The Edge - Sep 2009 (Issue 2)

contents

September 09

Contributors .6.

A brief introduction to the specialised team of contributors, who regularly lend their expertise and insight to TheEDGE.

.10.

NEWS IN BRIEF .8.

A snapshot of the latest business developments affecting the business landscape within Qatar and the GCC region.

NEWS IN QUOTES & NUMBERS .10.

Powerful statements and important statistics that made an impact.

BUSINESS INSIGHT .12.

TheEDGE speaks with key business people from in and around the region to discover what is in store for Qatar.

.26.

.30.

MARKET WATCH .22.

Martin Menachery lends his analysis and expert view on Qatar’s stock market trends and economic position.

INSIDE EDGE .26.

Rajesh Mirchandani gives the ‘inside edge’ on the state of Qatar’s economic footing and the global road to recovery.

COVER STORY .30.

Kelly Lewis explores the importance of corporate social responsibility (CSR) within today’s business landscape and speaks one-on-one, with a local business that is leading the CSR charge.

ECONOMIC BAROMETER .37.

Karim Nakhle takes on the role of the ‘human’ economic barometer offering his unbias commentary to tackle the GCC single currency debate.

ENTREPRENEURIAL AMBITION MEETS SOCIAL MEDIA .42.

TheEDGE speaks with two Emirati entrepreneurs, who are using social media to drive their business ambition.

SEPTEMBER 2009

1

contents

september 09

ON THE PULSE .48.

Edward Jameson investigates Qatar’s plans to diversify its economy and the steps it will need to take to succeed.

.57.

BUSINESS VIEWS - REAL ESTATE .52.

Edward Brookes weighs up the state of Qatar’s real estate sector; is there too much supply and not enough demand?

LEGAL INSIGHT .54.

Legal eagles, Andrew Watson and Michael Earley discuss the rules of dispute resolution in Qatar.

INDUSTRY FOCUS - LIGHTING DESIGN .57.

Kelly Lewis speaks exclusively with international lighting designer, Beau McClellan about his world first project, which will be unveiled in Qatar this November.

HOW-TO GUIDE .63.

TheEDGE goes ‘green’ this month offering tips and energy efficient awareness posters to help you ‘green your business’.

EVENTS & CONFERENCES .76.

A round-up of key industry events taking place in the MENA region and abroad in September.

TECH TOOLS .71.

TheEDGE takes a look at the latest tools and gadgets hitting the shelves.

LIFE & STYLE .74.

To beat the stress TheEDGE explores ways for you to relax and unwind.

QATAR PROJECT NEWS .77.

An update on key projects that are underway within Qatar as well as Qatari developments abroad, and a listing of the latest tenders open for biding.

GENERAL MANAGER Jocquine Chami James McCarthy: jmccarthy@surlaterre-me.com / +974 3159743 | Kelly Lewis: k.lewis@firefly-me.com / +974 5067574 Sales & marketing manager Emma Tapper: e.tapper@firefly-me.com / +974 3197446 Creative director Roula Zinati Ayoub Art AND DESIGN Lara Nakhleh - Rena Chehayber Illustrator Tarek Dergamoun Finaliser Michael Logaring printed by Ali Bin Ali Printing Press - Doha, Qatar

PO Box 11596, Doha , Qatar - Tel: +974 4340360 - Fax: +974 4340359 - www.firefly-me.com

SEPTEMBER 2009

3

CSR: ARE YOU PLAYING YOUR PART?

KELLY LEWIS

In this issue of TheEDGE Kelly Lewis explores corporate social responsibility as it is an area of growing concern for lots of companies. The main reason being that many stakeholders in a corporation (employees, investors, suppliers and customers) now look for it to act more responsibly in a variety of areas that affect society in general.

Corporate social responsibility (CSR) has a massive impact not only on the local community, but also the world. Its effects are social, economic and environmental. Both good and bad CSR practices have unavoidable effects that filter down onto all members of society.

As ethical and environmental consciousness grows, so too will certain types of buying behaviour. This is reflected by the growth of key product segments, notably fair-trade and organic consumption.

Further, as more businesses adopt ethically sound policies, transparency and trust will become an increasingly important currency as manufacturers attempt to cool a potential consumer backlash to ‘green-washing’ in the search for clear, honest and effective environmental benefits.

Ethical consumerism will increasingly come to the fore as people shop for products they feel akin to politically, ethically and aesthetically. Consumers will choose brands that are actively making a difference in a transparent and trustworthy manner.

As with many advancements in the area of business, the companies that take on and holistically address CSR challenges put themselves at a greater competitive advantage against rival businesses because they are addressing the concerns of more socially conscience consumers.

Additionally, there have been a number of reports released recently, which suggest that key investors are now more likely to invest in a business that has a proven investment in upholding good CSR practises.

Investors are aware of the customer’s strength of opinion regarding unethical companies, which means that the customer is now in a better position to shape CSR than ever before.

However, today’s society places tremendous importance on a healthy, growing economy.

Somehow the assumption is made that a healthy economy equals a healthy community, that a country’s economic growth means increased happiness and wealth for its citizens.

But, many of us know that the amount of money moving through our country’s economic systems says very little about the health and wealth of citizens.

We need to actively seek alternative economic measures that reward positive growth, while taxing growth that is harmful.

SEPTEMBER 2009

5

contributors

Andrew Watson

Partner - Corporate and Commercial – Clyde & Co, Doha, Qatar Andrew Watson joined Clyde & Co as a partner in October 2007 and is based in the Doha office. He specialises in corporate and commercial transactions (both national and international) across a wide range of sectors, including energy, infrastructure, finance and IT. Prior to joining Clyde & Co, Watson spent a short time in the UK after returning from Oman, where he spent four years working as the managing partner in the Muscat office of a London-based law firm. Prior to that, he was a partner in the same firm for 15 years, practising in both London and Brussels. While in Oman, Watson was a regular contributor for the Oman Economic Review and spoke regularly about legal developments in the sultanate.

Edd Brookes

Director - DTZ Middle East Operations, Doha, Qatar Edd Brookes, based in Qatar for the past four years, is a professional member of the Royal Institution of Chartered Surveyors and a director of DTZ Middle East Operations. In addition to being head of DTZ Middle East Valuation, Brookes runs the Agency Department, which is involved in the sale and leasing of a number of key projects. The diverse calibre of Brookes’ work has seen him operate out of various MENA countries. He is a regular guest on the BBC’s World Middle East Business Report and a speaker at key regional events.

Michael Earley

Senior associate - Corporate and Commercial, Clyde & Co, Doha, Qatar Michael Earley joined Clyde & Co in September 2008 and is based in the Doha office. Earley is a corporate and commercial lawyer with more than five years experience advising clients throughout the Middle East. Earley has advised clients in relation to employment law, company formation and structuring, corporate finance, project finance, IT service agreements, and IPOs. Recently, he gained significant expertise working with the Qatar Financial Centre (QFC) and its regulators. Earley combines his knowledge of local and regional Middle East business practices with his legal knowledge and skills to provide the best outcome for clients. Prior to joining Clyde & Co, Earley was an associate at another leading English law firm in its Muscat office.

During Earley ’s time in Oman, he was published more than 25 times in the Oman Economic Review ‘legalities section’ covering myriad aspects of Omanian law.

6

SEPTEMBER 2009

contributors

Edward Jameson

Senior business journalist - Middle East North Africa region Edward Jameson is a seasoned business journalist operating out of the GCC. Jameson’s editorial expertise extends to the construction, logistics and environmental sectors. After earning an MA in Journalism in the UK, Jameson traveled extensively throughout Australasia, South East Asia, the UK and, most recently, the Gulf region. Throughout Jameson’s career his work has featured in numerous global leading publications in both print and online mediums.

Karim Nakhle

Senior business strategist - Doha, Qatar Karim Nakhle, based in Doha, is a business strategist with more than eight years experience in financial advisory, M&A, investor relations, business development, strategic planning, corporate communications and banking, having worked with HSBC, KPMG, International Bank of Qatar and National Bank of Kuwait, in Europe, the Middle East and North Africa. He is a member of the Economist Intelligence Unit, and a consultant with Standard & Poor’s Society of Industry Leaders. Nakhle has published various market reports, country economic and financial analysis, and thought leadership publications.

Contributing for TheEdge as the ‘Economic Barometer’, Nakhle will offer his sharp analysis to get behind the numbers, while using his in-depth markets and sectors’ experience (that includes banking, financial services, telecommunications, FMCG, retail and luxury, environmental energy, real estate and oil and gas) to tackle key business and economic issues on a domestic and international front through a compelling commentary.

Rajesh Mirchandani

CEO - Dun & Bradstreet, South Asia Middle East, Dubai, UAE Rajesh Mirchandani is a postgraduate from the Indian Institute of Management Studies (IIM-C) and is currently responsible for the South Asia, Middle East and Africa (excluding South African bloc) operations of Dun & Bradstreet.

Mirchandani led the management team responsible for the buyout and creation of Dun & Bradstreet South Asia Middle East Ltd. Mirchandani has exceeded Dun & Bradstreet corporate objectives each year of the past 10 years and has achieved the highest score globally on the Dun & Bradstreet Employee Satisfaction Index. He also serves on the board of directors for several companies in India and abroad.

Prior to his current post as CEO, Mirchandani was the managing director of Dun & Bradstreet ASEAN/South Asia. Preceding this, he was managing director of Meridian VAT Reclaim.

SEPTEMBER 2009

7

NEWS

NEWS IN BRIEF QATAR TAKES A QR36 BILLION CHUNK IN VW/ PORSCHE DEAL

Qatar Holding reached a final agreement with Porsche Automobil Holding SE (Porsche) and the family shareholders of Porsche on Qatar Holding’s investment in Volkswagen AG (VW), last month.

Qatar Holding will acquire 10 percent of the ordinary shares of the Porsche holding company from the family owners and the majority of Porsche’s cash-settled options on VW shares, freeing up more than QR5.1 billion for Porsche that is currently serving as collateral for the options structure. Qatar Holding’s overall investment commitment across all components is in excess of QR35.9 billion.

VW said it would raise QR20.7 billion in capital to acquire a stake in the operating business of Porsche.

If the combination with Volkswagen should not take place, Qatar Holding is entitled to resell its stake in Porsche SE to the families, Porsche confirmed.

The deal is part of an agreement between VW and Porsche, under which they will merge by 2011, ending months of feuding. Under the merger deal, VW will initially buy a 42 percent stake in Porsche by the end of this year, for QR17.2 billion.

BARWA BANK ENTERS THE MARKET

After months positioning itself within the Qatari market and attaining its financial infrastructure, Barwa Bank will officially rollout its ‘full-fledged’ operations this month.

Barwa Bank, an arm of Barwa Real Estate Company, will open the doors of its first and main branch, located on Doha’s Grand Hamad Street, mid this month to coincide with the month of Ramadan.

The local head office will operate as a full-service branch offering separate gender branches, with both retail and corporate banking services.

8

SEPTEMBER 2009

However, a spokesperson for Barwa said the bank’s focal point would remain heavily centred on the retail sector.

“Barwa Bank aims to completely repackage the Islamic retail banking experience in Qatar, offering customers exceptional levels of service, innovation and choice in an inclusive Shari’ah compliant environment that is expected to exceed current standards,” they said.

Backed by a 130-stong expert financial services team, with ‘rich’ global banking experience, Barwa said it had ambitious plans for the Qatari market.

Barwa Bank has an authorised capital of QR1 billon, with a paid up capital of QR500 million.

LIVE IMPORTS to qatar RECEIVE major BOOST

In a bid to meet the expected demand for livestock requirements during the month of Ramadan, Qatari livestock company, Mawashi, signed deals with officials from Australia and Syria for the live import of 80,000 and 5000 sheep respectively, Arrayah Arabic Newspaper reported.

Officials from Mawashi said measures had been taken to ensure meat prices remained stable, while also preventing a manipulation in prices by retail traders.

Qatar’s government has a subsidy trade agreement with the Australian livestock export industry, which will ensure that prices will not peak above QR14 per kilogram.

CROSS-COUNTRY PIPELINE to be runINg by 2010

Sharjah-based Dolphin Energy will complete building the crosscountry pipeline, which will pump

gas from Qatar to the UAE’s east coast in the third quarter of 2010, Reuters reported.

The 240-kilometre pipeline will enable Dolphin to pump gas across to the emirate of Fujairah from the plant in Abu Dhabi’s Taweelah, which receives Qatari gas.

Another section of the pipeline from Taweelah, which will link with a pipeline to Al Ain and then on to Fujairah, has been earmarked for competition in February 2010, Dolphin confirmed.

QATAR SET TO BE THE MIDDLE EAST HUB FOR GENETIC TESTING

Qatar’s Hamad Medical Corporation (HMC) is to receive cutting-edge technology to boost the technical capabilities of its endocrine laboratory and make it a centre of excellence catering to the broader GCC. Once fitted with the state-ofthe-art equipment, the endocrine laboratory, which forms part of

NEWS

INDONESIA EYES QATAR AS KEY INVESTOR

To bolster its international trade relations, Indonesia is keen to strengthen existing ties and develop new partnerships with Qatar, Indonesian officials reported.

A number of top-level visits have been made between the two countries in the recent past, which has resulted in Qatar developing economic and technical cooperation with Indonesia, but the country has its sights set on boosting investment into key areas, which includes tourism, transport, agriculture and healthcare.

HMC’s newborn screening programmes, will be finished equal to the high-quality standard of Heidelberg University Children’s Hospital in Germany, with which HMC has formed a strong partnership.

Since the programme’s establishment back in 2003, more than 73,000 newborns have been tested for endocrine and metabolism disorders, hearing defects and vision impairment.

In total, 148 genetic diseases have been identified the most recent being homosystinuria, a rare genetic tissue disorder, which can cause mental retardation and dislocation of the eye lens. The disease, for which findings will be published in an international journal in the near future, has only been found in the GCC.

QATAR AIRWAYS makes its way DOWNUNDER

The national carrier will make its inaugural flight to Melbourne, Australia on December 6, in time for the country’s peak holiday season, Qatar Airways CEO Akbar Al Baker confirmed.

Initial services will fly direct to Melbourne three times weekly via the airliners new fleet (due for delivery later this year) of Boeing

TRADE RELATIONS SET TO STRENGTHEN BETWEEN QATAR AND INDIA

B777-200 Long Range aircraft.

Daily flight routes are expected to be rolled-out early in 2010.

SWITZERLAND AND QATAR team up on tax

An agreement signed last month between Switzerland and Qatar will see the two countries enter into a double taxation agreement (DTA).

In an announcement made by the Swiss authorities, they said the initialled agreement also comprised an article on administrative assistance in accordance with Article 26 of the OECD Model Convention.

The DTA contains solutions, which are favourable for developing bilateral economic relations.

Following the Federal Council’s decision in March 2009, Qatar was the 13th and, simultaneously, the first country outside the OECD, with which Switzerland had initialled a DTA containing the extended administrative assistance clause in accordance with Article 26 of the OECD Model Convention.

Bilateral ties between India and Qatar are to be bolstered come the end of Ramadan, Indian Ambassador to Qatar, Deepa Gopalan Wadhwa said.

“The ties between the two countries have always been excellent. However, after Eid, we will have lots of movements between the countries in the diplomatic levels. We are expecting a visit by a leading minister of state from the central government to help boost the talks,” Wadhwa told The Peninsula newspaper.

Further, that the visit would be an opportunity to boost India’s tourism.

“India is a vast country with cultures and tradition that vary form place to place. So we hope to bring the different tourist, historical and heritage sites of India to the people here. Our ties with the Arab world have been going on for centuries,” she said.

Another key activity Wadhwa identified was the promotion of medical tourism to India. She said the country’s medical roots go back through the centuries and much of the western world was not utilising the cheap but effective medical treatment available in India.

SEPTEMBER 2009

9

NEWS IN QUOTES & NUMBERS

news in quotes

news in numbers

“Doha Tribeca Film Festival (DTFF) seeks to initiate a dialogue about the power of film that resonates long after the festival’s conclusion and creates a sustainable foundation for the growth of a film industry in Qatar...We hope that the festival will help nurture and support area filmmakers and be an important step toward creating the next generation of filmmakers in Qatar.”

Amanda Palmer DTFF executive director (and head of entertainment for Al Jazeera English), said in relation to the upcoming event.

“Working in partnership with Qatar Petroleum, Ras Laffan Train 6 represents yet another technological milestone that will help supply the growing demand for clean-burning natural gas…Advanced technologies, strong project execution skills and economies of scale have reduced the cost of producing and transporting LNG, thereby extending our ability to bring LNG to more people around the world.”

Alex Dodds, president and general manager, ExxonMobil Qatar, said in reference to Ras Laffan 3 announcing the start-up of Train 6 at Ras Laffan Industrial City.

“These are the latest figures [the population of Qatar is down from 1.9 million at the peak of the housing shortage to around 1.6 million].

So, with so many people having left, where do you think the demand is going to come from…We, therefore, expect the rents to come down…I wouldn’t be surprised if over the next two years (by 2010 - 11) you see the rents in Doha back to their previous levels to QR1200 and QR1400 monthly.”

Nasser Mohamed Al Mansoory, CEO of Qatar Oman Investment Company said in relation to the current state of Qatar’s housing market.

100,000

50,000

150,000

Data revealed by Qatar Statistics Authority (QSA) identified that around 100,000 people, who normally reside in Qatar are travelling out of the country.

On June 30, 2009, Qatar’s total population rate stood at 1,608,903, but the monthly figures on July 31, put the population at 1,502,374; a decrease of 106,529.

Qatar’s population graph has been steadily rising over the past few years. From 1,553,729 in December 2008, the population rate shot up to 1,652,608 in May 2009. However, June 2009 witnessed a small fall in the number as the monthly data put the total population to 1,608,903. Now, recent figures show it has further reduced. Summer vacation is being attributed to the steep fall in the population rate.

Pic Of the month

“Qatari women’s opportunities for promotion to senior jobs at the government departments are still less than those of men, who have the same educational qualifications…

Women’s representation in top jobs was only concentrated in the ministries and departments concerned with the social affairs, including health, education and Qatar University.

But,they were not represented in those dealing with politics and economy.”

A study conducted by Qatar’s Supreme Council for Family Affairs, said that the ‘high level’ participation of Qatari women in the workforce was failing.

10

SEPTEMBER 2009

- Iran’s Hamed Hadadi (left) attempts to block Ali Turki Ali of Qatar as he drives to the hoop during their quarter-final match at the Asian Basketball Championships last month in Tianjin, northern China. Iran defeated Qatar 75-65. (Photo: Frederic Brown) -

BUSINESS INSIGHT – FINANCIAL SERVICES SECTOR

HUB OF

INTELLIGENCE In the July edition of TheEDGE, Kelly Lewis spoke with Jon Morton, director of Qatar Financial and Business Academy (QFBA), about the Doha-based learning and development organisation, which is set to officially open its doors next month. In this issue, she reveals what the QFBA will offer the market.

- Jon Morton, director of Qatar Financial and Business Academy. -

12

SEPTEMBER 2009

BUSINESS INSIGHT – FINANCIAL SERVICES SECTOR

T

he QFBA, established in partnership between the Qatar Financial Centre (QFC) and Qatar Foundation (QF), has been created in a bid to support and build Qatar’s reputation as a leading regional centre for financial services, education and research.

QFBA will rollout a number of learning and development programmes targeted at individuals and organisations working in Qatar, and the GCC in the fields of banking, asset management, capital markets, insurance and financial services leadership.

Heading-up the senior management and faculty team for QFBA will be a host of world-class business professionals and academics drawn from international business schools, including Columbia, INSEAD, IESE Business School, Harvard and London Business School.

The team of directors, project managers and faculty all have extensive experience in designing and delivering learning to organisations and individuals in a broad range of industries and global economies.

Collectively, this core team will be responsible for steering the ongoing development of the learning programme in line with market trends and industry needs. As a major part of its portfolio, QFBA will offer internationally recognised qualifications.

