contents December 2014 w w w.t h e e d ge. m e
Exclusive interview: Vivek Seth, CEO of Halul Offshore Services Company
- December 2014
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Logistics is the backbone of business and trade. Qatar’s logistics market is expected to grown by about 10 percent in 2014 over the previous year. (Image Corbis)
Feature story: Prospects of regional IPOs better
Growing Asian markets: Right time, right place, right product
PUBLIC OFFERINGS
How strong is the regional outlook really for new listings?
DELIVERY TO DOHA
100% Qatari
PLUS:
Qatar's lucrative logistics sector
QIA diversifies into China Procuring construction materials Arbitration increasing in Qatar Simulation Center at Sidra
Against a global energy backdrop charged with the aim of reducing greenhouse gas (GHG) emissions, the question remains to what degree Qatar can leverage these natural market advantages into the dominant energy strategy in the coming years? Simon Watkins reports
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features
- QATAR’S BUSINESS MAGAZINE - Vol. 6 No. 12 - Issue 62 - December 2014
cover story
Vol. 6 No. 12
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Throughout 2014, equity research analysts have pointed out that, compared with 2013, as an asset and investment class, equity had picked up, both in terms of volume and numbers in the Middle East and North Africa region. Experts tell The Edge that a comparable momentum can be expected for the first quarter of 2015, writes Aparajita Mukherjee.
Business interview: Taking Halul Offshore beyond Qatar 50
A second-generation marine engineer, Vivek Seth, CEO of Halul Offshore Services Company, talks to The Edge about what it means to be heading an offshore shipping company in Qatar, with a total of 38 vessels with an asset base of QAR920 million, writes Aparajita Mukherjee.
Feature story: Delivery to Doha: Qatar’s logistics bounty 56
Powered by investments in infrastructure and transport, Qatar’s logistics industry seems to be heading on the right path, writes Aparna Shivpuri.
“Halul Offshore is the critical logistics arm of the offshore oil and gas industry,” says Vivek Seth, the company’s CEO.
The Edge | 3
contents page
sectors
Finance & Markets 25
With around 80 percent of its USD170 billion plus (QAR619 billion) global investments currently exposed to the rising collective sovereign risks of the European Union, it makes perfect sense for the Qatar Investment Authority to diversify its portfolio further, in favour of Asia.
The Hong Kong skyline (pictured here) has seen one of Qatar’s significant Asian investments in 2010 when the country bought a stake in Lifestyle International Holdings.
Energy & Sustainability 29
In mid-November, Qatar sent its first liquefied natural gas (LNG) delivery by Qatargas onboard a Q-Max vessel to the Dubai Supply Authority (DUSUP) LNG Terminal, an important regional development for the gas exporting nation.
Real Estate & Construction 33 With the demand for concrete expected to grow at a rate of 108 percent by 2015, Qatar needs to take a sound approach to its strategies for procuring building materials.
Tech & Communications 35
A recent survey shows that the role of cloud computing, mobile, social and Big Data is having a significant impact on the way businesses in Qatar function and interact with their customers.
Business Insight
63
“When moving towards a culture of patient safety, it is best to train individuals as part of a team,” says Joanne Davies of Sidra Medical and Research Center, who along with Cedric Lizin, head of wealth management, Middle East and North Africa and Japan, Barclays, talk to The Edge about the changes in the private banking landscape.
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6 | The Edge
editor’s letter Earlier this year, The Edge tallied up and published the results of our second online reader survey, which we had placed on our website in H2 2013 and collated later that year, comparing it to 2012. Recently we again compared statistics to see if there were any remarkable changes, and also to learn more about our readers - or at least those readers who are inclined to spend a few minutes online completing our survey. The outcome, of course, is not nearly as scientific as we would like it to be. But analysing the data can hint at trends, for instance, when comparing 2012’s results to 2013’s, we noticed a rise of more than 10 percent in the number of female readers and a notable decrease in the median age of The Edge reader base. I must also point out at this stage that the big difference between our first two sets of short survey results and this latest one, is that the 2014 survey has been left live permanently and therefore has far more participants. This perhaps gives us a more accurate reflection of who reads and supports The Edge, and how this broad demographic is reflected in, or compares to, the greater business environment in Qatar itself. Firstly, on our male/female split, we see a two percent decline of the latter, with the current averages being 28 percent women and 72 percent men. This is within the three-point margin of error accepted in all surveys and can thus be construed as largely unchanged from the year before. However, does this really mean that almost a third of Qatar’s business world – and especially those inclined to read The Edge – is female? At the same time, while the number of this group experienced a spike of numbers not too long ago, it has also recently plateaued and even reached a saturation point. Given these numbers mirror the population demographics
of the country as a whole, this does seem a logical conclusion. As far as age groupings go, our once dominant bracket of 40- to 49-year-olds, has held steady at 20 percent since 2013, but the new leader the same year, 30- to 39-year-olds, declined by a full five percent in 2014. Most notably though, The Edge’s readership in the 20 to 29 age group grew to 24 percent and thus in 2014, millennials for the first time eclipsed those at the cusp of Generation-X/Baby Boomers under 50. Again, from the past three The Edge online reader surveys, a clear trend from 2012 to 2014 can be seen in a steady reduction of the average age of a large group of our readership. And again, one can at the very least postulate that this mimics the make up of Qatar and indeed the region in general, as large numbers of these age groups are beginning to enter the workplace. Incidentally, there was also a jump of a couple of points each for our oldest readership categories 50 to 59, and 60+. With some bias, we feel that this could be more thanks to The Edge growing in popularity and reach than any spike in population numbers of our older readers. Within small variations, the majority of our readers are middle and upper management in that order, followed by company directors, those who class themselves merely as employees and a smattering of C-suite executives. Students and those who identify as self-employed fill the last two slots of readership at five and three percent. Also, here we do not see any surprises in terms of demographics, and considering how most organisations are structured, there are bound to be far less C-suite executives than managers, though we would expect and hope to see even more entrepreneurs in Qatar. Predictably, given the broad scope of The Edge, our readership’s market segmentation reflects almost every business sector. Another thing that seems unchanged, or in fact has risen slightly, is the level of satisfaction our readership has with our magazine, which remains high. So thanks to all the readers of The Edge for participating and for the ongoing support. More by happenstance than design this issue has an export/logistics theme so I hope you find reading it as enlightening as we have compiling it.
In 2014, The Edge’s readership in the 20- to 29 age group grew to 24 percent and thus millennials for the first time eclipsed those at the cusp of Miles Masterson Gen-X/Baby Boomers under 50. Managing Editor 8 | The Edge
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The Chinese Connection
photo of the month
HH the Emir Sheikh Tamim bin Hamad Al Thani flanked by HE Dr. Mohammed bin Saleh Al Sada, the Minister of Energy and Industry and HE Khalid bin Mohamad Al Attiyah, the foreign minister, meet with China’s Premier Li Keqiang (2nd R) at the Great Hall of the People on November 4, 2014 in Beijing, China. The Emir also met with the president of China, Xi Jinping during the state visit. The trip was followed by a flurry of announcements that included Ahmed Al Sayed, CEO of Qatar Investment Authority, who visited Beijing to launch a QAR36.4 billion fund that will invest in Asia, and a clearing deal that will make Qatar the Middle East’s first hub for transaction in Chinese currency. (Photo by Jason Lee-Pool/Getty Images) The Edge | 13
news
business news
Qatar hosts a series of events celebrating Global Entrepreneurship Week
main story
Some of the most well-attended events during the week were those hosted by the Al Jazeera Media and Training Center, which tackled topics such as social media tactics for entrepreneurs.
The Global Entrepreneurship Week, which was celebrated in Doha from November 17 to 23 brought together numerous entrepreneurs and support organisations in Qatar. A global event that was launched in 2008, the event is now celebrated in 125 countries with more than 24,000 partner organisations that organise more than 33,000 activities to engage participants each year. This year the GEW Qatar hosted more than 40 talks and workshops that focused on a variety of different areas related to entrepreneurship and innovation. Abdulaziz bin Nasser Al Khalifa, CEO of Qatar Development Bank, one of the main partner organisations of GEW Qatar said, “The launch and growing popularity of Global Entrepreneurship Week in Qatar has engaged entrepreneurs, built capacity and given great thinkers in our community the space and resources they need to create and innovate – moving the country’s entire entrepreneurial ecosystem forward. QDB will always support the success of SMEs, innovative projects and the people behind them. We look forward to many more years of partnership with GEW and everyone who makes this week possible.” Events held during the week included introductory sessions to encourage people to take the leap and start a business. Silatech, the Qatar country host partner for GEW, during the week also convened an informal entrepreneurship-policy working group. Discussions focused on how to best support an enabling policy environment for both aspiring and existing entrepreneurs in Qatar, as well as the potential for improved impact from stakeholders in the entrepreneurship ecosystem. Another interesting event during GEW Qatar that was organised by the Al Jazeera Media and Training Centre talks and workshops held in Doha was a session titled “We’ll during GEW.
40
14 | The Edge
Make You Media Ready! Pilot Interviews!” where a mock TV studio was setup and entrepreneurs were given a chance to be questioned on screen. In fact, the focus of many of Al Jazeera Media and Training Centre events, gave startups the opportunity to learn how to interact with the media, which many at the event found a useful addition to this year’s event. Al Jazeera senior presenter and host Kamahl Santamaria spoke to entrepreneurs about how to pitch ideas to journalists and get their stories noticed. Other events held during the week included a sports medicine hackathon organised by the Qatar Science and Technology Park (QSTP). QSTP worked with MIT’s Hacking Medicine initiative to launch the event, which was the first of its kind in the Middle East and the first focused on sports medicine. Aided by healthcare professionals and global innovation experts, teams were presented with real world scenarios that can be addressed through technology innovation. Over the course of the event, teams devised, tested and pitched their solutions to a panel of expert judges. In honor of Women’s Entrepreneurship Day, on Wednesday, November 19, the Qatar Chamber, the International Chamber of Commerce, and How Women Work hosted a panel session featuring female entrepreneurs in Qatar, and workshops on interactive networking and how to do business in Qatar.
Abdulaziz bin Nasser Al Khalifa, CEO of Qatar Development Bank, said, “The launch and growing popularity of Global Entrepreneurship Week in Qatar has engaged entrepreneurs, built capacity and given great thinkers in our community the space and resources they need to create and innovate.”
by the numbers Large-scale construction to impact supply chain Matt Kitson, regional director of Hilson Moran Qatar, spoke to The Edge about the likely impact of large construction and infrastructure projects on the country. With major improvements needed in Qatar’s infrastructure, demand for large-scale construction projects will grow, which is likely to impact the supply chain, according to Matt Kitson, regional director of Hilson Moran Qatar. Kitson added, “Growing concerns around the availability of key materials continues, with shortages of concrete and steel at the top of the list. Inevitably, as material demands increase, prices will rise.” Commenting on the legacy issues, Kitson said, “From a design point of view, the old issues still have not gone away. Water, energy efficiency and waste management need to improve, with Qatar consuming too much water and energy per capita as the country tries to cope with its population growth and keep up with demand. All these issues, however, can be addressed in the design phase, particularly through sustainable master planning.” So what’s the solution? Kitson said, “It is about designing with a hierarchy of engineering and environmental initiatives in mind. This should start with reducing demand at the source to an efficient system design to recycling what’s left over.” Practical measures, in Kitson’s views for water, include using low-flow fixtures along with a combination of drinking water and recycled treated water to serve them – unused water can then be used for irrigation. In terms of energy, it is about good, efficient treatment of the skin of a building to reduce excessive solar and thermal gain (glass and shading optimisation and a reduction in air leakage), as well as effective airconditioning systems with efficient motors and controls and highly efficient central cooling systems to service a site. “And for waste,” added Kitson, “we should be minimising and recycling construction waste where possible, and recycling operational waste using a district-wide recycling network. As with most developing countries throughout the world, infrastructure is a cause for concern; however, it is great to see that Qatar is working and striving towards making the improvements required to thrive.”
“Water, energy and waste management need to improve in Qatar.” - Matt Kitson, Hilson Moran Qatar
news
Qatar’s food security challeges Only 1% of Qatar’s land is arable of food in Qatar is imported to meet domestic demand.
93%
This higher dependency on imports makes the country susceptible to fluctuations in global food prices. Key food commodities: Dependence on imports for consumption Cereals
Fruits
99.8%
Meat
98.2% Milk
93.7% Vegetables
85.6%
84.7%
As Qatar’s population continues to grow, the cost of food imports will also increase
QAR
QAR
QAR
billion 2010
billion 2015E
billion 2020E
4.7
7.6
12
However, the Qatar National Food Security Programme is formulating a Food Security Master Plan that is expected to be completed by 2014. By 2023 Qatar expects to gain
60% to 70% food independence.
Source: GCC Food Industry, Alpen Capital
The Edge | 15
news
business in quotes
“Human capital development in any company is significant, and 80 percent of HR managers believe that the training being provided to their employees is very significant and is in fact greater than can be determined.” Dr AbdulAziz AlHorr, CEO, Qatar Finance and Business Academy at a seminar on the importance on human capital development in an organisation and its relation to Qatar’s National Vision 2030.
“Today’s decision by the Chairman of the Adjudicatory Chamber contains numerous materially incomplete and erroneous representations of the facts and conclusions detailed in the report.” Michael J. Garcia, chairman of the investigatory chamber of the FIFA Ethics Committee reacting to Hans-Joachim Eckert, chairman of the adjudicatory chamber of FIFA, who said that while there were some concerns regarding the conduct of individuals during the process, there was no evidence to find any country guilty of corruption in the 2018 and 2022 World Cup bids.
