The Edge Nov 2013 (issue 49)

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contents November 2013 w w w.t h e e d ge. m e

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Special feature: Is building a brand a creative imperative for Qatar’s firms?

Vol. 5 No. 11 - Issue 49 - November 2013

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- QATAR’S CATALYST FOR BUSINESS - Vol. 5 No. 11 - Issue 49 - November 2013

cover story

NET PROFIT Will Qatar’s stake in PSG set a new standard in football investment?

STRATEGISING GROWTH An exclusive interview with al khaliji group CEO Robin McCall

STREET SMART

Masarak’s Abdulaziz Al Khal on Qatar’s Intelligent Transport Systems

PLUS:

Euromoney’s Richard Banks Qatar 2022: FIFA, faith and football Risks and challenges for Qatar’s mega projects Kamahl Santamaria on Doha’s ‘Carmageddon’

Barry Mansfield examines whether Qatar’s substantial investments in world football, particularly with its prize acquisition, Paris Saint-Germain (PSG), are sound business propositions.

Nasser Al Khelaifi, president of Qatari-owned French football club, Paris SaintGermain, attends a press conference in Doha earlier this year to announce the team’s acquisition of Brazilian soccer star, Lucas Moura. (Image Reuters/Corbis)

features

Business Interview: Abdulaziz Al Khal

52

56

Abdulaziz Al Khal, the director of Masarak, discusses how leveraging technology can help create intelligent and safer transport management systems for Qatar.

Feature Story: Qatar’s creative imperative 56

With ongoing economic diversification, where does Qatar’s advertising industry stand in comparison to international markets?

Business Interview: Robin McCall 62

Robin McCall, group CEO of Al Khalij Commercial Bank (al khaliji) QSC, discusses his vision for the bank and what he says is its most important asset – its people.

Business Management: Road-test your entrepreneurial dream 68

Only the bravest entrepreneurs have the willingness to wake up every morning and ask a simple question: “Will this work?”

Hussein Fakhri, CEO Agency 222 says some companies in Qatar are solely dependent on relationships and word of mouth for sales, and see advertising as a luxury.

The Edge | 3

contents page

sectors

Finance & Markets 27

Barwa Bank has moved up from 41st to 38th in CPI Financial’s Top 100 Banks (in the GCC and the Levant) listing for 2012. CEO Steve Troop tells The Edge what the ranking means to the bank.

In this month’s Finance & Markets Sector, we also report how Qatar’s bourse, the Qatar Exchange has been touted to be one of the most active in the region in the future. (Image Reuters/ Corbis)

Energy & Sustainability 31

After the abandonment of Europe’s flagship carbon capture and storage project last month, says Jamie Stewart, Qatar can take the leadership in this field.

Real Estate & Construction 35 Qatar joins the GCC’s USD155 billion (QAR564 billion) investment to construct green energy generating plants.

Tech & Communications 39

Companies in Qatar employing Big Data practices are seeing a significant impact on their businesses, but the technology also poses some challenges.

Business Insight 71

Richard Banks, regional director, Euromoney Conferences, talks about Qatar’s role in global finance. Managing director of HSBC, Jody Sanderson discusses the challenges banks face in Qatar’s overbanked market.

74 Jody Sanderson, managing director of HSBC, is of the view that Qatar’s banking market is highly competitive.

regulars From the Editor 08 Photo of the Month 12 Business News 14 Qatar Perspectives 20 Products Page 78 The View from Doha 80 4 | The Edge

publications director mohamed jaidah m.jaidah@firefly-me.com general manager joe marritt j.marritt@firefly-me.com managing editor miles masterson m.masterson@theedge-me.com senior business editor aparajita mukherjee a.mukherjee@theedge-me.com deputy editor farwa zahra f.zahra@theedge-me.com digital editor/editorial asst. shehan mashood s.mashood@theedge-me.com international sales director julia toon j.toon@firefly-me.com | +974 66880228 head of business sales manu parmar m.parmar@theedge-me.com | +974 33325038 sales manager adam kynnersley a.kynnersley@theedge-me.com | +974 66079716 digital sales manager norbert asenso n.asenso@theedge-me.com | +974 50142936 area sales manager UAE roger cousin r.cousin@firefly-me.com | +971 508716076 distribution & subscriptions azqa haroon/joseph isaac a.haroon@firefly-me.com/ j.issac@firefly-me.com art director sarah jabari production coordinator ron baron photographer herbert villadelrey printer ali bin ali printing press Doha, Qatar

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The Edge is printed monthly Š 2013 Firefly Communications. All material strictly copyright and all rights reserved. Reproduction in whole or in part, without the prior written permission of Firefly Communications, is strictly forbidden. All content is believed to be factual at the time of publication. Views expressed by contributors are their own derived opinions and not necessarily endorsed by The Edge or Firefly Communications. No responsibility or liability is accepted by the editorial staff or the publishers for any loss occasioned to any individual or company, legal or physical, acting or refraining from action as a result of any statement, fact, figure, expression of opinion or belief contained in The Edge. The publisher (Firefly Communications) does not officially endorse any advertising or advertorial content for third party products.

Photography/image credits and copyright, where not specifically stated, are that of Shutterstock and/or iStock Photo or Firefly Communications.

6 | The Edge

editor’s letter There is perhaps not a man, woman, child or camel that is unfamiliar and indeed fed up with Qatar’s traffic problems. Every commute seems to involve at least a few major traffic jams enroute to one’s destination, near misses, aggressive driving, impatient hooting and more. And every day, one also seems to read about horrific and deadly accidents and new roadworks set to disrupt different parts of Doha.

It is surely no coincidence then, that in this issue we cover the topic in two separate articles, most notably an interview on page 52 with Abdulaziz Al Khal of Qatari initiative Masarak, which is developing locally-produced technology to attempt to ease traffic flow and reduce the dangers of driving, a risk exacerbated by Qatar’s ever-growing vehicle number (now exceeding one million) and the haphazard roads of a country under construction.

The success of Masarak’s efforts, though already being implemented, will take some time to come to fruition, which is why the advice offered by long-term Doha resident and Al Jazeera presenter, Kamahl Santamaria, in his back-page column The View from Doha on page 80 provides some short-term balance to what is set to be a challenge for Qatar’s commuters for many years.

Moving overseas, our cover story this month on page 46 examines a kind of investment – in sports teams – that on the face of it can seem like an indulgence of wealthy men. But when examined closely, at least in the case of Qatar’s ownership of French football club Paris Saint-Germain (PSG), it is based on sound business principles and an aim towards substantial long-term profits.

Following the purchase in a majority stake from the Qatar Sports Investments company (part of the Qatar Investment Authority under His Highness the Emir Sheikh Tamim bin Hamad

Al Thani) and the directorship of Qatar sports legend Nasser Al Khelaifi, PSG, writes author Barry Mansfield, is set to turn an operating profit in the near future. Such football clubs are rare, most best break even, and those that make high returns, such as Spain’s Real Madrid, which has already made more than EUR500 million (QAR2.5 billion) from ticket sales, merchandising and sponsorship this year, even more rare.

Thus if PSG can join that small group of elite profitable football clubs, not only will it be yet another Qatari financial success story, but it could set a precedent for a sports business investment model to be followed by local, regional or even international investors. PSG’s progress will be an interesting story to be followed with keen interest by both football lovers and businessmen alike.

On page 56, senior business editor Aparajita Mukherjee investigates the state of advertising and marketing in Qatar. Anyone who follows the media in Doha will know that newspapers are highly popular here (especially when you consider their decline in other parts of the world) and thus receive a disproportionately large share of advertising spend at more than 80 percent.

Compared with a figure for newspapers in a mature market such as the United States, where this is only 10 percent, local experts agree that it is indicative of a marketing domain in Qatar that has far to go to develop in terms of integrated campaigns and highly creative conceptual longterm brand-based advertising, at least over short-term sales-driven retail advertising in daily print media. Yet another sector to watch closely.

Finally, a sector in Qatar which of course is well established and currently much in the news is banking, again reflected in this edition. In both our Business Insights, starting on page 71, the sector is highlighted in exclusive interviews with Euromoney Conferences’ Richard Banks and HSBC Qatar’s Jody Sanderson, both of whom feel that banking consolidation is inevitable in Qatar.

However, there is still room for newcomers, such as al khaliji. Rounding out our features, The Edge meets CEO Robin McCall who reveals candidly how his particular approach to managing the bank has proven instrumental in this financial institution’s rapid rise to prominence in Qatar.

Enjoy the issue.

Newspapers take more than 80 percent of Qatar’s media spend, ahead of broadcast, outdoor, Miles Masterson magazines and digital. Managing Editor 8 | The Edge

12 | The Edge

photo of the month

On the world stage

Russia’s Evgeny Novikov and Austria’s Ilka Minor compete in their Qatar M-Sport WRT Ford Fiesta RS WRC during the shakedown of the WRC Spain on October 24, 2013 in Salou, Spain. Based in Europe, Qatar M-Sport is a world rally championship team driving Ford Fiesta rally cars. It is sponsored by the State of Qatar and directed by a former champion British driver Malcolm Wilson. Qatar M-Sport also includes team members such as perennial world rally driver and crowd favourite Qatari, Nasser Al Attiyah among its roster of top drivers. (Image Getty Images) The Edge | 13

news business

Nakilat joint venture with Damen announces plan to build ships in Qatar

Damen Shipyard is known for its quality standards and Nakilat Damen Shipyards Qatar is confident that the ships manufactured in Qatar will have the same quality as those manufactured in other Damen shipyards. (Image Qatargas)

Qatar Gas Transport Company (Nakilat), one of the world’s largest shippers of liquefied natural gas (LNG), recently announced two joint ventures that aim to build and operate seven LNG-related vessels.

Nakilat’s joint venture with privately-owned Dutch Damen Shipyard’s group, Nakilat Damen Shipyards Qatar (NDSQ), will build the ships in Qatar, according to a company statement.

Jan Wim Dekker, CEO of NSDQ, told The Edge that construction of some vessels will start in 2013 and all vessels will be delivered by 2015. Dekker added that the quality of the vessels will be comparable to the best in the world and similar to vessels delivered by other Damen shipyards.

Nakilat managing director and chairman of NDSQ and Nakilat-SvitzerWijsmuller (NSW), Muhammad Ghannam said, “We are delighted with the continued confidence in the services that our joint ventures are providing in Qatar.

NSW will ensure that the port of Ras Laffan will continue to receive first-class harbour services at increased capacity using vessels built in Qatar

by NDSQ.”

14 | The Edge

NDSQ is based at Erhama Bin Jaber Al Jalahma Shipyard in Ras Laffan, Qatar. It began operations in 2010 and builds ships in steel, aluminium and fibre-reinforced plastic (FRP), up to 170 metres in length. NSW, owned 70 percent by Nakilat and 30 percent by Svitzer Middle East Limited, the Middle East branch of towage operator Svitzer, will operate the ships under a 14-year contract with state-owned oil group Qatar Petroleum, the report stated. The vessels operated by NSW include tug boats, pilot boats, line boats and crew boats.

“NSW will ensure that the port of Ras Laffan will continue to receive first-class harbour services at increased capacity.”

- Muhammad Ghannam, chairman NDSQ and NSW.

news business

Qatar’s first cultural centre to be housed in Washington, DC

Number of the month

Space allocated for Qatar’s cultural centre in Washington’s CityCenterDC

CityCenterDC in Washington will house Qatar’s first cultural centre by Qatar Foundation, set to be opened in 2014.

Financing a major segment of CityCenterDC in Washington, DC, Qatar is now set to launch an Arab cultural centre in the downtown development. Tentatively named Al Bayt, the cultural centre is a project of Qatar Foundation International (QFI) and is aimed at providing information and resources on Arab culture for United States (US) students, educators, and the general community.

Covering a space of 1400 square metres, the centre is expected to open in the beginning of next year. Sharing more details with The Edge, Maggie Mitchell Salem, executive director of QFI said, “When students and teachers enter Al Bayt, they will be invited to unleash their curiosity about Arab culture. Multisensory stimuli in light and sound will engage their interest and imagination.”

The space will be modelled on a traditional Qatari home with

1400m2 “hands-on activities that allow them to learn, at their own pace, about the language and culture of the Arab region, with a special focus on Qatar.”

As organiser of cultural programmes, Al Bayt will work as an awareness outlet of Arab culture for the West. Salem revealed, “These [programmes] will include musical, literary, and artistic gatherings and, eventually, culinary demonstrations and lectures about food in the Arab world.”

While the foundation has an official presence in countries such as Brazil, US and Canada, the planned cultural centre is the first of its kind by QFI.

Syrian Electronic Army takes down local websites Earlier this month, the Syrian Electronic Army (SEA), a group of pro-Assad computer hackers seized control of the .qa domain and took down numerous local websites including the Qatar Exchange, the Ministry of Interior and Hukoomi, and the e-government portal among others.

According to a press statement from ictQATAR, which manages the Qatar Domains Registry, the hacking was contained by the Qatar Computer Emergency Response Team and websites were restored to their previous state later the same day.

Nicolai Solling, director of technology services at Help AG, a security consulting firm, told The Edge that according to their information, the hackers were utilising malware and leaked account information to attack key infrastructure in the domain registrar environment – that is the Qatar Domains Registry. Screenshots of an administrator page released by the

SEA showed as much. The failure in this case was in the authentication aspects of the infrastructure, furthered Solling, “If you had a password [that] was always unique and could not be reused, you limit your risks if you lose account information as the attacker would not be able to replay a dynamic password.”

The statement released by ictQATAR, however, stressed that the hack was limited to the domain names and did not affect content, adding, “The hacking resulted in no loss or damage at the individual, institutional and enterprise levels.”

The Edge | 15

news

business in brief Words & Numbers

“We support the people and their revolutions. This has been an unchangeable principle for Qatar for a long time now. We have no contact with Assad.”

Qatari Foreign Minister Khaled Al Attiyah discussing issues surrounding Qatar’s role in ongoing international attempts to broker a peace deal in Syria at a press conference alongside US Secretary of State John Kerry.

QAR557,990 The average wealth per adult, in Qatar, highest in the MENA region, up two percent from 2011, in a recent Credit Suisse Global Wealth Report.

“The GCC is considered a priority market for Foreign Affairs and International Trade Canada. GCC-Canada bilateral trade increased from QAR17 billion in 2010 to QAR24 billion in 2012.”

Climate Control Conference concludes in Doha

The seventh edition of the Climate Control Conference (C3) in Qatar aimed to discuss district cooling within the framework of regulation, the sustainable use of water, end-user aspirations and carbon credits as a source of finance. Held on October 6 and 7, the conference brought together speakers from the district cooling stakeholder community in Qatar, the energy and water sectors and the finance industry.

Some of the major exhibitors of C3 included Qatar Cool and Gulf Organisation for Research and Development.

QFC proposes amendments to various regulations The Qatar Financial Centre Authority (QFCA) is proposing legislative enhancements in three important areas of the QFC Legal Environment: Insolvency Regulations, the Single Family Office Regulations and the Special Company Regulations. In addition to the amendments, new rules are being proposed to supplement and provide further detail to the practical operation of the respective regulations. The proposed legislative enhancements were drafted after a thorough comparison with various legislative and legal regimes around the world.

Al Khalij Bank QSC prices its EMTN programme at USD500 million Al Khalij Commercial Bank QSC has announced the successful pricing of its debut USD500 million (QAR1.8 billion) Senior Unsecured issuance under its newly established USD750 million (QAR2.7 billion) HE Sheikh Hamad bin Faysal Euro Medium Al Thani is the chairman and managing director of Al Term Note Khalij Commercial Bank.

Programme.

The transaction was issued at 99.57 percent with a coupon of 3.25 percent and a yield of 3.34 percent. Robin McCall, al khaliji’s group CEO said, “We are delighted to effectively engage with the global fixed income investor community and introduce them to al khaliji’s credit story.”

Turkish Airlines launches new fares to Istanbul As part of a new campaign to promote the tourist capital of Turkey as a top travel destination for GCC travellers, the national carrier, Turkish Airlines has announced two-way airfares, of up to 50 percent off, for passengers from Qatar. The promotional airfares start at only QAR1010, inclusive of tax and service charges. The promotion allows advance bookings to Istanbul and other cities in Turkey over the winter months.

Qatar University launches Entrepreneurship Forum

Qatar’s Doha Bank CEO R. Seetharaman discussing Qatar and GCC trade with Canada at the opening of its Canada representative office in October.