“Ultimately, the responsibility for the learning and research of the programmes resides with QFBA. We are, however, working with internationally recognised organisations [such as those mentioned above] to design world-class learning and qualifications, which are appropriate for the financial services sector in Qatar and the GCC region,” said Jon Morton, director of QFBA. “This is a key principle in the strategic positioning of QFBA – we will design learning and research around the critical business issues that financial service organisations are facing now and into the future.

This means that we will draw upon the best-in-class learning processes and adapt them to the specific requirements of the national and regional marketplace.”

QFBA’s open learning portfolio will

- The Qatar Financial and Business Academy will target individuals and organisations working in Qatar and the GCC. -

be launched after Ramadan in October, and will consist of a range of learning programs focused around the banking, asset management, capital markets and insurance industries, which Morton said would be delivered across the professional financial services landscape in Qatar and the GCC region.

“All of QFBA’s programs will be delivered in Doha at QFC Tower 2.

Our innovative learning space aims to break down the barriers of traditional education by providing a physical and virtual space to enable collaboration, interaction and information sharing among participants,” claimed Morton.

The learning space has been designed in a flexible manner to accommodate groups ranging from 10 to 35 members.

However, Morton said that he anticipated there would typically be an average participation rate of between 18 and 24 applicants per open program.

He added that the QFBA would run as many programs as the industry required, leaving no shortage of places for financial services professionals.

“QFBA’s new virtual learning

environment is also an essential tool in the integrated learning environment – participants will continue their learning process outside the organisation’s educational space and in the virtual learning environment, where they will be involved in one-to-one discussions with their coach, small group project activities, networking with the broader financial services community and research into specific areas of financial services activity,” Morton said.

“Our capital markets learning programs will be delivered through a simulated dealing room. Participants will be given the opportunity to learn about the dealing and trading environment through practical experimentation using live data feeds.”

When asked if Qatari nationals would be allocated priority-learning spaces in a bid to boost local workforce participation, Morton said, “Our primary objective is the development of the financial services industry in Qatar – QFBA is an important tool in building the infrastructure of the industry now and for the future.

SEPTEMBER 2009

13

BUSINESS INSIGHT – FINANCIAL SERVICES SECTOR

“However, of course a fundamental objective of QFBA is to contribute to the development of Qatar’s reputation as a centre for financial services learning and research, so it will be important to attract professionals from elsewhere in the region to deliver against this agenda. That said, we also see QFBA as an important channel for attracting more Qatari nationals into the financial sector as a long-term career.”

Catering to the emerging needs of Qatari women working in the private sector has been earmarked as a key objective by the QFBA. To increase the local workforce participation rate of Qatari women, Morton said the QFBA has tailored specific learning initiatives aimed at women.

“Qatari women are an extremely important element of the growth economy in the country – women are playing an increasingly significant role in the leadership and development of the financial services sector in the global business environment, and this is especially true in Qatar.

We are planning to deliver learning and development, which is targeted specifically at women in the financial services sector,” said Morton.

In regard to the financial payment of the learning programmes delivered

by QFBA, Morton said QFBA was a not-for-profit organisation and its strategic mandate was to develop the financial services industry. However, in order to adopt a sustainable business model, he confirmed that the QFBA would deliver both fee-paying and non-fee-paying courses.

“We will be delivering some learning for free and some will be fee-paying.

Typically, a participant will have a corporate or government sponsor for the fee-paying elements of their learning process. Although we are designing and delivering a strong open portfolio of programs, it is important to recognise that in 18 months to two years from now, the majority of our activity will be custom learning designed around a specific corporate agenda.”

As part of the QFBA’s directive to broadly develop the financial services industry, Morton said that an independent research centre would be established in order to provide accurate, timely, unbiased and 14

SEPTEMBER 2009

credible market intelligence on and for the GCC, and the international financial services industry.

“The research centre is an essential activity for QFBA. We have designed a sustainable business model, but once again this is a not-for-profit venture.

We will be delivering independently produced primary and secondary research, which will be delivered through articles, flagship reports and conferences/speeches as well as other relevant distribution channels for both

professionals and institutions.

We do not see this as revenue generating activity, but part of our strategic mandate to develop the financial services industry,” he said.

“However, we do see revenue opportunities through corporate or government sponsored research projects (centred around specific subjects) and through the sponsorship of fellowships or chairs in the research centre and similar related activities.”

- Qatar Financial and Business Academy is set to broadly develop Qatar's financial services industry. -

BUSINESS INSIGHT – HEALTH SCIENCES

QATAR SET TO GET A

DOSE OF MEDICINE

Dubai-based pharmacy retailer, Planet Pharmacy, recently announced its ambitious plans to position itself as the leading pharmacy products retailer in the Middle East North Africa (MENA) region by 2012.

Kelly Lewis investigates what the company’s plans are for the Qatari market.

P

lanet Pharmacy is a joint venture (established in December 2007, with a capital of UAE Dhs900 million) between the largest generic pharmaceutical manufacturing company in the Middle East, Julphar, and the private equity division of a leading Kuwait investment firm, Global Investment House.

The company at present has around 130 pharmacies in the United Arab Emirates (UAE), the Kindom of Saudi

- John Makepeace, CEO of Planet Pharmacy. -

Arabia (KSA) and Oman.

The company’s target for 2012, is to launch 250 pharmacies across the UAE and more than 500 in the KSA, making it the largest pharmacy chain in the Middle East.

The pharmacy retailer’s focus will be split between its primary markets of the UAE and the KSA, but also through new footprints, with Qatar earmarked as a serious contender.

There will also be significant opportunity for it to expand organically and this focus will increase once solid platforms and footprints are secured within respective countries.

In addition to retail, Planet Pharmacy is focused on increasing its wholesale business through the addition of new agencies and acquisitions of other wholesalers.

As part of its expansion plans, Planet Pharmacy will acquire pharmacy chains/standalone pharmacies or set up new pharmacies to gain a footprint in the whole of the MENA region. Once the company is firmly established in the MENA region, the company will expand into the South Asia region, which will include India and China.

The pharmaceutical retailer has also acquired the pharmacy and distribution business of Julphar, and working on the model of global pharmacy retail giants the company plans to primarily grow the inorganic way.

By the end of this year, the company will have launched up to 10 of its ‘Health First’ pharmacies in the UAE, with additional test outlets

operational in the KSA. Planet Pharmacy’s retail offerings will include a mix of prescription and over the counter drugs, cosmetics and other health and hygiene products.

Stores will also provide value-added services such as skin care advice, information on medicines, prescription filling services, tie-ups with insurance providers and, in some cases, provide 24-hour pharmacy care.

John Makepeace, the CEO of Planet Pharmacy told TheEDGE that under the terms of the business arrangement, Julphar and Planet Pharmacy would function as separate entities with isolated boards and strategic directions.

“Julphar will focus on production and manufacturing whereas Planet Pharmacy will focus on retail pharmacy and pharmacy wholesaling,” Makepeace confirmed.

“Planet will leverage the partnership with Julphar to help us develop product ranges such as private label medicines.

We will also be able to obtain great value from Julphar’s knowledge of the Middle Eastern markets.”

Makepeace said private label medicine was where Planet Pharmacy would offer high quality medicine at affordable prices. He said these would be equivalent to the quality standard of the original brand.

“An example of this is where private label paracetamol would be produced, which is equivalent to Panadol or Tylenol,” he confirmed.

Makepeace said that this programme would be used for drugs, which were off patent.

SEPTEMBER 2009

15

BUSINESS INSIGHT – HEALTH SCIENCES

“For example, we could produce private label simvastatin to lower cholesterol (equivalent to Zocor),” he said.

Planet’s only involvement in locally produced medicines will be in selling and distributing them, obtaining appropriate approvals and registrations through the necessary ministries of health.

Planet Pharmacy’s objective is to build an integrated network of retail and wholesale distribution channels in the countries that it targets.

“We will serve retail customers directly and business customers through our wholesale and distribution network – logistics is an important part of this plan,” Makepeace said.

“We want to control the supply chain from the source to the final customer, so we can monitor the quality. It will also allow us to ensure that we maintain a larger quantity of medicinal products in stock.”

Planet Pharmacy currently has 19 pharmacies in Oman, 53 in the UAE and 59 in KSA, with logistics facilities in all three countries and a pharmacy wholesale business based in Oman and the UAE. “In 2009 we will be expanding by both acquisition and organic growth in KSA, the UAE and hopefully in Qatar – our initial move to Qatar will be by acquisition,” Makepeace claimed.

“In acquisition terms, we are looking at a number of retail pharmacy chains and also pharmacy wholesale businesses.

“While in regard to our organic growth, we will add 10 pharmacies in KSA this year and approximately five in the UAE – we will be launching our new, branded pharmacies in both new locations and by converting a number 16

SEPTEMBER 2009

of our already existing locations.

“We are very serious about the Qatar market. We see it as an important part of our portfolio.

“We would anticipate eventually growing to have a market share of up to 20 percent in the Qatari market.

We regard it as a strong, economically vibrant country and ideally we would like to establish a retail pharmacy and wholesale footprint in the country.”

While Makepeace said pharmacies coexisted well next to clinics and that Planet Pharmacy owned a number of clinics in other locations, he added that it was not a core part of Planet Pharmacy’s strategy for Qatar.

“We have a number of discussions underway in Qatar and our plan would be to partner with local Qatari investors, local pharmacists and governmental bodies, particularly the Ministry of Health,” said Makepeace.

“One of the strengths of Planet Pharmacy has been the ability to establish local relationships. Our independent board member on the Planet Pharmacy board is a very prominent Qatari businessman, Hamad Al Attiyah.”

For the person on the street, Makepeace said the ultimate impact of Planet Pharmacy would be seen in the offerings under its new brand and the significantly high standards associated with it.

“There is a void in the market for a new pharmacy brand. The brand is not ready to be launched as yet, but will be in December of this year and what we will be able to deliver under this brand will be a significant leap forward for the Middle East pharmaceutical market.”

Makepeace said the specialist offerings of the Planet Pharmacy

brand would include product quality, pharmacist training, product selection and availability, a clean, safe and welcoming environment, which would be dedicated to holistically nurturing the patient’s overall wellbeing.

Planet Pharmacy is also committed to hiring Arab professionals and Makepeace said that the company had already established close links with two pharmacy colleges in the UAE to develop a range of learning and mentoring programmes.

Makepeace added that Planet Pharmacy’s pharmacists receive on-thejob training, while formal ‘continuous professional development’ programmes were currently being formed.

“We currently have 750 employees; obviously this will grow dramatically in the coming three years. Where possible, we will always retain staff from any of our acquisition targets.

Currently over 500 of our employees have been through a variety of training programmes - this work is ongoing,” he said.

In terms of regulation and IP, Makepeace said he anticipated that there would be a gradual increase in standards across the region, with the objective of having safe and effective medicines widely available, while ensuring that any hazardous products were kept at bay.

He also anticipated there would be more of an even balance between branded and generic products emerging in the region.

“Middle Eastern consumers currently have a strong preference for branded pharmaceuticals (up to 80 percent). Over time I would expect there to be a gradual uptake of generic products to manage costs.

In the UK for example, more than 60 percent of prescriptions are dispensed generically,” Makepeace explained.

“Planet Pharmacy has chosen to focus on nutrition, asthma and Type 2 diabetes as priorities for our new brand. There is very much an increasing need, not only for the medicines to treat these conditions, but also for testing and credible lifestyle advice to occur, so that there can also be prevention and mitigation.

“Increased demand for pharmaceutical products will only enhance the opportunities for pharmaceutical manufacturers, wholesalers and retailers in the Middle East.”

BUSINESS INSIGHT – INTERNATIONAL BUSINESS

BUILDING BILATERAL RELATIONS A long-since established organisation in Qatar, UK Trade and Investment (UKTI), is seeing an increase in relationships being established between the UK and Qatar businesses.

- Mark Ellam, director of Trade and Investment, UK Trade and Invetment, Doha. -

I

n a bid to further boost British exports and attract inward investment, UKTI, a British Government organisation responsible for marketing the UK overseas, has been ramping-up its activities to extend its reach throughout the GCC region.

Mark Ellam, director of Trade and Investment at the British Embassy, said UKTI has a wide network of international trade advisers, both in the UK and overseas, where it has 150 offices, with 2500 staff in 100 markets.

“Figures generated by a National Audit Office report, show that UKTI trade services generate an estimated 15:1 benefit to cost ratio for businesses - for every £1 (QR6) UKTI spends, £15 (QR90) is generated for the UK economy,” Ellam said.

The main objective of UKTI in Qatar is to support UK companies in building business partnerships in the emirate. With the UK’s exports to Qatar experiencing a 10 percent growth in 2009, Ellam said the outlook for

boosting UK/Qatar ties was optimistic.

Each year, UKTI aids around 20,000 UK companies in identifying specific business opportunities in overseas markets. Some of the prominent UK based companies in Qatar include Vodafone, Boots pharmacy and Marks & Spencer.

“In Qatar, since 2008 we have hosted more than 10 UK trade missions to Qatar involving around 100 SMEs. UKTI Doha, also recently worked with local contacts to host a series of Partnership Qatar events in the UK, in order to highlight opportunities for business in Qatar and help prepare UK businesses for operating here,” Ellam said.

“Additionally, during the British Prime Minister’s visit to Qatar in November 2008, the UK and Qatar held a Ministerial Bilateral Trade and Investment Forum to discuss ways of boosting trade and investment and reducing barriers to trade.”

While the economic downturn has affected a broad-scope of international

business relationships, Ellam said that due to the more buoyant position of Qatar’s economy, it has UK businesses looking to the region in search of more stable business ventures.

“The UK and Qatar have a longstanding relationship, both politically and commercially. The current economic climate has presented both challenges and opportunities for UK companies trading overseas. While the economic downturn has caused some companies to take a more cautious approach when exploring new markets, it has encouraged many companies to actively look into new markets (such as the Gulf) following the drop in business from their more traditional territories,” he claimed.

“Given Qatar’s strong performance throughout 2009, and its ongoing efforts to diversify its economy, more UK companies are looking to establish new (and indeed strengthen existing), meaningful partnerships with the country. For its part, UKTI had already selected Qatar as one of its highgrowth markets in 2007, well before the current downturn.”

Ellam said the number of UK companies showing an interest in Qatar had been growing year-on-year, as had the volume of UK-Qatar trade.

Ellam cited one area increasing in interest in the Qatar market was the export of UK goods, which increased by 26 percent in the first quarter of 2009 in comparison with the same period last year.

Further, he confirmed that UK exports in 2008, stood at around £691 million (more than QR4 billion) - representing an increase of around 11 percent from 2007. For combined goods and services it was in excess of £1 billion (QR6 billion).

The Qatar British Business Forum (QBBF) has also seen a steady rise in SEPTEMBER 2009

17

BUSINESS INSIGHT – INTERNATIONAL BUSINESS membership in the past six months to encompass more than 300 members.

Ellam said that UKTI Doha would also host several groups of UK businesses after the summer period, which he said was a positive reflection in the rising level of interest in business partnerships with Qatar.

On the Qatar front, Ellam said that construction, legal/financial services and education and training were experiencing the most significant rise in interest from UK companies. Other key areas identified were generating interest included ports and logistics, transport, healthcare and power and water.

“These are all sectors in which Qatar could utilise the expertise of UK companies through, for example, the financial and legal services, research and development and creative industries,” Ellam claimed.

“Moving forward, we see opportunities for UK companies in green and sustainable projects across a number of sectors, including construction and energy – areas that the UK has a proven track record.”

Once a UK small-to-medium business decides to invest in Qatar, Ellam said there could be a level of ‘red tape’ and lengthy delays involved in setting up a business in the emirate.

“The process of registering a company can be time consuming in Qatar, as it is elsewhere. UKTI, and indeed the embassy as a whole, work to maintain a good relationship with the Qatari authorities in order to discuss the business environment,” he said.

- UKTI is looking to boost its trade relations with Qatar. -

18

SEPTEMBER 2009

“Given the importance of ensuring any registrations and agreements are done correctly, we advise all UK companies to seek legal advice prior to making any commitments. We work with local lawyers and business services companies to provide a support network for businesses.”

Once a UK company decides to set up in Qatar, Ellam said UKTI could help it by providing a list of potential customers\agents and sponsors as well as aiding with the arrangement of meetings, or by advising on ways to raise awareness of their goods and services in the marketplace.

In regard to supporting and financially funding Qatar-based

feeding sector information, business opportunities and market opportunities in the various territories back to the UK and through additional support such as UKTI’s Tradeshow Access Program, which provides grant support for eligible SMEs to attend market trade missions and/or overseas trade shows.

Ellam said UK companies that trade both in the UK and in Qatar could avoid double taxation by operating under a Double Taxation Agreement (DTA).

“On 25 June, Qatar and the UK signed a DTA to avoid double taxation and to prevent financial evasion pertaining to income tax and capital between the two countries,” he stated.

“Moving forward we see opportunities for UK companies in green and sustainable projects across a number of sectors including construction and energy – areas that the UK has a proven track record.”

- Mark Ellam projects, Ellam said UK companies had full access to UKTI’s worldwide network of staff and advisors.

Through its services, the website at www.uktradeinvest.gov.uk and business mentoring by its international trade advisers, the UKTI provides advice to UK companies on the benefits of internationalising, building capacity to export and export in new areas.

UKTI then assists UK companies in accessing those markets by providing direct help and advice from posts,

“The DTA doesn’t do away with tax altogether, but does set out the conditions under which a company from one country can be taxed in the other. It should be noted that Qatar’s Advisory Council introduced a new lower rate of corporate tax on 24 June, 2009 - corporate tax has been reduced from 35 to 10 percent and Qataris and Gulf Arab nationals are exempt.”

To fill the void in Qatar’s skilled labour market, Ellam said UK and Qatari businesses were already working together closely in this area to bring about change.

The UK has a long established reputation for education and training and is recognised as a significant centre for research and development. Ellam said that forming links and activity between UK education and training providers and Qatar could assist both countries achieve their objectives and build long-term partnerships.

“We understand the value of these links and partnerships, and together with the British Council, we are helping them to develop further,” he said.

“Where there are short-term gaps in the labour market, UK recruitment companies can assist. Many are already active here and we’ve been encouraging more to consider the Qatari market – last year we helped arrange for a trade mission of specialised IT recruitment companies to visit Qatar.”

BUSINESS INSIGHT - FINANCIAL REGULATION

RETHINK

AND REGULATE In his official statement made in July, the chairman and CEO of Qatar Financial Centre Regulatory Authority (QFCRA), Phillip Thorpe said, while Qatar had been fortunate to be somewhat insulated against the full-blown turmoil created by the global economic meltdown, it had nevertheless felt the impact with measurable effect.

20

SEPTEMBER 2009

BUSINESS INSIGHT - FINANCIAL REGULATION

T

he series of economic events that took place in the latter part of 2008 caused significant damage to the financial services markets, which has resulted in the call for governments across the globe to rethink their approach to financial regulation.

For the QFCRA, Thorpe said the economic slowdown resulted in a steady decline of business for the remainder of 2008, as well the easing in new applications being lodged from firms looking to establish themselves in the Qatar Financial Centre.

However, Thorpe said that while the rate of applications received for the year had tapered-off in the last half of 2008, the final number of applications ended slightly up on 2007’s results, with 59 authorised firms on the register, 42 licensed firms and 451 registered individuals. Thorpe described these numbers as being “all healthy increases over the comparable numbers in 2007”.

While Thorpe said the business picture remained “broadly positive” for Qatar due to its “relative level of insulation”, he admitted that the regulatory story had been “demanding time and attention”.

“The QFCRA had expected 2008 to be a year of significant change for the regulatory structure in Qatar, given the Qatari government’s plans to move to a single regulatory body,” Thorpe stated.

“Not surprisingly the events that took place in the global market, combined with major questions over the effectiveness of different regulatory models, have caused the government to be preoccupied with more pressing economic issues and to recognise that previous assumptions may need re-examination.”

