The Business Year: Abu Dhabi 2015 by Grace Cameron

ABU DHABI

2015

In This Issue FOREWORD HH Sheikh Hazza bin Zayed Al Nahyan, National Security Adviser and Vice Chairman of the Abu Dhabi Executive Council 7 ENERGY INTERVIEW GREEN FIELDS HE Suhail Mohamed Faraj Al Mazrouei, UAE Minister of Energy, on diversifying the sector 61 TRANSPORT FOCUS: KHALIFA PORT LET’S TRADE The world’s fifth most productive port is about to get even bigger 112 EDUCATION REVIEW “A” FOR ABU DHABI Classroom efforts to forge a knowledge-based economy 157

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Establishing OfďŹ ces across the UAE & Launch of Interactive Portal: Taking our Services Closer to Stakeholders

Water. Electricity. We regulate them to keep Abu Dhabi going.

The Regulation and Supervision Bureau is the independent regulator of the water, wastewater and electricity sector in the Emirate of Abu Dhabi. Our main duty is to keep Abu Dhabi running. So we plan carefully and work tirelessly in order for our community to enjoy secure water and electricity for generations to come. Get to know us at www.rsb.gov.ae

Contents ABU DHABI 2015 7 HH Sheikh Hazza bin Zayed Al Nahyan, National Security Adviser, Vice Chairman of the Abu Dhabi Executive Council • Foreword 8 Year in review

11 DIPLOMACY 11 A global citizen • Review 14 Timeline 16 HH Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE • Profile 17 M.R. Pridiyathorn Devakula, Deputy Prime Minister of The Kingdom of Thailand • Guest speaker 18 James Michel, President of the Republic of Seychelles • Guest speaker 19 A rising tide lifts all ships • Focus: Foreign aid 19 Eric Solheim, Chair of the OECD Development Assistance Committee (DAC) • Column 20 Come together • Vox populi: International relations

21 ECONOMY 21 Money talks • Review 22 Mohamed Shabeeb Al Dhaheri, CEO of Universal Group of Companies (UGC) • Column

24 HE Eng. Mohammed Al Shihhi, Undersecretary of the Ministry of Economy • Interview 26 HE Abdullah Saeed Al Darmaki, CEO of Khalifa Fund for Enterprise Development • Interview 27 Nazem Al Kudsi, former CEO of Abu Dhabi Investment Company (Invest AD) • Interview 28 Investing for the future • Focus: Year of innovation 29 HE Dr. Jamal S. Al-Suwaidi, Director General of Emirates Center for Strategic Studies and Research (ECSSR) • Interview 30 Jack of all trades • Forum: Holding companies 32 HE Butti Ahmed Mohamed Bin Butti Al Qubaisi, Director General of the Statistics Centre - Abu Dhabi (SCAD) • Interview

41 FINANCE 41 A solid print • Review: Banking 45 Philippe Ghanem, Vice Chairman and Executive Managing Director of ADS Securities • Interview

33 David Stockton, CEO of G4S UAE • Interview

46 All part of the service • Focus: Financial center

34 First for ideas • Focus: Innovation index

47 Mohammad Nasr Abdeen, CEO of Union National Bank (UNB) • Interview

36 Mahmud P.K. Merali, Managing Partner of Merali's Group • Interview 37 The sharpest tools • B2B: Investment opportunities 38 Options matter • Forum: Why Abu Dhabi?

48 Peter England, CEO of The National Bank of Ras Al-Khaimah (RAKBANK) • Interview 49 Not oil that bad • Review: Capital markets 50 Sara I. Mohamed, CEO, Al Bashayer Investment Company LLC • Column 51 A wider net • Review: Insurance 53 HE Ebrahim Obaid Al Zaabi, Director General of the Insurance Authority • Interview 54 Oussama A. Kaissi, CEO of National Takaful Company PSC – Watania • Interview 55 Joseph Faddoul, Executive Director of Chedid Capital Holding • Interview 56 Glass walls • Focus: Al Etihad Credit Bureau

ABU DHABI

2015

£75 | ¤95 | $130 | CDN $140 | AUD $137 | SGD $162

In association with: United Arab Emirates Ministry of Economy

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ABU DHABI 2015

57 ENERGY 57 The sound provider • Review 58 Eng. Salah Salem bin Omair Al Shamsi, Chairman, Liwa Petroleum & Industrial Supplies • Column 61 HE Eng. Suhail Mohamed Faraj Al Mazrouei, UAE Minister of Energy • Interview 63 Tord Lien, Minister of Petroleum and Energy of Norway • Guest speaker 64 Abdulla Nasser Al Suwaidi, Director General of Abu Dhabi National Oil Company (ADNOC) • Interview

74 Tsuyoshi Nakai, CEO of Japan Cooperation Center, Petroleum (JCCP) • Guest speaker 76 Find a way • Forum: Enhanced oil recovery 78 Hussein Fouad El Ghazzawy, General Manager & Vice-President of Schlumberger UAE • Interview 79 Shared risk, shared reward • Focus: Local energy events 80 Naji El Haddad, Group Event Director, Reed Exhibitions – World Future Energy Summit 2015 • Column 81 We know what you want • Vox populi: Oil & gas producers

65 Saif Saeed Al Qubaisi, Acting Director General of the Regulation & Supervision Bureau (RSB) • Interview

83 Adnan Z. Amin, Director-General of the International Renewable Energy Agency (IRENA) • Interview

66 Less is more • Focus: Demand side management

84 Ali Vezvaei, President of Middle East & North Africa of Linde AGEngineering • Interview

68 Maria van der Hoeven, Executive Director of the International Energy Agency (IEA) • Guest speaker 69 Dr. Ali Obaid Al-Yabhouni, CEO of the National Gas Shipping Company Ltd. (NGSCO) & Abu Dhabi National Tanker Co (ADNATCO) • Interview 70 Jasem Ali Al-Sayegh, CEO of Abu Dhabi Oil Refining Company (TAKREER) • Interview 71 Brian Dawes, Regional Manager - Middle East at Applus Velosi • Interview 72 Power plants • Focus: Nuclear energy

85 Rashed Saif Bin Jabr Alsuwaidi, Chairman of Horizon Energy • Interview 86 Saif Ahmed Al Ghafli, CEO of Abu Dhabi Gas Development Co. Ltd. (Al Hosn Gas) • Interview

87 INDUSTRY 87 Find your advantage • Review 92 HE Saeed Ghumran Al Romaithi, CEO of Emirates Steel • Interview 93 Colin Smith, Managing Director of Abu Dhabi Vegetable Oil Company (ADVOC) • Interview 94 Badr Al-Olama, CEO of Strata Manufacturing • Interview

95 TELECOMS, IT

& MEDIA

95 Digital future • Review 97 Fayez Ibbini, Founder and Managing Director, Alpha Data Group • Column 98 Ahmad Julfar, CEO of Etisalat Group • Interview 99 Move online • Focus: E-government 100 HE Rashed Lahej Al Mansoori, Director General of the Abu Dhabi Systems and Information Center (ADSIC) • Interview 101 HE Noura Al Kaabi, CEO of twofour54 • Interview 102 ACTION! • Focus: Film industry

103 TRANSPORT 103 Policy of containment • Review 106 Paul Brannigan, Middle East Director, Wrightbus International • Column 109 HE Nadir A. Al Hammadi, Chairman of Abu Dhabi Aviation • Interview

116 Freight safe • Focus: DoT’s master plan 116 Faris Saif Al Mazrouei, CEO, Etihad Rail • Column 118 Mohamed Al Qamzi, General Manager of the Centre for Regulation of Transport by Hire Cars (TransAD) • Interview

119 CONSTRUCTION

& REAL ESTATE 119 Back to work • Review: Construction

120 Riad Nashif, Executive Vice President - Middle East and Managing Director - UAE and Oman, AECOM • Column 122 Walid Salman, Regional Managing Director of Operations, UAE of Consolidated Contractors International Company S.A.L. (CCC) • Interview 123 Emporia extra • Focus: Reem Mall 124 Brick by brick • Forum: Building materials 126 Tunnel Vision • Focus: Strategic tunnel enhancement program

110 HE Salem Ali Al Zaabi, Director General of the Federal Land and Marine Transport Authority (FLMTA) • Interview

127 Alan Thomson, Managing Director of Abu Dhabi Sewerage Services Company (ADSSC) • Interview

111 Rashed Mohamed Al Hebsi, CEO of The Emirates Classification Society (TASNEEF) • Interview

128 A place to rent • Review: Real estate

112 Let's trade • Focus: Khalifa Port

131 Creating foundations • B2B: Real estate services

114 Supply lines • Vox populi: Logistics and services

132 Market watch • Vox populi: Realty

THEBUSINESSYEAR

Managing Editor Leland Rice Regional Director Betül Çakaloğlu Country Managers Gülay Sultan, Natalia Mukovnina Assistant Country Managers Cristiana Di Filippo, Bridget Tilton Country Editors Grace Cameron, Ivo Santos Chief Executive Officer Ayşe Hazır Valentin Commercial Director Laila Bastati Editorial Director Christopher Copper-Ind Senior Editor Mark A. Szawlowski Associate Editor Terry Whitlam Web Editor Peter Howson Sub-Editors Aidan McMahon, Lewis King, Lily Leach Editorial Assistant Asiye Duman Contributor Jason J. Nash Transcribers Attila Pelit, Deanne de Vries, Heather Conover, Nikolai Davis, Olga Gertcyk, Claire Livesay, Pronto Publishing Services Art Director Berin Cansu Zafer Jr Art Director Bahar Kara Graphic Designers Ceren Bettemir, Sérgio Caldeira Cover Illustrator Kürşat Ünsal PR Manager Shweta Mulani HR Executive Inés Delgado Operations Manager Semiha Elkıran Operations Executive Öznur Yıldız Operations Assistants Gamze Zorlu, Şölen Cenberoğlu Financial Operations Manager Serpil Yaltalıer Finance Manager Ana Mari Finance Assistant Janine Escobar Circulation Manager Amy Burtin Publisher Peggy Rosiak The Business Year is published by The Business Year International, Trident Chambers, P.O. Box 146, Road Town, Tortola, British Virgin Islands. Printed by Apa Uniprint, Hadımköy Mahallesi 434 Street No:6, 34555, Arnavutköy, İstanbul, Türkiye. The Business Year is a registered trademark of The Business Year International, Copyright The Business Year International Inc. 2015. All rights reserved. No part of this publication may be reproduced, stored in a retrievable system, or transmitted in any form or by any means, electronic, mechanical, photocopied, recorded, or otherwise without prior permission of The Business Year International Inc. The Business Year International Inc. has made every effort to ensure that the content of this publication is accurate at the time of printing. The Business Year International Inc. makes no warranty, representation, or undertaking, whether expressed or implied, nor does it assume any legal liability, direct or indirect, or responsibility for the accuracy, completeness, or usefulness of any information contained in this publication. ISBN 978-1-908180-45-2

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133 AGRICULTURE,

FISHERIES & FOOD

133 Future harvest • Review 136 Fady Antonios, President and CEO, National Food Products Company (NFPC) • Column 137 Iqbal Hamza, CEO of Agthia • Interview 138 HE Dr. Rashid Mohammed Khalfan Al Shariqi, Director General of the Abu Dhabi Food Control Authority (ADFCA) • Inside perspective 139 Chris Hegadorn, Director of the Office of Global Food Security of the United States Department of State • Guest speaker 140 Rain on demand • Focus: Floppy sprinkler technology 141 Mohammed Al Falasi, CEO, Jenaan Investment • Column 142 Teach a man to fish • B2B: Seafood 143 Sustainable supplies • Focus: Aquaculture

145 HEALTH 145 Healthy, wealthy & wise • Review 150 HE Prof. Maha Taysir Barakat, Director General of Health AuthorityAbu Dhabi (HAAD) • Interview 151 Anything you need • B2B: Hospitals 152 Care and patients • Focus: Medical campuses 152 Dr. Marc Harrison, CEO, Cleveland Clinic Abu Dhabi • Column 153 I got the pills • B2B: Hospital management 154 Well aware • Communiqué 155 Dr. Saf Naqvi, Medical Director, Consultant Physician, and Endocrinologist at Imperial College London Diabetes Centre • Interview 156 Robert Ball, CEO of National Ambulance • Interview

157 EDUCATION 157 “A” for Abu Dhabi • Review 158 Brendan Law, Headmaster, Cranleigh Abu Dhabi and Director of Education, Tourism and Development Investment Corporation (TDIC) • Column 160 HH Sheikh Hamdan Bin Mubarak Al Nahyan, Minister of Higher Education and Scientific Research • Interview 161 Prof. Dr. Mohamed Yousif Baniyas, Vice Chancellor of Emirates College for Advanced Education (ECAE) and Higher Education Advisor at the Abu Dhabi Education Council (ADEC) • Interview 162 Dr. Thomas Hochstettler, President of the Petroleum Institute (PI) • Interview 163 Paths to success • Focus: Vocational education 164 Dr. Addel Al Ameri, Managing Director of Abu Dhabi Vocational Education and Training Institute (ADVETI) • Interview 166 Top campus • Forum: Universities 168 House of knowledge • Focus: The National Library 170 Dr. Faisal O. Al Ayyan, Executive Vice President of Rabdan Academy • Interview

171 TOURISM,

CULTURE & SPORTS

171 Work hard, play hard • Review 172 Mubarak Al Shamsi, Director, Abu Dhabi Convention Bureau • Column 175 HE Sheikh Nahyan Bin Mubarak Al Nahyan, Minister of Culture, Youth, and Community Development • Inside perspective 176 Treasure island • Focus: Museums 178 Rooms for all • B2B: Hospitality expansion 180 The sole destination • Destination: Saadiyat Island 182 Through the arcade • Focus: Yas Mall 183 HE Aref Hamad Al Awani, General Secretary of the Abu Dhabi Sports Council (ADSC) • Interview 184 In the game • B2B: Sports

185 EXECUTIVE

GUIDE

185 Merali's provides an overview of the legal ins and outs associated with investing in Abu Dhabi • Review: Legal 187 Merali's provides an overview of Abu Dhabi's business environment and tax regime • Review: Tax 190 When in Abu Dhabi...

THEBUSINESSYEAR

ABU DHABI 2015

BRIEFING ABU DHABI

RULER HH Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE & Ruler of Abu Dhabi LEGISLATIVE POWER 8 representatives from Abu Dhabi sit on the 40-Member Federal National Council POLITICAL STRUCTURE Constitutional Monarchy GDP GROWTH 4.8%

LOCAL GOVERNMENT STRUCTURE 7 Federal Emirates

GDP PER CAPITA 105,885 USD

TOTAL POPULATION 2.4 million

INFLATION RATE 1.3%

UNEMPLOYMENT RATE 3.8%

LIFE EXPECTANCY (F/M) 78.7 / 75.2 CURRENCY Dirham (AED)

1 USD = 3.67 AED

Source: SCAD

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FOREWORD TO THE BUSINESS YEAR: ABU DHABI 2015 HH Sheikh Hazza bin Zayed Al Nahyan, National Security Adviser and Vice Chairman of the Abu Dhabi Executive Council

All the progress and economic prosperity the United Arab Emirates has witnessed as a result of the thoughtful work, strategic plans and insightful vision of the wise leadership of His Highness Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE, and His Highness Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President, Prime Minister and Ruler of Dubai, as well as of the continuous efforts of His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, succeeded in making the UAE occupy a leading standing in the global scene and ensure the citizens’ welfare. Hence, the UAE was able to achieve its development goals in various fields, enabling it to rank among the first positions in international development indicators and experience the success and efficiency of the policies in force and uniqueness of the UAE government. In this regard, Abu Dhabi, the capital of the United Arab Emirates, believes that clear systematic planning constitutes the main pillar upon which the desired goals can be achieved. Accordingly, the Abu Dhabi government adopted the economic diversification policy so as to establish a solid economic base that contributes to achieving the Emirate’s economic sus-

tainability. This effective strategic policy has, in turn, reflected on the economic performance, as shown through the indicators’ positive and tangible results. Thus, the 2014 estimates showed that non-oil activities now constitute 49% of the Emirate’s economy. Also, the continuous investment in infrastructure projects is intended to enhance the Emirate’s economic competitiveness, provide an optimal enabling environment for economic growth, and promote partnerships between the public and private sectors. This confirms Abu Dhabi’s constant efforts and pursuit to achieve the ambitious vision that has been developed based on the approach of the late Sheikh Zayed bin Sultan Al Nahyan, leading Abu Dhabi to become among the most developed and advanced economies and societies. The Abu Dhabi government is keen to continuously develop the education system, and believes in the importance of building and empowering human capacities, as education constitutes the cornerstone of advances societies that look toward the future with confidence and high optimism. Furthermore, His Highness Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE, declared 2015 a “Year of Innovation” so as to instil a culture of innovation and creativity, support research and development, and stimulate activities within the field of scientific creativity. Hence, maintaining leadership requires us to move forward toward a knowledge and creativity-based era. Through the insightful vision of our wise leadership, qualitative production and diversification of income sources, the United Arab Emirates have become able to withstand the energy market fluctuations and changes in the global economy, and continue implementing development strategies, which confirmed the success of the UAE’s efforts to ensure a safe and prosperous future, and develop a strong competitive economy which enhances progress, improvement and prosperity. Perhaps the goal announced by His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces to have the UAE ready and prepared for the day when Emirati citizens can happily wave goodbye to the last oil cargo leaving the country, and build a diversified and efficient economy that can sustain development without the need for oil, and the continuous readiness to achieve this goal is what governs the UAE’s economic vision in general and that of Abu Dhabi, the capital, in particular. It is from here that the UAE is keen to develop all its vital sectors, especially the education sector, to meet the needs of the future, through an educated generation capable of overcoming obstacles and innovating solutions that ensure the continuation of the development process. ✖

THEBUSINESSYEAR

ABU DHABI 2015

Amid a climate of low oil prices, observers have been keen to see how the Middle Eastâ&#x20AC;&#x2122;s oil and gas giants would respond. Now, having had time to come to terms with the loss in revenues, Abu Dhabi is more enthusiastic than ever to show off the merits of its non-hydrocarbon sector.

Year in Review IRAN

ARABIAN GULF OMAN

P A Ras Al Khaimah

Ajman

Khor Fakkan

P Sharjah A

A Fujairah

P Dubai A P Jebel Ali A Khalifa Port

Port Zayed

Abu Dhabi A Al Ain

ABU DHABI 67,340 sqkm

SAUDI ARABIA

P Port A Airport

OMAN

THEBUSINESSYEAR

WHILE IT WAS NOT SO LONG AGO, oil barons think back fondly to the time when a barrel of the black stuff fetched well over $100. Now lucky to get half that, spectators have waited patiently for the growth forecasts to roll in. And the verdict? Abu Dhabi is still on course, with Moody’s predicting GDP growth of 3% for 2015, down from 4.1% in 2014, and the IMF calling 3.5% for 2015 and 2016. Aside from a strong non-oil sector, which is expected to grow 5.5% in 2015, Abu Dhabi’s strong fiscal and external position, as well as its hefty net asset position, are more than enough to ensure the Emirate can effectively ride out the storm of lower hydrocarbon revenues. Looking at the big picture, oil now accounts for just over 30% of GDP, according to the Abu Dhabi Statistics Center (SCAD), with the Emirate already making a name for itself in a host of new areas. One such area is aluminum, with construction currently underway on Emirates Global Aluminum’s $3 billion refinery. The company is the result of a recent merger between Emirates Aluminum (Emal) and Dubai Aluminum (Dubal), and is cementing the UAE’s position as the region’s top producer of aluminum products. And the Emirate certainly isn’t driving blind, with the overall goal coming in the form of UAE Vision 2021, by which time the country hopes to have developed a true knowledge-based and competitive economy to succeed the hydrocarbon environment. The culmination of the Vision also coincides with the UAE’s golden jubilee, an event that will also be marked by the launch of the first Arab probe to Mars, which is being developed by the recently established Emirates Space Agency. And with Emirati investments in space technology already having exceeded $5.45 billion, the country’s leadership certainly has the appetite to join the very exclusive club of nations and blocs to have probed the heavens. But back here on Earth, the capital markets are also forming a cornerstone of diversification. Embracing international best practices, the Abu Dhabi Stock Exchange (ADX) tells a clear story; from 2000 to 2010 the general index rose from 1,267.2 (2001) to 2,719.9, while MCap rose from $3.2 billion to $77.2 billion and the number of brokers rose from 10 to 74. Investor numbers were also up, from 3,020 to 894,517, while value traded soared from $2 million to

$9.4 billion and volume traded climbed from 0.1 million to 17.6 billion. As of January 2015, there were 126 companies listed in the UAE overall. The markets are also a complement to Abu Dhabi’s powerhouse banking sector, which in 2013 represented 55% of total local banking assets and has become something of a safe haven for investors in the region. Non-oil exports are also up, rising by 8.5% between August 2013 and August 2014, according to SCAD, while re-exports rose by a more considerable 101.5%. On the flip side, imports were up 31.3%, contributing to an overall trade increase of 36.2%. Delving further into SCAD’s stats, a significant increase in value addition also emerges, with the value of exports between July and August 2014 increasing by 49.3% and the value of re-exported goods increasing by 86.4%. Abu Dhabi’s three largest non-oil export destinations are Saudi Arabia ($119.8 million), China ($71.6 million), and Singapore ($35.4 million), with manufactured goods making up the lion’s share of the basket. The three largest exporters are the US ($408.4 million), Japan ($326.7 million), and Saudi Arabia ($257.8 million). Moving further into 2015, it will become more evident to what extent the non-oil economy can pick up the slack of reduced revenues from oil. That said, the government is ardent about keeping investment flowing, with the federal budget for 2015 set at $13.36 billion, up by $790 million over 2014. A whopping 49% of that figure, or $6.53 billion, is set to be pumped into service projects, social development, and social benefits, including health, education, and social services. A total of 3.7% is also set aside for infrastructure projects. And in that regard, Abu Dhabi is all set. Its government debt position stands at just 2.7% of GDP as of early 2015, according to Moody’s, with reserves estimated at $489 billion. A weakened euro also offers present opportunities to consumers, which is adding to consumer confidence, while supermarket chains in the UAE expect a 10% reduction in prices despite overhead costs remaining the same, according to the Emirates News Agency. All of these figures are set to see the good ship ride the crest of lower oil prices with style, until, as Standard & Poor’s predicts, oil prices return to their former height in 2016. Should they not, it will only expedite the diversification of the economy. ✖

The federal budget for 2015 is set at $13.36 billion, up by $790 million over 2014. Fully 49% of that figure, or $6.53 billion, is set to be pumped into service projects, social development, and social benefits.

Vision 2021 will culminate in the UAE developing a fully knowledgebased economy

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Progressive policies, cultural development, and a booming economy: A modern history of Abu Dhabi in a timeline.

HH Sheikh Khalifa bin Zayed Al Nahyan has continued in his father’s footsteps while also building upon his achievements.

The UAE is one of the leading donor countries in the world and a key player in global human development.

Diplomacy REVIEW

Abu Dhabi is working to expand its influence in the region and the wider world, and has set foreign aid and humanitarian assistance as key priorities for its diplomatic policy.

he federal capital of the UAE, Abu Dhabi is the largest and wealthiest of the seven Emirates, and the central hub of administrative power in the country. Over the past 40 years since the founding of the UAE, Abu Dhabi has experienced significant population growth and economic expansion. With a view to assuring the future prosperity of the Emirate, the Government has developed a long-term development plan known as Abu Dhabi Vision 2030. According to this guiding strategy, the promotion of economic growth, which has been phenomenal, should be complemented by paying special attention to social and human development. This is reflected directly in investments in education, healthcare, housing, infrastructure, and social welfare. The Vision sets out guidelines for reaching key financial targets for the next 20 years. One of the most important reasons for the success of the Emirate’s development over recent decades has been the focus on

A GLOBAL CITIZEN

Abu Dhabi’s diplomatic efforts reach beyond the boundaries of the Arab world, primarily in the form of generous development assistance to countries in need, regardless of their beliefs or politics.

people as the primary beneficiaries of economic growth. HH Sheikh Khalifa bin Zayed Al Nahyan, has been the President of the UAE and the Ruler of Abu Dhabi since 2004. The Deputy Prime Ministers are HH Sheikh Saif bin Zayed Al Nahyan, and HH Sheikh Mansour bin Zayed Al Nahyan. Both have held their positions since 2009. The Deputy Prime Minister is appointed by the President, as is the Cabinet, or Council of Ministers. The loyalty and genuine affection of Emiratis—who make up an estimated 20% of the total UAE population—for their rulers is based upon a social contract in which they receive generous state benefits including free healthcare and education, along with an extremely high standard of living and other benefits such as subsidized food and fuel prices, courtesy of the federation’s massive oil revenues. These revenues are mainly provided by Abu Dhabi. Abu Dhabi is widely regarded as the most solid, and statesmanlike of all of the

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ABU DHABI 2015

The Emirates spent $5.4 billion in aid in 2013, a 435% increase from the previous year, taking the UAE’s global ranking from the 19th largest donor nation globally in 2012 to the first in 2013.

Emirates, and is by far the richest. Possessing 8% of the world’s proven crude oil reserves, it is a major oil producer and exporter; the rest of the Emirates have not been blessed with such resources. Abu Dhabi’s economic situation is admired the world over, and its sovereign wealth fund is by far the largest in the region, and the envy of many larger and more powerful states. Managed by the Abu Dhabi Investment Authority, founded in 1976, the fund has helped assure the prosperity of the Emirate, and allows Abu Dhabi to be generous and beneficent with not only its own citizens, but also with its neighbors, the region, and the world at large.

MULTILATERAL DIPLOMAT As an emerging regional and global player, it is clear that Abu Dhabi, and the UAE more broadly, must deal with numerous political challenges on many levels. It does this largely in cooperation with a diverse group of allies, primarily in the GCC, the Arab League, the Organization of the Islamic Conference, and the United Nations. UAE foreign policy also emphasizes the strong relationship and mutual interests the country shares with the US and other countries, including the UK and the European powers. HH General Sheikh Mohamed bin Zayed Al Nahyan, the Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces has stated that the UAE respects and recognizes “the importance of diplomacy and its role in supporting connection and collaboration with other countries of the world” and this idea underpins the guiding philosophy by which Abu Dhabi operates in the global arena. In 2014, Abu Dhabi has also been showing its diplomatic strength in efforts to assure lasting peace and stability in the region. There have been some contentious periods recently between the members of the GCC, but in late 2014 regional relations showed signs of clear improvement. In the final days of the year it became clear that a rapprochement had been reached between Qatar and Saudi Arabia, the UAE, and Bahrain, who had previously disagreed on a number of regional Arab political issues. At the 35th GCC Summit in Doha, Gulf leaders announced plans to create a regional police force and a joint naval force to further bolster regional defense ties. The Government of Abu Dhabi said the police force would im-

prove cooperation against terrorism, help to counter crime, and serve to assure regional peace. The police force will be based out of Abu Dhabi while the naval force will operate out of Bahrain. The police force will be known as GCC-POL, was announced at the conclusion of the Gulf bloc’s annual summit in Qatar. The GCC already possesses a land-based joint military force, known as the Peninsula Shield Force, which is currently based in Saudi Arabia.

A POSITIVE FORCE Foreign aid and humanitarian assistance are among the top priorities of the UAE’s approach to diplomacy, and again it is Abu Dhabi that is leading the way. The philosophy behind this role is based on two key ideas: firstly, it is guided by the Islamic belief that helping those in need is a primary duty; and secondly, that part of the country’s wealth from oil and gas should be devoted to assisting less fortunate people across the globe. The late Sheikh Zayed bin Sultan Al Nahyan, founder of the UAE, expressed this very clearly when he declared, “We believe that the benefit of the fortune granted to us by God should spread to cover our brothers and friends.” The Emirates spent $5.4 billion in aid in 2013, a 435% increase from the previous year, taking the UAE’s global ranking from the 19th largest donor nation globally in 2012 to the first in 2013. This policy is consistent with the increased importance the UAE is placing on its role as a provider of development cooperation, which is also reflected in the creation of the Ministry of International Cooperation and Development (MICAD) in 2013. The Abu Dhabi Fund for Development (ADFD) is the core-financing agency among the many UAE actors involved. Naturally, many Islamic countries are amongst the beneficiaries of this largesse, assuring that Abu Dhabi is known throughout the Muslim world as a key player on the global scene. In 2013, the UAE provided much needed bilateral cooperation assistance to Egypt, Pakistan, Jordan, Morocco, the West Bank and Gaza Strip, and Afghanistan. The main sectors of the these bilateral development programs disperse funds for economic infrastructure, education, health, and population issues. However, Abu Dhabi’s bridge building activities reach beyond the boundaries of the Muslim

Diplomacy

world as well, primarily in the form of generous development assistance to countries in need, regardless of their faith. In a new and innovative program, the UAE-Pacific Partnership Fund was formed to disburse $50 million in grants for renewable energy generation projects in Pacific island countries. Project agreements between the UAE and six Pacific countries—Fiji, Kiribati, Samoa, Tonga, Tuvalu, and Vanuatu—have been signed to date, with completion times estimated for 2016. Masdar, the UAE’s renewable energy arm, acts as project developer and manager. The Fund is administered jointly by the Ministry of Foreign Affairs and the Directorate of Energy and Climate Change, with the necessary capital provided by the ADFD. Founded in 1971, the ADFD is a state-managed development bank financed by the government of Abu Dhabi. Since its founding, the ADFD has provided more than $5.4 billion in aid to over 287 projects in 53 countries. Decisions about projects and funding types are made by ADFD’s governing board, which is led by several members of Abu Dhabi’s ruling family. The majority of Abu Dhabi’s development assistance funding supports infrastructure development, including transportation, water, and electricity, while alternative energy is also a priority. According to Business Insider, the ADFD said in early 2015 that it will provide $57 million worth of concessional loans for clean energy projects in five developing countries. The fund is committed to supporting renewable energy projects in cooperation with the International Renewable Energy Agency (IRENA), which is also headquartered in Abu Dhabi. Concessional finance of up to $350 million is available over seven cycles. Projects approved for funding to date include solar, hydropower, wind energy and other alternative fuel programs in Ecuador, Mali, Maldives, Mauritania, Samoa and Sierra Leone. Assistance to global health initiatives is also a key area of focus. The Health Authority of Abu Dhabi (HAAD) has pledged $25 million to assist in a partnership to “Roll Back Malaria”—an international partnership dedicated to fighting this disease. MICAD and the United Nation’s Children’s Fund (UNICEF) are partnering to implement a $5 million project to fight the Ebola virus in the three West African nations of Liberia, Guinea, and Sierra Leone.

Image: Bahrain Ministry of Foreign Affairs

HH General Sheikh Mohamed bin Zayed Al Nahyan, the Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, has asserted that “the importance of diplomacy and its role in supporting connection and collaboration with other countries of the world” should form the core of Abu Dhabi’s global mission. His Highness also stressed the importance of “highlighting the UAE’s leading position and its economic development, as well as its values of co-existence and tolerance and human interaction, to open the doors for more fruitful collaboration with all other countries in the world.” A more apt description of Abu Dhabi’s role on the world stage is difficult to imagine; going forward, the emirate will continue to expand its programs to proactively deal with international issues in a peaceful, constructive, and diplomatic fashion, and use its wealth and influence as a force for good. ✖

THEBUSINESSYEAR

Abu Dhabi is becoming a regional focal point for diplomacy and is expanding its global reach

A MODERN HISTORY OF ABU DHABI

1918

1939

Late 1950s-early 1960s

August 6, 1966

1968

His Highness Sheikh Zayed bin Sultan Al Nahyan, principal founder of the United Arab Emirates, first president of the UAE and ruler of Abu Dhabi is born to Sheikh Sultan bin Zayed bin Khalifah Al Nahyan and Sheikha Salama bint Butti.

His Highness Sheikh Shakhbut bin Sultan Al Nahyan, ruler of Abu Dhabi from 1928 to 1966, grants petroleum licensing to Petroleum Development Trucial Coast Ltd (PDTC) in a bid to explore for large oil reserves.

Oil is discovered in Abu Dhabi, marking the beginning of significant growth and development in the region. The Emirates begin oil exportation, and the PDTC becomes the Abu Dhabi Petroleum Company.

His Highness Sheikh Zayed bin Sultan Al Nahyan is sworn in as the new ruler of Abu Dhabi by the Nahyan family. Over the next 38 years he will lead reforms in education, public housing, healthcare, and urban development.

His Highness Sheikh Zayed bin Sultan Al Nahyan participates in the signing of the agreement to found the United Arab Emirates. Great Britain agrees to withdraw from the Gulf by 1971.

1996

2000

2004

2006

December 16, 2006

Abu Dhabi is confirmed as the UAE’s federal capital, and the Emirate celebrates His Highness Sheikh Zayed bin Sultan Al Nahyan’s 30th anniversary as Ruler of Abu Dhabi. The UAE’s temporary constitution becomes permanent by order of the Supreme Council, and the Emirates celebrate their 25th National Day.

After a two-day summit in Bahrain’s capital, leaders of the GCC, including Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE sign a mutual defense pact establishing a rapid deployment force.

UAE's first president and ruler of Abu Dhabi His Highness Sheikh Zayed bin Sultan Al Nahyan dies. He is succeeded by his eldest son, His Highness Sheikh Khalifa bin Zayed Al Nahyan. Sheikha Lubna Al Qasimi is appointed as Minister of Foreign Trade, becoming the first female minister in cabinet.

The city of Abu Dhabi signs an agreement with the Solomon R. Guggenheim Foundation in New York City to build a Guggenheim Museum on Saadiyat Island. The 30,000 sqm museum, slated for completion in 2017, will be designed by architect Frank Gehry.

Abu Dhabi votes in the UAE’s first national parliamentary elections. Dr. Amal Abdullah Al Qubaisi becomes the first woman elected to the UAE parliament.

Progressive policies, cultural development, and a booming economy have contributed to Abu Dhabi’s position as a leader in the Emirates and the world.

1971

May 19, 1973

1975

1981

1990-91

The UAE joins the Arab League along with Bahrain, Oman, and Qatar, to participate in the strengthening of relations between the member-states in matters of economic, financial and cultural affairs among others.

The UAE dirham (AED) is introduced as the United Arab Emirates’ official currency replacing the Bahraini dinar. Before 1966, the Emirates, then the Trucial States, used the Indian rupee.

HH Sheikha Fatima bint Mubarak Al Ketbi, wife of UAE founder HH Sheikh Zayed bin Sultan Al Nahyan and a major supporter of women’s rights and literacy in the UAE, establishes the Abu Dhabi Society for the Awakening of Women, the first women’s association in the Emirates.

The Cooperation Council for the Arab States of the Gulf, known widely as the Gulf Cooperation Council (GCC), is established as a political and economic union comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE.

The UAE condemns the Ba’athist Iraqi invasion of Kuwait and joins the coalition of the Gulf War. By 1998 diplomatic relations are restored between the UAE and Iraq with the opening of a ferry service to Iraq's Umm Qasr port.

2007

2011

2012

2013

2014

As part of a 30-year agreement between Abu Dhabi and the French Government, the Louvre in Paris announces plans for construction of a new Louvre museum in the Emirate, estimated for completion in 2015 on Saadiyat Island.

The UAE celebrates its 40th Anniversary as a sovereign nation and commemorates the signing of the Proclamation of Union. The World Bank's Doing Business 2011 Report ranks the UAE the 14th best nation in the world for doing business.

The UAE inaugurates the long-awaited 380-km overland Abu Dhabi Crude Oil Pipeline bypassing the Strait of Hormuz, which ships two-thirds of the UAE's crude oil at full capacity.

The UAE’s economy has grown to $394 billion, nearly 231 times since the Federation's establishment in 1971. Non-oil trade has increased almost 28 times from 1981 to 2012, to $326 billion.

In preparation for the UN’s Climate Summit, organized by UN Secretary-General Ban Ki-moon, 1,000 government ministers, businesses and civil society leaders gather to participate in the Abu Dhabi Ascent, a high-level meeting to develop climate change solutions.

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ABU DHABI 2015

PROFILE

focal POINT Since becoming the President of the UAE in 2004, HH Sheikh Khalifa bin Zayed Al Nahyan has continued in his father’s footsteps while also building upon his achievements and created a more prosperous and inclusive society. CROWN PRINCE Having grown up in Al Ain, HH Sheikh Khalifa has close links to the Eastern Region. In 1966, at the age of 18, he succeeded his father as Ruler's Representative. In 1969, he was appointed Crown Prince of Abu Dhabi. HH Sheikh Khalifa is the head of Abu Dhabi's ruling Al Nahyan family, which has led the Bani Yas tribal confederation for nearly 300 years. BIRTH OF THE UAE With the creation of the UAE in December 1971, HH Sheikh Khalifa became Deputy Prime Minister in the first federal cabinet. He also served as head of the Abu Dhabi Cabinet, becoming Chairman of its successor, the Executive Council, in 1974. Upon the merger of the UAE’s Armed Forces in 1976, he became Deputy Supreme Commander of the UAE Armed Forces. In the late 1980s, Sheikh

Khalifa was also appointed as Chairman of Abu Dhabi’s Supreme Petroleum Council. PRESIDENT As president of the UAE, HH Sheikh Khalifa has worked closely with HH Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai, and with HH Sheikh Mohammed bin Zayed, his successor as Abu Dhabi Crown Prince, to continue the program of development initiated by the late Sheikh Zayed. A fundamental element of that has been a focus on providing the country’s citizens with the requisite elements to enable them to live a productive and fulfilling life, not just in their homes, but through the opportunities provided to them. Through an extensive and expensive program of initiatives that have covered improvements in the national infrastruc-

ture, healthcare, education, housing, and employment, the whole of the country has seen substantial progress in the decade since HH Sheikh Khalifa became president. The diversification of the economy away from dependency on oil and gas, through the development of major industrial projects tourism and services has provided an important boost to the private sector of the economy. At the same time, in accordance with the guidelines and policies laid down by Sheikh Zayed and building on his achievements, there has been substantial progress in the empowerment of women, as exemplified by their presence in the Cabinet and the Federal National Council (FNC), and in the promotion of a greater engagement by citizens in the process of governance. First created by Sheikh Zayed at the beginning of the federation, the FNC now has democratic elections for half of its members, part of a long-term plan to enhance its role. In Abu Dhabi, the results of the initiatives by HH Sheikh Khalifa, ably assisted by his Crown Prince, HH Sheikh Mohammed bin Zayed, can be seen in the coming to fruition of free zones such as the Khalifa Industrial Zone Abu Dhabi (Kizad) and Global Marketplace Abu Dhabi. HH Sheikh Khalifa has also presided over the development of the Abu Dhabi Economic Vision 2030, a plan that will take GDP to over $415 billion, with the hydrocarbon sector representing just 36% of the figure. As part of the plan, Abu Dhabi is targeting the promotion of a more open, integrated business environment, the adoption of disciplined fiscal

policy, the establishment of a resilient monetary and financial environment, an improved labor market, the construction of infrastructure to support growth, the cultivation of a highly skilled workforce, and the enabling of financial markets. Like his father before him, HH Sheikh Khalifa has had a lasting impact on the Emirate of Abu Dhabi and the UAE. He has pioneered a transparent and open style of rule, promoting the long-established concept of consultation between government and people, and watched as the country moves beyond dependence on its hydrocarbon wealth to take the first steps to life beyond oil. ✖

BIO His Highness Sheikh Khalifa bin Zayed Al Nahyan is the President of the UAE and the Ruler of Abu Dhabi, the largest of the seven Emirates that make up the UAE. He was born in 1948 in Al Ain, the eldest son of his father, Sheikh Zayed bin Sultan Al Nahyan, then the Ruler’s Representative in the Eastern Region of Abu Dhabi and later Ruler of Abu Dhabi and the UAE's first President, from 1971. Upon his father's death, in November 2004, he succeeded him as Ruler, also being elected as the country’s president by his fellow members of the Federal Supreme Council.