The legal amendments recommended by QFC Authority aim to provide better clarity and certainty of the regulations in Qatar.

#1

The position Qatar’s Sheikha Al Mayassa bint Hamad Al Thani holds on the annual ArtReview magazine’s ‘Power 100’.

16 | The Edge

New 911 Turbo S comes to Porsche Centre Doha

On its 50th anniversary, Porsche Centre Doha, Al Boraq Automobile Co. WLL, is introducing the new 911 Turbo S. Featuring more power and improved efficiency, the standard bearing Turbo S has active rear-axle steering, adaptive aerodynamics, new all-wheel drive and new chassis in lightweight design.

The Entrepreneurship in Economic Development Forum, launched recently, will be held in February next year.

Interactive Business Network and Qatar University (QU) have launched the Entrepreneurship in Economic Development Forum, a regional initiative to encourage entrepreneurship among young people in Qatar and the Gulf. It aims to bring together young entrepreneurs and provide them with expert advice and guidance from experts.

events business

Qatar, November 2013

event of the month 6-7 November

Aspire4Sport

The Aspire4Sport 2013 Congress and Exhibition will take place again this year at the Aspire Dome, and will also bring the sports facilities conference, Coliseum summit to Doha.

This year, the Coliseum summit will bring Professor Volkwin Marg, one of the world’s most accomplished stadium designers, who has been involved in a number of famous and award-winning stadiums. These include two 2010 FIFA World Cup stadiums in South Africa, the refurbishment of the historic 1936 Berlin Olympic Stadium, the angular Sports Center in Shenzhen, China, and the Warsaw National Stadium of Poland.

Professor Marg will be delivering a presentation on the latest trends, ideas, and technologies in stadium design. He will also be in direct conversation with key Qatari decision makers in the sports business industry, as he will participate in an open discussion on the opportunities Qatar possess to deliver exceptional sports projects and events.

The Coliseum summit will bring together all stakeholders involved in the planning, development, and execution of the facilities in the sports industry, from city planning councils to sports venue professionals.

17 - 21 November Global Entrepreneurship Week

Global Entrepreneurship Week (GEW) takes place once a year and is one of the largest gatherings for entrepreneurs to come together and discuss start-up ideas and participate in competitions and networking opportunities with mentors and investors. First started in 2008, the event is now held in 115 countries. This year, Qatar’s GEW will take place at the Renaissance Doha City Center Hotel.

24 - 27 November

Qatar Customer Service Forum

The first ever Qatar Customer Service Forum is a high-level networking opportunity for senior government officials and business executives to discuss the development of a customer-centric culture in Qatar’s organisations. The event will attempt to stimulate interest in customer service initiatives in a drive to elevate the country’s customer service levels.

November events 12 – 16 November International Boat Show

24 – 25 November

Qatar Foundation Annual Research Conference

26 – 28 November Transportation and Rail Exhibition

December events 4 – 7 December Paediatrics Conference

The Aspire Dome in Doha will again host the Aspire4Sport Congress and Exhibition this year. (Image Corbis)

18 | The Edge

10 – 11 December Euromoney Qatar

The Edge | 19

qatar perspectives Risks and challenges facing Qatar’s mega projects To prepare for the 2022 World Cup, Qatar will see multiple mega projects in a short time.

This will bring challenges such as less planning time, higher costs and scarcity of skilled workers, arguably resulting in poor delivery, writes Ahmed Fouad Engineering makes up a significant phase of the proper execution of a construction project. Typically, it starts with a concept design, followed by further design stages before the project is approved for construction (AFC) resulting in shop drawings.

Yet, due to the fast-track nature of the mega projects to meet the time requirements of 2022 World Cup projects, it is expected that these different stages will overlap, creating risks. In many cases, the approval and finalisation of the masterplan is not likely to happen at the time of awarding the projects, which can affect the utilities plant loads, utility lines routing and other interface issues.

Concurrent engineering, scheduling, procurement and construction activities can disrupt the flow of well-coordinated AFC drawings in terms of the mechanical, electrical and plumbing aspects. To avoid such risks, building information modelling must be utilised at early stages of the project as its absence can lead to an enormous number of technical queries.

These are likely to cause design changes, which can further affect the quality and delivery schedule of the project.

The procurement procedure is one of the areas with the highest risk probability to cause delays in the delivery of almost all mega projects. One of these risks is that there is no tolerance regarding the preferred vendor lists. Often the client demands material from certain manufacturers and most of them are from European or American factories. This increases both the risk of delayed deliveries and the cost.

Another risk is the delay in final approval for items with long lead times such as switchgears and transformers, etcetera. It is expected that the lead time will increase 20 | The Edge

by 20 percent due to concurrent demand by the various parallel ongoing major projects, in addition to the expected rise in all construction material costs and increase in the delivery time.

One solution is to consolidate all forecasted project requirement schedules by a government organisation to secure the main construction materials such as cement and reinforcement steel, and for contractors to order the material as early as possible and plan for longer delivery times. This can only work if it is supported by flexibility, quick design and material approvals by the clients.

Green buildings

Construction works will be facing new challenges and risks with the focus on sustainability that must be ensured in the heating, ventilation and air-conditioning systems for the stadiums and other aspects of the projects. These trends will lead to the engagement of highly skilled and specialised subcontractors who are new to the region. This will invariably have a cost implication both at the subcontractor and contractor level.

One solution to this could be that the government and the Qatar 2022 Supreme Committee do not schedule projects within the same time frame, especially for the forecasted specialised subcontractors works. This will help reduce the risk of delays and budget overrun. A point must be made to communicate the new lessons learned in fast-track project to all projects which are underway.

Shortage of skilled manpower is another major risk during the construction phase of a project. The situation can become similar to the shortage that happened before the Asian Games in 2006 and again in 2008 during the construction boom in Qatar.

But this time, the proportion of the risk will increase due to other factors such as the shortage of efficient workforce on the back of immigration policies which impose restrictions for demographic balancing purposes.

There are other risks at the interface level, especially with government organisations, such as timely issuance of work permit for excavation and

“Most of time, the clients demand materials from European or American factories. This increases the risk of delayed deliveries and increases costs.�

construction from Baladiya, final design approval from civil defence, and handover for the fire detection and fighting systems, and approval from Kahramaa for power and utilities supply. These approvals take a long time and with the sheer amount of projects, are expected to take longer, which the country cannot afford.

Ahmed Fouad is the head of planning and risk management coordinator at one of the projects being carried out

by Consolidated Contractors Company in Qatar.

qatar perspectives How well are Qatari banks facing Basel III norms?

In its Basel III circular released in August, Qatar Central Bank (QCB) raised the minimum capital requirements for Qatari banks, setting a Core Equity Tier 1 target of up to 11 percent while most European banks have been targeting only nine to 10 percent. This and other stringent requirements, say Jaap Meijer and Christine Kalindjian, may limit shareholder payouts while bolstering their loan books.

Qatar has been experiencing a boom in its construction industry, boosted by the 2022 World Cup. With USD96 billion (QAR349.4 billion) in projects under execution, and another USD124 billion (QAR451.4 billion) planned, Qatari banks, and especially the government-backed ones, are on track to deliver steep growth. Qatar National Bank (QNB) has been able to take a substantial share, and has tripled its loans over the last five years, while European banks have scaled back their lending in the region to improve their capital positions.

Qatari banks remain acquisition-hungry as they position themselves for a potential slowdown after 2022.

While some banks are leading the growth wave, others might soon be impacted by tighter Basel III regulations. Nevertheless, we calculate that MENA banks are far more liquid, profitable, solvent and shock resistant than their European peers.

In its Basel III circular released in August, QCB raised the minimum capital requirements for Qatari banks; it now sets a Core Equity Tier 1 target of up to 11 percent (including two capital buffers), while most European banks have been targeting only nine to 10 percent. Furthermore, larger banks should be required to hold at least one percent more. Non-equity components will no longer be included in core equity ratios. Financial associates in excess of 10 percent of capital will have to also be fully deducted from core capital.

The circular also stipulates that subordinated debt will need to carry loss absorption features through a write off or 22 | The Edge

a conversion into equity, making them less of a cheap option as these instruments will have to bear higher coupon rates (10 percent) instead of the lower rates of banks in the United Arab Emirates (UAE) to compensate for the implied writedown risk.

Dividend payouts

We would welcome caps being introduced on dividends since most Qatari banks (with the exception of QNB and Masraf Al Rayan) have been overly generous in their payouts, often paying a huge share of earnings as dividends. A capital hike for Commercial Bank of Qatar (CBQ) appears inevitable given the bank’s strong loan growth, very low earnings retention and the recent acquisition of the relatively small Turkish bank Alternatifbank for a substantial price (twice the book value).

Qatari banks have been allocating part of their shareholder funds as a general provision. If banks are allowed to add these reserves to their capital ratios, CBQ may buy itself a 12-month delay to raise capital.

Doha Bank has already addressed its weak capital base through a rights issue, but did not take the Global Depository Receipt (GDR) placement due to the lack of investor interest, and is now opting for a QAR2 billion Tier 1 issue. This could mean an earning per share (EPS) dilution of 13 percent as the subordinated loan will have to be Basel III compliant.

Basel III also targets to improve the liquidity of banks. Qatari banks that are relying much on corporate and government deposits may need to bolster their cash positions, by diversifying their funding base through issuing wholesale debt. This should put some pressure on the banks’ net interest margin, but would hardly dent the profitability of the sector.

We expect continued loan growth for Qatari banks, especially for QNB and Masraf Al Rayan. Most Qatari banks are meeting the new QCB guidelines for Basel III. However, inconsistent payouts for most banks leave them reliant on future capital hikes, and we expect CBQ to be the next. We would not be surprised to see caps being introduced on dividends. More stringent liquidity requirements should lead to increased debt issuance, but this should hardly dent their profitability.

MENA banks are far more liquid, profitable, solvent and shock-resistant than their European peers.

Jaap Meijer is an executive director at Arqaam Capital. Christine Kalindjian is a senior associate at Arqaam Capital.

Special advertiSement

Case Study: The Importance of PreEmployment Screening Rogue Assistant Manager with Unknown Criminal Past Bilks Company for More Than $50,000 EXECUTIVE SUMMARY

A rogue employee working in the finance department of a multinational corporation steals more than $50,000 before being discovered by the company.

PERSONS OF INTEREST

The individual in question had a notable criminal record, which should have raised red flags prior to his hire. Unfortunately, the corporation did not conduct a pre-employment background check prior to hiring the employee, so the individual’s criminal history was never discovered.

BREACHES IN SECURITY

• Failure to conduct a pre-employment background check to vet the individual.

• Lack of regular employee background investigation procedures for individuals in key financial positions.

• Weaknesses in departmental systems and internal controls which allowed the employee to easily execute the crime. IMPACT OF BREACH Aside from the notable financial loss that the business will seek to recoup, the company is forced to spend time, energy and resources building a solid case to proceed with charges against the employee.

Case Study: The Importance of PreEmployment Screening

Rogue Assistant Manager with Unknown Criminal Past Bilks Company for More Than $50,000. Recently, CRI Group was engaged by a large multinational corporation to conduct a background investigation on an assistant manager in the company’s finance department. The individual was accused of questionable behavior related to a large amount of missing company funds.

After an extensive investigation, CRI Group reported that, prior to working for the company, the subject in question had spent more than two years in prison having been convicted of using a phony passport and engaging in immigration violations in the Middle East.

Because the company neglected to conduct an initial pre-employment background investigation prior to hiring the assistant manager, the individual’s criminal history and prior incarceration were never revealed.

Subsequently, while in the company’s employ, the individual devised a system of writing corporate checks to himself and forging the signature of the department’s authorized director. In the end the employee managed to bilk the company out of $55,000.

Who’s At Fault?

While enough evidence has surfaced in this case to effectively prosecute the employee, one prevailing question keeps surfacing: Why wasn’t the individual properly vetted before being hired to run such a vital and sensitive operation?

Many companies, faced with “quick-hire” needs to keep departments running smoothly, will admit that they oftentimes expedite the hiring process in order to avoid any potential disruptions in operations. In doing so, the company will often forgo the pre-employment vetting process, typically one of the first verification cogs in any secure hiring process.

In this case, the company’s failure to conduct such an investigation opened the doors (and the corporate checkbook) to the risk of criminal activity.

Know the Facts

It’s a well-known fact that nine-out-of-ten security problems in any corporate setting are generally caused by individuals within that organization.

The most effective way to deter this activity in a business is to institute an effective vetting process that identifies and weeds out those individuals who’s histories could potentially cause irreparable harm to the organization.

That initiative begins with a pre-employment screening process which goes well beyond the “facts” provided on a candidate’s resume and uncovers any inconsistencies or irregularities in that individual’s history.

While an effective screening process will dig deep to uncover past transgressions, it should be streamlined so as to not become a hindrance to the Human Resources department, which is constantly under pressure to turn around the vetting and interviewing process to quickly fill needed vacancies within the organization.

Special advertiSement

An Effective Pre-Employment Screening Process

Companies that conduct thorough background checks on candidates before hiring often discover information that tells them where, when and why the candidate left a previous job. Many times, this offers an investigative goldmine to a background screening investigator, and can identify a wealth of potential issues (both personal and workrelated) that might set off alarms about the candidate’s future job performance.

An effective pre-employment screening process will eliminate the uncertainty of a job candidate truly possessing the skills, credentials, knowledge and experience that they claim on their resumes and in the interview process, while verifying the individual’s integrity, background and personal history.

Such a screening process will involve the following investigations: • Previous job verification • Verification of highest degree obtained • Address verification • Criminal history investigation • Verify national id number • Research into past financial behavior • Verify past 10 years of employment • Discreet, in-depth reputation interviews • Conduct litigation checks • nvestigate prior businesses owned, licenses held, legal/disciplinary actions • Conduct media research • Conduct property asset research • Research liens & bankruptcy records Proper screening provides the assurance needed to fully scrutinize job candidates and reduce the risks associated with hiring rogue employees.

Taking It A Step Further

This case study also exemplifies the need for companies to conduct regular background checks on existing employees, particularly those staff members in executive, managerial and financial roles.

Ongoing employee background checks work as a deterrent against “inside jobs” and other criminal activity which could occur in the workplace.

These investigations delve into an employee’s recent criminal and financial history to uncover irregularities that might lead that employee to commit a financial, or even a violent crime.

In this case, an employee background check could have revealed significant changes in the assistant manager’s lifestyle that would have raised red flags, signaling unwarranted financial gains resulting from his check writing scheme.

(Fortunately, a check uncovered his past criminal history, which subsequently broke open the case.)

Further, the development of an internal Employee Integrity Program may have prevented this scenario from taking place. An Employee Integrity Program (EIP) is a highly promoted company initiative that helps to instill honesty within the ranks while encouraging strong internal controls and ultimately protecting corporate resources and enhancing the company’s reputation.

An EIP is comprised of several facets, each designed as a separate level of security. These facets include: • Background checks on senior or security-sensitive employees; • Professional pre-employment screening monitoring and surveillance; • Spot checks on ethics compliance for key positions; • Substance abuse testing (where appropriate); • Risk analysis of the organization; • Whistle-blowing and employee complaint mechanisms; • Structured exit interview processes; and • Strict standard operational procedures to maintain control over the organization’s many functions.

An EIP is a vital part of an ongoing human resources risk mitigation program, and would have been instrumental in preventing or detecting the criminal activity in this case before it got too far out of hand. Getting Help From the Outside Companies often admit that the security measures mentioned above would be beneficial in safeguarding their operations, but rarely do they have the time, personnel or resources to maintain such programs. That’s where utilizing an experienced outside professional organization can be extremely beneficial.

Additionally, screening firms adhere to strict federal, regional and local laws that govern the investigative process, thus further protecting the company.

1. Customer support response time.

2. Data integrity level.

3. Reasonable pricing structure.

By considering these factors when choosing an outside background screening company, the most competent providers for your organization will naturally rise to the top, making the selection a fairly easy one.

The ability to effectively pre-empt internal security issues and corporate crimes can save businesses from huge potential losses and reputation damage. Instituting a pre-employment screening service, augmented by an ongoing employee background screening and Employee Integrity Program, will expose vulnerabilities and threats within the organization, which can significantly reduce the potential of business and financial crime, fraud and malpractice from occurring within the workplace.