16 | The Edge
“Our mission is to provide access to the best healthcare possible and assure every member of the Qatari family that they need not worry should they fall ill, because Seha provides them with the choice to seek the quality healthcare they need.” Dr Faleh Mohamed Hussain Ali, acting CEO NHIC, which has set up Seha information booths at key hospitals.
Business News in Brief ibq wins STP award from Commerzbank International Bank of Qatar (ibq) has won the Commerzbank Straight Through Processing (STP) award for the fourth year running, which recognises the bank’s outstanding performance in the execution of commercial and financial payments in Euros. The award is based on ibq’s in-house payments architecture and reflects its standards, which facilitate automated processing throughout the payment process. Accuracy in transactions is one of the main criteria for Commerzbank when choosing winners of the award.
Qatar’s investment programme sustainable at USD67 per barrel: QNB Qatar’s large infrastructure investment programme would be sustainable, even if oil prices fell considerably further. Brent crude oil prices have dropped from a peak of USD115 per barrel (QAR418.6) in June 2014 to about USD82 (QAR298.5) currently. This has raised speculation about the impact of falling oil prices on hydrocarbon exporting countries. QNB’s assessment based on 2013 data, is the fiscal breakeven price – the oil price at which Qatari government expenditure would equal government revenue – was USD67 per barrel (QAR243.9).
business in brief WISH holds special research preview The World Innovation Summit for Health (WISH), a global initiative of Qatar Foundation, held an The panel introducing exclusive preview the research forums ahead of the WISH of research and 2015 summit. findings ahead of the 2015 summit under the guidance of its Forum Chairs recently. In addition to the seven new research forums, WISH announced a special panel on healthcare and ethics in partnership with the Research Center for Islamic Legislation and Ethics (CILE), a centre of the Qatar Faculty of Islamic Studies (QFIS) in Hamad Bin Khalifa University within Education City.
Sherborne Qatar students excel in recent exams Sherborne Qatar continues to prove that it is a school with high academic standards and talented pupils. In the June 2014 IGCSE examinations set by Cambridge International Examinations, four pupils excelled and gained marks that singled them out as ‘Top in Qatar’. Headmaster, Michael Weston, commented, “This is no mean achievement, given the popularity of CIE amongst not only British schools, but also other international schools.”
Mashreq awarded Qatar’s best customer service bank
In recent years, Mashreq Qatar has won a series of Global Banking and Finance Awards
Mashreq Qatar, which has made significant investments in technology and people to develop its cusomter service, has been awarded the ‘Best Customer Service Bank’ in the Global Banking and Finance Review Awards 2014. Niranjan Mendonca, head of retail banking, Mashreq Qatar, said, “Each and every staff in Mashreq is suitably trained to take individual responsibility to provide our customers with superior service at any touch point. Service is a big focus area to us .”
Start-up Watch
news
eGrab, a local start-up launching soon, wants to create a digital catalogue of the inventory in Qatar’s supermarkets and groceries which can be ordered through a mobile app. (Image Corbis)
Can you talk about your concept, how did eGrab come about? eGrab is an idea that came about from frustrations that I had personally while doing my weekly grocery shop. I had a day job from 9 am to 6 pm. It was a lot of stress when we went grocery shopping after work. The traffic, finding parking, the crowded stores, long lines at the cashier, carrying all the items, broken trolleys, kids crying, it was all very stressful. I thought why don’t hypermarkets deliver? Then I saw that the inventory was huge and it couldn’t be done over the phone. That is where eGrab comes in, it is a mobile app, where you can select a store, then select your items from the app, and order, which we then deliver. What about partnerships, who will you be working with when you launch? We have partnered with some of Qatar’s hypermarkets and supermarkets. Our customers will be able to see the major stores and can start shopping. One of our professional grabbers will receive the order and start shopping for you. What are some of the challenges you have had to overcome? One of them was to have a list of all the items with pictures: that’s around 35,000 items. We had to get all the pictures by ourselves and we did it. It was also difficult to find programmers with a start-up mindset, but now the ecosystem is changing with incubation centres such as Qatar Business Incubation Centre (QBIC).
What are you planning to charge customers for delivery? And can you talk about the challenges to delivery? We have a validated model for delivery. The delivery happens in one hour from the time your order. Delivery from some stores is free. Some stores do have a delivery fee of QAR20 on a minimum purchase of QAR200. The traffic is increasing every day, but we have a very effective plan for the logistics that utilises technologies available today to make the one-hour delivery happen. What are your plans for the future with eGrab? As a first step, we applied to QBIC and we got incubated. It was a great journey with a lot of mentoring and support. Looking ahead we plan to provide the best customer experience by investing in technology. There are no plans to keep stocks. Our plans are to capitalise on the delivery system with the best technologies available.
Rahid Kader, founder of eGrab tells The Edge that they will aim to deliver orders from stores within an hour.
The Edge | 17
news
events
3–4 December
17–18 February
Future Drainage Works
World Innovation Summit for Health
Driven by Qatar’s premiere construction related event, Project Qatar, Future Drainage Networks Qatar is a specialised conference for drainage and sewerage networks. The programme has been designed in collaboration with an expert conference advisory board to meet the requirements of designing, constructing, refurbishing, operating and maintaining effective sewerage and drainage networks in Qatar. Significant opportunities exist in the market, including Ashghal’s Local Roads and Drainage programme estimated to be worth QAR7.2 billion over the next five to seven years. The conference programme will feature leading case studies from across Qatar and the GCC and will enable senior engineers and project managers to network and share knowledge in a focused environment.
2-4 February
WISH recently announced its first ‘Innovation Showcases’ competition, giving healthcare innovators the chance to demonstrate their work at the event to global health experts.
The World Innovation Summit for Health (WISH) each year brings together a global community of leading innovators in healthcare policy, research and industry. The focus of the summit is to encourage global collaboration in harnessing the power of innovation to overcome some of the world’s most urgent healthcare challenges and inspire other stakeholders to action. WISH is an initiative of Qatar Foundation and first took place in 2013 that brought together more than 1000 global healthcare leaders. The six areas of discussion at this year’s event will be: communicating complex health messages, delivering affordable cancer care, dementia, diabetes, patient safety, mental health and wellbeing in children and young people, and universal healthcare coverage.
24–25 March
The Energy Efficiency & Conservation Forum As a dedicated design and interiors event, the IQ Exhibition will attract a highly targeted audience.
Interiors Qatar Exhibition
Interiors Qatar Exhibition is a three-day interiors event to be held at Qatar National Convention Centre. The event brings together international trade professionals such as designers, architects, contractors, engineers, consultants, project managers, manufacturers, high net worth individuals, facility managers and fit-out companies among others. For exhibitors in particular, the event can help generate new sales leads and provide opportunity for market research and launch new products. 18 | The Edge
Current patterns of energy use put Arab economies among the least efficient in the world. Growth in energy consumption has been faster than economic growth during the past decade. This trend implies energy is not being used effectively to produce value within the regional economies. The Energy Efficiency and Conservation Forum is designed to provide a common platform for experts, government officials and delegates to share their experiences and research ideas. Topics of discussion at the event will include the energy and water nexus in the Arab world, an energy-efficient Qatar including Kahramaa‘s advancements toward energy efficiency and conservation.
Events Listing 1-3 December CSR Qatar 7-10 December AcousticsTech Qatar 7-10 December InsulationTech Qatar 10-11 December ITU Telecom World 18 December Qatar National Day
January
26-28 January Offshore Middle East
February
1 February Qatar Design Awards
March
10-11 March Qatar Projects Conference
April
6-7 April Future BIM Implementation
qatar perspectives
The climate for, and trends in, financial services in Qatar Qatar’s financial sector enjoys a benign climate and has a bright future. The present conditions in which the industry operates and its prospects owe much to the same combination of factors: a strong economy, a growing population and a burgeoning business culture, writes Yousef Al Jaida.
Heavy focus on infrastructure projects is spurring investment, employment and growth.
Underpinned by hydrocarbon wealth, the economy of Qatar has expanded rapidly. In the five years leading to the end of 2012, nominal gross domestic product (GDP) grew by an average of 15 percent annually. Growth slowed to 6.6 percent last year, but is still the fastest within the Gulf Cooperation Council (GCC) and is likely to continue to be for the next few years. Heavy focus on infrastructure projects is spurring investment, employment and growth. Interest rates are stable and macroeconomic policy, sound. Between 2012 and 2013 alone, the population grew by 11.4 percent to more than two million and is expected to keep increasing. At the same time, Qatar’s open economy encourages business development and a new generation of entrepreneurs is emerging. All these factors together are pushing up demand for financial services. Between 2010 and 2013, the finance, insurance, real state and business services sectors grew by nine percent a year. That makes up about 12 percent of GDP and is part of a major structural change in which the non-hydrocarbon sector now contributes almost half of national output. The progress of Qatar’s banks tells the story. According to the Qatar Central Bank’s most recent Financial Stability Review, in 2013 the combined assets of the banks rose by 19 percent – and that was slightly slower than in recent years. Expressed as a percentage of GDP, banking assets went up from 97.6 in 2011 to 118 last year. The Qatar Financial Centre (QFC) has been integral to this transformation of Qatar’s economy. Since our inception
in 2005, we have evolved with Qatar’s development to meet the ever-changing needs of firms wishing to do business in Qatar, regionally and internationally. The core of the QFC’s strategy is an onshore, world-class operating environment, which provides firms with a legal system based on English Common Law, robust regulation and a competitive tax regime. QFC-licensed firms can enjoy 100 percent foreign ownership, repatriation of profits and a competitive 10 percent corporate tax rate on locally sourced profits. Recently, we have undertaken several legal and structural enhancements, together with process improvements, to encourage a broader range of non-financial firms and structures to be licensed. Refinements have been introduced to clarify many aspects of QFC legislation and give QFC-licensed firms more certainty and flexibility in their operations. These enhancements include special purpose companies, holding companies, single family offices and the insolvency regimes in the QFC. Among other services the QFC now welcomes are corporate headquarters, professional and business services, corporate services and classification and grading services. The process improvements include streamlined licence application for non-financial firms. They can now take advantage of a one-stop shop for licensing, immigration and related services. The process may take no longer than a couple of weeks – or even only a few days – to complete, and fees are competitive. The ease, cost and speed of setting up
20 | The Edge
at the QFC compare favourably with other financial centres around the world and are especially attractive for domestic Qatari firms wishing to conduct business in Qatar, regionally or internationally. Qatari firms constitute about 28 percent of active QFClicensed firms and the number is expected to continue rising. Taken overall, the range of activities firms may undertake at the QFC and the straightforward and competitive licensing process for non-financial firms there, underline the QFC’s commitment to supporting business in Qatar in line with the goals of the Qatar National Vision 2030. As Qatar’s financial sector and economy evolve, so will the QFC.
Yousef Al Jaida is the deputy chief executive, Qatar Financial Centre Authority.
ONE DAY, ONE CROWD, ONE STYLE
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qatar perspectives Arbitration use to become more pronounced in Qatar Resolution of conflicts arising from business transactions is one of the most important considerations in drafting commercial contracts. Disputes stemming from commercial transactions can be resolved under different forums and are not interchangeable, writes Dr. Minas Khatchadourian. Disputing parties can be brought to national courts of one of the contracting parties, submitted for arbitration, or settled by means of alternative dispute resolution, such as mediation or conciliation. These methods of dispute resolution are not interchangeable. They differ depending on factors such as time limits, cost of procedures, finality, and enforceability of decisions or awards. Most often, disputing parties do not want to grant the home court advantage to the other party and prefer to seek adjudication from a neutral forum. Such neutrality, combined with flexibility and confidentiality of procedures, and finality and enforceability of awards, has made arbitration the most oft-used mechanism for settling international commercial disputes. Disputes arising from international commercial transactions are most frequently submitted to such arbitral institutions as the International Chamber of Commerce (ICC) International Court of Arbitration, the American Arbitration Association’s (AAA) or to some regional arbitration centre, such as Dubai International Arbitration Centre or Qatar International Center for Conciliation and Arbitration (QICCA).
As for Qatar, the national arbitration rules are found in the Civil and Commercial Procedural Law of 1990 (‘the Qatari Arbitration Law’). Last year, a draft arbitration law was circulated for comment, which is expected to resolve some of these challenges. As yet, however, there has been no indication of when such a law might come into effect. In the last few years, several developing trends concerning international arbitration have been identified. Practitioners and users of arbitration in Qatar and the Gulf Cooperation Council (GCC) region should keep an eye on the fact that all the major arbitral institutions have adopted new procedures for the appointment of emergency arbitrators with the power to issue interim measures before an arbitral tribunal has been constituted. There is also a growing trend to expand discovery rights in international arbitration, especially with regard to e-discovery, a trend likely to continue going forward. There is also a recurring pattern towards providing informal or interim dispute resolution procedures. It is likely that this trend will continue in an effort to stave off criticism that international arbitration takes entirely too long to render decisions. There is a growing use of new methods intended to expedite international arbitration proceedings; among them are the Scott Schedule (to set out in tabular form, the positions of the respective parties on each item in dispute for use at the hearing of the case), hot-tubbing (or concurrent expert evident), etcetera. Several international arbitration institutions now recommend use of these tools and thus are likely to grow even further in use. Finally, it appears that international arbitration has turned into a
Dispute resolution methods differ depending on such factors as time limits, cost of procedures, finality, and enforceability of decisions or awards. 22 | The Edge
market and must be viewed through that lens. There will be more competition among the stakeholders (practitioners, arbitral institutions, experts, cities seeking to become arbitral seats), an inclination that is most likely to continue. Likewise, cultural globalisation nowadays plays a significant role in the flow of AngloAmerican legal culture to Arab Middle Eastern and Gulf civil law jurisdictions such as Qatar. In light of the economic developments, in the Arab Middle East, arbitration – whether international commercial arbitration or international investment arbitration – is now playing an increasingly fundamental role in the various economic sectors in the region. Today, international investment arbitration, running parallel with international commercial arbitration, plays a significant role in the legal and economic life of the Middle East and North Africa region, including the GCC countries. The next few years will certainly bring more progress to arbitration in Qatar. The discussion about the new law and the constant legal education and practice in this field will surely bring extensive debate in the arbitration legal community and will constantly keep us aware of the international developments in this area.