Diplomacy

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GUEST SPEAKER

GOOD

impressions TBY talks to M.R. Pridiyathorn Devakula, Deputy Prime Minister of the Kingdom of Thailand, on relations between Thailand and the UAE and bilateral trade. What are the key areas of cooperation currently in place between Thailand and the UAE?

The areas of cooperation are diverse, but our economic ties currently stand out, if you consider that the UAE and Thailand are each other’s biggest trading partners in the Mid-

BIO M.R. Pridiyathorn Devakula is a renowned Thai economist and Deputy Prime Minister of Thailand. Previously, he served as Governor of the Bank of Thailand and as Minister of Finance. From 1971 to 1990, he worked for the Thai Farmers Bank (presently Kasikornbank), where he rose through the ranks to become Director and Senior Executive Vice President. Later, he moved into government offices, first serving as official spokesman for the Prime Minister and then Deputy Minister of Commerce in three consecutive cabinets. During his political career, he helped the government to found Export-Import Bank of Thailand and was appointed the first President. Afterward, in 2001, he became the Governor of the Bank of Thailand, a position he held until 2006 when he was invited to be Deputy Prime Minister and Minister of Finance.

dle East and Southeast Asia respectively. The UAE is also vital for our energy security as it has been our number-one import source of crude oil for many years now. Beyond the macro-level, people-to-people relations between both countries are very close. Many Emiratis have visited Thailand as tourists, many among them medical tourists, and they have a good impression of my country and its people. On the other hand, there are currently about 10,000 Thai nationals residing in the UAE and working in various sectors, ranging from heavy industry and infrastructure to the hospitality sector and the airline business. Thai people are contributing to the growth and prosperity of the UAE as well. The UAE is Thailand’s primary trade partner in the region. How has the volume of bilateral trade developed over the years and in what ways is the UAE a hub for Thai trade to the Middle East?

The UAE is not only our primary trade partner in the Middle East, but was our fifth largest trading partner worldwide in 2013, with a trade volume exceeding $20 billion for the first time in history. Both our exports to and imports from the UAE have risen continuously over many years, although for 2014 Thai imports from the UAE may decline for the first time. However, there is no cause for concern as this drop is mainly due to the falling average price of crude oil, which dominates our imports

IN NUMBERS The Kingdom of Thailand from the UAE. The UAE is a perfect hub for Thai trade to the Middle East because of its highly developed infrastructure, both physical and digital, its excellent connectivity to other parts of the world, and also its enabling trade and economic policy. This is best illustrated by the fact that the Thai Trade Centre, which is the government export promotion agency in the Middle East, is based in Dubai. What opportunities exist for the UAE’s private-sector investment in Thailand?

Foreign investment opportunities exist across all sectors in Thailand. We have an investment-friendly economic policy, a highly skilled workforce, reasonably well-developed infrastructure, and a favorable geographical location. These factors will be boosted even further by the establishment of the ASEAN Economic Community in 2015 when the 10 South-East Asian nations become a single market and production base with free flow of goods, labor, and capital—and Thailand is right in the heart of it. In the coming years, there will be numerous investment opportunities in the logistics industry and related sectors, especially in the transportation infrastructure area, following the recent approval of the infrastructure development plan for 2015-22, which targets the improvement and expansion of the provincial rail network, highways, a sea port, and public transport in

years of Thai-UAE diplomatic relations

10,000 Thai nationals living and working in the UAE

Bangkok. For the very short term, UAE oil firms might be interested in the coming petroleum concession bidding round, which is the first petroleum concession in Thailand since 2007. The Thai Board of Investment (BOI) also just approved the Seven-Year Investment Strategy for 201521, with a view to promote investments that create value for Thailand and those that have positive impact on the society and environment. Special incentives will be given to investments in, for example, high-tech and creative industries, the digital economy, projects located in 20 lower-income provinces, as well as the five special economic development zones in the border areas. In this regard, I would encourage potential investors to study this strategy in order to optimize their investment decisions. ✖

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ABU DHABI 2015

GUEST SPEAKER

TBY talks to James Michel, President of the Republic of Seychelles, on the state’s relationship with the UAE and Abu Dhabi and how to strengthen it more in the future.

BRIGHT friends How would you describe the bilateral relationship between the UAE and Seychelles?

The relationship between Seychelles and the UAE, and Abu Dhabi especially, is a beautiful partnership. In September of 2014, we proved the strength of our relations by signing a visa-waiver agreement, making Seychelles the first African country to benefit from visa exemption in the UAE. Apart from that, we have an excellent program of collaboration between our two countries, which is not only characterized as a bilateral relationship, but as a friendship that has evolved over the past 20 years with HH Sheikh Khalifa bin Zayed Al Nahyan having a residence in Seychelles and the royal family, and HH General Sheikh Mohamed bin Zayed Al Nahyan who comes to the Seychelles regularly for holidays. They have developed a love for the Seychelles and a friendship that is long lasting. As a result, they have been prepared to make tangible manifestations of that friendship through substantial grants to the Republic of Seychelles for the development of our youth and for social sectors, such as housing and healthcare. The economic reforms I launched in 2008 have been successful in opening the way for partnership as an

$200 million: the total value of investment and grants from Abu Dhabi to the Seychelles over the past decade

avenue of investment with the UAE, and Abu Dhabi was the first to give us $50 million to boost our reserves. Over the past 10 years alone, the value of projects and grants between Seychelles and Abu Dhabi has amounted to almost $200 million. For a small country like Seychelles, this is huge. You can see the results of their investments all over the country, and they can see that the funds have been judiciously and properly utilized for the development of the country. The Abu Dhabi Urban Planning Council has begun preparing the Seychelles Strategic Plan. What does the plan signify for Seychelles and how is it progressing?

The Seychelles Strategic Plan

will help in the proper planning and development not only of the town itself, but also the surrounding areas, which could turn into plans for the whole island and the whole country. It is a coordinated exercise that aims at creating ownership by the people in the future development of the country. We have meetings with the population and all stakeholders so they can give their views, and also try to maintain a balance with all the different sectors of development, including businesses, residences, national heritage sites, and the different utilities that will be needed over the next 30 to 50 years. It is a comprehensive plan that Abu Dhabi is helping us to develop that will enable Seychelles to ensure its orderly and sustainable development for the future. At the same time, it is a realistic plan, acknowledging what can be done now, and what can be achieved in the future. It is extremely important and useful for the development of the country, and the clean energy component will be incorporated as well. Technicians from Seychelles and Abu Dhabi will further study the plan, develop it, and come back with their suggestions. We have two more scoping exercises to do for the whole project. ✖

BIO James Michel is the third President of the Seychelles, having taken office in 2004, and subsequently winning two elections. One of his greatest achievements as President has been the revitalization and reform of the Seychelles economy, following an IMF-backed reform program, which started in October 2008, and was undertaken with vigor and far-reaching impact, unprecedented in Seychelles' history. He expanded the Seychelles' protected areas to more than 50% of the country’s land territory, making it the first country in the world to do so. As Co-Chair and Founder of the Global Island Partnership, he is an active advocate of sustainable development and the leadership role of Small Island Developing States in the fight against climate change.

Diplomacy

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FOREIGN AID FOCUS

A RISING TIDE LIFTS ALL SHIPS The UAE is one of the leading donor countries in the world and a key player in global human development, consistently increasing the amount of foreign aid it spends year after year. NET DEVELOPMENT AID from donor countries worldwide reached record levels in 2013 according to the OECD, totaling $134.8 billion. That the UAE led the pack that year by Official Development Assistance (ODA) to GNI ratio was no accident. Wise leadership, strong sources of finance and capital, an effective organizational infrastructure, and a deep-rooted cultural belief in generosity—particularly to those in need—are some of the key ingredients attributable to the UAE’s commitment to the betterment of struggling populations worldwide. Humanitarian diplomacy is also one of the core foundational pillars upon which the UAE’s foreign policy is based, and as a result, Emirati aid is behind several sustainable development programs and humanitarian efforts around the world. The proportion of Emirati ODA to GNI is a figure that has been increasing with each passing year. The Emirates spent $5.4 billion in aid in 2013, a 435% increase from the previous year, taking the UAE’s global rank from the 19th largest donor nation globally in 2012 to the 1st in 2013. This upward trend in foreign aid spending shows no sign of slowing down as the Emirates became an official member of the OECD’s Development Assistance Committee (DAC) for the first time in July 2014, the main international body of donor countries. The move has opened the door to more collaborative efforts between the UAE and other donor countries on a global level, allowing for greater exchange in expertise from effective financing models to project management. Improved coordination and cooperation between donor countries increases aid effectiveness, the ultimate measure of the success of foreign aid—how much the recipient countries feel the benefits. Tens of thousands of lives worldwide have benefited from the Emirates’ support. A look at the UAE’s financial and humanitarian aid disbursements by country shows that in 2012, the top 10 recipients of UAE foreign aid were Jordan, followed by Pakistan, Afghanistan, the West Bank and Gaza Strip, Yemen, Kazakhstan, Morocco, Libya, Eritrea, and Azerbaijan. The breakdown of aid by sectors suggests that the majority of UAE aid is targeted at encouraging self-sustaining local production in recipient

countries, followed by aid to general program assistance, economic infrastructure building and support to human capital development in education, health and population-based sectors. The country’s role in providing sustainable development assistance around the world is facilitated in part by two key institutions, both of which are headquartered in the capital city of Abu Dhabi. Of the UAE’s more than 30 primary donor organizations, the Abu Dhabi Fund for Development is the UAE capital city’s flagship foreign aid organization. Established in 1971, the ADFD is the government’s main foreign aid channel, directing funds in the form of concessionary loans and grants to developing countries. A non-profit organization, the ADFD finances projects and investments with the aim of energizing economic development in impoverished countries. Targeting vital development sectors is the ADFD’s modus operandi, financing over 400 projects in 71 developing countries worldwide in areas such as infrastructure, transportation, agriculture, renewable energy, electricity, and other economically catalytic sectors. The Ministry of International Cooperation and Development (MICAD) is the UAE’s official public sector foreign aid entity and the first Ministry of its kind in the GCC. Headed by HE Sheikha Lubna Khalid Al Qasimi, MICAD documents foreign aid provided by Emirati organizations and guides project strategies and programs toward international best practices in financial management, monitoring project success and working to ensure the efficient allocation of funds. The scope of development and humanitarian programs funded by Emirati donor organizations to date is remarkable, and expanding these programs in the years to come will represent a major aspect of the UAE’s foreign policy. As the Millennium Development Goals approach their 2015 expiration date, world leaders will be meeting in 2015 to discuss the strategy ahead, one that will likely be aimed at 100% eradication of poverty by 2030. As a member of the OECD-DAC and a major provider of development funding, the UAE is poised to play a crucial role in shaping the post-2015 agenda moving forward. ✖

ERIC SOLHEIM Chair of the OECD Development Assistance Committee (DAC) How would you characterize the UAE’s commitment to humanitarian and development programs worldwide? It is impressive. Development assistance is provided out of solidarity and enlightened self-interest. The UAE was the most generous provider of development assistance in 2013, providing 1.34% of GDP to help less fortunate countries. The UAE’s development co-operation is a top foreign policy priority and is provided out of national interest. Such a foreign policy is based on a belief that a more prosperous world, with less poverty, conflict, terrorism, and climate change is good for everyone. How has the UAE’s Ministry of International Cooperation and Development (MICAD) enhanced ties between the UAE foreign aid sector and the international aid community? The UAE was the first Arab nation to become a participant in the OECD DAC. That means that the international development community and the UAE will work more closely together and learn from each other. The Emirates can provide important lessons on how to mobilize the political will to increase spending on official development assistance. Religious groups and traditional leaders are by far the most important civil society groups in many developing countries. The OECD provides statistical expertise and access to analytical work useful to the UAE.

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ABU DHABI 2015

VOX POPULI INTERNATIONAL RELATIONS

lovakia can support Abu Dhabi’s efforts in economic diversification and build a knowledge-based economy through investing in the sectors that are set out in the Abu Dhabi Economic Vision 2030. We look to contribute to the sustainable economic development process in the Emirate by participating in joint investment projects supported through know-how and technology transfer, all the while providing specialized education and training together with our UAE partners. Our vision is that Slovakia will be a business hub that connects and supports businesses between Abu Dhabi and the EU. We would like to attract knowledge-based, innovative, and value-added businesses in Abu Dhabi and pro-

COME TOGETHER

A number of countries see Abu Dhabi as a solid and reliable partner in the Middle East, and are looking to improve relations and sign agreements.

vide opportunities to Abu Dhabi businesses to have a presence in the EU through our global business network. The main sectors of mutual cooperation are in the areas of air transportation, defense-specialized industry, software services, and products, and IT for government institutions. Within the framework of possible cooperation, we also see room for cultural cooperation and education.

MIROSLAV LAJCÁK Deputy Prime Minister and Minister of Foreign and European Affairs, Slovak Republic

ur political relations are extremely positive and constructive, as a result of our common objectives. We understand the decision of the Emirati authorities to unilaterally liberalize their visa regime ahead of full bilateral liberalization by the UAE and the EU as a step that not only corroborates the existing interest, but also effectively strengthens the totality of relations between the two countries and their people. This opens the way for enhanced political dialog, offers new opportunities for economic and cultural cooperation, and simplifies people-to-people contacts on both sides. It also provides the possibility of an increased tourist flow from Slovenia to the UAE. Regular high-level political dialogue was confirmed by the visit of the Emirati Minister of Economy HE Sultan bin Saeed Al Mansouri at the 2014 Bled Strategic Forum. Furthermore, I am planning a visit to the UAE together with a delegation of Slovenian hightech industry representatives in the first half of 2015.

KARL ERJAVEC Minister of Foreign Affairs, Republic of Slovenia

EVA WALDER Director-General for Trade, Ministry for Foreign Affairs, Sweden

he UAE is one of Sweden’s largest trading partners in the Middle East. Exports during 2014 amounted to around $620 million, with steady YoY growth being seen. More than 200 Swedish companies are based in the UAE, and more than 4,000 Swedes reside there, an illustration of the interest

shown in the UAE. We see a lot of growth potential in a range of sectors. In particular, I would mention life sciences and healthcare, clean-tech, sustainable solutions including in ICT, research and higher education, corporate social responsibility, as well as many others. Many Swedish companies are at the forefront in

these areas and can provide innovative and environmentally sustainable technology for these sectors. Taking into account life-cycle costs and the environmental aspects of an investment, their solutions are strongly competitive. We also want the UAE to discover the creative and artistic side of Sweden.

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HE Eng. Mohammed Al Shihhi, Undersecretary of the Ministry of Economy, on the Year of Innovation, and growth sectors.

HE Butti Ahmed Mohamed Bin Butti Al Qubaisi, Director General of SCAD, on the role of statistics and Economic Vision 2030.

Abu Dhabi is ranked first among capitals in the Arab world for inventions and it remains at the forefront of innovation.

Economy REVIEW

Thanks to years of fiscal responsibility and investment in the non-oil sector, Abu Dhabi’s economy is shrugging off a slump in oil prices and posting healthy growth in other sectors.

n Abu Dhabi, it is no longer business as usual. Like its Gulf counterparts, Abu Dhabi’s economy is reliant on energy sales for the bulk of its exports—about 55% by most estimates. With the KSA throwing open the taps to the north, oil prices have plummeted and although Abu Dhabi can still move crude at a healthy profit, the days when oil sold for over $100 a barrel are unlikely to return any time soon. The question currently at the forefront of investor’s minds is, will other sectors of the economy pick up the slack? The verdict seems to be that, although a lower growth rate is inevitable in the short term, Abu Dhabi’s economy will continue to post solid growth. To begin with, Moody’s predicts that economic growth will slow to below 3%, down from their 2014 4.1% due to oil prices. This prediction was qualified by assurances from the auditing firm that the government was in a strong position to weather the downturn. The IMF, which tends to skew

MONEY TALKS

Image: Applus Velosi

Both exports and imports are up in 2015, indicating that the Emirate’s position in the global economy is growing, and allowing its trade to evolve in conjunction with global fluctuations.

more positive in these matters cut its forecast to 3.5% for 2015 and 2016. The silver lining to these announcements is that while energy-related activities will take a hit, in the non-oil economy, companies are expected to post growth of 5.5% during the same time period—lower than 2013’s 7% growth rate but still enviable. In other words, non-oil firms are expected to shake off most of the losses in business from the energy sector, and post gains that are exceptional under such circumstances. Meanwhile, Standard & Poor’s forecast a stable outlook for Abu Dhabi, predicting that its economy would remain resilient. The ratings agency released a statement in late 2014 defending their evaluation based on evidence that, “the ratings are supported by Abu Dhabi’s strong fiscal and external positions, which afford it fiscal policy flexibility. The exceptional strength of Abu Dhabi’s net asset positions also provides a buffer to counter the negative impact of oil price volatility on economic growth and gov-

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ABU DHABI 2015

ernment revenues, as well as on the external account.” While the agency’s assessment assumes a return to $100 a barrel oil in 2016, their appraisal also takes into account Abu Dhabi’s $102,000 per capita GDP in 2014, massive public spending, and augmentation of the economy’s production base, especially in services and manufacturing. Striking a more optimistic note, HE Sultan Bin Saeed Al Mansouri, the UAE’s Minister of Economy, expects growth rates of around 4.5% in 2015, with the GDP hitting $490 billion by 2018. Either way, investors will be looking beyond Abu Dhabi’s economic mainstay for this manifestation of this growth. Diversification strategies—some decades into their implementation—have paid off, and oil now accounts for just over 30% of the national GDP according to Abu Dhabi Statistics Center (SCAD). Abu Dhabi’s Economic Vision 2030 and the 2021 Vision are leading this drive, and the Emirate is one of the world’s leading producer of aluminum. With a $3 billion alumina refinery being built by Emirates Global Refinery—the worlds fourth largest aluminum producer—Abu Dhabi is set to further consolidate its dominance in the sector. The 2021 Vision aims to place innovation, research, science, and technology at the center of a knowledge-based, highly productive, and competitive economy, all in time for the UAE’s golden jubilee in 2021. Of special interest, 2021 is also the target date for the launch of the first Arab Islamic probe to Mars, which will be launched into space by the recently established Emirates Space Agency. No stranger to grand gestures, HH Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE and the Ruler of Abu Dhabi explained that this astronomical undertaking—and price tag— would prove that Emiratis, “are capable of delivering new scientific contributions to humanity.” According to Abu Dhabi Media, Emirati investments in space technology have already exceeded $5.45 billion.

MONEY TALKS And while multi-billion dollar refineries and rocket ships to Mars grab headlines, decades of development strategies (as well as dollars chasing profits) are playing out across the economy. Both public and private investors are bolstering the Emirate’s position in export-oriented sectors such as heavy industry, transport, petrochemicals, tourism, information technology, telecommunications, renewable energy, aviation and space, and oil and gas services. In many cases, developments in these sectors are over a decade old, and investments are translating into hard statistics—with balance sheets that explain Abu Dhabi’s resilience in the face of declining oil prices. Non-oil exports are up, in spite of a sluggish performance on the global level. According to the most recent Statistical Yearbook released by SCAD, between August of 2013 and 2014, exports in that category rose by 8.5%, while re-exports rose by a whopping 101.5%. At the

same time, imports rose by 31.3%. Combined, the numbers point to a 36.2% increase in overall imports and exports, which in turn indicates brisk economic activity in the period leading up to 2015, which overlaps significantly with depressed oil prices. According to SCAD, the value of non-oil exports between July and August 2014 increased by 49.3%, including a $101.3 million increase in “manufactured goods classified chiefly by material,” a classification that encompasses non-metallic mineral manufactures, iron and steel, non-ferrous metals, and manufactures of metals. Meanwhile, the value of re-exported goods increased by 86.4%.

IT’S GOOD TO BE KING Thanks to its location, and its integration into numerous global commodity chains, Abu Dhabi is able to draw on a diversity of importers and exporters, which allows the country to access everything from raw materials to advanced equipment in a competitive manner. Reflecting this position, as well as the outlay of its economy—a preponderance of manufactured goods classified chiefly by material and oil exports— SCAD reports that Abu Dhabi’s two biggest sources of imports are the US, at $408.4 million, and Japan, with $326.7 million. Saudi Arabia is in third place with $257.8 million—despite its reputation for oil exports, the KSA is a significant exporter of dairy and other agriculture products to the region. In terms of exports, the 2014 SCAD Yearbook lists the three largest non-oil export destinations as Saudi Arabia, China, and Singapore, with export values of $119.8 million, $71.6 million, and $35.4 million respectively. While the KSA is the largest recipient by country, most of Abu Dhabi’s exports make their way to Asia. SCAD reported that manufactured goods were the largest category of non-oil exports in 2Q2014, an increase of $66.7 million or 10.8% from a year earlier. In this category, exports of non-ferrous metals increased by $22.9 million, offsetting a decrease in iron and steel exports which fell by $22.6 million in the same time period. Chemicals and related products were the second largest export category, increasing 17% with a bill of $57.4 million for 2Q2104, with plastics in primary forms being the most prominent good in this category, and growing by 15.9%.

REALISTIC EXPECTATIONS In 1Q2015, a picture of the global economy is emerging where economic conditions vary from staggered recovery in some mature economies, to economic malaise or volatility in the value of exports and currencies, which is hitting SMEs in particular. Abu Dhabi finds itself facing both sides of this Janus-faced economy. The obvious downside is the shrinking return per barrel of oil. The centrality of energy sales renders a YoY increase almost unimaginable under the current conditions, which has spurred ratings agencies to reduce their growth expectations through 2016. With energy firms taking the hit,

MOHAMED SHABEEB AL DHAHERI CEO, Universal Group of Companies (UGC) What is your assessment of Abu Dhabi's development over the past few years? With major new projects taking place by the government, we have seen Abu Dhabi develop in every sector. In areas like tourism, services, and trading, the government has been pushing many projects into the market and this has led to unprecedented growth in the capital. It has been a difficult journey but Abu Dhabi is on the right track. It is starting to show signs of healthy growth as the economy shifts away from dependence on oil and gas. We continue to expect our business to increase and benefit from the good conditions in Abu Dhabi and the UAE as a whole. How has UGC expanded over the past five years? We opened a new business in 2009 and by 2010 we had developed a factory and service center in Mussafah. In 2011, we opened our travel and tourism office. Although these were difficult years for many companies, our group has continued to open new businesses in various sectors. We are in the middle of the shift from West to East, and we have the infrastructure, the communication network, and the investment laws to take advantage of it. The market here draws foreign business and investments for new ventures and it is also attractive.

Economy

the ripple effects are felt across the economy, such as in real estate where the World Property Journal reported that in 2H2014, nearly 80% of enquiries were for spaces between 100 and 500sqm. This news suggests that many firms are reallocating resources in light of expected, or current, declines in growth. That said, the journal was quick to point out that the overall effect on the market has been minimal, and that the sector should be able to shrug off investor’s consternation as the region’s medium- to longterm prospects are still strong, in addition to a limited amount of office supply in the pipeline. The real story here is the way in which the Emirate has positioned itself as a stable economic investment in spite of global volatility. While other oil-producing countries are scrambling to meet their obligations, Abu Dhabi is spending on investment like its 2011 all over again. The weakening euro offers Abu Dhabi consumers a price advantage, which in addition to increasing spending has the potential to boost consumer confidence. Emiratis are flocking to the mall. According to the Emirates News Agency, supermarket chains in the UAE expect a 10% reduction in prices despite overhead costs remaining the same. Turning to more expensive undertakings, the slump in oil prices will not affect major government spending, thanks to the Emirate’s sizable stock of foreign assets and reserves, and pru-

dent spending. In January 2015, Moody’s announced that, “resources accumulated during years of high oil prices, and a prudent budgeting of oil proceeds, will mitigate the negative consequences of oil price volatility on Abu Dhabi’s fiscal and external accounts.” As of the time of writing, all key projects such as Etihad Railways, museums, aerospace investments, and manufacturing initiatives were moving ahead at full tilt. The draft federal budget for 2015 was set at $13.36 billion, an increase of $790 million over 2014. Approximately 49%, or $6.53 billion has been allocated for service projects, social development, and social benefits, including health, education, and social services. Other projected expenditure in the 2015 budget includes $5.44 billion, or 41%, for government affairs, as well as 3.7% for infrastructure, 3.2% for financial assets and another 2.1% for other federal spending. Abu Dhabi’s enviable position is best explained by its fiscal policy. To start with, Abu Dhabi’s government debt rate was only 2.7% of GDP in early 2015 according to Moody’s. In other words, the Emirate’s impressive investments over the last year were outpaced by the private sector, allowing the state to amass considerable reserves, estimated to be around $489 billion in early 2015. With a buffer that large, the Abu Dhabi private sector can rest assured that the fiscal tools exist to withstand whatever the global economy throws at them. ✖

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AMER OMER SALEH Chairman, Al Amry Group There are substantial opportunities here as it is a safe region, which is growing strongly, especially the UAE, Saudi Arabia, and Oman. The media is talking about hundreds of billions of dollars in construction. We intend to focus on growing the group’s subsidiaries. For example, currently Boudoir Interiors has a joint venture with a German company, and we are considering siting the factory here in Abu Dhabi. This is a substantial project of around $5 million to $10 million in size.

THEBUSINESSYEAR

ABU DHABI 2015

INTERVIEW

growth INNOVATION

TBY talks to HE Eng. Mohammed Al Shihhi, Undersecretary for Economic Affairs at the Ministry of Economy, on the Emirate’s economic development, the Year of Innovation, and critical growth sectors.

How has Abu Dhabi's economy developed and diversified in recent years?

Thanks to the Emirate’s wise leadership and continuous efforts to maximize benefits from oil revenues, Abu Dhabi’s economy registered significant progress in all key areas of development. Economic development in the Emirate of Abu Dhabi in recent years has been characterized by the increased focus on channeling investments into non-oil sectors, to advance the diversification of the economic base and its income sources. This approach has been matched by government efforts to stimulate private sector involvement to contribute actively to the Emirate’s development process through laying down the foundations for an attractive and competitive business environment. The diversification strategy has succeeded in enhancing non-oil sector activities within the country. Abu Dhabi’s real GDP achieved a growth rate of 5.6% in 2012. In addition, nonoil economic activities have been experiencing stable growth rates between 5% and 9% during the period 2007-12, which in turn have raised the contribution of non-oil economic activities to the real GDP from less than 44% in 2007 to 49% in 2013. Abu Dhabi’s economy has clearly made significant strides in a short period of time and is steadily moving toward greater progress and development. The Abu Dhabi government is seeking to transform the Emirate into a diversified knowledge-based economy, capable of achieving sustainable development, as well as regional leadership and competitiveness at the global level. With 2015 being named the Year of Innovation, how do you view the Ministry's role in cultivating a culture of innovation in Abu Dhabi and the UAE at large?

The federal government in general and the Ministry of Economy in particular do not spare any efforts in advancing and encouraging innovation and research in the UAE. Our nation-

al agenda focuses on building a sustainable knowledge-based economy and our target is to increase the share of knowledge-based sectors to 5% of the UAE’s GDP by 2021. We are collaborating with all concerned stakeholders to enhance the business environment and support innovation and creativity. We do this through developing the country’s legal and legislative framework with the aim of creating a competitive, highly productive, and sustainable economy. A major milestone in building a competitive economy will be the launch of our National Patent Center to inspect, award, and register patents in the UAE. We believe this process will greatly encourage technological innovation and economic growth in the country and the wider region. Finally, the National Innovation Strategy, which was launched by HH Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE, and Ruler of Dubai in 2014, will further encourage the UAE as a whole to position itself among the most innovative nations in the world within the next six years. What opportunities exist for partnerships, knowledge transfer, and investment into the critical growth sectors outlined in the Abu Dhabi Vision 2030?

Through our local and foreign relations, we are always working on attracting investors from developed countries. During our visits outside the UAE, we focus on establishing synergies with technological and industrial development research centers primarily in fields that are beneficial to the UAE as a whole as well as the individual emirates. The government is actively stimulating FDI, and providing various opportunities for investors, particularly in areas that contribute to the transfer of technology and expertise. The UAE Offset Program, now renamed the Tawazun Economic Program, is a huge initiative that will aid the economy. The Offset Program ensures that local capacities

Economy

are built through the transfer of technologies (from foreign contractors), and opens up markets related to these specific purchases. The program has gone a long way toward diversifying the UAE’s economy and creating new ventures in various sectors by partnering with international defense contractors. To date, the program has effectively generated several multi-million dollar joint ventures in various economic and industrial sectors including ship building, district cooling, aircraft leasing, fish farming, healthcare, agriculture, banking, and education. R&D and knowledge transfer at a regional level can also help to facilitate the development of industrial and service clusters that can in turn have a transformative impact on a country’s economy. What was the significance of the UAE’s first Economic Planning Forum held in the Emirate of Fujairah in 2014 for the Ministry's objectives of boosting cooperation between federal and local governments from each of the seven Emirates?

This and future forums will have a major impact on the country’s national economy. The aim of these forums is to offer an advanced discussion platform for all participants and stakeholders concerned with the development of the national economy on both local and federal levels. The forums are in line with our strategy to step-up cooperation among the different Emirates. The Economic Planning Forum concept is aligned with the national agenda adopted by the UAE government and calls for better coordination and collaboration from each Emirate. We are keen to streamline our efforts on the local and national levels and advance the growth of expertise to further boost the competitiveness of the nation as a whole, and develop a successful and sustainable economy. The forums facilitate better communication among individual Emirates, which results in better planning and more cohesive policies and strategies, eventually leading to a more advanced overall economy for the UAE. What regional economic role do you see Abu Dhabi taking on in the coming years?

Abu Dhabi is set to play a major role in a range of economic activities. In addition to the traditional oil and gas industry in which Abu Dhabi is major international player, the Emirate

has emerged as a regional and international leader in renewable energy through Masdar, the home of the International Renewable Energy Agency (IRENA), the inter-governmental organization that supports countries in their transition to a sustainable energy future. Over the last few years, Abu Dhabi has made huge strides in logistics and transportation with new developments, such as the massive expansion of its international airport and the mega Khalifa Port project. The Kizad project and other investments in industry are also setting the scene for a paradigm shift in the Emirate’s economy. In the future, there will also be a much greater focus on tourism, as several more projects are expected to be completed, including the Guggenheim Abu Dhabi, the Louvre Abu Dhabi, and Saadiyat Island, among others. The Emirate’s aviation industry is also advancing with double-digit growth rates annually. Abu Dhabi is aiming to become a regional and international hub for air travel through the rapid expansion of Etihad Airways, the second largest airline in the UAE, after Emirates. Abu Dhabi is also looking to play a leading role in the regional financial services sector through the implementation of the Abu Dhabi Global Market (ADGM). Therefore, it is apparent that Abu Dhabi will play a significant role in the coming few years by emerging as a regional center for energy, logistics, transport, and also play an increasingly important role in trade, finance, tourism, and leisure. What are the Ministry's priorities in 2015 to further promote Abu Dhabi as a competitive, global business hub?

As a federal ministry, we work on preparing the general plan for economic development in the country through relevant laws and bills that are aligned to the overall general federal strategy. Our immediate priorities for 2015 include outlining a general economic and trade policy, identifying action plans for the policy, and implementing those plans as soon and as effectively as possible. We offer complete support to Abu Dhabi and the other Emirates through our long-standing cordial relations, international agreements, visits, conferences, and trade fairs. We coordinate with other federal ministries and local authorities in each Emirate. ✖

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BIO HE Eng. Mohammed Al Shihhi has been the Undersecretary for Economic Affairs at the Ministry of Economy of the UAE since October 2006. He is involved in the day-to-day administrative functions at the Ministry and also plays an instrumental role in policy formulation and implementation, especially in highlighting the UAE as a stable and diversified economy that is diligently working to become a fullyfledged, knowledge-based economy. He is a member of the Board and Head of the Executive Committee of the Board of the Emirates Identity Authority. He is also member of the Board of the Emirates Identity Authority, Emirates General Petroleum Corporation (Emarat), Emirates Standardization and Metrology Authority, Arab Mining Company, and the Arab Planning Institute, in addition to being the head of the UAE Auditor Certification Committee and Trade Mark Committee. He also serves as Vice-Chairman of the Supreme Committee for Consumer Protection and the UAE Fencing Federation, and member of the Entrepreneur’s Forum. HE Al Shihhi holds an Executive MBA from the American University of Sharjah and a Bachelor’s degree in Electrical Engineering from the University of South Florida-Tampa.

THEBUSINESSYEAR

ABU DHABI 2015

INTERVIEW

PATH finder TBY talks to HE Abdullah Saeed Al Darmaki, CEO of Khalifa Fund for Enterprise Development (Khalifa Fund), on supporting entrepreneurs, SMEs, and developing innovation. How would you describe the role Khalifa Fund plays in supporting entrepreneurs in the UAE?

Khalifa Fund was created as a social development agency with the objective of transforming those supported enterprises we help into viable businesses economically that have a part of today’s economic growth engine. We have access to finance and technical support organizations that foster entrepreneurship and advise federal and local agencies on how to contribute to a growing SME landscape. As a non-profit organization, we are able to provide access to finance on very reasonable terms and conditions. Over the last decade, UAE citizens have been more inclined toward public sector jobs. We are trying to

provide a platform for individuals with the ability to explore their potential in becoming effective entrepreneurs. There is a suite of services that we have designed over the last couple of years that go toward promoting the whole notion of a vibrant entrepreneurship environment and SME ecosystem. The leadership of the UAE, starting from HH Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE and the Ruler of Abu Dhabi, have continuously given their support in pushing the envelope on SMEs in the UAE.

IN NUMBERS Khalifa Fund

The SME Toolkit has

regional partners and has been translated into

15 languages

The fund started with capital of AED300 million and then increased that amount to AED1 billion, and then to AED2 billion ($544 million). How do you allocate the fund's capital?

Start-ups are the most sensitive enterprises we have because of the high risk of exposure and setup challenges, at times possible failure. We step in when financial institutions are shying away because of the fact that start-ups are considered to be, in financial terms, “toxic assets;” having said that, those institutions are more inclined to look to fast-growing businesses and those that are already making good returns. We work with people who are keen to start businesses and address their challenges. Over the last couple of years, we have created financial products for different economic activities and demographics within society. The aim is to guide the individuals who are in the process of putting together a business plan, they meet with an array of consultants who help in putting together a financial model, then they are required to present their plan to a committee of peers who make sure that the entrepreneur understands the different key parameters of establishing this Enterprise.

How do you support SMEs in gaining access to global markets?

Access to global markets is critical. The fact that our entrepreneurs and SMEs have the ability to participate in international events be it exhibitions or conferences is crucial in that it allows for the sharing of best practices and knowledge transfer. We have witnessed a growing number of entrepreneurs participating in such events all over the globe, which has led to adoption of new practices within the perspective SMEs signing of new alliances in delivering some of those services with the UAE and a vote of confidence for those entrepreneurs to take central stage in the global arena. How do you view the level of innovation among SMEs in the UAE?

BIO With over 20 years experience in the hydrocarbons and manufacturing industries, and investments as well as a background in sales and marketing, he has held number of leadership positions in governmental and private organizations in the UAE. He is currently Chairman of Abu Dhabi Systems Integration LLC, Board Member of the Abu Dhabi Ship Building Co, Committee Member of Abu Dhabi Demographic Council, Vice Chairman of Abu Dhabi Loans Commissions to Egypt, and Vice Chairman of the National Network Committee. Al Darmaki has a BA in International Affairs and Political Science, from Lewis & Clark College, Portland, US.

The UAE needs to continue investing in areas of innovations. The country will have to make further investment in areas of R&D especially within academia and some of the main clusters that have been developed across the UAE. Graduates should have the ability to develop their know-how further through R&D and leverage on a growing number of mentors who come to this country with past experiences. For enterprises what to continue to grow, they should leverage innovating, which requires robust R&D infrastructure. That is something that is lacking. We are engaged with a multitude of educational institutions from primary to tertiary, and from vocational to higher education, simply because we want to continue to foster entrepreneurship within the mindset of the younger generation from a very early stage all the way through to graduation. ✖

Economy

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INTERVIEW

A WALK in the FOREST TBY talks to Nazem Al Kudsi, former CEO of Abu Dhabi Investment Company (Invest AD), on the company’s history in the region, the attractiveness of frontier markets, and how to add value. Invest AD has been operating in the African and Middle Eastern markets for over 30 years. How would you characterize the kind of expertise investors can expect from Invest AD?

BIO Nazem Al Kudsi is the former CEO of Invest AD. A CFA charter-holder, he has a distinguished investment track record in the Middle East, the US, North Africa, and Far East. For almost two decades, he worked in the sovereign wealth fund arena in leading roles at the Abu Dhabi Investment Authority (ADIA). He was also responsible for a number of international investment portfolios, initially as US technologies portfolio manager in Silicon Valley, and later as a senior fund manager in Japan. In 2005, he was invited by the National Bank of Abu Dhabi to be Chief Investment Officer, responsible for all aspects of the business. In 2008, the government of Abu Dhabi asked him to take the lead at Invest AD, the investment arm of the Abu Dhabi Investment Council, a Sovereign Wealth Fund.

One of the problems in our region is that we have gaps in our knowledge because of the historical instability of the Middle East. In contrast, Western financial and portfolio management theory has had a long history and developed its knowledge, with layers and revisions building on top of each other. In 2008, when we received a mandate, we thought that our people, who are our main strength, should focus on specific regions; those regions being MENA and a part of Sub-Saharan Africa. That knowledge is what we call boots on the ground. We also conduct quantitative analyses; however, in frontier or slightly emerging markets, and especially in Eastern societies, you need to see people; you need to look into their eyes, and talk to them. Therefore, fundamentally, on the ground research is essential for our markets. Invest AD’s strength is that it focuses on specific areas; on a small set of asset classes, and we are building a knowledge base that will hopefully continue to add value for investors. What factors make the frontier markets you target attractive for investment?

In most Western countries and developed markets, the loan to deposit ratio is close to one. In Iraq, it was 0.15. This means people did not

trust the system and held on to their cash. Today, the Iraqi banking sector is still underdeveloped. Then, there is consumerism, especially in Africa. In places such as Kenya, with Safari Telecom, they have some interesting technologies for payments. Everybody uses their phone for daily commerce, including for such things as paying your plumber. This leads to the third item, which is the empowerment of people. New products and services, such as the iPad and Skype, are now a part of life. Many people may consider African countries backward, but actually they are far more advanced than many of the countries in the region in terms of how they are working together. Teamwork is an endangered species in many parts of the world. We are seeing evidence of highly- educated people coming back to the region and coordinating their policies together in order to attract capital for infrastructure purposes. Where do you see the most growth potential in the GCC?

In the GCC, it is Saudi Arabia if you take it as the largest market and factor in its ability to diversify the economy and to concentrate on social spending. One of the issues we have in the region is that we are always looking to target products for “VVIPs,” but the average man also has to live. There is growth potential in the middle class as well, and there will be a lot of policies to stimulate the middle class.

Invest AD • Established in 1977 • Funds performing in the top quartile

What is your main strategy moving forward?