ABOUT THE AUTHOR: Zafar I. Anjum, CFE, CIS, MICA, Int. Dip. (Fin. Crime) is Group Chief Executive Officer of CRI Group (www.crigroup.com), a global supplier of investigative, forensic accounting, business due diligence and employee background screening services for some of the world’s leading business organizations. A Licensed and Incorporated entity with the Dubai International Financial Centre and the Qatar Financial Center, CRI Group safeguards businesses by establishing the legal compliance, financial viability, and integrity levels of outside partners, suppliers and customers seeking to affiliate with your business. CRI Group maintains offices in UAE, Qatar, Pakistan, Hong Kong, Singapore, Philippines, United Kingdom and United States of America.

ContaCt details PO Box 111794, Dubai, UAE Tel. +971 4 3589884 Fax +971 4 3589094 Website www.crigroup.com

This section is brought to you by Qatar Financial Centre Contents: Barwa Bank moves up three places in CPI ranking 27. Fast market growth but low penetration in insurance 28. QE expected to be among GCC’s most active 29. QFC releases first Asia Reinsurance Barometer 29.

finance & markets

Barwa Bank moves up three places in CPI ranking

“We are not a mass market retail bank. Though we do have quite a lot of retail banking activity, we are essentially upscale,” Steve Troop, CEO, Barwa Bank. tells The Edge.

CPI Financial has published its Top 100 Banks (in the GCC and the Levant) listing for 2012, based on six key variables – size of profits and balance sheet, growth rates of assets and liabilities, year-on-year growth in profits and return on equity – according to which Barwa Bank has moved up three places (from 41 in 2011 to 38). In an exclusive interview, Steve Troop, CEO of Barwa Bank spoke to The Edge about the bank’s business model and what the CPI ranking means to the institution. by Aparajita Mukherjee

A

s a bank that has a three-year business history, Barwa Bank’s rising position in the CPI Financial ranking is a notable achievement, more so since the bank, given its upscale retail banking focus, has other mass-market retail banks as competitors.

Commenting on the strategy behind rolling out branches, Troop said, “We are not a mass-market retail bank. Though we do have quite a lot of retail banking activity, we are essentially an upscale retail bank. We have five branches and will add selectively and very carefully to that network.”

The bank has maintained a broadly consistent strategy throughout. In Qatar, a

Brought to you by:

The Edge | 27

sectors | finance & markets

congested marketplace, the bank has seen no real opportunity to appeal to a massmarket and has chosen to differentiate its offerings on the basis of its competitive advantage. Troop added, “Because we are relatively small, we try and turn this to our advantage. We are more nimble, have a flat hierarchy and can respond quicker because we don’t have layers of management, allowing us to deliver the consistently high-quality service standards that our customers have come to expect.”

Success in banking, according to Troop, is about finding niches and opportunities where customers may feel they are not getting the service that they need or their requirements are not being met.

“Innovation,” he added, “comes around [depending on] how the institution handles its delivery, service quality, and the channels that the bank chooses to reach out to customers.”

Banking, according to Troop, has to do with focus and for Barwa Bank, it is the highincome earners including private banking.

He added that the bank has been active on the retail banking side though the growth story has been led by corporate banking.

Troop added that the other major growth story for the bank over the last two years has been its considerable investment in treasury and Islamic capital markets.

Clarifying this, he said that Barwa Bank had been fortunate enough to secure an excellent team, which has been focusing its expertise on the sukuk markets. “We have had lead management roles in a number of very high-profile transactions and have been active traders of sukuk on behalf of our investors. So that has certainly helped build our business in this growth sector.”

Speaking about the bank’s proficiency in the sukuk business, in the context of Barwa Bank’s joint lead management of the

Barwa Bank, says CEO Steve Troop, has maintained a broadly consistent strategy throughout. Qatar, being a congested marketplace, the bank has seen no real opportunity to be a mass-market bank and has chosen to differentiate its offerings on the basis of its competitive advantage.

28 | The Edge

Success in Insurance market banking is Fast market about finding growth but low niches where penetration customers may Qatar, which is the third largest feel they are insurance market in the Gulf region, has seen a compound not getting the annual growth rate (CAGR) of service they need. 17.9 percent over the last six State of Qatar sukuk followed closely by the Republic of Turkey sukuk (in 2012), Troop said that both these attracted a great deal of positive publicity which demonstrated competence and expertise domestically and internationally. He added that the capital market business is very much a credentials business and being involved in such high-profile transactions has the virtue of attracting new business.

Commenting on whether the bank intends to get rated and go in for an initial public offering (IPO), Troop said that both these objectives remain aspirations and the bank intends to do both, adding that there is a sequencing issue. “We want to do the IPO and then we want to do the rating.

As far as the IPO goes, we are now subject to final regulatory approvals,” he disclosed.

New deals

With the multi-pronged activity in Qatar’s infrastructure sector, Barwa Bank has been booking some business in that segment.

Troop mentioned that the bank has both participated in and led one of the Islamic banking consortia for one of the Qatar Rail projects. He added, “At this stage, they represent contingent commitments, they are not funded so it is bonds, performance bonds, performance guarantees and will become balance sheet assets at some point next year. We will learn a lot from these kinds of deals as we go along.”

Finance for the shipping sector was another first for Barwa Bank. Troop mentioned that the bank has financed 12 of Topaz Energy and Marine’s vessels.

Comprising two separate structures, the facility involved a USD110 million (QAR400 million) ijara-based financing scheme for 10 existing vessels and a USD15 million (QAR54.6 million) istisnabased deal for the purchase of two new vessels under construction.

years, making it the second fastest growing market, according to global credit rating agency Moody’s, but there remains low insurance penetration.

The fast market growth has not led to high insurance penetration. Qatar has one of the lowest insurance penetrations in the region at 0.6 percent of gross domestic product (GDP) and an insurance density (which indicates the annual per capita insurance premiums) of USD695.9 (QAR2533) as of 2012, Moody’s has revealed. “This implies that there is room for significant further growth within the Qatari insurance market,” the credit ratings agency stated.

A resource-driven economic boom in recent years has boosted per capita GDP at purchasing power parity to the highest level in the world at nearly USD98,000 (QAR356,720) as of 2011.

“This growth, together with anticipated infrastructure developments ahead of the 2022 World Cup, should drive future demand for insurance products over the medium term,” Moody’s reported.

Finding strong capitalisation and good access to capital for most of the insurance companies, it stated that Qatari insurers have relatively low or nonexistent levels of financial borrowing.

qar

2533

The annual per capita insurance premiums in Qatar.

finance & markets | sectors

Equity markets

QE expected to be among GCC’s most active According to Deloitte Middle East’s first Equity Capital Markets Confidence Survey, Qatar Exchange (QE) is expected to be among the most active Gulf Cooperation Council (GCC) exchanges over the next 12 months.

While regional and international equity markets have generally been depressed post-global financial crisis, early signs of recovery are appearing with higher volumes being traded on some of the regional exchanges, with more interest from foreign investors. GCC economies are also showing positive signs of recovery across a multitude of sectors, including retail, tourism, real estate and infrastructure.

The survey was conducted through meetings with 30 equity capital market practitioners within regional and international banks operating in the GCC, covering the MENA region. Commenting on the reason that QE is expected to be one of the most active exchanges in the next 12 months, Robin Butteriss, head of financial advisory services at Deloitte & Touche, Qatar, told The Edge, “We expect, based on the Reinsurance

QFC releases first Asia Reinsurance Barometer

Overall, says Qatar Financial Centre, the reinsurance business sentiment in Asia is strong.

On the back of a relatively stable political environment, well-established regional reinsurance hubs and strong gross domestic product (GDP) and

With a spate of IPOs planned, the QE is set to become more vibrant. (Image Reuters/Corbis)

survey results, that there will be an increase in the listings and initial public offerings on the QE in the coming year. There are currently a number of IPOs planned, which should be launched in the next six months. Further, the Qatar Exchange Venture Market has the necessary backing to launch in the coming year, providing mid-size Qatari companies a platform to list.”

Butteriss added that the success of each IPO will depend on their individual merits. “However, given the business confidence in Qatar and the industries that each [company] operates [in], subject to pricing, I would expect the listings to be well supported,” he told The Edge.

premium growth expectations, Asian markets reveal the strong position of its reinsurance markets.

The report is based on demographic factors, low average insurance penetration rates and product innovation, both in insurance and reinsurance. Measured on a scale from -5 to +5 (very bearish to very bullish), average sentiment stood at 1.9. However, the trend is negative. About 12 months ago, business confidence was stronger at 2.3. Over the next 12 months, average business sentiment is expected to deteriorate further, reaching a value of 1.7, mainly reflecting an economic slowdown, a negative outlook on reinsurance prices, increasing regulatory/compliance and personnel costs, and hence declining

Given the business confidence in Qatar and the industries that each operate, subject to pricing, I would expect the listings to be well supported, said Robin Butteriss, head of financial advisory services at Deloitte & Touche,, Qatar.

overall profitability.

An overwhelming majority (96 percent) of all respondents expect a further increase in reinsurance capacity over the next 12 months, as the region remains an attractive growth market. This trend is a concern for most reinsurers, as margins will come under additional pressure.

Shashank Srivastava, chief executive officer and board member of the QFC Authority said, “Asia is one of the fastest growing reinsurance markets in the world and a strategic priority for any aspiring international reinsurer. Given the evercloser economic ties between Qatar and Asia, it was only natural for the QFC Authority to extend its proven barometer survey to the Asian reinsurance marketplace.”

The Edge | 29

Contents: Qatar’s carbon capture opportunity 31 . Muntajat Netherlands move reveals Qatar’s downstream ambition 32 . Qatar minister calls for energy market transparency 34 . Gas Arabia summit returns to Oman 34 .

energy & sustainability

Once touted as a viable means to provide emission-free solutions to the world’s energy needs, carbon capture and storage (CSS) has proven commercially ineffective due to unsustainable costs, prompting the closure of a facility in Norway recently that was supposed to lead the way in the technology. (Image Corbis)

Qatar’s carbon capture development opportunity The world needs leadership on carbon capture and storage after Europe’s flagship project was abandoned last month. Qatar could take the helm, writes The Edge Energy and Sustainability Editor Jamie Stewart

A

few simple truths 1: Qatar, with gross domestic product per person of QR306,000, is the richest nation per capita on the planet. 2: Qatar has made its fortune through the sale of liquid natural gas (LNG) and other gas derivatives. 3: The world’s appetite for gas has not waned as its fear of the climactic impact or hazards of emitting carbon from other fossil fuels such as coal or nuclear power has grown. 4: The world still requires fuel for its power plants, its heaters and transport. 5: If the world could burn massive amounts of gas, without emitting carbon, it would do so, on a massive scale. And commercial scale carbon capture and storage (CCS), (a process of capturing a storing large-scale CO2 waste) would allow it to do just that.

These facts are all that is required to bolster this argument: Qatar should be making CCS work at commercial scale, and it

should be doing so regardless of the upfront investment and initial estimates of long-term costs. If it can do so, it guarantees the existence of a global market for its most ample commodity, natural gas, for years to come.

But the unfortunate fact is the world is struggling to make the dream of carbon emission-free, fossil-fuel combustion a reality. Last month, Norway, a sparsely populated, natural gasrich nation in Northern Europe, scrapped Europe’s first full-scale CCS project at the Mongstad oil refinery.

The country’s government, which had referred to the scheme as ‘Norway’s Moon Landing’ project, had begun to see it as unsustainable, and consequently instructed state-run energy giant Statoil to end the project before the technology could be transposed to a gas-fired power plant, which was to be the The Edge | 31

sectors | energy & sustainability

Petrochemical sector

The recently defunct Mongstad oil refinery in Norway was home to Europe’s most advanced CCS project.

Qatar is now in a strong position to pick up the mantle as world leader in carbon capture, if it chooses to do so, says the author. (Image Statoil)

project’s next phase.

Like Qatar, Norway sells oil and gas to the world, and would have much to gain if CCS could be made to work, but nowhere near as much as Doha would gain, sitting abreast gas reserves 12 times greater than Norway’s.

For every riyal Doha was to spend on making CCS feasible, and proving to the world that it can happen at scale, it could get back tenfold, or more. And the returns would not just lie in the value of gas sold, because CCS technology itself would also hold immense export potential.

Qatar has been clear about its grand plans to build a knowledge-based economy. Indeed the first pillar of its 2030 national plan – the policy-guiding document so often referred to by big business and government departments alike – is human development, and it states: “Future economic success will

For every riyal Doha was to spend on making CCS happen, it could get back tenfold, or more, and the technology itself would also hold immense export potential.

32 | The Edge

Muntajat Netherlands move reveals Qatar’s downstream ambition

12

The multiple by which Qatar’s gas reserves exceed Norway’s. increasingly depend on the ability of the Qatari people to deal with a new international order that is knowledgebased and extremely competitive.”

This term ‘knowledge-based’ is difficult to imagine in concrete, material terms but in the field of CCS, Qatar could create a palpable version of the reality that it strives for throughout its 2030 vision: the knowledge to create, and the ability to export what that knowledge has produced.

The world needs a new leader in the field of CCS, and the industry itself needs one even faster. Hours after the cessation of the Mongstad project was announced, the need to retain what had been learnt was being portrayed: The project’s executive vice president Eldar Sætre said it was important “that all we have learnt will be of benefit to the industry in its continuing work on CCS.” Time is surely of the essence if the industry’s collective knowledge is to one day pay off. Qatar may be a tiny, desert nation, as far removed from the icy plains of Norway as can be, but if any nation has the financial resources – and the potential reward – to make CCS work, it is arguably this country.

Muntajat BV chairman Yousef Jeham Al Kuwari has said the company’s decision to base its world headquarters in The Hague, Netherlands is one that is, strategic both in a business and geographic sense. (Image Muntajat)

Doha-headquartered company Muntajat has taken a major step in its masterplan to become the “leading marketer of chemicals and petrochemicals worldwide”, underscoring the growing importance of the downstream hydrocarbon sector to Qatar.

Muntajat Besloten Vennoot (Muntajat BV), which markets the chemical, polymer and fertiliser products of Qatar abroad, is building a network of offices in strategic locations globally, it said in a statement, with an office in the Netherlands, western Europe, as its newly-established international base.

The decision to set up shop in The Hague, the capital city of the Netherlands, alludes to a longer-term strategy of gaining a foothold in established markets before expanding that presence and staying for the long term.

The move is part of a sustained drive to diversify the reach of Qatar’s stateregulated chemical products, seen as a vital growth area in light of what will

sector name | banner heading

The Edge | 33

sectors | energy & sustainability

Muntajat BV is a part of a sustained drive to diversify the reach of Qatar’s stateregulated chemical products.

Oil and gas

Qatar minister calls for energy market transparency

Hydrocarbon sector

Gas Arabia Summit returns to Oman

Qatar’s fellow Gulf Cooperation state, Oman will host the Gas Arabia Summit in December to bolster the discussion on reducing gas flaring in the hydrocarbon industry. (Image Reuters/Corbis)

1.5 million

The amount in tonnes of Qatari liquefied natural gas (LNG) that will be delivered to the Gate LNG Terminal in Rotterdam, Netherlands from next year.

become an increasingly challenging market for the export of crude oil and natural gas.

As Muntajat BV chairman Yousef Jeham Al Kuwari explained, the proximity of The Hague to the ports of Rotterdam and Antwerp, Schiphol Airport and international chemical and petrochemical companies, also contributed to the decision.

The move adds to a growing air of cooperation between Qatar and the Netherlands. In October, Qatargas signed a five-year deal to supply European utility E.ON with 1.5 million tonnes of liquefied natural gas (LNG) annually beginning next year, delivered to the Gate LNG Terminal in Rotterdam, the Netherlands.

34 | The Edge

Qatari energy minister Mohammed bin Saleh Al Sada told Asian ministers in South Korea that to promote vital stability in the regional energy sector, markets must be more open to scrutiny.

Qatar energy minister Mohammed bin Saleh Al Sada has called for the establishment of an “easily accessible and reliable information system” covering global oil reserves. The move would form part of a bid to halt sharp price fluctuations that can shock energy markets and threaten the stability of national financial systems.

Al Sada made the comments before a meeting of Asian ministers at the International Energy Forum, in South Korea’s capital Seoul.