One of the key issues that Thorpe highlighted as in need of further consideration was the relationship between the critical components in any financial oversight system; which in the context of Qatar involves the financial regulator, the Central Bank and the Ministry of Finance.

Thorpe added that the experience learnt by the United Kingdom and the United States clearly identified the problems that can arise in structuring such relationships, which also highlighted the need for adequate

powers for the respective bodies, transparency in the relationships between them and appropriate accountability in the exercise of the powers that are vested in them.

“The international debate on these relationships is likely to continue throughout 2009, and we will review with interest the suggestions for achieving an appropriate balance between the objectives of the regulatory body and the objectives of those responsible for financial stability and the public purse,” said Thorpe.

Another key point Thorpe raised was the vast experience there was to be gained from a the global economic crisis, especially in the way in which regulation should be executed.

He said there was already evidence about the damage that can occur when there is the opportunity for regulatory arbitrage and where there are a number of bodies discharging similar regulatory functions in a jurisdiction.

There is no more proof required to demonstrate the potential for misuse in a system where there are gaps that exist between the jurisdictions of different regulatory bodies.

“This has particular resonance in Qatar, where the three existing regulators (our own QFCRA, the Central Bank in respect of domestic banking institutions and the recently formed Markets Authority overseeing the stock market) provide imperfect coverage of financial services in the state,” Thorpe claimed.

A particular area of concern, according to Thorpe, is the insurance sector, which he identified as being in urgent need of an overhaul.

“It’s clear Qatar will need to find a way to fill these gaps, and we remain convinced that the option of a single regulator, in a state the size of Qatar and with the resources available to us, continues to be the best option for the country,” he said.

“There are some interesting (but sadly, not new) lessons emerging about the ability of the financial services industry to be self-policing. Those who convinced themselves that the market would be the most efficient regulator of professional financial services have been forced into reconsidering the

merit of that proposition.

“My view is that the matter was never in doubt – while there is a good case for recognising that business conducted between professional counterparties may be regulated in a different, even less invasive way than business directed at retail customers, it would be a mistake to assume that this should be read as doing away with the need for regulation completely.”

In particular, Thorpe said the crisis brought home the importance of any regulatory system being able to deliver real disincentives for bad or destructive behaviour, which impact the markets.

Events have shown how important it is that regulators and the criminal authorities maintain the powers and resources to investigate and prosecute wrongdoings when these arise.

In the aftermath of the financial crisis, Thorpe said the QFCRA was looking more closely at the investment strategies of the firms it regulates, taking a more critical look at the nature of the capital held by these firms, and questioning previous assumptions regarding reliance on parent company or offshore funding for businesses operating within the state of Qatar.

“We fully understand the reviews being undertaken internationally and domestically also carry a real potential for regulatory overreaction, which may cause further deleveraging, raise the costs of regulatory capital, and generally inhibit the ability of firms to transact business and assume otherwise reasonable levels of risk,” he said.

“Again there are many debates on the appropriate level of regulation for the post-crisis world now being conducted among international regulatory bodies, and we expect to follow these with interest through the course of 2009. We will be careful to ensure that any consequent regulatory reforms proposed by the QFCRA are proportionate, and balance the need for caution, while recognising that a primary function of financial services is the assessment, trading, and management of risk – the financial services business cannot, by its nature, be risk free.”

SEPTEMBER 2009

21

MARKET WATCH

QATAR’S ECONOMIC FOOTING Martin Menachery, the senior editor of The Wealth Matrix magazine for Arab Capital Markets Resource Center (UAE), lends his analysis and expert view on Qatar’s stock market trends and economic position.

The economy of Qatar largely depends on oil and gas that accounts for 50 percent of its GDP, 85 percent of export earnings and 70 percent of government revenues. In fact, oil and gas resources have made Qatar one of the world’s fastest growing and higher per capita income nations. Continued high oil prices and increased natural gas exports up to late 2008 have strongly supported Qatar’s trade surpluses and foreign reserves.

Q

atar has a proven crude oil reserve of 15.21 billion barrels currently, which will last for 55 years as per the existing level of production. In terms of natural gas reserves, Qatar is the richest among the GCC nations. In 2007, the country represented 61.9 percent of the GCC’s total natural gas reserves and around 14.6 percent of the world’s total.

Qatar is one of the most stable countries in the Middle East as a result of its combination of noteworthy natural

resources and cautious macroeconomic management. The country witnessed an economic boom until late 2008. In the past six years, the economy grew more than five times in its size – at an average annual rate of 32 percent – from US$19.36 billion in 2002, to US$102.30 billion in 2008.

Huge foreign investments in the development of its gas fields were facilitated by Qatar and the country is likely to emerge soon as the top exporter of liquefied natural gas. Qatar

is gearing up for further liberalisation of its economy. An important agenda in the country’s future economic strategy is luring more foreign investment in the development of its non-energy sector.

The fall in oil prices in late 2008, which has not recovered significantly to date due to the global economic crisis, however, is likely to bring down the country’s budget surplus. This could even slow down the pace of investments as well as development of projects in the remaining months of 2009.

MARKET WATCH

GROWTH PROSPECTS AND MARKET INDICATORS

Strong private sector activity, increasing oil and gas production and a sharp upturn in energy prices during 2003 to 2008, has catalysed strong economic growth in Qatar, resulting in enhancement of the macroeconomic indicators of the country. In 2008, the nominal GDP grew by 44 percent – the highest annual growth rate experienced by the country – to US$102.3 billion, as compared to a growth of 24.8 percent to US$71.04 billion in 2007.

Although inflation remained low in Qatar prior to 2004, it reached an all-time high rate of 15.1 percent in 2008, compared to 13.8 percent in 2007. Increasing property prices and demand for goods and services, and depreciation of the US dollar against world’s major currencies resulted in the unusual rise in the consumer price index from 2004 to 2008.

However, due to appropriate and timely government intervention, inflation is likely to decelerate steadily to nine and 8.4 percent in 2009 and 2010, respectively.

Although a sharp upturn in oil prices in the recent past enormously enhanced the government’s fiscal position, its dependence on oil and gas export revenues, which is the source of about 70 percent of fiscal revenues, makes the country’s economy highly sensitive to the fluctuations in global energy prices.

A large part of the industrialisation programmes in the country are now complete and the government plans

to keep its domestic expenditures at the lowest level possible until Qatar’s external debt repayments are fulfilled.

The economy achieved a budget surplus of 8.2 percent of GDP in 2008, as compared to 2007.

The fiscal surplus is projected to reduce to two and 2.5 percent of GDP in 2009 and 2010, respectively.

Qatar operates a fixed exchange rate regime – broadly maintaining the current rate of US$:QR at 3.64 since the early 1980s.

Although the US dollar has depreciated against major currencies, this rate is expected to be maintained in the medium-term.

Qatar’s major exports – oil and gas – remain denominated in US dollars.

At the end of 2008, total reserves of Qatar, excluding gold, stood at US$10.1 billion, compared to US$9.4 billion at the end of 2007. It is likely to be at US$10 and US$10.5 billion at the end of 2009 and 2010, respectively.

In comparison with other regional economies, Qatar has a high per capita income, with huge hydrocarbon reserves, and a population of just 0.8 million. Qatar export volumes are expected to witness a rising trend.

The current account surplus stood at an all-time high of US$36.08 billion in 2008, as compared to US$21.95 billion in 2007.

However, the surplus is likely to drop sharply by 79.4 percent to US$7.44 billion in 2009, while the forecast for current account surplus in 2010 is expected to increase by 224.5 percent to US$24.16 billion.

A VIBRANT STOCK MARKET

Qatar has one of the most dynamic stock markets in the Gulf region. Stocks dealing in Qatar started back in the mid1990s, where stocks were traded through certain unspecialised and unlicensed offices performing as intermediaries between the sellers and buyers. Hence, appropriate bases that are found in a developed and regulated stock market were absent, resulting in a lack of proper controls and transparency, which consecutively led to unfairness in pricing stocks and large fluctuations in prices.

Doha Securities Market (DSM), one of the Middle East’s largest share markets, was established in accordance with Qatar’s Decree Law No. (14) of 1995, as a step towards consolidating the financial and economic structure of the country, aiming to develop the market framework, enhance and organise the procedures in the trading of stocks in the country, train market workers and brokers, encourage Qatarisation, develop systems and procedures for investor awareness, improve the investment climate, and support amendments in the legislations in terms of allowing non-Qataris to invest in the local stock market.

DSM started its activities on May 26, 1997, with 17 companies and an estimated market capitalisation of around QR6 billion. Although securities’ trading was manual at the trading halls and the clearing and settlement department in the beginning, a Central Registration System was implemented in August 1998, and trading became fully electronic on March 11, 2002.

In the beginning, DSM only allowed Qatari citizens to trade. However, the country recently passed a new law allowing citizens of the other Gulf countries to invest in the stocks of the listed companies, for a maximum of 25 percent. The new law also permitted nonQataris to invest in the capital stock of newly established or private firms. There is a possibility that the government may issue a new law allowing non-Qataris to invest in the capital stock of all companies through investment funds.

SEPTEMBER 2009

23

MARKET WATCH

On June 21, 2009, DSM changed its name to Qatar Exchange and is aiming for flotation within the next two to three years. Qatar Exchange aims to pursue a primary listing in Doha as well as dual listings in New York and Paris. The transatlantic exchange group, NYSE Euronext, bought a 20 percent stake in the newly created Qatar Exchange, while the remaining 80 percent belongs to Qatar Holding, a direct investment arm of Qatar Investment Authority.

MAJOR RECENT STOCK MARKET TRENDS

Losing up to 29 percent of its value in the first quarter of 2009, DSM, valued at nearly US$1 billion, experienced the biggest fall in its index, among all the GCC markets. During this period, the DSM Index’s market capitalisation in dollar terms was down 29.4 percent from US$54,622 million to US$38,582 million. While the P/E, P/B and dividend yield also declined in the first quarter 2009, the average trading volume increased by more than 25 percent. Industrial and banking sectors registered relatively high losses with the industrial sector having the maximum standard deviation of daily returns during this quarter.

While the first quarter of 2009 was quite bearish for the DSM Index, it gained the most among the GCC

24

SEPTEMBER 2009

markets in the second quarter of 2009, the index offering positive returns on 38 out of 65 trading days.

Meanwhile, the market capitalisation of the index increased from US$38,582 million to US$51,847 million – a growth of 34 percent – in the second quarter of 2009. The average trading volume increased by more then eight percent compared to the first quarter.

Qatar Exchange showed a mixed result in July 2009.

While major indicators such as the Qatar Exchange Price Index and market value increased, the number of deals, total trading value and volume of deals decreased. Market capitalisation of the 43 listed companies within the Qatar bourse increased to QR285.71 billion on July 30, 2009, which was an increase of 5.74 percent compared to the previous month. The financial sector topped this market capitalisation with 38.4 percent of the total, followed by industrial segment accounting for 31.9 percent, consumer services 13 percent, telecommunications 10.6 percent, utilities 5.8 percent and healthcare 0.1 percent. In terms of value traded, the top five companies within the Qatar bourse were Nakilat, Industrial Qatar, Vodafone Qatar, Gulf International Services and Commercialbank of Qatar.

Another big development around Qatar bourse was on July 22, 2009 – Vodafone Qatar became listed on Qatar Exchange, only weeks after launching mobile phone services in the country.

Vodafone Qatar issued up to 40 percent of its shares to secure around US$950 million. This IPO was the largest in the world for 2009, at the time of the close of the subscription period.

The remaining 60 percent of the Vodafone Qatar shares are blocked from trading for two years.

Qatar Exchange plans to use the trading technology of the NYSE Euronext to launch a range of products largely unavailable in the region.

It will install NYSE’s Universal Trading Platform, which is being rolled out across NYSE cash and derivatives markets globally, to launch Qatar’s own derivatives exchange.

Qatar Exchange is also planning an initial public offering, but so far it has provided no indication of when or how large the offering will be.

Qatar bourse’s focus on new products reflects the tough task it faces in moving ahead with other stock markets in the region and the aspiration to establish its regional leadership.

The views expressed in this article are opinions derived from available economic and market data and not necessarily endorsed by Arab Capital Markets Resource Center.

Nisha Abraham and Firuza Ganieva also provided editorial input for this article.

INSIDE EDGE

A road to recovery visible ahead,

too early to celebrate

By Rajesh Mirchandani, CEO, Dun & Bradstreet South Asia Middle East.

I

n the past quarter, the global economy has started showing signs of recovering from one of its deepest and most prolonged recessions in recent times. In its World Economic Outlook report, the International Monetary Fund (IMF) highlighted that although the global GDP will contract by 1.4 percent in the current year, the forecast for expansion in the world economy next year has been revised from 1.9 to 2.5 percent.

It believes that the timely and unorthodox measures taken by the governments of various nations in tandem will fetch more momentum in the remaining part of the year as the real benefits of the stimulus and policy measures will start emerging.

The United States recently reported a one percent contraction in its GDP in the second quarter of the current year as compared to a 6.4 percent drop in the previous three months. Manufacturing activity around the globe has started picking up and trade volumes also show improvement.

- Rajesh Mirchandani. -

INSIDE EDGE

These positive factors have made investors across the world bullish. International stock markets have recovered from their multi-year lows and commodity markets have started to get the sheen back.

The positive mood is reflected in prices of crude oil as well. Crude oil is now trading at around US$70 per barrel in the international commodity exchanges after hitting lows of US$30 per barrel in December 2008, which was due to demand concerns and deteriorating outlook for the world economy, as well as the flight of speculative funds from the oil futures market. In recent months, expectation of global economic recovery has been behind the revival of crude oil prices rather than any improvement in demand fundamentals.

The weak US Dollar, in which oil is priced, has also lent support to the upward movement in prices.

The oil and gas sector remains the key economic driver for most Gulf countries, contributing to the region’s growth and supporting the economic diversification plans of the governments. Qatar and the other oil exporting nations have felt the impact of the global economic downturn through large decline in respective stock market valuations and liquidity shortage in the banking sector. The combined GDP of the six GCC countries is projected to weaken to 1.3 percent in 2009, from 6.4 percent in 2008, as oil prices are expected to remain subdued as compared to last year’s prices.

Hydrocarbon production is projected to decline in order to adjust to the low demand. The Qatari economy contracted by 23.2 percent quarter-on-quarter in Q4 2008, and 8.5 percent in Q1 2009, in nominal terms.

Dun & Bradstreet has been tracking business sentiments in Qatar since the third quarter of 2008. It publishes the D&B Business Optimism Index (BOI) each quarter, which is recognised as an indicator of the pulse of the business community and serves as a reliable benchmark for investors.

The BOI is arrived at on the basis of a quarterly survey of business expectations and covers all the key sectors of the Qatari economy. The survey tracks expectation of the business community regarding the parameters of volume of sales, net profits, level of selling prices, new orders received, level of stock and number of employees.

The trend observed in the BOI, over the past five quarters, has reflected the perceived impact of the global financial crisis on Qatar’s economy. Business sentiments in Qatar were strongest in the third quarter of 2008 (July to September 2008), at a time when oil prices were at their peak and the Gulf economies were expected to be immune to the global financial crisis.

As signs emerged that the financial system in Qatar was becoming affected, sentiments started dipping and were lowest in Q2 (April to June) 2009. With recovery in oil prices and the government’s efforts to limit the impact of the economic downturn, sentiments turned around in the current quarter, July to September 2009. The survey for the third quarter of 2009 reveals that all sectors in the non-hydrocarbon segment had a marked improvement in the expectations of sales, new orders, net profits, selling prices and stock levels in comparison to the previous quarter.

SEPTEMBER 2009

27

INSIDE EDGE

“What will happen when the power of the stimulus fizzles out? Will this be enough to change the buying habits of millions across the world, who have altered their demand for goods and services?”

- Rajesh Mirchandani

This indicates a positive expectation of an increase in demand in the coming months, coupled with improved expectations of selling prices, leading the businesses to expect higher net profits in Q3. The same confidence was reflected in the country’s stock market, which has recovered from its multi year lows and is down only 2.5 percent year-to-date (July 2009), as compared to a 28.1 percent slump witnessed in the year 2008.

However, employers remain conservative about hiring new employees, mainly due to the dynamic business environment.

Among the five sectors surveyed, the manufacturing sector was the most optimistic on all parameters. Firms in the hydrocarbon sector, which includes Qatar’s mining, oil and

28

SEPTEMBER 2009

gas companies, are expecting oil prices to weaken as the current high prices are not backed by a real improvement in the demand for oil.

While the sentiments in the Qatari economy have followed global trends, it is early to say if the recession has truly bottomed out. We believe that Qatar’s economic outlook remains very favourable, in light of the significant investments made in the oil and gas sector. The government, in conjunction with the country’s central bank, has implemented measures to limit the impact of the downturn.

Qatari banks are adequately capitalised and quite sound to pull-up the economy through the crisis.

The government has provided strong support to its local banks by buying their trading and real estate portfolios.

This has helped the industry mitigate the effects of a fall in the value of these assets, which could have broadly led to a drastic dip in lending. Although the real estate prices have fallen in the range of 25 to 30 percent, in the long run such corrections make the market mature and healthier by clearing the speculative money from the system. Through the sovereign wealth fund, the government has purchased billions of Riyals worth of listed banks’ investment portfolios in order to provide liquidity. With a rebound in oil prices, and a spate of strong corporate earnings reports, the commercial environment is expected to remain strong. The authorities are also reinvesting abroad and becoming major purchasers of foreign capital.

The country has not been completely immune, as it has experienced a reduction in tourist inflow, as well a large drop in property prices. Going forward, the shortage of liquidity in the global financial markets might be a key challenge to Qatar’s continuing strong growth.

Even though Qatar’s economy will experience some slowdown in the current year as compared to the previous one, it is expected to post a real GDP growth of around nine percent, according to D&B estimates. On the other hand, most developed countries are experiencing a contraction in

INSIDE EDGE

their GDPs. As some signs of growth are emerging in these countries, people across the world have now started talking about the shape of world economic recovery. However, many economists have warned that the road to recovery will not be a joyful ride and the world economy still faces major challenges ahead.

In the past, economies impacted by a downturn have resorted to export-led recoveries. This scenario is unlikely this time around, as most of the world’s economies are impacted by the current crisis and there are no countries with large surpluses to export to. What we are witnessing right now is the power of stimulus measures, which has led to positive economic data. But, what will happen when the power of the stimulus fizzles out? Will this be enough to change the buying habits of millions across the world, who have altered their demand for goods and services?

The unemployment levels in the US continue to cast a spectre of gloom. On the realty front, the US has witnessed 1.5 million foreclosure filings in the first six months of the year, a 14.6 percent increase from the same period last year.

The banking sector has an uphill task as it faces pressure from the government to increase lending despite the fact that their bad debts have been rising sharply over the last couple of months. Moreover, the recent healthy results posted by the banking industry are driven by their trading activities and not from their core lending operations, which still lag. All these concerns compel us to adopt a cautionary approach before a full- fledged recovery takes place.

What we are witnessing is the increasing focus on ‘not so bad news’ as against the worsening global economic scenario witnessed in the past. There is a growing view that this recovery is neither going to be a ‘V’ shaped nor a ‘W’ shaped one, but more like the Internet protocol of ‘WWW’.

Most practicing economists are of the view that we are at the bottom of the recessionary cycle. Let us hope that this is not a false bottom and that the end of the tunnel is not leading us into another tunnel.

- Qatar, while not immune to the credit crunch, is driving forward on the road to recovery. -

SEPTEMBER 2009

29

COVER STORY

HANDS-ON BUSINESS

COVER STORY

Does the world need yet another retailer? The obvious answer is no. There is already a myriad of retailers competing to fill the unrelenting demand of a mass consumerist society. However, what the global community needs are businesses that seek to re-engineer the economic system by promoting the non-monetary value of ethics and which lay the foundation for a civil society, and craft a better world through good corporate social responsibility (CSR) practises.