Dr. Minas Khatchadourian is the deputy secretary general of the Qatar International Center for Conciliation and Arbitration. He has recently established the Gulf Legal Excellence Network.
SEASON'S GREETINGS
Souq Najd, Salwa Road, Tel: 4432 4888 | Royal Plaza, Al Sadd, Tel: 4435 5588
Fauchon.Qa
Contents: Qatar diversifies QIA portfolio to include China. 25. Going local: Qatar’s SME zones. 27.
finance & markets The Hong Kong skyline (pictured here) has seen one of Qatar’s significant Asian investments in 2010 when the country bought a stake in Lifestyle International Holdings (LIH) .
With around 80 percent of its USD170 billion plus (QAR619 billion plus) global investments currently exposed to the rising collective sovereign risks of the European Union (EU), it makes perfect sense for the Qatar Investment Authority (QIA) to diversify its portfolio, and a recent flurry of news confirms that it is doing just this, with a re-weighting in favour of Asia, writes Simon Watkins.
S
overeign investment analysts say that by including Chinese state entities in much of this diversification strategy, it is also a very shrewd way of broadening and deepening Qatar’s already strong economic and financial links with the biggest of the Asian Tiger states, In broad terms, the initial focus of QIA (the 13th biggest sovereign wealth fund in the world, according to the Sovereign Wealth Fund Institute) will be on investing around USD15 to USD20 billion (QAR55 to 73 billion) over the next five years in the developed Asian markets of Japan and Singapore, and in those high up the emerging markets development curve,
Qatar diversifies QIA portfolio to include China China (including Hong Kong SAR) and South Korea, according to sources in the Middle East. Testament to this new-found impetus is Qatar’s general investment stasis in Asia since it took a USD2.8 billion (QAR10.2 billion) stake in Agricultural Bank of China’s Initial Public Offering (IPO) in 2010. This trend ended in October, when the QIA said it would pay USD616 million (QAR2.2 billion) for a 19.9 percent stake in Lifestyle International Holdings (LIH), which owns Hong Kong’s SOGO department stores. The purchase of this mid- to upmarket retailer is in line with the previous sectoral investment preferences of QIA chief executive, Ahmed Al Sayed – consisting of
consumer goods, services, and technology, media and telecommunications. In line with this strategy, QIA already has stakes in France’s Champ Elysees mall and LVMH, the United Kingdom’s (UK) Harrod’s department store and Camden Market, and the US’ Tiffany’s brand. Qatar’s UK holdings extend to stakes in the London Stock Exchange, Sainsbury’s supermarket chain, Barclays Bank, the Olympic Athletes’ Village, the Shard office building, Canary Wharf, and the Chelsea Barracks site. Despite some rumours to the contrary, though, there seems little evidence that this shift away from Europe is a reaction to rising criticism in some quarters over The Edge | 25
sectors | finance & markets
Qatar’s alleged links to the funding of Islamic extremism. A case in point in this respect is that, although UK Prime Minister David Cameron reportedly asked HH The Emir Tamim bin Hamad Al Thani about such links during a meeting in London in late October, the UK leader then went on to urge Qatar to plough more money into infrastructure projects across Britain, especially in the north of the country.
Eastward shift
The recent developments between Qatar and China are results of the seismic-scale of shifts in the relations between the two countries that have built upon the groundwork done over the past few years, says independent Middle East analyst and former director for Caspian Sea Oil and Gas Affairs in Iran’s Ministry of Petroleum, Mahmood Khaghani, in Tehran. In this specific context, whilst Qatar made no significant investments into Asian businesses from 2010 after its Hong Kong Lifestyle International Holdings (LIH) stake purchase, it was allowed by China
“In five years’ time, using the Chinese currency is going to be a requirement for any Middle East firm.” - Simon Williams, HSBC MENA. – extremely significantly, as The Edge reported at the time – to buy a 22 percent stake in CITIC Group, the investment arm of China’s sovereign wealth fund, the China Investment Corporation (CIC) in August 2012. This occurred shortly before the investment arm of the QIA – Qatar Holding – was granted a USD5 billion (QAR18.2 billion) quota to invest in China’s capital markets, under the Qualified Foreign Institutional Investor (QFII) scheme. The QFII scheme is the main channel for foreign investment in Chinese stock and bond markets, and may well be regarded a template for the quid pro quo theme of Sino-Qatari relations going forward. Moreover, in May 2014, QIA was among a group of investors who bought
Country
Fund
Norway
Government Pension Fund Global
893
UAE, Abu Dhabi
Abu Dhabi Investment Authority
773
Saudi Arabia
Sama Foreign Holdings
757
China
China Investment Corporation
653
China
SAFE Investment Corporation
568
Kuwait
Kuwait Investment Authority
548
Hong Kong
Hong Kong Monetary Authority Investment Portfolio
400
Singapore
Government of Singapore Investment Corporation
320
Canada Federal
CPP Investment Board
208
China
National Social Secutiry
202
Canada Quebec
Caisse de depot et placement du Quebec
191
Singapore
Temasek Holdings
177
Qatar
Qatar Investment Authority
170
Source: Sovereign wealth fund Institute
26 | The Edge
Assets USD billion
USD5.1 billion (QAR18.6 billion) of shares in CITIC Pacific, which was acquiring assets from its parent, CITIC Group. As underlined by HSBC’s chief economist for MENA, Simon Williams, in Dubai that, “In five years’ time, using the Chinese currency is going to be a requirement for any Middle East firm serious about developing its trading links with China”, these latest advances in currency and investment cooperation find resonance in booming trade between the two countries. Overall, the volume of trade between Qatar and China during the period from end2008 to end-2013 rose by 345 percent to reach USD11.5 billion (QAR41.7 billion) in the past year, highlights the Minister of Economy and Trade, HE Sheikh Ahmed bin Jassim bin Mohammed Al Thani, adding that increasingly strong economic ties constitute an incentive for Chinese companies to enter the Qatari market. In fact, there are currently 13 companies fully owned by China operating in Qatar, in addition to the 181 joint venture companies with Qatari partners. More specifically, in May this year, China for the first time in 2014 overtook the US’ position as leading exporter into Qatar (with a 10.3 percent share of its monthly imports), whilst Qatar is the main source of liquefied natural gas exports to China, accounting for around 60 percent of its LNG requirements.
QAR
41.7 billion
The escalation of volume of trade between Qatar and China during the period from end-2008 to end-2013.
finance & markets | sectors
Entrepreneurship
Going local: Qatar’s SME zones While diversification strategies aimed at moving economies away from hydrocarbon dependency have become commonplace around the Gulf in recent years, in Qatar, the move towards solidifying diversification has been underway for some time, and from an early stage, the government has recognised that the creation of a vibrant and expansive world of small and medium-sized enterprises (SMEs) is key to success in this, writes Oliver Cornock. Qatar has therefore been concerned, too, with measures to help bring in the investment, expertise and entrepreneurial culture necessary to ensure this becomes a reality. Yet, by far, the majority of SMEs in the state remain dominated by expatriates, a fact recently illustrated by moves to boost Qatarisation rates in the private sector. The Qatar National Bank (QNB) September 2014 Economic Review stated that as much as 94.1 percent of the private sector labour force was non-Qatari. One important step towards tackling this imbalance has recently been taken with the Ras Bufontas specialised economic zone, which was set to break ground last month. While it is true that special economic zones have been widely established across the region in recent times, Ras Bufontas is significantly different: the zone is the first of three such parks specifically targeting Qatari SMEs – not only SMEs based in Qatar, that is, but most importantly those set up and run by nationals. This is an important step in recognising that long-term, sustainable growth in the state is best served by an indigenous private sector, capable of competing globally and providing the country with future jobs and prosperity, long after the
“The government does not want the economy to drop off after the 2022 World Cup,” Fahad Rashi Al Kaabi, CEO of Manateq, which is behind free zones in Qatar.
major, prestige infrastructure projects – and even the natural gas – are over. “The government does not want the economy to drop off after the 2022 World Cup,” Fahad Rashi Al Kaabi, CEO of Manateq, which is behind the zones, recently told OBG. “The idea is to encourage local industrial capacity. The overall aim is to target locals to set up across a wide range of sectors, while attracting international tenants to be the main anchors in the zones.” Manateq is the renamed state economic zones company, owned by the government via Qatar’s SME Authority. With an authorised capital of QAR5 billion, it is now in the process of creating special economic zones for local SMEs at Um Alhoul, Ras Bufontas, and one additional location that is being currently discussed. Ras Bufontas Special Economic Zone is the most advanced, and will eventually occupy a four sq km area near Hamad International Airport, with all three phases of the project expected to be completed by mid-2019 with phase one launching in 2017. Um Alhoul will be the largest – a 34 sq km area adjacent to the New Port
Project at Wakrah. Eventually including a canal, it will launch the first of its three phases to the market in 2017 while the last phase begins after 2022. The Economic Zone 3, meanwhile, is the least advanced and is still looking for a location. The zones’ novel approach is to reserve their space and incentives for local SMEs and businesses in general, particularly those within the knowledge economy. Investment in these companies and in the zones can be from anywhere, with global players being courted to set up operations, but the target is mainly the national, Qatari private sector. This is likely to be widely welcomed. The local, Qatari national private sector has long faced a number of obstacles – not least of which is the lack of incentive for many Qataris to go into business, when public sector jobs are so attractive. For SMEs, too, obtaining finance has often been problematic, given the family nature of many enterprises and their consequent lack of transparency. A third challenge has been the creation of an entrepreneurial culture in schools and colleges, training new generations to think in terms of opportunities, which have commercial prospects. Recent times have seen numerous schemes rolled out to tackle these challenges, however, particularly in financing and education. Manateq is now providing the space and conditions for Qatari SMEs to show what they can do within an incentivised, one-stop-shop environment. Many will be watching to see how these economic zones develop, as they will likely provide a good test of how far a local entrepreneurial culture has taken root – as well as being an important test of the ability of government policy to shape the goals of future generations of Qataris.
Oliver Cornock is regional editor, Middle East, for Oxford Business Group. The Edge | 27
Contents: Qatar’s first Q-Max LNG cargo to Dubai. 29. Saudi Arabia abdicates ‘swing producer’ crown. 30.
energy & sustainability Qatar expands its delivery options with first Q-Max LNG cargo to Dubai In mid-November, Qatar sent its first liquefied natural gas (LNG) delivery by Qatargas onboard a Q-Max vessel to the Dubai Supply Authority (DUSUP) LNG Terminal located at the Jebel Ali Port, an important regional development for the gas exporting nation, writes Simon Watkins
T
Qatar has the capacity to produce as much as 77 million tonnes a year of LNG. (Image RasGas)
he Q-Max LNG vessel ‘Lijmiliya’ – which, at 345 metres long and with a capacity of 263,000 cubic metres, ranks as one of the largest LNG vessels in the world - was loaded with 150,000 cubic metres of LNG in the Port of Ras Laffan. From there, it later pulled alongside DUSUP’s 125,000 cubic metre Floating Storage and Re-gasification Unit (FSRU) Golar Freeze, which is moored at a jetty in the Jebel Ali Port to unload the cargo, a process that took two days. Qatargas has been delivering LNG to Dubai for some time on board Q-Flex vessels, but the Q-Max cargo is a first for the involved parties Qatargas, DUSUP, Nakilat, and Shell International Trading and Shipping Company (STASCo), highlighted Qatargas’ CEO, Khalid bin Khalifa Al Thani, in Doha. “The safe and efficient loading, transportation and discharge of LNG is crucial to maintaining Qatargas’ reliability as the world’s largest LNG producer and supplier,” he added. In broader terms, the latest delivery is part of an agreement signed in 2008 between Qatargas 4 and Shell International LNG Supply for the supply of LNG to DUSUP in Dubai, with the first Q-Flex cargo from Qatargas delivered to DUSUP in November 2010. Facing mounting competitive challenges from other potential suppliers into the region – Australia, for example, is set to more than triple its annual LNG-manufacturing capacity to 85 million tonnes by 2018, surpassing that of Qatar – increasing the flexibility of its mechanisms for delivering LNG to clients has been a feature of Qatar in recent months. In this context, Qatargas currently utilises a fleet of some 19 Q-Flex and 13 Q-Max vessels in addition to 12 conventional LNG vessels, and has continued to strengthen its relationship with Nakilat, Qatar’s dedicated LNG shipping company. Nakilat, The Edge | 29
sectors | energy & sustainability
Facing mounting competitive challenges from other potential suppliers into the region, increasing flexibility of delivering LNG to clients has been a feature of Qatar recently. in turn, recently cemented its position as Qatargas’ premier gas transporter by dint of a refinancing deal of USD807.4 million (QAR2.9 billion), through Qatar Islamic Bank (QIB) and Barwa Bank, allowing for the purchase of three new liquefied natural gas (LNG) carriers that will be added to Maran Nakilat, Nakilat’s joint venture with Greek shipping company, Maran Ventures. According to Nakilat, the additional vessels include an existing 2007-built 145,000 cubic metre (cbm) ship and two 160,000 cbm ships currently under construction at DSME and Hyundai Samho, with expected deliveries in June 2015 and April 2015, respectively, while Qatar has the capacity to produce as much as 77 million tonnes a year of LNG, according to industry figures. These new vessels increase the joint
venture’s total fleet from eight vessels to 11 and will be used in international trade, growing Nakilat’s LNG fleet from 58 vessels to 61 (the largest in the world), and expanding Nakilat’s total fleet - including both LNG and liquefied petroleum gas (LPG) carriers - from 62 vessels to 65. Indeed, the past few years has seen exponential growth at Maran Nakilat, over three distinct phases: the first being an initial fleet of four vessels with a cargo capacity of 580 thousand cbm; the second with the now expanded fleet of 11 vessels with a cumulative capacity of 1.7 million cbm; and the third being Nakilat’s increase in ownership of the joint venture (in June 2013) from 30 percent to 40 percent. As it now stands, Maran Nakilat – which was established in 2005 – has chartered out the original fleet of four LNG vessels
to RasGas, while Nakilat also manages and operates four large LPG carriers via two strategic joint ventures: Nakilat Keppel Offshore & Marine (N-KOM) and Nakilat Damen Shipyards Qatar (NDSQ), in addition to operating the ship repair and construction facilities at Erhama Bin Jaber Al Jalahma Shipyard. Looking further forward in expanding Qatar’s delivery options, Nakilat managing director, Abdullah Fadhalah Al Sulaiti, said that there are two more phases remaining before completing a new state-of-the-art dry dock: the first, ‘Phase 2-a’, involving preparing a floating dock for the Q-Max vessels (due to end in 2015); and the second, ‘Phase Six’, involving the production and maintenance of FRP vessels (currently in the process of architectural design, and due for completion in two and a half to three years). Al Sulaiti added that, even as is, the dry dock provided maintenance to 200 vessels last year, and also hosted the construction of 10 new vessels, with nine new vessels to be constructed this year as well, whilst all 19 vessels will go to the Mesaieed Port. Other deals include an agreement with Ras Laffan to construct seven vessels in the dry dock, with the total number of signed agreements allowing for another 18 vessels to be constructed there.