The comments demonstrated recognition of a need for transparency in energy markets, a drive that has gained traction in recent months as the global financial system finally shows signs of emerging from the downturn. This has been accompanied by a push to ensure the financial system, with global trade at its heart, can move beyond the problems caused by a lack of transparency that contributed to its near-collapse.

Al Sada said that stable energy markets have a key role to play in the promotion of regional energy trade – itself an accepted concept in mature and established energy markets.

Gas Arabia Summit is an event developed to support National Oil Companies in the region and is to return to Muscat, Oman, in December. The event aims to bring together international and national industry leaders from across the oil and gas industry along with engineering, procurement and construction, technology and intelligence and financing companies.

Statistical research shows that Oman’s total oil supply reached 924,000 barrels per day in 2012, and the government hopes to produce more than 940,000 barrels per day in 2013.

The Gas Arabia Summit will begin with the third Annual Gas Flaring Reduction Day on 8 December 2013. The agenda on this day will focus on discussions related to gas conservation and anti-flare techniques, as well as new technologies and pioneering management initiatives, using successful case studies.

Jamie Stewart is a freelance journalist and oil and gas industry researcher and analyst based in the United Kingdom.

Contents: Qatar joins the GCC’s sustainability investment 35. Not just a construction model 36.

real estate & construction

In an attempt to diversify away from conventional energy sources, the GCC is looking forward to constructing more solar plants in future. (Image Reuters/Corbis)

Qatar joins the GCC’s sustainability investment Qatar, having joined the Gulf Cooperation Council’s (GCC) QAR564 billion investment to construct green energy generating plants, welcomes GreenScreen, a sustainable construction material.

W

ith increasing emphasis on sustainability, the Gulf Cooperation Council (GCC) has announced an investment of USD155 billion (QAR564.2 billion) to construct plants that would produce energy from unconventional sources, according to a report released by Abu Dhabi-based Crescent Petroleum. Considering the Gulf’s climatic conditions, a major focus of these

plants is on capturing solar power as a source of energy.

Speaking with The Edge about Qatar’s ongoing attempts to promote green construction, Tim Cook, who is manager environment at GHD, an Australian engineering, architecture and environmental consulting company, said, “Sustainability is certainly on the agenda in Qatar. In reality, the application of sustainability in construction and development is in its infancy.” Cook, however, acknowledged the fact that sustainability is gaining momentum.

One way of ensuring sustainability is by incorporating green elements in buildings.

One such product that has recently made its debut in Qatar is GreenScreen. Launched

by Hunter Douglas, a leader company

in the construction materials business, GreenScreen is the first sun control system made from recycled bottles. Speaking with The Edge, André Weiss, centre manager at Hunter Douglas Europe, discussed the business case of their product in the Qatar market. According to Weiss, the GreenScreen fabric series is the first 100 percent PVC-free solar control shading solution in the marketplace. Weiss added, “Our main focus was on recyclability, which made and still makes sense, considering the fact that per year between 20 and 22 million square metres of non-recyclable poly vinyl chloride (PVC) containing shading fabrics end up in landfills. This being a reality, it seems just logical to think about the other end of the material cycle.”

The Edge | 35

sectors | real estate & construction

In discussing the cost differential between GreenScreen and alternatives, Weiss said that the polyester and PVC combination screens are copy of the fibreglass screens that are increasing in popularity due to their cost effectiveness.

While adding building materials like GreenScreen offers green credentials to a construction project, it is not enough to ensure the project is sustainable. Steven Humphrey, construction economics and finance advisor at Qatar Green Building Council, is of the view that adding

GreenScreen is the first sun control system made from recycled bottles.

renewable energy features is not a sustainable solution by itself. While such features introduce environmentally-safe materials in construction, sustainability of a project also requires reducing the environmental cost on a longer-term basis. The realisation, according to Humphrey, “is gaining greater awareness and, as a result, we are seeing a movement towards the adoption of sustainable design practices and approaches, often founded on the traditional Arabic designs of the past.”

Project exhibits

Not just a construction model Making models for construction projects is more than just a marketing gimmick. Khalid Al Jaber explains why investing in good quality models is a good idea.

Size does not matter. The quality of a construction model depends on how well it reflects the actual building regardless of its small size. Some might think, especially in the Middle East, that the use of these models is to enhance sales and is therefore only required at the beginning of the project, thereby tempting many companies to go with low-quality models made of cheaper material. However, investing in a good quality model can enhance projects. Investors all over the world, particularly those in Europe, pay a great deal of attention to the details of a project’s model, focusing on various stages from introduction to execution.

In Germany for example, most advanced companies allocate a large amount of

Investors around the world pay a great deal of attention to the details of a project’s model.

36 | The Edge

This model, done by Innovation Technologies GmbH, shows the inside view of My Zeil Mall in Frankfurt City.

money for models to be made with high quality materials and supported with lighting which work as a mirror image of the project, as well as an exhibition tool. For international exhibitions, modular models can be dismantled and transported anywhere in the world.

To fit the changing requirements of the project, model companies have now started to provide post-sales services as well, which includes periodic maintenance and installation work on the model and its components. Sometimes, changes in the project also occur. For instance, a change in the surrounding area of the project can be easily incorporated in the model through these post-sales services.

Some companies require the models to be executed in several stages, similar to the stages of the project itself.

Many times, these companies request two copies of the model, a complete version of the final project, and a version in several phases parallel to the phases of execution of the project.

Ultimately, the budget allocated for a model defines its quality. The standard

of materials used also plays a significant role. High quality materials such as acrylic, glass, steel and porcelain can be used, as opposed to cheaper materials such as wood, thin cardboard and plastic.

While models have their place in the world of construction, a more advanced technique is now being used in the international market. Three-dimensional visualisation of the project not only provides the elementary design of a project, but can also offer many internal details added to those not viewable in a project model.

Khalid Al Jaber is the chairman of Innovation Group.

Contents: Big Data in Qatar: More challenges ahead 39 . How cash on delivery is impacting e-commerce in Qatar 42 . Data is the future for telcoms 42 .

tech & communications

Big Data in Qatar: More challenges ahead Companies in Qatar employing Big Data practices are seeing a significant impact on their businesses, according to a recent EMC survey of local businesses. However, Big Data still has numerous challenges to overcome. by Shehan Mashood

O

rganisations in Qatar are making use of the vast amount of information that is being created daily within companies to help drive insight into how they can better business

functions. Among those organisations surveyed in Qatar, 44 percent said that they had achieved a competitive advantage as a result of Big Data analytics, and 85 percent noted that decision making within their organisation could be improved with the better use of data.

Samer Diya, country manager of EMC in Qatar said at a recent press conference, “Not only are senior management executives beginning to engage with the idea of Big Data analytics, but many businesses are aware of the huge competitive advantages the technology brings.”

However, Big Data adoption is not without its challenges, Patricia Florissi, vice president and global chief technology officer for EMC Sales, told The Edge that companies are being very selective at present about how and where they deploy Big Data within their business. “In a couple of years from now, we are going to have an issue of how to bring those Big Data infrastructure architectures together and correlate the data across the Big Data silos,” she explained.

Companies are not yet convinced about the usefulness of Big Data to their business as a whole, and rather than stalling projects The Edge | 39

sectors | technology & communications

today to try and think long-term, businesses are more interested in seeing short-term results, leaving integration as a problem to be solved in the future, furthered Florissi.

According to her, some firms are not even aware of how many Big Data efforts they have across the company.

Big Data is still a relatively new concept in business and many are struggling to understand how exactly it applies to their business unit or a particular scenario.

In fact, understanding of the technology was the second most popular reason for not deploying Big Data technology, according to the EMC survey. The most popular reason was return on investment (ROI). “People are still trying to figure out how they can use the technology, 10 years from now, it won’t be a question,” said Florissi. In Qatar, the biggest priority driving IT adoption is to gain operational efficiency, “and Big Data is trying to help them reduce costs, and improve the quality of service,” she added.

Globally, marketing people are the most active in using Big Data to understand information that is coming from social media in order to gain higher levels of customer intimacy. Enhancing customer experiences was ranked by local businesses as the third largest priority driving IT adoption in the country. To capitalise on these potential opportunities, however, organisations face another challenge, the recruitment of competent staff.

Last year, IBM reported that there were 300,000 job openings for data scientists in the United States alone. Data scientists require a blend of computer science, mathematics, statistics, an understanding of the business and sometimes an element of art, because the best way to interpret Big Data is through creative visualisation techniques, explained Florissi. She, however, added that it was normal to see a lag between the introduction of a new technology and reaching a critical mass of professionals in the field. It was not until the late 1990s that a dotcom bubble appeared, even though the technology first arrived in the market a decade earlier.

can also view their data in context of what is taking place in their industry, the local market or their competition. “Big Data together with the cloud, mobile technologies and social media has level set the ROI on technology and Big Data for small and big companies,” she added.

Two decades ago, it would require inhouse experts and analysts for a company to calculate growth, interpolate data and create graph analytics. Today, these are functions of a basic spreadsheet client such as Microsoft Excel. “We do not have the equivalent of a spreadsheet built with functions for Big Data analytics that will benefit small companies in particular industries immediately. But there is no reason why we cannot have a service where the functions that are embedded have more of an element of Big Data analytics, predictive analytics, and so on, that I can get from small companies and provide the results.”

Overall, businesses in Qatar are positive about its prospects despite the numerous challenges, with 77 percent of those surveyed saying that technology investment would help them reach their goals.

Big Data in Qatar What is stopping Big Data?

85%

Agree it helps better decision making

44%

40 | The Edge

Agree it gives them a competitive edge

53%

Say their budget is the most important factor in decision making

SMEs and Big Data

Before the arrival of Big Data, there was Business Intelligence and only large companies would have the amount of data required to do meaningful analysis.

Today, a small company has access to the cloud. They do not have any upfront capital investment from an infrastructure perspective, and data is widely available, explained Florissi. In fact, small firms

Globally, marketing people are the most active in using Big Data.

25% Source: EMC

Say they are not planning to implement Big Data technology

1

Return on Investment

2

Understanding

3

Culture

Top business priorities driving IT

1 Business efficiency

2 Governance and compliance 3 Customer experience

sectors | technology & communications

Online transactions

How cash on delivery is impacting e-commerce in Qatar Qatar is one of the Middle East’s largest e-commerce markets, and is expected to continue its steady growth reaching QAR4.4 billion by 2015. However, due to fears of security and convenience, many customers in Qatar use cash on delivery (COD) as their preferred choice of payment. This, however, is not a sustainable model for e-commerce both in Qatar and the region, argue regional representatives of PayPal. According to PayPal, 75 percent of customers in Qatar use COD as their preferred choice Communications

Data is the future for telecoms

Smartphone applications such as Whatsapp have stripped profits from previously more lucrative telecom SMS services.

The combination of smartphone penetration in Qatar and growth of Internet-based communications services, such as Skype and Whatsapp are resulting is lower profits for traditional telecom services of voice and SMS. 42 | The Edge

of payment, and while COD has emerged as a trend in e-commerce across many emerging markets, it has created particularly high costs for the Middle East e-commerce ecosystem, said Harith Al Anbari, product manager at PayPal EMEA. It is hampering growth and increasing the cost of doing business, explained Al Anbari, as up to 40 percent of goods are returned in the Middle East. These rates are higher than in countries where COD is not as dominant, sometimes with as much as twice as many returns.

Elias Ghanem, the managing director of PayPal MENA, told The Edge that the logistics to operate COD are expensive for e-commerce firms, especially when returns are factored in, “If you do it across [borders] you have duties in and out, making it very cumbersome.”

Al Anbari also added that this delay meant a delay in payment for merchants, who have to wait up to as much as four weeks, which could lead to cashflow problems, in addition to handling costs, security and high transfer fees. This is hindering the growth of the e-commerce ecosystem, said Al Anbari, as cash transactions are not reported as thoroughly as electronic transactions, limiting transparency. It also creates a high cost of entry for new e-commerce merchants as Voice revenues that have traditionally been the largest source of profits, for telecom providers in Qatar are declining as more customers ulitise smartphone applications to meet their communications needs. This reflects a global trend which is captured in a recent report by Infonetics Research which predicts that telecom voice will account for only 50 percent of mobile service revenue by 2017. Smartphone sales in the Middle East and Africa surpassed feature phone sales for the first time in the second quarter this year, said Sarwan Singh, director sales and operation at Prologix, a solutions provider for telecoms.

“With these devices, consumers now have easy access to a multitude of Internetbased communications applications. Even businesses are employing technologies such as VoIP and IP telephony to reduce operational expenses,” said Singh, and this is driving business away from voice services and forcing telecoms to look at new offerings. While home user needs will be best met by better priced data packages and faster mobile Internet - Ooredoo most recently made permanent a summer offer that cut data package prices by 50 percent -

they have to factor in heavy COD costs.

It is not only e-commerce businesses that are being impacted by these high costs, as they are then passed on to the consumer, said Al Anbari. Consumers also have to be present at the time of delivery which can be a hassle, explained Ghanem, and because they also need to have cash on hand for the item at the time of delivery, the average sales price for COD is quite small.

COD comes at such as high cost in exchange for security and ease of use, that it is not a sustainable solution for e-commerce in the Middle East, claimed Al Anbari.

Elias Ghanem, the managing director, PayPal MENA, told The Edge that the average sales price for cash on delivery items are much lower since the customer needs to be able to pay at the time of delivery.

it is in the enterprise space that telcoms can truly diversify their offerings.

Singh noted that while service providers in Qatar do in fact regularly upgrade network components, smarter investment is required if true progress is to be made. “Currently, the main investments should focus on customer experience management. Operators need to deploy test and measurement probes that give them complete visibility into their 2G, 3G and LTE networks so they can easily identify bottlenecks across these heterogeneous networks. This information can then be used to chart investment roadmaps and build high-performance infrastructures.”

Telecom voice will only account for 50 percent of mobile revenue by 2017.

NET PROFIT Will Qatar’s stake in PSG set a new standard in football investment ?

by Barry Mansfield

cover story | sports investment

For the last few years, Qatar has been hosting major sporting events. According to some analysts, the country’s growing interest in sports, particularly football, represents its strategic move to build a sports sector – an approach, which is considered to be far more comprehensive compared to those adopted by some other GCC countries. Barry Mansfield looks at whether Qatar’s substantial investments in world football, particularly with its prize acquisition, Paris Saint-Germain (PSG), are based on sound business principles.

T

hat Qatar has invested heavily in international football, especially European teams, is no great secret.

The country has of course had a prominent presence in international football since the Qatar Foundation (QF) signed a USD200 million (QAR728 million) sponsorship deal with Spanish professional football club FC Barcelona in 2010. The deal itself became the subject of some controversy as the financially challenged club had previously pledged never to enter into such an endorsement agreement, but was then ostensibly forced to do so with Qatar Foundation out of financial necessity.

Earlier in the same year, Qatar’s Sheikh Abdullah bin Nasser Al Thani also acquired embattled Spanish La Liga Málaga CF, further spending EUR200 million (QAR 996 million) to revive the fortunes of the once low-rated but highly popular, and now marginalised and financially struggling sports entity.

In what is probably Qatar’s most highprofile football acquisition to date, in June 2011, the Qatar Sports Investments company (founded in 2005 and part of the Qatar Investment Authority or QIA), set up

by His Highness the Emir Sheikh Tamim bin Hamad Al Thani, bought a majority stake

QAR

728 million

The amount the Qatar Tourism Authority will pay PSG per season until 2016 in a publicity agreement.

Qatar Airways’ sponsorship of leading Spanish team FC Barcelona is yet another among a raft of Qatari companies endorsing European football franchises in 2013. (Image Getty Images)

48 | The Edge

sports investment | cover story

in French professional football club Paris St-Germain (PSG), and installed former professional Qatari tennis player Nasser Al Khelaifi as president, investing heavily in international football megastars.

“It’s a simple message,” Khelaifi told British newspaper The Guardian in 2012.

“We are building a team to be one of the best in Europe. To become big, you need to sign players and that is what we are doing.

Obviously, we believe in our targets and objectives, and we are really confident that the dreams are going to come true.”

Endorsement-wise, recently Qatari telecommunications firm Ooredoo signed a five-year sponsorship of PSG, with their distinctive red and white logo to be emblazoned on the back of the team shirts for the next five years, for an undisclosed but no doubt substantial figure. September’s deal between Ooredoo and PSG will also ostensibly give a boost to youth and community sport by establishing coaching clinics in the Middle East, North Africa, and South-East Asia. There is also some speculation that PSG’s owners are looking to invest in a major league soccer franchise in the United States.