Our main strategy is to figure out how we can add value for investors. To add value is to wander in the forest and let the forest lead you to the river. If you get lost, it is the best thing that could happen to you. I would love to see the great examples out there of entities and people that have made it big in any field in life that did not get lost at some point. Too many people put an emphasis on “you have got to do everything right, you have got to act right, you have got to do this or that.” We are a corporate entity; meaning, we are continuously looking for ways to add value to our investors. If I tell you that we have a five-year plan with A, B, and C, it will sound nice, but it is not true. We are starting to get engaged in things we never thought we would. The journey you are on is never the journey you start with. We have our core businesses, we have our funds, and they are doing well. However, I think the real excitement will come from somewhere else; possibly from where we are least expecting to find it. ✖

THEBUSINESSYEAR

ABU DHABI 2015

FOCUS YEAR OF INNOVATION

Officially the “Year of Innovation,” 2015 marks heightened efforts to look beyond the country’s dominant oil sector, as the UAE embraces the best practices to nurture innovation for the whole economy.

INVESTING FOR THE FUTURE CONSIDERING THE UAE SITS ON 10% of the world’s proven oil reserves, the country’s deliberate economic shift away from a GDP dependent on oil revenues is characteristic of the forward-thinking nature of the Emirate’s leadership. In the long-term economic visions that have been initiated at the federal level, from the UAE Vision 2021 to the Abu Dhabi Economic Vision 2030, development of non-oil sectors are targeted in order to strengthen economic stability domestically and enhance competitiveness globally. The focus on non-oil sectors does not mean oil is being ignored, and in fact Abu Dhabi aims to increase production of oil by 3.5 million bpd by 2017. However, the shift in focus does acknowledge the crucial importance that increasing contributions of knowledge-based industries have on sustainable economic growth. As a result, nurturing and encouraging innovation in non-oil sectors is a top national priority in the UAE, a theme that will continue to shape the economy in the years ahead. With cabinet approval, President of the UAE and Ruler of Abu Dhabi HH Sheikh Khalifa Bin Zayed Al Nahyan declared 2015 as the “Year of Innovation,” building on initiatives already set forth in the UAE Vision 2021 and the Abu Dhabi Vision 2030. The Year of Innovation will be the first year of the UAE’s seven-year National Innovation Strategy, which aims to transform the country into one of the most innovative nations in the world over the next seven years by 2021, giving priority to seven key sectors: education, renewable energy, health, transport, technology, water, and space. The emphasis on innovation comes from the realization that the path of continued sustainable economic progress and prosperity in the modern world is paved by high technology, creative solutions, and challenges. The Year of Innovation brings with it several policies, projects, initiatives, and incentive programs that are taking off in the Emirates, all designed to motivate and encourage a culture of innovation in both government and private sectors. The entire innovation value chain has been considered in the creation of the strategy’s four-pillared plan, which includes initiatives that en-

The entire innovation value chain has been considered in the creation of the strategy’s four-pillared plan, which includes initiatives that ensure what is necessary to sustain the progress of high-tech industries is accessible within the country. sure what is necessary to sustain the progress of high-tech industries is accessible within the country, with a keen focus on removing barriers to innovation, supporting research and development, protecting intellectual property, and easing the patenting process. According to the Abu Dhabi Department of Economic Development (ADDED), Abu Dhabi, and Abu Dhabi-based companies and institutions across sectors are well positioned to access the knowledge necessary to embrace innovation. Results of the ADDED’s first ever Abu Dhabi Innovation Index report issued in partnership with INSEAD and SCAD showed that the business community and economy in Abu Dhabi has grown into a highly effective innovating ecosystem with increasing linkages between research and innovation centers geared toward addressing industry and social challenges. With continued efforts, the country is fast becoming one of the most economically competitive and technologically advanced in the world, and it leads the region in its ability to source, create, and apply new technologies efficiently. Though Abu Dhabi is on the right track, it seeks to attract more global firms and expand its range of exports to increase its access to top-level expertise from around the world across all sectors. Nurturing innovation through incubators and industry-academia partnerships coupled with accessible avenues to funding will be a key component supporting the local innovation ecosystem. The National Innovation Strategy is a historic shift in the nation’s economy that is expected to significantly increase innovation spending, spark new discoveries and inventions, and fast-track them into commercial successes in the years ahead. ✖

DR. NADIR MOHAMMED Country Director, GCC Countries, World Bank The UAE is ranked 22nd in the 2015 overall ease of doing business table, but is also among the top 10 most improved performers in the world in the areas measured by the Doing Business survey. For the period covered in the last report, the UAE implemented several reforms that resulted in an improved business regulatory environment.

Economy

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INTERVIEW

leading the way TBY talks to HE Dr. Jamal S. Al-Suwaidi, Director General of Emirates Center for Strategic Studies and Research (ECSSR), on the organization’s focus on education and research, and how to meet the labor markets needs.

When it comes to education, what are some focus areas that are important to the UAE?

BIO Dr. Jamal S. Al-Suwaidi is the Director General of the ECSSR, and the political advisor HH Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces. He earned his PhD in Political Science from the University of Wisconsin in 1990. Dr. Al-Suwaidi has authored several books, including “The Mirage.” He has been awarded the Legion of Merit (Commander Degree) from the late King Hassan II of Morocco and the French Order of Merit (First Class) by the French President. In 2013, HH Sheikh Khalifa bin Zayed Al Nahyan presented the “Head of State Merit Awardæ to Dr. Al-Suwaidi. In 2015, he received the “Knight of Arab Studies” Award from the Arab Producers Union.

Focusing on education entails focusing on educators and on the mechanisms of action for raising teacher performance and experience, as well as updating academic curricula to meet the best international standards. We need to update the curricula because the requirements today in 2015 are different from what they were in the 1960s and 1970s. We have to tackle the socio-economic constraints of the Emirati disinclination toward the teaching profession. It is also important to develop digital infrastructure in order to meet the evolving requirements of modern education, and explore future trends in educational information technologies and their possible applications in the UAE. Moreover, there is a clear relationship between educational process and labor market needs; therefore, the output of the modern education process should be compatible with the labor market. Ultimately, this will enable us to create an advanced academic environment where a culture of excellence, creativity and innovation prevails among our students and youth, leading to a productive knowledge-based society in the UAE. It is worth mentioning here that the ECSSR, since 2010, organizes an annual education conference. The UAE embraces technology at a rapid pace compared to other countries in the region. What effect has technology had on society in the UAE?

In my book “From Tribe to Facebook: The Transformational Role of Social Net-

ECSSR • 1,124 publications issued • 21 years in operation

works,” I have outlined that the proliferation of social networks has led to a social shift, and this phenomenon wouldn’t have been possible without the unprecedented spread of technological advances. The UAE is an excellent consumer of technology; however, the UAE doesn’t produce technology. There is a difference. When the Cabinet marked 2015 as the Year of Innovation, it is because they want people to produce technology and know it, not just consume it. In the same context came the Smart Government initiative launched by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Ruler of Dubai, UAE Vice President and Prime Minister. The UAE is highly developed compared to many countries in the Middle East, but as we embrace technology we have to be aware of the repercussions of interconnectedness and globalization. What makes Abu Dhabi an attractive place for foreign investment in the region?

First is the stability in the UAE. As long as the UAE is able to maintain stability, foreign

investment will continue to flow into the Emirates. Second is the laws that we have in place, which are supportive of foreign investment. These two factors are conducive to investment. How do you see the ECSSR’s role in educating the public, and how are you looking to increase the ECSSR’s influence in the near future?

The ECSSR is a place where people come together and live in harmony with each other. We have people from all over the world coming here to deliver lectures. We never censor their ideas or tell them “say this, but don't say that;” people can say anything they like. These lectures are open, we publicize them in newspapers, and invite the public to attend. The ECSSR has become a destination of choice for both lecturers and audience. As for our research and publications, we need to ensure we have a wide network of distribution. The unfortunate part is that research is like milk, if you don’t consume it on time it will expire and become irrelevant. We have excellent content; however, if we don’t tell people about it, and if we don’t publish in different languages—French, Spanish, German, Russian, Chinese, and Urdu for example—then it will remain at the local level, while we aim for global outreach. We have excellent publications, such as the most recent one Mirage, which I have published in Arabic and will be released in several languages soon. The book’s main idea is the political illusion promoted by religious political groups among Arab and Muslim nations. ✖

THEBUSINESSYEAR

ABU DHABI 2015

FORUM HOLDING COMPANIES

JACK OF ALL TRADES

Holding companies in Abu Dhabi are investing and working in all sectors to help achieve the targets of the Abu Dhabi Vision 2030 as well as help foreign companies settle in the Emirate.

NABEEL ABDULRAHMAN

AMER FAYEZ KAKISH

CEO, KBBO GROUP

CEO, Ittihad International Investment LLC

n line with the Abu Dhabi Vision 2030 to achieve effective transformation and global integration of the Emirate’s economy, KBBO Group aims to bring about sustainable growth and enduring benefits. Abu Dhabi’s Vision 2030 is focused on four key areas of activity: economic development, social and human resources development, infrastructure development, and environmental sustainability, and the optimization of government operations. With the exception of the last one—government operations—these are the same areas where KBBO sees the most opportunity in private equity. World-class education and health services are a priority for the Vision 2030 and KBBO’s has a number of investments in these industries. Our vision is to be the premium private equity firm with local expertise, regional knowledge, and international interests. We aim to be the “go to” institution for the segments that we are present, and to keep probing for investment opportunities in high growth and undervalued sectors. We are already on track to reach our objective of consolidating our position as a pre-eminent region-leading business.

s Ittihad started in 2008 as a holding company, grouping a variety of investments and enterprises, we were faced with a few challenges. Not the least of which was how to bring an assortment of bright businesses, ideas, and individuals each in a different field, and each operating on a different scale and pace, into one collective drive. And how to make it all relevant and meaningful to everyone we work with, and everyone who works here. Indeed, collectively, we found the way. We did not look for synergies. We opted against optimization. What we sought, and we hoped have achieved, is listening, understanding, and working ethically and diligently to satisfy all our internal and external stakeholders’ needs. And we are grateful for the results. Our revenues and profits have grown exponentially, and our partnerships and friendships even more so. Looking ahead now, we know for a fact success is not just about numbers. It is about choosing who you work with and what you work for. That belief and enjoyment will determine how you work and how hard you work. It makes the whole difference.

SYED BASAR SHUEB CEO, PAL Group of Companies

AL has always worked toward providing solutions to the problems of the future. PAL invested in district cooling projects at a time when the entire concept was relatively new, untested, and unexplored in this region. It was a risk; however, it was also one of the solutions to the problems that we are facing; namely, energy and water. Similarly, PAL’s advent into aquaculture was to address the issue of food security in the UAE by trying to be a part of the government’s initiative to develop self-sustaining farms that would grow food locally. Today, PAL’s aquaculture company, Al Jaraf Fisheries, is one of the success stories in shrimp farming in the UAE. PAL’s laundry division in Support Services & Catering

based in Al Ain is one of the premium and exclusive laundry businesses and one of the largest in UAE, catering to the hospital industry. PAL’s decision to specialize in the hospital sector paid off well as we are seen as one of the most exclusive laundry services that does not mix the linen from the hospital with any other sector, be it a home or hotel laundry. We believe that PAL is the perfect partner for any serious investors looking for a partner in the UAE. PAL has nearly two decades of experience in successful startups and with its existing network of business partners PAL could prove to be a highly influential partner for those looking to promote their existing businesses or launching their new businesses into the UAE.

Did you know? By 2017, $40 billion in foreign investment is expected to flow into Saudi Arabiaâ&#x20AC;&#x2122;s bourse from international investors following the opening-up of the Saudi Stock Exchange (Tadawul) in 2015.

Find out more in The Business Year: Saudi Arabia

w w w. thebu sin essy ea r. com

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ABU DHABI 2015

INTERVIEW

a numbers GAME TBY talks to HE Butti Ahmed Mohamed Bin Butti Al Qubaisi, Director General of the Statistics Centre - Abu Dhabi (SCAD), on the importance of accurate statistics and the center’s contribution to the Abu Dhabi Economic Vision 2030.

Do you think your data is being used correctly by the business community in general?

Part of SCAD’s strategy is to support informed investment decisions by the private sector. The availability of reliable and relevant statistics promotes investors’ confidence and facilitates informed decision-making. This mix serves as a platform for balanced and sustainable economic growth in the Emirate. SCAD compiles and disseminates a wide range of official statistics of interest to the business community.

BIO HE Butti Ahmed Mohamed Bin Butti Al Qubaisi is the Director General of the Statistics Centre - Abu Dhabi (SCAD) and also a member of Abu Dhabi National Advisory Council, the Board of the National Statistics Center, the SubCommittee on Population Structure, the Abu Dhabi Center for Corporate Governance, and the Abu Dhabi Food Security Committee. He holds a Master’s degree in Business Administration from Geneva and a Bachelor’s degree in Public Administration from the UAE University.

These include economic, demographic, agricultural, and environmental indicators. For example, GDP is one of the most important indicators of the economic performance of a country. The FDI statistics show something of the relationship between foreign investors and Abu Dhabi. The statistics demonstrate that European countries account for the largest proportion of FDI. SCAD undertakes a number of initiatives to improve the understanding and use of statistics, especially among those in the business community, including investors. Are you planning to expand your database to other fields in the near future?

SCAD is keen to open up new opportunities by working with strategic partners in the government and the business world. The current Sport Survey, undertaken at the request of the Abu Dhabi Sport Council, will provide baseline information for planning and policy for sport, recreation, and community health in the Emirate. The Disability Survey is being undertaken in collaboration with the Zayed Higher Organization, and will produce measures such as disability prevalence rates and participation rates in education and work by persons with disabilities. Thus, we continue to make advanc-

es by coming up with new indicators in the economic and social sectors. Recently, SCAD released a new indicator called Expected Inflation, which we will continue to issue every quarter. How do you see your contribution to the Abu Dhabi Economic Vision 2030?

By law, the government acknowledges SCAD as the official statistical organization of Abu Dhabi. One of SCAD’s strategic outcomes is to ensure sound government policies and decisions based on relevant statistics. Whenever official figures are needed, SCAD is the main resource for statistics. We have assumed the role as the trusted partner in providing timely and relevant statistical products, which support decision and policy makers. As such, SCAD is a key player in the pursuit of the Abu Dhabi Economic Vision 2030 under the umbrella of the Executive Council of Abu Dhabi Emirate. We have been an active contributor to the Abu Dhabi Economic Vision 2030 since its first draft, and we update all the data at appropriate intervals. As the provider of latest available data and official statistics, SCAD makes a fundamental contribution to the technical work aimed at achieving the Abu Dhabi Economic Vision 2030. SCAD contributes to the Five-Year

Economic Development Strategic Plan, which contains the guiding principles for Abu Dhabi to achieve its 2030 targets. What are the advantages of SCAD’s recent MoU with the Italian National Institute?

SCAD has signed several MoUs with key international statistical agencies. The first international agreement was signed with the Australian Bureau of Statistics (ABS) in February 2011 and Statistics Korea (KOSTAT) in September 2012. This year we signed an MoU with the Federal Statistical Office of the Federal Republic of Germany (Destatis), and most recently with the National Institute of Statistics of Italy (Istat) in May 2014. The aim of international cooperation is to boost the technical know-how in statistics, especially within the younger generation of UAE nationals. Building these alliances has supported SCAD’s success in hosting the Conference of International Association for Official Statistics (IAOS) to be held in Abu Dhabi in 2016. By raising SCAD’s profile internationally and with the transfer of knowledge and experience gained through our international partnerships, we hope for further success in bidding to host the International Statistical Institute World Statistics Congress (WSC ISI) 2021. ✖

Economy

THEBUSINESSYEAR

INTERVIEW

CLEAR in sector two As the largest security provider in the Emirates, what are G4S UAE’s major accomplishments to date?

Like any business operating in the UAE, we are delighted to support the country, its citizens, and its businesses. We are a business that operates in shopping malls to residential communities to businesses to national infrastructure. Being part of that, and actually delivering what I believe are excellent services to our clients and citizens of the UAE, is a massive accomplishment. We have over 11,500 employees delivering outstanding service and solutions across five different businesses, which is 21 years old in 2015.

BIO As CEO of G4S Dubai UAE, David Stockton is responsible for UAE business with excess of 11,500 employees proving solutions in manned security, electronic security, cash processing and transportation, event security, facilities management, people recruitment, and outsourcing. Prior to joining G4S, he spent six years as Chief Commercial Officer for Pourshins-Supplair as well as with British Airways for nine years. David has a proven track record in developing business and its people through outstanding team management and is a highly driven, resultsorientated leader that is able to plan and execute strategy through diplomacy and tenacity.

TBY talks to David Stockton, CEO of G4S UAE, on accomplishments, new technologies, and partnerships.

What are some of the primary services you provide in the Emirates?

From a human capital point of view, our largest footprint is secure solutions or the traditional term of “man guarding,” which today is being augmented with technology. In guarding business towers, shopping centers, airports, ports, and remote sites, we use over 5,500 staff. That is what G4S is primarily built on globally as a security company. Equally, we support the country’s cash movements for financial institutions, moving capital around the Emirates on behalf of banks and financial institutions. We help process cash, checks, and other forms of high value goods into the financial institutions and economy. We also have a facilities management business, which is very much soft services for office, building, and hotel support. What are some pioneering technological solutions that you are bringing into the UAE?

There are some exciting things happening with cash. This is a very cash-generative country. The amount of cash that still moves hands versus electronic methods is much greater than many other parts of the world. We have a great technology for cash called Retail 360. It allows clients to be able to deposit their back office cash much quicker; therefore, they can put it on their balance sheet, which

IN NUMBERS G4S UAE

Over

11,500 employees

G4S has

640k employees globally

is better for their cash flow and security. This is different from the traditional methodology, which will take away some of our traditional business; however, we believe investing in it now will help in the long term. Today, someone takes cash to a shop, it gets collected, goes through processing, and hits their balance sheet; yet, with this technology it is allowing for a quicker transaction time and reduced need for the supply chain, while delivering balance sheet awareness. As soon as it goes into the machine, it is effectively in the bank. With the UAE being a destination country, it also allows you to take multiple denominations of up to five different currencies, which is a huge potential advantage for retailers.

What sort of partnerships or collaborative projects are you looking to build in the near future?

One of our focuses is on sourcing the best people who can act as the face of our service proposition in comparison to our competitors. We work with our own company overseas to offer that career route through our business here. Equally, we want to train local people and give them international experience in security that will help them develop and ultimately secure businesses and infrastructure in their own country. That is something that I am really passionate about. It is going back to basics: schools, universities, and having partnerships early on. Security goes from asset protection to managing a whole supply chain of critical infrastructure. How do we take local people and give them a career in security? We are developing a program, which is currently in its infancy. In the future, I would like to see Emiratis being sent to help operations overseas, and then come back to run the operation here. We are looking at the best ways to differentiate ourselves through partnerships or acquisitions to fundamentally change our proposition. It is a great opportunity to be able to partner with the right people and enter sectors and organically grow those sectors. ✖

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ABU DHABI 2015

FOCUS INNOVATION INDEX

FIRST FOR IDEAS Abu Dhabi was ranked first among other capitals in the Arab world in terms of inventions and it shows no signs of slowing momentum as it remains at the forefront of innovation regionally and seeks to move up the ranks globally. THE UAE is often referred to as one of the most technologically advanced countries in the MENA region, and, increasingly, in the world. What sits at the core of this distinction is the Emirates’ determination to constantly innovate and improve on its economic position and competitiveness. When it comes to doing business, one of the major factors necessary to encourage innovation is government support, an area Abu Dhabi has covered. This is where investors can take comfort in knowing that barriers to doing business, competing in the global economy, or even getting a start-up off the ground are minimal and both individuals and organizations can access the knowledge resources they need to invent new products and services, test, re-test, and bring to market innovative solutions—and there is growing amounts of data to prove these claims. In addition to global innovation reports, Abu Dhabi’s capacity to innovate were measured in the city’s first Innovation Index issued in 2014, which evidenced that in the capital of the UAE in particular, the state of innovation is strong and growing stronger year on year as it restructures its economy into a knowledge-based model, a strategic goal outlined in its Economic Vision 2030, the sustainable development plan for the Emirate. Abu Dhabi’s ability to initiate and embrace innovation is second to none in the region, and the capital is increasingly growing more competitive in its innovation abilities. In numbers, a global report announced by the World Intellectual Property Organization (WIPO) in October 2014 ranked Abu Dhabi first among Arab capitals in terms of inventions, with 76 inventions being registered between mid-2010 and mid-2014. In the Abu Dhabi Department of Economic Development’s first Abu Dhabi Innovation Index in 2014, results showed that the city ranked eight out of 23 countries by access to knowledge, and fifth in terms of innovation performance. The rise of the city as an innovation capital can be seen across every sector of the economy. From using robotics in surgeries and other medical treatments, to utilizing drones to monitor endangered wildlife species in the UAE, to

mobile banking solutions, and to tablets and smart boards in classrooms, the business environment in Abu Dhabi is ripe to absorb new technologies and creative solutions that touch the lives of all people in society. As businesses, individuals, investors, and policymakers are today, more than ever, turning to innovation as a means of addressing societal and economic problems, Abu Dhabi aims to transform into a hub where such solutions can take shape. Abu Dhabi’s high-ranking achievements in the realm of innovation can be attributed to the fact that innovation in the capital, and the UAE as a whole, is more than just a novel idea, but is a matter of government policy implemented at the federal level. Both technological advancement and innovation are being nurtured for growth with government support as the Emirate’s leadership aims to put Abu Dhabi on track to surpass its regional lead and potentially become a leading global innovation center as a result. The UAE capital city indeed has the capabilities to attract the know-how and expertise necessary to nurture innovation locally, advancing progress of society and economy forward and move up further in the rankings in the coming years. As several industry experts would agree, one of the largest factors impeding the uptake of innovation is the challenge of changing human behavior and turning inventions into commercial successes. Even if the “new” is a significant improvement on the “old,” there can be a lag shifting those comfortable with the old towards the new. Part of the federal innovation strategy in the UAE, and Abu Dhabi, is to weave the concept of innovation into the social fabric that unites all local stakeholders from both government and private sectors, businesses, research institutions, and the UAE population at large. With its pioneering spirit, Abu Dhabi aims to build on its culture of innovation and improve its position in the annual innovation rankings to close the gaps between its current state of development and its Economic Vision 2030. To get there, innovation is at the top of the economic agenda in the UAE. ✖

Economy

THEBUSINESSYEAR

Source: Khaleej Times, INSTEAD

ABU DHABI INNOVATION SURVEY 2014

1st

SURVEY CONDUCTED

NATURAL RESOURCE ECONOMIES (NREs) COMPARED

GLOBAL INNOVATION INDEX (GII) 2014 UAE

1st

IN PERFORMANCE AMONG MENA COUNTRIES

36th

WORLD INTELLECTUAL PROPERTY ORGANIZATION (WIPO) 2014 ABU DHABI

1st

OUT OF 143 COUNTRIES

AMONG ARAB CAPITALS IN TERMS OF INVENTIONS

INDICATORS MEASURED

INVENTIONS BETWEEN 2010 AND 2014

ABU DHABIâ&#x20AC;&#x2122;S CULTURE OF INNOVATION IS BEING RECOGNIZED ON AN INTERNATIONAL SCALE, FOSTERED BY FEDERAL GOVERNMENTAL POLICIES MANDATING TECHNOLOGICAL ADVANCEMENT AND CREATIVITY.

ABU DHABI INNOVATION INDEX 2014 Developed by the Department of Economic DevelopmentAbu Dhabi (ADDED), directed by the General Secretariat of the Executive CouncilAbu Dhabi (GSEC), in collaboration with INSEAD and SCAD.

ABU DHABI

8th

OUT OF 23 COUNTRIES FOR ACCESS TO KNOWLEDGE

5th

FOR INNOVATION PERFORMANCE

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ABU DHABI 2015

INTERVIEW

got YOUR back What are some things foreign companies should know about the business environment and norms of Abu Dhabi’s local market and society?

Abu Dhabi is one of the most rapidly growing economies and entrepreneurial places in the world—it is quite an achievement. Foreign companies can carry out business activities in the UAE only after having been registered by the relevant authorities. A foreign investor can generally establish a business presence either on the UAE mainland or offshore, which basically involves a business presence in a free trade zone. In terms of legal forms, there is a company law providing regulation governing the operations of a foreign business. The federal law provides for seven categories of business organization: limited liability company (LLC), branches, partnership, joint venture company, public share holding company, private share holding company, and share partnership company. But owing to certain restrictions, the choices commonly adopted by foreign companies are generally limited to an LLC, or a branch. Other options, such as partnerships and joint ventures, are usually not favored by foreign investors. As for UAE commercial company law, the foreign owner of an LLC may not exceed 49%, meaning 51% has to be held by a UAE national.

TBY talks to Mahmud P.K. Merali, Managing Partner of Merali's Group, on the business environment and taxation laws in the Emirate. What are some of the factors that are attracting foreign companies and foreign investors to Abu Dhabi?

In Abu Dhabi, there is a disciplined process for registering your company and entering the market. Foreign companies like to know that there is a consistent set of regulations. This disciplined procedure is important for the UAE and Abu Dhabi in terms of attracting foreign businesses. Abu Dhabi also provides competitively priced utilities. Abu Dhabi has been attracting more and more visitors, and the hospitality sector is constantly growing and attracting many residential and office developments. Investors are attracted here because of the good returns on their investments. What should foreign investors know about taxation in Abu Dhabi?

The federal government of the UAE has not promulgated any tax laws. Most of the individual Emirates have issued corporation tax decrees, but in practice taxes are only imposed on oil and gas producing companies at rates set forth in government concession agreements, and also on branches of foreign banks at specific tax rates. Unless you are an oil and gas producing company or a bank, you are not subject to taxation. That is very attractive for foreign investors. The income tax-

es that have been enacted in each Emirate provide for tax to be imposed on the taxable income of all bodies and the branches that carry on trade and businesses at any time during the taxable year through a permanent establishment in the relevant Emirates. But apart from those three industries—oil, gas, and banking—nothing is being collected. In terms of taxation in Abu Dhabi, according to the Abu Dhabi income tax decree, all companies carrying on trade or business in Abu Dhabi are required to pay tax on their earnings. Legally, the tax rates are on a sliding scale, with a maximum rate of 55%. But in practice, oil and gas companies pay taxes at rates specified by the relevant concession agreement. Oil companies also pay royalties on production. Branches of foreign banks, meanwhile, pay an annual flat rate of 20% on profits. The taxable income of the banks is determined by the reference rates audited on financial statements. The Abu Dhabi Income Tax Decree of 1965 specified that an organization that conducts trade or business in Abu Dhabi shall be subject to taxation as follows, bearing in mind this is what is set out in law but not applied in practice: companies are exempt for up to $1 million; $1-2 million is 10%; $2-3 million is 20%; $3-4 million is 30%; $4-5 million is 40%; and above $5 million is 55%. ✖

THE ABU DHABI INCOME TAX DECREE OF 1965 An organization that conducts trade or business in Abu Dhabi shall be subject to taxation as follows: companies are exempt for up to $1 million; $1-2 million is 10%; $2-3 million is 20%; $3-4 million is 30%; $4-5 million is 40%; and above $5 million is 55%.

BIO As Managing Partner of the Merali's Group, Mahmud P.K. Merali is the regional head for EMEA region. He has over 40 years of experience and serves as consultant to multinational and listed companies in the UK, the UAE, and East Africa. A Vice-Chairman of the Board of a listed entity in Turkey, he is also a member of its Corporate Governance Committee and attends the Audit and Risk Management Committees.

Economy

THEBUSINESSYEAR

INVESTMENT OPPORTUNITIES B2B

SHAMIS A. K. AL DHAHERI Managing Director, Ali & Sons Co. LLC

SANAD AL MEQBALI Vice Chairman, Bin Murshed Holding and CEO, Enjazat Services

the sharpest TOOLS TBY talks to two executives on each company’s diversified portfolios and working with overseas clients.

How would you describe your diversified business strategy across sectors?

as well. We try our best with the tools that we have to be part of the bigger picture.

SHAMIS A. K. AL DHAHERI At this stage, we are consolidating the number of sectors that we work in because we want to increase our focus, reduce the over-horizontal expansion, and increase vertical expansion within the business unit. The main business units that we have today include the motors business, real estate, retail, contracting, industrial, marine, and the oil and gas sector. We also manage other passive investments. We look at our business units as operationally active investments. As a family business, we tend to be focused on maintaining our reputation and providing high-quality deliverables, whether that means quality of service, the products that we provide, or quality in the development of our team. We also focus on ethics. We are known as a company that delivers. We are looking to the future not just of Ali & Sons, but also of the entire UAE economy. It is important for us that we work toward developing the UAE as well. That is our goal and it includes social responsibilities, as the development of the economy leads to the development of the people within that economy

SANAD AL MEQBALI Bin Murshed Holdings is a family company, established by HE Saeed Mohamed Murshed Al Meqbali. I graduated from university as an IT specialist, and worked in programming in website design and software development. As an entrepreneur I had established different companies in different sectors. Such ventures provide extensive experiences and knowledge into how to perform better. I joined Bin Murshed Holding in 2008 in an attempt to spin out successfully from the financial crisis and to diversify the holding portfolio into more growth and demanding sectors. What exposure do you have in overseas business? SAKAD Our main focus is to expand and strengthen our existing services in the UAE and use that to deliver the same to neighboring countries or wherever the services are required. In the future, we are planning to provide UAE services externally all over the world. The starting point to providing these services, from the operational side, is the oil field sup-

plies and services, because oil field supplies by nature travel all over the world. Hence, the same way that we have the air drilling service here in the UAE, we have the same service in Indonesia, where our main client is Chevron; we have been working with it since end-2006. For around seven years, we have been continually providing it services. We have also been providing oil and gas services to Iraq since 2005. These are our two main provisions of services from the UAE. SAM Our key aim is to help businesses develop both inside and outside the country. We are their sponsors and partners. With Enjazat, we established the first one-stop center, which contains all the government departments—both local and international—that are needed in order to provide quality services to entrepreneurs and start-ups. They can complete any task within minutes. The services provided consist of two parts: individual and business operations. If businesses need to complete a transaction or establish a company, Enjazat has created a one-stop shop-integrated service to help them. If you type “Abu Dhabi business set up” into Google, Enjazat is the first result you get. ✖

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ABU DHABI 2015

FORUM WHY ABU DHABI?

OPTIONS MATTER

Abu Dhabi has worked hard to create a business-friendly environment where companies are confident in their longterm investments.

RIAD NASHIF

AYMAN HAIKAL

Executive Vice President - Middle East and Managing Director - UAE and Oman, AECOM

Regional Managing Director, Dorsch Holding GmbH - Abu Dhabi

t AECOM, we are currently working on a major theme park on Yas Island that we believe will be an iconic tourist destination. We are very proud to be involved in this project. Besides the Saadiyat Island project, we have also been involved with many iconic projects for Abu Dhabi, including Etihad Rail, the Abu Dhabi Metro, Cleveland Clinic Abu Dhabi, and the award-winning Yas Mall, which won the Construction Week 2014â&#x20AC;&#x2122;s Commercial Project of the Year award. We donâ&#x20AC;&#x2122;t believe in profit at any price. The quality of the project and the value that we add comes first. We work closely with the Urban Planning Council (UPC), which has taken major steps toward establishing controls over buildings, regulations, and protocols. Over the last two or three years, the UPC has shifted its approach into matching the planning controls with cultures, which was lacking at the early stages of its creation. Other improvements are visible in new developments, which are more pedestrian-friendly and community-oriented, rather than just unassociated dwellings and commercial buildings. UPC is careful to consider the cultures and try to address the concept of culture in their regulations and activities.

he Abu Dhabi market is a mature market where decision makers know precisely what they are looking for. Our targets are clear and we always look to achieve the highest quality, as our clients set a great importance on quality within their projects. Within the GCC, the UAE was one of the earliest to develop. In some ways, it was a pioneer in real estate development, city development and in different infrastructure activities. As the UAE advanced, there was always a clear plan and vision for the future, one with a focus on product quality. As a result, many countries within the Gulf that are currently developing their cities are looking to Abu Dhabi and the UAE as a benchmark. I consider the UAE and Abu Dhabi, to be well established with state-of-the-art infrastructure within the cities, such as: master planning, architecture, telecommunications, roads, utilities, facilities. and services. In 2011, we made the decision to choose Abu Dhabi to be our regional head office. There were many reasons for this decision, but the most impactful reasons were because our extensive experience within Abu Dhabi, the availability of talented staff, and Abu Dhabi itself as a city. People feel happy and comfortable living in Abu Dhabi, and as a result we find it benefits us when recruiting experienced staff from around the world. This city has a remarkable social life, unique facilities, and amazing infrastructure.

HUSSEIN FOUAD EL GHAZZAWY General Manager and Vice-President, Schlumberger UAE

s far as the UAE market is concerned, the main technical challenges are extended reach drilling and the sour gas development by Al Hosn and Shell. We are looking to enhance the existing technology to meet the increasing complexities within the extended reach and sour gas environment in the UAE, where there is high H2S and high CO2. Most importantly, it is about the reliability of that technology. We have an Excellence in Execution initiative to achieve this. It has been made certain that the UAE will carry on with all their major projects. We will have to see how new projects will be affected. As service providers, we are in a bubble. We expect there will be pressure on compensation and the pricing of our services, which is something we saw coming. Our role is to maintain the efficiency and the reliability of our services, which translates to more cost effective solutions for our clients. Simply giving discounts is not necessarily the right solution. We maintain our focus on offering reliable tools whether oil prices go up or down. It is a continuous process and commitment we have with our clients and the UAE. We are continuing with several of our internal transformation initiatives, which are transmitting into more efficient, more reliable services, overall, giving more cost effective solutions to our clients.

Economy

PAUL BRANNIGAN Middle East Director, Wrightbus International rightbus is one of the world’s pre-eminent bus manufacturers and has been active in the GCC region since the 1980s. We have an established global platform with offices in Singapore, Hong Kong, India, Malaysia, and the UK, and therefore opening a GCC office was a natural step for us to take as part of our ongoing international expansion. Masdar has been a fantastic channel for us to enter the Abu Dhabi market. With Masdar's globally recognized brand and great infrastructure, setting up an office through their one-stop shop was effortless. Masdar City represents an excellent strategic location for Wrightbus International as both Masdar and ourselves share the same core principles of smart technology and continuous product innovation in the field of low carbon transportation. There is a fundamental shift to public transportation throughout the Middle East, and we see this is a long-term trend as people increasingly value the ability to travel without a car, given its direct and indirect costs in the form of congestion and environmental damage. With advancements in hybrid, low-carbon urban mobility driving urban sustainability agenda, the role of public transport will become ever more important not just in Abu Dhabi but across the GCC.

DR. MARC HARRISON CEO, Cleveland Clinic Abu Dhabi

ubadala is supporting Abu Dhabi’s vision by creating new sectors and professions, while helping establish the Emirate as a global player in knowledge-intensive industries. This includes the development of a pioneering, world-class healthcare sector that supports the rapid development the Emirate is witnessing. Mubadala selected Cleveland Clinic to replicate its model of care in Abu Dhabi, leveraging almost 100 years of clinical expertise and a longstanding track record of delivering quality care across key medical specialties and sub-specialties which align with the healthcare needs of Abu Dhabi. Providing multispecialty complex and critical care services in Abu Dhabi offers an alternative for patients who would otherwise travel abroad for care. We also know that a sustainable Cleveland Clinic Abu Dhabi is one that provides professional and learning opportunities to the Emirati workforce, which we are committed to supporting. The idea that we help Abu Dhabi fulfill the Vision 2030 is really the big picture for a lot of us. Abu Dhabi is a great place to live. It is the center of the world economically in many ways as well as from a geographic standpoint. It is a place that is growing quickly and encourages innovation; these are many of the same qualities that Cleveland Clinic has. We are forward leaning, we love new things, and we like to grow.

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ALFRED BLOOM Vice Chancellor, New York University Abu Dhabi (NYUAD)

uring our first four years of operation in downtown Abu Dhabi, NYUAD had already become a world-class institution, sending graduates to Oxford as Rhodes Scholars, to advanced degree programs in some of the best universities in the world, and into positions of significant responsibly across public and private sectors. With our first graduation behind us, and energized by the dynamic architecture and superb facilities of our new campus, in this our fifth academic year NYUAD is truly hitting its stride. We are now positioned to demonstrate to the world the value of the education model that we represent. Given the distinctive composition, mission, and location of our institution, we believe our contributions of educational opportunity, intellectual energy, and research productivity are already exerting positive impact on the quality of life in Abu Dhabi, and on its increasing stature in the world community. NYUAD is intrinsically part of the NYU network and broadly empowered by that network. But, in addition, it offers a model of an institution whose undergraduate and research programs are deliberately fit to a global world. Given Abu Dhabi’s increasing stature as an idea capital for, and leader towards, a more productive, cooperative, and peaceful world, we believe there was an ideal fit between our location and NYUAD’s mission.

Plan with us... for a global solution

Dubai, Saudi Arabia, Kenya, Uganda, Rwanda, Iraq, Sri Lanka and the Maldives, clients enjoy the advantages of a dedicated local model that combines personal care with a global range of resources.

and highly respectable clientele all over the world. Once again, Meraliâ&#x20AC;&#x2122;s proved to be ahead of the pack with yet another crowning achievement when it was awarded the Platinum Approved Employer Trainee Development status by the (ACCA). Meraliâ&#x20AC;&#x2122;s has further substantiated its professional excellence with its Dubai Financial Services Authority (DFSA) and Real Estate Regulatory Agency (RERA). of hard work, honesty, professional excellence and trust. Meralis provides a range of accountancy and business advisory services to assist you with a full spectrum of advice from compliance to facilitating growth locally and internationally so Plan with Us.

MAHMUD MERALI Group Managing Partner mpkmerali@meralisgroup.com Dxb : + 971 50 273 7030 UK : + 44 7 86 032 3264

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Philippe Ghanem, Vice Chairman and Executive Managing Director of ADS Securities, on the development of the market.

The Abu Dhabi Global Market established on Al Maryah Island is turning Abu Dhabi into a world-class financial center.

HE Ebrahim Obaid Al Zaabi, Director General of the Insurance Authority, on market demand, and the role of takaful.

Finance REVIEW BANKING

Abu Dhabi’s financial sector is set for still greater things, as the Emirate becomes a formidable international hub for the financial services sector.

A SOLID PRINT

he UAE’s Vision 2021 has far reaching social and economic goals that require a sustainable economic model. Fundamental to this is a liquid and rationally governed banking environment. Moreover, Abu Dhabi’s banking sector has also become a safe haven for investors from more troubled quarters of the Middle East.