Kelly Lewis investigates the important role that CSR plays in today’s business landscape and speaks with a local outfit that is raising the bar for CSR standards in Qatar and abroad, The One.

I

t is imperative to note that businesses need to be commercially viable in the first instance if they are to operate successfully. However, there are distinct differences between businesses that only seek to turn a profit and businesses, which extend beyond monetary gain to provide a needed service to a community or to the world.

All businesses have a corporate responsibility to the public, the shareholders and the world it trades in. In its most basic terms, CSR can be realised as the ethical manner in which a business operates.

As part of TheEDGE’s special CSR investigation, we focus on The One, a company that is going above and beyond the majority of Qatar-based businesses in regard to the level and execution of its CSR practices.

While there are many other companies that also promote good CSR policies, the operations of this unique retailer should encourage and alert local businesses about how to raise the profile of their individual CSR standards.

- Gaby Salome, country operations manager for The One, Qatar. -

ONE VISION Born out of the idea of creating not another retail shop, but rather a “total home experience” store that also sought to improve the quality of the community that it operates within, the passionate Swedish-born inventor and CEO, Thomas Lundgren launched the first ‘The One’ store in the UAE capital of Abu Dhabi in 1996.

Now some 13-years on, The One brand has evolved to encompass more than 700 employees, with 14 stores spread across five Middle East countries; Qatar, United Arab Emirates, Kuwait, Jordan and Bahrain.

What makes The One so unique as a Middle Eastern company is its commitment to quality in all aspects of its operations. But, it is not the simply the value of money that drives the company forward, but rather the quality of life that it seeks to promote and provide directly to the local and global community.

SEPTEMBER 2009

31

COVER STORY

- Employees of The One Qatar participating in the annual Terry Fox Run. -

The founding principle that The One is built on is embodied in its name – ‘The One’ meaning unity and equality.

The One likes to refer to its employees not as staff, but as ‘tribe’ members, as all members of staff are deemed equally important to the company regardless of what position an individual holds.

Corporate Social Responsibility: “It’s not a values issue, it’s a priority issue.”

- Thomas Lundgren, The One inventor and CEO. To ensure a successful coexistence of its tribe members, The One has a set of ‘core values’, which underpin the company’s ethical objective: Live – being positive, questioning and significant; Dare – being accountable, truthful and openminded; Believe – being committed, loyal and informative; Love – being respectful, encouraging and forgiving.

Now, while some blue-collar and white-collar businesses may view the above values as being somewhat of a ‘colourful’ palette in which to ink their CSR pen, such values are a fundamental vehicle that all businesses, regardless of size or nature, need. These values are essential tools that enable businesses to have empathy in their leadership as well as the ability to connect and relate to all people associated with their business operations.

Gaby Salome, country operations manager for The One, Qatar, says CSR is a term that too many businesses simply toss around in front of the media these days in a bid to promote their operations.

“If we want to do something related to CSR, we do it with value rather than with money,” he says.

32

SEPTEMBER 2009

“It’s so easy for businesses to give large sums of money to organisations and then turn their backs. There are many large companies, which do just that and you constantly see these types of stories in the press.

“To us, it’s not about how much you give, it’s about how and what you actually give that either adds benefit or changes lives. Additionally, we ensure that all our staff play their part and are involved in any CSR activities that we undertake.”

Fair and equal employment is a crucial element of good CSR; giving people financial security brings along with it independence and equality, which are vital to any human.

The importance of the right to paid work for all has not diminished since the drafting of the Universal Declaration of Human Rights in 1948. Despite tough laws enforced in many countries, discrimination against disabled people in the workplace is still rife and this is something that The One, as a company, is committed to changing.

In Qatar, laws for ensuring equality for people with special needs have failed to bring about adequate employment opportunities, according to various sources.

Under Qatari Law, as set out in Article (5) of the People With Special Needs Law No. (2) of 2004, it stipulates that employers are required to employ challenged workers to a minimum of two percent of their total workforce. Despite the official legal framework, the law is not being adequately enforced leaving a minority of Qatar-based employers adhering to this legislation.

The One’s employment policy denounces discrimination against a person’s race, colour, ancestry, ethnic origin, citizenship, place of origin, creed, religion, age, disability, sex, marital status and family status.

This is visibly seen in the array of employees, who are present on the shop floor, or actively participating in all facets of the company’s business operations.

The One also actively searches out physically and mentally challenged individuals, who are suitable candidates for recruitment, which is a key objective of its equal employment opportunity strategy.

And as part of this initiative, the company has set itself the ambitious target of attaining a minimum level of five percent challenged employee participation as part of its total staff complement by 2012.

In Qatar, The One already has 4.5 percent of its workforce filled by challenged employees and continually works with Hamad Medical Corporation’s Rumaillah Rehabilitation Services, to link challenged individuals with the opportunity of gaining paid work.

The One started recruiting

COVER STORY

challenged employees five years ago and the first challenged ‘tribe member’ to be recruited at The One Qatar was a Sudanese lady, Mona Al Haj, who worked as a secretary.

“Mona’s story was a very sad one, she was left paralysed as a result of accident, her husband was also killed in a road accident while she was pregnant, she was then terminated from her job because she was deemed impaired by her employer,” Salome informs.

“We were happy to be able to recruit Mona and to give her the opportunity to participate in the workforce again.

She was an excellent secretary and member of staff during her time here, but sadly she was struck with a very aggressive form of breast cancer and after only six months working with us she lost her battle with the disease.

“This was a devastating loss for all of us, but Mona’s involvement with the company changed everyone’s lives.

Working with Mona taught us to have a better appreciation of life and for how we treat those around us. This experience, although very sad, is what encouraged us to recruit more challenged employees.”

Through The One Qatar’s partnership with Rumaillah, the company has since recruited three challenged staff members: Ahmed Mohammed Issa, Vivian Penpillo and Marwan Al-Olbaidi.

Ahmed is a 22-year-old wheelchair-bound Sudanese exfootball player, who works at The One as a sales coordinator/ cashier. Vivian is a 35-year-old Filipino, who is paralysed

- The One Qatar sells paintings produced by Shafallah's special needs children to raise funds and awareness for the not-for-profit organisation. -

THE ONE’S COMMUNITY AND VOLUNTEER PROGRAMS BY COUNTRY: Qatar: Shafallah Centre for Children with Special Needs, Hamad Medical Corporation’s Rumaillah Rehabilitation Services, Reach Out to Asia and the United Nations’ World Food Programme.

Bahrain: Down Syndrome Centre, Society for Children with Behavioural and Communication Difficulties and Alia for Early Intervention Centre.

Jordan: River Foundation and Queen Rania Family and Child Centre.

Kuwait: Children’s Orphanage and Khalifa School.

UAE: Dubai Centre for Special Needs, Rashid Paediatric Therapy Centre and Special Needs Families Group, as well as the Abu Dhabi Future Centre for Children with Special Needs. from the waist down as a result of a vehicle accident; she now works as a full time receptionist. Marwan is a 19-yearold British national, who was born in Iraq with Morquio syndrome (a form of mucopolysaccharidosis that affects skeletal development) and is employed as a receptionist and planogram controller.

All three of these employees are wheelchair-bound, but rather than accepting this as a limitation, Salome and his ‘tribe’ re-designed and fitted-out the work environment to enable all members to carryout their job tasks unobstructed.

It is the policy of The One, in all its locations, to ensure that its workplaces cater not only for the safety of its challenged and non-challenged employees, but also its customers. This includes fitting its buildings with wheelchair ramps, safe and effective floor design, lifts, disabled toilets and visual and hearing aids in which to alert people in the event of an emergency.

Salome says that employing challenged individuals, while also providing them with a sense of purpose and independence, fosters a greater level of empathy among the non-challenged employees and customers, and encourages greater social integration.

As part of Vivian’s rehabilitation program she worked for a period of five months as a receptionist with the team at The One Qatar, with the assistance of a wheelchair provided

by Rumaillah’s rehabilitation department. However, when Salome spoke to Rumaillah about recruiting Vivian on the completion of her rehabilitation program, Rumaillah declined his request on the basis that Vivian could not afford to purchase her own wheelchair.

Salome sent a memo on the staff intranet system asking if people would ‘dig deep’ and each consider forfeiting one day’s pay in order to raise the QR10,500, which was required to purchase the wheelchair for Vivian.

“The response from everyone was overwhelming. We bound together as a team, raised the funds and purchased Vivian’s wheelchair, which permitted Vivian to stay in Doha where she now works for us as a full time receptionist,” Salome informs.

However, while initiatives such as these seek to bridge the gap in equal and fair right to work, such endeavours will never fully succeed in their mission unless all the individual SEPTEMBER 2009

33

SECTION COVER STORY

- The One Qatar turns its Landmark-based store into a temporary blood donor clinic as part of its annual World Blood Donor Day activities. -

links in the chain are holistically joined.

One major issue that Salome, among others, has identified as a preventative measure in promoting participation of challenged employees in the local workforce, is the lack of transportation options available for the wheelchair-bound to and from their place of work.

“There are currently only two Karwa Taxi vehicles [operated

by Qatar’s state-owned transport company Mowasalat], which are adequately equipped to carry wheelchair-bound people for the entire state of Qatar,” Salome states.

“Additionally, these special taxi vehicles are generally allocated to servicing private clients rather than for the commuting services that our staff need them for – every time we have contacted Karwa we have been informed that the service is full.”

Salome is trying to combat the transportation issues facing his challenged staff by approaching local vehicle dealerships to see if the are willing to either donate or aid The One Qatar in its quest to provide a suitable vehicle, in which to carry staff members to and from work.

“It is a big responsibility to recruit challenged people. You need to holistically be able to accommodate them, ensure that you can equip them and your other staff members with the right tools and skills in which to do their job safely, but is a responsibility worth taking on,” states Salome.

Local organisations, including Shafallah Centre for Children with Special Needs and Al-Noor Institute for the Blind, are also pushing to change these issues and the low employment rate of challenged people by proactively approaching government departments and local business houses in a bid to turn their attention to such problems.

34

SEPTEMBER 2009

In addition to its extensive in-house CSR practises, The One Qatar seeks to help its local community were it can by supporting numerous initiatives and causes in Qatar and the GCC region.

One Qatar As part of its Qatar-based initiatives The One is involved with the annual World Blood Donor Day where it turns the front of its Landmark store into a temporary blood donor clinic (with the help of Hamad Hospital’s Mobile Blood Bank) to encourage people to help others by giving up a small amount of their time to donate blood.

Each year employees of The One Qatar participate in the Terry Fox Run in a bid to raise funds for cancer research (www.terryfoxrun.org). The annual run began in Canada, as one young man’s dream to raise money for cancer research after being diagnosed with bone cancer. At the age of 18, Terry Fox suffered the amputation of a leg, but in 1980 he began the, now worldwide, running event. In 1981, Terry died from the disease, but his legacy remains and has raised in excess of US$400 million for cancer research.

To support the significance of the month of Ramadan, The One Qatar partners with Reach Out to Asia (ROTA) and local-based NGOs on an annual basis to perform various activities as part of the ROTA Ramadan Programme, which includes offering the kitchen (of its in-house restaurant) to prepare food for Qatar’s underprivileged. It also participates in a charity drive, gathering clothing and books, which are distributed directly into ROTA schools and communities abroad. Additionally, The One Qatar supports ROTA’s Sidra Tree Campaign to promote environmental awareness, culture,

COVER SECTION STORY

tradition and community care (www.reachouttoasia.org).

The One Qatar also provides retail space on its shop walls to hang and sell a selection of paintings produced (on canvas)

by Shafallah’s special needs children to raise awareness and funds for the not-for-profit organisation. Each individual artwork contains a complimentary information booklet and DVD about Shafallah and the child/artist of the paintings, which was produced by Al Jazeera, Doha. All profits from the sale of the paintings go directly back into the Shafallah Centre (www.shafallah.org) “When we sell the paintings that the children from Shafallah have created, our staff do not simply sell the painting saying they’re from Shafallah, they have a duty to inform each buyer of the story behind the painting, who the artist is, their age, disability and so on, so the buyer is ethically aware of the meaning of painting and what their money is directly helping to support,” Salome says.

Getting individuals, in both the commercial and public domain to holistically make a real difference and remove the stigma that is attached with challenged and underprivileged individuals will require, in the first instance, a change of mentality, but it will also take time and require the support of the government, the media and the private sector, says Salome.

enable communities to be self-sustaining and in charge of their future; while the installation of wells, clean water supplies and effective hygiene practises will seek to abate infant mortality rates and the incidence of bacteria-related illnesses.

The Onderworld tribe consults with and directly works the local community to ensure their full participation in holistically implementing these three to five year selfsustaining projects.

One Environment As part of The One’s environmental practises the company seeks to reduce its ecological impact wherever possible. This is realised in its supply chain, where The One has committed to only dealing with manufacturers that are not involved with any form of deforestation as well as the company’s own desire to either abolish plastic bags from all its outlets or to only use biodegradable bags – testing is currently underway to enable this.

To reduce its energy emissions, all The One stores are fitted with illume light bulbs and to employ products that have less impact on the environment, The One sources organic cotton for its bedding range, with three eco-friendly towelling collections also made from bamboo, certified cotton and organic cotton. In addition, the company has introduced of a new line of eco-friendly cookware to the Middle East, GreenPan. To further its ethical reach, The One actively supports the preservation of all wildlife and while many of its ‘animal’ products may resemble a lifelike quality, all products are in fact faux (100 percent textile) and animal free.

One World On an international front all The One centres “work to change the world together” through the company’s own The Onderworld: a Sustainable Village Community programme (www.theonderworld.com).

The idea for this program is based on “old-fashioned values” where people pull together to help each other, a concept that many people, sadly forget or under value these days.

This initiative focuses on regions of the world that need support in the four primary programme areas: balanced and quality primary education, healthcare services, alternative income projects and safe, clean drinking water and sanitation systems – a special emphasis has been placed on areas faced with a high incidence of child labour, exploitation of children and minimal opportunities for females.

The first of the programmes was launched in August 2008, with Free The Children in Kenya. The Onderworld tribe has big ambitions for the Sustainable Village Community program: for each new The One store that is opened it will support - The One Qatar works with Hamad Medical Corporation's Rumaillah Rehabilitation Services to recruit challenged employees. one village program and by 2020, The One aims to have 99 The Onderworld projects In closing, measuring ethical value in monetary terms is up and running throughout the world.

As part of these combined programmes, schools with all fallible. Ethics is not a commodity that can be bought or sold; it essential facilities will be built to improve child and adult is the guiding moral code that governs the conduct of humanity. literacy; preventative healthcare programmes, medical So, especially during this month of Ramadan, businesses should education initiatives and poverty-related illness will be take the time to reflect on their CSR policies and honestly ask combated; sustainable micro-businesses will be established to themselves if they are actively playing their part.

SEPTEMBER 2009

35

ET

EC

N

I C BAR M O O

M

O

Economic Barometer

ER

GCC SINGLE CURRENCY: DOUBT REIGNS OVER THE HORIZON

SEPTEMBER 2009

37

ECONOMIC BAROMETER

Karim Nakhle, a leading Doha-based business strategist, assumes the role of TheEDGE’s Economic Barometer from this month onwards.

Nakhle will pull no punches to offer his sharp analysis, get behind the numbers and tackle head-on the key business and economic issues, to give you the inside ‘edge’ on what is really going on in the domestic and global economy.

P

eople’s needs, living patterns, habits and behaviours vary demographically and geographically, on an international, regional and even local level. But, all share a unique goal; a purpose for which people build nations, the basis of growth, a key element for survival, the soul of prosperity, of strength that portrays the wisdom of rulers, it is the guarantor of the future and the essence, which will help the next generation blossom, it is: ‘economic stability’.

Stabilising the economy is the first task of any nation, emphasised in any basic lesson, simplified by the world’s economic reformers and researchers, from Frederick Taylor and Douglas McGregor to Frederick Herzberg and Abraham Maslow noted for his conceptualisation of the “hierarchy of human needs” [in his 1943 paper A Theory of Human Motivation].

Ideologies can change, organisational structures can be purpose built, and modus operandi can be different. But, in every utopia, in every party or coalition brought together, passing by the Marxist movements of Asia and Latin America, to the extreme right capitalist movements of Europe and the USA, the vision of a stable economy generating wealth and prosperity to all was shared. Sometimes shedding more light on some aspects of it than others, but in the end making it a goal unique to each, yet a common purpose to all. A solution perceived by many as a great coefficient of common growth and prosperity across nations was the introduction of a single currency.

The single currency is thought to be the ancestor of all economic reforms. It is the common denominator that makes cross-border business easier, facilitates mergers, acquisitions and takeovers among regional business leaders, allowing them to deliver the sort of regional business amalgamations that can compete with the multinationals, locally, regionally and internationally.

The creation of a unified currency bloc has been a long-term aim of the Gulf Cooperation Council (GCC) countries – comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE. This ambitious goal was formally declared soon after the foundation of the GCC in Article 22 of the Council’s Unified Economic Agreement of June 1982, which states: “The six-member states shall seek to coordinate their financial, monetary and banking policies and enhance cooperation between monetary agencies and central banks, including an endeavour to establish a common currency”.

The news that emerged years ago that the central bankers of the GCC had agreed on the convergence criteria needed to create 38

SEPTEMBER 2009

ECONOMIC BAROMETER

- The future of a single currency for the GCC remains in doubt. -

a single currency by 2010, was a healthy development, and a welcomed step by GCC operating businesses. All of the six GCC member states embarked on the monetary union/ single currency venture with enthusiasm and a positive outlook for the future; eyeing prosperous cash flow, mutually beneficial bilateral trade and exchange agreements, hoping that the single currency would aid economic integration and compliment moves already taken to ensure the free movement of goods, labour and capital across national boundaries.

Collaboration en masse would also afford a degree of economic protection to individual countries. A date for monetary union was set for 2010, and all six countries pegged their currencies to the US dollar in order to help fulfil what economists call ‘convergence criteria’. The hope was that inflation, public debt and interest rates and current accounts could be brought into line ensuring a smooth transition into the new currency.

In the long run, this move would be beneficial to the formation of cross border companies, with economies of scale, which could deliver higher productivity, shared knowhow, better incentives, and of course returns to shareholders of GCC operating companies.

A single GCC currency was not just seen as a good idea for the business traveller, who had to carry six different currencies during a three-day trip to the GCC region. The impact on day-to-day business would be largely advantageous, since problems of foreign exchange rates, consolidating accounts and paying salaries in six different currencies, for a GCC entity will be obsolete, giving companies, finance teams, and banks the time to focus on actual trading concerns, rather

than being distracted with complex exchange issues.

Creating a single currency would almost certainly fail to be the smoothest ‘mission’ the region could embark on, but looking back at the winning streak of its predecessor: the US dollar, which has become the currency of reserve for the world and the Euro model; almost everyone agrees that creating a single currency has eliminated problems and not caused them. It might be ambitious to expect a future GCC currency to achieve the status of a global reserve currency, but with the hydrocarbon resources of the region behind it, nothing would be impossible.

Could we compare the GCC’s single currency to the Euro?

Creating the pioneering Euro currency was a complicated procedure, due to the diversity of culture, language, fiscal policies, rules and regulations within the Euro zone, as well as the other obvious reasons such as the economies of France and Greece or Germany and Spain being poles apart.

But the benefits are clear today, after a long battle and waves of instability that lurked over the European Union, the Euro has steadily gained ground, and has positioned itself as a ‘hard cash’ and solid currency.

Europe is starting to benefit from transnational megamergers, often at the level of small and medium enterprises producing the kind of companies that can compete globally with US giants.

Hence creating a GCC single currency should be a lucrative and feasible process, since the cultural differences are minimal, the language is unified, and the economic/ financial strength of the project initiators can help smooth the transition to a single currency.

SEPTEMBER 2009

39

ECONOMIC BAROMETER

If this single currency were to see light, it would help boost the closely knit GCC economies and solidify its fundamentals, open up the markets and strengthen the region’s position on a global level, allowing it to leverage both from its large oil and gas reserves.