Thanks to the Union of European Football Association (UEFA) ownership laws, this maybe not have been possible prior to another more recent deal signed between PSG and the Qatar Tourism Authority (QTA) in December 2012, but could now be allowed due to a loophole in UEFA’s Financial Fair Play regulations which requires that clubs not spend more than they make. The QTA deal, termed a ‘publicity agreement’ was reportedly

“Obviously, we believe in our targets and objectives, and we are really confident that the dreams are going to come true.” – Qatar’s Nasser Al Khelaifi, PSG president.

Qatari-owned football team Paris St-Germain’s president Nasser Al Khelaifi has grand ambitions for the franchise, many of which are being fulfilled through a championship trophy and the attendant increasing revenues that come with them. (Image Reuters/Corbis)

The Edge | 49

cover story | sports investment

In 2010, Qatar’s Sheikh Abdullah bin Nasser Al Thani acquired Spanish club La Liga Málaga CF, and invested a further EUR200 million in the club. signed for a value of USD800 million (QAR2.9 billion) according to various international media outlets, such as France’s La Parisien newspaper.

By winning the coveted French Ligue 1 title in the 2012-13 season and by signing lucrative sponsorship deals (the largest with Qatari sponsors), PSG so far has been Qatar’s football ownership success story.

The opposite is perhaps true for Málaga, which recently entered a liquidity crisis and suffered a controversial Union of European Football Association (UEFA) ban after players and staff failed to be paid on time.

The club was forced to offload prize players and its ambitions for a plush new EUR19 million (QAR96 million) sports academy on Spain’s Costa Blanca are now on hold.

The main reason clubs fail is cashflow problems. It does not matter how large the revenue or profits are, if the club has

Investment in football is a means for Qatar to project a positive profile of the Gulf state in the world, but it is to be seen if, managed correctly, it can be a sound addition to the country’s vast and diverse business portfolio, alongside those of other countries such as the United Arab Emirates.. (Image Getty Images)

no funds to pay players, suppliers or the taxman, it could face bankruptcy. So, what is attracting Qatari investors to invest in these clubs? Are their trophy clubs destined to remain vehicles for self-promotion or can they be turned into self-sustaining, profitgenerating businesses in the long-term?

James M. Dorsey, author of The Turbulent World of Middle East Soccer, says Qatar’s investments are more wide-

60,000

The number of people that the renovated PSG’s home Parc de Princes stadium will accommodate, up from the current 48,000, once planning permission and construction is completed.

ranging than those seen from other Gulf states. “Compared to the UAE and Bahrain, Qatar’s approach is more strategic and far more comprehensive,” he tells The Edge.

“The former destinations host events and seek associations. By contrast, Qatar is building a sports sector, but also investing in sports medicine, a world-class academy, conferences. Qatar’s leadership wants to build sport into the national identity.”

Dorsey also ponders, “How do you measure cost-benefit analysis? You’re hoping that it will pay off in terms of country branding.”

That may explain why the PSG owners are willing to put up with a punishing 75 percent tax rate in Paris, and competition from newly-rich but poorly supported AS Monaco, which benefits from lower corporation tax in the principality, and the ability to offer foreign players tax-free earnings.

Meanwhile, Qatar’s Aspire Zone Foundation acquired KAS Eupen, a second division club in Liege, Belgium. Dorsey stresses that the recent acquisitions are “not just Arabs buying teams. PSG was a three-way deal involving investments in France, where Qatar already has close ties.

Then there was Michel Platini’s vote. Eupen was a strategic move, because they needed an extension to the academy.”

Attaining operating profit

In a sport, currently plagued by financially troubled clubs, operating profit status has already been achieved in a few notable cases.

Three English Premier League clubs reported operating profits last season: Manchester United at GBP35 million (QAR205 million), Swansea City at GBP18 million (QAR106 Like all sports with lucrative business opportunities, a solid fan base is key to maximising profits through ticket sales, merchandising and sponsorship deals, and Qatar-backed PSG is gaining momentum on all fronts, underlined by its recent on-field successes including the 2012-13 La Ligue 1 Trophy. (Image Reuters/Corbis)

50 | The Edge

Continued on page 76

sports investment | cover story

FIFA, faith and football: Why Qatar must silence the 2022 doubters by Jamie Stewart December 2, 2010: Few gave Qatar, the outsider from the Middle East, a chance as Sepp Blatter, the president of soccer global governing body FIFA, took to the stage in Zurich, Switzerland, to announce the host nation of the 2022 World Cup. Japan, South Korea, Australia and the United States (US) – all had applied, and each was favoured ahead of Qatar.

But FIFA made a bold decision, opting to send the World Cup not just to a new land, but to a new people. What has transpired since may be considered by some a series of bitter pills to swallow – accusations of vote rigging; question marks over the climate; Qatar’s ability to complete a monstrous infrastructure programme in a little over a decade; and the treatment of migrant workers building that infrastructure – but what continues to endure is the underlying sentiment of human development that FIFA’s choice represents.

Doubt

The emergence of doubt over Qatar’s selection was inevitable. Look at the four nations beaten to the prize in the final round of voting: Rich, developed,

diverse resource-laden economies, all of which – bar Australia – had previously hosted the tournament.

It is perhaps for this reason that some of the more assertive criticism of uncertainty over tournament dates has come out of Australia, a country that, having also not hosted the tournament before, had an equal claim to the first-of-a-kind mantle. Once the furore over the vote-rigging allegations had passed somewhat, doubts over the climate came to the fore, regardless of Qatar’s plans to construct giant air-conditioned stadiums powered by renewable energy.

Frank Lowy, chairman of Football Federation Australia, said a tournament held in the northern hemisphere winter would suck cash and attention from Australia’s domestic summer league.

Football is nothing if not big business, on a grand scale. So last month, FIFA took the democratic option by choosing to consult on the date switch, underlining that its call “would be given the necessary time to consider all of the elements.” No decision will be made before next year’s Brazil tournament.

In the meantime, Qatar faced highprofile global criticism on labour conditions

FIFA President Sepp Blatter displays documents while addressing the media after a meeting of the executive committee in Zurich on October 4. FIFA members said they needed more time to decide whether to vote that the 2022 World Cup in Qatar should be staged outside the traditional June-July period and a final decision on the matter is unlikely soon. (Image Reuters/Corbis)

The emergence of doubt over Qatar’s selection for 2022 by FIFA was inevitable. among migrant construction workers – a long-standing issue across the Middle East. Again, despite that private sector contractors were at the heart of the allegation, the mud hurt, and Qatar was forced by the glare of the global media spotlight to react, dispatching relevant government authorities to look into the treatment of foreign workers by private sector employers.

Faith

Each allegation, whether just or not, carries with it a certain weight of doubt, and at its height, concerns were being aired that the sum total of allegations could reach a critical mass at which point Qatar’s very right to host the tournament could be questioned.

But in this case, the motivation behind both Qatar’s original bid and FIFA’s original decision, stands as firm today as it did on December 2, 2010.

The Arab region, despite its inherent political volatility; despite its ongoing race against time to develop and integrate its economies with those of the globe on a sustainable footing, and despite its social, cultural and historical differences with the rest of the planet, deserves its chance to welcome the world.

The 2022 World Cup in Qatar could mark the pinnacle of a glorious 40-year Arab integration drive that has seen the region inarguably attain global recognition and, in some fields, preeminence.

It was a long time coming. But three years ago Qatar’s commitment earned FIFA’s faith. Now it is up to Qatar to prove that it is worthy.

The Edge | 51

traffic

traffic Technology

Masarak’s Abdulaziz Al Khal tells The Edge how home-grown intelligent transport systems are set to change the future of commuting in Qatar

business interview | mobile technology

Masarak is a Qatari government initiative that aims to leverage technology and create intelligent and safer transport management systems for Qatar. Abdulaziz Al Khal, the director of Masarak, sat down for an exclusive interview with The Edge to discuss how mobile technologies might transform the way we drive and in the future, help make Qatar’s dire traffic jams a thing of the past. by Shehan Mashood Masarak is part of the Qatar Mobility Innovations Center (QMIC). What does that entail?

Qatar Mobility Innovations Center (QMIC) is a not-for-profit research and development centre launched in 2009 as an outcome of an innovative partnership between Qatar University and Qatar Foundation. The centre is legally owned by Qatar University but operates independently and autonomously.

Could you tell us about Masarak and some of its initiatives?

Masarak is a portfolio made up of a data collection platform and a suite of integrated services to serve three market segments, namely; intelligent transportation, logistics management, and road safety. Under each of these segments, Masarak has a number of services that it offers to its customers.

These services include applications such as iTraffic, iTrip, iFleet, iDispatch among many others.

Are these technologies being developed based on local needs?

QMIC is very careful to only deliver mobility

solutions that are needed in Qatar. As part of our product-creation process, we identify gaps in the market for missing mobility solutions and try to fill those gaps. For instance, we recently launched a much-needed road safety initiative called Salamtek that helps reduce traffic accidents by decreasing distractions caused by mobile phones while driving.

Who are you targeting with the Salamtek application?

We are promoting the application to all driving adults. However, adults in the age range of 18 to 30 years probably need such a safety service most, since that is the age category that is at highest risk as revealed by statistics in Qatar’s national road safety plans.

What is the role ministries play when you partner with them?

We are very happy to partner with the Ministry of Municipality and Urban Planning (MMUP) on Masarak and we are proud to say MMUP is a co-owner of Masarak.

Clearly, Masarak is a national asset and will serve all entities in Qatar from the governmental sector to enterprises and

Masarak’s director Abdulaziz Al Khal tells The Edge that they are in talks with many government initiatives about sharing the traffic data the company collects which can support planning activities in the country.

54 | The Edge

consumers. MMUP saw a great benefit to the ministry and to the country in creating mobility innovations for transportation locally, to address the growing need for such solutions to manage traffic and to create tools that can help in urban planning, for analytics, and for many similar perfect reasons.

The Labeeb platform developed by QMIC underpins Masarak. What is this?

Labeeb is an intelligent data collection and machine-to-machine services platform.

Labeeb can be thought of as the brain of the Masarak solution and other mobility solutions that QMIC delivers. It was named ‘Labeeb’ which in Arabic means ‘intelligent’ to reflect that it provides a layer of intelligence to the data it receives and processes. The way Labeeb works is as follows: It receives the raw data through different sources and devices whether it is roadside sensors, mobile sources, or GPS. It picks up all the raw data and transforms it to relevant information. Everything we develop requires Labeeb, so Masarak utilises Labeeb’s intelligence platform to provide its own services.

Is the data that is collected stored somewhere? Is there historical analysis?

Absolutely, we are dealing with two big trends or concepts in the global market, which is Big Data and Data Intelligence.

QMIC receives and stores millions of records on a daily basis and we have records that go back to over a year, and we keep accumulating more records everyday, every month and every year. The idea is to build a rich data bank that can be used to draw trend analysis and historical data views from it, among other studies.

Do government institutions request this data for planning purposes?

They do, and we are in talks with many government initiatives. Considering the country is preparing for the 2022 World Cup with infrastructure building, the planning authorities need this rich traffic

Masarak’s iTraffic app in numbers

The iTraffic app provides real-time data on traffic

36,225

Users have downloaded the iTraffic app Between September and October there was a Traffic in Doha has been especially congested in the past few months as major road construction projects increase. According to Masarak statistics, their iTraffic application which provides users with real-time traffic data has seen a 150 percent increase in usage over the past two months.

300%

increase in downloads and

150%

increase in active users Source: Masarak

databank to perform analysis and studies that support their planning activities.

Are you pushing consumers in the market to use the technology, specifically the applications you have developed?

We believe everyone in Qatar will need to use certain aspects of the technology in one way or another. Consumers, as one of the sectors in the market, will definitely benefit greatly from certain services offered by Masarak, and at this time, we have exposed some useful applications to consumers to use for free, such as iTraffic, iTrip, and not to mention the Salamtek application.

Could you talk about some of the future technologies being developed?

QMIC is working on a number of technologies to be introduced to the market in the coming years. As an example, QMIC is currently working on the connected vehicles initiative and on the eCall initiative. Many other technologies are planned to be introduced

by QMIC in the future as well, such as a smart parking concept.

How does the connected cars technology work?

The idea of connected cars (or car-to-car and car-to-infrastructure) concept is to prevent traffic accidents from occurring by allowing cars to communicate with other cars or communicate to infrastructure.

That would require having the capability installed in every manufactured car, and having the entire infrastructure in place in the country to provide that kind of setup, which, once installed in all of the vehicles, could potentially reduce accidents by 81

“We create products that are 100 percent built in Qatar.�

percent, according to the US Department of Transportation statistics.

And what about the eCall system, how does that work?

The connected cars technology is preventative, but eCall is a reactive technology. It is a global initiative which we are participating in. It is a technology for post-accident response. As you know, right now there is no clear visibility for the authorities on where an accident has happened. Maybe manually through cameras or they have to wait for a call.

In the future, that would be improved to a point where if there was an accident, the authorities would know exactly where the accident has happened instantaneously.

So again statistically, the potential of the time lag between when an accident occurs and how soon authorities get to it could be reduced by as much as 51 percent, so half the time. There would be a much higher reactive and visibility rate, and it is a technology being developed for emergency responders.

Are there plans to commercialise the venture? And is there scope for this in other parts of the region?

We have a long-term commercialisation plan for Masarak. Currently, we are aiming to commercialise it in the Qatar market, but in the long term we are hoping to lead it towards expansion in the MENA region and finally on a global scale as well.

The Edge | 55

Qatar’s creative imperative?

feature story | advertising industry

Is there, upon closer scrutiny, a clear mismatch between the nature of Qatar’s marketing culture and the maturity of its advertising market? Local industry experts concur that a contributing factor to the state of the industry here is the predominance of the nation’s state-owned energy sector, which is bolstered by global demands in captive markets and thus ostensibly does not need to rely as much on advertising, especially domestically. A lack of understanding of the power of advertising and brand building across many mediums is another factor. But with diversification of the economy as a stated objective of the country, which assumes strong brands in the other sectors of the economy, where does Doha’s advertising industry stand? Could brand building campaigns ever be shaped here that merit comparison with agencies based in New York, London, Frankfurt, Hong Kong or Singapore? The Edge’s Aparajita Mukherjee investigates.

A

dvertising and marketing activity in any country is measured using various metrics – total spend, print spend and spread of spend across the dominant marketing media (print, digital, outdoor and audiovisual, etcetera). While there is a consistent dearth of reliable data on online media spend in Qatar, an issue highlighted at the recent third Qatar Media Industries Forum (QMIF) hosted by Northwestern University Qatar (NUQ), data from the Pan Arab Research Center, at the QMIF projects that Qatar’s advertising spend across

traditional media will be around USD634 million (QAR2.3 billion) for 2013.

By comparison, total media spend in the United Arab Emirates, a fellow Gulf Cooperation Council (GCC) country with roughly five times the population of Qatar and hosting arguably the most sophisticated media sector in the region, is set to be USD1.6 billion (QAR5.8 billion) for the year. This is only slightly more than twice that of Qatar, which, given the economic strength of the country, is not much of a surprise.

Many retailers in Doha use advertising and marketing extensively in the daily newspapers. But if one analyses the messages that these advertisements have carried, it has been restricted to sale announcements, which are time bound and arguably do not contribute to any long-term brand building exercise. (Image Corbis)

58 | The Edge

However, a real reflection of Doha’s marketing sector emerges when you dig deeper into the figures. Qatar’s newspaper media spend in 2013 has been estimated to be more than USD27 million (QAR1.9 billion) or 82.6 percent of the total media spend, according to figures revealed at the QMIF. With newspaper sales in sharp decline in most established economies, by comparison this is an enormous figure. For example in the United States, newspaper advertising total market share predicted by emarketer.com for 2013 is only 10 percent of the total.

What is clear is that Qatar’s marketers are disproportionately reliant on a marketing medium that has fallen largely out of favour in established economies, indicating an ostensibly archaic mindset when it comes to marketing as a sector that needs to mature and catch up with the rest of the world. But apart from the numbers, the diversity of industries that are regular advertisers are also an indicator of the maturity of the local advertising industry. Scanning the advertisers in the

“If media owners want to sell more advertising, they have to prove that advertising can help the brand achieve its business objectives.”