SOME UAE BANKING METRICS The financial services sector stumped up 16% of the UAE’s nominal GDP in 2013. In asset terms the UAE banking sector—with the Central Bank as its watchdog—is the largest in the GCC at roughly 30% of the total. In 2013, the capital, Abu Dhabi, held 55% of total local banking assets, with Dubai at 37%. And together accounting for close to 90% of GDP the bulk of financial activity predictably occurs in the two emirates. Currently there are 51 commercial banks in the UAE, where 23 are national and 28 foreign, and the largest five hold around 70% of

Image: Ahmed Al Harthi

Conservative policy at most banks means that the significant SME contingent of the economy has faced difficulty in securing loans.

total commercial banking assets. Therefore, consolidation could provide a growth stimulus; in a past example, Abu Dhabi Commercial Bank bought the retail arm of Royal Bank of Scotland in 2010 for around $100 million, thereby gaining over 250,000 customers. In the same year the UAE’s total banking assets of $453 billion ranked it the foremost banking sector of the GCC. Post crisis, the federal government propped up the banks with a $15.8bn capital injection, lifting the capital adequacy ratio (CAR) by 5pp and providing huge term deposits converted into capital. Yet the UAE Central Bank’s Law No.29/2011 Regarding Bank Loans and Services Offered to Individual Customers effective as of May 1st, 2011 placed responsibility for healthy banking sector performance on the system itself, encouraging prudent lending activities, and efficient due diligence. According to Central Bank of the UAE data, gross bank assets, including bankers’ acceptances, slid 0.8%, during

THEBUSINESSYEAR

ABU DHABI 2015

December 2014, slipping from $637.8 billion at end-November to $632.4 billion at end-December 2014. Gross bank loans and advances also fell 0.1%, from $380.6 billion at end-November to $380.1 billion at end-December 2014. Meanwhile, overall bank deposits lost $1.3 billion for December 2014, to $386.9 billion, on a $6.2 billion slide in resident deposits, which represented 89.2% of total bank deposits, thus dampening the $4.9 billion rise in non-resident deposits, which comprised 10.8% of total bank deposits as 2014 came to a close.

ASSESSING THE MOOD In November 2013 Moody’s upgraded the UAE’s banking system outlook to “stable” from negative in light of its confidence inspiring operating environment, and post-crisis recovery of the local real estate market. The agency’s more recent appraisal in January 2015 is cautiously optimistic, despite oil prices still approaching those of bottled water. The UAE, of course, continues to spend hugely on the requisite infrastructure for economic diversification away from oil. Plans are afoot for Abu Dhabi’s financial sector to step properly onto the global stage. Given its location, Moody’s encouragingly notes that the emirate’s banking sector is not at risk from regional political strife. Abu Dhabi’s (rating: AA stable) economic growth is forecast decelerating to under 3% in 2015. Yet Moody’s expects economic policy to mitigate any fallout. This despite putting “…an end to four consecutive years of double-digit fiscal surpluses, the emirate’s sizable stock of foreign assets will help cushion the impact of lower oil revenues in the coming years.” Abu Dhabi’s central government debt is at a minuscule 2.7% of GDP, making for slender liquidity risk. This leaves Moody’s confident that resources accumulated in the heady days of elevated oil prices, “…and a prudent budgeting of oil proceeds will mitigate the negative consequences of oil price volatility on Abu Dhabi’s fiscal and external accounts.” The Emirate, it is pointed out, also has vast and diverse offshore assets, which can always be liquidated in the event of adversity, and which in any case comfortably exceed government-related institutions’ liabilities. And it hurts no one that the Abu Dhabi Investment Authority, the Emirate’s sovereign wealth fund, sat on estimated assets of $498 billion in 2014. These assets also more than take care of Abu Dhabi’s debt inclusive of government-related institution liabilities, and those of the banking system. Official figures put the Emirate’s overall debt of roughly $105 billion at 40.5% of GDP.

NATIONAL BANK OF ABU DHABI With a 70.5% stake held by the government of Abu Dhabi, National Bank of Abu Dhabi is the sole bank in the UAE rated AA by all major agencies. The bank’s five-year Strategy presentation of March 2014 revealed that in the UAE it ranked 2nd for branch network, 5th for its

customer base, 2nd for deposits, 5th for loans, and held 4% of the credit card market. Total assets for FY2014 of $102.4 billion were down 5.5% QoQ, but up 15.7% YoY from $88.5 billion. Loans & Advances of $52.9 billion were down 1.9% QoQ, but up 5.7% YoY. With higher earnings a capital resources (Basel-II) came in at $11.2 billion up 3.7% QoQ and 11.2% YoY at YE2014. The Basel-II compliant capital adequacy ratio print at 31 Dec 2014 was 16.4%, thus well above the UAE Central Bank’s minimum stipulation of 12%. FY2014 revenues of $2.8 billion were 11% up YoY from $2.6 billion. Meanwhile, net profit for FY2014 of $1.5 billion was up 18% YoY from $1.3 billion.

FIRST GULF BANK

Forecast QISMUT Islamic Banking Assets by 2018 (billion USD) Source: EY

First Gulf Bank, incorporated in 1979, and 86.4% owned by UAE companies and individuals, has established a formidable pedigree, whereby for 2013 it led the UAE banking system on net profit of $2.3 billion. And for 2014 net profit was at $1.6 billion, up 18% YoY. Exceeding much of its 2014 guidance, loan and revenue growth were 11% and 10% up YoY. The bank’s 2015 guidance is for low double-digit net profit growth. A plethora of awards for 2014 included Forbes ranking the institution 8% on the Top 500 Companies in the Arab World—4th leading bank and 2nd UAE bank.

ABU DHABI ISLAMIC BANK EY’s World Islamic Bank Competitiveness Report 2013-14 posits a potential scenario where by 2018 Islamic banking assets in the key QISMUT market (Qatar, Indonesia, Saudi Arabia, Malaysia, UAE, and Turkey) reach $1.6 trillion, and $3.4 trillion worldwide. Incorporated in

Qatar

166

Indonesia

113

Saudi Arabia

632

Malaysia

392

UAE

205

Turkey

166

HOLGER LAUBENTHAL CEO, Mubadala GE Capital Mubadala’s mandate is the delivery of sustainable financial returns as well as the diversification of the economy and the creation of opportunities for UAE citizens. We have specific training and management development programs in finance, risk management, HR, and IT. These participants have gone on to larger roles, either as senior managers for our business or leadership roles in Mubadala or the wider Abu Dhabi economy. When they are out there they serve as multipliers, taking their experiences with them.

THEBUSINESSYEAR

ABU DHABI 2015

Abu Dhabi’s banking sector has also become a safe haven for investors from more troubled quarters of the Middle East.

1997, Abu Dhabi Islamic Bank was the to exclusively cater to this market in the Emirate of Abu Dhabi. In 2014 it expanded its branch network of 88 in the UAE and three overseas branches in Iraq, Qatar and Sudan, as well as subsidiaries in the UAE, the Kingdom of Saudi Arabia and the UK. Total assets as at December 31st, 2014 printed at $30.5 billion, up 8.5% YoY from $28.1 billion. Customer deposits appreciated 12.3% YoY to $23.1 billion from $20.6 billion. Net profit for 2014 climbed 20.7% YoY to $476.4 million.

ABU DHABI COMMERCIAL BANK Almost 60%-owned by the Abu Dhabi government Abu Dhabi Commercial Bank has a network of 280 ATMs, and more than 50 branches across the UAE plus two in India. In November 2013 the bank launched a major rebranding program to launch more intuitive services, the first stage starting at its prestigious branch at Abu Dhabi Mall. Total assets for 2014 stood at $55.5 billion, with total liabilities of $48.4 billion and a net profit of $1.1 billion.

UNION NATIONAL BANK (UNB) Awarded Best Banking Group in the UAE at the World Finance Banking Awards 2014, UNB— established in 1982—is the sole banking entity jointly owned by the governments of Abu Dhabi and Dubai. As CEO Mohammad Nasr Abdeen told TBY, “We have consistent strong ratings from Moody’s Investors’ Service Ratings, Fitch Ratings and Capital Intelligence, with all three ratings reporting a “stable” outlook for the bank.” UNB saw record group profit in 2014 of $544.5 million. Operating income climbed 9% YoY to $952.9 million, while loans and advances of $17.5 billion were up 7% YoY. Total assets stood at $25.5 billion, up 7% YoY, and the customer deposit base of $18.3 billion as had climbed 4% YoY. Highly liquid, the bank boasted a loan to deposit ratio of 95.1% as at December 31st, 2014.

MONEY ISLAND The UAE is already a financial hub, hallmarked by the establishment in 2004 of the Dubai International Financial Centre (DIFC), a federal financial free zone (FFZ). Abu Dhabi, too, is about to launch its own FFZ, namely Abu Dhabi Global Marketplace (ADGM). Located on Al

Maryah Island, and offering the familiar gamut of investment incentives, it will strategically bridge financial markets in the Far East and Europe. ADGM’s three independent authorities of the Financial Services Regulations Bureau, the Registration Bureau, and the Courts will ensure compliance with international best practice. The ADGM’s signing of a 50year lease for the island’s iconic anvil-shaped building in itself should spur the island’s financial activity.

UAE Banking Sector Selected Indicators (billion AED)

TRYING TO PLEASE THOSE SMEs

500

According to The National, around 60% of the UAE’s non-oil economy is operated by SMEs, which account for 90% of all businesses. These enterprises employ over 42% of the workforce, and the Ministry of Economy estimates SMEs generating 70% of GDP by 2021. Nonetheless, the average SME has some difficulty obtaining loans at convenient rates, if at all, with a rejection rate for applications of between 50-70%. In a TBY interview RAKBANK CEO Peter England described the bank as being “…tightly focused on retail and small business lending—the S of SME. And while many banks ceased lending post-crisis the bank selectively upped its loan book. “Customers remember us for that,” he commented, adding that in consequence, “today, 60% of one of our main products, RAKFinance, a term loan that we offer to small business owners, comes from existing customers topping up.” Well-regulated and flush, the Emirate’s banking powerhouses will withstand strife in the broader region and the prevailing climate of discounted oil alike. ✖

Source: FGB 2500 2000 1500 1000

Net Total Assets

Net Loans and Advances

Dec 2013

Customer Deposits

Dec. 2014

Finance

THEBUSINESSYEAR

INTERVIEW

a daily BASIS TBY talks to Philippe Ghanem, Vice Chairman and Executive Managing Director of ADS Securities, on the development of the financial market in Abu Dhabi and the company’s role in it.

What does your new ADS London office add to your network?

What kinds of new technology are you investing in?

Our office in London will initially be focused on our FX, precious metals, and CFD trading business. This is because London is still responsible for trading 41% of the daily $5.3 trillion currency market, meaning it is essential that we have a regulated business in the UK. Most of the important liquidity providers, our counter parties, and a number of our largest clients are in the City. The Financial Conduct Authority (FCA) is a respected regulator, and we are pleased that it has accepted ADS Securities to work alongside some of the most important global financial services companies. Before I could be appointed as Chairman of ADS London, along with James Watson, our Managing Director, we had to go through detailed checks from the FCA to ensure that we met the international standards it works to. Having our London and Hong Kong offices means that we are now regulated in three major markets and act as a genuine bridge from the Far East through the Middle East to Europe and on to North America.

We have a new platform out called OREX Optim, which is a platform made for all kinds of traders, from bank traders to professional traders. It is a platform that gives you the ability to manage all your assets. It is an easy platform to use, being quick and highly sophisticated. The whole objective of this platform was to build on the idea of giving our clients excellent execution and putting them in charge of their trades. From having developed the first platform in the region we are now creating global technology firsts for Abu Dhabi; for example, we have implemented the world’s first 40 GB FX Ethernet cards. The 40 GB network cards allow each tick from multiple liquidity venues to be processed with dramatically reduced delays during volatile market conditions. This option is only available to ADS Securities clients.

How has the response been in regard to bringing online trading to the Middle East?

We are the first international online trading company headquartered in the Middle East, and the response has been overwhelming. I look at all the awards we have and I am shocked. Every day we have clients willing to trade with us, and we have had a great response. We are a real success story. And we continue to invest in the services we can provide them, including fixed income (bonds), structured products, wealth management, investment banking, and asset management. They like what ADS Securities provides and they want us to grow. People want to put money in ADS and be managed by ADS, because we have qualified people and we have a hands-on approach.

What are some challenges you expect going forward?

The financial services sector is always the most competitive in the world. It is a very challenging industry that can also produce great rewards and, if you are not very careful, also losses. To be able to compete against the main well-known firms that have been building their reputation and businesses for many years is difficult. But, for the reasons we have discussed, we believe that we have a unique and important offer and will work day and night to make sure that this is delivered to the market. Our challenge is to keep making money so that we can keep investing in our people, our technology, and services for our clients. We want to be the best and will strive to achieve this even when markets are difficult and investors are cautious. Our vision has always been to demonstrate that the independent financial services sector in Abu Dhabi has a role to play alongside other similar sectors in the world’s leading financial centers. ✖

IN NUMBERS ADS Securities

400 million USD capitalization

170 employees

BIO Philippe Ghanem is the Executive Managing Director and Vice Chairman of ADS Securities, the Abu Dhabi-based forex and commodities trading company conceived and developed to offer a world-class global trading and investment company located in the Middle East. He was instrumental in setting up ADS Securities, drawing on his wealth of experience in both establishing and running successful entrepreneurial financial services companies. He is also Deputy CEO and Vice-Chairman of ADS Securities’ parent company, ADS Holding, and Chairman of ADS Securities London Limited. Prior to joining ADS Securities, he successfully created and launched a number of forex businesses. He holds a Bachelor of Business Administration Degree from the International University of Geneva, Switzerland.

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ABU DHABI 2015

FOCUS FINANCIAL CENTER

ALL PART OF THE SERVICE The Abu Dhabi Global Market established on Al Maryah Island is turning Abu Dhabi into a world-class financial center and is expected to ignite the next phase of advancement in the local financial services sector. THE FOUNDATIONS OF a new financial free zone in the GCC are taking shape in the capital of the UAE. Aptly called the Abu Dhabi Global Market (ADGM), the ADGM is set to turn Abu Dhabi into a global financial center and investment hub linking financial flows in the MENA and Asia geographic areas to the rest of the world. As its 50-year lease agreement with the Mubadala Development Company communicates, the ADGM is becoming an anchor within Abu Dhabi’s financial sector headquartered on the capital’s 24-hour financial district, Al Maryah Island, and is attracting interests from top international investors with its list of commercial incentives and regulatory architecture. ADGM’s momentum began in 2013 when the Abu Dhabi government passed the Federal Law Number 4 by Decree to establish a financial free zone in the UAE’s capital city with the aim of becoming operational in the year 2015. With Abu Dhabi’s reputation for financial stability, vast reserves of oil wealth, and an economic diversification plan underway, the ADGM’s objectives are to funnel more global market players into the economy through various financial incentives and a transparent system of rules and regulations applicable in the free zone. In its design, the ADGM building will be home to the three primary operational components of the financial center: the Financial Services Regulations Bureau, the Registration Bureau, and the Courts. Being a licensed company at the ADGM will offer investors several benefits in conducting their banking, insurance, and trading, and investment activities through the ADGM such as 100% foreign ownership policies for non-UAE nationals, a zero tax rate, and an English-language court system to settle disputes. In a pioneering one-of-a-kind approach for the Middle East, the ADGM has decided that English common law will be the governing legal system at the financial free zone, modeling the legal frameworks on those of financial centers

in Singapore and Hong Kong. Acknowledging that with increased financial activity freedom comes increased regulatory and legal responsibilities, unlike any other zone in the Middle East, the ADGM will present a key advantage for investors and international finance institutions given the added capacity they will have to do business within a transparent legal framework, reducing risk, and enhancing the certainty of financial transactions.

With Abu Dhabi’s reputation for financial stability, vast reserves of oil wealth, and an economic diversification plan underway, the ADGM’s objectives are to funnel more global market players into the economy through various financial incentives and a transparent system of rules and regulations applicable in the free zone. In 2015, the ADGM will begin licensing its first batch of institutions looking to transact their business from Abu Dhabi’s fledgling financial free zone, which will primarily be restricted to private banking, wealth management, and asset management institutions. The impact this increased commercial activity will have on the financial services sector is expected to ignite a new phase in the advancement of Abu Dhabi’s financial sector. As the role the ADGM will sustain in Abu Dhabi’s economy, the UAE’s economy, the regional economy, and the global economy at large unfolds, what is certain is that the establishment of the ADGM represents a major milestone in the Emirate’s strategic journey of economic growth and development. Today, a more attractive and robust business environment is developing within the local financial services sector, liberating Abu Dhabi’s potential success as a global financial center of world-class standards and reaffirming its ambitions to remain a key player in the world of finance. ✖

Finance

THEBUSINESSYEAR

INTERVIEW

TBY talks to Mohammad Nasr Abdeen, CEO of Union National Bank (UNB), on the bank’s position in the financial market and its performance.

in the BANK What have been some of the key highlights at UNB over 2014?

BIO As CEO of UNB, one of the leading banks in the UAE, and the only bank owned by the governments of Abu Dhabi and Dubai, Mohammad Nasr Abdeen is as dynamic and success driven as the organization he heads. He oversees the activities of the UNB Group and its subsidiaries, managing a team of over 1,800 employees. He has led the bank’s expansion strategy through subsidiaries including the Union Brokerage Company and the Al Wifaq Finance Company, offering shariacompliant solutions. UNB has significantly expanded its retail reach in recent years, with branches in Egypt, Qatar, Kuwait, and an office in Shanghai.

Reviewing our financials, we have maintained a consistent growth course, recording a profit of AED1.584 billion for 9M2014, achieving an increase of 10% compared to the corresponding period of the previous year. Our profit for 3Q2014 was AED552 million, up notably by 22% compared to the same quarter of 2013 and an impressive 6% QoQ, principally driven by an increase in volumes across our various business segments. The UNB Group’s performance in 3Q2014 maintained its upward trend, with the Group announcing a record profit. We remain focused on sustainably growing our franchise and business. The key to the success of our business model is its strong customer-oriented strategy, providing a wide array of award-winning products and services and our persistent endeavor to enhance customer experience. How would you describe the position of UNB in the UAE’s financial sector?

We have consistently strong ratings from Moody’s Investors’ Service Ratings, Fitch Ratings, and Capital Intelligence, with all three ratings reporting a “stable” outlook for the bank. At UNB, we have improved our activi-

Union National Bank (UNB) • Sustained growth in loans and advances to AED64 billion as of September 30, 2014, up 6% YoY • Awarded Best Banking Group in the UAE at the World Finance Banking Awards 2014

ties, services, and products over the years in order to be a good partner in the banking industry so as to support the economy and the country. We have an Islamic finance arm called Al Wifaq Finance Company. UNB established the first brokerage company in the UAE, Union Brokerage Company (UBC), as well as a sales and marketing services company, Injaz Marketing Management. We understand the market fully, and we focus on this aspect of our business. We are selec-

tive about where we engage outside the UAE. Currently, we have a presence in Egypt through a 96.6% owned subsidiary. While UNB has a representative office in China, and a presence in Kuwait and Qatar, we are not aggressive about expanding to every country in the world. We select markets in which we are able to manage our business. What is your analysis of UNB’s 10% increase in profit in 3Q2014 compared to the corresponding period in 2013?

First, we have a strong credit culture. We plan our actions well, and we do not take excessively high risks. It is well known that UNB is more conservative, which was at one point taken as a negative. When 2008 came, it turned out to be a great point in our favor. Many others began complimenting what we had done. We are consistent. We stick with credit principles and take calculated risks. We identify the segments we want to deal with, and we understand them. We have specialized people in each industry. The bank understands in detail customer needs and plans, and it works as a partner with the client. We take the necessary action when the time is right. We are not the kind of bank that changes according to the news. We are consistent because of our conservative approach. ✖

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ABU DHABI 2015

INTERVIEW

RAKBANK is ranked first in the UAE by return on assets. To what do you attribute this distinction?

BIT by bit TBY talks to Peter England, CEO of The National Bank of Ras Al-Khaimah (RAKBANK), on the bank’s return on assets, awards, and ownership.

We are tightly focused on retail and small business lending. One of the reasons the bank’s return on assets, as well as net interest margins and gross interest margins, are the highest in the UAE, and very high globally, is that we are predominantly in the unsecured lending business. If you get it right, you have high returns. If you get it wrong, you have low or negative returns. However, RAKBANK has stuck with the formula it has adopted for a long time. Bit by bit, RAKBANK has developed its ideas. It has tried new things, and changed new solutions along the way; however, once it decided to enter into certain lines of business, it stayed with it. We have focused heavily on mobile sales and to a certain extent electronic channels, because we believe that in this day and age it is not really necessary to have hundreds of branches, particularly in a relatively small place like the UAE. Therefore, we prefer to go to customers rather than have them come to us. RAKBANK won an award in 2014 for its “Click and Collect” online service. How do you plan to continue innovating in the digital segment?

RAKBANK is perceived to be technologically advanced; however, considering the markets I come from, I still believe we have a long way to go. The world is changing quickly, and we need to rethink our whole digital strategy and come back to the market with something powerful and refreshing. There

is a great space to do that in the UAE. The UAE market is sophisticated, but in terms of digital banking, it is still at its infancy. Our digital offering is functional and works nicely, but we are looking to offer more of a financial services platform rather than just a pure transactional internet site and to do more in terms of convergence of mobile and internet. RAKBANK is currently awaiting regulatory approval for a majority stake in Ras AlKhaimah National Insurance Company (RAKNIC). What value do you expect RAKNIC to add to the bank once approved?

The intention is to work in synergy. RAKNIC is a successful general insurance company and is doing exceptionally well at an operating profit level. It has a full life license, which it isn’t using at this point in time. In the longer term, we see a fantastic opportunity to use RAKNIC for both our general and life offerings. We will have to build the life capability with RAKNIC’s management but I think it is still a fantastic synergy. Even though we don’t have the majority stake yet, we are passing quite a lot of business to RAKNIC. In the past, we would pass customers who wanted insurance for something on to other organizations. There is a great opportunity for business to go both ways through RAKNIC and RAKBANK. RAKNIC is also a large insurer and has a large customer base. It is not a takaful company at the moment, which is something we would also potentially explore down the road if we were able to obtain a takaful license. ✖

The National Bank of Ras Al-Khaimah (RAKBANK) • 34 branches across the UAE • First in return on assets in the UAE • CAGR of 10.3% in Bank’s loan book since 2010

BIO Peter England became the CEO of RAKBANK on November 1, 2013. Before joining RAKBANK, he spent seven years as the Head of Retail Banking at CIMB Bank Berhad, a subsidiary of CIMB Group and one of the largest banks in ASEAN, where he managed CIMB Bank Malaysia’s business for individual and small enterprise customers and worked on developing a wide range of conventional and Islamic products and services.

Finance

THEBUSINESSYEAR

Global tremors have taken their toll on the UAE’s equity market, but the state has ensured that steps are taken to sustain credibility and investor confidence.

Review

C A P I TA L M A R K E T S

NOT OIL THAT BAD The Abu Dhabi Stock Exchange (ADX) has become the cornerstone of the UAE’s broader economic plan as encompassed in its in its Vision 2030. The bourse has long embraced international best practice, and has forged strategic bonds with international exchanges. Taking a 10-year perspective from its inception, the basic metrics of the ADX tell a clear story. From 2000 to 2010 the general index rose from 1,267.2 (2001) to 2,719.9; MCap rose from $3.2 billion to $77.2 billion; broker numbers rose from 10 to 74; investor numbers rose from 3,020 to 894,517; value traded soared from $2 million to $9.4 billion, and volume traded climbed from 0.1 million to 17.6 billion. As at January 2015 the UAE’s 126 listed companies had a market capitalization of AED4,480 billion, with the benchmark ADSMI General Index up 2.16% YoY as of February 13th.

SELECT DEVELOPMENTS In June 2014 several stocks in the UAE commenced trading in the MSCI Emerging Markets Index having attained frontier market status due to increased interest from foreign investors; added to this were signs of financial and economic national maturity. Subsequent losses on Dubai’s key securities index, the Dubai Financial Market General Index, erased gains made in 2014, as a result of which the valuations of UAE stocks by December 2014 had approximated those of emerging market bourses, which include stocks from countries in the throes of political and economic turmoil such as Russia and Brazil. As a result, the premium between emerging market stocks and UAE stocks faded. According to Abu Dhabi-based asset manager Invest AD, quoted in The National, “some UAE stocks are now looking very attractive. If the oil price weakness is here to stay, if they remain weak for a long period of time, the case for a premium valuation becomes weaker.” Inves-

tors had been willing to pay a premium for UAE stocks over other emerging markets given the gigantic government infrastructure programs being pursued to diversify away from the extractive sector, in stark contrast to more sluggish performance in the wake of the 2008 global financial crisis.

THE NUTS AND BOLTS The ADX has around 70 listed securities. Listed foreign companies are 100% open to trading by foreign nationals, who may hold up to 49% of companies operating beyond the free zones. Trading hours run from Sunday through Thursday, where pre-open trading takes place from 9:30 am to 10:00 am, while continuous trading runs from 10:00 am to 2:00 pm. In 2014 the ADX adopted the new X-Stream Trading platform enabling a greater variety of financial instruments to be traded to boost investor interest. ADX Chief Executive Rashed Abdul Kareem Al Baloushi stressed that the system would also expedite trading, while providing greater security of execution. This underpins the ADX’s aim of becoming a financial hub able to host and facilitate other regional markets.

WIDER FOOTPRINT The Emirate of Abu Dhabi is already building on its AA credit-worthiness. In 2013 the SCA approved the secondary listing on the ADX of the Abu Dhabi Government’s bonds that mature in 2014 and 2019. The move brought the government a presence on both the London Stock Exchange (LSE) and ADX, with simultaneous trading of Abu Dhabi Government bonds. In the aftermath of the financial crisis the benchmark index hemorrhaged 48% for 2008, in stark contrast gaining 63% in 2013 on infrastructure-related bullish sentiment toward broader Emirati development. It had shed 1.6% for January 2015.

As of January 2015 the UAE’s 126 listed companies had a market capitalization of AED4,480 billion, with the benchmark ADSMI General Index up 2.16% YoY as of February 13th.

THEBUSINESSYEAR

ABU DHABI 2015

KEEPING IT LIQUID With the seismic tremors resulting from a slowdown in the global economy and consequently deflated oil prices came the need to mitigate lost investor confidence. Accordingly, the first market maker operations on the ADX began in early 2015, with the bourse anticipating a boost to trading volume and less erratic price swings. Official data reveals that the General Index had shed more than 10% since October, when Brent oil was at $80 a barrel, before testing $50-levels in early on in the year. The index shed 23.8% from October to mid-December 2014, before succumbing to a period of fluctuation. Anticipating such environments, and to mitigate instability the National Bank of Abu Dhabi (NBAD) was licensed in April of 2014 to execute its market making business with available paid-up capital of $8.17 million to avail four key stocks of liquidity. These stocks are Aldar, FGB, Waha Capital, and Abu Dhabi Commercial Bank. NBAD, therefore, acts as a broker-dealer balancing supply and demand for shares by guaranteeing to hold a certain volume to enable buying and selling regardless of market conditions. The bank aims to expand the scope of its coverage across the UAE’s three exchanges, including the Dubai Financial Market (DFM) and the Nasdaq Dubai. In these equity markets liquidity is concentrated between around 12 stocks out of over 80 listed companies. And with trading activity predominantly that of retail investors, bull and bear sentiment can impact the index; notably in December 2014, Minister of Economy and Chairman of the SCA, HE Sultan bin Saeed Al Mansouri, implored investors to base trading decisions on rational fundamentals rather than gut feeling.

WOES POSTPONE IPOs The National in mid-January 2015 speculated over the postponement of the anticipated AED576 million IPO of Massar Solutions fol-

As of January 2015, the UAE’s 126 listed companies had a market capitalization of

1,219 billion USD

TRADING TIMES Sunday through Thursday continuous trading runs from

10.00-14.00 The first market maker operations on the ADX began in early

2015 The ADX adopted the new X-Stream Trading platform in

2014

lowing poor share take-up, where plunging oil prices were seen as the culprit. Notably less that half of the shares were taken up by the Emirati retail and institutional investors earmarked to purchase them. Amid such bearishness, the question now is the extent to which this might deter other listings in the current environment. Indeed, it appears that IPOs for Gulf Capital, Al Habtoor Group and the hotels wing of Emaar Properties may return to the agenda in 2H2015, circumstances permitting. Massar—the fleet management arm of Al Wathba—was to have been a touchstone for listing activity, as the first Abu Dhabi company to be listed amid the recent upturn in IPOs exclusively realized in Dubai. Taqa and Abu Dhabi Investment Company (Invest AD), the two controlling shareholders, keen to sell 20% each of their stakes, experienced disappointment before the subscription deadline of January 25th. As at mid-January, the ADX General Index had lost shed over 15% since early June, roughly co-synchronous with the slide in oil prices. For the period, the Dubai exchange’s benchmark index had shed close to 28%. Industry insiders have speculated that any IPOs in 2015 would likely be among industries forecasting notable growth in the GCC, including healthcare and education. Ultimately—international noise aside—the broader picture isn’t grim. So let’s leave the final word to Philippe Ghanem, Vice Chairman and Executive Managing Director of ADS Securities. In a TBY interview he succinctly summed up prospects for the ADX thus: “I think that Abu Dhabi can play a major role– become a market-maker and price-producer for the industry–across a large number of markets. With a stable foundation of people, capital, technology, and regulation in a stable and secure country, Abu Dhabi has all the building blocks for success.” ✖

SARA I. MOHAMED CEO, Al Bashayer Investment Company LLC What are the characteristics of your female clients, and what is your strategy to address their financial needs? As far as women investors are concerned, they tend to be slow decision makers when it comes to investment in financial instruments. It takes them time to understand the risk associated and complexity of the investment structures. Male investors tend to take on more risk and jump in and make decisions quickly. A woman is more concerned about protection and preservation. They prefer consistency and income, for example. These are some of their preferences. We tend to understand their investment objectives and expectations and provide them with solution that can deliver their short term and long-term goals. There is no one size fits all; investors need customized solutions.

What kinds of services do you see financial institutions creating for women? Many financial institutions, especially banks, have a branch or department for female clients. However, in most of these accounts 22% belongs to women who actually run their own businesses or women who have inherited funding from their families. Sadly, most of them let it sit in a deposit account. Even banks lack the capability of actually providing them with the services they need. When it comes to investment, banks usually do not have suitable investment products for women investors. Many times I hear women complaining that they were given investments that lost them a lot of money and there is no one to service them or manage their portfolios. In order to create an investment portfolio for women, you need to have longer-term targets rather than short-term ones.

Finance

THEBUSINESSYEAR

The insurance sector, robust in corporate lines, has yet to mature in personal coverage, although the regulator is adamant about educating citizens on the merits of precaution and saving.

Review

INSURANCE

A WIDER NET The Insurance Authority (IA) was set up by Federal Law No (6) of 2007 on as the sector supervisor tasked with setting the playing field for this branch of the capital markets in line with Abu Dhabi’s Vision 2030, itself underpinned by diversification of the economic matrix beyond hydrocarbons into such areas such as tourism and health, and importantly, the financial arena of banking and insurance. While the UAE’s insurance sector has seen annual growth of around 10% for some years, most of its 60 players would describe it as concentrated, a situation compounded by minuscule consumer penetration of 1%, which naturally curbs the pooling of resources for investment. Meanwhile, vicious price competition renders premiums generated moot for many smaller entities. Yet the government has made sure that insurance is can by no means to be perceived as an ersatz investment instrument.

Type of Insurance, 2013 (%) Source: IA

THE FIELD

THE ENVIRONMENT According to The National, people living in the UAE are at least three to four times less insured than their counterparts in countries of similar economies. One lateral attempt at capturing consumer interest saw Zurich Middle East partner Air Miles in a campaign that offered customers one mile for each AED spent on car (mandatory), home, or travel insurance. A survey in 2013, commissioned by Zurich, revealed that more than half of UAE residents did not purchase travel insurance when traveling abroad, although the company estimated a maximum penetration rate of 6%, despite this being the higher earning end of the social spectrum. This starkly contrasts with the UK’s 90% even though

the average number of annual journeys was one or two. Meanwhile, only around 5% of people in the UAE have home insurance coverage.

Accidents and Liability

32.8%

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9.7%

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7.6%

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44.1%

Other Risks

5.8%

Total Written Premium Gen. Insurance (billion USD) Source: IA 7 6 5 4 3 2 1 2009

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According to IA data, of the UAE’s 60 insurance companies, 34 are national and 26 foreign insurance companies. There are 11 national and two foreign comprehensive insurers, while 20 national and 17 foreign companies offer property and liability insurance. Life assurance and fund formation services are provided by two national and eight foreign entities. Just one local company provides credit export insurance. And through the Islamic window, 10 firms offer takaful insurance.

HEALTHY STEPS With an estimated 2 million citizens not covered, the UAE is introducing mandatory health insurance to encompass blue-collar employees. Accordingly, by 2016 employers will be obliged to cover their staff, who will themselves be responsible for insuring families and domestic employees. Meanwhile, foreign participation in this segment is limited to those enterprises previously licensed to operate. Demographic trends such as population growth and longevity do factor. But health insurance in the UAE predominantly caters to the life needs of foreign nationals, who outnumber locals by more than 10 to one. Health insurance became mandatory for foreign nationals in 2006. And then there are regional and global factors at play in the insurance business. Regional conflict—though largely sparing the UAE so far—have partially raised awareness of the benefits of coverage, which could lead citizens to sign on the dotted line.

THEBUSINESSYEAR

Insurance industry growth in the Gulf has an estimated CAGR of 18.1% between 2012 and 2017 to $37.5 billion. This largely derives from the substantial insurance needs of industry.

ABU DHABI 2015

IN NUMBERS

EDUCATION

Official data for 2013 indicates total underwritten premiums in life assurance and fund formation operations of $1.9 billion, where the share of national companies stood at 21.8% and that of foreign companies at 78.2%. Insurance industry growth in the Gulf has an estimated CAGR of 18.1% between 2012 and 2017 to $37.5 billion. This largely derives from the substantial insurance needs of industry. Total underwritten premiums in the property and liability segment stood at $6.1 billion, where national and foreign insurers claimed respective shares of 74.4% and 25.6%. For 2013, the percentage of national insurance firms retention of underwritten premiums for property and liability insurance was 55%, while rates for other branches were at 65.2% for accidents and liability insurance, 25.9% for fire insurance, 27.4% for land, sea and air transport insurance, 63% for medical insurance, and 19.2% for “other risk” insurance. Meanwhile, the earned premiums of property and liability insurance amounted to $5.9 billion. For 2013 the total investment of insurance companies in the UAE was $10.3 billion, of which $4 billion derived from foreign, and $6.3 billion from national companies.

It is undeniable that an under-skilled local insurance workforce has negatively impacted underwriting performance. In employment terms official figures for 2013 put UAE national insurance workers at 769 (8.9%) out of a total of 8,590. The IA forecasts the pace of insurance sector Emiratization through training to have reached 15% by end-2015. In 2014, the IA signed an MoU with Hamdan Bin Mohammed Smart University to promote insurance degrees.

NEW REGULATIONS The latest insurance regulations, made law in 2015, are geared at reducing risk, while fostering a regime that enables greater profitability; three years are allotted for full compliance. The regulations, some years in the making, are set to have a marked impact on the overcrowded insurance sector, which has been buffeted by fierce price competition, pushing companies into the red. Trade Arabia reports that Abu Dhabi-based insurer Green Crescent in 2014 merged with Kanoo Group and France’s Axa Insurance in what was the most recent price-competition prompted consolidation. The latest regime stipulates the degree of exposure insurers may have in specific asset classes. Also required is the establishment of an independent investment committee, plus stricter corporate governance, compliance and risk management. As such, the latest stage marks a maturing of the capital markets. New rules state, among other stipulations, that insurers must invest no more than 30% in the equity instruments of UAE companies and a maximum of 10% per individual stock, fund, or instrument. Insurers can invest a maximum of 20% of their funds in foreign equities investments, with a maximum of 10% exposure to a single counter party. Yet to pursue investment, they may allocate up to 100% of their funds in government securities or UAE-issued instruments, with a maximum of 25% per security or instrument.

ABU DHABI NATIONAL INSURANCE COMPANY (ADNIC) Abu Dhabi accounts for the bulk of the infrastructure and industrial diversification projects undertaken by state-owned companies that underpin the UAE’s Vision 2030. Associated insurance needs are met through ‘National Insurance’ companies that enjoy privileged access to high-risk profile projects. ADNIC’s 2013 net underwriting income rose 4% YoY to $79.1 million compared to $79.1 million in 2012, on continued focus on profitability. Gross written premium, up 5% YoY printed at $0.7 billion, while reinsurance premium ceded $0.27 billion, fractionally up YoY. Net written premium came in at $0.38 billion, and the premium retention ratio of 58% was up 1pp YoY. Net investment income appreciated 23% to $2.7 million, while net profit climbed a healthy 25% to $4.9 million.

ABU DHABI NATIONAL TAKAFUL CO. PSC Part of the sharia-compliant universe is the insurance component, Takaful. According to Ernst & Young’s 2014 Global Takaful Insights update, given; “…the estimated $2 trillion global Islamic finance markets, the global takaful market is estimated to continue its double-digit growth momentum of about 14% in 2014. By 2017, the global takaful industry may reach over $20 billion.” The IA’s establishment of a standardizing sharia board remains a work in progress. Highly awarded, in February 2015 the company was named ‘Takaful Insurer of the Year’ for the second consecutive year at the MENAIR Insurance Awards 2015. “Our main proposition…” Chief Executive Oussama A. Kaissi told TBY, “…has always been to cater in the medium to long term to individuals and SMEs, while initial focus remains on corporate clientele.” For 9M2014 the firm registered a profit of $6.8 million, and an underwriting profit of $4.2 million. According to the company, the August 2014 AM BEST financial strength rating of B++ (Good), “…reflects its excellent risk-adjusted capitalization, strong underwriting performance and sound risk management.” Well-regulated and fueled by industry, the local insurance business has now to appeal to a wider demographic, with promotional activities seeking to erode stubborn public indifference. ✖

Finance

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INTERVIEW

meeting YOUR NEEDS TBY talks to HE Ebrahim Obaid Al Zaabi, Director General of the Insurance Authority, on market demand, the role of takaful, and increasing penetration. What has the Insurance Authority done in recent years to ensure that the industry continues to grow and meet market demand?

BIO HE Ebrahim Obaid Al Zaabi is the General Manager of the Insurance Authority of UAE, the federal authority regulating the insurance sector and a Board Member of the financial free zone, the Abu Dhabi Global Market. He represents the UAE on the Board of the GCC Accounting & Auditing Organization and is a member of the UAE Committee to Review Defaults of Public Shareholding Companies. Prior to this, while being the Deputy CEO for Issuance, Research and Legal Affairs at Securities & Commodities Authority (SCA), he was also a Board Member of Insurance Authority until 2011. At the SCA, he had a distinguished career spanning more than 11 years. He is a graduate of California State University with further enhanced academic credentials through overseas and UAE based high-level management and financial courses, training, and seminars.

We are now at the stage where we are reorganizing all the sectors within insurance. We have new regulations that address investment and finance and concern both takaful and conventional insurance. We already have the brokerage firms regulation in operation, which came out in 2013. We are working with actuaries to ensure that most of the companies are solvent and comply with international solvency levels. These are the major topics we are working on. How do you see the role of takaful in the insurance industry of the country?

We currently have around 10 takaful companies in the UAE, and we have been discussing how we can improve the law and regulations to make them more beneficial for both sides. We need to promote takaful, and are in the process of creating the sharia committee that the law requires. And this national sharia committee will help companies comply with the law. How would you assess the growth that the local insurance industry has experienced in recent years?

Every year, we have a growth rate of around 10%. What we want, however, is a high-

er penetration rate. There is growth in a general sense, but on the life side I do not think there is enough. This is where we are now focusing. We need more products and penetration, and we are helping companies achieve this. Therefore, we are working with them to develop new products and get them onto the market quicker. We have been approached by government entities and professionals that want a specialized contract for their business. We are helping them liaise with companies to ensure this happens. What is being done currently to increase the insurance penetration rate?