Oil prices
Pressure on Qatar’s budget to rise as Saudi Arabia abdicates ‘swing producer’ crown Despite the fact that countries with very low debt-to-GDP ratios (such as Qatar, with 34.25 percent at last reading) are theoretically able to afford running primary deficits for a few periods without compromising their overall fiscal soundness, any move under USD71 per barrel (pb) of oil sustained after one year, and USD80pb (after two years) would pose problems, according to industry data. Despite the fact that countries with very low debt-to-GDP ratios (such as Qatar, with 34.25 percent at last reading) are theoretically able to afford running primary deficits for a few periods without compromising their overall fiscal soundness, any move under USD71 (QAR258) per barrel (pb) of oil sustained after one year, and USD80 (QAR291) pb (after two years) would pose problems, according to industry data. While these figures seemed unthinkable even a year ago, they are not anymore, particularly given the changing stance of the long-standing ‘swing producer’ of 30 | The Edge
oil, Saudi Arabia, in propping up oil prices when necessary. As long ago as September 2008, Saudi Arabia publically announced that it would not honour the Organisation of Petroleum Exporting Countries’ (OPEC) guidance on production. OPEC’s largest member, controlling around a third of its capacity, even walked out of OPEC meetings, effectively saying that it would meet market demand as and when it arose, and abdicated its power position in the organisation. Much more recently, and crucially, the Saudi’s shift in strategy away from being the
predominant swing capacity in the market was communicated by Saudi officials in meetings in New York in the middle of October, underlined Michael Lewis, global head of commodities research for Deutsche Bank in New York. “It appears to reveal that the kingdom is willing to tolerate brent prices between USD80 to USD90 (QAR291 to QAR328) a barrel for a period of one to two years in order to achieve two aims: firstly, to slow increases in US tight oil production and, secondly, to pressure other OPEC members to contribute to supply discipline,” he said. Even these figures, though, may be
energy & sustainability | sectors
Saudi’s shift in strategy away from being the predominant swing capacity in the market and thus a major influencer on oil price was communicated by Saudi officials in meetings in New York in October. (Image Arabian Eye)
beyond the control of Saudi, given ongoing doubts about the believability of its reserves numbers, with some analysts now believing that Saudi’s total liquids – oil and natural gas – capacity, including what is not being utilised, could currently be as little as 500,000 barrels per day (bpd), rather than the oft-vaunted spare capacity number of 2.4 million bpd. In this respect, ascertaining accurate figures for many Middle Eastern countries hydrocarbons reserves is a tricky matter. For example, Abu Dhabi claimed reserves of 92.3 billion barrels of oil (bbo) from 1988 to 2004 but, over that period, approximately 14 bbo were extracted, and no new substantial oil reserves were ever announced. Similarly, back in 1989, Saudi Arabia claimed to be sitting on a total of 170 bbo, but only a year later, and without the discovery of any major new oil fields, the official reserve estimate somehow grew 51.2 percent to 257 bbo, and has grown again to ‘around 266 billion barrels’. This is despite Saudi’s pumping at around a maximum volume of 12 to 12.5 million bpd for a number of periods, and well over eight million bpd for the remainder of the time. Regardless of reserves, the ongoing oil price depression combined with this latest development in Saudi may ostensibly place pressure on Qatar’s budget to rise.
Budget breakeven prices vs brent price (In USD per barrel)
125 105 85
25
Qatar
Saudi Arabia
2015
2014
2013
2012
2011
2010
2009
2008
2007
45
2006
65
Brent price
Source : Deutsche Bank estimates
The Edge | 31
Q a t a r ’s B u s i n e s s M a g a z i n e
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Contents: Strategising materials procurement for Qatar’s construction sector 33. 2014: A great year for Qatar’s real estate sector 34.
real estate & construction Strategising materials procurement for Qatar’s construction sector
While advanced concreting methods such as shotcrete is used in other parts of the world, they are not introduced in an otherwise flourishing market of the Gulf. Pictured here are stacks of concrete blocks at a construction site at Doha’s Corniche. (Image Arabian Eye)
With the demand for concrete expected to grow at a rate of 108 percent by 2015, Qatar needs to take a sound approach to its strategies for procuring building materials. by Farwa Zahra
A
recent survey by Qatar’s Ministry of Development Planning & Statistics suggests that the country’s construction sector will experience an all-time high demand for basic building materials over the next few years ahead of the 2022 Word Cup. Of the primary building materials, according to the survey, limestone will have the highest demand, forecasted to increase by 127 percent by 2015. Similarly, demand for cement is expected to show a growth rate of 108 percent, while that of washed sand may reach 106 percent. With USD22.5 (QAR82 billion) worth of contracts awarded in Qatar during the first
three quarters of 2014, Meed Projects expects the amount will reach USD30 billion (QAR109 billion) by the end of 2014. With more projects lined up after 2014, ostensibly, the demand for primary building materials is only going to grow. While a range of raw materials is not naturally found in Qatar, they are being increasingly imported and locally refined and treated for use in construction. The supply of building materials, hence, inevitably relies on imports from other countries. Add to this Dubai’s Expo 2020, among other projects heating up regional competition, and the task of procuring materials to meet the country’s demand seemingly becomes a challenge.
In fact, according to Ventures Onsite, the Gulf Cooperation Council countries alone accounts for over 40 percent of the Middle East concrete consumption. So what are some strategies Qatar can adopt to ensure a steady supply of building materials such as concrete? According to Rabih Fakih, founder and managing director of Grey Matters Consultancy, a building materials consultancy, proper planning is the key, “For Qatar, raw material, such as aggregates, is a major concern, showing signs of adverse price escalation. Concreting in Qatar will seemingly face challenges to meet deadlines and quality standards. Following a standard concrete production The Edge | 33
sectors | real estate & construction
Speaking about the pricing trends for building materials, CEO of Msheireb Properties, engineer Abdulla Hassan Al Mehshadi said, “It is not only materials, it is also availability of right resources, and the right calibre of people to help us in the running of all projects.”
cycle, Qatar can safely cover the concrete demands in terms of production facilities such as batch plants, transit mixers and pumps.” While the region has recovered its market for materials such as cement, advanced material and techniques are yet to be introduced in the region. Shotcrete, a process of concreting through highpressure spray, still has not reached the Gulf market. Requiring less formwork, the method is also a sustainable alternative to traditional cast-work concreting. “More attention shall be paid to the impact of concrete on the environment where new sustainable solutions, in terms of concrete materials and production facilities, shall be adopted in order to cope with the rising trend towards sustainable developments in the region,” said Ihab Bassiouni, Unites Arab Emirates’ country manager for Grey Matters Consultancy.
However, regardless of technologies, sustainable credentials and procurement strategies, the increasing pace and scope of construction is bound to escalate material prices. When asked about the pricing and sourcing trend for building materials, chief executive officer of Msheireb Properties, Engineer Abdulla Hassan Al Mehshadi said, “The prices will be under pressure because of the exponential growth and construction around this area. So it will be a challenge, not only of prices, but also of sourcing.” Ultimately, the focus for Qatar, he says, should be to ensure that “we have a good control on the material supply and the supply chain altogether. It is not only materials that will be somewhat challenging, it is also availability of right resources, and right calibre of people to help us in the running of all projects”.
Residential
2014: A great year for Qatar’s real estate sector Complementing Qatar’s construction sector, Qatar’s real estate sector showed a growth of 15.2 percent in the first nine months of the year. In the first three quarters of the year, Qatar’s real estate sector showed a growth of 15.2 percent, with the volume of transactions reaching approximately QAR37.2 billion compared to QAR32.3 billion in the same period last year, according to a news report. In the third quarter of the year alone, aggregate earnings reached QAR11.2 billion compared to QAR10.3 billion in the second
“Lusail and The Pearl, when fully developed, will provide accommodation for in excess of 500,000 people.” – Nick Witty, Deloitte. 34 | The Edge
quarter, reflecting an increase of about QAR931 million, according to Qatar National Bank’s Financial Services Research. On the leasing side of the sector, further growth is expected with Ezdan Holding’s recent announcement about the launch of a 10,000-house project, adding to its current base of around 145,000 residential units across Qatar. Speaking about other developments in the residential sector, Nick Witty, director of real estate for Deloitte, said, “There are a total of 60 towers planned
in the Pearl-Qatar. Approximately 24 of those are currently inhabitable or near completion and the majority are not fully occupied. Given the release of additional units on Qanat Quartier and the ongoing development of residential projects within the Foxhills District of Lusail, the level of demand will have to increase significantly if they are all going to secure tenants or residents. Lusail and The Pearl, when fully developed, will provide accommodation for in excess of 500,000 people.”
Ezdan Holding has announced a residential project featuring 10,000 units. Pictured here is a model of one of Ezdan’s residential schemes in Doha.
Contents: How businesses in Qatar see IT. 35. Three ridiculous myths about cyber security. 36.
tech & communications How businesses in Qatar see IT EMC Corporation recently released the findings of a survey that looked at the role IT is playing in local businesses, specifically in areas such as cloud computing, mobile, social and Big Data. The role of these technologies is having a significant impact on the way businesses function and interact with their customers, which has made IT more strategically relevant to organisations than ever before.
IT departments in Qatar have the opportunity to innovate and transform businesses through IT, moving it from a support function to a strategic enabler. (Image Corbis)
T
he EMC Forum Survey revealed that three quarters of respondents in Qatar said they saw IT as a strategic lever to grow their business, now more than ever before. The top three business priorities when implementing new technologies for organisations in Qatar were: automating processes (51 percent), enhancing customer experience (48 percent), and enhancing security for customers (38 percent). Mohammed Amin, senior vice president and regional manager for Turkey, Eastern Europe, Africa, and Middle East, EMC, said that enterprises across the region and in Qatar continue to turn to technologies such as cloud, social, mobile and big data to drive agility and engage the connected consumers. “As this transition to third platform becomes a reality,” he explained, “IT departments find themselves open to new opportunities to innovate and truly fuel business transformation driving it from a mere support function to a strategic enabler.” The survey also showed that 82 percent of respondents in Qatar saw increasing automation processes – such as softwaredefined storage – as critical to business growth. Many respondents also looked The Edge | 35
sectors | technology & communications
favourably on emerging megatrends as a way to give their businesses a competitive advantage. This was most evident in the area of improving customer experience where 61 percent said it would impact key aspects of their business. Dave Paulding, from Interactive Intelligence, a customer experience service provider, says, “Customers are becoming more empowered by technology and driven by the immediacy it provides, and anticipate that same sense of urgency from their interactions with businesses. Whether it is to resolve a complaint, answer a query or request information, they want the quickest and most efficient resolution. In fact, he explains a study done in early 2014 showed that half of consumers surveyed said they always or usually make their products or services purchasing decisions based solely on the organisation’s customer service reputation.” Jeremy Burton, president, products and marketing at EMC Corporation agrees, saying, “Consumer expectations have undergone a radical shift. Consumers now expect to interact not only with each other, but with a multitude of organisations, via
mobile devices and at the speed of now.”