As unforeseen factors usually reshuffle any equation, defy the planning process and change the plans; the single currency project has witnessed a series of drawbacks that challenged its status quo. This began with minor details, which could have been easily resolved, such as naming the new currency, setting the new timetable for the introduction of the physical currency, agreeing on the rate at which each currency would be converted, and finally deciding where would the GCC monetary council would be based and how much independence it would have.

But, major drawbacks emerged on the surface when Oman dropped out of monetary union plans in 2006, arguing that it could not meet the budget deficit target due to the need for increased domestic spending on employment, hence jeopardising the 2010 target date.

Further, Kuwait de-pegged its currency from the weakening US dollar, citing delays to the monetary union and inflationary pressured caused by the tumbling US currency, while arguing that it was suffering from unreasonable levels of inflation, throwing convergence efforts into disarray in a region where currencies have long been pegged to the US dollar.

40

SEPTEMBER 2009

The latest knock-out hit came from the UAE, in April 2009, when the UAE decided against joining the monetary union (for the time being) since the members voted for the new regional central bank to be located in Riyadh as oppose to Abu Dhabi being the host city.

The UAE would have been the second largest economy in the agreement, after Saudi Arabia. The decision was a major spanner in the works and a serious setback to the plans for a single currency, possibly delaying the launch of the single currency by three years to 2013.

As Oman and now the UAE, both decided against joining the monetary union, and Kuwait de-pegging its currency from the dollar, it throws the future of the GCC common currency seriously into doubt.

With a fully-fledged common currency momentarily off the agenda, GCC central banks are now focused on weathering the impact of the global financial crisis on their economies, which were not immune and have been affected, despite efforts to minimise the storm, and are hoping to be buffered by savings from a six-year oil price boom.

As the worldwide demand for oil is reducing, the global recession has compelled crude exporting countries to resort to production cuts, therefore lowering the influx of cash and liquidity, while amplifying the need for financial, debt, and human capital restructuring making the situation even more challenging for the GCC economies.

ENTREPRENEURIAL NETWORKING

ENTREPRENEURIAL AMBITION

MEETS SOCIAL MEDIA The growing popularity of social media sites among both businesses and individuals has given rise to a vast array of new communication portals.

Kelly Lewis investigates how one Dubai-based dining concept, Wild Peeta, established by two UAE national entrepreneurs, is successfully using social media as a cost-effective, interactive and honest tool to communicate with its audience.

T

he ever-sprawling platform of social media, with its low cost of entry and potential to reach out and communicate with a diverse audience, offers a wealth of opportunity for businesses and marketers to drive their product forward.

Entrepreneurs and SMEs are seeing the social media frontier as the new marketing gold rush, and have been quick to jump on the bandwagon in order to reap the reward of exposure.

Across the Middle East, individual governments are investing heavily in communications technology, which has strengthened the uptake of Internet usage across the region.

One positive spin-off from this is that marketing through social media is expected to offer significant opportunities in the GCC, with the micro-blogging service, Twitter, already shooting at a growth rate of 300 percent in the region.

A recent study, conducted by Middle East basedcommunications consultancy, Spot On Public Relations, found Twitter had jumped by a 100 percent growth rate in a few months, with analysts confirming that the 140-character platform had already started building new trends for regional marketers seeking innovative, interactive and measurable campaigns.

According to the study, there are 12,266 Twitter users registered in the Arab world.

The GCC currently has 8212 registered Twitter users, with the UAE accounting for around 60 percent of all GCC users.

In common with Facebook usage across the region, Egypt, Saudi Arabia and the UAE have the three largest Twitter communities, accounting for 1741 users, 1405 users and 4952 users respectively. At the end of 2008, the GCC had less than 1000 Twitter users in total.

In the UAE, a few brands have started utilising Twitter to interact with target audiences and Wild Peeta is one successful example of a Twitter campaign.

Wild Peeta is an Emirati brand of quick-service ‘fusion shawarma restaurants’ established by two UAE national entrepreneurs and although it has not yet been inaugurated, Wild Peeta has already succeeded in attracting 764 followers, which is 15 percent of the UAE Twitter community.

42

SEPTEMBER 2009

ENTREPRENEURIAL NETWORKING

Kelly Lewis speaks directly with the two Emirati brothers behind the Wild Peeta brand, Mohamed Parham Al Awadhi and Peyman Parham Al Awadhi.

- Peyman (left) and Mohamed Parham Al Awadhi. -

You have opted to embrace the social media tools of Twitter, Facebook and MySpace as the main communication outlets for Wild Peeta. What is the benefit of using these methods of communication and what level of interest are you registering through each of the portals?

The financial motive [of using social media] is clear. As a small business we need to constantly look at cost effective ways to engage with our followers. This translated into having a strong and focused web-presence as well as finding ways to create ongoing conversations with our target market.

Our website (www.wildpeeta.com) was the first step, and then came the search engine optimisation and social networking sites. Social networking sites, including Facebook, Twitter, MySpace, Blip.fm and Friendster are ideal for participation marketing. We have dedicated real-human resource in order to create meaningful relationships with our target customers and we have certainly avoided any form of spamming.

However, just as in any relationship, gaining the trust of our customers took time. This involved a lot of sharing on our own part because in social networking ‘you have got to give to get’.

For Wild Peeta, it meant opening ourselves to our customers, caring about what they thought and addressing their concerns.

And in doing so, we have built a common ground with them: trust. This has enabled Wild Peeta to take this journey together with our customers and that is when our customers make the transition from being a customer to being our follower, the latter being a more powerful connection.

As a result, we bounce ideas off of our followers and we get a lot of valuable perspective from them – related to design, process, service and even food.

We decided early on not to entice people with gifts to ‘follow us’ online. What tends to happen is that you create a following of people who are only interested in your brand for the sake of a material reward. We instead offer personal rewards like friendship, trust, knowledge, respect, perspective and care.

This has resulted in a database of more than 1500 customers (each having 10 to 100 followers themselves), who follow us because they truly care about our brand and our people.

SEPTEMBER 2009

43

ENTREPRENEURIAL NETWORKING

Our ‘follower’ growth is purely organic and driven by people who have heard about us and want to participate with our brand – a reciprocal benefit that comes from this participation and helps us evolve and develop as a brand.

What do these modern day communication tools enable you to do that more traditional communication methods can not?

Traditional media serves a purpose, but it is often a oneway stream of information and lacks the human element. Here, time plays a major role where ‘consumer opinion’ may change over a period of time. There is the ‘engagement’ strategy where brands almost impose themselves on consumers. Due to the nature of this interaction, consumers often come across as insincere and guarded so the ‘feedback’ is not as honest as one would like. This is why we feel that using social media sites as a platform for participation marketing allows us the highest level of honesty from our consumers.

It’s one-on-one so the human element is strong. As a brand, you feel naked and exposed, but we would rather know what our consumers think than live in our own brand-utopia. In the end, a brand is what consumers ‘say’ it is, not what companies may ‘think’ it is – the best brands are the ones with the strongest human element.

Social media marketing is definitely an important communication tool that should be the part of any company’s marketing strategy. There are even PR companies in the Middle East such as Spot On Public Relations, which specialise in online marketing with a focus on social media marketing as a means to shape brands.

- Peyman (left) and Mohamed display some of Wild Peeta’s ‘youthful’ branding materials. -

44

SEPTEMBER 2009

What people should not get caught up with is the banter on the lifespan of Twitter or Facebook. These social networking sites are only platforms, but the act of conversing with your audience via the internet is here to stay and goes beyond obsolete website banners.

Today, people get their news online. When was the last time you watched CNN on television and how did you learn about the last major aeroplane crash that everyone was talking about?

We’ve even gone as far as placing our Facebook and Twitter details on all our packaging and menu boards.

What has the feedback from your customers and the general business community alike been in regard to your use of social media?

Through our followers we have had the opportunity to be on prime-time television, radio and in the print media. We have also been extensively featured on the Internet.

We use these platforms to enhance our participation marketing programs, but also to speak about the causes we are passionate about. These range from Emiratisation to supporting local industries and agriculture, corporate social responsibility and promoting Emirati youth culture and art.

Recently, we were given the opportunity to share the Wild Peeta story with aspiring university students at the Sharjah Men’s College. We were also invited to the S. S. Lootah Group headquarters as part of their Emiratisation programme to share our experience with a group of corporate executives and Emirati interns.

ENTREPRENEURIAL NETWORKING

For entrepreneurs and SMEs, how cost efficient and readily available is social media as a communication tool in comparison to more traditional communication streams?

Statistics and research show that Internet marketing is the most effective and cost efficient form of communication for entrepreneurs and SMEs. Registering with social networking sites is free of charge and once you understand how they work, then you have access to infinite opportunities to participate with potential customers.

What is the success rate in reaching your target audience, with social media – do you find that it is achieving the level of success that you anticipated?

People will find that they will have access to thousands of followers on social networking sites, however it is the quality of followers that counts not the quantity. There is etiquette involved in the process and the art is in the ‘pull (attraction)’ not the ‘push (spam)’.

As a result of our social media strategy, we have seen our website hit rate grow from 5000 in January 2009, to 103,000 in July 2009. Our search engine ranking has also increased tremendously, which means that people can easily find us by simply searching for ‘Wild Peeta’, ‘shawarma Dubai’ or ‘fusion shawarma’.

The concept of Wild Peeta is a business venture that you have developed over the past seven years, however you say it was through your association with the Sheikh Mohammed Bin Rashid Establishment for Young Business Leaders that finally helped bring your entrepreneurial idea into reality. What processes have you gone through over the years and what stage are you at now with your business concept?

Our business model has evolved totally from when we first came up with the concept of Wild Peeta. Our business plan was a work in progress for seven years. It was extensive and covered every aspect of our business, including sales, marketing, finance, logistics, human resource and operations.

We initially intended to be a dine-in restaurant, but [as an SME] malls would not entertain our requests for an outlet.

We were not a destination brand. We then looked at densely populated business and residential areas where convenience, quality and nutrition were important factors to customers.

That is how Wild Peeta transitioned into a business model that focused 70 percent of its business on deliveries and pick-ups.

In terms of funding, we sought private equity, approached financial institutions and looked at partnerships until seven years later when we crossed paths with the Sheikh Mohammed establishment by pure coincidence. We actually met with them for something completely unrelated and ended up talking about our passion for the restaurant business. Then, after a series of presentations to the senior management and the submission of our five-year business plan, the Sheikh Mohammed establishment agreed to invest in us. We will be forever thankful for the vision of H H Sheikh Mohammed Bin Rashid Al Maktoum, Ruler of Dubai, UAE Vice President and Prime Minister, and the amazing people at the Sheikh Mohammed Establishment for Young Business Leaders. It is their vision that emphasises the importance of small and medium businesses in the economy.

- Wild Peeta is promoting UAE culture through the talent of young Emirati artists and is using pop art comics (with traditional phrases written in Khaleeji) to engage its audience. -

SEPTEMBER 2009

45

ENTREPRENEURIAL NETWORKING

Was it difficult in acquiring financial backing and what steps did you have to go through in order to obtain funding?

We were refused loans by banks. Our family did not have sufficient funds. We were not successful in acquiring partners.

That’s why having an entity like the Sheikh Mohammed establishment is a blessing for small businesses and crucial to the continuous development of the entrepreneurial spirit.

What type of business license do you operate under and why have you chosen the particular locations that you have for your business?

Since we are UAE Nationals our license application was purely based on the location of our outlet. In our case, it was the Dubai Healthcare City, which operates under a free zone (FZ LLC) licence. We will, however, have to apply for a domestic trade license for our second outlet, which will be located in the Bastakiya district of Bur Dubai.

- Wild Peeta's marketing initiatives combine art, music, sport and patriotism. -

Considering the volatility that is still largely at play in both the domestic and international economy, how did you choose to structure your business blueprint to ensure a successful business model?

We kept evolving our business plan, particularly the figures. We did this depending on the outlet size, location and economic climate. We ensured our risks were highly calculated and that we had enough capital to take us through the rough periods.

We also sought the support of the Sheikh Mohammed establishment as it has a highly experienced team there.

Most importantly, we had faith and knew that we were going to give it everything we had in order to succeed.

People comment about the time we chose to launch our business, but we see it as an opportunity to attract the more economically minded customers.

What level of market research did you carry out in order to tailor the business plan to your specific business idea?

We researched extensively over the Internet looking at all sorts of trends related to population, demographics, tourism, GDP, consumer spending, and industry.

We also studied our competition extensively and benchmarked ourselves against them. From an operational standpoint, Wild Peeta is an amalgamation of our own multinational brand experience and some leading global franchises.

Over the years, we even developed detailed organisational manuals that dictate every aspect of our operation.

In regard to financial matters, what have your startup costs been and what level of access did you have to financial support?

The start-up costs associated with Wild Peeta were around one million UAE Dirhams, both the Sheikh Mohammed establishment and Wild Peeta have invested in the venture.

46

SEPTEMBER 2009

You say that your primary communication goal is to raise awareness for the Wild Peeta brand, but you are also committed to driving awareness among the international community about talented Emirati youth and culture. Can you explain how you are doing this and why?

We always believed that people of different cultures lived segregated lives in the UAE. It is rare that expatriate residents in the UAE know people outside their own demographic, particularly Emiratis. So if expatriate residents in Dubai do not know many Emiratis, then the rest of the world does not know anything about Emiratis.

To make matters worse, Middle Easterners are portrayed in such a clichéd way in Western movies. As a result, the perception of Middle Easterners by the international community is completely skewed. We felt a need to spread a real awareness about Emiratis. Government entities already have terrific plans in place for promoting Emirati heritage so we decided to focus on our Emirati youth.

To communicate this we use UAE Pop Art Comics. It is creative, light-hearted, and recognisable to people all over the world. The UAE pop art comics were created by talented young Emirati artists, which were donated to Wild Peeta. The artwork is hung in our outlets for everyone to see. It is also used on the Internet as part of our marketing initiatives. The language used in the pop art is ‘Khaleeji’ written in ‘Arabinglish’ internetspeak. Our aim is to get non-Emiratis curious about typical Emirati phrases like ‘Kash5a’ or ‘Mar7aba Essa3’ and in doing so create an opportunity to bring people closer together. These artists have entrusted us with their work, so it is with extreme gratitude and respect that we make use of it.

Wild Peeta has been established as a multi-dimensional brand that stretches beyond a food label. It is recognised as an Emirati brand, which underpins the foundation and heritage of Arab culture. Can you explain why you have developed the brand in this fashion?

The brand aspect of Wild Peeta came naturally as our background includes more than 12 years of international bluechip marketing experience. Plus, we knew that there would be copycat businesses that would quickly follow our lead. And, while we may inspire a market for pita sandwich operators to

ENTREPRENEURIAL NETWORKING

pop up, there will always be one ‘Peeta’ company.

We narrowed down the Wild Peeta brand into four dimensions: art, music, sport, and patriotism. They are four characteristics that everyone relates to. We then set about making them more specific to the UAE. The result is a brand that anyone can relate to, particularly young Emiratis. Wild Peeta is a youthful brand, so the content was developed with trendy Emiratis in mind – we are a ‘youthful’ brand, not a ‘young’ brand. It is youthful in the sense that it is ageless and a state of mind.

The more that people learn about Emiratis and our culture, the more cross-cultural relationships and understanding will be built.

our recipes were developed ensuring that the ingredients are available anywhere in the world. Our staff profile is such that anyone can work at Wild Peeta without the needed for niche skills.

For more information on Wild Peeta visit: www.wildpeeta.com Email: welisten@wildpeeta.com Facebook: www.facebook.com/wildpeeta Twitter: www.twitter.com/wildpeeta

What are your ambitions for the Wild Peeta brand in the immediate and long-term future?

Our short-term plan is to expand within the UAE. Our long-term plans are to export Wild Peeta across the world.

We believe wild Peeta to be a brand and a product that the world will appreciate, so our business infrastructure has been developed with this in mind. We already have extensive manuals in place that cover every aspect of our operation. All

SEPTEMBER 2009

47

ON THE PULSE

Stepping

on the

GAS

The colossal investment required to drive the economic diversification of Qatar will be delivered not in one hit, but over the course of decades. And it will be the country’s ability to manage, market and export the natural resources that it is blessed with, which will form the first step of this long journey.

Edward Jameson explores a national industry, of international importance.

E

nergy is the key, the root behind growth, be it economic, materialistic or organic. Everything requires an input of energy.

Reading this article online? Energy is behind your computer, your monitor, and the car you drove to get to where you are. A vast amount of energy was put into the building you sit in, to raise it from the ground, and a similarly vast amount is pumped into maintaining not just the building, but the temperature of the air you are breathing, and the cleanliness of the water that runs from the taps.

Reading this in print, in a coffee shop? Hear the glug of the coffee machine mixing another cappuccino? Energy. The soft background music? Energy. The purring engines and blaring horns of the traffic outside? Energy.

The development cycle of the modern cities we inhabit today moves at an exponential rate. Demand for energy to drive physical and economic growth will continue to climb for decades to come, in line with global population growth and the continual need for technological advancement.

The world knows that its natural resources will not last forever. It is for this reason that the optimistic ideal of a renewable energy economy has entered into the everyday texts of the media, politics and science. But such a glorious future remains a long way out of reach.

US President Barack Obama told the world: “We will harness the sun and the winds and the soil to fuel our cars

and run our factories.” Whether he, or any member of his administration for that matter, will ever see the day that this promise is kept, is another matter.

And so the globe’s existing energy houses stand on the path of golden opportunity, and despite the windfalls of recent years that have befallen the world’s energy suppliers, the true riches are yet to come.

- One of the huge LNG transporters that carries Qatar’s energy to its customers around the world. -

ON THE PULSE

- A Russian LNG tanker. Russia lags behind Qatar in exports via tanker despite its vast pipeline export industry. -

Last month this column explored the vitality of Qatar’s economic diversification plans, and took a hopeful glimpse into the future for the sun-drenched peninsula. But as Lao Tzu wrote, “A journey of a thousand miles begins with a single step.” In Qatar, that single step comes in the form of natural gas - and the world’s insatiable hunger for what lies beneath our desert sand and our ocean bed.

The numbers game

The statistical review of world energy, published last month by BP, revealed that Qatar sat on 25.46 trillion m3 of natural gas reserves at the end of 2008, or 13.8 percent of the world’s total, along with 27.3 billion barrels of oil, or 2.2 percent of the world’s total. The majority of the gas is stored in the giant North Field, a huge section of which extends over the maritime border with Iran. The Iranian share is known as the South Pars field.

According to the Qatar Statistics Authority, the mining and quarrying sector, which combines the oil and gas sectors along with related services, was worth QR30.7 billion to the nation’s GDP in the first quarter of 2009. No less than QR17.4 billion of this was the result of the natural gas industry.

Total GDP for the first quarter was QR70.9 billion, which presents us with a stark conclusion: The mining and quarrying sector, in total, accounted for around 43 percent of GDP in Qatar during the first three months of this year. That’s a very

high reliance on a sector that, as nature dictates, is unlikely to last beyond the next several generations.

But consider this. Last year, mining and quarrying accounted for a massive 60 percent of GDP in Qatar, due to the until then-unseen severity of the spike in energy prices. The temporary fall in global demand for energy at the beginning of this year and subsequent troughing of prices artificially lowered the percentage of GDP accounted for by energy throughout the first quarter in Qatar.

Still, whichever way you look at it, the ability to harness and manage the sector is vital to embarking on the necessary road to economic diversification and, by extension, longterm prosperity.

The small matter of a global recession is, however, an admittedly large boulder to progress that Qatar must deal with. The nation is reliant on energy, that much we know. So it must find a way to continue developing the sector despite being alarmingly susceptible to shocks in energy prices.

The name’s Bond

It is such a climate of insecurity amid the globe’s financial storm clouds that has led to the trend in bond issuance seen across the Gulf. From Oman to the UAE, governments have been issuing bonds underwritten by their own central banks in order to maintain development, which has become vital to regional states in the ongoing quest to attract foreign investment.