We cannot tell companies to “do this.” They have to come up with the ideas. However, if government or professional entities approach us, then we will work with them. Basically, we go to companies and say that if they want a policy for life or their children, then offer them a proposal that could meets their needs. It is not our job, but we are trying to liaise between companies so that we can increase penetration. Our mandate is the regulation and supervision of the industry. Although we facilitate the growth of the business, we do not seek to interfere. In early 2014, the Insurance Authority signed a Memorandum of Understanding (MoU) with Hamdan Bin Mohammed

The Insurance Authority • Mandate is regulation and supervision • 60 licensed insurance companies in the UAE • 10% growth per year

Smart University (HBMSU). How will this contribute to the country’s insurance sector?

We are working with HBMSU to ensure that more students go to university to study insurance, because we need to increase the level of awareness. That is why we are taking up MoUs with not only this university, but are also looking at other universities in the UAE, allowing us to establish dialogue to enhance the sector. The UAE used to have universities that offered insurance degrees. At the moment, there are no courses because not enough people were interested. The UAE needs more people in this field, and for this reason we are working with universities to try and create an appealing and useful program for the youth. We are interested in doing campaigns in universities, malls, and schools to spread this awareness of insurance and that this is a good field to study. ✖

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ABU DHABI 2015

INTERVIEW

the FOCUS

BIO Oussama A. Kaissi is currently the CEO of National Takaful Company PSC – Watania. He has over 28 years of experience in the insurance industry, out of which 14 years has been spent at the senior executive level. He is the founding CEO of Watania and had also established and led Abu Dhabi National Takaful from inception till 2010. Prior to this, he was the GM of ARIG, Bahrain, the MD of ALIG, Lebanon, and the Head of Operation's in ARIG, Bahrain. Graduating in 1987 from Indiana University, US, and having worked in US, the UAE, Bahrain, and Lebanon both in conventional and Takaful companies, he has had vastly diversified exposure to different markets, cultures, and business models.

TBY talks to Oussama A. Kaissi, CEO of National Takaful Company PSC – Watania, on the takaful segment, the company’s financial results, and regulatory bodies in the UAE.

strategy and we made some money along the way as well. While the technical side of our business is profitable, the majority of income is still being generated from the investment returns; the challenge is to balance our sources of income. This is how we will ensure the company is viable to continue its course without being largely dependent on investment income.

What has been the added value of Watania to the takaful segment?

The insurance authority is creating a National Sharia Committee. What else can be done in order to strengthen the regulatory bodies in the UAE?

Watania established strong relationships with a few Islamic financial institutions in the UAE, and we believe that there is still room for us to deliver products within this niche market in which we operate. Our main proposition has always been to cater in the medium to long term to individuals and SMEs, while initial focus remains on corporate clientele. We believe that the targeted markets of SMEs in the UAE are growing and are a part of our approach and strategy. We need to find a niche where we can build a network with these businesses and grow with them over time. Watania achieved profitability in 1H2014. To what do you attribute this positive financial result?

There is great potential in the market, as well as difficult challenges ahead for the company. Our portfolio has a balance between different lines of businesses; it has not skewed toward a line that is more risky than others. We have worked hard as a team to deliver on the distribution of the portfolio. The underwritten business has been profitable on the technical side. We have been prudent with our investment

One of the challenges that the takaful industry has is not having a unified body that regulates its operations. Sharia scholars help find solutions for takaful and Islamic finance at large. In order for a regulator to have an in-depth and scientific view of the industry, where it can manage multiple operators, it should enact unified regulations. The regulatory body should closely consult sharia scholars in order to bring about proper processes, procedures, and governing laws for the industry. The appointment of a higher committee for the sharia to operate at industry level was an integral part of the takaful rules issued by the UAE Insurance Authority in 2010. The IA is working on forming the higher sharia committee, and we hope this will bring uniformity to the rules and regulations that govern the takaful operators. This will not only impact positively the takaful operators, but also the insured. I am hopeful that the formation of the higher sharia committee will go through. The other major hurdle the committee

National Takaful Company PSC – Watania reports 1H2014 total assets of AED319 million

must overcome is the interaction with several other sharia committees at company level in order to bring uniformity to the market. In addition, issuance of investment guidelines should take priority and must be clearly defined; we are anticipating the insurance authority introduction of the new financial regulations in respect of the investment and financial guidelines for the industry, which has been long awaited. The investment and financial guidelines should be addressed from a sharia compliance perspective. The higher sharia committee should address the audit processes of operators. What would be your recommendations to investors who are interested in takaful?

When it comes to investing in a takaful operator, existing or green field, the investor should be aware that such investment should not be considered a short or medium term investment in any portfolio. It should not be done on speculation either. Investment in takaful operators should be long term due to the nature of the business. The industry still shows tremendous potential, and I am a believer of its viability in the long term. ✖

Finance

THEBUSINESSYEAR

INTERVIEW

back up PLAN TBY talks to Joseph Faddoul, Executive Director of Chedid Capital Holding, on the history of the company, its client base, and its growth strategy.

How would you describe the history of Chedid Capital Holding in Dubai and the UAE?

For Chedid Capital Holding, the UAE is of great importance. It is a very dynamic and competitive market, which makes it extremely challenging. At Chedid Capital Holding, we see these parameters as very exciting, and we tune our team mind accordingly. Therefore, we understand that to be successful we always have to anticipate our clients’ needs before it becomes obvious. On the other hand, since we are based in Lebanon, we have the luxury of cost advantage and can attract competent

BIO Joseph Faddoul is Chedid Capital Holding’s Executive Director. He is responsible for a portfolio in excess of $180 million that consists of property, engineering, life, accident, marine, and casualty facultative reinsurance business. Prior to that, he was the Business Development Manager for AIG in Saudi Arabia. He is also an Associate of the Chartered Insurance Institute of London.

and committed human resources at relatively acceptable packages that give us a competitive edge. Our team is trained to respond and offer a high level of service and we are reachable seven days a week, 24 hours a day, and ready to run the extra mile. We understand that the deal is just a few breaths away from our competitors. How would you describe your client base or your partner base in the UAE?

The UAE market is very dynamic and active, and I believe it is one of the most enjoyable markets to service. It is also an extremely aggressive market, as you have to be innovative and willing to run the extra mile. Over the years, we have managed to build a sound and respectful reputation, and our clients are more comfortable dealing with us since they are convinced that Chedid Capital Holding is a reliable partner of choice. How would you describe your growth strategy for the UAE market?

Our growth strategy relies on the areas with unexploited opportunity, especially regarding the restrictions imposed by the reinsurers on the businesses shared between the insurance compa-

Chedid Capital Holding • Delivers comprehensive solutions to over 270 insurance companies • Serves 22 countries • Reinsurance Broker of the Year at Gulf Insurance Awards 2010, MENA Insurance Awards 2011, and INSUREX Awards 2010, 2011, and 2013

nies. Previously, many midsized businesses and SMEs were not routed to the open market because that business used to be shared between the insurance companies locally. However, with the restrictions imposed by treaty reinsurers, they cannot carry on with such an arrangement. Consequently, we are seeing a great deal of growth in the SME business as a result of the new applicable restrictions. We have to keep in mind that although the primary market is growing by double digits every year, the reinsurance market is shrinking because this premium is being retained, meaning that many proportional arrangements are shifting to excess of loss arrangements. Many premiums on the topside are being retained by the companies, the potential growth lies in the business that used to be shared between the players, and this is what we are currently focusing on. How important do you think creating a UAE-based association of insurance companies and brokers is?

Any joint effort is much better than a unilateral action. If you have an association to discuss threats that the market is encountering or the challenges that we have, and it is finding solutions or imposing regulations to assist, then I think this benefits the country’s economy as a whole. When a governing body is in place, those who benefit the most out of such initiatives are the companies themselves since we will be tackling obstacles from a macro perspective. ✖

ABU DHABI 2015

THEBUSINESSYEAR

FOCUS AL ETIHAD CREDIT BUREAU

GLASS WALLS The UAE is ushering in a new era of transparency for the lending sector with the establishment of Al Etihad Credit Bureau (AECB), something that has been welcomed by lenders and borrowers alike. WITHOUT AN OFFICIAL CONSUMER

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credit bureau in the UAE, banks and financial institutions have had little reference when assessing borrower’s capacity to pay back a loan. As a result, the lending environment in the Emirates has experienced over-borrowing and credit defaults in the past. A consumer’s less than stellar credit history can easily go unnoticed in the absence of a historical database tracking financial behavior. With the launch of the Al Etihad Credit Bureau (AECB), the UAE has embarked on a landmark development in the country’s retail-lending environment. The AECB began issuing its first credit reports in September 2014. The Bureau is the country’s first centralized credit reporting system mandated by law to compile a database of credit information and make it available to credit providers nationwide. Banks and financial institutions will now be able to access consumer’s credit data from the past 24 months, adding more comprehensive financial data to the system than was previously available and equipping financial institutions with a more accurate record to determine a potential borrower’s credit risk profile. The bureau is expected to be a significant positive contributor to the financial stability of the UAE and the arrival of such a system has been long awaited. Credit check reforms in the UAE were initiated years ago. The country’s charge to improve lending standards began with Emcredit, the first private credit information company set up in the UAE in 2006. It gathered a database of 5.6 million consumer identification records by 2008, but the need to establish a federal-level entity intensified when the global financial crisis hit and scores of bad debt surfaced in the UAE in 2009. This prompted local authorities to begin implementing subsequent reforms to the financial sector’s standards on assessing consumers’ creditworthiness. The passing of the Credit Information Law the following year made background checks on all loan applicants compulsory, and in 2010, plans to initiate a federal credit bureau to support the law were approved by HH Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE and the Ruler of Abu Dhabi. The path to a more disciplined, data-driven financial lending environment now appears to be on the cards for the Emirates.

Compliance with the bureau from financial providers has been widespread. As of November 2014, the AECB’s database covers 90% of credit data submitted to the bureau by banks and financial institutions over the past two years. Now, over 2.8 million individuals are accounted for, representing 97% of the UAE’s total population with a credit history. Some 43 banks and financial institutions have submitted customers’ credit data and 29 have subscribed to the bureau’s credit reporting service. Further testament to the bureau’s increasing adoption is the support the AECB has received from the UAE Banks Federation, a national entity representing 49 banks in the Emirates. Banks will begin using the data to revamp their lending standards and will be better equipped to identify and refuse loans to high-risk individuals. This new era of transparency in the UAE’s financial sector comes at a much-needed time with debt per capita in the country currently at around $95,000 per person, exceeding the global average. As banks integrate the bureau’s credit reports into their systems, credit culture in the country is expected to improve as greater financial awareness spreads throughout. Evaluating customers’ reports before offering credit terms should reduce the amount of bad debt and make high-risk individuals easier to identify. Tracking financial history and behavior will also serve to incentivize sound financial management in the economy at large. Those who pay their debts on time will be rewarded by lenders through lowered costs and better interest rates. Costs of financing will likely shift from standardized prices to tier-based prices depending on good or bad credit scores as banks use the data to assess risk. In the same way, those with unsavory credit histories will be encouraged to change their behavior in order to build up their credit score by managing their finances responsibly and within their means. Overall, the use of credit reports in the UAE should encourage sound financial management in the country, as the possibility of slipping through the system will be more difficult than ever. In 2015, the first full year of operations will be marked at the AECB, and it will continue to build on its data store, progressively developing in phases along the way. It will add more dimensions to its suite of services to lenders and plans on including the commercial sector in its database in the near future. Eventually, the bureau intends to link up with international credit bureaus such as Experian, Equifax, CIBIL (India), and SIMAH (Saudi Arabia). Though the bureau’s presence alone doesn’t guarantee more responsible financial decisions will be made, it is an important step in preventing over-borrowing in the UAE—one that consumers, lenders, and the economy as a whole should feel the benefits of. ✖

THEBUSINESSYEAR

TBY talks to HE Eng. Suhail Mohamed Faraj Al Mazrouei, UAE Minister of Energy, on diversifying the energy mix.

Abdulla Nasser Al Suwaidi, Director General of Abu Dhabi National Oil Company (ADNOC), on the Ruwais Refinery.

Saif Saeed Al Qubaisi, Acting Director General of the Regulation & Supervision Bureau (RSB), on innovation.

Energy REVIEW

The race for new concession holding agreements overshadows the effects of the commodity pricing cycle, while the jump to nuclear power is being managed through sound investment.

he key role of the oil and gas industry in the growth of Abu Dhabi’s economy since the establishment of the Federation in 1971 is culminating in 2015, as the 75-year concession agreements signed with major International Oil Companies (IOCs) come up for renegotiation. Despite the environment of fluctuating oil prices, the IOCs have shown their willingness to stay in the game in Abu Dhabi, with its national oil company (NOC) Abu Dhabi National Oil Company (ADNOC) offering 40year concessions over up to 40% of ADCO’s fields. As well, Abu Dhabi is looking to use these new concession agreements to help drive development in its extensive sour gas reserves, long an underutilized part of the sector whether in upstream or downstream terms. In addition, the electricity sector is getting ready for the operation of the Emirate’s first of four nuclear power reactors in 2017, with construction well on the way to meet the goal of having all four reactors operational by 2020.

THE SOUND PROVIDER

OIL AHEAD

Image: Linde AG-Engineering

Overall, the UAE has some 97.8 billion barrels of reserves, or 5.8% of global proven reserves. And while oil exports are on the rise and new concession agreements look to improve productivity, the price of oil has been on the decline.

At some 3.65 million bpd of production, according to BP’s Statistical Review of World Energy 2014, the UAE is one of the bigger hitters in the OPEC club, with Abu Dhabi providing the lion’s share of the nation’s oil exports. Overall, the UAE has some 97.8 billion barrels in reserves, or some 5.8% of global proven reserves. While oil exports are on the rise, with new concession agreements look to improve productivity, the price of oil has been on the decline. And as crude oil was estimated by the Statistics Centre Abu Dhabi (SCAD) to contribute some 55% of GDP in 2013, the effect of the near halving of the crude oil price will reverberate throughout the local economy without careful management. At the end of February 2015, ADNOC set its sale price for the key Murban crude oil at $56.55 a barrel, well down on the $111.65 a barrel it was receiving in June 2014, though up on the $46.40 it was getting in January 2015. As a result of the new oil pricing environment, by early 2015, the IMF had wound its GDP growth es-

THEBUSINESSYEAR

ABU DHABI 2015

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timates for the UAE as a whole back to 3.5%, 1 percentage point lower than its prior estimates, while Abu Dhabi is expected to grow by 3% on the back of a lower oil price. As well as the substantial assets built up by the Emirate’s sovereign wealth funds (SWFs), Abu Dhabi has a great deal of long-term economic depth to stimulate the local economy and meet government revenue needs, though a tighter rein on spending is also being planned so that the budget deficits expected for 2015-16 can return to surplus as of 2017. The long-awaited renegotiation of the 60-year concession agreements in Abu Dhabi hit its first major target, after ADNOC and Total sign an agreement for a 40-year concession over 15 oilfields controlled by ADCO at the end of February 2015. Total is set to receive a 10% stake in the new concession, higher than the 9.5% it held under the previous operating agreement that lasted for 60 years. However, under the old agreement ADCO only held a 60% stake, with BP, ExxonMobil, Royal Dutch Shell, and Total holding 9.5% shares each, with Partex holding a remaining 2% stake. With Total now as the sole IOC operating with ADNOC for its ADCO assets, this has put pressure on the companies that failed to secure a stake to be more competitive in the remaining concessions on offer by Abu Dhabi in ADCO’s operations, which vary between 5% and 10% and in total would form up to a 30% stake. ADNOC is targeting through the new concession agreements utilizing new technology to up its production rate from around 1.6 million bpd currently to 1.8 million bpd by the end of 2017. Another key company operating under the ADNOC rubric in the oil sector is Zakum Development Company (ZADCO), which through shareholders ADNOC (60%), ExxonMobil (28%), and JODCO of Japan (12%) operates the Upper Zakum oil field. ZADCO is presently looking to expand production from its facilities from 550,000bpd to 750,000bpd by end-2015 through the use of artificial islands on which to base facilities. ADMA-OPCO, jointly owned by ADNOC (60%), BP (14.66%), Total (12.33%), and JODCO (12%), is also looking to make its mark of late, signing a $3.5 billion deal in late 2014 to boost output from its Nasr Oilfield.

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In terms of refining capability, the big event for Abu Dhabi in early 2015 was the completion of the expansion of the Ruwais Refinery. The project, worth some $10 billion, was set to nearly double refining capacity at Ruwais to over 800,000bpd, thus future proofing the Emirate in terms of local fuel needs, and also giving a healthy margin for potential exports. As Abu Dhabi is looking to encourage more downstream activity to improve industrial diversity, more work on the refining side, whether for liquids or in terms of gas, will be on the agenda.

NOT SO SOUR In many ways, Abu Dhabi was a late starter to the natural gas market, much as a result of the sour nature of its gas reserves, which require careful refining to purify to be used for conventional applications. BP reported reserves of 125.1 trillion sqft for the UAE as a whole, with most of these falling within the Emirate of Abu Dhabi. Three key companies act under the rubric of ADNOC in the natural gas business: Abu Dhabi Gas Industries (GASCO), Abu Dhabi Gas Liquefaction Company (ADGAS), and Al Hosn Gas, while ELIXIER handles the supply side of ADNOC’s gas operations for larger users. And with up to 90% of the UAE’s electricity generation dependent on natural gas, the need for increased local supplies is becoming more apparent. In fact, the UAE imported around 2 billion cubic feet per day in 2013 via the Dolphin Energy pipeline, according to the UAE Ministry of Energy. Projects aimed at addressing the Emirate’s energy deficit on the natural gas side include through a joint venture between Al Hosn Gas and Occidental Petroleum to develop the Shah Gas field in Abu Dhabi’s Liwa Desert, a field set for completion in 1H2015 and potentially supplying some 500 million cubic feet of gas per day. Shell is working with ADNOC on the Bab Gas Compression Project, which should also supply the Emirate with a further 500 million cubic feet of gas per day by 2020. Still, the UAE will be in need of further natural gas supplies to sustain its industrial and economic development, and in order to satisfy this demand a new regasification terminal to receive imported gas is being constructed in the northern Emirate of Fujairah.

ENG. SALAH SALEM BIN OMAIR AL SHAMSI Chairman, Liwa Petroleum & Industrial Supplies What makes Abu Dhabi a good place to invest? Everything is transparent in Abu Dhabi. Anyone wanting to do business here needs to set up an office, work with a local company, gather information and understand the market, then go through the process of registration and prequalification, and finally participate in a tender. The process is easy if you have all that it takes to prequalify. If you are a top international company in Turkey, for example, and you have been supplying a major oil and gas company outside of that country, you can do the same thing here by registering and prequalifying and participating in the tenders. People should know that the Abu Dhabi market is open to new products and technology, technically and commercially. What kind of opportunities are you looking for from international partners? We try to encourage and meet people from all over the world who are interested in doing business in Abu Dhabi, particularly in the manufacturing sector. We will be moving in the coming years toward manufacturing, and therefore, we are trying to meet people who are interested in investing along with us in manufacturing products and services.

ABU DHABI 2015

THEBUSINESSYEAR

ELECTRICITY IN ACTION Since the privatization of the water and power industry in the Emirate, the Abu Dhabi Water and Electricity Authority (ADWEA) has sought to cover the water and electricity needs of all the other emirates in the UAE aside from those of Dubai and Sharjah, which have their own separate electricity and water authorities. The slow build up to the new nuclear power plant project in the Western Region of Abu Dhabi has seen the Emirate’s generators sweat their assets. While generating capacity has remained relatively stagnant at some 13,899 MW in 2013 according to ADWEA’s wholly owned subsidiary Abu Dhabi Water and Electricity Company (ADWEC), little up on the 2011 figure of 13,850MW, actual annual generation has grown nearly 16% to 65,492GWh over the same period. In terms of electricity generation, in July 2014 SAPCO in cooperation with the Korea Electric Power Corporation and Japan’s Sumitomo Corporation brought into operation the new S3 facility at Ruwais, in the Western Region of Abu Dhabi. The project, boasting some 1,600MW of generating capacity, should help bridge the gap between the growing needs of the Emirate for its power needs and the upcoming start of the new nuclear power plant in the UAE. As power generation often goes hand in hand with desalination, the Emirate has seen a 13.7% rise in output from its plants to 263 million gallons over the 2011-13 period, despite generating capacity remaining at 916 million gallons per day. However, with a raw

capacity utilization rate (CUR) of some 78.7%, the Emirate may soon need to be looking at adding capacity. The Fujairah F1 Independent Water and Power Plant is capable of supplying some 100 million gallons of water per day and has a gross capacity of 893MW.

Oil & Gas GDP Share at Current Prices

RENEWABLES

As part of its efforts to reach 30% no-emission electricity generation by 2020, Abu Dhabi has looked to increase both the use of solar energy and nuclear energy sources. For the latter, the UAE is moving rapidly to install its first of four nuclear energy reactors. The Emirates Nuclear Energy Corporation (ENEC) is hard at work on the project, built in cooperation with a consortium led by Korea Electric Power Company (KEPCO), though with Hyundai, Doosan, and Samsung—all key members of the $20 billion plus project. The first of four 1,400 MW capacity reactors is due to come online in 2017, with the final of the four reactors set to enter service in 2020. Leading the charge for the Emirate’s efforts at improving its use of renewables is Masdar, which installed a 10MW solar photovoltaic plant in its Masdar City project in 2009, while other solar projects have included the 100MW Shams One project, located in the Western Region of Abu Dhabi and launched in 2013. Smaller means are being targeted, such as through the use of solar power for street lighting, parking meters, and hot water, to reduce the amount of carbon emissions that the Emirate generates. ✖

Source: SCAD 60 50 40

20 10 0 2010

2011

CEO, WTS Energy There are two sides to the skill pool of oil and gas people. On the one hand, there are numerous foreigners from Asia, Europe, the US, and the Middle East itself who work in the oil industry here. On the other hand, there is the development of local talent because the population has been growing here.

As an integrated service supplier with multinational experience, we firmly believe in the benefits of local knowledge. We strive to understand your environment, so we can help you optimize your exploration and production with confidence. Based on decades of field-proven technologies and expertise in conventional and unconventional hydrocarbon exploration and production, our industry best practices deliver superior results while protecting the interests of the people and the environment in which we live and work.

2013*

FREDERIK RENGERS

Worldwide experience—targeted delivery.

Schlumberger and UAE. A partnership based on experience and collaboration.

2012

Energy

THEBUSINESSYEAR

INTERVIEW

GREEN fields TBY talks to HE Eng. Suhail Mohamed Faraj Al Mazrouei, UAE Minister of Energy, on diversifying the energy mix, the impact of falling oil prices, and Emiratization.

What are some of the Ministry’s priorities when it comes to diversifying the UAE’s energy mix leading up to 2030?

Natural gas accounts for almost 100% of our energy currently, but we know that this will not last. We want to increase green energy as a share of the overall electricity sector. We aim, by 2020, to achieve around 30% of electricity generation from emission-free sources, with 25% from nuclear power and the remainder from solar energy. Today, we have three solar projects that are currently in the bidding phase, each at 100 MW. One is in Al Ain, and the other is in Dubai. At the end of 2014, we hope to be at the final investment decision stage to start constructing the largest single-site LNG receiving facility in the region, the Emirates LNG receiving terminal at Fujairah. With a capacity of 9 million tons, it will enable us to deal with future growth in demand. We have received commercial bids, and we are currently evaluating them. The facility will help us to diversify our gas import market by having three different forms: indigenous gas, pipeline gas, and LNG. The fact that gas prices are increasing has made us consider sour gas projects. Electricity demand is growing at around 6% per annum in the UAE, and that requires additional resources every year. The first sour gas project is Al Hosn Gas’ Shah field, which will start production in 2015. We are now implementing the second sour project, Bab, which Shell is developing. That will come in 2017. With electricity as the largest consumer of gas, we are working with electric-

ity providers and regulators across the Emirates to establish a unified conservation law to encourage people to consume less. The levels of subsidies paid by the government will triple when the more expensive gas comes into the system. We want to look at this structurally and with a unified approach. We are trying to monitor newly built housing and structures through green initiatives, which force the construction of energy-efficient buildings. However, existing buildings are less efficient. We have launched the first UAE Energy Status Report for 2015 in collaboration with the UN, which puts together all of these initiatives and all of the work that has been done in one easily comprehensible format. What is the Ministry doing to make solar energy more attractive and feasible for the private sector?

We are trying to make the tariff attractive and reasonable, while at the same time looking at the costs of generation for solar energy. The PV Solar energy generation cost went as low as $0.12 per KWh. This makes solar much more attractive. The UAE, and the wider region, have the lowest tariffs in the world, and we are going to try to raise them when prices increase. If we reach $0.15-0.16 per KWh, that would be reasonable. In Europe, it is around $0.33 per KWh. It is not costing us as much as it used to, but people need to preserve energy. People are now living in larger houses with many more amenities. The aim is for a reasonable per capita use of energy.

BIO HE Eng. Suhail Mohamed Faraj Al Mazrouei was appointed as UAE Minister of Energy in March 2013. He is also the Chairman of the Boards of Directors of the Federal Electricity and Water Authority, Mubadala Petroleum, and Emirates Liquefied Gas Company, as well as a Member of the Board of Directors of the Petroleum Development Co. and Dolphin Energy. He has held multiple positions in government as well as the private sector, and registered numerous achievements in the service of the country throughout his career. Al Mazrouei graduated in 1996 from the University of Tulsa in the US with a Bachelor’s degree in Petroleum Engineering.

THEBUSINESSYEAR

ABU DHABI 2015

In terms of solar energy technology, what role does innovation play alongside public-sector involvement and R&D in Abu Dhabi?

Innovation plays a key role, which is why we have not merely focused on attracting investors but have also emphasized R&D. For example, through the Masdar Institute of Technology we are developing better and more efficient PV cells and working with international companies on new technology. Masdar is one of the leading companies that is wholly owned by the government of Abu Dhabi. It is a major investor in a variety of renewable energies. We are also working directly with the industry by putting seed capital into research projects in companies. Our market is open for this, and has attracted people to work on innovation in this area; however, we do not want to over-subsidize the sector. Incentives and new technology are coming to the market, and I believe that we have an excellent future in solar energy. How does the recent slump in oil prices affect your outlook on production capacity building? The UAE's Ministry of Energy keeps a close eye on the sector

How are you working to bring about change in consumption behavior toward conservation?

Talking to, and incentivizing people, is extremely important to us. We have started giving lectures to this effect. I myself have gone to universities for this purpose. We gave a televised lecture at the Majlis of HH Sheikh Mohammed bin Zayed Al Nahyan, the Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, which was attended by government officials, businessmen, and diplomats, along with about 300-400 other citizens, on the subject of the importance of the conservation of energy. We also allocated several prizes across the different sectors for consumers. We launched the UAE prize for electricity and water conservation achievements offered to housewives, schools, and mosques for reducing energy and water consumption.

Capacity is for the long term. As a mature investor in and producer of oil, we always look at the long term to continue to being a reliable producer. Upstream energy requires such investments to cater to the shortage that is coming to the market. However, pricing is important, and what led to the development of fracking in the US was pricing. If pricing there does not adjust, investors will leave; you don’t produce oil to lose money. I don’t see these low prices as the new norm. The current low prices aren’t going to affect the major players, such as the UAE, in the long term. The worry is that if the cost of production stays higher than the price for consumers, investors will be scared off. We need them to stay and help us supply the world with what it needs. Imagine what would have happened to prices if shale oil had not been around over the past four years. It has been a huge help to the world to keep prices reasonable and sustainable, at around $100 per barrel. The context is important; this is not the first time we have seen a slump, and in general, 2014 was a good year for us, with average prices still standing at around $100. ✖

Targeting 30% electricity from emissionfree sources; 25% from nuclear and remaining from solar by 2030

The UAE is first in the region to work on implementing a nationwide energy conservation law

Energy

THEBUSINESSYEAR

GUEST SPEAKER

How do you view Norway’s and Abu Dhabi’s role in leading the transition toward clean energy technology and a more sustainable energy future in the decades to come?

ASK THE experts TBY talks to Tord Lien, Minister of Petroleum and Energy of Norway, on the role of Statoil in the UAE and collaboration between Norway and Abu Dhabi on sustainable production. Norway and Abu Dhabi are both in a transitional state, diversifying their economies away from dependence on oil revenues. What similarities exist between the two regions in regards to this shift?

Norway and the UAE are both small countries, but large energy producers. Although the petroleum sector contributes significantly to the national economies, both countries also have a strong focus on renewable energy and carbon capture and storage (CCS). This is particularly evident when it comes to R&D in renewable energy sources. Norway has, together with Iceland, the largest share of renewable energy production—and consumption—in Europe. Nearly all of the electricity in Norway comes from hydropower. Norway and the UAE, with Abu Dhabi in the forefront, are both committed to reducing CO2 in order to mitigate climate change. The two countries collaborate in the major global processes to achieve this goal.

Statoil, Norway’s state oil company, is one of the top international oil companies bidding in Abu Dhabi’s main onshore oil concessions, as the historic 75-year operations agreement expired in January 2014. What is Statoil’s main value-added as a partner in operating the UAE’s biggest onshore oilfields?

Statoil is the largest operator on the Norwegian continental shelf and has more than 40 years of experience in developing cutting-edge technology for producing both oil and gas. I believe Statoil can add value to particularly three areas that are of importance to Abu Dhabi; increased oil recovery, gas production, and CCS. Increased oil recovery is important both because it represents enormous value and ensures that natural resources are not wasted. Statoil is already a world leader in increased oil recovery with an average recovery rate of 50%. Thus it can contribute with important technology and experience.

Abu Dhabi plans to spend over $60 billion over the next decade to expand its oil and gas industry and is looking to increase its sustainable oil production capacity from 2.8 million to 3.5 million barrels per day by 2017. What opportunities do you see for further collaboration and between Norway and Abu Dhabi in light of these aims?

The Norwegian petroleum industry has developed worldclass technology and expertise. Increased oil recovery is one area that will be crucial in order for Abu Dhabi to reach its ambitious goals. Both Statoil and the world leading Norwegian supply industry can contribute with technology and expertise in this development. I would also like to mention that due to a strong CO2 taxation regime on the Norwegian continental shelf, the Norwegian industry has had a strong economic incentive to research and develop more environmentally friendly technology. This has led to operators and suppliers on the Norwegian continental shelf being world leading when it comes to producing oil and gas in a sustainable manner. I believe this fits with Abu Dhabi’s role both as a large energy producer and ambitions to mitigate climate change.

The contribution of small countries like Norway and Abu Dhabi is mainly in the areas of research and technology development, in addition to promoting international cooperation. Both countries are undertaking focused efforts into this contribution and this is particularly evident when it comes to renewable energy and CCS. In this context, I would like to mention Abu Dhabi’s Masdar City as an ambitious initiative in the pursuit of developing sustainable cities. The fact that the International Renewable Energy Agency (IRENA) has its headquarters in Abu Dhabi is further proof of these ambitious renewable energy policies. ✖

BIO Tord Lien was appointed Minister of Petroleum and Energy on October 16, 2013. He has been a member of the Norwegian Parliament for the Progress Party since 2005. From 2009 to 2013 he served as Second Vice-chair of the Standing Committee on Education, Research and Church Affairs. From 2005 to 2009, he served as a member of the Standing Committee on Energy and the Environment. He holds a MA in History from the Norwegian University of Technology and Science.

THEBUSINESSYEAR

ABU DHABI 2015

INTERVIEW

DRILL IT TBY talks to Abdulla Nasser Al Suwaidi, Director General of Abu Dhabi National Oil Company (ADNOC), on achieving the company’s production targets, the Ruwais Refinery, and oil prices. What progress has been made towards achieving the 3.5 million bpd target by 2017, and how will increased output impact the market?

BIO Abdulla Nasser Al Suwaidi is the Director General of Abu Dhabi National Oil Company (ADNOC), and has been in his post since June 2011. He is a Board Member of the Abu Dhabibased Supreme Petroleum Council (SPC), in addition to several federal and local government organizations and entities. Al Suwaidi graduated as a Chemical Engineer from the University of Wisconsin-Madison in the US.

ADNOC is on course to meet its production target of 3.5 million bpd by the year 2017. It is difficult to list all the projects’ phases completed over the past one to two years and those yet on schedule to be completed in the coming two years, but whatever has been completed is a strong indication in meeting our commitment to meet such goal. In crude oil exploration, development and production activities, ADNOC has been utilizing latest technologies for maximum yield of its current onshore fields under its subsidiary Abu Dhabi Company for Onshore Petroleum Operations (ADCO) and offshore under its other subsidiary Abu Dhabi Marine Operating Company (ADMA-OPCO). In addition, work is now in the last stages for the completion of four full-scale artificial islands project in the Zakum offshore field with a target to boost production from 550,000 to 750,000 bpd in 2015. The establishment of two new ADNOC Group companies, namely Al Dhafra Petroleum Operations Company and Al Yasat Petroleum Operations Company, aimed at further developing onshore and offshore fields across the Emirate of Abu Dhabi. In parallel with this, enhanced oil recovery (EOR) technology has been applied in various

offshore and onshore existing reservoirs for further production and maximum yields. These efforts and tasks combined offer fairly promising good assessment of the status of what is currently ongoing in terms of projects and ambitions in meeting the 2017 outlook that ADNOC has set for itself and for the international market. What impact will the Ruwais Refinery expansion capacity of 417,000 bpd have on the domestic economy in Abu Dhabi when it comes online in 2015?

The Ruwais Refinery expansion is expected to have a positive impact on ADNOC, Abu Dhabi, and the UAE. That is why ADNOC went forward in such strategic project. Through its subsidiary company Abu Dhabi Oil Refining Company (Takreer), ADNOC operates two refineries; one in Umm Al Nar on the outskirts of the city of Abu Dhabi and Ruwais in the Western Region. The expansion will increase the current, which has been for years, by 417,000 bpd bringing the total capacity up to 817,000 bpd and with Umm Al Nar Refinery, bringing ADNOC’s total refining capacity to over 900,000 bpd. Such capacity will make ADNOC and Abu Dhabi much more self-dependent on utilizing their natural resources of crude oil and use this for local purposes and consumption rather than importing the Emirate’s need from refined crude oil products. AD-

NOC will depend on its own manufactured, processed, and refined crude products, rather than just exporting quantities of crude oil, which gets processed and refined and then later to be imported for local consumption reducing costs to minimum levels and utilizing and customizing spending more efficiently for the company’s benefit and so the emirate and the nation as a whole. How has the drop in oil price to less than $70 a barrel affected the UAE market in comparison to other GCC nations?

Drop and fluctuations of international crude oil prices have been going on since crude oil became a major consumer commodity. Therefore, the recent price cycles come with no surprise. ADNOC has been receptive to such price cycles and with preemptive measures, midand long-term anticipations and adaptable. ADNOC remains on course in regard to its planned projects and expansions as per the set target in boosting production to 3.5 billion barrels a day and Emiratization target of 75%, both by 2017. Longer term, ADNOC has been pursuing its set objectives and plans for the Abu Dhabi Economic Vision 2030 as well. In other words, the short-term instability of recent years must not derail our long term goals. Therefore, all our committed projects are in progress. ✖

Energy

THEBUSINESSYEAR

INTERVIEW

What are the goals behind the RSB’s Business Continuity Management regulations?

TBY talks to Saif Saeed Al Qubaisi, Acting Director General of the Regulation & Supervision Bureau (RSB), on innovations taking place in the water and electricity sectors.

CONSERVE to win BIO Saif Saeed Al Qubaisi has extensive experience as a leader in the water and electricity sector in the UAE, and has a proven track record in project management and sustained service delivery. He joined the firm from the Executive Council, where he held the position of Energy Affairs Director. Over the last 10 years, he has worked in various entities including the Abu Dhabi Water and Electricity Authority (ADWEA), ALDAR properties, and Abu Dhabi Transmission and Despatch Company (TRANSCO). He holds an MBA and a BSc in Electrical Engineering. He also holds a Project Management Professional certificate and is a member of the UAE Society of Engineers, IEEE, and PMI.

What are some of the current shifts and trends occurring in Abu Dhabi’s water, wastewater, and electricity sectors?

A huge amount of diversity and change is taking place. With electricity, we are seeing more renewable energy, more panels on roofs, and more involvement with customers—more focus is being put on conservation. There are many developments in the use of recycled water, particularly in the wastewater sector, where we have introduced a three-tap approach that seeks to direct large users to the best source of water for their needs. In this connection, the three taps are; ground water, drinking water, and recycled water. The more recycled water we can use and the more efficiently we use it, the less drinking water we have to produce in the beginning. The key themes of diversity and sustainability run through everything we are doing.

This is part of a much wider process the Abu Dhabi government has introduced in terms of planning requirements to ensure that, under any circumstances, business continues. For example, we have seven power plants in the Gulf waters producing drinking water using desalination technology. We have looked at the likelihood of incidents such as what would happen if these waters become heavily contaminated. In such a situation, we can supply all of our drinking water needs from Fujairah into Abu Dhabi. We have done that and tested the system and it works perfectly. We have also looked at things such as IT systems and if they would be prone to cyber attacks. In other words, we look at how to deal with worstcase scenarios for everything. What are some of the findings of your feasibility studies on waste-to-energy (WtE) technology in Abu Dhabi?

Overall, we have a good understanding of WtE projects and have been working with deferent stockholders in studying these technologies. WtE incineration plants offer a reliable form of energy production and stop the release of dangerous gases ,such as methane, into the atmosphere. It is known as a carbon-neutral technology. However, in line with our conservation philosophy there are certain rules that apply to everyone in connection with waste. The first thing is to try not to produce much of it. The second is when you do produce waste, recycle as much as you can

Al Mirfa plant on track to add 1,600 MW of power generation and 52.5 million gallons of water production by 2017

By 2020, 5,600 MW of installed capacity will come from nuclear power

before burning it. The third is how you deal with the residue. The things you can’t recycle easily, such as rubber, plastic, and organic materials, are either burnt or are fed into anaerobic digestives for the organic materials. The average electricity unit costs are pretty competitive compared with other technologies. What are some key features of the new Al Mirfa power and water plant, and how will it add value to the sector?

The Al Mirfa plant is probably the most complex and unique plant procured since the restructuring of the sector in 1999. Utilizing four unused plants from one of the Northern Emirates with a total capacity of 400MW and new gas and steam turbines, the station will have a combined output capacity 1,600MW. ✖

THEBUSINESSYEAR

ABU DHABI 2015

FOCUS DEMAND SIDE MANAGEMENT

LESS IS MORE Higher water and electricity tariffs in Abu Dhabi have been put in place to curb wasteful energy consumption in the Emirate as part of a wider effort to educate consumers on the importance of their role in the energy equation.