The challenge
IT departments in Qatar have the opportunity to innovate and transform businesses through IT moving it from a support function to a strategic enabler; however, the local market is not without its challenges. While three quarters of companies surveyed see IT as a business enabler, almost 63 percent of companies believe that spending for technology was outside of IT department control. This indicates there is still work to be done by IT departments in gaining trust from decision makers within the organisation. Just over half of those surveyed also believed that it would be a challenge for skills within the firm to keep pace with IT innovation over the next one to two years. “To remain relevant and competitive, businesses across every industry are reinventing their business models to handle unprecedented levels of access, interaction and scale, says Burton from EMC. “For this reason, IT finds itself back in the driver’s seat, morphing from cost centre to a true catalyst for change through the use of cloud and Big Data technologies.”
IT in Qatar
51% automating processes
48%
enhancing customer experience
38%
enhancing security for customers
14%
would be happy to outsource majority of applications only to the public cloud
18%
now believe that the IT department of the future will act as the in-house provider of on-demand services
Source: EMC
Information security
Three ridiculous myths about cyber security John Bentley, a cyber security expert and director, Middle East, Africa and India at AccessData, provides tips on how to view cyber security in today’s world. 1: You can always keep the bad guys from getting in.
The truth is, if the bad guys want in bad enough, they will find a way in. Advanced attackers and the advanced persistent threats (APT) are savvy, sophisticated, welleducated, and often well-funded. While I do not believe you can stop the bad guys from getting in 100 percent of the time, I do believe you can be proactive about it. Anticipate it, prepare for it, and in doing so put yourself in a position of power. And while you cannot guarantee the bad guys will not get in, you can feel confident about being able to mitigate the impact to your organisation. 36 | The Edge
2: You do not have anything worth taking.
Advanced attackers and the APT do not just go after military secrets and big ticket items like KFC’s secret recipe. If your company has customer data, credit card information, makes the little widget that is part of a satellite, has information on mergers and acquisitions or negotiations; basically if it is worth having, someone will want it. Identify what these critical pieces of information are for your organisation and put a plan in place to protect them.
immediately. In other words, have your mop and bucket handy, it is going to get wet. It is a scary world out there, but you have great resources on your side. Take advantage of them. Make sure what you put into place gives you the visibility, context and automation you need to resolve any security incident that comes your way.
3: It will not happen to your organisation.
First, read myths #1 and #2. Second, reset your expectations. You will at some juncture be compromised – in fact, you probably already are. The chances of it happening are inevitable. Expect it, plan for it and make sure that you are in a position to identify the threat and respond to it
John Bentley, a cyber security expert and director, Middle East, Africa and India, at AccessData.
Qatari Exports Right place, Right time, Right product
Gas Despite increased focus on diversfying the economy - and not without challenges - the future of Qatar’s hydrocarbons industry remains positive, particularly in Asian exports. by Simon Watkins
Public offerings
Higher stock prices, greater liquidity to enhance regional IPO prospects
Throughout 2014, equity research analysts have pointed out that, compared with 2013, as an asset and investment class, equity (both primary listings and secondary trading) had picked up, both in terms of volume and numbers in the Middle East and North Africa (MENA) region. As per the latest data issued by Thomson Reuters, equity-related issuance during the first nine months of 2014 totalled USD5.1 billion (QAR18.6 billion), a 43 percent increase in activity from the same period in 2013 amounting to USD3.6 billion (QAR13.1 billion). Experts tell The Edge that a comparable momentum can be expected for the first quarter of 2015, though volumes cannot be predicted at this stage. by Aparajita Mukherjee
regional IPOs | feature story
A screen displaying stock information is seen as investors look on at the Dubai Financial Market. (Image Reuters/Arabian Eye)
The Edge | 45
feature story | regional IPOs
I
n July 2014, EY had said in their MENA IPO Update: Q2 2014 that Middle East and North Africa (MENA) initial public offering (IPO) proceeds had seen a jump of 129 percent in the second quarter of 2014. In Q2 2014, there were 11 IPOs raising USD1.1 billion (QAR4 billion), a rise of 22 percent compared to the same period in 2013 by deal numbers. According to EY, there were a total of 16 deals raising USD2.4 billion (QAR8.74 billion) in the first six months of the year, an increase of 14 percent for both volume and proceeds compared with the same period in 2013 and the highest amount of capital raised in the first half since 2008. Gulf Cooperation Council (GCC) IPOs represented 90 percent of all MENA IPOs in the first half of the year, with 10 GCC IPOs raising USD2.26 billion (QAR8.23 billion). Saudi Arabia led the GCC activity in the first half of the year with four IPOs, followed by the United Arab Emirates (UAE) with three, Oman with two and Qatar with one. In late October, Thomson Reuters, in their quarterly investment banking analysis for the Middle East region, reported that Middle Eastern equity and equity-related issuance during the first nine months of 2014 totalled USD5.1 billion (QAR18.6 billion), a 43 percent increase in activity from the same period in 2013 amounting to USD3.6 billion (QAR13.1 billion). Equity capital markets underwriting fees totalled USD134.5 million
Steven Drake, PwC’s capital markets partner, feels that private equity firms can also consider using IPOs as an exit route for their portfolio.
46 | The Edge
QAR
8.23 billion
The amount 10 GCC IPOs raised in H1 2014. (QAR489.6 billion), up 183 percent from the same period last year, which reached USD47.5 million (QAR172.9 billion). Given these trends in the regional capital markets, The Edge spoke to experts on the IPO climate for H2 2014. Until mid-October 2014, USD3.7 billion (QAR13.47 billion) was raised by GCC-based companies, across a number of sectors such as real estate, petrochemical, marine services, e-commerce, cement, travel services and power, among others. Commenting on the prospects of IPOs in the GCC in H2 2014, Sanjay Bhatia, managing director of Alpen Capital Investment Bank (Qatar) LLC, says that the GCC region dominates the MENA IPO market. Bhatia continues, “The largest IPO so far in 2014 was Emaar Malls, which listed on the Dubai Financial Market and raised USD1.57 billion (QAR5.71 billion). The IPO was oversubscribed 30 times. Another large listing was Mesaieed Petrochemical Holding Company (MPHC) on the Qatar Stock Exchange (QSE), which raised USD887 million (QAR3.23 billion) and was oversubscribed five times.” In terms of number of IPOs, the UAE and Saudi Arabia each had four listings, with USD2.1 billion (QAR7.6 billion) and USD500 million (QAR1.8 billion) raised, respectively, says Bhatia. “Stock markets which are expected to experience high activity levels in the last quarter of 2014 are Saudi Arabia and the UAE,” according to Bhatia, a sentiment Steven Drake, PwC’s Capital Markets partner, agrees with. Drake mentions that the signs are that the Saudi Arabia market will continue to be strong, though it was relatively quiet in H1 of 2014, mostly because a number of companies that
were in the listing process had still not received regulatory clearance. “The UAE market is also strong with a number of prospective IPOs slated for H2, though most likely many of these will spill over to Q1 of 2015,” says Drake. In the opinion of Abdulaziz Al Emadi, director of the listing department at QSE, regional capital raising is still coming off a low base and therefore a small number of large deals can distort the picture. “However,” Al Emadi adds, “the GCC has clearly seen an increase in activity which may continue and is likely to account for a significant portion of overall MENA activity.” “The UAE currently look the most promising for IPO activity in the GCC during the remainder of 2014, with Qatar and Saudi Arabia following closely behind. All three, however, are driven by different dynamics,” says Michael Katounas, deputy CEO and head of investment banking at QInvest. “The UAE,” according to Katounas, “banks on Dubai, which benefits from
regional IPOs | feature story
significant local and regional demand as well as international liquidity. This drives companies with bigger market capitalisations to seek a public listing in the UAE.” In Saudi, the fundamentals are very attractive. It is a bigger economy, with encouraging growth prospects. However, the demand will be predominantly from local investors rather than international, where there will only be marginal interest, says Katounas. Commenting on Qatar, Katounas says, “We see a healthy supply of companies looking to list and there is significant investor demand to support these listings. While historically the procedural hurdles have made a listing in Qatar more difficult, there are a number of initiatives currently underway which we believe, once fully introduced, will accelerate the Qatari IPO process.”
H2 prognosis
Q2 of 2014 has seen more successful IPOs in the GCC, compared to Q1. What
does it portend for H2 IPOs, in terms of volume? Bhatia of Alpen Capital Investment Bank (Qatar) LLC feels that successful listings during the first nine months of 2014 have encouraged other companies to refresh previous IPO plans, and other companies are considering this fund raising route as well. He continues, “As a result, many IPOs are now being planned during the remaining months of 2014. The bigger ones expected by the end of this year include National Commercial Bank (Saudi Arabia), Saudi Airlines Cargo (Saudi Arabia), Gulf Capital (UAE) and Amanat Holdings (UAE).” “There would appear to be a regional pipeline of potential IPOs that exceeds what we have seen to date. That said, provided the equity markets continue to perform well, then the IPO window should remain open. The head winds we are seeing in other markets and the continuing economic backdrop of slower growth from some key countries and potential interest
“There are initiatives underway, that once fully introduced, will accelerate the Qatari IPO process.” – Michael Katounas, QInvest.
In terms of number of IPOs, the UAE and Saudi Arabia each had four listings, with USD2.1 billion (QAR7.6 billion) and USD500 million (QAR1.8 billion) raised, respectively. (Image Reuters/Arabian Eye)
QAR
490 million
Equity capital markets underwriting fees in H1 2014. The Edge | 47
feature story | regional IPOs
rate rises need careful monitoring for those seeking to list,” says Declan Hayes, managing director, transaction services, Deloitte. The GCC IPO activity is expected to continue to rise in H2 of 2014, with market valuations returning to somewhere near pre-crisis levels, according to Phil Gandier, MENA transaction advisory services leader, EY. Gandier says that Q3 2014 had only one IPO, with the third quarter historically being the slowest of the year. “However,” he continues, “activity March 2014 April 2014 May 2014 is expected to pick up in Q4. Many companies from the MENA region have Saudi SE Bahrain SE Kuwait SE Muscat SE announced plans for going public by the end of the year, with companies in the financial services and real estate sectors dominating the pipeline.”
t performance
Dividend yield of GCC indices Note: Data as of June 30 2014.
Bahrain SE
4.2% Muscat SE
4.2% Abu Dhabi SE
4.1% Qatar SE
3.9% Kuwait SE
3.4% Saudi SE
3.1% Dubai SE
2.4% Source: Zawya
48 | The Edge
“Provided the equity markets perform well, the IPO window should remain open.” – Declan Hayes, Deloitte. June 2014
In the opinion of Al Emadi of QSE, it is widely acknowledged that improved conditions in the underlying equity markets are beneficial for IPOs. “Higher stock prices in general allow for more favourable pricing from owners, and greater liquidity encourages investor participation. It is also the case that launching an IPO requires a ‘window’ which can be over a month long to take account of the subscription period and the immediate aftermarket, and so all other things being equal, the currently improved market conditions are supportive of more IPOs,” says Al Emadi.
Stock exchange upgrades
Last June, Morgan Stanley Composite Index (MSCI) upgraded the Qatar and UAE exchanges to ‘Emerging Market’ status, which was followed by the S&P Dow Jones upgrade for QSE in September 2014. Do these mean better prospects for IPOs in these two markets? Bhatia of Alpen Capital says that this is expected to improve market liquidity and position the exchanges for long-term investments. “In addition,” mentions Bhatia, “the Saudi stock exchange is in the process of formulating regulations for international investors to invest, which is expected to be finalised by early 2015. These measures are expected to draw fresh liquidity to the region.” Hayes of Deloitte is of the opinion that these upgrades ensure that large international funds now have to consider investing in regional markets, adding, “This potential liquidity supply means in theory there should be a bigger pool of
investors to invest in IPOs.” “The MSCI upgrade of the UAE and Qatar to the emerging markets status will go a long way toward changing investors’ perceptions that regional markets are weakly regulated and have poor disclosure,” says Gandier of EY. He adds that passive funds which track emerging markets will now need to change their portfolio allocations to include the UAE and Qatar, which is expected improve liquidity in these markets. Katounas of QInvest agrees saying that the upgrades make both countries’ equities increasingly relevant and attractive to international investors, and a core component of global asset allocation. He specifies that the upgrades should have a positive impact on the prospects for IPOs in both Qatar and the UAE as it will increase liquidity, which will be beneficial across both markets.
Debt and private equity
In late October, Thomson Reuters, in their quarterly investment banking analysis for the Middle East region, mentioned that Middle Eastern debt issuance reached USD6.3 billion (QAR22.9 billion) during the third quarter of 2014, down 68 percent from the record-breaking second quarter total of USD19.7 billion (QAR71.71 billion). Boosted by the strong second quarter, bonds issued so far during 2014 increased five percent from the same period last year, to USD32.8 billion (QAR119.4 billion). What do these figures reflect, in the experts’ views? If IPOs do well in this region, what impact will that have on debt or private equity as capital raising mechanisms? Bhatia feels that the success of IPOs in the region will positively influence
QAR
3.23 billion
Amount raised by Mesaieed Petrochemical on the Qatar Stock Exchange.
regional IPOs | feature story
Regional stock market performance Market return (% change)
YTD 2014 (%)
60% 40% 20% 0% January 2014 Qatar SE
February 2014 Abu Dhabi SE
Dubai SE
March 2014 Bahrain SE
April 2014 Kuwait SE
Muscat SE
May 2014
June 2014
Saudi SE
Source: Zawya and EY analysis
debt and private equity transactions, and will increase overall financial activity. For IPOs where the end-use of funds raised is to enhance growth, equity funds raised is likely to be paired with debt in order to optimally structure a project’s capital structure. “Further,” in Bhatia’s opinion, “IPOs provide a viable exit option for private equity investors to consider and provide the required comfort for them to realise anticipated returns.” The impact will depend on various factors, says Gandier of EY, since not all companies are suitable for IPO, which means that they would need to look at other means to raise capital. He explains, “Companies that don’t want to dilute their shareholdings will look at debt to raise capital to maintain control. With sufficient levels of liquidity in the market to raise capital through IPO, private equity or debt, positive competitive tension could help to raise sentiment in the market.” Both Gandier and Steven Drake PwC’s Capital Markets partner agree that private equity firms can also consider using IPOs as an exit route for their portfolio, which has already been happening in other markets
internationally. Al Emadi of QSE says, “The debt and equity capital markets in the region remain ‘young’ in relevant terms. However, confidence plays a major part in the capital markets and that is true both for issuers and investors. Landmark IPOs, for exampleNote: MPHC will no Data asin of Qatar, June 30 2014. doubt act as catalysts for future IPOs.”