SEPTEMBER 2009

49

ON THE PULSE

In the Qatar energy sector, things are no different. On July 9, a Qatar Petroleum and ExxonMobil joint venture revealed its plans to sell up to QR8.4 billion in bonds to finance the expansion of gas facilities in the country.

Liquified natural gas (LNG) is natural gas transferred to liquid form for export purposes. The plants where such conversion takes place are known as trains. Specifically, the cash from the bond sale is to be poured into RasGas’ trains 6 and 7.

Rasgas is one of two LNG producers in Qatar, the second being Qatargas. The company already operates five LNG trains in Ras Laffan Industrial City, and will also operate trains 6 and 7 – which together will be known as RasGas 3. Exxonmobil holds 30 percent in RasGas 3, with the remainder owned by Qatar Petroleum.

Such an intricate web of investment, ownership and operation may seem somewhat complex, but to simplify things and underline the importance of such a deal: Qatar plans to double its capacity for gas production this year alone. Trains 6 and 7 will be the two largest such facilities in the world. Both trains have experienced delays, though train 6 is set to come online by the end of this year, with train 7 due to follow shortly after, energy and industry minister and deputy premier HE Abdullah bin Hamad Al Attiyah says.

Evidence of such rampant investment, and the ability of the sector to raise funds despite the vulnerability of the

- Qatar energy and industry minister and deputy premier HE Abdullah bin Hamad Al Attiyah. -

50

SEPTEMBER 2009

economy to the vagaries of global energy prices, attracts the right people. Qatar sits on the world’s third biggest natural gas reserves behind Russia and Iran. It is the world’s biggest supplier by shipment – which does not include export via pipeline – and its margin at the top is getting bigger.

Last month the Pakistan prime minister’s petroleum advisor Dr Asim Hussain visited Doha to discuss the importation of 3.2 million tonnes of LNG from Qatar. The under-construction Iran-Pakistan gas pipeline will not be operational for at least five years, and Pakistan is seeking to fuel its industrial growth in the meantime. China also has a rampant appetite. “China’s needs are still not satisfied,” Al Attiyah says.

“They need huge amounts of gas. So now China is the centre today of the new LNG compass.”

Tough at the top

Among the three nations with the largest natural gas reserves globally, competition is tough. The international trade in LNG takes place via pipeline or tanker shipment.

According to BP’s Statistical Review of World Energy, the biggest importer of Qatari LNG was the UAE, which consumed 15.4 billion m3 via the Dolphin Pipeline, a 230 mile-long 48-inch pipeline that transports gas from Qatar’s North Field to the UAE capital Abu Dhabi.

Russia’s principal consumer and most valued customer was Germany, which gobbled up an immense 36.2 billion m3 from the world’s biggest supplier. Italy received 24.5 billion m3 from Russia, while Turkey received 23.6 billion m3, indicating the importance of the European market to Russia - and vice-versa.

Though Qatar has itself made firm inroads into the European market. On June 29, a deal was inked to supply Poland with LNG. Minister of state for the treasury Aleksander Grad said he hoped the deal may eventually equate “to more than 1.4 billion m3 of LNG per year.” This compares against the 7.2 billion it imported from Russia last year. More than a drop in the ocean.

In the case of Iran, its biggest customer was Turkey, which

ON THE PULSE

received 5.8 million m3. Though Iran’s progress has stuttered and stalled in the face of international sanctions and political instability, National Iranian Gas Export Company marketing manager Alireza Qasemi Javid assures us it has no less than seven LNG projects underway, including development of the North Pars gas field, one of the biggest independent fields in the world, though it will be at least 2016 until all of these projects show financial results.

So though Qatar leads the way in terms of exports at present, and has a prosperous pipeline-fed relationship with the UAE, it may to have to fight for the cash to fuel its economic diversification needs in years to come.

There will come a point in Qatar’s ongoing development when the reinvestment of hydrocarbon dollars will have paid such dividends that energy is no longer the principal source of income for the state.

- Edward Jameson

The tipping point

There will come a point in Qatar’s ongoing development when the reinvestment of hydrocarbon dollars will have paid such dividends that energy is no longer the principal source of income for the state.

Whether that tipping point has been reached yet or not is difficult to say, with mining and quarrying accounting for approximately 40 or 60 percent of GDP, depending on energy prices.

Regardless of this, the race is on within the energy sector to feed a historically insatiable global appetite. Qatar is well positioned, and investment is continuing. With trains 6 and 7 coming online in months, Iran still the best part of a decade from beginning to capitalise on its reserves, and the vast majority of Russia’s gas being fed via pipeline to Europe, the dawn of the windfall years may well be upon Qatar.

SOUTH PARS

M

ar

iti

m

e

Bo

rd

PERSIAN GULF

er

of

Q

at

NORTH FIELD

ar

an

d

Ira

n

QATAR Natural Gas Field Oil Field Oil & Gas Field

- Qatar’s natural gas reserves are centred in the giant North Field (HIS Energy/IEA). -

SEPTEMBER 2009

51

BUSINESS VIEW - REAL ESTATE

s e k oo r b d d e Qatar’s Real Estate Bubble – WIlL it burst?

In the past six months there have been many conflicting headlines, with some industry experts announcing a 40 percent fall in residential prices, while on the other hand, assuring us that sales are proceeding at record levels. Such conflicting views can leave the investor slightly confused as to the true picture of Qatar’s burgeoning real estate market.

S

ince 2004, when Law No.17 was enacted, expatriates have been able to purchase freehold and long leasehold real estate within certain defined areas of Qatar. However, it has only been in the past three years, as some of the more prominent developments such as Porto Arabia at The Pearl and the ‘Zig Zag’ residential towers at Lagoon Plaza have been taking shape, that a buying frenzy began. During 2007, and the first nine months of 2008, mortgage finance was plentiful and banks were almost tripping over each other to avail mortgages to the growing number of expatriate investors. Loan to value ratios of 90, 100, even 110 percent mortgages were readily available.

Purchase prices for off-plan apartments seemed to grow as fast as the number of mortgage products available. Average prices per m2 on Porto Arabia increased from an average of QR8750 in 2006, to QR12,000 in 2007 and QR17,500 by the second quarter of 2008.

Between Q3 2008, and Q1 2009, it is fair to say the situation changed and we all got used to the phrase ‘global downturn’. While I would be one of the first to argue how fortunate we are to be living in one of the least affected counties, local banks certainly made their lending criteria stricter and loan to value ratios reduced to closer to 60 percent where mortgages were still offered.

However, I do not believe this was a result of the global slowdown, more the simple fact that when an economy is undergoing the monumental growth that Qatar has been experiencing, huge pressures are put on banking institutions. Such is the demand for credit as the economy grows exponentially that reduced cash for retail lending can be the result.

The fact that the government has intervened three times since last November, most recently by ring fencing property debt to the tune of more than QR15 billion, has demonstrated its commitment to the Real Estate sector. Banks are now lending again and 80 percent mortgages are readily available.

BUSINESS VIEW - REAL ESTATE So, let’s get back to the Real Estate Bubble. Whether it bursts or not is a matter of key market fundamentals. They fall into three categories: Availability of lending, Affordability and Population Growth.

We have discussed mortgage lending above although the amount of equity required is still somewhat higher than 12 months ago, lending is readily available.

Affordability is, of course, subjective, but property on The Pearl remains considerably cheaper than comparable units on developments such as The Palm Jumeirah – that is after prices have dropped in Dubai by a reported 45 percent over the last six months.

It is always difficult to actually gauge real price levels when the secondary market is so limited, although looking at various local property selling websites, there are plenty of examples of properties on Porto Arabia for sale in the price range of QR12,750 to QR15,000 currently and more important, the prospects for growth look excellent. Hence we come on to the third factor – population.

Population growth in Qatar has been reaching an average of eight percent over the past three years and looks set to continue. Below is a graph setting out population growth considering various growth rates:

Even taking a very conservative estimate of five percent annual growth, it gives us a population of more than 2.2 million by 2012. Of course, crucially, out of the population, who can actually afford to purchase real estate?

Out of the current expatriate population of approximately 1.3 million, DTZ have estimated that around 12.8 percent of expats have the ability to obtain local mortgage finance.

That translates to 166,400 people. Considering the Pearl contains nearly 14,000 apartments then the prospects for capital growth suddenly look much brighter.

The other fact is that a number of towers on The Pearl will not be offered to the sale market because they are subject to pre-leasing agreements. This restricts the number of apartments available further. This also does not include those overseas purchasers.Those looking to make quick money by ‘flipping’ may, of course, be disappointed.

Property investment is a medium to long-term game and always has been. If you are buying to occupy yourself, or as a longer term investment, then purchasing real estate in Qatar currently represents a unique opportunity – however, if you are looking for 40 percent capital appreciation in 12 months then you are better off going down to the securities exchange.

- The Pearl is one of Doha's most prominent developments under construction. -

- Doha’s ‘Zig Zag’ residential towers at Lagoon Plaza. -

SEPTEMBER 2009

53

LEGAL INSIGHT

o C &

the ugh ion o r th itrat r b able vail re of Ar hambe a ( t C n n r o e a ti Qat cilia nal C ion con rnatio s of the ry). d iliat re e n c t e t a s n c n i u I o sp ar nd and c al nd a Qat the au and I erci ts a n omm legal under merce ediatio concep e. c om and e tat nct ,m ew ivil o disti the Stat f of C owever ively n in the S c t H n to s tw no sed rela n of te ate, latio tar ha sdictio isdictio still idely u e r e Sta n the St , is r r i a a w r u .

In j Q ) u t j i e e C , e y the ion arts d th (QF utes not s: th n i n f litigat ounterp ommon disp diction ate), an Centre o i d o c t c an ris (St ial CC n ome n in iga rate rew ju f Qatar r Financ ictio e Lit he outc n its G dict tha gland. m of o d p s i r o a i e n e T ur timat Qat syst ly y, co nd And o pr as E l as w j , the l la the ul nlike as wel fficult t s such formal ording o o arle i a v E C r e i c l c e t i t e n U c r & e y o d a o a a a n i s a n e t w e n d is S ict es ty. tio e, or Mich ercial la of Clyd h, ate i decre uthori decisio to m jurisd d abov ists, an in rela rably t c S The n e m law s note ent ex court onsid ourt er bra The h Emir tive a ns, the tribute c d c tar.

A com n, partn Centre ic a isla sdictio t con h one ary g er Q rece ly w e l in ri in ing no ion. ri rt p sion of e may v anoth tantial so al u i n t a u j o t c o a o i d a c t n c w t s i d i t s f W u Q t a a a c b l n u o l l m r i e u s n o p f o i u i b s d s a o n mon ri co c di ith of the f leg econ ious ect ar F pute res isio No com e Qata body o ision v al resp t act a specifi e dec pute w Qat b b s i o n o Law ely i l d c n ( h h s o e g e i t g t o y s n e d v l d f n n t s i e n . id o t ll u ta the wing not the exis d, the ding o d it wi courts , from g on a disc he S at is w hich e , t o g ith h f . h n f r t a n i e n s s n o e h e t w i ati e o is Inst ill be b re it, a for oth he Sta le rul lar fact l Code out w ciple’, cris of ab ith on remain i t i n s w b fo dent v i t m i e a s r n i t e l w e i n s r i b s n p C h a a sig untry rld c ft ise ns av r cou atter prece The 2004) general n o ts o m o e ar a co the wo g effec the binding disput o opti litigatio rms he ‘ ) of tw s – a fo e (22 wn as t ar a t s in chillin y ’ s a l d i r l a P r r e e u at Q utes GD he ze.

Sho e prima g parti h oth tion a , kno g th est mt e p ar putin thoug esolu iation e high une fro edit fre urprisin in dis ulf, r the e dis – al ute r y med G s r h imm dant c ore un crease in the l p f n to t ration ve dis , name n i e e s r r t att is the g an e i rie . i e t t t b a d a n i t r n u s S a r It ssin her co e scale to con the alte in itne t of able in m e ed l is w ar to o the sa portun resolv icial i ava n d il sim t not o es it op can be ious ju ard. i e r k e s EY alb his ma ispute t the va ay be h d AR L a T m E k h y o c L e o u h s t ol HAE how r, and t e which M IC a r t o a f Q es be i bod

C LYDE

R esolution

D ispute

W

RE AN D

ATSON WW

in Q

atar

LEGAL INSIGHT

gives legislative effect to the freedom of parties to contract with each other. The parties may freely agree the terms of the contract governing their behaviour, provided that nothing in the contract is contrary to public order or the morals of the State.

In the event a dispute arises under a contract, and that contract contains a choice of foreign law and/or jurisdiction clause, the Qatari courts will usually apply the general principle and recognise the law and jurisdiction agreed between the parties. In instances in which a specific jurisdiction is not stipulated, the Qatari courts will assume jurisdiction and/or may apply Qatari law, even if this potentially conflicts with the parties’ choice of law.

Where a dispute goes before a court in the State, the pleadings and documentary evidence must be drafted and submitted to the court in Arabic by a local advocate who has standing to appear before the courts in accordance with the Civil and Commercial Procedure Code (Law No (13) of 1990).

Although the courts may hear oral testimony, in commercial disputes the preference of the court is to rely first on written documentary evidence, limiting oral testimony to circumstances where the written evidence is insufficient or otherwise unclear.

The courts in Qatar tend to be generalist courts, and where a dispute requires a certain level of specialised expertise, they will appoint an expert to assist them. There is no discovery of documents process (as is found in common law jurisdictions). The court appointed expert will review all relevant documentation and, if deemed necessary, may meet with relevant witnesses. The expert will usually produce a report in respect of liability and quantum. The expert’s report is often highly influential on the outcome of a case, and the decision of the court commonly reflects very closely the expert’s report.

Decisions of the court may be appealed to the Court of Appeal and, subsequently, on points of law and with court permission, they may ultimately be appealed to the Court of Cassation.

- Business disputes are on the rise in Qatar as well as other GCC states. -

Arbitration in the State

As the worldwide financial crisis continues, contracting parties have increasingly started looking to arbitration as an alternative means of settling disputes.

Although Qatar is well positioned to weather the economic storm, contractual disputes are on the rise, especially in the construction sector.

This has brought dispute resolution provisions into sharp relief, and has seen a trend in the State towards the inclusion of compulsory arbitration clauses in commercial contracts.

Arbitration offers several advantages over litigation, particularly where foreign companies are involved.

Such advantages include: • Avoidance of local courts where the outcome of litigation may be somewhat less predictable; • Avoidance of unfamiliar laws and public court procedures; • Ability to select the seat of the arbitration and to appoint arbitrators who are specialised in the relevant field; • Most disputes can be resolved more quickly and more cost effectively through arbitration;

• Increased certainty of outcome as appeal rights are very limited; • Confidentiality of proceedings and awards (the judgments of State courts are published); and • Potential enforceability of awards in foreign jurisdictions, which may not recognise Qatar court judgements.

In the State, the Civil and Commercial Procedure Code contains provisions specific to arbitration. These provisions provide a basic framework to allow arbitration to proceed in Qatar, and there is no doubt that its utilisation is gradually increasing.

Internationally recognised arbitration rules, including the ICC, the LCIA and the UNCITRAL Rules are accepted in the State generally – such rules should ideally be agreed between the contractual parties when signing the contract.

The grounds on which the parties may appeal an arbitral judgment to the State courts are restricted to matters of procedural defects and errors of law.

SEPTEMBER 2009

55

Dispute Resolution in the QFC

As noted above, the QFC has a separate dispute resolution regime. Law No (7) of 2005 (QFC Law) established the QFC and provided for the creation of both an appeals body and a tribunal within the QFC. Several QFC regulations contained provisions that made reference to, and granted authority to, a ‘tribunal’, even though no official tribunal existed at the time. Accordingly, it was not entirely clear before which forum disputes should be presented.

In 2009 however, the QFC Law was amended by Law No (2) of 2009 (Amending Law). The Amending Law amends certain provisions of the original QFC Law, but it also formally establishes two QFC judicial bodies: • The Qatar Financial Centre Regulatory Tribunal (QFC Tribunal), which shall consider challenges against decisions of the QFCA, QFCRA or other QFC bodies; and • The Qatar Financial Centre Civil and Commercial Court (QFC Court), which shall consider substantive civil and commercial disputes involving entities established in the QFC as well as appeals from the QFC Tribunal.

The establishment of these bodies has provided clarity in relation to their respective responsibilities, and the QFC Court recently heard its first case, which is discussed in more detail below.

In April 2009, both the QFC Court and the QFC Tribunal issued interim practice guides, pending the finalisation of the final operational rulebook and procedures guide.

Although many have initially speculated that in the absence of formal civil procedure rules the QFC Court would 56

SEPTEMBER 2009

be likely to rely on the State Civil and Commercial Procedure Code, the practice guide has clarified that until the official rules are published, the QFC Court will apply best international practice “as typified by the procedures set out in the London Admiralty and Commercial Court Guide, 7th edition.”

It remains to be seen whether the QFC Court will look to apply common law procedures and principles when hearing disputes.

Arbitration proceedings may also be conducted within the QFC pursuant to the QFC Arbitration Regulations, which also allow parties to choose applicable, internationally recognised arbitration rules as the rules to be applied.

QFC Court Case No: 0001/2009

The first case to be heard by the QFC Court related to the winding up of Sliver Leaf Capital Partners LLC, a QFC incorporated company.

Although a full legal analysis of the ruling is beyond the scope of this article, the QFC Court did take the opportunity to clarify a number of areas of uncertainty. One of these concerns references in the QFC regulations to the ‘tribunal’, which should now be read as references to the QFC Court.

The ruling also refers to written and oral submissions of evidence, suggesting that perhaps an adversarial system incorporating oral arguments will be more common in the QFC Courts.

What remains unclear, however, is whether QFC Court decisions will create binding precedent for cases, which come before it subsequently.

Ultimately, and regardless of whether the contracting parties are located in the State or the QFC, there exist many dispute resolution options in both jurisdictions, and parties should feel confident that in the unfortunate event of a dispute in Qatar an equitable solution could be found.

Note: this article is of a general nature only and is not legal advice and, therefore, should not be relied upon as such. Any person or entity requiring legal advice should consult a lawyer and obtain advice specific to their individual circumstances.

INDUSTRY FOCUS - LIGHTING DESIGN

LARGER THAN LIGHT

KELLY LEWIS SPEAKS EXCLUSIVELY WITH lighting designer BEAU MCCLELLAN.

Functionality, environmental concerns and cultural aspects are all issues, which need to be taken into consideration by today’s leading lighting designers, and this is certainly true of the lighting trends currently emerging in the Middle East.

G

lobally renowned lighting designer, Beau McClellan, has the lighting industry waiting with bated breath for the unveiling of his most ambitious lighting installation work to date: Reflective Flow, which is to be housed in a prominent commercial building in Qatar.

McClellan’s talent for designing a superlative array of lighting installations has earned him the reputation as one of the world’s leading lighting designers.

This reputation has taken him years to earn, but along the way the Scottish-born, Portugal-based, designer has collected a number of prestigious lighting awards; with McClellan winning four Red Dot Design Awards in 2007 for his Beau for Brumberg range, which was designed for German lighting manufacturer, Brumberg. The Red Dot Design Awards are a prestigious international award, which rank among the largest and most renowned design competitions in the world. McClellan was also named as the runner-up for the Light of the Year Award in 2008, and was a nominee for the Design Preis in the same year.

McClellan describes himself as a designer working to change the focus of the lighting industry through craftsmanship, innovation and cutting-edge LED technology.

His work encompasses exclusive designs for private clients around the world to unique lighting design installations for specialist manufactures.

Additionally, late last year Beau McClellan Design formed an alliance with two Canadian companies with an impressive portfolio of work; the world-famous, Ambiances Lighting and Visual Design headed by principal designer Martin Gagnon, who is armed with more than 15-years of experience, together with LED technology specialists, LSI Saco Technologies.