THE UAE is rich in energy resources, implementing a diversified strategy that includes investments in oil, gas, solar, nuclear, and Abu Dhabi in particular has a keen interest in embracing more advanced clean energy technologies and emission-free sources into its local mix. However, rapid economic development coupled with a consumer-mentality of limitless abundance has led to the UAE carrying the distinction as one of the largest energy consuming nations per capita in the world, with fossil fuels dominating domestic energy usage. Over-consumption of energy is not only a domestic concern for the UAE, but also a concern for countries that rely on the UAE for oil exports, as domestic consumption taps into export supplies. For these reasons, it is widely understood among government leaders and key regulators in the energy, water, and electricity sectors that current rates of consumption cannot continue in light of increasing demand projections. To address this, consumers are being encouraged to consume less through incentives designed to increase awareness of wasteful consumption and positive measures in demand-side management are taking place in Abu Dhabi. Residents of Abu Dhabi likely saw a rise in their water and electricity bills beginning January 1, 2015 as the government implemented higher tariff rates early in the year. Depending on the size and type of household residents live in, both locals and expatriates are now subject to higher tariffs, with the expat rate higher than the local one. Nevertheless, for the first time, Emiratis have to pay for water usage—a ma-

jor shift in the local mindset when it comes to energy consumption. With household energy bills now seeing the impact of higher tariffs, consumers will now have a greater incentive to adapt their behavior, turning off their lights and faucets more readily than before. The expected shift in mindset and behavior these raised tariffs are encouraging is something energy suppliers, regulators, and consumers all stand to see the benefits of. For the UAE and the entire GCC region, energy has been, and will remain, a key pillar of economic development and progress of the future. In speaking about the efforts being made at the governmental level to change consumption behavior, UAE Minster of Energy, HE Eng. Suhail Mohamed Faraj Al Mazrouei stated, “Talking to, and incentivizing people, is extremely important to us.” For Abu Dhabi, the demand-side of the energy equation is now receiving more attention than it had been previously with the implementation of higher water and electricity tariffs and other incentives to reduce wasteful energy consumption domestically. Initiatives like these help to raise awareness of over-consumption and shift consumers toward adopting greener solutions, freeing up more energy for export in the global market. In the efforts to reduce the UAE’s characterization as one of the highest consumers of energy per capita and shift toward greener energies, Abu Dhabi is working to ensure consumers understand the key role they must play in the overall energy equation. ✖

GENERATING ENERGY FOR FUTURE NEEDS

Our Vision To be a world-class company in the development of sour gas resources and a distinguished partner of choice.

Our Mission To successfully develop, construct, operate and maintain the Shah Gas Field, utilizing the highest engineering standards and adopting premier business practices and technologies to enhance the long-term value to our Stakeholders. We will achieve this by: • • • •

Implementing effective management systems. Developing competencies and retaining our human capital. Protecting the health and safety of our workforce and the environment. Maintaining the well-being of our communities.

Al Hosn Gas (Abu Dhabi Gas Development Company Ltd.) PO Box: 44115, Abu Dhabi - United Arab Emirates, Tel: +971 2 654 2222, Fax: 971 2 654 2044

www.alhosngas.com

THEBUSINESSYEAR

ABU DHABI 2015

GUEST SPEAKER

a barrel OR TWO Your role as Executive Director of the IEA is to steer the world toward a more secure, sustainable energy future. What role does Abu Dhabi play in the global energy landscape?

TBY talks to Maria van der Hoeven, Executive Director of the International Energy Agency (IEA), on Abu Dhabi’s role in the global energy matrix.

Abu Dhabi is of course a major producer and exporter of crude oil, and the UAE plays a very important role in OPEC. In recent years UAE production has been pushed up close to 3 million bpd to help compensate for some of the recent disruptions in supply. This has allowed prices to remain relatively stable. Abu Dhabi is also very active in the gas trade. LNG has been exported to Japan for nearly 40 years, while Abu Dhabi and Dubai have been importing surplus gas from Qatar since 2004, and transiting part of that supply to Oman. Therefore, Abu Dhabi sees all sides of the trade in gas. In the long term, the extensive use of renewable energies will also contribute to energy security, in the Gulf area as everywhere else. There is great scope for solar power in the region, as Abu Dhabi’s pioneering solar thermal plant, Shams I, has recently demonstrated. As the Abu Dhabi National Oil Company (ADNOC) works to increase natural gas production via the development of sour gas reserves and CO2 injection technology, how do you see Abu Dhabi’s natural gas influence reaching beyond the borders of the UAE?

Abu Dhabi certainly seems well integrated into the global gas market, as an exporter, an importer, and a transit country. Gas is becoming a popu-

lar fuel; it is relatively clean and quite widely available. But once Abu Dhabi’s associated gas is spoken for and the easily available non-associated gas begins to decline, developing more challenging reserves gets expensive. It is important to find ways to make the projects more attractive through offsetting benefits. Wet gas-fields deliver NGLs and condensates; a sour gas field can deliver quantities of sulfur for export (and I think Abu Dhabi is building a special railway to transport this); and with CO2 injection you can enhance production while disposing of unwanted green house gases. Our team working on carbon capture and storage has been very interested in the technical and legal challenges of this approach. This is an area where international collaboration yields real dividends; and, as for solar power, successful projects will tell their own story. Part of the investment strategy toward energy diversification includes four nuclear power plants, which are intended to allow the city to be 25% powered by nuclear energy by 2020, when all four plants will come online. What is your take on Abu Dhabi’s nuclear ambitions as countries such as Germany, Belgium, and Switzerland phase out of nuclear?

Every country has a sovereign right to decide on the role of nuclear power in its energy mix. Nuclear is one of the world’s largest sources of low-carbon energy, and as such has made and should continue to make

an important contribution to energy security and sustainability. The IEA’s World Energy Outlook has examined the effect of low nuclear investment in detail. The analysis has shown that low nuclear investment is likely to lead to higher demand for gas and coal, higher electricity prices, increased import dependency on fossil fuels and electricity, and a more difficult path to decarbonisation, although such a trend could also open up new opportunities for renewable energy sources. Such a scenario would therefore make it much more difficult for the world to meet the 2°C climate stabilization goal, and have potentially negative impacts on energy security. ✖

BIO Maria van der Hoeven has served as Executive Director of the IEA since September 2011. She has steered the IEA during a period of exceptional change in the global energy landscape, and is taking the initiative to address the challenges of global energy governance. Her priorities include building and formalizing cooperation with the major emerging energy players of the 21st Century, and also expanding energy access. She was formerly Minister of Economic Affairs of the Netherlands.

Energy

THEBUSINESSYEAR

INTERVIEW

THE HIGH SEAS TBY talks to Dr. Ali Obaid Al-Yabhouni, CEO of the National Gas Shipping Company Ltd. (NGSCO) & Abu Dhabi National Tanker Co (ADNATCO), on trading with a diversified fleet of ships, fighting high energy prices, and investing in professionals.

BIO Since 1992, Dr. Ali Obaid Al-Yabhouni has worked in a wide range of senior positions in the ADNOC Group of Companies. He became CEO of National Gas Shipping Co. Ltd (NGSCO) in 2007, and since January 2009 has also led Abu Dhabi National Tanker Company (ADNATCO). In addition, he has been involved in OPEC affairs since 1999 and is UAE Governor for OPEC and Chairman of the OPEC Board of Governors. He holds a PhD in Law from the University of Tasmania, an MBA from South Eastern University, Washington D.C., and a degree in Economics and Political Science from the University of Southern Indiana.

What have been the main achievements of ADNATCO and NGSCO in the petroleum sector, and what role did the companies play in developing the Emirate of Abu Dhabi?

We primarily serve Abu Dhabi National Oil Company (ADNOC) and its group of companies; however, as a well-positioned and growing regional maritime operator, we also contribute to the trade growth of the Emirate of Abu Dhabi. Trading with a diversified fleet of ships, which includes LNG carriers, bulk carriers, chemical and products tankers, and container ships provides us the opportunity to extend our services to the different business sectors of the Emirate. Our vessels carry LNG from Das Island in the Arabian Gulf to Japan, while ADNATCO is involved in the worldwide transportation of the hydrocarbon products that are produced by ADNOC Group companies. How are ADNATCO and NGSCO planning on fighting high energy prices and resolving the need for more efficient and high-tech ships in the market?

We believe that saving fuel consumption and establishing an organizational culture based on energy efficiency is an effective alternative fuel

for the future. To achieve this, we embarked on an initiative called the Al Daffah Project, which was aimed at reducing the CO2 emissions generated by the company’s ships. By using new tools and techniques in managing our fleet, as well as installing new measuring instruments to achieve the company’s targets and improve key performance indicators (KPIs), Al Daffah’s ultimate aim is to achieve huge savings in fuel consumption and greatly reduce CO2 emissions. How do you see the market developing in the medium term, and what will be the strategy of ADNATCO and NGSCO to maintain their leading position in the region?

We always look at the long term. Our strategic objective is to meet the needs for ADNOC and its group of companies for efficient marine transportation. We know that ADNOC certainly remains firmly committed to maintaining a strong presence in the shipping industry. This provides us with numerous opportunities to grow our business and stay in the lead. The maritime industry faces the increased threat of piracy. Which innovative defensive measures is ADNATCO implementing to ensure the protection of its seafarers and ships?

We remain vigilant and ensure that we have the right preventative measures available to safeguard the security and safety of our crews and ships. We always seek innovative ways to strengthen the defensive mechanism of our ships, and I am happy to say that some of our company’s award-winning innovations in this regard have been adopted by other companies.

IN NUMBERS NGSCO, ADNATCO

40% of seafarers are Emirati

Through the Cadetship Program, ADNATCO and NGSCO are strongly committed to the employment of UAE nationals. How are ADNATCO and NGSCO currently investing in the UAE’s capital by forming skilled petroleum professionals?

Our Cadetship Program, which trains UAE nationals to become seamen, is one of our most successful initiatives in developing and employing UAE nationals in key positions throughout the company. Every year, we accept over 40 new young high school graduates to join the program, which offers attractive career prospects. Over the years, we have trained hundreds of UAE nationals as maritime professionals, who today hold senior positions, not just at ADNATCO and NGSCO, but also in shipping and port companies throughout the UAE. As a result of this program, over 40% of our seafarers are Emirati nationals. Over time, our national seafarers are taking increasingly senior positions on-board our vessels and already hold Master and Chief Engineer tickets. We also provide a wide range of other opportunities for office-based UAE nationals. Our Tamkeen program provides a structured training program for onshore UAE nationals to support their long-term career development within the company. ✖

THEBUSINESSYEAR

ABU DHABI 2015

INTERVIEW

from black TO GREEN TBY talks to Jasem Ali Al-Sayegh, CEO of Abu Dhabi Oil Refining Company (TAKREER), on some of the targets and goals the company has established and the status of some of its projects.

BIO Jasem Ali Al-Sayegh is a Chemical Engineer that graduated from the University of Washington. He joined ADNOC in 1986 where he assumed different challenging posts that greatly contributed in evolving the process engineering, operations, projects and HSE functions and management. He worked in several strategic expansion projects and gained valuable experience in technology handling and human resources management. After managing Ruwais Refinery for four years, he moved to the Company’s Headquarters in 2003 as Assistant General Manager (Technical). He then assumed the post of TAKREER General Manager in 2006. He contributed at a senior level to the local downstream oil industry by assuming the role of a Board Member of both Borouge and ADNOC Distribution for the last three years. In January 2012, he was appointed as TAKREER’s CEO.

What are the targets in place to achieve the “BIOjet Abu Dhabi: Flight Path to Sustainability” venture project with Etihad Airways, the Masdar Institute of Science and Technology, Boeing, and Total, and what is the expected timeline of this product?

This product is introducing a certain percentage of biofuel into jet fuel. Etihad Airways is planning this in preparation for the expected future worldwide regulation that jet fuel should be composed of a certain percentage of biofuel. TAKREER participated in this project by refining the biofuel at TAKREER Research Centre and bringing it to the specifications required that can be blended into regular jet fuel, which was used in a test flight by Etihad last January. The initiative is currently in the early stages and Masdar Institute is embarking on research to generate biofuel from crops that are inedible. We are continuing to work with Etihad and Masdar in this direction, because we see the biofuel production in the future as complementary to our efforts, in view of the expected increase in demand

Expansion of Ruwais refinery will increase TAKREER capacity to more than 900,000 bpd

for jet fuel due to the rapid expansion of the aviation industry in the Emirates and the region. In the UAE market, TAKREER has just begun distributing its new low-sulfur, environmentally friendly diesel fuel. What is the significance of this milestone for TAKREER?

This product falls in line with the sustainability efforts undertaken by ADNOC. We introduced this product, the Green Diesel, in the market in July 2014. All diesel types in the UAE meet now the Euro5 specifications, which

is 10 parts per million (ppm) of sulfur. We are proud of being the first country in the region to introduce this sort of high-level product in the market. TAKREER was already ahead of its time two years ago, and in anticipation of the expected regulation we were able to start production after completing and commissioning the Green Diesel Project in Ruwais, which enabled us to convert all the diesel produced in our facilities into Green Diesel that meet the Euro5 specifications. This is important for us for obvious environmental reasons, and also to cope with the global market trend to go with low-sulfur diesel. We are happy to see such a regulation is enforced in our country. ADNOC had committed itself to meeting this regulation and invested in our facilities to ensure its smooth implementation. For the external market, we will be able to export this low-sulfur diesel to locations where it is required, whether in Europe or the Far East, which will give us a more competitive edge as it is a higher value product. ✖

Energy

THEBUSINESSYEAR

INTERVIEW

TBY talks to Brian Dawes, Regional Manager - Middle East at Applus Velosi, on value added, opportunities in the market and beating the competition.

servicing the SERVICES How has Applus Velosi been adding value to the local and regional markets with Abu Dhabi as its base in the Middle East?

We have been in Abu Dhabi for many years, so we are well known in our industry. Our main business is testing, inspection, and certification. For example, if TAKREER has a refinery expansion it would order equipment and materials, and it needs to know that its vendors are going to be producing what it needs on time and on specification. Our company has a worldwide network of inspectors who visit vendor sites and help to ensure that costly delays and rework are avoided. We also provide third-party inspections at the customer’s own site to certify the integrity of the installed unit. Other services include non-destructive testing. For example, if a customer is building a pipeline, the welds that connect each section need to be absolutely perfect. We will carry out ultra-sonic testing or radiographic testing, or whatever the job requires, to check the integrity of the welds.

What factors drove the bulk of your business in 2014?

Our business is driven by projects. The oil refinery is a nice example. The nuclear power projects ongoing in the Emirates are opportunities for us as well and we do provide services there. One interesting thing that stands out when you look at where the UAE’s capital is spent is that there is a lot more being spent in construction than in hydrocarbons. The Etihad Rail project is a great example. In the last year or so, the number of new projects in the oil and gas business has fallen away slightly. There is more to come, of course, but when I look at the mix of investments and where capital is being spent, there are superb opportunities for us in infrastructure and construction, as well as the traditional oil and gas chain. So my focus is shifting toward developing new services for those sectors. How are you capitalizing on the opportunities that you see arising with various projects in the pipeline?

One such opportunity is

services, in which we are already successful and well established, such as lift equipment inspection. Every construction site we see has huge tower cranes. They all need to be inspected and certified. It is very much the same service, and delivered by the same inspectors. The obvious thing to do is to take a successful service and replicate that success in another sector. We also provide HSE services to many sectors. The other thing we are doing is introducing new services, like mechanical and electrical power systems, such as heating, ventilation, and air conditioning systems in buildings. We are helping our customers to make certain that everything they do is compliant with the regulations. Regulations drive everything we do. Companies won’t spend money if they don’t have to. What makes Applus Velosi the partner of choice for industry players?

One thing that we have in our favor is that we have been around for many years, so we know our customers very well. We are pre-qualified with all the major operating companies and are very experienced. We continuously review the services that we provide to make sure that the latest technology is available to our customers, not just at the point where the projects are being built and commissioned, but also throughout the operating life of the project. We provide asset integrity management services, which assess the life of a process unit, for example, and how to extend it. We introduce services that go beyond the commodity. ✖

IN NUMBERS Applus Velosi

Around

300 inspectors

Global company founded in Malaysia in

1982

BIO Brian Dawes started his career with the UK chemicals giant ICI in the early 1980s, and held a number of management positions including General Manager (Polypropylene Business) and Managing Director (Thailand). After a spell as Managing Director of a clinical research organization in China, he moved to Kuwait as General Manager of a local chemicals manufacturing company. He has served as Vice-President of Ikarus Petroleum, and VicePresident of Lamprell. He is currently serving as Regional Manager (Middle East) for Applus Velosi.

THEBUSINESSYEAR

ABU DHABI 2015

FOCUS NUCLEAR ENERGY

POWER PLANTS Abu Dhabi is planning to meet its growing demand for electricity in part by nuclear power, diversifying its fuel mix toward cleaner sources and creating an entirely new industry around the capital’s Western Region, Al Gharbia. WHEN IT COMES TO ELECTRICITY in Abu Dhabi, the diversification of fuel sources is an integral part of the strategy to power the anticipated growth in the Emirate over the next decade and beyond. Demand for electricity in the UAE is estimated to be one of the highest growing in the region, increasing by roughly 9% per year—three times the global average—due to a rapidly expanding domestic industry and a growing population, which is estimated to hit 3 million by 2030. Currently, according to the Abu Dhabi Water and Electricity Authority (ADWEA), close to 100% of electricity in Abu Dhabi is generated by gas-fired plants. By the same logic that drives the Emirate’s push to diversify its economy away from oil-dependency, Abu Dhabi is seeking to diversify away from gas-dependency by integrating cleaner and renewable sources into the mix. Facilitating investment in alternative energy resources is, thus, a major focus on the Abu Dhabi government’s policy agenda. The Emirate is planning for wind, solar, and hydrogen power plants to account for 7% of electricity requirements by 2030, while the UAE’s peaceful civil nuclear program will contribute 25% of electricity generation come 2020. The idea of including nuclear in Abu Dhabi’s fuel mix became a likely option when the UAE’s Ministry of Foreign Affairs published its first official “Policy of the UAE on the Evaluation and Potential Development of Peaceful Nuclear Energy” in 2008. The conclusion was that nuclear was indeed feasible and Abu Dhabi has since taken on the task of building a nuclear industry from the ground up in the Western Region, 300km outside the city. The UAE’s four nuclear plants are being built there, each with a capacity of 1,500MW, and a high-tech nuclear industry is taking shape with the support of several key stakeholders in Abu Dhabi. Under the watchful eye of the Federal Authority for Nuclear Regulation (FANR), the Emirates Nuclear Energy Corporation (ENEC) is the local operator charging the UAE’s nuclear initiatives forward. As per a multi-billion dollar contract with Korea’s state nuclear energy company, Korea Electric Power Corporation (KEPCO), the first unit of the four plants

is more than 60% complete and will open in 2017, followed by unit 2 in 2018, unit 3 in 2019, and unit 4 in 2020, if everything goes to plan. Ensuring the nuclear plants are developing in line with environmental standards, the Environment Agency Abu Dhabi provides ENEC with guidelines to ensure the surrounding natural environment near the Barakah plants are protected. ENEC has already implemented water conservation initiatives and built an artificial reef in the waters near the plant to nurture local biodiversity. Once the plants are fully completed, the challenges ahead will involve continuing to monitor and ensure high levels of safety, efficient operation, emergency preparedness, and proper disposal of radioactive waste—challenges Abu Dhabi is already preparing for through proactive and cooperative engagement with these key stakeholders at the forefront of the sector.

According to estimates by the IAEA, there will be a continued expansion and steady increase in adoption of nuclear power around the world in the coming years. From the initial project plans in 2008 to today, the UAE is now not only the first country in the Middle East to be developing a civil nuclear energy program; but it is the first country in the world to do so in nearly 30 years following the former Soviet Union’s Chernobyl meltdown of 1986. According to estimates by the IAEA, there will be a continued expansion and steady increase in adoption of nuclear power around the world in the coming years, and the UAE’s nuclear program could be a model for others to emulate. Certainly for the UAE, with growing demand for electricity, the long-term supply plans are being built on pillars of diversification, efficiency, sustainability, and a reduced carbon footprint. Nuclear energy is set to play an increasingly valuable role in Abu Dhabi’s diversified energy mix, marking a major shift in the Emirates domestic energy landscape that will power its future for years to come. ✖

Energy

THEBUSINESSYEAR

ON APRIL 1, 2008, THE UAE’S MINISTRY OF FOREIGN AFFAIRS PUBLISHED FIRST OFFICIAL POLICY OF THE UAE ON THE EVALUATION AND POTENTIAL DEVELOPMENT OF PEACEFUL NUCLEAR ENERGY.

Abu Dhabi’s Barakah nuclear reactor unit is Korea’s first nuclear contract established with a foreign nation. KEPCO will help Abu Dhabi construct four nuclear plants in Al Gharbia.

AL GHARBIA

CONTRACT DETAILS Korea Electric Power Corporation (KEPCO)

3rd 3rd largest nuclear

NUCLEAR POWER CAPITAL CONTRIBUTION

16.88 BILLION USD

company in the world

TOTAL LAND AREA

51%

ENEC-KEPCO CONTRACT VALUE

OF THE UAE’S TOTAL LAND MASS

BILLION USD

60%

CONTRACT LENGTH

OF ABU DHABI

100 YEARS

Source: TBY Research

ABU DHABI’S NUCLEAR ENERGY STATS PERCENTAGE OF ELECTRICITY PRODUCED BY NUCLEAR BY 2020

REDUCTION IN GREEN HOUSE EMISSIONS: UP TO

ADWEA’S REQUIRED POWER CAPACITY FORECAST PROJECTS A CAGR RATE OF

TOTAL GROSS INSTALLED NUCLEAR CAPACITY

25%

4.9%

5,600

MILLION TONS PA

LEADING UP TO 2020

THE FOUR PLANTS ARE SCHEDULED TO BE COMPLETED BETWEEN 2017 AND 2020

UNIT 1: 2017 60%+ COMPLETE

UNIT 2: 2018

UNIT 3: 2019

UNIT 4: 2020

ELECTRICITY DEMAND AND CAPACITY STATS Electricity demand in the UAE is growing 9% per year (3 times the global average) ADWEA forecasted electricity capacity growth: CAGR of 4.9% leading up to 2020

THEBUSINESSYEAR

ABU DHABI 2015

GUEST SPEAKER

tapped OUT TBY talks to Tsuyoshi Nakai, CEO of Japan Cooperation Center, Petroleum (JCCP), on the recent decline in oil prices and areas where technology cooperation are taking place. How has the recent decline in oil prices impacted your relations with oil and gas companies in the Middle East?

The relationship between the Middle East and Japan should be based on mutual benefit over the long term. The shortterm matters are not our first concern. That is the principle of the JCCP. Of course, the price of oil is sometimes high and sometimes low. The impact of that can either be good or bad for any particular economy. Focusing on the medium to long term, in addition to developing new oil and gas industries, we support technological and human resource development as well. Those are the base of our mutual relations with the Middle East. What are some of the key areas of technology cooperation taking place?

One area is high severity fluid catalytic cracking (HSFCC)— an original technology of Japan which process can be obtained highly value added products such as light olefin, thereby stimulate energy conservation. We have multiple technologies in Japan that are solutions to issues facing oil companies in the Gulf, and we welcome cooperation and dialogue to try and promote collaboration. In Abu Dhabi, under ADNOC, there is a national oil refining company called TAKREER, which operates a technical research center called TAKREER Research Centre (TRC). TRC

JCCP • Head office in Tokyo; Middle East offices in Abu Dhabi and Riyadh • ADNOC is JCCP’s counterpart in the UAE

was originally created by IDEMITSU and JCCP along with TAKREER, and it has developed well. It researches refining technologies and evaluates and improves performance of refineries. Abu Dhabi is now developing major new refineries, which need the technological support that TRC provides. I am in discussion with the CEO of ADNOC, Abdulla Nasser Al Suwaidi, to develop further collaboration in technology and human resource development. We engage in similar collaboration with Nizar Al Adsani, CEO of Kuwait Petroleum Corporation (KPC). How are you working to promote collaboration between JCCP in the long term through engagement with national oil companies in the Gulf?

Of course, we are one of the highest petroleum consuming countries. In addition, Japan has a particularly unique

working style not found in Europe or the US. As a developed country, Japan can supply an interesting, pleasant way of doing business, which derives from our long history and rich culture. The Middle East has its own histories and cultures, and we are offering a new way of cultural engagement as the third choice. It is important that Japan tries to import aspects of Western culture and integrate them into Japanese society. In the automobile sectors; for example, we have our own business and working style, though originally automobile technology comes from Europe and the US. Japanese industries are becoming very competitive today. They know how to make a product efficiently, safely, and in an environmentally friendly way. Especially in the field of manufacturing, Japan is developing a reputation for high-quality products. Additionally, we have experienced many environmental problems during our economic growth period that we overcame, and we had a major earthquake, namely North-East Japan Earthquake several years ago. We faced the difficulties and recognize that safety and environmental issues are important. Historically, our culture and values show that Japanese people are very involved in addressing the challenges of promoting higher levels of safety and a better environment. This kind of expertise can help countries in the Middle East. ✖

BIO Tsuyoshi Nakai passed the Superior National Administration Examination by the Japanese government and joined the Ministry of International Trade and Industry (MITI) in 1976. He directed policy making in various fields, such as industry, trade, energy, small enterprises, and high technology. He was appointed Chief Representative for China, the New Energy and Industrial Technology Organization (NEDO) Beijing office (19951998), and Director General of Japan External Trade Organization (JETRO) Paris for European and Maghreb affairs (2003-2008). He was Corporate Vice-President of Fuji Heavy Industries (SUBARU) for overseas marketing, external relations, and legal affairs (20112014). He is presently CEO of Japan Cooperation Center Petroleum (JCCP), a position he has held since July 2014. He graduated from Keio University in Economics in 1976 and studied at the Fletcher School of Law and Diplomacy in Boston (MA) in 1982. He was also a Visiting Professor for Management of INSEAD (France). His written works include China under the Energy Risk Era. In 2013, he was awarded the French L’ Ordre National du Merite.

THEBUSINESSYEAR

ABU DHABI 2015

FORUM ENHANCED OIL RECOVERY

FIND A WAY

OMAR YOUSSEF MOHAMED UAE Country Director, Baker Hughes

here is a challenge involving extended reach wells (ERW), and we have offered the technology to extend reach beyond 10,000 feet, for example. Working at CTI has helped me a great deal in developing and introducing new technology to Abu Dhabi. One of the success stories with regard to bringing in new technology to the UAE is our successful deployment of the Baker Hughes FASTrak™ logging while drilling (LWD) fluid analysis sampling and testing service. The FASTrak LWD services successfully obtains 23 pressure points and collects nine hydrocarbon gas samples back to the surface. The FASTrak service obtains accurate pressure points and reservoir samples while drilling. For the first time in the UAE, onshore in Abu Dhabi, the FASTrak service was deployed as part of the 6¾” bottomhole assembly (BHA) to drill the 8½” pilot hole. BHA consisted of the AutoTrak™ rotary steerable system for precise directional control along with an LWD suite of gamma ray, resistivity, density, and neutron porosity. After reaching total depth, formation evaluation data was used to pick out the desired pressure point depths. Twenty-three high quality pressure points were obtained with an average test time of 9.9 minutes. The data was used to get the sampling program underway. This successful deployment opens the door for future opportunities in the UAE for this technology.

As oil supplies begin to dwindle, companies are looking for new and improved ways of accessing more of the Emirate’s current reserves, which in the past may have been impossible.

DR. UWE SALGE

WALID NOSSIER

General Manager Middle East, Wintershall Middle East GmbH

Country Manager for UAE, Weatherford

hen we talk about enhanced oil recovery (EOR), there are many different types of technologies that can be deployed. One thing we displayed in November 2014 at the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) is our famous Schizophyllum. Schizophyllum is a biopolymer made out of a natural fungus that can be found in every average forest. It is biodegradable. You inject it directly into a reservoir wait a little bit and the biopolymer will make the oil flow more easily. This is something we are testing right now in a pilot phase in Germany. This is an exclusive product we would have in the market. Actually, it was an accidental discovery; the fungus was used for a different purpose at first, and then we found this application for the oil industry. It is something you inject into the reservoir where oil is around grains. A lot of oil sticks to these grains. Around 30%50% of the oil remains down there, and this fungus actually sweeps the oil away from the grains and brings it to the surface. We have some cooperation agreements and we bring this competency into these ventures, for example with Statoil in Norway. However, we discovered it and it belongs to us, so we can select who we give it to. Right now it’s just being tested in Germany, but we are hoping to use it elsewhere. It takes a long time to develop, but once it’s there, it will be good. We do not know when we can bring it to the Middle East; we have to wait for the results of the pilot project first.

ecently, we introduced our stimulation services to the UAE market, which is very well established business for Weatherford in the US. Underbalanced drilling, for example, is one of the services Weatherford has pioneered, and we have been working with one of our operators in the UAE to prove the concept and commercialize the business. We work with all of the operators in the UAE. Recently, the market has started to open for international oil companies (IOCs), and we have been working with them since the beginning to build partnerships, support their field development plans, and offer the technology they need. We have already established healthy business model with some international operating companies and we are waiting for new comers about to sign for new concessions in the UAE. Weatherford investment in R&D is significant, because if you stop investing in R&D, then we are out of the competition. Everyday there is new technology released; therefore, we need to be there and compete. Having our own competitive technology helps to add value to operations. We give recommendations to corporate based on our client requirements, and these are evaluated and then the direction and application for investment is decided upon. An increase in oil production reflects an increase in drilling activity, which reflects in more business for all service providers.

Energy

AHMED AL MOOSA AL NUAIMI

ABDALLA SAEED AL-SUWAIDI

CEO, Turbine Services & Solutions (TS&S)

CEO, National Drilling Company (NDC)

e have been in the business for over 15 years now, and I can say we have successfully established an engineering base in the country when it comes to gas turbines and rotating equipment. We have accumulated experience, and we use this, while we have even challenged conventional standards when it comes to our environment here. The environment in our region is harsh, meaning it needs some special changes here and there. We manage to do that along with our customers and hand in hand with the OEMs as well. We provide customized solutions to suit our customers’ needs. At TS&S, we have also made a conscious decision to invest more on R&D, the aim is to come up with advanced repairs for our clients, our partners and the OEMs. One of Abu Dhabi’s 2030 goals is to have essential technology in the country; it is also one of our new joint venture goals as well. We are focusing on the core business, which is gas turbine technology and the total package around gas turbines. This is a technically oriented field, meaning we see our role to be a specialist and experts in gas turbines. With the capabilities we are developing in-house, we are serving this strategically important sector of the UAE’s economy, and we have support in the country by entering into these joint ventures and collaborations. We train UAE nationals, allowing them to acquire the necessary know-how, meaning it stays in the country and provides high-value jobs for Emiratis.

hen it comes to opportunity, of course, we have a core business and associated services. With regards to the core business, we will be adding more rigs to our fleet. That means that we will work with the clients to keep abreast of what they need to achieve Abu Dhabi’s target of 3.5 million barrels of oil per day by 2018. We will be putting capabilities and resources at their disposal. If they need more rigs, we will secure that. This is an opportunity, and there will be the chance to hire more national talents to serve this kind of expansion. There are also associated services that come around the rigs. The drilling business is not just rigs, but other services that are all around it. We provide some services that are normally provided by other services companies, such as logging and so on, and this can be expanded in the future. We already have a significant market share in this sector, as they are not only provided by NDC, but by other international service companies. For example, there was only few companies providing explosive services. NDC is the first and only national, local company that has managed to obtain a license from the government for explosive services, which we use to make perforations in the wells and other similar operations. Therefore, we are competing with international companies in this area.

THEBUSINESSYEAR

IBRAHIM AL-ALAWI Deputy CEO, AlMansoori

e are keeping our eye on the market to find out what services there is a demand or a shortage for. AlMansoori caters to very diverse clients, the majority of which are regional from the GCC, but there are also many international companies such as the traditional International Oil Companies (IOCs) or small start-up companies that have popped up recently. In fact, in 2014 we have added two new services; coiled tubing and stimulation services. They are crucially important to enhancing the productivity of wells. In some cases they are bringing the wells back to life. There is pressure on the oil companies to increase their production. And one of the ways they can relieve that is to stimulate and to work over existing wells that are not producing. We are the newcomers in these two particular areas. However, we are going head-to-head with the established majors. The industry in the region is moving more toward gas, so we are seeing more focus on safety and quality than in the past because the risks are so much higher. The consequences are catastrophic. Think of the Gulf of Mexico. People are realizing that they cannot afford to have a similar accident here.

THEBUSINESSYEAR

ABU DHABI 2015

INTERVIEW

HERE we go TBY talks to Hussein Fouad El Ghazzawy, General Manager & Vice-President of Schlumberger UAE, on new technologies on the market and declining oil prices.

What are some of the new technologies that you are bringing to the market here?

We were pleased to have had the global launch for the GeoSphere reservoir-mapping-while drilling service here in Abu Dhabi in May of 2014 and GeoSphere won the ADIPEC award for Best Technology and Innovation in November of the same year. The GeoSphere service allows you to see up to 35m from the well bore, revolutionizing the ability to map the reservoir as it is being drilled. If we look at reservoir characterization and seismic data processing, we have one of the largest centers in the region. We are acquiring seismic data and one of the technologies we have introduced here is called the UniQ service, which is a single point source receiver that of-

fers high fidelity seismic data enabling the imaging of structures never seen before. We have also introduced the Saturn 3D radial probe, which is a reservoir-sampling tool. We have always lead the way in sampling technology; however, Saturn takes it to a new level and allows the acquisition of samplings in much tighter formations while significantly reducing the risks of getting stuck while sampling. This benefits the drillers and allows us to acquire samples in formations that were previously difficult to acquire. What does the next phase of technology look like at Schlumberger?

As far as the UAE market is concerned, the main technical challenges are extended reach drilling and the sour gas development by Al Hosn and Shell. We are looking to enhance the existing technology to meet the increasing complexities within the extended reach and sour gas environment in the UAE, where there is high H2S and high CO2. Most importantly, it is about the reliability of that technology. We have an Excellence in Execution initiative to achieve this. A key concern for the whole industry is reliability of technology. To address this, Schlumberger launched an Excellence in Execution initiative to improve tool reliability and to further operational excellence. Another area where service providers can play a key part is in efficiency. We are reducing our footprint in the fields by doing some of the jobs remotely where we can control the tools and communicate off-site. Our remote operations are definitely complimenting new technology as well. How is Schlumberger adapting to the declining price of oil and in what ways do you expect the market to adjust?

It has been made certain that the UAE will carry on with all their major projects. We will have to see how new projects

BIO Schlumberger UAE • Winner of 2 out of 7 ADIPEC Awards in 2014 • Presence in Abu Dhabi since 1950

will be affected. As service providers, we are in a bubble. We expect there will be pressure on compensation and the pricing of our services, which is something we saw coming. Our role is to maintain the efficiency and the reliability of our services, which translates to more cost effective solutions for our clients. Simply giving discounts is not necessarily the right solution. We maintain our focus on offering reliable tools whether oil prices go up or down. It is a continuous process and commitment we have with our clients and the UAE. We are continuing with several of our internal transformation initiatives, which are transmitting into more efficient, more reliable services, overall, giving more cost effective solutions to our clients. ✖

Hussein Fouad El Ghazzawy started his career with Schlumberger in 1984 as a Field Engineer for the Drilling & Measurements (D&M) segment in Egypt, Pakistan, Nigeria, West Africa, and in 1992 moved to a Field Management position based in Port Harcourt, Nigeria. From 1995, he held various Managerial and Regional positions in charge of D&M segment business in North-East Africa and East Mediterranean (Libya, Egypt, Sudan, Kenya, Tanzania, Syria, and Jordan). In 2001, he became the D&M Segment Area Marketing Manager responsible for Middle East and Asia countries based in Dubai. In 2003, he was assigned as D&M Segment Regional Manager for the Gulf region based in Abu Dhabi covering UAE, Qatar, Oman, and Yemen. In August 2007, he became General Manager for Schlumberger in Yemen. In May 2010, he started his current assignment in Abu Dhabi as General Manager and Vice-President for Schlumberger in the UAE. Hussein has earned a BSc in Geology and Geophysics and a Master’s in Petroleum Geology from Ain Shams University, Egypt.

Energy

THEBUSINESSYEAR

LOCAL ENERGY EVENTS FOCUS

SHARED RISK, SHARED REWARD

With the global economy more than doubling in size, the population climbing to 9 billion by 2050, and consumption and prosperity rising in tandem, meeting global energy demands in the medium- and long-term depends increasingly on key decision makers’ ability to set fourth strategies that factor in future challenges in the sector. Collaboration among policymakers and key players in the world energy scene becomes a crucial component to achieving security and stability in the context of rising global energy demand, which OPEC projects will increase 60% leading up to 2040 (2014 World Oil Outlook). Facilitating knowledge transfer, business agreements, and encouraging partnerships in this regard are top priorities for energy exhibitions, conferences, and events held in Abu Dhabi. The city sets the stage for decision makers to engage in valuable dialogue and interact with one another, discussing their long-term outlooks and sharing game-changing technologies across the spectrum of the energy mix, from fossil fuels to renewables—and the crowds keep coming in record breaking numbers.

Abu Dhabi is host to some of the most prestigious and well-attended energy exhibitions, conferences, and events in the world, further adding to the city’s reputation as a leader in the global energy landscape.

Energy demand in the Gulf is set to triple over the next 20 years

GLOBAL ENERGY CLOSING THE GLOBAL ENERGY GAP WILL REQUIRE

Energy demand in the Gulf is currently growing at 3 times the global average

$48 trillion

• Largest conference program in the world • Over 70,000 attendees and 1,868 exhibitors in 2014

ABU DHABI SUSTAINABILITY WEEK (ADSW) • Largest forum on sustainability in the Middle East • 30,000 attendees and over 140 official government delegations in 2014 • 800 exhibiting companies from 40 countries in 2014

JANUARY 18-21 2016

• Largest oil and gas event in the region

JANUARY 16-23 2016

NOVEMBER 9-12 2016

OF INVESTMENT OVER THE NEXT 20 YEARS

ABU DHABI INTERNATIONAL PETROLEUM EXHIBITION AND CONFERENCE (ADIPEC)

Facilitating knowledge transfer, business agreements, and encouraging partnerships in this regard are top priorities for energy exhibitions, conferences, and events.

WORLD FUTURE ENERGY SUMMIT (WFES) • The centerpiece of ADSW • Largest sustainability gathering in the region • Nearly 32,000 attendees and 650 exhibiting in 2014 Source: National Bank of Abu Dhabi

THEBUSINESSYEAR

ABU DHABI 2015

ABU DHABI INTERNATIONAL PETROLEUM EXHIBITION AND CONFERENCE (ADIPEC) While Abu Dhabi continues to make significant strides toward diversifying its economy away from a dependence on oil revenues, the fact remains that oil will continue to play a major part in meeting the world’s energy demands in the future. With the support of the UAE Ministry of Energy, ADNOC, and the Abu Dhabi Chamber, ADIPEC is the region’s largest oil and gas event and the largest conference program in the world. Established in 1984, ADIPEC 2014 marked the event’s 30th year serving the industry as a networking platform offering unrivaled access to key industry experts and stakeholders from around the world. The 2014 ADIPEC themes discussed were issues such as US shale gas production, the drop in oil prices, new concessions for oil companies in the UAE due to the 75 year agreement expiration in Abu Dhabi, and the progress of oil projects taking place.

ABU DHABI SUSTAINABILITY WEEK (ADSW) With Abu Dhabi as pioneer, the future of energy will involve sources beyond fossil fuels. Illustrating the country’s commitment to the transition towards sustainable energy sources, the UAE supplies 1GW of clean energy parallel to the 2.9 million barrels of oil it provides per day to international markets. ADSW, the Middle East’s largest forum on sustainability, was established to accelerate projects and initia-

tives encouraging more far-reaching adoption of renewable energy in countries all around the world.