Dividend yield of GCC indices
Bahrain SE What to expect by end -2014
4.2%
End of the year usually sees heightened activity in the regional capital markets and if plans areMuscat anythingSEto rely on, experts agree that the month of December 2014 also represents the latest date by which corporates expect to publicly list. Abu Dhabi SE Gandier of EY says that the growing number of planned IPOs indicates that investor confidence is on the rise. He adds, “The improved economy and regulatory Qatar SE initiatives are expected to bring liquidity to the market. Government spending on infrastructure and diversification of oilbased economies have created more Kuwait opportunities in the privateSE sector. These continued developments will encourage more companies to raise capital from the market.” For Al Emadi Saudi of QSE,SE IPO activity is
4.2%
always volatile given the long lead times involved and the need for consistent market conditions when IPOs are being distributed. He says that a number of countries have talked publicly about a pipeline for the remainder of 2014 and market participants in particular will be keen to close deals before the year-end if at all possible. As contributing factors, Al Emadi cites improved liquidity and generally strong share performances, which will help GCC issuers and bankers to be pushing to bring companies to the capital market if the necessary preparation and approvals can be secured.
4.1%
3.9% 3.4%
3.1% “Regional capital raising is Dubai SE still coming off a low base and therefore a small number of large 2.4% deals can distort the picture.” Abdulaziz Al Emadi, director, listing department, Qatar Stock Exchange. Source: Zawya
Michael Katounas, deputy CEO and head of investment banking at QInvest says that the UAE banks on Dubai, which benefits from significant local and regional demand as well as international liquidity.
The Edge | 49
“The gap between technologically advanced vessels and the people who can effectively operate and manage them is increasing. Running these sophisticated vessels is relatively easy but failures can be expensive,� says Vivek Seth, CEO, Halul Offshore.
Taking
Halul Offshore
beyond
Qatar Vivek Seth, CEO of Halul Offshore Services Company, on the strategy of market expansion
business interview | energy shipping
A second-generation marine engineer, Vivek Seth, CEO of Halul Offshore Services Company, talks to The Edge about what it means to be heading an offshore shipping company in Qatar, with a total of 38 vessels and an asset base of QAR920 million. by Aparajita Mukherjee
A
fter having completed senior management roles – from offshore marine in upstream (with Tidewater), to midstream oil and gas (with Svitzer – part of A.P. Moller Maersk and Smit Lamnalco) – Halul Offshore was the logical choice for Vivek Seth. “I came ashore as a chief engineer and then by default came into the offshore industry after completing my MBA. Tidewater, the largest offshore marine company, picked me up as part of their management programme, which heralded my career in this industry.” This stint was followed by his tenure with Svitzer (three years), and Smit Lamnalco for five years as regional managing director with responsibilities for over nine countries, after which, he joined Halul Offshore. On why the new opportunity was promising, Seth elaborates, “Halul Offshore, being fully owned by Milaha, will be able to leverage the group’s reputation, balanced investment portfolio and strong balance sheet in order to increase its growth prospects. At Milaha, we are at a time of enormous change and opportunity. Halul Offshore is more in line with upstream oil and gas and where I see exciting things happening with new technology, types of vessels and bigger playing fields. Add to that the board and shareholders’ commitment to grow the business beyond Qatar, and we have an exciting opportunity.” With the mandate from the board to take the company outside of Qatar, Seth mentions, he has to start thinking internationally and see how he can bring about internal and external changes, armed with an execution strategy in place.
52 | The Edge
Talking about the current services that Halul Offshore offers, Seth says, “In our offshore services, we support all the oil majors, with our anchor handlers, platform supply vessels (PSVs, which are ships specially designed to supply offshore oil platforms), and diving support vessels (DSVs, which are used as a floating base for professional diving projects). I consider these a critical logistics arm of the offshore oil and gas offshore, a very niche market, that establishes the vital connect between the land and the offshore operations in the exploration and the production phase.” Are there any expansion plans in the services portfolio from Halul Offshore? Seth begins by talking about how in the phase of consolidation for Halul Offshore, Qatar’s gas riches and the focus around gas, “where there is a lot happening offshore in the domestic economy,” allowed the company to flourish here. Commenting on the current focus of Halul Offshore, Seth says, “We have been an asset-centric company with certain offerings. The focus of expansion will centre on geography, moving our vessels beyond Qatar to cover the Middle East.” He continues, “At the moment, we are providing supply vessels, and support services; in our next phase, I’m trying to create some more solutions for the client. Right now, within the marine offshore segment, we’re providing a limited range of services.” Seth adds that he would eventually want to provide a majority of marine offshore solutions to the client, adding value in the process.
Impact of moratorium
The Qatari government has put a moratorium on further development of the North Field so it can assess ways to maintain output levels, and has suspended construction of new LNG plants. Is that likely to have any impact of Halul Offshore’s prospects? Seth says that it is not so much the moratorium but, “if you are looking at the macro picture, there is concern about the price of oil.” Shale gas, in Seth’s opinion, is not a threat to Qatar’s hydrocarbon prospects since shale gas breakeven numbers
“Halul Offshore is the critical logistics arm of the offshore oil and gas industry, one that establishes the vital connect between the land and the offshore operations in the exploration and the production phase.” – Vivek Seth, CEO, Halul Offshore.
38
Total number of vessels Halul Offshore owns. are relatively high and can effectively compete with oil only if oil prices stay over USD100 (QAR365) per barrel for a sustained period. He continues, “That doesn’t seem to be happening, and if sliding oil prices continue, shale gas’ will not be very competitive. The oil majors are now cutting back, avoiding going for new explorations to offset more oil production in a scenario of prices sliding.” Instead, says Seth, oil majors are now focusing more on the existing fields, with the intention of cutting cost, which means, “the supply chain of the oil and gas industry will start impacting my business. This is on the demand side,” adding that on the supply side, “we have an increasing number of new vessel owners who are building vessels on the hope that they could gain on the back of increased business opportunities globally and at the regional level”. On the overall prospects of the company in this scenario, Seth says that the industry will know the difference between the seasoned players – “the men”, in Seth’s words – and the relatively newer ones – “the boys”, as Seth puts it – in the next one to two years.
Client selection
With major local and international oil and gas exploration companies as Halul Offshore’s clients what degree of priority does the company give one client over another, given that both come with the same request at the same time? Seth says, “To be honest, all clients are equally important for us, and it would not be fair to choose one over the other. In my career so far, I have not come across a situation where you have two different clients wanting an identical vessel at the same time, there could be a spot requirement for a week or 10 days, which is fine, but if you’re looking at six months to a year, it’s highly unlikely I’ll have a need for the same vessel by two different clients.” However, if that were to happen, Seth
Halul 10, a safety standby vehicle, on the fleet of Halul Offshore.
The Edge | 53
business interview | energy shipping
“Besides organic growth, we need to look at alternative means of capitalising on our strengths through mergers and acquisitions, joint ventures, etcetera,” Seth tells The Edge.
QAR
75
million
The approximate cost of an offshore vessel.
says that the company can find ways to service them by looking at third-party vessels to charter.
Fleet addition
Halul Offshore has ordered a total 14 additional vessels, across PSVs and anchors handlers. Some have been delivered, with the remaining ships to be delivered by 2016. What does this fleet addition mean for the company? In Seth’s view, “This shows the board’s commitment to Halul Offshore’s growth, which means that they definitely see an excellent growth story there. After having these high-end, built-to-order and specialised vessels onboard, we would like to go beyond the Middle East. In our business, a company’s growth could be organic (and slower relatively) or it could be achieved through partnerships.” Commenting on the suitability of the partnership model for Halul Offshore, Seth says that with each vessel costing anywhere between USD25 million (QAR 91 million) to USD75 million (QAR 273 54 | The Edge
million), a company that only relies on organic growth may not pick up momentum since the competition will have moved faster. “Besides organic growth, we need to look at alternative means of capitalising on our strengths through mergers and acquisitions, joint ventures, and working on various forms of partnerships,” says Seth.
Technology
Offshore marine is one of the most technology-reliant industries, and to that extent, runs a high chance of technical redundancy. For instance, dynamic positioning one (DP1, a computercontrolled system to automatically maintain a vessel’s position and heading by using its own propellers and thrusters) has already had an upgraded version installed, DP2. But even with DP2 installed, there are issues of high initial costs of installation, and a chance of running off position by system failure, blackout, underwater
hazard, and high maintenance for the mechanical systems. How does Halul Offshore work around these? Seth says, “What’s paramount today is safety. No client wants any incidents or accidents. Most importantly, clients are reluctant for traditional vessels without DP capabilities, and that’s where we have to oblige, although the capital investment is relatively higher. Some of the time, the best bet is to have a DP1 vessel, with the hardware for DP2, much like buying a computer, and deciding later whether I want to upgrade it to a new version of Microsoft Windows or not, but at least you have the hardware.” Some of the newer vessels, which Halul Offshore has, are operated on a diesel electric drive and are more fuel efficient. Commenting on why the company chose this technology, Seth says, “The power management is more efficient than traditional vessels. So if the client can save 10 to 15 percent from fuel cost, which is the next biggest
energy shipping | business interview
“Clients are reluctant to hire traditional vessels without dynamic positioning capabilities. We have to oblige though the capital investment is higher.”
HALUL OFFSHORE’S FUTURE FLEET PSV’s
7 Vessels AHTSV’s
18 Vessels Construction Support Vessels
9 Vessels DSV
3 Vessels Offshore marine is one of the most technology reliant (and to that extent, runs a high chance of technical redundancy) industries.
cost after the vessel charter, he doesn’t mind paying a little extra because he’s getting new vessels, better station keeping (which means they can hold the positions better), which translates to safer, more efficient vessels.” Technical redundancy plays a part in acquiring new fleets and phasing out old ones. Halul Offshore’s older vessels will be phased out because, Seth says, “I don’t see a future for those vessels and their maintenance cost goes up. I would say a good 60 percent of our fleet will be DP2 very soon.”
Human resource and future
Keeping pace with technology is becoming a recruitment challenge, says Seth, since it is difficult to get qualified master mariners or engineers. “The gap between technologically advanced vessels and the people
who can operate and manage these vessels is increasing,” he explains, “our focus will be on training, and trying to maintain the same pool of people within the same sister vessels, so they get familiar, rather than just picking up people from the market. This helps in knowledge sharing, staff retention and along the way, we have to keep incentivising them by showing them a clear career path.” The plan for the next three years is clearly geographical growth. Seth says, “As of now I’m not looking at the Americas. I’m looking at Africa, SouthEast Asia and the Middle East and this can be actuated, given that at any point in time, Halul Offshore has 80 percent vessel occupancy.” “If all goes to plan, Halul Offshore would soon be stepping in to a different league altogether,” he adds.
Safety Standby Vessels
8 Vessels
Well Head Maintenance Vessels
1 Vessel
Wireline Vessels
2 Vessels
Jack up Accommodation
2 Vessels TOTAL
50 Vessels The Edge | 55
Delivery to Doha
Qatar’s logistics bounty
56 | The Edge
logistics | feature story
“There is an expected gap of six to eight million square metres of logistics facilities that must be filled by 2020, according to our estimates, in order for the State to fulfil its international obligations,” says Ranjeev Menon, Group CEO Gulf Warehousing Company. (Image Corbis)
Logistics is the backbone of business and trade. In the supply chain, it is all about efficiently procuring the goods, storing them and moving them to the end user. Powered by investments in infrastructure and transport, Qatar’s logistics industry seems to be heading on the right path, writes Aparna Shivpuri
A
ccording to the Agility Logistics Emerging Markets Index 2014, Gulf countries are riding high in the table of international locations offering favourable conditions for business and trade. The Kingdom of Saudi Arabia (KSA) climbed one place to third spot, with the United Arab Emirates (UAE) at number six followed by Qatar, Oman, Kuwait and Bahrain at 12, 13, 18 and 22, respectively, out of 45 countries. Understandably, Nael Attiyat, country manager, DHL Express Qatar, is optimistic about the future of the logistics in the country. “The future looks great,” he tells The Edge, “and we think the ongoing construction and development of infrastructure will definitely lead to highly-connected facilities that will positively impact our daily delivery time. At the moment, there is a lot of construction going on and that causes bottlenecks, but in our business, these are the kind of challenges that we face regularly and we have our plans on how to tackle them.” There is also no denying that Qatar’s strategic location has contributed to the growth of the logistics industry. Elaborating on this, Srinath Manda, programme manager, transportation and logistics practice, Middle East, North Africa and South Asia, Frost & Sullivan, remarks, “Qatar’s geographic location has significant potential to tap the Gulf region’s trans-shipment trade flow and cargo from the established neighbouring trade hubs such as the UAE and KSA. While the country has been reasonably successful in this aspect with regards to air freight, as evident from the 25 percent compound annual growth rate (CAGR) of the market during the past The Edge | 57
feature story | logistics
five years, the marine freight segment has not achieved any notable growth.” Nevertheless, Qatar has been highly focused on developing its transportation and economic infrastructure over the past few years, as a part of which a major new seaport is being built, and this may help in enhancing its marine freight volumes in the near future.