This partnership, operating under the banner of D3, has enabled the three companies to combine lighting design expertise and advanced technical know-how to create major lighting projects, both in the Middle East and worldwide.

McClellan’s designs are iconic, unparalleled and technologically demanding. He is a sophisticated designer driven by passion and commitment to intelligent design. McClellan is about to unveil his most ambitious project to date: Reflective Flow.

Reflective Flow is a lighting installation project, which will make its mark as the world’s largest interactive LED chandelier and will be installed in Doha’s own Al Hitmi Office Building in November – owned by Al Hitmi Property Development and located on the Corniche.

INDUSTRY FOCUS - LIGHTING DESIGN

THE ‘LIGHT’ER SIDE OF LIFE

There is an ever-increasing reliance on lighting designers to be environmentally conscious as to the ecological impact of their work.

Beau McClellan, a world-leading lighting designer discusses the current and future trends of the LED lighting industry in Qatar.

L

ighting design continues to grow in importance alongside developments in architecture and interior design. There are increasing demands on lighting in terms of creating atmosphere, comfort, control and efficiency, for both commercial and residential properties. You only have to look at the lighting in modern hotel rooms to see this in action – it is not uncommon to have up to 10 different lighting fixtures in the bedroom alone to give the guest complete control over the mood and functionality of the room.

GREEN LIGHTING

When I first started out in lighting design, very few people were concerned with the environmental impact of traditional lighting fixtures, and even fewer people outside the industry had knowledge of LED lighting. Now the market is saturated with LED technology as people become increasingly aware of the impact of conventional lighting on the environment, not to mention the huge energy running costs.

I have always been aware of the ecological impact of my work, which is why the majority of my designs incorporate the latest in LED technology; my most recent light sculpture in Qatar, Reflective Flow, will be no different – although it will combine more than 80,000 LEDs, the cost and emissions of an installation of this size are a portion of what they would be had I used traditional lighting methods.

I believe that every designer needs to be aware of the ecological impact of their work. We can all make a difference by using new technology and with LED’s; you can still have all the glamour of designer lighting, while using a fraction of the energy.

The concept of ‘green energy’ has had implications on the global lighting industry, and Qatar is no different. As in Abu Dhabi, where the first carbon neutral city, Masdar, is being built, Qatar is planning its own eco city project, Energy City Qatar.

Energy consumption is obviously a major factor in reducing emissions and lighting is a key area being explored, which is reflected in the increase in the use of LED lighting throughout the region.

Qatar has already established its own Green Building Council, the QGBC, which aims to encourage the construction industry to implement environmentally friendly building practices, which also encompasses the use of energy efficient lighting.

One of the world’s leading lighting giants, Philips, recently co-hosted round table discussions in Doha, which encouraged dialogue on the use of energy efficient lighting in the region.

The use of LED lighting is already playing a role in the Qatar skyline. The steel mesh facade of the Aspire Tower in Doha’s Sports City complex utilises low resolution LED lighting, which can be used to create a vast array of dramatic visual effects.

With major investment in green lighting systems by lighting industry leaders, Qatar can expect to see many more buildings utilising the latest in LED technology in the near future.

Focused on improving the energy efficiency of its lighting products and distribution in the Middle East, Philips’ investment in the region, together with the current construction boom, has put Qatar firmly on the world lighting map.

- Beau McClellan. -

58

SEPTEMBER 2009

- Reflective Flow will snake through the building's atrium. -

CULTURAL INFLUENCES

Doha’s emerging contemporary landscape is propelling Qatar into heady new heights of design. The vast array of buildings that are emerging are creating some inspirational and iconic designs, not only in terms of architecture, but also in the realm of interior and lighting design. Where once interiors and lighting were thought of as secondary to architecture, these fields are now intrinsically linked, with the different elements working to complement each other.

This is also true in terms of lighting trends in the Middle East. With a wealth of innovative buildings springing up, this is helping to push the boundaries in terms of lighting design.

While Islamic traditions have been maintained and are reflected in a wide selection of installations in the region, the area in terms of architecture and interiors has evolved and has been given a new freedom of expression.

Leading international designers are now showcasing their wares in the region alongside the professional home grown designers.

However, even with the emergence of a contemporary skyline, Qatar has not forgotten its Islamic roots, a country which has long been known for its beautiful Islamic architecture. As modern and minimalist as many of the new buildings in Qatar are, the traditional cultural aspects of the region are still reflected in the design and lighting.

One of my favourite buildings in Qatar, the Museum of Islamic Art, designed by world renowned architect I.M. Pei, demonstrates the subtle blending of old and new, modern and contemporary in build, the inspirations of Islamic tradition are clear to see throughout his design.

The W Hotel, is another example: a luxurious worldwide brand, which is known for its contemporary interiors, but its finishing and lighting reflect the Islamic influences of the region.

My own inspiration for working in Qatar was sparked by meeting a visionary man, Hitmi Ali Khalifa Al Hitmi, CEO of Al Hitmi Property, who commissioned me to create a light sculpture for his unique office and hotel development located on Doha’s Corniche.

Drawing inspiration from the Persian Gulf, this unique building makes a dramatic impact, while maintaining a sense of elegance and style.

I wanted to create a light installation, which was not only a fitting centrepiece for this incredible building, but which also pushed its own boundaries in terms of size, design and technology.

With the increasing number of ambitious construction projects becoming reality in Qatar, lighting designers, including myself, are being challenged creatively to come up with ever more innovative designs to match the extraordinary buildings housing their creations.

SEPTEMBER 2009

59

INDUSTRY FOCUS - LIGHTING DESIGN

- Reflective Flow is supported by a special aluminium extrusion for its top frame, which is one of the largest extrusions ever made. -

EXCLUSIVE Q&A OVERVIEW OF REFLECTIVE FLOW: The cutting-edge lighting installation, Reflective Flow, has been designed over a two-year period for a seven-story high, linearly arranged office block anchored by a 15-story residential tower office building in Qatar and will be the world’s largest interactive LED light sculpture when installed this November.

The concept for the architectural project was inspired by imagery of stone formations cantilevered over a body of water, to create a metamorphic link to the Persian Gulf. Clad with dark tinted glass, polished and textured natural stone tiles, the massing of the project is a direct response to the development’s proximity to the water.

The Beau McClellan signature art piece will take pride of place in the building’s sky-light atrium consisting of 2300 individually hand ground optical crystals, each shrouded on both sides by high quality pieces of concaved glass, covered with a unique reflective coating.

More than 80,000 LEDs will be used in this light installation, which have been made in Japan to the highest possible specification and are designed and controlled by a state of the art system built specifically for this project.

Each of the 2300 modules can be controlled individually, allowing the maximum amount of colour and display variation, so that the light sculpture can constantly and organically transform and evolve in colour, shape and light.

The unique glass coating on the sculpture has been in development for three years. It has all the qualities of a mirror, reflecting exactly all that surrounds it, including light and movement.

The coating is also anti-static to help 60

SEPTEMBER 2009

repel dust, which reduces the ever-present problem of cleaning a light installation of this size.

During the day, Reflective Flow will be an organic art sculpture, constantly changing with its surroundings, but it is at night that it will really come alive. When light streams through from behind the glass frames, the coating becomes either fully or semi transparent allowing the art sculpture to transform into an incredible ever-changing lighting masterpiece.

Control System Totally interactive, each LED pixel can be individually controlled, with all the data coming to the sculpture through a system of fibre optics.

A low-resolution video control system has been developed specifically for the project, as McClellan wanted to keep this sculpture as an interactive art installation and not have it used as a media screen.

REFLECTIVE FLOW FAST FACTS: • LENGTH – 46m long (snaked) / 91m (stretched).

• WEIGHT – 25 tonnes.

• 82,800 LEDs. • 2300 pieces of optical cut crystal.

• 4600 specially coated glass panels.

• 37 strategically placed stainless steel cables will fix Reflective Flow to the building.

• The specially designed aluminium extrusion for Reflective Flow’s top frame is one of the largest extrusions ever made.

• Technology and materials have been amalgamated from around the world to bring this project to fruition.

- Reflective Flow comprises 2300 hand ground optical crystals, shrouded both sides by concaved glass with a special reflective coating. -

INDUSTRY FOCUS - LIGHTING DESIGN

Beau McClellan has pulled together the best teams worldwide to make this sculpture a reality: Reflective Flow sounds both artistically challenging and rewarding, but also technologically complicated. Tell me, how did the concept for Reflective Flow first come about?

First of all let’s not forget that Reflective Flow will be installed in a building that in itself is an incredible design.

The Al Hitmi Office Building is an amazing architectural achievement that was created according to Al Hitmi’s vision.

Al Hitmi personally introduced me to the concept behind the building’s design and then I had to find the best way to create this concept in a way that would both compliment and extenuate the architectural masterpiece where Reflective Flow was to be installed.

Trying not to spoil too much of the ‘mystery’ behind Reflective Flow, I can tell you that it is a flow of light and a river of life, or a flow of life and a river of light. It a very large-scale chandelier/light sculpture, but during the day it becomes a majestic reflective sculpture, that will reflect all of its surroundings becoming almost an organic representation of the life that flows daily inside the building.

Reflective Flow has been designed to operate as a multidimensional lighting installation; during daylight hours it coexists as a sculptural piece with its surroundings, however I understand that at night it transforms into a visual canvas. What are the capabilities of Reflective Flow in terms of the type of content it can support/display and how the content is triggered to interact with movement?

First of all from the start I did not want to create a media screen, this was to be a light sculpture and not something you could show stocks and shares on.

The ‘content’ had to have more of a feeling of ‘content’ rather than being content. We have programmed it with real video content, but by using a low-resolution screen and the reflections from the mirrors themselves the content will appear as organic shapes and forms.

I also wanted to create a system where the content could be affected by its interaction with people; their presence would spark changes to the programmed sequences. To achieve this, I had to find a team that could understand this and try to generate content in a totally new way.

This is when Martin Gagnon and his team from Ambiance came on board. Martin’s partner, Veronique started to develop content, while Martin started to develop the interface. We decided, after much discussion, to use the latest IP cameras to trigger the changes caused by the interaction with people. We could also use these cameras to monitor the sculpture from anywhere in the world for maintenance purposes and to create new content when required.

This remote access and control required Gagnon to try and develop a very secure ‘firewall’ to stop anyone hacking into our sculpture content or gain control of our cameras. I am happy to say that Gagnon and his team did a great job to overcome all of these problems, and we had a great time working together. I look forward to working with them again on the next project.

Why did you build Reflective Flow on such a large scale and what were the complications associated with this?

We had no intention of building it big to impress or to set records, it just felt right, from the moment we produced the first 3D renders we felt the excitement – it was perfect, it blended the architectural surroundings and yet it had a strong presence – we just knew we had to go with the ‘flow’ and work to make it become a reality.

Of course the complications are proportional to the size of it, but we have been working alongside the building architects and engineers. Our engineers received their input on the best hanging points, the loads allowed per point and the many other factors involved for evaluation.

This ensured that the fabrication and the installation are as free of problems as possible.

SEPTEMBER 2009

61

industry focus

- More than 80,000 LEDs are being used for this lighting installation. -

I understand that you worked with a specialist team in a warehouse in China to undertake some installation trial runs. Explain why this was done and how long you worked in China on this part of the project?

We have done several ‘trial runs’ and finally an actual ‘rehearsal’ of the fitting of Reflective Flow as best as we can.

When dealing with such a large and complicated installation, there is no margin for error, so we decided to rent a huge warehouse and assemble the entire sculpture there.

This way, we were able to pre-empt problems that we might encounter and to also test all the individual components before shipping them to Qatar.

Our trial runs are like the rehearsals for a show before the opening night, the fitting of Reflective Flow will be our ‘opening night’ and we want everything to be perfect. I have been in China for several weeks at a time to oversee these activities – all in all about six months – I must say everyone locally, who worked with me were both professional and extremely talented.

Why is the unique reflective coating, which covers the 2300 crystal light casings, so important to the overall design and functionality of Reflective Flow and what has been involved in the manufacturing and coating process of each of the modules?

The quality of materials and the finishing are the ‘soul’ of all of my designs and it is something I take very seriously.

An artist expresses himself trough the materials he uses. In the case of Reflective Flow we have two key motives: ‘light and reflection’, so we had to find the best way achieve those goals.

By using the best materials and giving each individual component a personalised touch, we can be sure that the final piece will show all the care and dedication that has been put in, while being as faithful as possible to its original design.

The coating on the concave glass is very important in this sculpture because it has to be reflective enough to be ‘mirrorlike’ during the day and transparent enough to let the light ‘travel’ during the night.

You have had a specially designed aluminium extrusion manufactured for the top frame, which is one of the largest extrusions ever made. Can you explain this in more detail?

To create an extrusion, the material (in this case aluminium) is pushed through a ‘die or mould’ of the desired crosssection. The aluminium is heated to the point of melting and injected through the mould.

Using this process we have the ability to create very complex cross-sections and work with very hard materials.

In the case of Reflective Flow we had to build a frame 62

SEPTEMBER 2009

structure that was able to support a lot of weight; however this part also had a complex design because it had to interact with lots of other components that would have to ‘slide through’ it or to be ‘anchored’ to it. In the end, the use of an extrusion was our only option.

Because of the pure size and length of Reflective Flow, the relevant specifications required an enormous extrusion - it ended up being pretty impressive.

You have had a state-of-the-art control system built to operate the individual lighting and content requirements of this project. What are the fundamental elements of this?

The content is only impressive if we have something to show it on. This meant developing a unique system for this project, once again I had to find a team that would be up for this task; SACO was that team.

We had to develop pixels and drivers that would fit the sculpture and this was a huge challenge. SACO also had to build both hardware and software that would interface with Gagnon’s content.

SACO is a company used to working at the highest level creating LED screen technology; it was the company responsible for the design and manufacture of the huge LED video walls used by U2 on their recent Vertigo Tour and they have also worked with Madonna and key players in the entertainment world.

How energy effecient and cost effective is Reflective Flow?

It’s very cost effective to run a large scale LED installation when compared to traditional methods, it’s not just the energy involved, but also the maintenance of a system like this, an LED installation is very reliable in comparison to a conventional installation that would have huge costs in maintenance alone (bulb replacements for example).

HOW-TO GUIDE

OUR Y G REEN

BUSINESS

HOW-TO GUIDE

Global warming is now one of the primary causes of natural disasters such as glaciers melting, the more frequent occurrences of typhoons, droughts and floods, and the extinction of some species of plants and animals. The excessive burning of fossil fuel to produce energy is resulting in increased emissions of carbon dioxide, which greatly contributes to global warming.

Saving 1kWh of electricity is equivalent to saving 0.4kg of coal and 0.4 litres of pure water, and reducing emission of 1kg of carbon dioxide and 0.03kg of sulphur dioxide. Our environment is changing for the worse. More and more, fossil fuels are burnt to keep up with the world’s increasing energy requirements.

Qatar’s need for new initiatives to reduce green house gases gained global attention after a 2007 UNDP Human Development Report revealed Qatar’s per capita CO2 emissions to be the highest in the world at 79.3 tonnes/capita, well above the ninth ranked United States.

Its high-emitting gas production sector and its small population cause Qatar’s excessive per capita carbon dioxide emissions. Less than10 percent of Qatar’s energy is used within its borders, while 90 percent is exported.

To decrease CO2 emissions, the Qatari government has launched recent initiatives to try and minimise future environmental degradation.

However, there remains a real need for all sectors and individuals of the business community to proactively play their part and mitigate environmentally unfriendly business operations.

The widespread effects of global warming can be improved if collectively, everyone makes an effort. In this special How-to: ‘Green Your Business’ section, you will find some practical energy-saving tips offered by The Carbon Trust and Tandberg.

Start making a difference today by cutting out these special ‘Green Your Business’ posters by TheEDGE and put them around your office to encourage your workplace to play its part...

64

SEPTEMBER 2009

Turn it off overnight and you will make all the difference.

Air conditioning can use a huge amount of energy. In fact, air conditioning can increase a building's energy consumption and associated carbon emissions by up to 100 percent.

Think about your impact!

Even though air conditioning can use lots of energy, many organisations choose to use it – not least because of the extra heat generated by increasing use of IT equipment.

Luckily, there are some simple, low-cost ways to save energy and make your air conditioning system more efficient.

The top three recommended carbon saving air conditioning projects: • Temperature control Make sure your air conditioning does not operate below 24°C. Also, make sure that you do not have the heating and cooling systems competing with each other, it is a waste of money. The best way to do this is to keep a temperature gap (known as a ‘deadband’) between your heating and air conditioning control temperatures.

• Variable speed drives (VSDs) Do not produce more cooling than you need as this wastes money and energy. Variable speed drives can vary the output of your air conditioning system to meet your needs throughout the day.

This will help you save money on energy costs.

• Free cooling coils Free cooling coils use the outside air as a source of cooling for air conditioning systems (when it is cool enough). This saves money because you will not need to use as much energy to produce cooling for the air conditioning system.

Checklist to cut energy costs – air conditioning: • Turn off air conditioning Do not run your air conditioning system when it is not needed – especially out of hours.

66

SEPTEMBER 2009

• Reduce heat sources Switch off equipment when it is not in use – this will reduce the heat build-up in a building and lessen the need for air conditioning.

• Understand the controls Make sure you know how to operate the time and temperature controls. Also, ensure the controls are well maintained.

Note: many companies waste a lot of money by either not understanding how to use their air conditioning system efficiently, or simply overriding the controls.

• Consider your needs Think about how you can use your air conditioning system more efficiently.

Have you, for example considered how your needs might change with: * Building usage or occupation patterns * Different times of day / year * Zones within your building • Blinds Provide shading in glazed areas to stop heat getting into your building in the first place.

• Building fabric Fix gaps where you are losing the air you have paid to cool. This will minimise the energy required to maintain your desired temperature.

Think about your impact!

Switch it off and you will make all the difference.

From PCs to vending machines, office equipment of some kind or another is used by almost all businesses and accounts for a significant portion of all the electrical energy used in offices. It is an area where huge savings can be made, as effective management of equipment can reduce its energy consumption by up to 70 percent.

Think about your impact!

Small actions can have huge benefits. From the simple act of housekeeping, to upgrading equipment and systems, you will actively make your office equipment more energy efficient, save money and reduce your carbon footprint.

The top three recommended carbon saving measures for office equipment:

Checklist to cut energy costs – Computers and monitors:

1. Upgrade existing equipment Technology advances daily. New equipment with better energy efficiency ratings can lead to big savings.

1. Switch off The monitor can account for a large proportion of the energy used by a computer. Encourage users to turn monitors off if they are going to be away from their desks for more than 10 minutes, and switch off computers at the end of the day.

2. Have an office equipment policy Develop a set of guidelines to standardise operations and ensure you communicate it.

For example: activate stand-by modes on PCs and set up printers to print on both sides of the paper (duplex printing).

3. Maintain equipment Well-maintained equipment is more efficient and lasts longer. So set up a maintenance schedule, keep equipment free from obstructions and prevent over-heating by cleaning filters and fans regularly.

Housekeeping: Simple housekeeping measures can help existing equipment function more efficiently, reducing carbon emissions and cutting your energy bills.

The key thing is to get your staff involved. A good way to get everyone on board is to run an awareness campaign and appoint an office monitor to ensure people are adhering to energy efficient practises.

Checklist to cut energy costs – office equipment: 1. Enable energy saving features Enable energy saving features on your appliances, and reduce energy consumption by up to 30 percent.

2. Switch off and save As well as reducing the power used by the equipment, switching it off also saves on cooling or air conditioning costs.

68

SEPTEMBER 2009

2. Power down Make setting up standard profiles for computer systems official policy, so standby modes are the default. Screen savers do not save energy – monitors should switch to standby if not being used (but users should still switch them off).

Printers and photocopiers: 1. Set default features and save paper Make it company policy to set double-sided printing as the default. Use a lower print quality for internal documents and drafts and minimise paper use by decreasing print margins.