– Kirby Kearns, managing director, Resolution Productions.

advertising industry | feature story

print media, those The Edge approached in Qatar’s creative marketing industry feel that a few specific sectors such as automotive sellers, real estate companies, banks or the retail industry have a consistent presence.

So why do other sectors, like trading companies or logistics companies not advertise? Is it because of assured sales or is it to do with a certain mindset?

According to industry experts, one factor delaying the maturity of the Qatari advertising market can partly be attributed to the fact that experienced marketing professionals are rarely on the board of directors of companies. As a consequence, many organisations lack strategic marketing leadership. Many brands in Qatar still do not appreciate that a company’s brand attributes (such as the company logo, the colour, the message or what the company wants itself to be perceived as by its consumers) are essential to how it projects itself to the world.

Client brief

In advertising, an effective creative delivery is a byproduct of a great client brief, say media professionals. Unless there is absolute clarity from the advertiser in terms of how they want their brand to be perceived and experienced by the consumer, it is tremendously challenging to meet the consumer’s expectations of the brand through advertising. This, in itself, is linked with the standards of the industry and the level of general understanding of media marketing of both the consumers and the advertisers.

Kirby Kearns, the managing director of Resolution Productions, a Doha-based video production company which recently won two Cannes awards for local corporate videos, says that added to this is the reality of media owners themselves doing little to help the cause of increased advertising by [not supporting] research on the efficacy of advertising. “If media owners want to sell more advertising space, they have a responsibility to prove to advertisers that their medium can help a brand achieve its business objectives.”

Many in the industry agree with this sentiment. As a whole, advertising and related agencies have a responsibility to educate companies on the benefits of advertising and support their efforts to generate an appreciation that building one’s brand is not just a responsibility of a company but in fact a necessity toward building long-term shareholder value.

Hussein Fakhri, CEO Agency 222, says that some companies in Qatar treat advertising as a luxury and are dependent on relationships and word of mouth for sales.

QAR

1.9

billion

Qatar’s spend in newspaper advertising in 2013.

Compared with the West, representatives of the industry agree that Qatar’s media industry is in relative infancy since it not only lacks mature, local players and is driven by agencies that are branches of international agencies, but also because advertising has not always been considered the marketing medium of choice here in Qatar when compared internationally.

The latter is, in part, a result of not seeing advertising as a contributing factor to increasing sales value of products. “The marketplace here is also familiar with existing styles of trading where established local names hold brand equity,” says Toby Hart, head of strategy at Adabisc, a Qatar agency dedicated to branding and communications. Lack of competition, he adds among service providers also impacts the industry. Being driven by family-owned businesses, which possess a monopoly over certain brands and even product categories, the necessity to advertise and make their wares more popular was never felt in Qatar.

Analysing the client mindset, Hussein Fakhri, CEO of Qatar advertising agency Agency 222 informs The Edge that some The Edge | 59

feature story | advertising industry

a host of further reasons. Firstly, advertising is mainly for large volume or expensive consumer items, and most companies are either small and/or business-to-business and may not need to advertise in general dailies or magazines since they have niche media outlets like industry newsletters to fall back on. Secondly, advertising is still considered expensive relative to the immediate gain.

However, the third, in Prest’s opinion, does go back to the awareness issue, in that the market is relatively unsophisticated and even firms that may benefit from advertising lack an understanding of the potential impact that it can have on the company’s return on investment.

Lack of communication

Roula Zinati Ayoub, general manager of 60 Degrees, says that agencies such as hers work to offer solutions across all media.

companies treat advertising as a luxury and are dependent on relationships and word of mouth to promote sales. He adds that in mature markets, a widely acknowledged truth is that advertising is a necessity and has a direct correlation to sales and commercial success, though some local industry leaders are yet to appreciate these gains.

Lack of media smarts in certain companies is not the only factor when it comes to advertising. Michael Prest, president of the Gulf region at public relations consultancy Citigate Dewe Rogerson, says that the decision to advertise, depends on

With a predominant share of the gross domestic product (GDP) from oil and gas (57.8 percent in 2012, according to Qatar Statistics Authority), advertising industry experts agree that this does have an impact on the necessity of advertising as a medium of communication. They feel that the wealth generated by these sectors offers Qatar companies within them a privileged position where aggressive marketing has, to date, not been critical.

At the same time, however it would be naïve to assume that this would remain prevalent in the future, since markets are not static and industries need to constantly evolve to remain relevant. “Everything that Qatar is doing in terms of international positioning,” says Hart of Adabisc, “and development of its ‘global brand’ status makes it clear that there is absolutely no blinkered thinking in the minds of our

Kirby Kearns, managing director of Resolution Productions says that CSR campaigns of energy companies do little to augment communication about corporate brand attributes.

60 | The Edge

Kulluna - TheEDGE Mag FA OL.indd 1

7/8/13 3:57 PM

‘Kulluna’ in Arabic means ‘all of us’ and is a health and safety awareness campaign, launched in May 2013.

market. For this reason I am confident that a focus on advertising will come to the fore in Qatar sooner rather than later.”

For others such as Mladen Erjavec, CEO, DTM (a media production company), in Qatar personal connection and trust are still seen as much more important to gain and keep the market share than branding and advertising. In his view, business promotion and word-of-mouth marketing that is done at the ‘majlis’ is still more effective than, say, a TV marketing campaign. “And much cheaper, obviously,” he adds.

An offshoot of communication but with a distinct objective, say the media agencies, are the corporate social responsibility (CSR) programmes of energy companies which bring them closer to the communities they operate in and to consumers to show that they are now more conscious of the impact the industry has on the environment and society as a whole. This has created an environment where different advertising and communications channels that rely on the human element, are more accepted, allowing for personal messages that are impactful and far-reaching. “That’s why you will find all the major oil and gas companies in Qatar associated with specific community outreach themes, be it education, health, sports, or environment,” says Fakhri of Agency 222.

However, Kearns of Resolution Productions says that CSR campaigns do little to augment communication about corporate brand attributes to either the local community or the world at large. These organisations have wonderful stories to tell, in Kirby’s opinion, but it is a shame that the

advertising industry | feature story

Prominent Qatari advertising campaigns in 2013 HE Sheikh Abdullah bin Mohammed bin Saud Al Thani, chairman of the board of directors, Ooredoo with Lionel Messi, brand ambassador Ooredoo. The partnership between them hinges on a common belief in enriching the lives of people around the world. This is a classic case of one strong brand image having a positive effect on another. (Image Reuters/Corbis)

energy companies don’t talk about it more through their advertising. “One just has to make a comparison with international oil and gas brand values. Of the top 10 most valuable oil and gas brands in the world, not one Qatari company is listed,” he says.

Channels of communication

With cluttered newspaper media in Qatar, the question naturally arises if the bias towards the medium works against the development of other channels of communication.

Agencies such as 60 Degrees work to offer solutions across all media, says Roula Zinati Ayoub, general manager – from traditional campaigns through branded digital content to experiential marketing and educating clients on the comparative advantage of media use, which will help them make an informed choice.

Commenting on the predominant

Tele QAR vision 105 milli on

QA Ma R9 ga 8. zin 3m e illi o

Radio QAR25.5 million

or on tdo illi Ou .7 m 4 17

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Forecasted media spend in Qatar 2013

n

Newspaper QAR1.9 billion

Source: Pan Arab Research Center

media used in Qatar, Hart of Adabisc says, “Due to the heat, people spend more time in cars unlike our European counterparts who mass commute on public transport. So our communication approach has adapted to our surrounds here in Qatar.”

Quoting the recent survey by Northwestern University, which shows that online penetration is at 86 percent in Qatar (the second highest after TV which is 90 percent), Fakhri of Agency 222 is of the opinion that print is still powerful among specific age groups. “So the facts tell us that we should not dismiss print but instead ensure that it goes hand in hand with other advertising and communications channels – outdoor, digital or any other.”

However, Prest of Citigate Dewe Rogerson feels that radio and TV, for instance, are staples in more mature markets but have relatively less following in Qatar whereas digital is growing rapidly, something which may not have many parallels in world media trends.

Building brands

The primary purpose of advertising – some might say the most important – is building a visible marketing equity in the long term, to aid in building the overall brand. Given the Qatari preference for and knowledge about brands in the international markets (which have propelled investment decisions such as Harrods in London or the LVMH group in France), why does Qatar lack many strong domestic brands?

Some Qatar-based agencies feel that brand building is a process that many companies may not consider as an immediate priority. However, Hani El Korek, general manager, Al Mana Media

• Qatar Airways/FC Barcelona • Commercial Bank of Qatar • Ministry of Interior ‘One Second Campaign’ for road safety • Ooredoo rebranding • Kulluna for a Healthy Heart

12%

Percentage increase in Internet advertising in Qatar in the first quarter of 2012. argues that brand building eventually might succeed on the back of one positive factor in the local mindset. Some clients, he says, see advertising as an investment and not an expense.

Citing the case of electronics sector firm TechnoQ, Erjavec of DTM says that building a brand does not necessarily have to include advertising, either. “They built their whole brand by always insisting on quality of service and reliability. I have never seen a single advertisement from TechnoQ in papers or on TV, but literally everybody in Qatar knows that they’re guys to call if you need quality AV installation,” he says.

For Prest, some companies in Qatar are very visually brand conscious such as Oreedoo. Building a brand takes time and many companies in Qatar are small in size and young in age, he adds, and have not reached that degree of maturity. But agencies such as Agency 222 also point out another interesting trend: clients might not be fully aware of what brand building entails but they have a very clear vision of where they want to take their companies.

It is here, says Fakhri, that the role of the communications specialist comes in.

“It’s all about understanding these needs.

Clients know where they want to be and need the right partner who will help them get there. Strong agencies should support clients on that journey, ensuring they meet their business and communications objectives.”

The Edge | 61

Strategising

growth people and relationships: The Main Pillars of al khaliji Bank 62 | The Edge

financial services | business interview

In such a fiercely competitive environment as Qatar, it can be challenging to drive a relatively young bank amid so many established operations in the industry. But for someone such as Robin McCall, group chief executive officer of Al Khalij Commercial Bank (al khaliji) QSC, the algorithm of growth comes down to a simple yet effective approach – strategy. In an exclusive interview with The Edge, McCall discusses his vision for the bank and what he calls his most important asset – the people – who are responsible for executing the plans for the institution. by Aparajita Mukherjee

F

irm belief or conviction is what is needed to carve out an institution and create something that is clearly different from the rest of the market. Robin McCall is convinced that for a young bank such as al khaliji, it has got to be the business focus. Once the core niche has been identified, it is more a question of fine-tuning it. al khaliji picked its corporate focus right at the beginning, and left its vibrant personal banking division to concentrate on premium and private banking customers. Identifying the sectors that al khaliji concentrates on, McCall says that mass retail is not, and never was, a target segment for the bank.

“From the outset, our aim has been to differentiate ourselves in the market and to build a bank based on the long-term principles of expertise, stability and trust. We maintain an unwavering focus on specific markets and concentrate on achieving deep penetration in select industries. We are a Qatar-centric organisation and as such align ourselves closely to the local economy. As a wholesalesector led bank, our two major tiers are corporate banking and treasury, complemented by a third tier which focuses on premium and private banking,” he explains, adding that the bank is exclusive and deals only with chosen customers. “Admittedly this in itself is a tactical distinction that separates al khaliji from other banks in Qatar, and this approach is highly significant given the competitive business climate that exists in the local market,” he says.

In the last 12 to 18 months, competition in the banking sector has increased in line with the lack of expected growth in certain sectors, specifically in infrastructure. McCall says that all the banks have been anticipating projects to move to the award stage, and given that there have been some delays in reaching this which is more a result of scheduled planning in line with the new development plan, competition has increased.

“It is the fluidity of the geopolitical, economic and competitive environment that necessitates al khaliji to reevaluate and refine its business strategy every year to ensure that it remains in sync with the economic realities and drivers of the regions we operate in,” says McCall. “In a way it’s a maturity curve. Every time we do this exercise, we come up with lessons learned and we up the game next time round. There is no doubt it reinvigorates the organisation The Edge | 63

business interview | financial services

and ensures we continuously pay due attention to current developments. This annual process also keeps the journey more exciting.”

Tracing the history of al khaliji as a bank born in the middle of the financial crisis of 2008 and 2009, McCall says that by the nature of its small size, the bank could afford to be flexible enabling it to change its business direction quickly and align itself to the current scenario. “As we were a new bank,” he adds, “and relatively small at the time, we could be nimble and adjust our strategy and governance structure, and most importantly source the right intellectual capital to drive the implementation and execution of the strategy going forward.” al khaliji’s success is a testament to its people; McCall cites that consistently through 2009, on a compounded annual growth, profitability has grown about 45 percent. Elaborating on this, McCall says, “What is fundamental to any strategy is active empowerment of everyone in an organisation. This engagement culture counts for a lot and remains key to successful implementation.”

McCall elaborates on its hiring focus, saying that the bank carefully screens to ensure it employs the right people. “We strategically invest in our team by attracting experienced and reliable resources.

Factoring in a multicultural dynamic is very important to us also and we strive to achieve an appropriate diversity of age, ethnicity and gender. We have been very successful in this regard and currently employ 36 different nationalities. I am of the opinion that in any interview process, we are able to unearth the technical knowledge that a potential candidate may possess. The real challenge lies in choosing candidates that fit the specific culture

Given the overall climate of anticipation for projects being launched, the Qatari market has seen greater money supply and a resultant pressure on margins, says Robin McCall, group CEO of al khaliji.

64 | The Edge

“From the outset, our aim has been to differentiate ourselves based on the long-term principles of expertise, stability and trust.”

financial services | business interview

and values of al khaliji, which is one more thing which sets us apart from the rest in the market,” he says adding, “I think what ultimately keeps us together is our values and we need to look at those values in terms of how we interact with both internal and external stakeholders. All our people must have a very client-friendly approach, this is a prerequisite.”

Acquisition history

Having acquired BLC Bank (now al khaliji France) in the fourth quarter of 2008, with a network of five branches, the bank attained a presence in France and the United Arab Emirates (UAE). “We view the UAE as our second home market while Paris has always had close economic and cultural ties with Qatar and the Gulf Cooperation Council (GCC), so it’s a good fit,” says McCall.

Commenting on how the acquisition of al khaliji France has added value to the institution, McCall is of the view that it brought with it a loyal and longstanding customer base to the bank. “We undertook some business restructuring, systems integration, process enhancements and generally benefited from synergies to improve efficiency in a manner that would allow us to build scale. This business now forms an important pillar and currently contributes 17 percent of group revenues.”

McCall rules out other acquisitions for the time being and says that the predominant attention will be on Qatar in terms of delivering organic growth in select market segments. He is enthusiastic when he outlines several future ambitions. “It will be a combination of preferred customer acquisition and profitable balance sheet growth with a focus on infrastructure financing leading up to the 2022 World Cup and the 2030 National Vision. We will continue to broaden our income streams and deliver a large recurring revenue base to support our long-term growth objectives.

Strengthening our brand equity to create value and build special relationships with our customers, which extend far beyond the product or customary banking connection they have experienced to date, is a key objective of ours.”

Liquidity and margins

Regarding the level of liquidity in the market and its impact on the bank’s margins, McCall says, “We are in the midst of an unprecedented structural growth story that will transform the face of Qatar. All banks are

geared up for the large capital expenditures associated with the country’s infrastructure sector and have factored these into their financial targets. “Likewise,” he continues, “shareholders anticipate strong returns over the coming years. While there has been acceleration in the level of contracts awarded in the first half of this year, the interval between planning and execution has been somewhat longer than anticipated.

These factors have combined to generate high levels of competition within the banking industry and exert downward pressure on margins, as participants attempt to meet expectations.”

It is the competitive climate that can usher in consolidation in the banking industry, according to McCall. Adding to an already existing body of discussion and debate that explores the possibility of consolidation within the market, he says, “I believe that there is room for consolidation particularly in the retail sphere for two midtier banks to come together. The resultant economies of scale and combined market share would most likely be compelling.”

“What is fundamental to any strategy is active empowerment of everyone in an organisation.

This engagement culture counts for a lot and remains key to successful implementation.”

Achievements of the bank

To a large extent, it is strategy that dictates what the bank has achieved over the past years. McCall attests the achievements and says that it is a combination of factors.