Logistics Village
One development that has changed the logistics industry in Qatar is the Logistics Village Qatar (LVQ). The one million square metre, self-contained logistics hub allows related businesses to expand and provide world-class services in Qatar. Of the village, Ranjeev Menon, group CEO, Gulf Warehousing Company, says,” “The LVQ provides its clients with readily available infrastructure, including customisable warehouses and distribution centres, multi-purpose warehouses, thirdparty logistics (3PL) warehouses, data centre, container yard, and transport service shop. The facility provides a full range of storage solutions, including ambient, dry, chilled, refrigerated, bulk, and open yard storage. In addition, clients have access to one of the largest transport fleets and networks in the country, as well as state-of-the-art IT infrastructure, providing IP telephony and a variety of operational and warehouse management systems.” All clients at the LVQ also have access to a global network of more than 550 freight and logistics services offices in 130 countries. With a premium location no further than 18 kilometres from the city centre and 15 minutes away from the currently developing New Doha Port, the LVQ has been strategically positioned within easy reach of every transportation passage and port of call. Ranjeev Menon, group CEO, Gulf Warehousing Company, says clients at the LVQ have access to a global network of more than 550 freight and logistics services offices in 130 countries.
The importance of 3PL
Qatar has witnessed a rise in the number of companies using 3PL providers, which is a function of the fact that many small
Ranjeev Menon, group CEO, Gulf Warehousing Company, says clients at the LVQ Qatar have access to a global network of more than 550 freight and logistics services offices in 130 countries.
and medium companies cannot afford to have in-house logistics services. “While 90 percent of companies still run their logistics in-house, and due to their organic growth, they often spread to various warehouses,” explains Menon, “which makes for the inefficient operation that is one of the many drivers of why a good number have switched over to 3PL. Estimations have set the potential market share for 3PL at 15 percent of the overall logistics market by the year 2016. This is in line with trends in Europe and the UAE, which sees the
Srinath Manda, programme manager, transportation and logistics practice, Middle East, North Africa and South Asia, Frost & Sullivan tells The Edge that Qatar’s logistics market is expected to grow by about 10 percent in 2014 over the previous year.
58 | The Edge
logistics | feature story
“The development of a highly connected infrastructure will positively impact our daily delivery time.” – Nael Attiyat, DHL Express Qatar. outsourcing of logistics and supply chain needs at projected rates of 35-40 percent and 25 percent respectively,” Menon adds that this is largely due to the long processing times to establish new warehousing projects, which can last from two to three years between obtaining approvals, constructing the warehouses, and establishing a system to manage the stock and streamline operations. A good 3PL provider can largely expedite this process for near immediate service, depending on the clients’ needs and size of the operation. 3PL is also more cost efficient, with labour, construction, and management costs defrayed and united by one service provider. Paul Virgo, vice president, logistics, Milaha Maritime & Logistics, while agreeing on the benefits of 3PL, believed that the use of 3PL is still low due to a lack of awareness. “There is a need for all businesses to be more aware of the supply chain costs, to become more efficient and in turn be more competitive in the open market – this can only be
Qatar can build and expand its capacities in airfreight transhipment so as to sustain the impressive growth being currently witnessed, says Nael Attiyat, country manager, DHL Express Qatar.
feasible when corporations focus on their core business and outsource their logistics and supply chain requirements. This will provide a competitive advantage for the retailer and ensure that the cost savings get delivered to the end consumer through more efficient operations, resource pooling and economies of scale.” He also mentioned that the penetration of 3PL in Qatar’s logistics market is low compared to the global average, even when compared to neighbouring countries such as KSA or the UAE. The challenge is to persuade the various businesses across sectors, that logistic service companies are more experienced, have scalable resources and can offer the same control (if not better) of the supply chain compared to if it was managed in-house.
Challenges and the future
The logistics sector in Qatar has been facing challenges, some of them sparked by the huge growth in the demand for warehouses. This increase in demand has resulted in the rent of warehouses going up, which is then reflected in the price of the goods. For instance, for the food sector, which relies heavily on proper storage of goods, there is a shortage of warehouses that offer temperature control, among other things. Commenting on this, Virgo adds that the infrastructure sector is growing at a faster pace than can be sustained with current state or rate of growth of logistics infrastructure. The government has many initiatives in place to ease some of the bottlenecks; however, this may not be enough. There are shortages in warehousing and other issues across various stakeholders that may be limiting faster development of the logistics infrastructure. There is also a lack of integrated multimodal transportation. With investments
being made by the government in road, rail and air infrastructure, hopefully this problem will be sorted soon. As far as road infrastructure is concerned, a number of projects, such as the Bahrain Causeway, Doha Expressway and Qatar North Highway are being initiated to not only connect Qatar internally but also with its neighbours. There is an expected gap of six to eight million square metres of logistics facilities that must be filled by 2020, according to our estimates, in order for the state to fulfil its international obligations, says Menon of GWC. “This gap has been addressed head-on by a number of government initiatives, including the constructions of cargo and logistics facilities at the New Doha Port, Hamad International Airport, and the economic zones projects. A number of private parties, particularly GWC, have put themselves forward as good-faith partners to help design, construct, and manage these expanding facilities.” The government is also working on a new port project, which is estimated to cost close to USD7.4 billion (QAR30 billion). The project, which was started in 2011, is expected to handle its first shipment by 2016 and could possibly cover an area of 26.5 square kilometres. The eventual purpose of this project is to integrate with rail and road links and a new economic zone. The Edge | 59
feature story | logistics
LOGISTICS IN QATAR
L ogistics Market Revenue in 2013
by 2018
QAR billion
QAR billion
55
30
Logistics market break-up by segment in Qatar 2013
4% 15% 16% 65%
Value added logistics Transportation Warehousing Freight forwarding
Logistics spend as % of revenue
5%
Automotive
7%
Electronics
3%
Oil and Gas
10%
10%
Food
Pharmaceuticals
10% Retail
9%
Construction
The logistics sector in Qatar has been facing challenges, some of them sparked by the huge growth in the demand for warehouses.
Source: Frost & Sullivan analysis
60 | The Edge
logistics | feature story
The Hamad International Airport will also be fully functional by 2015 and will give a major boost to the logistics industry. It will have one of the largest cargo terminals in the world, with a capacity to handle about 2.5 million tonnes of cargo. However, according to Menon, it is not just the lack of logistics infrastructure, but also the lack of strong management. “As mentioned,” he points out, “a number of companies rent out warehouses in various areas throughout the industrial area. While we are sure they do their best, there isn’t always forethought into the use and customisability of the warehouses they are taking, which may lead to poor value for money. Good 3PL and 4PL companies can bridge this knowledge gap, providing the expertise and the technology to consolidate these warehousing facilities and managing them to peak efficiency.” Speaking on the same lines, Virgo remarked that, “One of the key areas that will hamper the development of the logistic sector is the ability of agencies, charged with enabling business, to communicate and understand the full effect of the proposed projects. In a time when inflation is rising at a faster pace than other Gulf countries, the supply chain should be studied holistically to ensure that all initiatives are aligned and complement each other.” According to Manda of Frost & Sullivan, Qatar’s logistics market is expected to witness about 10 percent growth in 2014 over the previous year. The market is likely to witness around 10 to 11 percent of Compounded Annual Growth Rate for the next three to four years. The contribution of Qatar’s logistics sector is also expected to grow, comprising 8.4 percent of real gross domestic product (GDP) by 2018. Giving his point of view on this, Attiyat of DHL Express Qatar says, “It should be noted that the country has to compete with the neighbouring large economies with a significantly high level of domestic and international trade cargo volumes and also the infrastructure capacity to handle them. Qatar can evolve itself as a complementary hub to support and benefit from these large markets and trade hubs. Furthermore, it can also build/expand its capacities in air freight transhipment so as to sustain
“Qatar’s geographic location has significant potential to tap the Gulf region’s transshipment trade flow and cargo.” – Srinath Manda, Frost & Sullivan.
the impressive growth being currently witnessed.” Being an import-dependent economy, it is imperative for Qatar to build on its logistics industry and the Qatar National Vision 2030 has paved the way for that, by increasing the demand for connectivity and in turn for logistics. Like his contemporaries, Menon is bullish about the future and is quick to add that the premium Qatar has placed on infrastructure spending is no secret, nor have been the public announcements of their aim to finish all current road infrastructure projects by 2016 to 2018, which should aid the transport and distribution industry immensely. He believes that the logistics industry is on the cusp of a major boom in operations and revenue in the coming five years. Meanwhile, the healthy growth of Qatar’s non-oil sector has directly translated into demand for industrial and logistics facilities in Qatar, and the future certainly seems positive for this key market sector in the country. The Edge | 61
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Inside the minds of leading business figures
business insight Asset diversification is a key need of the high net worth individual > 64 Cedric Lizin, head of wealth management, Middle East and North Africa and Japan, Barclays, talks to The Edge about how the private banking landscape has changed ever since the Qatar Financial Centre was set up in 2005 and identifies the trends in asset management globally.
There is crucial need to develop a culture of fairness and accountability for hospitals> 66 In conversation with The Edge, Joanne Davies, director, Simulation Center and Services, and Timothy McDonald, chair of anaesthesiology and medical director for quality and safety of Sidra Medical and Research Center, talk about the cost impact – both medical and human – that a simulation centre can achieve within the healthcare system.
66
Sidra Medical and Research Center has a patient simulation centre which, according to Timothy McDonald, chair of anaesthesiology and medical director for quality and safety, can reduce the patient harm and medical training-related costs by improving the knowledge, skills and behaviours of teams and highlighting gaps in systems and processes.
The Edge | 63
business insight | wealth management
PRIVATE BANKING
Asset diversification is a key need of the high net worth individuals
Cedric Lizin, head of wealth management, Middle East and North Africa and Japan, Barclays, talks to The Edge about how the private banking landscape has changed ever since the Qatar Financial Centre (QFC) was set up in 2005, and identifies the trends in asset management globally. Referencing the direction in which private banking has moved, Cedric Lizin, head of wealth management, Middle East and North Africa and Japan, Barclay’s, said, “Since the inception of the QFC, the private banking landscape in Qatar has evolved considerably. The scale of activity, quality of financial services, and standards of banking operations have expanded substantially. The laws and regulations applied by the Qatar Financial Centre Regulatory Authority (QFCRA) have put in place an attractive environment that encourages financial institutions to compete by providing higher quality of services and financial solutions.” The efforts of QFC have also contributed to the development of the homegrown financial market. For instance, offerings of local private equity investments and structured products linked to Qatarilisted companies have become a standard offering. With the MSCI upgrade of Qatar Stock Exchange (QSE), the financial market became even more attractive to international investors. High net worth clients The attractive business environment in Qatar has been accompanied by a rapid growth in wealth, according to Lizin, adding that the latest global report in the Barclays Wealth Insights series, titled The Rise of The Global Citizen, has highlighted that high net worth individuals (HNWIs) living and working in Qatar accrued wealth at the fastest rate globally. The report, said Lizin, has revealed 64 | The Edge
that 98 percent of HNWIs in Qatar acquired their wealth in less than 20 years, 38 percent of which successfully reached the HNW status within less than 10 years. The gross domestic product (GDP) per capita has also expanded by more than 400 percent for the period between 2005 and 2014, accentuating the growth of wealth in Qatar. Over the past decade, the QSE Index has also witnessed a growth of 289 percent from USD56 billion (QAR203.84 billion) in 2005 to USD162 billion (QAR589.7 billion) in 2014, further strengthening activity in the private banking space. In Lizin’s opinion, HNWIs in Qatar are extremely sophisticated and savvy. With the growth of the financial industry in Qatar, services and products offered to the HNWIs and ultra high net worth individuals (UHNWIs) continue to expand to include all asset classes from emerging and developed market equities to global fixed income, commodities, foreign exchange and derivatives, and alternative investments. “The UHNWIs in Qatar are also looking to those institutions that are able to bring together the full suite of financial
services, including institutional style investments. Barclays is well positioned in that space through its integrated business model that delivers the full suite of the Barclays’ group’s capabilities through close collaboration within its various divisions – between wealth and investment management division, corporate banking, and the investment bank, a global leader in fixed income, commodities and foreign exchange, in equities and investment banking. Barclays has a strong onshore franchise in all of these businesses,” said Lizin. Top trends in wealth management According to Lizin, the most common trend among HNWIs within the region is diversification. “After the financial crisis of 2008, investors developed a better understanding of financial markets and the importance of managing risk. He added, “As a result, we are witnessing a growing demand among our HNW clients for diversification, both on a geographic and an asset class level. Furthermore, we are witnessing increased interest in global
“After the financial crisis of 2008, investors developed a better understanding of financial markets and the importance of managing risk.”
wealth management | business insight
opportunities. Individuals are becoming more global in their operations and are approaching their investments with a global view,” said Lizin. Family businesses are also flourishing and Barclays’ dedicated teams of wealth advisors are always available to advise family businesses on family governance, succession planning, and risk mitigation.