2. Choose the right printer/copier for the job Print internal documents on black and white machines and only use colour printing when necessary (it is wasteful to print a document with only a few illustrations in full colour).

3. Fit seven-day timers If printers are left on after hours, they waste carbon and increase your energy costs. Install plug-in timers to all printers to make sure they are switched off at weekends and overnight.

4. Print in batches Printing in batches lets equipment spend more time in ‘deep sleep’ state and saves energy.

5. Position in cool places Position equipment in ventilated spaces and cool areas, like the north side of a building, so they do not waste energy working overtime to stay cool.

Think about your impact!

Switch them off and you will make all the difference.

Use an energy-saving bulb. The lighting effect of an 11W energy-saving bulb is the same as a traditional 60W bulb but consumes 80 percent less electricity.

Think about your impact!

Most organisations find that a hefty 20 to 40 percent of their electricity costs come from lighting. Yet you can cut these costs by up to a third, while reducing your carbon footprint and improving the working environment for your staff.

The top three recommended carbon saving lighting projects: 1. Use energy efficient lamps If you have fluorescent tube lighting, changing from T12 tubes to T8s will bring energy savings of 10 percent. Upgrading lamps and fittings to T5 will bring even greater savings and will retain a high light output.

2. Install occupancy sensors Why light empty spaces? Occupancy sensors, which switch off lights when a space is not being used, can reduce lighting costs by 30 percent.

3. Install daylight sensors Lighting a space artificially when daylight is already doing the job is a waste of energy. Light sensors (photocells) can switch off or dim artificial lighting when there is sufficient daylight.

Housekeeping: Your bulbs may be super-efficient, but if you leave lights on when they are not needed, you will waste energy. Know which areas of your site need lighting and when, and get staff to commit to turning lights off when not needed.

To do list: 1. Employ good housekeeping You can start saving energy today, by informing and involving your staff. Make switching lights off your official policy. See how to run an awareness campaign, and get posters (like these) to remind your staff to switch off other equipment.

70

SEPTEMBER 2009

2. Use blinds to maximise use of daylight By re-directing daylight onto the ceiling or higher walls, horizontal blinds can eliminate glare, while brightening the workspace, so you can save on unnecessary lighting.

Other technologies: 3. Ensure the lighting design is suitable for your building layout If building use or layout changes, it is important to remove lighting that is no longer required.

4. Set timers/sensors to meet and manage your lighting requirements Lighting requirements will vary at different times and in different parts of the building throughout the day – set your controls to match demand.

5. Lower lighting levels Many businesses are over-lit, which not only wastes energy, it also makes the working environment uncomfortable. To save energy and create an environment that is easier on the eye, switch off or dim unnecessary lights and consider task lighting where necessary.

Corridors and other non-critical areas in office spaces are often over-lit; where lights are not necessary, think about removing some lamps from their fittings.

By making these small, but significant changes you will save on your energy bill, and save carbon. But do not stop there!

Think about your impact!

TECH TOOLS

James McCarthy picks the best bits of business tech to hit the market this month.

Vertu All Beauty Ok, you might not be able to afford a Pagani Zonda supercar, with its completely carbon fibre chassis and aerodynamic styling, but when it comes to taking that all important deal-clicnching call, you will look like the fastest operator in the office with the Vertu Carbon Fibre Ascent Ti. This classy communication tool has a flawless uniform look thanks to the perfect blend of carbon fibres, resulting in both a robust yet light contemporary handset. Offering Bluetooth and micro USB connectivity, as well as modem support and both PC & Mac comptibility means you will always be able to receive, store or send your vital data. For those offthe-cuff candid snaps, a three megapixel camera with full autofocus function and integrated flash is included. The Vertu Carbon Fibre Ascent Ti supports up to 30 languages, Arabic included. It can make calls anywhere in the world thanks to its GSM Quadband support as well as offering faster web browsing, data download speeds and MSM messaging through its 3G-compatibility. Available from this month, the unit is limited production and available upon inquiry only. www.vertu.com

Picture This The doyens of digital imaging at Nikon have definitely come up with the season’s must-have picture-box, the Coolpix S1000pj. Jumping on the current bandwagon of the so-called ‘Pico Projector’ market, ultra tiny portable projection devices that are being groomed for the next generation of mobile phones, the S1000pj has used the technology in possibly the most logical application of all. Not only does the camera capture perfect 12.1 megapixel snaps with its 5x optical zoom 0.525mm Nikkor lens, but can immediately display the results of your photographic labours in glorious technicolour as a projected image up to 40 inches in size.

That is as big as your plasma TV. The S1000pj uses an LCD engine that can also show full-motion videos and offers up a VGA resolution at a brightness of 10 lumens. Available this month, it will be priced in the region of QR2400. www.nikon.com

SEPTEMBER 2009

71

TECH TOOLS

Mac-pack We love this here at TheEDGE. As an old-school journalist, my desk often looks like fireworks have gone off in a spaghetti factory, with camera cables, post-it notes and various other editorial acoutrements scattered hither and thither at the foot of my iMac. The rest of the editorial team, while considerably neater, also suffer from a lack of desktop real estate. So imagine our joy when we discovered that Mac accessories specialist, TwelveSouth, developed the BackPack – a clever shelf-like effort that clips to the back of your Mac to create a handy storage platform for, well, whatever you need. The BackPack rests on the back of the desk stand on flat-screen iMacs and Apple Cinema Displays using gravity and two simple, adjustable clips. This allows the sporty shelves to be positioned at the perfect height without any screws or bolts ever ruining the aesthetic the iMac. Because it is height adjustable, there is room for more than one BackPack in your life. Hang one low for hard drives and add a second one for hubs and gear. If, like mine, the back of your iMac faces the room, a BackPack or two is a completely fun, new way to personalise both your iMac and your workspace. The BackPack is available online at the TwelveSouth Store. www.twelvesouth.com

Lean, Green Counting Machines Calculating the cost of ‘going green’ is not always easy, with so many facets of everyday office life that need upgrading or changing. However, from this month onwards, at least the accounting department will not have to worry so much as they crunch the carbon footprint figures. Canon has introduced two new ‘green’ calculators, the LS-120TSG and the F-502G. The advanced bean-counting tools give nothing away in computing performance, but do adhere to the Japanese conglomerate’s corporate responsibility charter, ‘Kyosei’, adopted 1988.

The new LS-120TSG and F-502G use 100 percent recycled plastic, reclaimed from expired Canon photocopiers, for their front and back covers. In addition, the F-502G features a hard cover to protect it, while being carried around – also constructed from reconstituted copier plastic. Both the new models feature replaceable batteries and an auto-power off function, lengthening the life of the calculator and minimising waste. The LS-120TSG also uses solar-power – sunlight availability is something we have plenty of here in Doha – to further reduce energy consumption. www.canon.com 72

SEPTEMBER 2009

Life & style

Wake U p!

It is 3pm on Thursday afternoon and the clock seems to have stopped. There are three hours left to the weekend, but already your mind is willing the minutes to pass so you can let your hair down.

But what are you going to spend your precious free time doing?

Yes, there are the things you need to do; wash down the 4x4, traipse around Carrefour to stock up on toilet paper and shampoo...oh and you may get around to putting that shelf up that you have been meaning to do for a month now.

But let us be honest, what you really want is fun. Lots of wet, speed-filled fun...

The best way to bust the stress and wash away the week is to feel the warm wind tousle your hair, while cooling your face in the mist of salty brine being thrown up as you cut a swathe through the crystal waters of the Arabian Gulf.

Yes, wakeboarding is ‘the’ summer watersport here in Doha, with no shortage of opportunities to get in among the waves. In fact, it is a bit of a national 74

SEPTEMBER 2009

pastime – Doha even hosted the IWSF Word Championships in 2007.

If you are not familiar with the sport, wakeboarding involves riding a specially designed board, which is towed behind a boat travelling at speeds up to 40kph.

The sport is a direct descendant of water skiing and requires the boarder to ride, jump and leap over the wake trailing behind the boat in front.

The design of the board, the moves, tricks and slang are all derivative of a number of ‘extreme’ board sports such as snowboarding, skateboarding and surfing, and as such, it is not uncommon to meet people who are avid fans of all four activities.

The best place to get your white water rocks off in Doha is the Diplomatic Club, situated near the InterContinental Hotel.

Two hundred Riyals will buy you one hour with a boat, a driver/instructor and all the kit you require to begin bounding the boat’s bubbling breakers.

According to the experts at the

Diplomatic Club, it does not matter what your skill level is, it will take you just an hour to master the basics before you are leaping like a Scottish freshwater salmon all over West Bay Lagoon.

While we here at TheEDGE have mastered the art of ‘foam flipping’ and have the ‘aqua-batic’ skills required to draw gasps of admiration and awe from passing onlookers, we do not think it would be right to let you in on the secrets of the sport before you have given it a try for yourself.

What we can say, though, is that after one hour of trial and error, you will be – like that afore mentioned Scottish salmon during fishing season – hooked, ‘buttersliding’, ‘whirlybirding’ and ‘s-bending’ like a professional in no time.

To get geared up and start scything your way through the West Bay waves, check in at the Diplomatic Club on 484 7444 or visit www.thediplomaticclub.com

life & style

Lifestyle

Tools Put the paperwork down, the clock just struck hometime...

Figure This

Menswear fashion house, Canali, is putting the form in into formal with its winter 2009 collection of Silhouette suits. The new line up offers the urbane man about Doha innovation, both in the contemporary cuts, lighter elements and fabrics. Formal suits have adopted a more modern style, with a shorter jacket, well-defined lines and softer shoulders as well sporting details like patch pockets, which offer a new and dynamic twist on traditional and elegance and style.

The urban and contemporary line features svelte shapes for suits and short two-button jackets, with narrow lapels and higher cut sleeves to make movement more fluid and comfortable; trousers follow the same philosophy, with sober, unpleated lines. Look sharp while sipping those Skybar sundowners by trying these top togs from the new Canali collection at Salam Plaza. www.salams.com

Light Up Your Life Fire. Man’s greatest asset for millennia, yet conversely, his greatest foe. However, those clever fellows at S.T. Dupont have managed to tame the flame with plenty of flair.

Let us be honest, there is no point sitting around in your new Canali suit, flashing your cash around Habanos or the Cigar Lounge if you do not have the hardware to back up your hip new look. When you offer a Dupont lighter to your social circle to spark up their stogies, you are proffering nearly 70-years of hand-crafted conflagration.

Become the epitome of smoking style, with a Dupont in either white or pink gold, alligator skin, Chinese lacquer, mother-of-pearl or palladium. And when your smoking entourage has finished gaping in wonder at the beauty of your flash flame thrower, look James Bond suave when you operate the cleverly-designed mechanism, which can include automatic triggers and unique opening systems. www.st-dupont.com

Are You Board?

You have read our introduction to wakeboarding, flipped some gnarly ‘1280s’ with the guys from the Diplomatic Club and now you are hooked, right? As you will want to push yourself harder and higher to keep that brine-filled buzz, customising your kit becomes essential. Top boarding brand, Ronix, has come up trumps with the 2009 Ibex Wakeboard, as flown, flipped and free-ridden by top boarder, Parks Bonifay.

Ronix claims it is their wildest board, built for both speed and extreme and snap. The board combines aggression with a more forgiving softer bevel in the centre – meaning you will not be swallowing quite so much of the Arabian Gulf – before blending to a sharper bevel in the tail. The Ibex makes every ‘liquid transfer’ feel like a ‘triple up’ and, according to Ronix, puts the rumour to rest that explosive boards do not ride consistently.

That settles that debate among the editorial team the. www.ronixwake.com

SEPTEMBER 2009

75

EVENTS/CONFERENCES

CIEME 2009 1 - 5 September – Shenyang International Exhibition Centre, Shenyang, China China International Equipment Manufacturing Expo (CIEME 2009) is aimed at professionals working in a broad range of sectors, from installation, power generation, transmission and distribution to alternative energy. A vast array of industries will be represented, including suppliers operating in aerospace, energy, petrochemical and mining and construction sectors.

IFA Berlin 4 - 9 September – Messe Berlin Centre, Berlin, Germany IFA is the second largest consumer electronics tradeshow in the world behind CES in Las Vegas. The world’s electronic heavyweights will use the event to unveil cuttingedge technologies and prototypes, which will set the future technology trends for the consumer marketplace. New to the show this year is the electrical home appliances hall, which builds on IFA’s already expansive technology showcase.

IBC 2009 11 - 15 September – RAI Centre, Amsterdam, Holland IBC is the leading international forum for the digital media industry, attracting 1000 plus exhibitors from more than 130 countries. In addition to the tradeshow, IBC boasts a conference programme that hosts expert industry speakers. IBC delivers state-ofthe-art media technology, with unrivalled networking opportunities for industry folk working in the field of digital content, creation, management and delivery.

Islamic Finance – Reality and Outlook Seminar 26 - 30 September – Westin Resort and Convention Centre, Bali, Indonesia Alwashem Economic Consulting Services, Kuwait, in co-ordination with the Malomaty company – Riyadh, will host the Islamic Finance Seminar in a bid to raise awareness about the diverse global interests and members of the Islamic Finance industry, promote greater international participation and dialogue as well as strengthen finance industry systems at a national and global level.

The focus of the seminar will be Islamic Finance – Outlook and Reality.

The Middle East Reinsurance Conference 28 - 29 September – Four Seasons, Doha, Qatar Leading global financial publication, Reactions Magazine together with Euromoney Seminars, will host an innovative two-day discussions programme on the Middle East reinsurance sector. The event will cover key issues relating to the reinsurance sector and offer advice to industry professionals, as how to combat the many challenges posed by this region, in order to capitalise on opportunities going forward.

Doha Business Roundtable 29 September – The Ritz Carlton, Doha, Qatar Economist Conferences Doha Business Roundtable’s agenda is entitled Gulf 2020: scenario planning in a post-crisis world economy. The event will explore the current and long-term view of the world economy, focusing specifically on the key economic risks facing the GCC region as well as the future growth potential for Qatar.

76

SEPTEMBER 2009

construction & tenders SECTION

Housing Projects Description: Construction of new environmental laboratory building for a petroleum company.

Closing Date: September 13, 2009 Client Name: Qatar Petroleum Phone: (+974) 440 2000 Fax: (+974) 483 1125 / 449 1400 / 483 1995 Email: marketing@qp.com.qa Website: http://www.qp.com.qa Tender No: GT09110200 This tender supply is in Qatar.

Bid bond: QR500, 000 Tender documents can be obtained from: Qatar Petroleum Materials Department, Navigation Plaza Building (C’ Ring Road), Ground Floor, Room No. 30, Qatar Petroleum.

Hydrocarbon Processing, Storage & Distribution Description: Engineering procurement and construction (EPC) contract for supply and installation of sand filter for a petroleum company.

Closing Date: October 11, 2009 Client Name: Qatar Petroleum Phone: (+974) 440 2000 Fax: (+974) 4831125 / 449400 / 4831995 Email: marketing@qp.com.qa Website: http://www.qp.com.qa Tender No: GT09110100 This tender supply is at Dukhan in Qatar.

Bid bond: QR500, 000 Tender documents can be obtained from: Qatar Petroleum Materials Department, Navigation Plaza Building (C’ Ring Road), Ground Floor, Room No. 30.

QATAR TENDERS

Hydrocarbon Processing, Storage & Distribution Oilfield Development Description: Procurement, supply, installation and commissioning of two mechanical Plant Change Requests at a tank farm for a petroleum company.

Closing Date: September 13, 2009 Client Name: Qatar Petroleum Phone: (+974) 440 2000 Fax: (+974) 483 1125 / 449 1400 / 483 1995 Email: marketing@qp.com.qa Website: http://www.qp.com.qa Tender No: LT09107400 This tender supply is at Mesaieed Tank Farm in Qatar. Crude oil storage tanks T174, T176, T177, T179, T15 and T16 are having (6 Nos.) rach eight inch water drain lines. The client intends to replace the eight inch water drain lines with two inch lines as it will be more convenient for manual draining operation. Naphtha Storage Tanks QJA-17 and QJA-18 at Mesaieed Tank Farm are equipped with (2 Nos.) foam inductors on either side of each tank. Client intends to provide an additional external connection at the downstream of each foam skid that will serve as a backup facility to pump foam solution from the fire tenders or foam trolleys.

Bid Bond: QAR50, 000 Tender documents can be obtained from: Qatar Petroleum Contracts Department, Operations Division, Royal Plaza, G Wing, Fourth Floor, Room G13, Doha, Qatar.

SEPTEMBER 2009

77

Construction & tenders

QATAR PROJECTS UPDATE

MULTI-BILLION DOLLAR PIPELINE READY IN 2010 Dolphin Energy is to complete the gas pipeline in third quarter of 2010, to transport natural gas from Qatar along an overland route from Abu Dhabi to Fujairah on the UAE’s eastern coast.

The pipeline is a link in Dolphin Energy’s multi-billion dollar Dolphin Project, which involves the production and processing of gas from Qatar’s North Field and the transportation of this gas through a sub-sea export pipeline from Qatar to the UAE. The project includes, gas wells, a processing plant, an export pipeline and receiving facilities. The overland pipeline to Fujairah will allow Dolphin to pump gas across 240 kilometres from the emirate’s Taweelah plant, which receives the raw Qatari gas.

The 48-inch pipeline will follow an environmentally approved route of desert and mountains and be one of the longest overland gas pipelines in the nation.

Another section of pipeline from Taweelah to link up with a pipeline to the city of Al Ain and then on to Fujairah would be completed in February.

QR25.5 MILLION CONTRACT AWARDED FOR BARWA’s NEW CAIRO PROJECT Qatar Project Management Company (QPM) has awarded Berger Hill the contract to manage construction of the QR25.1 billion Barwa New Cairo project in Egypt.

Berger Hill, a joint venture between Hill International and Louis Berger SAS, has acquired an initial two-year contract, with estimated value of approximately QR25.5 million, although the project is expected to extend over an estimated period of 12 years.

The Barwa New Cairo project will be built on the east side of Cairo and feature golf courses, commercial office buildings, medical facilities, schools, mosques, resorts and business hotels, villas and apartments, parks and playgrounds, and a town centre with entertainment and retail shopping areas, among other various amenities.

The Barwa New Cairo project is one of a number of large real estate development projects planned or underway by Barwa around the world.

Logistics Village complex launched in Qatar Gulf Warehousing Company (GWC) is set to undertake a largescale warehousing complex, which will cover one million square metres in Qatar, Arabian Supply Chain reported.

Logistics Village Qatar (LVQ) will be developed in three phases, with the first stage of construction being earmarked for next month, comprising 83,000m2 of multi-purpose warehouses and 23,200m2 of accommodation.

Valued at approximately QR250 million, the first phase is scheduled for completion in the third quarter of 2010.

GWC has signed letters of intent, with Al Alia Trading and Contracting, Al Bader Construction and Steel Works, Lexus Engineering and Contracting Company, and Power Action Gulf, for building the warehouses, accommodation and main supporting infrastructure requirements.

Gulf Engineering and Industrial Consultancy also received a letter of intent for providing project management and supervision consultancy services.

78

SEPTEMBER 2009

SUBSCRIPTION

SUBSCRIPTION FORM 2009 TheEDGE is Qatar’s new monthly business magazine.

TheEDGE incorporates a mix of industry news and analysis, in depth features, special interviews with key business decision makers, economic insight and market activity reports, and tips for how you can improve your day-to-day business operations.

TheEDGE will not be available on the news stands, but will be delivered straight to the door of the targeted business community.

To ensure you keep up-to-date, with what is happening in Qatar’s business landscape, fill in the subscription form (below) to receive TheEDGE on a monthly basis.

Subscription is FREE (in Qatar). Forms are to be addressed to the Subscriptions Department at: TheEDGE Subscriptions Department Firefly Communications 11th Floor, Jaidah Tower PO Box 11596 Doha, Qatar

Last Name : First Name: Address: Company: Designation: P.O.Box: Area Code: City: Country: Tel: E-mail: Date and Signature: 80

SEPTEMBER 2009