WORLD FUTURE ENERGY SUMMIT (WFES) Addressing the role for renewable energies, energy efficiency, and clean technology to contribute to future energy needs is the WFES. Part of ADSW, it is the largest sustainability gathering in the MENA region and a top event on the global renewable energy agenda. Hosted by Masdar, a multi-faceted and wholly owned subsidiary of the Abu Dhabi government-owned Mubadala Development Company, the conference held at the Abu Dhabi National Exhibition Center (ADNEC) is supported by the International Renewable Energy Agency, the first intergovernmental organization to be headquartered in the Middle East based in Abu Dhabi, and endorsed by the UAE Ministry of Energy. At the WFES, the focus is on shifting the world’s energy consumption to modern energy sources that deliver power in clean and efficient methods and revolutionizing new business models that can facilitate the transition away from environmentally detrimental energy sources. The fact that the annual WFES conference and exhibition has grown from 11,000 attendees and 300 companies participating in its first year (2008) to nearly 32,000 attendees and 650 exhibiting in 2014 speaks to the relevance and urgency of the WFES’s mission to accelerate the integration of new energies into the global mix. ✖

NAJI EL HADDAD Group Event Director, Reed Exhibitions – World Future Energy Summit 2015 How would you describe Abu Dhabi’s role in the development of renewable energies in the MENA region? Abu Dhabi is a regional energy pioneer. With an economy based on hydrocarbon exports, the Emirate has embarked on a bold mission to diversify its economy into a knowledge based one, and balance its energy mix by investing and developing clean sources of energy. This makes it uniquely positioned to promote the expansion of clean energy in the MENA region, and I believe the region is following this lead. As regional economies grow and populations rise, the need for energy security and the need to liberate hydrocarbon resources for export becomes more important. WFES is a demonstration of Abu Dhabi’s commitment to advancing the clean energy dialogue, and connecting global players to stimulate action and progress.

How is WFES 2015 contributing to the realization of Abu Dhabi’s Economic Vision 2030? Abu Dhabi plans to diversify its economy, away from a reliance on hydrocarbons to one underpinned by knowledge and innovation, and WFES is an economic vehicle driving that process. Now into its eighth year, it forms the centerpiece of Abu Dhabi Sustainability Week and takes place alongside the International Water Summit (IWS) and EcoWASTE Exhibition, addressing the world’s energy challenges from a nexus perspective. This unique multi-platform initiative allows the public sector, industry, and investors to harmonize effective strategies in support of sustainable growth, and contribute to the UAE’s strategy to create an economy with knowledge and human capital at its core.

Energy

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OIL & GAS PRODUCERS VOX POPULI

Image: Abu Dhabi, Statoil Ole JĂ¸rgen Bratland

WE KNOW WHAT YOU WANT Due to the abundance of natural resources in Abu Dhabi, a number of IOCs have been in the Emirate for a long time.

ABDULKARIM AL MAAZMI

he UAE, and Abu Dhabi in particular, is a core area for Total. It has a strategic importance for us in the Middle East. When we go into different countries, we make sure we understand from the beginning what is needed to work in them. If you want to work in Abu Dhabi, you have to understand Abu Dhabi. You have to understand what Abu Dhabi needs and you have to understand how you can put together a win-win situation where you satisfy both sides. We chose to be in Abu Dhabi. If you compare our presence here to the other IOCs, you will see that Total has the largest spread of contracts in this country. We operate the Abu al-Bukhoosh field with our Japanese partners, which is on the Iranian border, and we are part of the production of oil in Abu Dhabi. We are a part of ADMA-OPCO, which operates the Umm Shaif and Zakum fields along with BP, JODCO, and ADNOC.

HATEM NUSEIBEH President and Group Representative in the UAE, Total E&P UAE

President and General Manager, UAE, BP

P has developed successful partnerships with national oil companies in the Middle East, bringing unparalleled scope and scale, in terms of technology, project management, managerial experience, capital, and access to global markets. A good example of partnership in the region is Rumaila in Iraq, with BP working alongside Chinaâ&#x20AC;&#x2122;s PetroChina and the South Oil Company of Iraq. Together, we have helped raise production by 40% to about 1.3 million barrels a day over the last five years. In Abu Dhabi, we have had a successful partnership with the government since the beginnings of the industry, bringing technical capability, technology, and investment to help create a world-class oil and gas sector. For example, BP and ADMA-OPCO recently signed an agreement to develop a new EOR technology where BP will provide support to ADMA-OPCO in conducting lab tests and reservoir modeling to evaluate the potential for using Carbonate Ionic Design EOR to support ADMA.

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ABU DHABI 2015

JOSĂ&#x2030; SILVA PEREIRA Middle East Representative, Partex Oil and Gas

IBRAHIM AHMED AL ANSAARI CEO, Dolphin Energy Limited

t Partex, we try to help governments in the countries where we operate and safeguard and promote their interests. We cooperate actively in the development of the country and the people. Partex has agreements with other foundations and institutions; in Abu Dhabi we operate closely with the Petroleum Institute (PI), and students from the PI go for summer internships at our head office in Lisbon. In R&D, we develop our own niches, and we apply the results of our research in the petroleum industry, usually in the areas of reservoir engineering, seismic inversion, and reservoir simulation. In addition, we open our doors to nationals from the UAE to participate in our research activities.

Image: Dolphin Energy Limited

olphin Energy is the first initiative of its kind in the GCC. Other companies in the UAE produce energy from natural resources within the country, where as in Qatar, produce gas from there and then bring it to the UAE. That is the main differentiator. With the good relations that we have built up with the owner of the natural resources in Qatar, and with our customers in the UAE and Oman, we have become a reliable energy supplier. We have gone beyond our mandate and are now working to acquire more gas for our customers from Qatar and through the Dubai Supply Authority (DUSUP).

NERI ASKLAND Vice-President Middle East & Country Manager of Abu Dhabi, Statoil

chieving things in the energy business is a long-term focus, and our presence in Abu Dhabi is linked to what we are trying to achieve. We are a small office here and are still in the business development stage. Most of our technical work is done outside of the country. We are pursuing our goals and looking for a long-term partnership with ADNOC in Abu Dhabi. With our regional office in Abu Dhabi,

our main goal is to establish a substantial and sustainable presence here. We are focusing on business opportunities where we believe we can add value to the Emirate. The areas we are looking for are, of course, upstream oil and gas opportunities, both onshore and offshore, as that is where we add value, and where we have to angle ourselves. So far, we are strong in our faith in achieving our objectives.

Energy

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INTERVIEW

START-UP KIT TBY talks to Adnan Z. Amin, Director-General of the International Renewable Energy Agency (IRENA), on the falling costs of renewable energies and how Abu Dhabi could be used as model for other cities and regions. What shifts have you seen in the cost of renewables?

Over the last five years, the cost of solar PV modules has fallen by 75%, which has dramatically changed the business case for solar. The cost of wind turbines has fallen by around 30%. The trends are downward, and as innovation continues, we will see reduced costs. The costs of geothermal and hydro are already some of the lowest costs on the grid. What role do private companies and investors play in making the transition toward renewables?

Private investment is the greatest driver for cost reduction. There is not enough public finance to reach the level and ambition that we need; thus, the role of the private sector is central to whatever will happen to renewable energy in the future. When the cost of technology starts to fall, that is when you reap the benefits of what is possible with renewable energy. The role of the private sector in developing models for market transformation is critical. The private sector possesses the knowledge, the technology, and the investment experience to make it happen. The key players we need to work with are investors because, so far, the perception of risk related to renewable energy is unrealistically high compared to its performance; therefore, we have to find ways to de-risk finance and investment.

International Renewable Energy Agency (IRENA) • From 60 members in 2011 to 138 country members today • 35 countries applying for membership

plant, one of the largest in the world at 100 MW. These indicate that the UAE is serious about moving ahead to meet the target; still, time is limited. What is required now is a clear policy framework through which investment in renewables will be incentivized and a clear roadmap highlighting which technologies and models are going to be used for reaching that target. It is a short time frame, but I think knowing the record of achievement in Abu Dhabi, it is possible to reach this target. In what ways is the city of Abu Dhabi a model for other cities in the region and around the world in its efforts toward reducing its carbon footprint?

Focusing on the UAE specifically, how do you assess the renewable energy market here and the policies in place to enable sustainable technologies to flourish?

In the UAE, Abu Dhabi created a 7% renewable energy target by 2020. To set an early target like that was an important step to indicate the seriousness with which they took this. I believe it is had a huge impact throughout the region because many other countries are now establishing their own plans. In Abu Dhabi, we have seen some of the initial investments of distributed solar projects around Masdar and the Shams 1 concentrated solar

Abu Dhabi was the first to launch one of the most efficient and ambitious projects for sustainability. That first investment led to huge dynamism in the region and has been an example to others, such as Saudi Arabia. The creation of Masdar City as a low carbon city in the desert, a very harsh environment, demonstrates some of the critical renewable technologies' integration into cities and the way you can actually build cities of the future with a much lower carbon footprint. The investments that they are undertaking, nationally and internationally, in renewables send a strong message. ✖

BIO Adnan Z. Amin, of Kenya, has over 25 years of experience in multilateral diplomacy and direct engagement in promoting the global development and socio-economic agenda, including sustainable development. Prior to joining IRENA, he served as Head of the UN System Chief Executives Board for Coordination (CEB) Secretariat. In this function, he was responsible for supporting the CEB in its UN system-wide policy coordination, under the Chairmanship of the UN Secretary General. He also served as the Executive Director of the Secretariat of the Secretary-General’s High Level Panel on UN System-wide Coherence, co-chaired by the prime ministers of Mozambique, Norway, and Pakistan. He is a member of global initiatives and entities such as REN21 and the UN Secretary General’s Sustainable Energy for All.

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ABU DHABI 2015

INTERVIEW

all along THE STREAM TBY talks to Ali Vezvaei, President of Middle East & North Africa of Linde AG-Engineering, on the services the company offers, R&D activities, and working with ADNOC. What customer services does Linde provide in Abu Dhabi?

BIO Ali Vezvaei was appointed in 2014 as the President of Linde AG, in charge of Linde Engineering companies and projects across the MENA. He also sits on the Board of all Linde Engineering companies in the MENA region. Prior to his current assignment at Linde, he served as the Global Senior VP of Siemens Oil & Gas (SOG), a cross-energy sector organization with hubs in Houston, Abu Dhabi, Singapore, and Germany representing Siemens’ broad offering toward the oil and gas industry. Previously, he served as the Senior Executive VP of Siemens AG’s Oil & Gas Division, overseeing projects and operations across 16 countries in the MENA region. He also served as the VP of Global Strategy and Mergers & Acquisitions, operating out of Siemens AG Oil & Gas’s HQ in Germany.

The majority of the business segments that we are engaged in can be clustered primarily into: Linde Engineering, which is the technology and execution arm of the group; Linde Gas, one of the world’s leading industrial gas suppliers with a considerable contribution to the group’s revenue; and Healthcare, a relatively new and exciting field that has been augmented through a major acquisition in the US. Linde Engineering’s business model is basically a technology-based EPC, meaning a comprehensive value proposition around our broad range of in-house technologies from upstream gas treatment, to midstream LNG, all the way to downstream in petrochemicals and chemicals. With its own specific market cycles, Linde Engineering has grown steadily over the past decade to revenues of between $4 billion to $4.5 billion. On the upstream side, we do natural gas treatment based on in-house and also external partnerships. Along that line comes nitrogen rejection units, sulfur

recovery, and, of course, LPG extraction, which has been booming in the US thanks to the shale gas revolution. In the midstream segment, Linde is one of main players in the field of LNG technology. We focus on midsize and smaller-scale opportunities that have their own momentum fueled by the era of distributed energy and enhanced monetization of the gas reserves. Downstream petrochemicals are also a focus market segment for Linde Engineering, built around several in-house patented technologies and innovative solutions that are aimed at adding value to our customers’ operations. What are the main opportunities feedstock diversity offers to the industry in Abu Dhabi?

This is where we believe technology leadership and collaboration is key to the challenges ahead. The gas shortage became a reality in the region. The ability to manage heavier feedstock is the bridge. The most interesting takeaway here is that technology not only enables also aims to make ventures more economically attractive. Linde is a leading player in this domain, on one side due to the decades of experience and excellence in liquid cracking and on the other side with new enhancing technologies and solutions. What we call it “value cracking” is a game-changing solution whereby optimization of the streams and derivatives in a liquid cracker creates more value that then enhances the economics of the sys-

tem. There are other well-established trends, including the integration of the refinery and petrochemicals, which basically builds on feedstock synergies, scope, optimization, and, of course, cost synergies. In an ideal scenario, Takreer and Chemaweyaat may have an opportunity to build on these synergies. What is your strategy in terms of R&D?

R&D is beyond a priority for us in the hydrocarbon industry; it is more like a necessity to remain in the game. If you want to lead the game, then you need to have a different game plan, or a combination of several initiatives. How would you assess your relationship with ADNOC?

The industry has become so complex and volatile that without trustful and successful partnerships, business ideas become more of a theory than a reality. Without a proper partnership, it is impossible to create value, to grow, and, of course, to succeed. When looking at ADNOC group, you see an interesting and broad mix of opportunities, from upstream gas and LNG terminals all the way to downstream and petrochemicals. ✖

Energy

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INTERVIEW TBY talks to Rashed Saif Bin Jabr Alsuwaidi, Chairman of Horizon Energy, on the company’s role in the market, investment, and local content. What is your main strategy when it comes to investing in different sectors?

POWER source As a holding company with diversified exposure in the UAE, how do you characterize Horizon Energy’s role in the local market?

We are a holding company; yet, we are a family office. Our model is simple: we want growth and to be able to market that growth. We invest in companies that meet our criteria, whether it is a startup, a green field project, or a company that has the knowhow and management in place but is also looking for growth, marketing, human, or financial resources. We also support businesses by removing the barriers and challenges they face, which could be in the industry or any issues that are related to that business. We only invest with people who know their business, are committed, and who are entrepreneurs wanting to do something for themselves. If these elements exist within the staff or the company, then we invest with them. This is our business model. We invest our time, money, and effort heavily, which is what differentiates us.

There are certain business areas we focus on. Our main focus is oil and gas, followed by heavy industry, manufacturing, and the marine sector. We seek niche products or if we see a service company with potential we will invest in that too. One example is vMonitor; we invested in it, and grew it from being a local company, to a regional company, and now it is on the international stage. We invest in companies that are related to engineering, fabrication, and technology. We are not the executives of any business, and we do not invest 100%. We support the oil and gas business in Abu Dhabi by identifying local companies that have limited resources. We take them to a higher level than where they were, allowing them to compete on par with international players and qualify in the oil and gas sector, which is highly competitive. We try and put them in a position where they can perform a quality job in a timely fashion and within budget. IOCs have been in Abu Dhabi for the past 75 years, and have been instrumental in the sector; however, ADNOC has been and still is a major protector of the interests of Abu Dhabi. That is important to us as well. We want to apply the latest technology to meet the interests of Abu Dhabi and recover the maximum capacity of our reservoirs. The trend is in technologies and increased productivity because costs are increasing. Companies with effective technologies reduce operating costs and increase project competence. The way forward is automation and efficiency. These are the two areas that are extremely important to the client. We invest in the latest long-term sustainable technologies to achieve client satisfaction. Financial returns

are important; however, sustainability is extremely important, which allows the returns to be sustainable as well. Abu Dhabi is a key player in the global energy industry. What role do you think Abu Dhabi plays in regard to innovation and human capital development in the sector?

Abu Dhabi is contributing to innovation through universities and petroleum institutions, and through the training of technicians to cope with the new automation systems being applied here. The oil industry in Abu Dhabi has done a fantastic job training young men and women in applying the latest technologies in the oil and gas business. The Petroleum Institute is unique in the way it prepares people in fields of petroleum engineering to chemical engineering in support of the oil and gas business. We need to conduct more R&D in the UAE, because this will keep that knowledge within the country, and it will train Emiratis to innovate and be able to sustain industry, which is important. What is the UAE’s benefit if the foreign companies come, and they only employ their own nationals?

All local companies in Abu Dhabi need some kind of local content where they benefit and gain experience, know-how, and knowledge of technologies, and then transfer that knowledge. Through technology transfer, the participation of local employment, and know-how, we can grow our industry in Abu Dhabi, and export this to other regions as a model. We can do the same business in Oman and in the region. We do not want to be only consumers; we want to be an active player in our economy. That is only done through a model that creates an environment that supports these factors. I am an advocate for local content but also in making sure there are processes there to be an international player. ✖

Over 3,000 employees across subsidiaries

Subsidiary companies spanning the GCC, Middle East, and Near East

BIO Rashed Saif Bin Jabr Alsuwaidi is a Petroleum Engineer, having graduated from the US in 1981. He has held several senior posts in the Abu Dhabi National Oil Company (ADNOC). He was concurrently a Board Member of most of the ADNOC subsidiaries, including ADMA, ADCO, ZADCO, ADGAS, NDC (Chairman), ADDCAP (Chairman), ADPPOC and others. He left ADNOC in 1999 and went on to acquire Essar Drilling in 2002, which was transformed into Dalma Energy. He is also on the Board of Noor Capital, Delma Exchange, and Arabian Gulf Steel Industries. Al Suwaidi’s company, Horizon Energy, was part of a consortium of investors that acquired Gulf Marine Services (GMS), a world-leading provider of self-propelled self-elevating support vessels (SESVs). He served as a Board Member of the Abu Dhabi Chamber of Commerce & Industry (ADCCI) and the Abu Dhabi Council for Economic Development.

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ABU DHABI 2015

INTERVIEW TBY talks to Saif Ahmed Al Ghafli, CEO of Abu Dhabi Gas Development Co. Ltd. (Al Hosn Gas), on the current state of the market and the demand for gas.

sweet VICTORY

What is your analysis of the gas market today?

Abu Dhabi and the UAE are growing rapidly. That economic growth will have to be supported with increased energy production. When you consider Abu Dhabi’s Vision 2030, energy requirements become even more crucial, and gas is a major part of it. There are calls for the diversification of energy resources, which is why nuclear and renewables are also there in terms of solar energy and gas. Shah Gas is here to meet that requirement and meet future expected growth. The demand for gas today outstrips supply and UAE has been a net importer of natural gas for a number of years. The demand-supply gap is increasing with rapid industrialization across the UAE. Al Hosn Gas will be producing 500 million standard cubic feet per day, which is approximately 10% of current UAE gas production, in an effort to reduce the shortfall in gas supplies. All of our natural gas production will be for domestic consumption. How is Al Hosn Gas continuing to innovate to meet the growing domestic energy needs?

Innovation is imperative in terms of meeting the energy needs of the UAE. The “low hanging” energy sources such as natural gas from conventional fields are already exploited and cannot be relied upon solely to meet energy re-

quirements. As a result, forays into tapping unconventional gas reserves such as sour gas, tight gas, and shale gas are inevitable, and this requires innovation and the adoption of state-of-the-art technologies. Also, the UAE is wisely diversifying its energy mix using nuclear and solar energy sources in addition to traditional fossil fuels. So, yes, innovation is widely prevalent in both the planning and execution of projects in the energy sector. What are some of the advancements in engineering, materials, machinery, and state-of-the-art technology that have contributed to making local sour gas accessible in Abu Dhabi?

The Shah Gas Field was discovered in the 1960s; however, it was not technically feasible to develop until recently. This project could be undertaken only because of the technological advancement that has occurred over several decades in the fields of drilling, reservoir management, facilities design and engineering, metallurgy, and equipment manufacturing, for example. Abu Dhabi has been quick to grab the opportunity to adopt the latest technological advancements. From Al Hosn Gas’ perspective, the moment we were entrusted with the responsibility to implement this project, we realized it was not business as usual. We meticulously planned the front-end engineering and design of the facilities and pipelines, paying attention to areas as diverse as selection of metallurgy and equipment, layout, and spacing of the gas plant, segregation of sour gas and sweet gas areas in the plant, plant

IN NUMBERS Shah Gas Field production capacity

500 million standard cubic feet a day

4,400

tons per day of natural gas liquids

foreseeable future. The alternative to sour gas is imported LNG, which is more expensive. And so, the economics of sour gas is robust and, furthermore, it contributes to domestic energy security, which is a paramount strategic consideration; the challenge is developing it in a safe and sustainable manner. How has multinational collaboration benefited the sector?

ADNOC has been one of the first NOCs to adopt a multinational collaboration model. That model has been a winwin situation. It has served the UAE as well as the foreign partners quite well. It has given the UAE access to the latest technology while the foreign partners profited from accessing and developing the UAE’s vast oil and gas reserves. The Al Hosn Gas partnership between ADNOC and Occidental has been exemplary, with both shareholders bringing unique and complementary strengths to the partnership. ✖

BIO

33,000 bpd of condensates

9,200

tons per day of sulfur granulation

maintenance philosophy, designing a control room with state-of the-art technology, and much more. What sort of market conditions will be required to achieve sustainable sour gas production in the long term?

The gas supply-demand imbalance is projected to continue and expand through the

Saif Ahmed Al Ghafli has been the CEO of Abu Dhabi Gas Development Co. Ltd. (Al Hosn Gas) since December 2008. Over the years, he has provided strategic leadership and direction to Al Hosn Gas right from the establishment of the company to the now nearcompletion of the project and ultimate delivery of sweet gas, condensate, natural gas liquids, and elemental sulfur to the UAE network. He has 33 years of overall experience in various fields covering leadership, processes, engineering, gas manufacturing, nitrogen fertilizer, sales, and marketing. He serves as a board member in organizations including manufacturing, education, and sport.

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HE Saeed Ghumran Al Romaithi, CEO of Emirates Steel, on changing market conditions, and the process of Emiratization.

Colin Smith, Managing Director of Abu Dhabi Vegetable Oil Company (ADVOC), on innovation, and African markets.

Badr Al-Olama, CEO of Strata Manufacturing, on regional manufacturing strategies to promote competitiveness.

Industry REVIEW

While manufacturing activity is on the rise in the Emirate, industrial development is moving toward smarter production, though mass operations are not being excluded, especially in the metals sector.

he goal of Abu Dhabi’s 2030 Economic Vision to source 24% of the Emirate’s GDP from the non-oil industrial sector is once again coming to the fore, in the wake of lower crude oil prices in 2014 and 2015. With the oil industry making up some 55% of GDP in 2013, according to the Statistics Centre—Abu Dhabi (SCAD), the need for a more diversified industrial base is being addressed at the Emirate level. Through the creation of improved transport linkages, industrial zones, and increased downstream activity, Abu Dhabi’s authorities are enlisting the support of the private sector to make the Emirate a key place for manufacturing in both the UAE and broader GCC region. Although seen as a strategic sector for economic diversification efforts, in 2013 SCAD preliminary estimates noted that the sector’s share of overall GDP was 5.7%, though in non-oil GDP terms

FIND YOUR ADVANTAGE

Image: Al Ghurair Iron & Steel

One of the main players in this sector is Emirates Steel, which has a production capacity of a substantial 3.5 million tons per annum.

it occupied 12.6% of all economic activity. In terms of gross output as a percentage of GDP, manufacturing took a 22.6% share, though much of this was a result of the strong output from oil and gas downstream industries. In 2012, the gross output of Abu Dhabi’s manufacturing sector was $49.5 billion, with $31.3 billion, or 62.8%, being sourced from the chemicals, plastics, and related industries category, all representing the strength of the oil and gas downstream industrial base in Abu Dhabi. The manufacture of basic metals came in second place in manufacturing terms, at $5.4 billion, though this is an industry very much related to the Emirate’s ability to provide low-cost energy and a growing local market, especially on the construction side. So influential is the sector in non-oil industrial activity, that in 2Q2014 the Producers Price Index (PPI) rose by some 4.2% in YoY terms, with 72.4% of the rise being inspired by manufac-

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ABU DHABI 2015

tured metal products. One of the main players in this sector is Emirates Steel, which has a production capacity of a more substantial 3.5 million tons per annum, is now linking up with Abu Dhabi National Oil Company (ADNOC) companies to put to good use its CO2 emissions by reinjecting them into oil wells. The project, set to go into operation in 2016, will see the sequestering of up to 800,000 tons of CO2 annually, in a world first for the iron and steel industry. As well, AGIS is looking to increase the capacity of its steel rolling facilities from 200,000 tons per year up to 400,000 tons during 2015. Emirates Aluminum (EMAL), part of the world’s fourth-largest aluminum producer Emirates Global Aluminum (EGA) Group, also represents a giant player in Abu Dhabi’s industrial sector. EMAL on its own has an annual smelting capacity of some 1.4 million tons spread over 444 pots—the longest potline in the world. EGA, which brought together the assets of EMAL and Dubai Aluminum (DUBAL), announced in September 2014 that it was looking to invest another $3 billion in its local refining abilities, adding another 4 million tons in annual capacity by 2017, to be spread over a two-stage project. At third on the list for gross output in the manufacturing sector was the non-metallic mineral exports, at $3.4 billion, while in fourth place was structural metal products, especially for the construction industry, at $2.5 billion, according to SCAD figures from 2012. The food, beverages, and tobacco category rounds off the top five, representing $2.1 billion of gross GDP output, or some 4.31% of the total. What seems apparent from the main statistics is that while Abu Dhabi is doing well in industries related to the oil and gas sector, more efforts may be needed to encourage manufacturing in other areas of the economy for the Emirate to reach its 24% target by 2030. Behind a significant portion of Abu Dhabi’s industrial success lies Mubadala, whose key investments in traditional strategic sectors such as aluminum through the EGA company, and oil and gas, such as via Dolphin Energy, Mubadala Petroleum, and Emirates LNG, have assisted in the development of related sectors. However, Mubadala has also begun to break out of its traditional mold and get involved in the aerospace sector, such as through Strata Manufacturing in Al Ain, which is seeking to produce composite materials and parts for global original equipment manufacturers (OEMs), in a bold move to move up the value-added chain. Mubadala Aerospace’s ambitions also have a global edge, with the group looking to bring foreign tech-

nical expertise from major manufacturers such as Boeing and Airbus to help kick start the local manufacturing and service sector for aircraft. Also on the high-tech front, Mubadala Technology has invested $54.5 million in constructing a local environment for semiconductor R&D and production, much on the back of its ownership of the world’s second largest semiconductor maker, GlobalFoundries. Not all attempts to get more high-tech manufacturing off the ground have met with success, with Masdar canceling plans to commence solar photovoltaic film production in Abu Dhabi in mid-2014, citing the small size of the local market and the need for improved economies of scale.

Share of Manufacturing in GDP at Current Prices (%) Source: SCAD 6 5 4 3 2 1 0 2010

2011

2012

2013*

IN THE ZONES Leading the way for the development of the manufacturing sector is the Department of Economic Development (DED), which through a host of initiatives is attempting to deepen diversification efforts. However, recent shifts in the global economy are complicating the issue. While at the Emirate level the issue of lower revenue generation from crude oil exports can be addressed by deficit spending, local manufacturing is facing another problem: a high US dollar. With the UAE’s currency, the dirham (AED), linked to the US dollar, any rise in its level versus key trading partners, such as in South Asia and Africa, will make exports a potentially trickier proposition, while manufactured imports will also be able to enter the UAE market on more favorable terms. Although manufacturers dealing with imported intermediate products may receive some relief from the high US dollar scenario, as well as more relaxed commodity prices, those going head to head with overseas manufacturers with weaker currencies will face a far higher level of competition. However, through smart policies aimed at encouraging manufacturers to look for gaps in the local market and seek export opportunities in markets not as sensitive to the US dollar in currency valuation terms, such as the GCC, the industrial sector is beginning to take even bolder steps. As part of these efforts, in 2004 the Higher Corporation for Specialised Economic Zones (ZonesCorp) was created to supervise growth in the Emirate’s two main supervised industrial zones: the Industrial City of Abu Dhabi (ICAD), and its three separate zones, and the smaller 10sqkm Al Ain Industrial City (AAIC). Spread over 47 square kilometers, ICAD is looking to expand away from its traditional industrial focus and include a new area devoted to technology and light industry (ICAD IV at 24 square kilome-

ABU BUCKER HUSAIN CEO, Al Ghurair Iron & Steel LLC (AGIS) The biggest advantage of being based in Abu Dhabi is the availability of land for industrial use, and our facilities are located near the Jebel Ali Port and Port Khalifa. While AGIS is the only producer of cold rolling and galvanized steel in the UAE, we experience fierce competition from international companies. We keep our costs low by promoting efficiency, and our joint venture with Nippon Steel & Sumitomo Metal Corporation gives us access to high-quality steel at competitive prices.

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ABU DHABI 2015

Image: Emirates Steel

ters) and the automotive industry (ICAD V at 11 square kilometers). Through ICAD V, ZonesCorp hopes to boost the automotive re-export market from the Emirate, encourage the production of spare parts and recycling activities, and create a hub for vehicle fleets and sales centers, and thus relieve traffic congestion on the main island of Abu Dhabi. As well, ZonesCorp is in the process of establishing a new industrial zone in the Western Region of Abu Dhabi, to tie in with the increased presence of energy-related projects in the area. While ZonesCorp has done well in integrating the energy resources available within the Emirate, a new industrial area located to the north of Abu Dhabi is looking to rethink the Emirate’s industrial policy and provide it with the room it needs to grow.

PORT FOR PLENTY The Khalifa Industrial Zone Abu Dhabi (Kizad), owned and operated by the Abu Dhabi Ports Company, is looking to take advantage of the new Port Khalifa facilities to kick-start foreign investment and export-focused industries. With expansion planned to encompass some 417 square kilometers of land, the Kizad zone has been targeted to contribute up to 15% of Abu Dhabi’s nonoil GDP by 2030. As part of its drive to grow, Kizad’s key anchor tenant was the EMAL aluminum smelter, and through the presence of these sorts of tenants it is hoped that intermediate and specialized producers will take their place to create more efficient production clusters. While 51:49 joint ventures with local companies are encouraged, 100%

Industry

foreign-owned companies can import and re-export goods, though exports bound for the mainland UAE market would be subject to duties. Aside from the aluminum sector, other key clusters that Kizad is targeting includes steel, petrochemicals, paper, pharmaceuticals, food and beverages, transport, and logistics. Kizad-based companies will also be able to take advantage of the new Etihad Rail project, which will connect Abu Dhabi into the integrated GCC railway network currently under construction, allowing for improved duty-free access to other GCC economies. Kizad has been racking up some significant successes of late. In early March 2015, leading local holding group Senaat announced it was entering into a deal with Maubeni-Ituchi Steel and JFE Steel from Japan to create a steel pipe-maker in the zone. The company, to be known as Al Gharbia Pipe, will represent a $300 million investment that will look to be up and running by 2018 with 240,000 tons in production capacity. While initially targeting import replacement in the UAE market place for industrial-grade steel pipes, up to 40% of its production will be earmarked for export. Senaat holds a broad number of assets

worth some $6.9 billion in the Emirate, and the new pipe-making plant complements its other assets including Emirates Steel and the Taweelah Aluminum Extrusion Company, presently under development and set to run in tandem with EMAL. Other companies looking to move to Kizad include National Food Products Company (NFPC), which is looking to expand into a 752,000sqm site in the near future. Staying with food and drink, Brazil Foods (BRF) announced a $380 million commitment to a new frozen foods plant for the Kizad zone, with some $180 million already invested. With BRF already having a 40% share of the GCC area’s frozen food market, the investment will bring the creation of a further 1,400 jobs and make Abu Dhabi the heart of its GCC-wide manufacturing and distribution activities. While the industrial sector has grown substantially over recent years, for it to form 24% of non-oil GDP in the Emirate by 2030, up from its 5.7% in 2013, will be a tall order. However, with the new efforts of the federal government in March 2015 to create “Proudly Made in the UAE” branding for locally made goods, Abu Dhabi’s manufacturing sector might get just the boost it needs. ✖

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MAJED ABDUL AZIZ ALBAKERI Chairman and CEO, National Factory for Safety & Security Products LLC (NFSSP) We are starting to manufacture sandals for the European market, and within 4Q2014 we will have our first contract with the European market. I have also had some interest from the Egyptian market, and we hope to have a contract there within 4Q2014, too. We are starting negotiations with the UAE Armed Forces for safety footwear, and we have another desert boot that is under development.

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ABU DHABI 2015

INTERVIEW

steel going strong How would you characterize the current state of the steel market?

TBY talks to HE Saeed Ghumran Al Romaithi, CEO of Emirates Steel, on changing market conditions, an upturn in revenue, and the process of Emiratization.

Overall, 2013 and 2014 have been difficult years for the global steel industry, mainly because of overcapacity, and the economic situation in China—where almost half the global production of steel is located—has been slowing down, which has had an effect on the entire steel industry worldwide. In addition, the European economy has been slowing down over the last two years. However, in this region, steel demand has been, and will always be, at least for the coming years, strong and healthy. In the UAE and the Gulf region in general, there has always been significant demand for steel due to high levels of investment in construction, infrastructure, and energy. If you talk about the Emirates market specifically during 2013 and 2014, we have been seeing relatively stable demand. We have sold what we have produced all over the world and we have a significant domestic market share. From the market point of view, I think we have been doing well. To what do you attribute your increase in revenues, and what is your strategy to continue this trend moving forward?

With Phase II specifically, the heavy section mill came strongly into play in 2013 as well as in 2014. We produced 316,000 tons of structural steel in 2013, which is significant for a new facility like this. This gave a strong boost to our sales and also to the bottom line profit. For years, we have been planning the diversification of our products, and what I see now, specifically in 2014, is that we are reaping the benefits of our heavy section mill expansion. Our strategy is to

Emirates Steel • The only integrated steel manufacturer in the UAE • One of four companies worldwide producing nuclear-grade steel

really diversify away from rebar, wire rod, and focus on structural steel and perhaps one day on flat steel products. What have been some of the key markets for Emirates Steel this year?

It varies from product to product. From the rebar point of view, we sold nearly 63% of the product domestically. For sections, I would expect in 2014 to grab 50% of the local UAE market in 2014, while the remainder would be exported abroad. Our main export market is Saudi Arabia. Apart from focusing on our domestic markets, we exert sustained efforts in increasing our exports to regional markets, with a YoY increase of 67%, our most significant export markets being the GCC states. We also sell to the Arab countries, Australasia, the Indian subcontinent, Africa, and Asia. Our newest markets include Europe and the US. How is the company progressing toward its target to reach 30% Emiratization by 2018?

In 2006, Emiratization at Emirates Steel was at about 9%.

Today, we are at 19%, and in few years’ time, we expect to reach our 30% target. I think we have really succeeded in encouraging UAE nationals to join the company at different levels, from technical to engineering to administration. We have more than 400 UAE nationals in the company now. Our government mandate is to develop UAE nationals with expertise in the steel industry, which is relatively new in the UAE compared to oil and gas. There are opportunities for UAE nationals within the industrial sector in general and steel in particular, and we are encouraging people to join us and share our strides towards success and prosperity. There are many steel production units here in the country, but integrated steel manufacturing is an entirely new and unique concept to the UAE; it presents a range of opportunities for UAE nationals to gather knowledge and experience. ✖

BIO HE Saeed Ghumran Al Romaithi is Emirates Steel’s CEO. He is a UAE national and holds a BSc in Electrical Engineering from California State University. He has over 15 years of experience in the steel industry, and has been with Emirates Steel since its inception. He commenced his career as Production Engineer in Operations and progressed through the ranks to become the Senior Vice President of Operations. In July 2011, he was appointed as CEO to head the company into its next phase of business development and to solidify its integral role in the Abu Dhabi 2030 vision.

Industry

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INTERVIEW

wide RANGE TBY talks to Colin Smith, Managing Director of Abu Dhabi Vegetable Oil Company (ADVOC), on innovation and automation, expanding into African markets, and the state of the regulatory environment. What have been the milestones for the company over the years?

BIO Colin Smith has been with the ADVOC group for more than 15 years, first as General Manager then as Managing Director since 2011. He began his career in the FMCG sector in the UK, where he held Senior Management roles with Gillette and British American Tobacco before relocating to Dubai in 1983. During his time in the Middle East he has held General Manager roles with several of the leading FMCG companies in the GCC including Spinneys, Binzagr, and Savola, where he was instrumental in establishing their leading brands in several countries in the Middle East and Iran. He originates from Scotland in the UK, where he studied Economics and Business in his hometown of Dundee.

First of all, ADVOC is in a strategically located port. In the early days, the company was set up with the primary aim to supply Iraq. While this plan had some success, the demand was not consistent and thus the company revised the business model with a view to ensuring the factory was fully engaged on a regular basis. ADVOC began producing Coroli brand products in Abu Dhabi in 2000 and 2004, and bought Cebag Middle East Limited, the owner of the Coroli brand, amongst other brands. ADVOC thus acquired the Coroli brand ownership rights for the MENA region, plus the Cebag trading business. This proved to be a significant milestone because it got the company away from relying on government tenders, which came on an irregular basis. Between 2004 and 2009, we built up a significant distribution network in all of the countries in the region, from East Africa to Pakistan and we now deal with all of the GCC for Coroli and other ADVOC brands. We also make private label brands for selected major clients. In 2010 we began a major program of upgrades and installed several automated sections to our plant including high-speed filling lines plus robotic packing and palletizing. In 2012 we expanded our factory capacity by about 25% increasing both efficiency and output. In 2013, we added a custom built

IN NUMBERS Abu Dhabi Vegetable Oil Company (ADVOC)

PET bottle making capacity of more than

million bottles a year

feedback from the trade. The Coroli brand has been around for 35-40 years and it has built a good client base throughout the region as well innovating a lot with the packaging. You need to provide a quality, competitive product and you need to provide support for advertising and promotion in order to keep the trade and the consumers happy. What countries are you present in at the moment?

Most of the business goes to the GCC and up to the Levant with Saudi Arabia being probably an even larger market than the UAE. Despite the various conflicts in the region we are still able to continue to supply parts of Syria plus Lebanon, and Jordan, and down to Tanzania and some of the top-end African countries. We have had a long business relationship with Pakistan, Nepal, and the Seychelles. It is quite a spread over all of these places, although the bulk of the business is done nearby. What is your plan for the future?

Coroli represents over

20% of the edible oils market locally

modern PET bottle making plant. We are now capable of making most of our own bottles and we plan to add further capacity as demand increases. In 2014, we also acquired a plot adjacent to our refinery that will double our current factory area. What is your companyâ&#x20AC;&#x2122;s strategy for being as customer orientated as possible?

We check our audit data to see how the product is perceived. We always get feedback through our people and solicit

We intend to expand into the African markets, and in time we will also further expand and upgrade into other nearby countries such as Iraq and Iran when matters improve. We have traditionally dealt with Iraq; however, when trouble starts, business goes down; it is a difficult place to do business. However, these are quite attractive and sizable markets. In the future, ADVOC will increase the output capability of the refinery further, including adding specialty fats like shortening, margarine, and fats for the bakery, hotels, restaurants, and catering segment. This will not just be here in Abu Dhabi, but throughout. This will give us a wider range of products. We have a substantial network of distributors, so it is easy for us to tack that on. We are also going to improve some of the product types that we make and widen the range of our existing products. â&#x153;&#x2013;

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ABU DHABI 2015

INTERVIEW TBY talks to Badr Al-Olama, CEO of Strata Manufacturing, on establishing high-tech manufacturing in Abu Dhabi, moving up the manufacturing chain, and regional manufacturing strategies that promote competitiveness.

where EAGLES DARE Strata Manufacturing, which is a subsidiary of Mubadala, was set up in 2010. What would you consider to be some of the key landmarks, and what were their impacts on the company?

