego wide range of channel partners, from IT generalists to data management and cybersecurity specialists.

Channel partners should find the ‘sweet spot’ of specialised channel partners, who are experts in the organisations’ exact needs. SMEs can gauge partner effectiveness by measurements such as length of experience in the market, breadth and depth of vendor certifications, previous and current customers, range of specialised solutions, and staff qualifications.

Once a channel partner is chosen and a digital strategy developed, SMEs need to adopt the right solutions, and SMEs face a universal challenge in the high initial cost of new technology adoption.

SMEs need to carefully consider the solutions, and it comes down to three factors; value, cost, and return on investment, rather than total cost of ownership, as ROI models show full costs and benefits.

Often, SMEs are tempted to settle for lower cost, jack-of-all-trade solutions that are actually masters of none. From small insurance companies to boutique fashion designers, SMEs of all shapes and sizes need to compare run-of-the-mill solutions against more specialised enterprise-grade solutions, and they’ll find that the benefits of general solutions do not stack up.

While specialised solutions may cost more than general solutions, the value and opportunity cost from specialised solutions is much higher. Furthermore,

with vendors often discounting 10-20 per cent off solutions, then the holistic cost of specialised solutions is almost on par with general solutions.

MEASURING SUCCESS While an SME has a productive relationship with its partner and the latest solutions, when it comes down to accounting, how do they measure success?

This is the trickiest part as in both data management and cybersecurity, the most important metric is the one that is hardest to measure–systems that did not go down and were not attacked.

Unfortunately, Middle East SMEs are often driven to adopt the latest data solutions based on reactive decisions, for example if a company is breached by a virus that sends out spam emails to all of its customers, or an auto showroom has a car stolen and the CCTV coverage was not properly recorded.

This is why SMEs should choose trusted partners, rather than merely product suppliers, and take a proactive approach and not wait until it is too late.

The urgency facing SMEs in adopting digital strategies cannot be overstated; and they need to adopt them in the next nine months to ensure their business and customer success.

Despite having lower budgets than larger enterprises, SMEs have smaller IT infrastructure that enables them to be more agile. If large enterprises are like cruise ships, then SMEs can be like the speedboats, sailing quickly and successfully into the new digital economy.

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TECH FOCUS

Handling HACKERS Luke Brown, GM and VP EMEA, India and LATAM, Digital Guardian, looks at how businesses can protect themselves from cybercrime

Luke Brown said protecting data should be a priority for all companies.

O

btaining sensitive data is the primary objective for cybercriminals when targeting businesses, regardless of their size. Sensitive data can vary depending on the organisation but examples include intellectual property, source code, trade secrets, customer and employee personal identifiable information, account numbers, financial credentials, pending mergers and acquisitions contracts, access tokens, and passwords. Cybercriminals will quickly turn the stolen data into a profit by reselling it to interested third parties, whether in the underground market or to competing organisations.

Sending spear-phishing emails to target employees remains the most common method of attack used by criminals to compromise organisations. Typically, spearphishing emails have malicious attachments, such as a PDF or word document, that exploit common vulnerabilities found in popular programmes such as Adobe’s Acrobat Reader, Oracle’s Java and Microsoft Office. The attackers rely on social engineering and human error to trick users into opening the malicious attachment, which triggers an infection in the machine.

Once infected, attackers can install additional malware that focuses on locating and stealing businesses’ sensitive data.

Organisations need to understand where their sensitive data is at all times while having complete visibility and control over who’s accessing it and where it’s travelling.

This will enable organisations to perform risk assessments across their IT infrastructure, including their physical, virtual and mobile environments. Risk assessments will provide organisations with the insight needed to protect their critical IT assets and sensitive data while hardening any points of

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weakness. For some businesses this may sound like a daunting task, but they should leverage their current IT team or outsourced IT service provider to do this. In today’s hyper security-sensitive environment, this type of cyberrisk assessment is commonplace with readily available processes and methodologies to ensure success.

Cybercriminals will resell stolen data to interested third parties, whether in the underground market or to competing organisations.

– Luke Brown, GM and VP EMEA, India and LATAM, Digital Guardian

SOLVING THE PROBLEM Often it’s an issue of resources and budget restrictions as opposed to making mistakes. Businesses may not have the money to purchase additional hardware or implement expensive security products across all areas of their IT infrastructure, nor do they have large IT staff with dedicated security professionals. But having the basic system and endpoint hygiene helps improve an organisation’s security posture dramatically.

For example, improving security education among employees is critical; in addition to ensuring all applications, programmes, AV software and operating systems have the most recent security updates installed. Lastly, businesses should consider Software-as-aService (SaaS) or Managed Security Service Provider (MSSP) based security solutions. This model of delivery will provide a much higher level of security at a lower, monthly subscription cost with no additional strain on existing IT resources.