What does Barclays do to expand its client base – pricing, service, product novelty or tailor-making? According to Lizin, Barclays continues to develop its product suite and services in line with the clients’ evolving requirements. “Furthermore, our continuous investment in Barclays’ intellectual capital and the ongoing introduction of innovative
“The ultra high networth individuals in Qatar are looking at institutions that are able to bring together a full suite of financial services.” structures and unique approaches to investment and wealth management, are the main differentiators from competition. For example, Barclays is a pioneer in portfolio structuring and wealth management being one of the first organisations to incorporate a client’s financial personality in the portfolio development process through the pioneering investment philosophy, which allows bankers to build their clients’ personalised portfolios through combining the science of behavioural finance and psychology with modern portfolio management,” said Lizin.
Cedric Lizin, head of wealth management, Middle East and North Africa and Japan, Barclays, told The Edge, “The ongoing introduction of innovative structures and unique approaches to investment and wealth management are the main differentiators from competition.”
Business in other jurisdictions Globally, Barclays has operations in many other jurisdictions. What recommendations could Lizin make to QFC, based on Barclays’ businesses in other jurisdictions, especially in the context of broadening the areas of operations within QFC? Lizin said, “The QFCRA has already taken a proactive approach to develop the financial industry. The authority is keen to encourage and promote local banks while also providing the necessary incentives to attract foreign financial institutions to operate in Doha. This has supported a balanced growth of the overall sector and encouraged industry participants to enhance their on-ground offering through innovation and service quality.” Lizin also added that Barclays is privileged to have been given the opportunity to set up and expand its business in the State of Qatar. He said, “The success of this British franchise was built over 324 years of history and expertise and it is well positioned to service the needs of the sophisticated investor in Qatar.” The Edge | 65
business insight | patient safety
SIMULATION
There is crucial need to develop a culture of fairness and accountability for hospitals in Qatar In conversation with The Edge, Joanne Davies, director, Simulation Center and Services, and Timothy McDonald, chair of anaesthesiology and medical director for quality and safety of Sidra Medical and Research Center, talk about the cost impact – both medical and human – that a simulation centre can have within the healthcare system. Tell us about yourselves, your backgrounds and how they have helped your present stint at Sidra. Joanne Davies: I have been a clinician for 20 years with a Master’s degree in Health Science and Education. I have worked in the United Kingdom, Australia, and several Middle Eastern countries. Working clinically, teaching, leading and specialising in simulation have led me to Sidra Medical and Research Center as the director of simulation. Over the past four years, I have been involved in the initial proposal, schematic design and detailed design of Sidra’s state-of-the-art Simulation Center. Timothy McDonald: I am a physicianattorney who has been involved in patient care activities for the past 25 years, and quality and patient safety efforts at the University of Illinois until January 2014. Prior to joining Sidra as the chair of anesthesiology and medical director for quality and safety, I served as the chief safety and risk officer for health affairs and the director of surgical services for the nationally recognised University of Illinois Eye and Infirmary from 1993 to 2006. During that time, I had also served in key administrative positions in the Department of Anesthesiology. My research focus has been on the principled approach 66 | The Edge
to quality, medical liability and patient harm with an emphasis on the robust reporting and communications related to patient safety events, near misses, and unsafe conditions. I had helped pioneer the University of Illinois medical centre’s learner reporting process as a means of engaging learners from all professions and all specialties in safety and quality education with a special emphasis on simulation and the use of standardised patients to teach complex health communication skills. What is your take on patient safety standards in the Gulf Cooperation Council (GCC) countries? Timothy McDonald: GCC countries are working hard to raise the standards of healthcare within the region, one example of this being the 2015 International Society for Quality in Health Care conference that will be held in Doha next year. The key to building a patient-safe environment is a teamsbased approach. Defining clear standards of care and implementing training, such as immersive simulation, fosters team culture and, therefore, increases patient and environmental safety. Within the region, skilled faculty with training and experience in the region’s unique cultural aspects are
crucial for successfully developing and implementing such programmes. What room for improvement would you suggest to the existing levels of patient safety in Qatar? Joanne Davies: When moving towards a culture of patient safety, it is best to train individuals as part of a team, at the same time introducing key elements like sound accreditation and quality programmes. It is also crucial to develop a culture of fairness and accountability that recognises points made in To Err is Human (the Institute of Medicine Report, 1999), namely that it is essential for hospitals to analyse the gaps and opportunities for improvement in their systems rather than look for individual fault, especially since we know all humans make non-reckless mistakes on occasion during their careers. How do you feel implementing simulation-based training can help reduce medical costs? Timothy McDonald: Medicine used to be taught with a ‘see one procedure, then do one procedure as you saw it, and teach one procedure after you’ve done one’ approach – an approach based on trial and error. This
patient safety | business insight
“Simulation-based training can reduce patient harm and medical training-related costs by improving knowledge, skills and behaviours of teams.” Timothy McDonald. approach incurred substantial costs, including human costs, while the learner mastered the knowledge and skills. Today, simulationbased training can reduce the patient harm and medical trainingrelated costs by improving the knowledge, skills and behaviours of teams and highlight gaps in systems and processes prior to learners ever touching a patient. If educational strategies are put in place or system improvements developed once gaps are identified, the savings to patients, families and hospitals can be substantial. For seasoned clinicians, research shows that for obstetrical patients, simulated training has shown to improve patient outcomes and reduce costs associated with patient harm when teams are trained to perform obstetric emergencies. From the population health perspective, we must consider the human and monetary value when reviewing the effects that adverse events have on patients, families and the dedicated healthcare teams that look after these families. The human costs are harder to quantify but are critical to consider when looking at harm reduction. By using real case scenarios, high fidelity simulation allows us to connect the learner’s ‘heart with their head’ in a way that facilitates the development of the necessary knowledge, skills, and attitude for patient and family centred care. What are the three ways in which patients in Qatar can hope to benefit from the simulation-based training of the entire healthcare team? Joanne Davies: Simulation-based training of the entire healthcare team can increase the standards of care while minimising risks and potential harm to patients, in addition to providing an alternative way of teaching patient and family education in a safe way to assess effectiveness that does not depend on real patient harm for learning. It also encourages the team to proactively identify and highlight process and system gaps so that healthcare can be designed and implemented in a more efficient and effective manner to the benefit and satisfaction of patients, families, the healthcare team and society at large.
Joanne Davies, director, Simulation Center and Services, Sidra Medical and Research Center, said, “When moving towards a culture of patient safety, it is best to train individuals as part of a team, at the same time introducing key elements like sound accreditation and quality programmes.”
Timothy McDonald, chair of anaesthesiology and medical director for quality and safety of Sidra Medical and Research Center, told The Edge, “If educational strategies are put in place or system improvements developed once gaps are identified, the savings to patients, families and hospitals can be substantial.”
The Edge | 67
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product & reviews
Reviews Toyota Land Cruiser GXR Limited Edition
B
uilding on the 60 years of heritage and the iconic status the Land Cruiser has achieved in Qatar, the 2015 GXR model is being offered in Doha as a Limited Edition. The exterior of the Land Cruiser continues to convey a rugged and luxurious image while delivering the performance and advanced off-roading capabilities expected from the SUV. The 2015 Land Cruiser GXR Limited Edition features small changes to the exterior, yet also manages to reflect its heritage and identity. The radiator grill has been redesigned for one, while the exterior
is decorated with the Limited Edition badge, which stands out vividly. Elements like the chrome roof rail and chrome plated side protection moulding on the Land Cruiser enhance its design making it a standout. The interior has also been revamped with features such as a nine-inch navigation system with EZ-cloud (Internet based system). The white floor illumination also creates a relaxing ambience inside, while the interior is laden with a rich wood grain cladding on the steering wheel, gear shift knob and instrument panel, giving the interior a superior finish. The 2015 Land Cruiser
also comes with numerous safety features, including ABS, brake assist, electronic brake distribution, as well as driver and passenger airbags. Other technology includes a realtime video parking assistance, the model also has an onscreen navigation display. The Land Cruiser GXR is equipped with a powerful 4.6-litre engine generating 304 brake horsepower giving it the ability to tackle some very rough terrain. The Land Cruiser also comes with an independent double wishbone type front suspension and a coil spring to enhance riding comfort and the strength to withstand rigorous use.
The Edge | 69
products & reviews
Read it:
Big Data: A Revolution That Will Transform How We Live, Work and Think You have probably heard of the term Big Data, having become one of the biggest trends in technology today. If you are looking to make sense of what it means to you as a consumer, a business owner or how it will impact society in general, this is certainly the book to help. Written by, Viktor MayerSchonberger, professor of Internet Governance and Regulation at Oxford University and Kenneth Cukier, Data Editor at The Economist, the book tries to explain what the catch-all term means through real world examples. Google, looking at data from the three billion plus
Read it:
Available at Virgin Megastores in Doha.
The $100 Startup
Subtitled Fire Your Boss, Do What You Love And Work Better To Live More seems like a dream scenario to most of us stuck working for other people. Who does not dream of being in complete control of his or her own life, taking orders from nobody, living the high life, while raking in oodles of cash? Sign me up. Of course, the reality is that very few people have the wherewithal to leave the shelter and security (and for many, borderline poverty) of full-time employment for the risky world of running a start-up. Very few, right? According to The $100 Startup author Chris Guillebeau, there are many people all over the world doing just that - leaving work to start their own firms - in what he terms a microbusiness revolution. Indeed, though Guillebeau includes his own personal experiences as an entrepreneur, the book is largely made up of case studies of these individuals. Ostensibly, the seeds of this trend, if it is to be seen as such, can be traced to the great recession, as it is now being termed, when many people were unceremoniously expelled from their jobs. And unexpectedly in many cases, such as United States (US) salesman Michael Hanna, who after being fired went from moping 70 | The Edge
searches performed on its platform every day, was able to identify the spread of a winter flu in the United States in near real time. This was in comparison to the Center for Disease Control (CDC), which took a week or two after the fact to track an outbreak. Both authors do a compelling job of putting forward the case for how using the massive amounts of data gathered today can be crunched to solve real problems. The technology at its core is about making predictions based on historic data; the more of it there is, and the more accurate it is, the better your extrapolations will be. The book also does well to point out that data being used to generate better decisions is often linked to the erosion of personal privacy, and certainly makes for an interesting read.
around, feeling sorry for himself, to seizing an opportunity to make a bit of extra cash selling a truckload of mattresses and turning it into a successful mattress store that delivered its wares by bicycle, using a special platform on the back. Cases like this and countless others are aplenty, and indeed people have been starting small or microbusinesses for aeons. What Guillebeau argues is different now is the ease with which one can become a ‘start-up’, thanks largely, of course, to technology. As a premise of this book, using the case studies he had gathered and feedback to more than 1500 respondents to a questionnaire he sent out, the author came up with six criteria, of which all his respondents met at least four. The first is a “followyour-passion” model whereby the entrepreneurial idea was based on a hobby or pastime. Another was that they possess “no special skills”, the bias being towards “businesses that anyone can operate” and thirdly that they have fewer than five employees, usually no more than one. The final criteria was financial. The enterprise must have a low start-up cost; achieve at least USD50,000 (QAR182,000) a year net income (the US average); and there would have to be full financial disclosure from all respondents. From there, Guillebeau formulated this interesting book, an insightful, advice-filled look into the wonderful, scary world of starting your own business and at once an inspiration and reality check for those who are seriously considering doing so.
Available at Virgin Megastores in Doha.
products & reviews
Acer Aspire V Nitro
App Reviews Update
Acer has announced the expansion of its Aspire V Nitro Black Edition Series of notebook PCs, adding a configuration featuring a 15.6-inch 4K Ultra High Definition display. With a resolution of 3840 x 2160 pixels, the UHD display delivers four times the pixels of a 1080p Full HD display.
If you hate managing calendar apps and swiping through calendars to save appointments and reminders, this is the app for you. It uses simple text-based commands and converts them into bookings. So, for example, typing in “Meeting with sales division at 10 today” into the app will automatically add a 10am event to your calendar on iOS with the topic meeting with sales.
Microsoft Office
Sony Xperia C3 Fifty One East and Sony Mobile Communications have announced the availability of Xperia C3, a new smartphone, in Qatar. It features a powerful new PROselfie cam and selfie apps. The smartphone has a dual SIM option, with super lightweight and slim design and powerful quad-core processor. The Xperia C3 will be available in black, white and mint colour.
Alberto Guardiani
Alberto Guardiani’s new winter collection features a bevy of materials such as suedes, super shiny rubberised calfskin, buffed abrasivato, and ponyskin. Also making an appearance are high-tech fabrics like nylon and neoprene. The collection also includes a lace-up in pearlised buffed abrasivato calfskin leather and rubberised calfskin leather with Oxford-style wingtip perforations. Lightness is the common denominator of this collection.
Canon EOS 7D Mark II
Canon Middle East has launched the EOS 7D Mark II, a DSLR to capture action. Building on the performance of the EOS 7D, and technologies found in the flagship, professional EOS1D X, EOS 7D Mark II is made for speed, with extreme power and performance, providing the freedom for enthusiast photographers to shoot fast action.
The Microsoft Office apps are some of the most popular on the app store at the moment. Thanks to removing the need to have an Office 365 subscription, the apps are now essentially free. Microsoft has also allowed Dropbox integration and is hoping its freemium pricing strategy will drive growth of Office on iOS products.
Intro Rethinking the business card is a new app called Intro. From the creators of About.me, the app grabs data from your About.me page, which you can then share with a new contact via email or text message. Having some context to where you met a person and a picture will help keep the endless number of people we meet professionally somewhat organised.
The Edge | 71
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