In McCall’s view, in 2010 al khaliji was able to achieve an A- rating by Fitch giving the institution an edge whereby it generated confidence from peers in the market and preferred clients who would rather deal with rated entities. “The achievement of the rating went a long way in terms of providing confidence to the external community and provided momentum to enable us to transact and engage more with certain preferred corporates and overseas banks.

The credit rating puts us in the international arena in terms of doing business.”

Innovation in product offering has also been a plan of al khaliji, he says. The bank’s belief in modern alternative channels as an operating model, has stood the test of time since it is based on customer needs, adds McCall.

McCall is thoughtful when he states, “As the English philosopher Francis Bacon said, ‘He that will not apply new remedies must expect new evils; for time is the greatest innovator,’ al khaliji’s competitive priority is to provide intelligent and flexible solutions to its customers and a commitment towards an optimum banking experience.

We consistently strive to deliver innovative products and services to our clients. We

45% Compounded annual growth rate of profit of al khaliji.

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al khaliji has believed that it was absolutely incumbent on them to advance a ‘Next Generation’ bank which made them see the limited benefits and negative downsides in replicating the physical models adopted by others.

apply the principles of ‘Kaizen’ and aim for continuous improvement each day.”

The innovative spirit of the bank that has been positively recognised and in 2013, al khaliji received the coveted titles, Best Premium Bank Service Award, the BestStructured Product and the Best Premium Bank in the Middle East, by the Middle East Banker Awards. This, according to McCall, is a strong indicator of the success and innovation of their distinct operating model.

It is because of the alternative channels that al khaliji had deemed that the bank could maintain a low physical footprint by way of a branch network. Disclosing the possibility of additional branches in the future, McCall lists the areas where three

qar

1.8 billion

Size of al khaliji’s debut Euro Medium Term Note programme issued in October.

66 | The Edge

new branches have been earmarked. “The first is located at City Center mall, the second in the Pearl-Qatar, and a third branch and proprietary building situated close to the Landmark shopping mall.”

Reflecting on the logic behind bank’s branch network, McCall says, “al khaliji was uniquely positioned given our youth when we formulated our initial strategy in 2009.

We believed it was absolutely incumbent on us to advance a ‘Next Generation’ bank, thereby creating a unique platform for products and services that set it apart from the competition. We could see limited benefit, and only negative downsides, in replicating the physical models adopted by others. The Board remains passionate that ‘Next Generation’ best defines the style and construct of the bank. Clients are serviced via a fully-fledged internet offering, mobile banking, highly qualified relationship managers and a carefully planned physical branch network.”

McCall refers to another instance of al khaliji’s financial strength when he says that if one were to look at the mandated lead arranger (MLA) market in the GCC (which generally has the leading role in arranging and structuring), al khaliji continues to be in the Top 10 MLA in the region for syndications.

“This certainly shows the intellectual capital we have is definitely allowing us to support, and make a difference to our customers in terms of meeting their needs and requirements,” he says.

In October 2013, the bank issued its debut USD500 million (QAR1.8 billion)

“Building special relationships with our customers, which extend far beyond the product, is our key objective.” bond under its Euro Medium Term Note Programme, which makes it easier for issuers to enter into foreign markets.

“Our bond issuance was very successful,” explains McCall, “market demand was exceptionally high representing seven times oversubscription. The transaction was allocated to investors across the Middle East and the United States, reflecting the development and growth of al khaliji’s franchise. In addition to achieving the strategic goals of adding duration to the liability side of the balance sheet, to complement financing infrastructure projects with long tenors, we have diversified our investor base.”

Another goal the organisation has set for itself is to achieve a greater commercial franchise. “We want to grow market share in our preferred customer segments.

“I believe this is a pragmatic way to look at things; we set for ourselves a percentage target which is realistic and achievable. All of us in the bank want our relationships with our customers to be more holistic and intrinsic, to the extent that we become their bank of first choice,” says McCall.

Looking to the future, the group CEO closes, “We will continue to build a company based on the long-term principles of expertise, stability and trust.

Our strategy will always be anchored on actions and not just words. We don’t want to win the next mile necessarily. We want to win the marathon.”

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Road-test your entrepreneurial dream 68 | The Edge

entrepreneurism | business management

“W

Starting up a business is a risky prospect. Without passion, conviction and tenacity, few entrepreneurs could fulfill their entrepreneurial dreams.

The London Business School’s John Mullins discusses a more valuable trait only the very best entrepreneurs possess – a willingness to wake up every morning and ask a simple question: “Will this work?”

Look for the elements of the market, industry, or team that cannot be fixed, by shaping the opportunity in a different way.

ill this work?”

Aspiring entrepreneurs ask this question because they know most business plans never raise money. They know most new ventures fail. Most of all, they do not want to end up starting and running a business that consumes years of their energy and effort, only to go nowhere in the end. Despite asking this crucial question every day, their passion remains undaunted.

They want to know why they might be wrong before bad things can happen.

If they can find flaws before they launch or before it takes down their new business, entrepreneurs can often work around them. They can modify their idea. If the flaw they find appears to be truly fatal, they can abandon the idea before launch, in some cases, or soon enough thereafter to avoid wasting months or years in pursuit of a dream that simply would not succeed.

Better yet, if after asking this daily question and probing, testing, and experimenting, the signs remain positive, they pursue their opportunity with renewed passion and conviction.

In today’s lean start-up world, the urge to launch right away and just learn as you go, while appealing in many respects, is all too likely to result in a waste of your entrepreneurial energy and talent. Is there a better way to go?

An idea that worked

In 2011, Qatari Diana Al Dajani worriedly saw her young son struggle with his Arabic homework. In an effort to counter his increasing alienation towards the language and to bring him closer to the Qatari culture, Diana searched online for any educational games that would make learning Arabic fun. Disappointed with the dull children’s options available online, Diana decided to use her computer engineering background to develop an Arabic learning game that was an instant hit with her son and made learning enjoyable for him.

That is how eduTechnoz.com was born.

A curriculum-based gaming platform, eduTechnoz aims to inspire children to fall in love with Arabic and now offers more than 150 games for children aged three to seven. Designed on the basis of the standard Arabic curriculum taught at most Middle Eastern schools, eduTechnoz

also provides monitoring tools to report children’s learning progress to teachers and parents and recommends specific games to target individual weaknesses within the language.

To date, eduTechnoz has won several entrepreneurial and business plan awards, has more than 20,000 registered users, and plans to go international starting 2014.

Understanding opportunities

Such opportunities are best understood in terms of three crucial elements: markets, industries, and the one or more key people that make up the entrepreneurial team.

The seven domains model (see graphic overleaf) articulated in The New Business Road Test: What Entrepreneurs and Executives Should Do Before Launching a Lean Start-Up, brings these elements together to answer the crucial question that aspiring entrepreneurs must ask themselves every morning: Why will or would not this work?

The model offers a toolkit for assessing and shaping market opportunities and a better way for entrepreneurs to assess the adequacy of what they bring to the table as individuals and as a team. The model also outlines a customer-driven feasibility study to guide entrepreneurs’ assessments before they invest precious time and effort in writing a business plan.

At first glance, the seven domains model simply summarises what everybody already knows about assessing opportunities.

Upon more careful scrutiny, however, the model goes further to highlight three crucial distinctions and observations that most entrepreneurs – not to mention many investors – overlook: • Markets and industries are not the same.

• Markets and industries must be examined at both the macro- and microlevel.

• The keys to assessing entrepreneurs and entrepreneurial teams are not found on their resumes or in character surveys or psychological tests.

Moreover, the model’s seven domains are not equally important. Nor are they additive. A simple checklist would not do.

In fact, the wrong combinations of them can kill your venture. On the other hand, The Edge | 69

business management | entrepreneurism

Abandon the idea early if you find fatal flaws.

Why wouldn’t my idea work?

In examining your opportunity through the seven domains lens, concerns will inevitably crop up: the potentially fatal flaws that can render your opportunity a non-starter.

The key task is to find any major flaw that cannot be resolved, the opportunity’s Achilles’ heel. Thus, the crucial things to look for on the downside are elements of the market, industry, or team that simply cannot be fixed by shaping the opportunity in a different way.

If flaws that cannot be fixed are found, the best thing to do is to abandon the opportunity at this early stage and move on to something more attractive. Persisting with a fundamentally flawed opportunity is likely to have one of two outcomes, both of which are exceedingly unpleasant: The best and most likely outcome is that experienced investors or other resource providers – suppliers, partners, and so on – will see the flaws that you have ignored and refuse to provide you with the resources you need, despite your business plan that papers over these flaws. Fortunately, their refusal will save you the agony of investing months or years of your life in a lousy business, though your efforts in preparing and pitching your business plan will have been wasted. The harsh reality is that this is the case for the majority of business plans, which seek to develop opportunities that are fatally flawed.

70 | The Edge

Market Domains

Industry Domains

Macro Level

Market Attractiveness

Industry Attractiveness

Mission, Aspirations, Propensity

Ability to execute on CSFs for risk

Team Domains

Connectedness up, down, across value chain Micro Level

sufficient strength on some factors can mitigate weaknesses on others. Attractive opportunities can be found in not-soattractive markets and industries.

As the seven domains graphic shows, the model comprises of four market and industry domains, including both macro and micro levels, and three additional domains related to the entrepreneurial team. These seven domains that emerged from my research address the central elements in the assessment of any market opportunity: • Are the market and industry attractive?

• Does the opportunity offer compelling customer benefits as well as a sustainable advantage over other solutions to the customer’s needs?

• Can the team deliver the results they seek and promise to others?

Exhibit:The seven domains of attractive opportunities

Target Segment Benefits and Attractiveness

Competitive and Economic Sustainability

Excerpted from John Mullins, The New Business Road Test: What Entrepreneurs and Executives Should Do Before Launching a Lean Start-up, London: FT/Prentice Hall, 2013.

The second, though less likely, outcome of pursuing a fundamentally flawed opportunity through the business planning stage is that, in spite of the flaws, you are able to secure the resources you need and actually start the business. At some point, the flaws will appear, and you will need to scramble to recast the business before it goes under.

Can my opportunity be shaped?

The good news is that potentially fatal flaws are most often fixable. You can choose a different target market that is more receptive to your proposed offering.

The offering can be adapted to better fit market needs. The opportunity can be pursued at a different level in the value chain – as a distributor, rather than retailer or manufacturer, for example – if a different industry setting would be more hospitable. Adding individuals to help the

team deliver on the critical success factors or who brings connections up, down, or across the value chain can strengthen the entrepreneurial team.

So, road-test your entrepreneurial dream before you even think about launching a lean start-up. If the seven domains road test looks positive, you will have jump-started your journey, and you will have gathered a body of evidence with which to guide your launch. And what if you have found fatal flaws? You can redirect your entrepreneurial time and talents to another opportunity with greater potential.

John Mullins is an associate professor of management practice at London Business School.

Inside the minds of leading business figures

business insight Financing stable growth: From bonds to sukuk > 72 Richard Banks, regional director, Euromoney Conferences, talks about the upcoming Euromoney Qatar Conference 2013 to be held in December, and Qatar’s role in the global financial world.

also in this section Financial crisis changed paradigms of banking, enforcing stricter regulations

In exclusive conversation with The Edge, Jody Sanderson, managing director and head of global banking at HSBC discusses the challenges Qatar’s over-banked market faces, and how SMEs can contribute more to the economy.

(P.74)

72 Numerous high-level attendees were present at last year’s Euromoney Qatar Conference, including on the far right, now-minister of finance, HE Ali Shareef Al Emadi. A higher turn out of dignitaries and delegates is expected at the Euromoney Qatar 2013 Conference in December. (Image Euromoney Conferences)

The Edge | 71

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global finance

Financing stable growth: From bonds to sukuk Richard Banks, regional director, Euromoney Conferences, in an exclusive interview with The Edge, offers his insights on Qatar’s role in the global financial world, the future of Qatar’s financial regulation, and how the sukuk and Islamic finance market could drive growth, all in the build-up to the Euromoney Qatar Conference 2013 to be held from 10 to 11 December.

How is the agenda for the Euromoney conference decided? What will the broad topics of conversation be at this year’s conference and why?

This year, our topic is ‘global finance: reengineered,’ and we expect that Qatar will lead the worldwide debate on the new role of conventional and Islamic finance and capital markets in promoting growth.

Qatar is a vital case in point for the Middle East North Africa (MENA) region, which currently faces opportunities and challenges. It has one of the region’s fastest-growing economies, but also needs to raise significant funds for planned infrastructure mega projects.

Our Euromoney editorial team decides the tentative agenda of each conference about six months before each event, based on local and global news. As we approach the event, we discuss the agenda with our partners and constantly refine the agenda every week in response to new developments.

What impact will the change in leadership have on the economy?

The leadership change in Qatar will have a positive effect on the economy, as it shows that the leadership is wary of the risks of excessive growth, and does not want to repeat the experiences of some of its neighbours.

What have your thoughts been on the regulatory developments in Qatar since the last Euromoney conference?

Qatar continues to execute its masterplan in harmonising the national 72 | The Edge

Richard Banks, regional director, Euromoney Conferences, tells The Edge that the unified regulatory strategy of Qatar will help develop the country’s capital market and make it a regional model for financial services.

economic efficiency | business insight

regulatory authorities for the financial sector, including Qatar Central Bank (QCB), the Qatar Financial Centre Regulatory Authority, and Qatar Financial Markets Authority. These authorities have worked together to prepare a unified regulatory strategy, which will contribute to the development of the Qatari capital market and position it as a regional model for financial services. This strategy should attract funds and encourage local investments.

What are some of the initiatives the QCB is considering in developing the bond market?

QCB is considering several initiatives in developing the bond market, with two initiatives in particular that could make a major impact. The first is developing a liquid and transparent Qatari Riyal bond market, which would give the QCB the tools it needs to maintain the country’s financial stability.

The second is creating an inventory of the debt structure of Qatari banks and companies, which would enhance systemic stability and financial efficiency.

What impact will the MSCI upgrade going into effect in May 2014, have on the Qatari stock market?

At the time of the announcement, the Qatar Exchange reached its highest level in five years. The upgrade will also deliver long-term benefits to Qatar’s stock market, and make it easier for people to invest in Qatar’s companies, and benefit potential initial public offerings (IPOs). However, it remains to be seen if there will be any changes to enable more international capital to flow into Qatar’s companies.

Based on this, do you think we will see predominance in equity financing among Qatari investors?

In the short term, Qatari investors will primarily use equity financing, in the stock market meaning of the word. However, in a smaller-sized economy like Qatar, where there is no shortage of capital or liquidity, debt will always be an easier way to raise large sums. As a result, equity financing and debt – both bank debt and bonds - will remain vital for Qatari investors.

Do you think sukuk will play a larger role as a financing instrument in Qatar?

Sukuk will definitely play a larger role as a financing instrument in Qatar. At the moment, sukuk in Qatar is a seller’s market – the market demand is there. However, the

“Bank consolidation is inevitable, because banks in Qatar are in fierce competition with one another.” bottleneck is on the supply side.

Sukuk are effectively bonds, so they need more than just buyers. The market needs frequent issuance, large size, varied tenors, varied risk profile and infrastructure.

As long as sukuk can be an efficient, and competitive financing instrument, its market will continue to grow as a subset of the wider bond market.

How will the Basel III capital requirements impact local banks?

Qatar’s banking system has sound capitalisation with a capital adequacy ratio of 19 percent, according to Qatar National Banks’s Qatar Economic Insight 2013 report. However, Qatar’s banks are looking for more specific guidance from the QCB as Basel III is phased in over the next several years.

Some feel that with the concentration of banks in Qatar, there is room for consolidation. What is your take on this?

Bank consolidation is inevitable, because banks in Qatar are in fierce competition with one another, and are concerned about the long-term sustainability of compressed margins. Consolidation will enable banks to gain more customers; diversify their risk, rollout advanced technology, and enhance their liquidity, savings and geographic penetration. Bank consolidation will also enable local banks to compete against international banks.

There are some high-profile international speakers at this year’s conference, what value do they bring to the event as opposed to local speakers?

The Euromoney Qatar Conference 2013 is not solely about Qatar, it is about global issues of finance and how they affect the region, especially Qatar.

Because of this global focus, international speakers are vital in complementing our speakers from Qatar’s leading organisations.

International speakers bring a wider perspective on how global issues affect Qatar’s economy, and

in turn show the world where Qatar fits into the global financial landscape.

What does Euromoney hope to achieve through its Qatar conference series?