A key point to remember is that businesses are not immune to cyberattacks. The list of compromised companies is already long and growing. While budget and resource pressures are intense, system security and data protection can no longer be ignored. At a minimum, businesses must do basic network maintenance, like patch management, so they don’t become the easy targets that both sophisticated and novice hackers are searching for every day.

HOW TO PROTECT YOUR BUSINESS 1. MAKE DATA PROTECTION THE TOP PRIORITY

Prioritise data protection first and foremost. Data breaches are inevitable but losing sensitive data is not.

2. IDENTIFY CRITICAL IT ASSETS AND SENSITIVE DATA

Identify which IT assets within the business are the most valuable and what type of sensitive data they hold–this will provide the visibility and control capabilities needed to prevent attackers from accessing and stealing sensitive data.

3. PROTECT THOSE DATA ASSETS

Once sensitive data is identified, label it. Classifying sensitive data with digital labels such as ‘internal only’ or ‘confidential’ will help with tracking sensitive information that will be targeted by attackers. In addition, have complete visibility over who is accessing the data and how it’s being used and shared, both internally and externally.

4. IMPROVE SECURITY EDUCATION FOR EMPLOYEES

Add data protection policies to manuals and employment agreements, and train employees regarding the use of confidential data. Also be sure to perform regular security educational training and invite your contractors, vendors and partners to participate. Include examples of social engineering techniques and common attack methods so your employees will be aware of the threats currently targeting them.

5. KNOW THAT COMPLIANCE ISN’T ENOUGH

Although many industries have basic compliance requirements, like HIPAA, PCI and Sarbanes-Oxley, these compliance standards are just the beginning to securely protecting sensitive data. They’re a good foundation, but more must be done to keep business-critical data, beyond credit card numbers and social security numbers, safe.

6. BE PREPARED IF YOUR DATA IS STOLEN

Even the most security conscious organisations in the world get attacked and lose sensitive data. Accept that it could happen and have an incident response plan at the ready.

Source: Luke Brown, GM and VP EMEA, India and LATAM, Digital Guardian

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LAST WORD

Health matters Clancey Po, CEO, Burjeel Hospital discusses healthcare–both in and out of hospital WHAT IS YOUR BUSINESS AND WHAT IS YOUR ROLE?

HOW DO YOU STRIKE A WORKLIFE BALANCE?

I am currently the Chief Executive Officer (CEO) of Burjeel Hospital–the largest private premium hospital in Abu Dhabi, UAE.

Everything is very subjective when it comes to a work-life balance. One can go home and sleep and still have a complaining wife and kids. As soon as I reach home, I forget about work. I switch off very easily and spend quality time with my family. I live very close to the hospital, so quite often, my wife walks with the dog to pick me up. So right from the hospital steps, I am connected with my family. By the time I reach home, which is eight or nine o’clock in the evening, my younger

WHAT DO YOU ENJOY THE MOST ABOUT YOUR POSITION? Having satisfied guests is very important for us in Burjeel. What was enjoyable yesterday is going to become basic tomorrow, so we always find newer ways to please our guests. We do not look Bassam Alkasser at our commercial gains alone; it is the sense of caring for our guests’ health and wellness that matters more. And this is what I like most about my work, and our industry as a whole.

WHAT DO YOU LOOK FOR THE MOST WHEN HIRING NEW TEAM MEMBERS? I was part of the commissioning team for Burjeel Hospital and every staff member is chosen very carefully. I headhunted most of my senior management team, creating a new niche for premium private hospitals. I hired top-notch doctors from all over the world which resulted in creating one of the finest private hospitals in the region.

Clancey Po

son is usually studying, so I get involved immediately. Just before we go to sleep, I call my eldest son in Canada.

WHAT IS YOUR DEFINITION OF SUCCESS? When I see the smile on the faces of all our guests who have gone through a complicated surgery or have been through difficult moments in their lives in terms of their health, that is very rewarding. Our success is measured by the difference we make in the lives of our guests.

What is your leadership style?

We have over 2,000 staff members on a full-time basis in Burjeel Hospitals and Medical Centres. I often look after strategic issues. As a leader, I am a delegator–supportive, empowering, and democratic.

What is your favourite film?

The Usual Suspects.

What is the first album you ever bought?

One of Michael Jackson’s.

What are your hobbies?

Sodoku, squash, cricket, and reading.

When I’m not at work I like to…

I like my walks with the family. When it is summer time, I like going to the gym and my wife is often there with me.

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