In 2012, we saw strong success on the first of the three-part the Euromoney Qatar Conference, with more than 600 attendees from 30 countries participating in ‘global finance: redesigned’.

One year later, the global economy is at a crucial juncture, as central banks slow their bond-buying programmes that delivered stability during the economic crisis.

Though the global financial system has stabilised since the financial crisis, economic growth largely remains elusive around the world. Despite what policy makers may claim, we are not out of the financial mess yet. Two issues that we will examine in-depth at the Euromoney Qatar Conference 2013 are the economic structure of advanced economies and their debt burden, in order to find solutions that will benefit everyone. The third Euromoney Qatar Conference in 2014 will be under the theme ‘global finance: relaunched’.

Where does the Euromoney Qatar conference fit into the regional conferences - how do they differ and are there plans for a Gulf Cooperation Council (GCC) conference?

Qatar joins key markets in the Middle East as hosting Euromoney Conferences, including the Kingdom of Saudi Arabia, Kuwait, Egypt, and Bahrain. In each of our markets, we work closely with governments, financiers and investors to ensure the events are locally relevant and meet our high standards.

Too often, the GCC is lumped together as an artificially homogeneous group, which is why we believe that an understanding of the region’s financial systems can only be gained from an in-depth understanding of each individual country.

We work with the GCC General Secretariat on a number of projects, and continue to investigate additional markets and events such as a GCC conference.

The Edge | 73

business insight | banking services

Lending norms

The financial crisis changed paradigms of banking, improving operating standards and enforcing stricter regulations In an exclusive interview with The Edge, Jody Sanderson, managing director and head of global banking at HSBC, spoke about the challenges that banks face in Qatar’s over-banked market. He also discussed how the small and medium enterprise (SME) sector can contribute more to the economy of Qatar.

“The construction sector will require working capital facilities to support the buildout of many of the infrastructurerelated projects.�

74 | The Edge

Jody Sanderson, managing director and head of global banking at HSBC, said that the local banking market has challenges at the level of competition for a market of this size.

What are the challenges that banks such as HSBC are facing today?

Globally, the banking industry is under pressure due to a number of key issues including reputational concerns after the global financial crisis, growing regulatory demands, pressure on revenue growth opportunities, constant changes in technology and higher capital adequacies

and liquidity requirements. Banks have to better manage constant change and have to become innovative and nimble.

Looking at the local market, banks in Qatar have challenges at the level of competition for a market of this size. There is evidence this has led to margin compression and pricing risk appropriately that makes the securing of transactions difficult.

banking services | business insight

Post-2008 financial crisis, have the paradigms of banking changed in any way?

The financial crisis was in many ways a wake-up call for the banking industry as a whole.

Operating standards changed tremendously with a focus on the general culture on how banks function with an increased emphasis on values and standards, regulations and compliance, customer outlooks, Know Your Customer (KYC) and due diligence for transactions.

The financial crisis exposed the vulnerability of some banks to withstand large losses from loan writedowns as well as trading losses. Regulatory changes have already been implemented and there will be more to come around Basel III that will require banks to hold more capital to allow them to withstand such potential losses in the future. This should be seen as a positive development in general as it has already led to a much stronger banking environment. The impact on return on equity of banks will be felt as it will restrict lending to some degree.

In an over-banked market like Qatar, what possibilities do you foresee for consolidation of banks?

The Qatar banking market remains highly competitive and the consolidation of banks would be a natural evolution, one that would be generally healthy for the broader banking market in Qatar.

There would appear to be many synergies that would be gained from consolidation of banks in the Qatar market given the dynamics of the local market and number of players operating in Qatar.

Banks operate on targets when it comes to lending. When it comes to Qatar, what is your take on the lending climate of the country?

The lending climate in Qatar is very healthy at the moment in terms of capacity.

However, there is evidence that the level of lending has reduced over the past year, in particular with some of the governmentrelated entities. There will be more lending activity related to infrastructure and other projects in progress or commencing in the near term. There will likely be an increased level of working capital loans required by many of the contractors and there will also be several large projectfinancing opportunities coming to market in the coming 24 months in the energy and petrochemical area. At present there

appears to be capacity to support what should be a notable increase in lending activity in the coming one to three years versus what has been seen in 2013.

Which segment will require the maximum fund deployment from banks?

The construction sector will require working capital facilities to support the build-out of many of the infrastructurerelated projects, which would be of shorter duration. Longer-term lending facilities will be required to support some of the potential petrochemical- and energyrelated projects that have been announced and likely to be taken forward in the nearterm. From a non-funded perspective, there will be exceptionally high requirements of banks related to performance bonding facilities, which is likely to greatly exceed the potential funded loan opportunities in the market in the coming years.

Compared to other regional markets, what would you list as the positives of the Qatar market?

The State of Qatar has a strong credit rating and is seen as one of the top rated counter-parties in the region.

A large number of the projects being taken forward are for government or government-related entities, which makes the risk of payment to contractors and others dealing with the government less of a concern than it would be in some other markets in the region. The Qatari leadership is focused on transparency and this will provide more comfort for existing and potential new entrants to the market looking to compete for new construction and other business activities. Qatar is seen as a safe and stable place to operate in, in a region where this has proven not to be the norm. Some of the inherent risks associated with geopolitical issues are much less of a concern in Qatar and allow for a more healthy business environment.

SMEs are still a minority in the Qatar market. How can institutions like HSBC improve their potential to the overall economy?

It is quite correct to emphasise the importance of SMEs in a growing economy.

As part of the Qatar National Vision 2030, investing in the training and supporting of entrepreneurs is a basic precondition for enabling the private sector, such as banks, to provide financial support. HSBC has an on-the-ground business banking team

that specifically focuses on SMEs with international business aspirations.

How does HSBC ward off non-profit loans in Qatar?

HSBC has demonstrated strong risk management practices globally which are used in Qatar. Throughout the financial crisis, HSBC was one of the few banks that did not require government support and was a testament to the bank’s risk management practices. HSBC has a high degree of focus on KYC and works with clients to build long-term, sustainable relationships.

What is your opinion on the corporate governance practices that are followed here?

Over the past number of years, great emphasis has been placed on embedding good corporate governance in the DNA of all companies in Qatar. A greater awareness of best practices as well as the minimum standards required has been created and there is a positive move towards implementation of these practices.

How evolved are the corporate boards in maintaining the level of corporate governance that is required today?

In Qatar, the level of corporate governance varies substantially depending on the company. There is still much work to be done as a whole on this front in Qatar.

“The Qatar banking market remains highly competitive and the consolidation of banks would be a natural evolution.�

The Edge | 75

Spillover Continued from page 51

Net Profit

Plans to increase PSG’s home stadium capacity from 48,000 to 60,000 have yet to be approved but should ultimately increase the club’s ticket sales and profitability. (Image Corbis)

million) and Norwich City at GBP17 million (QAR100 million). In a bid to join them, PSG is planning to renovate its stadium for EUR75 million (QAR377 million) over the next three years, with initial work starting in 2013. It is likely that PSG will aim to gain planning permission for a capacity of 60,000 – up from 48,000 – thus improving revenue potential from ticket sales. Another means of increasing revenues for PSG has been to raise ticket prices. Having previously offered affordable rates for a full-season subscription in an effort not to disenfranchise supporters, the club has since raised both match-day and season-ticket costs. Despite this, PSG is finally selling out home matches.

It also looks likely to be a mainstay in the Champions’ League. From a revenue point of view, reaching the semi-finals or thereabouts in every tournament, will be a real coup and a payback on the investment of the club’s Qatari ownership. To demonstrate that point, Bayern Munich, crowned European champions after defeating Borussia Dortmund at Wembley in May, received EUR55 million (QAR274 million) from UEFA. This sum consisted of EUR36 million (QAR180 million) in a range of bonuses covering the group and knockout stages, as well as EUR19 million (QAR95 million) from the television market.

Dortmund earned a total of EUR54 million (QAR269 million), which comprised EUR32 million (QAR274 million) in match payments, plus EUR22 million (QAR110 million) from the TV market. Success means PSG will also be able to demand higher fees from sponsors and corporate partners.

Jean-Claude Blanc, PSG’s general manager, believes the capital’s reputation for elegance and luxury will help it to add more high-end brands to existing partners such as Swiss watchmaker Hublot, to meet their “demand for perfection” and become an “entity recognised all over the world.” PSG can now play hardball, as seen in October, when they re-negotiated their Nike kit deal from EUR6.5 million (QAR32 million) to EUR20 million (QAR99 million) per season, with EUR30 million (QAR149 million) available if bonus targets are met.

76 | The Edge

Balancing act

To understand how PSG may eventually become profitable, it is important to also understand how football clubs account for transfer fees. Instead of expensing these completely in the year of purchase, players are treated as assets, whereby their value is written off evenly over the length of their contract via player amortisation. As an example, Manchester United signed star Dutch player Robin van Persie for GBP22 million (QAR129 million) on a four-year contract, so divided by four years, the annual amortisation is GBP5.5 million (QAR32 million).

PSG can learn valuable business lessons from Liverpool and Arsenal. Not only did the latter register the highest profit before tax at GBP37 million (QAR217 million) in the Premier League in 2011 to 2012 on the back of GBP235 million (QAR 1.4 billion) turnover, but it has also made an incredible GBP190 million (QAR1.1 billion) profit in the last five years, much of it from player sales.

PSG’s first movements resemble those of Liverpool FC’s John Henry, who favours signing top young players under the age of 23, in order to retain and maximise resale value. But PSG’s older, experienced players are seen as indispensable in the quest for silverware; Al Khelaifi insists he would not sell Brazilian superstar Thiago Silva “for even a billion euros”.

Fortunately, pricey superstars also sell merchandise. The Premier League shifted a total of five million replica jerseys worldwide last season.

Manchester United’s Robin Van Persie securing an astonishing 25 percent of those shirt sales alone.

Manchester United and Real Madrid have set the standard by offloading an average of 1.4 million shirts globally every year.

If PSG catches up, it can expect to make EUR18 million (QAR90 million), which would really help with developing a top youth team.

Former St. Etienne director of football Damian Comolli agrees that PSG’s strategy “to go and buy younger players, who could become world stars like Pastore, is the right one,” partly because established professionals yearn for the glamour of Spain or England.

Sports consulting firm Lagardère Unlimited finds that the global sports industry is growing much faster than national gross domestic product rates globally. If PSG’s high spending can help it close the gap on the likes of Real Madrid, the first club to surpass the EUR500 million (QAR2.5 billion) annual revenue threshold in 2013, then it seems feasible that PSG may eventually turn a profit without having to rely on further investment from its Qatari sponsors and may in fact set a new standard and spur other investors from the country and indeed the Gulf region and beyond to try to emulate their success.

The Edge | 77

products and reviews Montblanc’s Leonardo Edition

Montblanc’s new range of pens, Great Characters Limited Edition Leonardo, draws inspiration from the works of the Italian artist and scientist Leonardo da Vinci. The writing instrument features a cap and barrel crafted from anodised aluminium, polished platinum-plated fittings and red gold-plated gear at the end of the clip.

Handcrafted in gold and rhodium-plated, the nib is engraved with one of da Vinci’s famous drawings of a bat whose wings he studied to develop his flying machine.

Read it: The Greatest Business Decisions of All Time Looking at its title, The Greatest Business Decisions of All Time by Verne Harnish, one would assume that the editors of Fortune seem to unveil the secret recipe behind business success, when actually there isn’t one. A good decision, according to the authors, is not a single man’s idea. It takes debate – not consensus – with employees at different levels of corporate hierarchy. The greatest business decision, then, is not a matter of ‘what’ but ‘who’.

The book encourages free flow of ideas, which requires a leader to be open to others’ opinions. In fact, Jim Collins’ foreword suggests that leadership can get in the way of good decision if it bars contribution from the staff.

Instead of adopting a bland approach of communicating key ideas through managerial theories, this book builds up the reader’s interests by offering case studies from world’s leading companies. Establishing the lessons through a narrative style, The Greatest Business Decisions of All Time gives an account of what went on behind the scenes in today’s successful organisations such as Microsoft, Apple, Samsung, 3M, IBM, Ford, HP, Toyota and many others.

Every chapter starts with a brief history of the company and then goes on to introduce a unique situation that called for a radical decision or a smart idea that, when applied, led to great success.

What makes this book more appealing is the way it has been compiled.

Every chapter deals with no more than one company. For busy professionals, this book does not demand much time. With each case study featured on no more than 10 pages, readers can randomly sift through the chapters to find out more about the companies of their choice.

Available at Virgin Megastore for QR93 78 | The Edge

Panasonic’s 20-Inch Toughpad UT-MB5

Panasonic has released its Toughpad 4K UT-MB5, the world’s first 20-inch tablet with a 4K resolution display. 4K is a new digital viewing experience, which is more than four times better than HD at 3840 x 2560 pixels. The portable tablet comes with a new Panasonic electronic touch pen that provides paperlike feel for sketching, annotation or handwriting. The device also has Windows 8.1 Pro preinstalled on it.

Canon’s PIXMA MG3540 The Pixma MG3540 is a part of Canon’s latest range of all-in-one inkjet printers that are compact in design for personal and home office use. The new MG3540, which replaces MG3250, offers print, scan and copy functionality and comes in a variety of new finishes.

Wi-Fi is a key feature of this printer allowing wireless printing and scanning from multiple devices, such as PCs, smartphones and tablets. The model also supports Google Cloud Print, which enables users to print PDF and JPG attachments from their Gmail, and print from Google Docs, from virtually anywhere.

the view from doha

CARMAGEDDON! Talking about Doha’s traffic chaos has become like discussing the weather in the United Kingdom – a national pastime. Kamahl Santamaria offers some thoughts and advice on a situation that does not seem to be going away.

I

t seems like a bit of a throwaway topic for a magazine column – the traffic, and just how bad it has become, but two things have led me to write about it this month. One, the fact that it is all anyone can talk about these days. And two, the reality that this is not just a passing phenomenon and is here to stay, probably until a certain football tournament in about nine years time.

Qatar’s population as of the beginning of October was 2.04 million people.

Qatar’s car population at the same time was just over one million.

Can you imagine that! Well of course you can because you experience it… an astonishing, haphazard build-up of metal and wheels on the roads of Doha every day. And statistics prove it is only getting worse. In 2012, 5138 new cars were being registered every month. This year, it is 13,773 per month.

I feel this is hurting business. People are late to work, or are having to start their journeys unreasonably early to avoid the rush. Deliveries across town are taking longer. Missed meetings, cancelled appointments, unhappy clients and employers.

Everyone knows it is bad. In October, according to The Peninsula, “the State Cabinet raised the issue of traffic congestion on city roads”. Immediate action was called for, based on recommendations from the Advisory Council, showing that those in power are thinking the same as the rest of us.

I think that before things get any better, they tend to get worse. Proper crosssections are being constructed, but that has meant the six-month headache of converting them from roundabouts. ‘Intelligent traffic lights’ have been installed

on a widened Corniche – a process that caused disruption to one of Doha’s arterial roads. Lusail Street will one day be a multilevel expressway, but in the meantime resembles some sort of a racetrack with Arch Roundabout at its start line.

I am not trying to be an apologist, but what can we do except deal with it, and trust that things will be better once the diggers and rollers have moved on.

The simple fact is Qatar has grown so fast that it is very difficult for infrastructure plans to keep pace with the influx of cars and people. The same would be true for any other place experiencing such growth.

Now it is very rare in this column that I offer advice, but I feel a few ideas to possibly ease your journey are in order.

First, accept the situation. Make every trip count. If you can drop the kids off at school and do your grocery shopping in the same trip, that means you are making one journey instead of two. Do both of you have to take your cars out to meet for that coffee?

Buy some audiobooks. I could not believe how listening to an audiobook has transformed my car journey. They are engrossing but surprisingly not distracting, and you are feeding your brain too.

On that note, I think businesses may have to think about more flexibility in the workday. Staggered start times, later finishes, flexible hours, video-conferencing or even working from home. The alternate times could even apply to the start and end of the school day, which is a major source of road congestion.

Eventually, businesses will need to start thinking about tearing up the traditional workday.

Kamahl Santamaria is a Doha-based news anchor with Al Jazeera English and host of the channel’s business and economics programme Counting the Cost.

Traffic jams on Doha’s Corniche are a daily occurrence. (Image Reuters)

80 | The Edge