Our vision was inspired by the Abu Dhabi Economic Vision 2030 to diversify and building a knowledge-based economy in which UAE nationals will take leadership roles. The vision has identified aerospace as a key sector, and Mubadala decided to invest in composite aero structure manufacturing. This vision drove us to our first successful milestone, which was building our 21,000sqm manufacturing facility in 10 months and delivering our first A330 flap track fairings shipset to Airbus three months thereafter. Another milestone is our progress within the aerospace global value chain. We have moved from becoming a Tier 2 to a Tier 1 supplier for both Airbus and Boeing. Our third milestone has been earning the trust of our customers to manufacture their primary parts, as opposed to the secondary parts that we initially manufactured. Today, we are the single source supplier for every part we produce. How would you describe the overall growth strategy of Strata?

We started out with simple and moveable parts on the

• Targeting a revenue of AED1 billion by 2020 • Expanding manufacturing facility to 31,000 sqm • Emiritization of 50% by end of 2015

B787. In terms of people, this would be our greatest achievement. Most of the technicians that are working on the shop floor and manufacturing parts are high school graduates that went through a training program with four months of foundation training, six months of technical training with Lockheed-Martin, and then 12 months of on-the-job training. Once they complete 22 months, we certify that this person is a qualified aerospace technician. What factors will contribute to achieving your AED1 billion target by 2020?

wing. However, our fascination has been with the wing and empennage of an aircraft. The empennage is important because it is almost always made out of composites, and these parts are critical for the safety of an aircraft. Therefore, it requires high level of capability development. In terms of revenue, it has high margins. By creating different parts of the wing, we can integrate and assemble a complete wing. We are not going to go towards the wings, however, rather Strata have a commitment from Boeing to manufacture the vertical fin in Al-Ain, which is part of the empennage of the new Boeing

Strategy is of no use if you cannot deliver products on time, to the high standard that has been promised, and manage the cost parameters to make sure that you are profitable. The number one factor for success is to ensure that you deliver on time within the quality standards that have been promised and at a manageable cost. Once you do that, you gain credibility. Once you gain credibility, you can gain more commitments from the OEMs. How would you describe your international expansion strategy?

Two elements play a role here. The first is competitiveness. The customer, despite offering many commitments,

is always going to insist that you be competitive. To be competitive, we need to have a low-cost partner. For us, this would probably come from the North African or East Asian region. They will be from India, China, or Malaysia. However, because we are close to Europe, the potential exists to partner with an entity in North Africa, either Morocco, or Tunisia. The customer will also think about minimizing risk. What the customer will want is proximity to the final assembly line. By being closer to the customer, you can essentially fabricate the parts but assemble closer to the location, which minimizes risk, cost of shipping, and increases competitiveness. This sort of cooperation is what we are hoping to bring in to the industry to be more competitive. ✖

BIO Badr Al-Olama has been an Associate Director for Mubadala Aerospace & Engineering Services since 2005, and is the CEO at Strata Manufacturing. In his role with Mubadala, he was responsible for the development of Nibras, the Al Ain Aerospace Park that is a joint initiative between Mubadala Aerospace and Abu Dhabi Airports Company. Prior to his tenure with Mubadala, he was an advocate and legal consultant at Habib Al-Mulla and Company. A graduate of Harvard Law School in 2005 and the College of Shari’ah and Law at the UAE University in 2002, Al-Olama has also contributed to a number of seminars, panels and delegations. He serves as Chairman of Bidayaat—the region’s first childcare company—and also serves as the President of the UAE Harvard Alumni Society.

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100

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Ahmad Julfar, CEO of Etisalat Group, on primacy in the emerging market telecoms sector, and improving network quality.

HE Rashed Lahej Al Mansoori, Director General of the Abu Dhabi Systems and Information Center (ADSIC), on eGovernment.

TBY talks to HE Noura Al Kaabi, CEO of twofour54, on developing the UAEâ&#x20AC;&#x2122;s media and entertainment scene.

Telecoms, IT & Media REVIEW

In line with the central goals of the Abu Dhabi Economic Vision 2030, the government is building a nation that has the capability to not only meet the needs of the 21st Century, but to be a defining player in the ICT revolution.

DIGITAL FUTURE I

n order to remain consistently ahead of the rapidly shifting trends in information technology, the Abu Dhabi government has initiated a comprehensive national strategy to develop world-class ICT infrastructure that is both forward looking and capably governed. According to the Emirates Centre for Strategic Studies and Research (ECSSR), by 2020 there will be some 30 billion ICT enabled devices connected to the internet worldwide, including items such as clothing and household appliances as the Internet of Everything expands, and this for a projected population of only 9 billion people. In order to assure that all relevant actors are working together towards the same set of national goals, the government is implementing plans to encourage both local and foreign investment in the most advanced technologies available, as the Emirate stamps its own unique brand on what is undoubtedly a global revolution.

Image: Statistics Centre Abu Dhabi (SCAD)

Changes in the way education for the future is understood are helping mark a transition from conventional learning systems based on book-based study to modern methods of e-learning.

The total population of Abu Dhabi encompasses 2.33 million people, with 1.42 million in the Abu Dhabi Region alone. According to the most recent figures available by the national Statistics Centre, the major ICT indicators make for impressive reading. Mobile cellular (includes tablets and other devices) subscribers in 2013 per 100 inhabitants was measured at 197 per 100, and the percentage of the population covered by mobile networks (measured in terms of SIM card usage) stood at 100%. Although there were only 12 fixed broadband internet subscribers per 100 inhabitants, and 17 fixed telephone subscribers per 100 inhabitants, the ICT share in GDP at 4Q2013 prices was 2.3%. This share almost doubled to 5% when only non-oil GDP revenues were considered, and it was estimated that the ICT sector contributed to 3% of gross output as a percentage of GDP. This extremely high level of smartphone use and the popularity of mobile and social media in the UAE is

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ABU DHABI 2015

Given the increasing importance of effective and userfriendly ICT in all areas of life, the government is building a technology-oriented system that conforms to the requirements of the new generation of younger users who are constantly plugged in to their devices.

encouraging entrepreneurs to build businesses in rapidly expanding areas such as e-commerce and enhanced online services. Although the sector as a whole is always on the lookout for more capital investment, 2014 was also a year of new innovations that had the markets taking notice. The Abu Dhabi based telecoms giant Etisalat began the upgrade of its 4G network to Long Term Evolution-Advanced (LTE-A) Carrier Aggregation (CA) technology, paving the way for peak projected download speeds of up to 700Mbps. Live testing was completed on Etisalat’s 1800MHz/2600MHz 4G network and the operator is now waiting for the necessary handsets to be made available before announcing an official commercial launch date. The firm is currently using 150Mbps LTE technology to cover 88% of the populated areas of the UAE. Etisalat is the Middle East's leading telecommunications operator and one of the largest corporations in the Gulf Cooperation Council (GCC), with a market value of approximately $22 billion and annual revenues of over $9 billion. According to its own estimates, it currently has the widest coverage of 3G and 4G mobile technologies in the UAE, and its fiberto-the-home (FTTH) network, has helped the UAE rank as one of the most fiber-connected countries in the world with 85% fiber-optic penetration, connecting more than 1.3 million homes in the UAE. Moreover, in 2014 it signed a MoU with the major Chinese ICT equipment supplier Huawei which will bring cutting edge technologies like public access cloud coverage, Software-Defined Networking (SDN) and Network Function Visualization (NFV) technologies. Players from the other Emirates are also in the game of course; fixed line and mobile operator du has announced plans to set up 5,000 Wi-Fi hotspots at 100 separate locations in Dubai and Abu Dhabi. According to the Gulf News, these rollouts form an essential part of the UAE’s “Smart City” initiative. A 2014 agreement on network sharing, which was first broached in 2009, has begun to shift the monopolies held by Dubai-based du and Abu Dhabi’s Etisalat within their respective areas, by giving consumers a choice of operator for their fixed line, voice, and broadband services. du is primarily restricted to the new development areas and free zones of Dubai, while Etisalat serves the rest of the market. The media sector more broadly defined is developing along similar lines. The Abu Dhabi Media Zone, operated by the state backed initiative twofour54, has grown impressively in recent years. Before its existence there were

very few independent media or creative industries based in the region. Between 2010 and 2014, over 240 companies set up operations in Abu Dhabi, ranging from small startups through to larger global brand names such as CNN, Sky News, and the publisher Harper Collins. It is estimated that Media Zone has created over 3,000 jobs. HE Noura Al Kaabi, the CEO of twofour54, tells TBY that the goal of fostering Arab-focused media and digital businesses in the UAE extends across the whole media spectrum; “As well as accounting for an increasing share of GDP and helping economic diversification, the media sector also supports other sectors such as tourism. For example, several scenes from The Fast and the Furious 7 were shot in Abu Dhabi, including a scene that includes Etihad Towers. People will want to come and see those buildings in real life as a result.” ICT has not only revolutionized the Emirate, but has also succeeded in helping build it as a global brand.

SMART CITIES, SMARTER PEOPLE The Emirate is self-consciously striving to achieve a knowledge-based economy by deploying advanced technologies throughout its territory. Given the increasing importance of effective and user friendly ICT in all areas of life, the government is building a technology-oriented system that conforms to the requirements of the new generation of younger users who are constantly plugged in to their devices. One clear focus is education, specifically initiatives to establish a link between ICT literacy and labor market requirements. This goal drives academies, colleges, and higher education institutions to build a nation that has the capability to meet the needs of the 21st century, in line with the central goals of the Abu Dhabi Economic Vision 2030, and which is linked up with the needs of the overall economic development of the UAE. There are significant efforts underway in this regard. The powerful Khalifa Fund had financed about 800 projects by the end of 2014, providing $272 million in loans as well as training, logistics, marketing, and systems support for ICT education. Moreover the Abu Dhabi Education Council (ADEC) has been making progress in shifting to the using e-books as part of its “iClass e-learning initiative” which was implemented in a number of selected schools, as part of education development plans to prepare students for the future by providing them with skills to help compete globally. There are also new disciplines begin introduced by the Abu Dhabi Polytechnic of

Telecoms, IT & Media

the Institute of Applied Technology in 2014; specifically courses focusing on information security engineering technology, renewable energy engineering programs, and ICT for petrochemical engineering. These shifts will help in making a transition from more conventional education system based largely on memorization to the modern method of e-learning, wherein innovative educational resources are employed, commensurate with advancements in the field of information technology.

DEFENDING THE E-FRONTIER The impact of the rapid growth in technology on both government and citizens was the central theme of a major conference on the electronic future held in Abu Dhabi in 2014. The Emirates Centre for Strategic Studies and Research (ECSSR) annual meetings explored the numerous ways in which a more connected society would affect policy, governance, and daily life for the nation, the region, and the wider world. A key question posed at these meetings centered around how technology could be used to benefit society and create new ideas for business, education, health, and practically every sector of the economy. These new ways of doing business naturally require new means for protecting information for both consumers and industry. HH Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE and Ruler of Abu Dhabi, established the National Electronic Security Authority (NESA) through a Decree in 2012, and in 2014 the authority set out its road map for protecting the national digital infrastructure. “Cybersecurity is one of the biggest eco-

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nomic and national security challenges countries face in the 21st century,” said HE Jassem Bu Ataba Al Zaabi, the Director General of NESA, as he addressed the assembled media at the launch of the roadmap. NESA is the primary federal authority responsible for developing, supervising, and monitoring the implementation of UAE cyber-security policies and strategies. Headquartered in Abu Dhabi, and with a number of satellite offices both inside and outside the UAE, NESA seeks to safeguard the UAE online environment and contribute to the collective national ICT goals. In 2014 NESA also distributed the first editions of the National Cyber Security Strategy (NCSS), the Critical Information Infrastructure Policy (CIIP) and the UAE Information Assurance (IA) Standards which collectively work towards enhancing the UAE’s national security by improving the protection of the overall national information and communications infrastructure. The National reports that according to retired Major Gen Khaled Al Buainnain, former commander of the UAE Air Force, NESA is essential to enhancing cyber security in both Abu Dhabi and the region. “The UAE is the most advanced nation in the Gulf and the Arab world with regards to its cyber-technology infrastructure, however, having the most advanced infrastructure makes you the most vulnerable because of the rapidly changing and developing advances in cyber warfare,” Gen Al Buainnain said. All of these developments are significant news for both investors and companies focusing on the sector; as the Emirate moves confidently into the future, it is taking the local, regional, and global markets with it. Nobody can yet predict where the journey will lead. ✖

FAYEZ IBBINI Founder and Managing Director, Alpha Data Group How do you manage to attract and retain a workforce that is trained on the cutting edge of technology? All we have is the skill of our people. In order to locate and have a stream of talent keen to join you, it is important to understand that people’s knowledge is not enough; their willingness to commit to the company and its culture makes a major difference. We are aligned with market leaders, be it HP, CISCO, Dell, or Microsoft. They are as keen as we are to have our people trained in the use of cutting edge technology. Our greatest challenge

is to accommodate this need, and plan how many people we send to our partners. There is no shortage of training opportunities. We are fortunate to be located in the UAE, where access to such courses is easy. Our mission is to bring out the best in everyone we work with, whether it is staff or customers, this principle stands. We had some great success stories where our junior coordinators saw an opportunity that they had the potential to grow and, some of them astounded us by how good they were. People are valuable, but we recognize their talent and are glad to offer them opportunities to develop and grow.

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ABU DHABI 2015

INTERVIEW

space OUT TBY talks to Ahmad Julfar, CEO of Etisalat Group, on primacy in the emerging market telecoms sector, improving network quality, and acquiring assets overseas. Etisalat is striving to become the leading emerging market telecoms group in the world. What is your strategy to channel your resources in the right direction?

We had an excellent year in 2014, and one that illustrated the power and success of our core values of growth and innovation. Our expansion into French-speaking Africa, which increased our presence to 19 markets across the MENA region, was perhaps out biggest achievement in 2014. This endeavor is a sea change for Etisalat, so our goal to become the world’s most-admired telecoms company in emerging markets was further realized this past year. The year was accompanied by stronger than predicted figures along with the continuation of steady growth in our home market in the UAE. We also established strong global partnerships to develop new, cutting-edge technologies such as 5G. What are some of the ways you are working toward improving your network quality and connectivity?

In the UAE in 2014 we invested $680 million in bringing 4G to its fullest potential. We also further expanded our fiber-to-the-home network, with efforts to reach 90% of UAE households in 2015. I am proud to say that we remain the dominant force in the UAE’s mobile industry. This is due to our consistently innovative product and service offerings, coupled with the competitive prices we offer.

What opportunities do you see for investment in the mobile segment here in the UAE?

world and where will your focus be in the near future?

The number one thing is to improve the connectivity or the quality and the speed. That is why we are investing heavily in 4G and eventually 5G. We also want to be a partner in the innovation framework. Today, mobile phones are the center of most people's lives through communication and contacts. You never leave home without it, and it is no longer an accessory. We have to make it simple for people to use services on their device, whether they are government or financial, for example. We also have to provide enough security so that people feel safe when they use mobile service. We want to become the enabler for people and the role that technology plays in it.

Last year was a critical year for Etisalat as an international operator. The milestone of acquiring Maroc Telecom—one of the largest in the region’s history—has added strong value to Etisalat’s global footprint. The world is more connected than ever before. And as we’ve been talking about, with the expansion of data and the digitization of services, access to quality telecommunications is increasingly becoming a necessity; not merely a luxury. Our expansion in Africa delivers affordable, accessible mobile technology to thousands of people in these markets. This is literally changing people’s lives. Our portfolio of services is geared towards fostering improvements in education, healthcare, finance, and many other essential areas.

How are you looking to improve your position in your other countries of involvement around the

What are Etisalat's aspirations and expectations for the year ahead?

Etisalat Group • 85% of homes connected by fiber in the UAE • Abu Dhabi is the first capital in the world to have 100% fiberto-the-home connection

HH Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE, Ruler of the Emirate of Abu Dhabi and Supreme Commander of the UAE Armed Forces, has made the establishment of Smart Cities across the UAE a priority. As a result Etisalat has received consistent support from the UAE government as we work to develop the infrastructure and digital architecture that Smart Cities will be built on. Given this aspiration, and our own goals—both for EXPO 2020 and in a general sense as innovator—we will be heavily focused in these areas in the year to come. ✖

BIO Ahmad Julfar was appointed to his current position in 2011, taking over responsibility for Etisalat Group’s overall strategy and overseeing the operations in all 19 of Etisalat Group’s markets across the Middle East, Asia, and Africa. Prior to his current position, he served as Chief Operations Officer at Etisalat UAE for five years. He has worked at Etisalat for almost 30 years, serving in a variety of critical positions within the Group. He is also the Chairman of the Board of Directors for the Thuraya Group, and Deputy Chair of the GSM Association. He holds a BS in Civil Engineering and Computer Science from Gonzaga University, and is a graduate of the Mohammed Bin Rashid Programme for Leadership Development.

Telecoms, IT & Media

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E-GOVERNMENT FOCUS

MOVE ONLINE Abu Dhabi is working to stay on top of ICT trends in the coming years as it embraces e-government and m-government initiatives, modernizing the way its government interacts with citizens.

EVERYTHING IS TRENDING TOWARD the digital space in the UAE capital. Headed by the Abu Dhabi Systems and Information System (ADSIC), the official government body in charge with implementing the ICT strategy for the Emirate, government services in Abu Dhabi are transitioning to a more end-user friendly delivery model. With innovative ICT initiatives, such as smart applications and electronic services, the need to physically visit a government office is being reduced, with the main aim of bringing the government directly to the people. Further to the UAE’s objective of becoming a knowledge-based society, all government entities are participating and involved in the pursuit to transition government services to more accessible, digital formats, and integrate them as much as possible with the new technologies, products, and software systems being introduced each year. One standout initiative is TARESH, a new, first of its kind service in Abu Dhabi that allows vehicle owners in the capital to handle all their registration and renewal needs without leaving their home. Supported by the General Headquarters of the Abu Dhabi Police and the Abu Dhabi Traffic Department, TARESH sends one of its company drivers to the customer’s home to pickup the car and takes care of all the rest, adhering to the Traffic Department’s regulations and getting the customer their new vehicle registration card within three hours, the company promises. TARESH is an example of how a common government requirement, one that every law-abiding vehicle owner must adhere to, was reduced to a simple phone call and a few clicks online—an example that will surely be paving the way for more simplification and integration of the Abu Dhabi government’s services in the near future. Although initiatives like TARESH make handling government requirements simpler and more convenient for citizens, another aspect of enhancing government service delivery through electronic methods is the extended reach and efficiency the government can achieve through e-channels such as mobile applications. At the GITEX 2014 event, ADSIC exhibited 20 different smart apps and 70 electronic services. Winning the Best Government Authority Award was Abu Dhabi’s CityGuard app launched in 2013 by the Abu Dhabi Po-

lice. The free app allows users to report accidents, suspicious activity, traffic violations, public safety issues, or other civil crimes and disturbances around the Emirate directly with video, pictures, audio recording, and GPS capabilities. An official government case is created with each submission, which allows citizens and visitors to the capital to take part in creating a safer city through the use of the smart application. Abu Dhabi was ranked the safest city in the MENA region according to the Economist Intelligence Unit’s Safe Cities Index for 2015. Initiatives like the CityGuard app, the first of its kind in the MENA region, likely play a role in this achievement. By further digitizing and simplifying government services, Abu Dhabi’s government is moving toward becoming one of the most accessible and effective in the region. Systems like TARESH simplify a common government requirement and apps like CityGuard make it easier for the government to respond directly to the requests of citizens. Enhancing the electronic infrastructure needed for improved government service delivery is a key part of the ICT strategy in Abu Dhabi and moving forward, government entities are expected to continue to work together, identifying new and innovative methods of enhancing the efficiency of its services with more a integrated electronic infrastructure. The Abu Dhabi government aims to be one of the most modern governments in the world and its e-government services initiatives represent a key component in its strategy to achieve that. ✖

Further to the UAE’s objective of becoming a knowledgebased society, all government entities are participating and involved in the pursuit to transition government services to more accessible, digital formats.

ZAK MCKINVEN General Manager, Brash Brands Since the brand consultancy was set up in 2007, it has since grown into a truly global operation. We are a growth consultancy, and we help all kinds of businesses—whether they are small operations or prestigious international brands. We help to develop companies that are true to their values, while curating their unique story in a way that engages with their audience and, ultimately, brings tangible worth to both their brand and bottom line.

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INTERVIEW

EASY access TBY talks to HE Rashed Lahej Al Mansoori, Director General of the Abu Dhabi Systems and Information Center (ADSIC), on the eGovernment strategy, green initiatives, and cyber security.

impact on reducing Abu Dhabi’s carbon footprint?

• Implementing numerous m-Government initiatives • Educating the people on cyber threats

What are the key components of Abu Dhabi’s e-Government strategy?

The government of Abu Dhabi’s desire is to provide service oriented e-Government offerings that will make living and working in Abu Dhabi easier and more efficient for residents and businesses alike. To support that, ADSIC is mandated to be the IT standards authority and the e-government enabler, provide expert advice for modernization, and align government efforts to provide innovative world-class services to the end-user. ADSIC’s shared government initiatives including Abu Dhabi Government Contact Centre, e-Citizen Program, Abu Dhabi Spatial Data Infrastructure, Abu Dhabi Portal, CityGuard Application, Jobs Abu Dhabi, and the newly introduced government correspondence management system (Taresh). What are some Green IT initiatives that ADSIC is implementing, and what is the expected

One of the core benefits of e-Government services is that it is inherently greener than the processes that were in place just a few years ago. Customers don’t need to drive from one government department to another to complete a series of forms, for example, and those forms are no longer printed on paper and stored in archives. Specific initiatives, such as CityGuard and the Abu Dhabi Government Contact Centre, allow residents of Abu Dhabi to identify environmental concerns that can then be swiftly rectified by the relevant government entities. With mobile being one of the fastest growing segments in the ICT space, how is ADSIC investing in mobile technology and mobile service integration?

Mobile services are crucial for the next era of e-government. Later in 2015, we will announce our plan to provide a top-notch, integrated m-Government service offering. It is one of our highest priorities at the moment. What is ADSIC’s current level of Emiratization, and how is ADISC working to enhance the national skill-level within the ICT sector?

Ensuring Emiratis are able to enter the ICT sector is a priority area of focus for ADSIC; however, it is just the start of our responsibility to the population of Abu Dhabi. Our e-Citizen Programme seeks to provide or improve ICT skills of UAE nationals who are not e-literate, enabling them to operate a computer, use the internet, and leverage the

e-government services offered by ADSIC. How do envision ADSIC growing and evolving in its role over the next five years as the main e-Government services provider in Abu Dhabi?

Our focus will be on integrating services across government entities better, and our soon to be released plan for m-Government will be a driving factor in how we conduct our day-today operations. We also plan to focus on educating the population on cyber threats. In the ICT sector, you have to be engaged in a constant process of improvement to your systems and procedures in order to safeguard information from cyber threats. What are your expectations for the year ahead?

We know that m-Government will be a major part of 2015 for ADSIC and a number of other key government entities, but that only covers our efforts on the consumer/customer side of the equation. The Abu Dhabi government is aggressively pursuing a strategy to create smart cities throughout the Emirate. In regard to green initiatives, some of the most important things being done in ICT in this region to combat climate change stem from the creation of smart cities: automation of district cooling and improved efficiency of roads and transport systems, to name but two. Creating a truly smart city is a huge undertaking; however, the benefits to consumers, the cost savings, and the positive environmental impact make it of great strategic importance to ADSIC and the Abu Dhabi government. ✖

BIO HE Rashed Lahej Al Mansoori is the Chief Information Officer of the Abu Dhabi government and the Director General of the ADSIC, the government entity overseeing the ICT agenda of the Emirate of Abu Dhabi. Possessing over 20 years of experience in the IT field, he has spent most of his career managing IT infrastructure and large IT projects and supervising IT department operations. HE Al Mansoori provides overall operational and strategic leadership to ADSIC and orchestrates the development of Abu Dhabi’s e-government program. He was Chairman of the Abu Dhabi Emirate Statistics Center Executive Committee and a Board Member of Musanada, prior to ADSIC’s transformation into a fullyfledged center in 2008. He acted as the organization’s Chairman while it existed as the Abu Dhabi Systems and Information Committee from 2005 to 2008. Al Mansoori holds a Bachelor’s Degree in Management Information Systems from the University of Colorado, US. He has undergone various extensive leadership and management training programs conducted by renowned institutions such as the Harvard Business School and the IMD World Competitiveness Center.

Telecoms, IT & Media

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INTERVIEW

As the commercial arm of the Abu Dhabi Media Zone Authority, twofour54 was set up to nurture entrepreneurship in media and entertainment. How would you describe the creative environment and the work culture at twofour54?

show TIME TBY talks to HE Noura Al Kaabi, CEO of twofour54, on developing the UAE’s media and entertainment scene, attracting huge film developments, and the organization’s role in the region.

A group of 30 people started up this company in 2008. From day one we wanted to reflect creativity, teamwork, and a unique sense of environment, differentiating ourselves from companies that fall under the government and follow a specific structure. This does not mean that our processes are not fully compliant with the government, but there is a different look and feel of twofour54 and in how people operate here. This is a loose environment where we allow for creativity, and it is an environment where we allow people to express themselves. At the end of the day, they are part of a creative sector that is commercially based. In our creative lab, we have a video editing room, an audio editing room, and tablets for creatives to work on their films, animations, or games, and also a game area to help generate ideas and encourage the flow of creativity—all for free. Individuals can come here during the weekends too. This is where we harness their creative energy. In terms of content and new developments, what are some current projects taking place at twofour54?

We have partners like CNN, Sky News Arabia, and Cartoon Network set up here, and each one of them is responsible for its own target when it comes to its content or news segments. The Ubisoft studio developed a full iOS (iPad compatible) game called CSI: Hidden Crimes in Abu Dhabi with some graduates of Ubisoft Abu Dhabi, and it currently has over 13 million downloads. Furthermore, season two of an Emirati animation called Mansour supported by Mubadala, which used to be done outside the UAE, will be fully devel-

oped here in the Cartoon Network studios. We will also start filming the GCC version of Sesame Street, Iftah Ya Simsim, by the end of 2014, and it will show in 2015 on all GCC channels. We plan to have a channel on YouTube that will show the short films that are being made at twofour54; more than 400 members from our creative lab are volunteering on those short films. We have received a request from Etihad Airways to work on a documentary that shows the stories of Emirati pilots and cadets. These projects are helping our ecosystem by bringing more professionals, young creatives, and enthusiasts to twofour54; our creative lab now has more than 10,000 registered members. Our production services arm, intaj, has supported the production of more than 18,000 hours of content from its Abu Dhabi studios. intaj works closely with the Abu Dhabi Film Commission to encourage international films to be filmed here, such as Fast and Furious 7, Star Wars 7, and Bollywood films. We have also arranged for two episodes of the BBC’s Top Gear to be filmed here. Following the Abu Dhabi Media Summit in 2014, the three themes are distribution, content, and finance. What were the main topics discussed?

At the 2014 Summit we talked about how to build a sustainable media ecosystem in the Middle East. From a financing perspective, we wanted to talk about how start-ups can be taken to the next level. From a distribution and content perspective, there is a lot of piracy taking place and that, too, was a major topic of discussion. People were also talking a lot about the mobilization of content. In the coming year, we will be hosting people from Europe, the US, the region, and the Far East to talk about their models. For instance, the Hulu and Netflix models do not exist here yet. We discussed the major developments in the industry, such as new gadgets and technology. ✖

IN NUMBERS twofour54

300

companies currently set up

10,000+ creative lab members

18,000+ hours of content generated

BIO HE Noura Al Kaabi is the CEO of twofour54, an Abu Dhabi government initiative that aims to foster Arabfocused media and digital businesses in the UAE. A member of the UAE Federal National Council, she is on the board of Abu Dhabi Media, Abu Dhabi Chamber of Commerce, Image Nation, and the Abu Dhabi Sports Council. She is also a member of the Advisory Board for Abu Dhabi Music and Arts Foundation and a member of the Scientific Committee of the Sheikh Zayed Book Award. She has a degree in Management Information Systems from the United Arab Emirates University.

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FOCUS FILM INDUSTRY

ACTION! Attractive incentives for producers and a budding breed of local film industry talent has put Abu Dhabi on the radar of many filmmakers from around the world, and is adding to the UAE’s growing film scene. IN THE WORLD OF THE MOVIES, leading festivals from around the world from Cannes to Cairo have been major events on the calendars of film industry professionals and movie enthusiasts for years. The UAE’s film industry, although budding, is growing with Abu Dhabi playing a key part. The New York Film Academy Abu Dhabi opened in 2007, and that same year the Abu Dhabi Film Festival (ADFF) grabbed a slice of the limelight in the world of cinema when the capital played host to its first film festival, dubbed the Middle East International Festival at the time. Supported by Abu Dhabi’s twofour54, films from the UAE, Middle East, and around the world were screened at the ADFF 2014, a 10-day long event that witnessed several Arab produced film premieres. One symbol of how Abu Dha-

bi’s film industry has developed since then, the ADFF 2014 began with a showcase of From A to B, a film 100% produced and funded by twofour54 and ImageNation, well-known media organizations in Abu Dhabi that support and encourage the creation of local content. It was the first time ever that an Emirati film opened the event, and with the developing media infrastructure and growing film culture, Abu Dhabi hopes it will not be the last. A notable aspect of Abu Dhabi’s filmmaking scene are the several incentives offered in the Emirate, aimed at attracting film producers to the city and supporting the local filmmaking industry. When discussing factors that attract producers to Abu Dhabi, CEO of twofour54, Abu Dhabi’s media and creative hub, Noura Al Kaabi explains that “producers look at which countries in the world offer the best rebates and incentives. In addition to finding the right location, they are keen to find the most efficient way to spend their money.” Though it is not just about cost and location, as Al Kaabi further emphasized, “…our location in Abu Dhabi can be found elsewhere. It is what comes with it, the services and the team, that makes the difference.” There is an increasing amount of support for film producers in the UAE’s capital city, where even a 30% cash rebate on production costs is offered to international filmmakers by the Abu Dhabi Film Commission, the highest rebate of its kind in the MENA region. Incentives like these help to keep Abu Dhabi competitive in the global film market. Though the film industry in the UAE is expanding, it has yet to reach full maturation. Still lacking are proper distribution channels, such as those that exist in other developed entertainment industries. The Netflix or Hulu models, for example, are missing in the Emirates. Additionally, while there are educational opportunities to study film in the UAE, employment opportunities available tend to favor TV and commercial production. In the world of film education, many Emiratis travel abroad to study filmmaking, and seek to make a name for themselves elsewhere. What is needed is not just for more films to be shot in Abu Dhabi, however, but for more Emirati actors to take on more leading roles, and for more films to be written, directed, and produced by Emiratis. In the meantime, seeds of a vibrant and thriving local film industry can be found in Abu Dhabi. ✖

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HE Nadir A. Al Hammadi, Chairman of Abu Dhabi Aviation, on human capital, training, and the offshore oil business.

HE Salem Ali Al Zaabi, Director General of the Federal Land and Marine Transport Authority, on regulating the sector.

The fifth most productive port in the world is in Abu Dhabi, channeling increased trade at never-before-seen levels.

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Transport REVIEW

Progressive initiatives to integrate and improve the capital’s transportation infrastructure will facilitate business and improve life in the Emirate.

POLICY OF CONTAINMENT A

bu Dhabi has managed to strengthen its reputation as a regional transport and logistics center in recent years through the rapid implementation of a number of ambitious policies and plans. The Emirate is in an exceptional position, with its entire transportation infrastructure undergoing a process of renewal. The future of the sector and the effects it will have on business and quality of life in the Emirate have been defined in the Surface Transport Master Plan (STMP), the Abu Dhabi Vision 2030, and the UAE Vision 2021. The transformations planned for the city will have enormous consequences, and are likely not only to help Abu Dhabi sustain its ever-expanding population, but also to maintain the positive growth of the country’s economy.

POSITIVE INDICATORS The transportation and storage sector represents an important part of Abu Dhabi’s GDP, contributing over $9.53

billion, or 3.7% of the total in 2013, and making up a full 8.2% of non-oil GDP. In 2012, the figure stood at just over $8.71 billion, 9.3% less than 2013. The growth of the nonoil sector continued in 2014, spurred on by the transport sector, along with tourism, trade, and real estate. Also of note is the clear increase in total employee compensation in the transport sector, from $2.56 billion in 2012 to over $2.89 billion in 2013.

OBSTACLES TOO

Image: Etihad Rail

The population of the metropolitan area is expected to triple in size to over 3 million by 2030, leading policymakers to formulate the solutions outlined in the SMTP.

Though these figures suggest broadly positive developments for logistics and transportation activities in Abu Dhabi, issues related to the swiftly growing population are a serious concern for the administration. The population of the metropolitan area is expected to triple in size to over 3 million by 2030, leading policymakers to formulate the solutions outlined in the SMTP. A city which under a decade ago had minimal public transport services at its disposal is moving away from a system based

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around private vehicles toward one in which railways, metro, tram, buses, and taxis meet requirements. On an international industrial level, the rail, highway, maritime, and air segments will continue to expand, cementing the emirateâ&#x20AC;&#x2122;s central role in connecting the region and the wider world. The Master Plan forms part of the larger 2030 Vision, which aims to create an Abu Dhabi that is sustainable, prosperous, and more attractive for its citizens, and to make the capital a model for restructuring in other emirates.

ON THE ROAD A total of $4.8 billion in non-oil products was exported in 2014, with $2.45 billion of this being transported by road. The Ministry of Transport is working to renew the major roadways at present, and has developed the new E311 main road to serve as the principal highway between Abu Dhabi and its neighboring emirates. The 62km dual carriageway will also serve the Khalifa Port Industrial Zone, a key source of export goods and center for the logistics segment. Additionally, the Sheikh Khalifa Interchange project is also crucial to sustaining the flow of trucking in the area. It allows access to the new Sheikh Khalifa port, and will support the passage of over 500 trucks per day, with the capacity for far more as traffic increases. This project also involved widening the E311 for a 4.5km section, from

four lanes to six. Yet another key undertaking that has been completed as part of the SMTP is the Ras Ghmeis-Ghaghah Island Road project. This was focused on improving connectivity with the western portion of the Abu Dhabi Emirate, specifically creating a road link to the Al Ghaghah island in the Arabian Gulf. Each of these schemes has contributed to reducing congestion in and around the capital city and its hinterlands, and has facilitated the movement of cargo internally and for export purposes. Prior to the relatively recent development of an effective public transportation infrastructure, there was a preponderance of private vehicles on the roads of Abu Dhabi. Private cars remain popular, with 464,504 private vehicles registered on the Emirateâ&#x20AC;&#x2122;s roads. Between 2010 and 2015, the number of registered cars has increased by 12%. Over 7,500 taxis serve citizens across the city, and play an important role in the urban transportation mix. Over 70,000 public transport vehicles operate throughout the Emirate. With so many automobiles on the streets, road safety naturally emerges as a pressing issue. In response, the administration has established the Safety and Traffic Solutions Committee (STSC) as part of the Department of Transport (DoT). This initiative has been successful, with traffic accidents dropping by 40% over the past five years, and fatalities from

Image: Agility (Abu Dhabi) PJSC

CAPTAIN MAHMOUD ISMAEL COO, Falcon Aviation Services Most of our core business is in offshore oil and gas support services, such as providing helicopters and transporting people and materials for the offshore industry. There is little room for error, which means we enforce strict standards for all our operations. Our fleet offers charter services all over the world, and Falcon also provides VIP helicopter operations within the UAE and the surrounding region. In 2014, we added commercial aircraft operations. We are expanding with the Bombardier Dash 8-Q400 aircraft, which we are hoping to soon utilize.

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Aircraft Movement through Abu Dhabi International Airport by Month

Goods Movements by TEU Source: ADPC

Source: SCAD 1000 16

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such incidents reduced by 35% in the same period. Furthermore, the number of serious injuries resulting from these accidents has been halved.

AND HIGH SEAS TOO The maritime transportation sector is critically important to the capital’s economy. With AED6,607.5 million in non-oil products exported in this manner, the industry will continue to play a key role in supporting diverse businesses throughout the emirate. Significant focal points for the sector include the commercial ports of Musaffah, Zayed, the logistics port of Sir Bani Yas, and the passenger, leisure, and fishing ports of Shahama, Sila, Mugharrag, Delma, and Marfa. However, the principal harbor in Abu Dhabi, the deepwater Khalifa Port, is by far the most important asset in the maritime sector. Inaugurated in 2012, the Khalifa Port Container Terminal (KPCT) has an initial capacity of 2.5 million TEUs, but a final volume of up

2013

2014

Discharged

Loaded

to 15 million TEUs is envisaged over the coming 15 years. Its 20 container line services are efficiently linked to the rest of the country by direct highway access and a future rail link, while its proximity to the international airport and the adjacent Khalifa Industrial Zone Abu Dhabi (Kizad) allow for near seamless integration with international markets. The port handles all of the emirate’s container traffic, a total of 1.14 million TEUs in 2014, a figure that represents 26% growth in traffic on 2013. The amount of bulk and general cargo increased by a full 37% YoY. In conversation with TBY, Martijn Van de Linde, CEO of the Khalifa container terminal operator Abu Dhabi Terminals (ADT), noted that; “you can ship directly to more than 50 destinations internationally from Abu Dhabi today. This adds competitiveness to Kizad as an industrial zone, not only supporting trade in Abu Dhabi, but also as a regional base for industrial and international trade.” Port Zayed also had record success in 2014, with the Free Port there manag-

PAUL BRANNIGAN Middle East Director, Wrightbus International How would you describe the process of entering the Abu Dhabi market so far in terms of the ease of doing business? Masdar has been a fantastic channel for us to enter the Abu Dhabi market. With Masdar’s globally recognized brand and great infrastructure, setting up an office through their One-Stop Shop was effortless. In terms of penetrating the market, developing local alliances, contacting transportation authorities and so forth, they have helped greatly in introducing us to the right people at the right time. What objectives do you have in mind regarding Abu Dhabi's public transport network? As part of Abu Dhabi’s Economic Vision 2030, the government wants to create a multi-modal transportation system and our objective is to provide

an integrated solution with attractive high quality Bus products, in tandem with other suppliers. Our core product offering in Abu Dhabi will be our Streetlite Midi Bus, Double Deck Bus, and Streetcar Rapid Transit vehicle, each of which caters for its own distinct market segment. Our class leading Streetlite Midi Bus is capable of servicing additional untapped route corridors in the city as well as opening up new and emerging communities. By offering our iconic Double Deck buses, we could reduce congestion and free up urban space by lowering the vehicle road footprint within Abu Dhabi's central business district. Our iconic articulated Streetcar could add significantly to the urban fabric of Abu Dhabi as part of a Bus Rapid transit system linking key economic and tourist zones with transportation hubs.

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Prior to the relatively recent development of an effective public transportation infrastructure, there was a preponderance of private vehicles on the roads of Abu Dhabi. Private cars remain popular, with 464,504 private vehicles registered on the Emirate’s roads.

ing the largest ever shipment of project cargo. The port also deals with steel imports into the emirate, due to its storage capacity.

GLOBAL REACH The emirate has also emerged as one of the key centers of air travel in the region, for both cargo and passenger traffic. In 2014, $93.68 million worth of exports were carried by air. Etihad Cargo, a division of the world-famous airline, manages a logistics services portfolio that is expanding in parallel with the growth of the airline’s international network. The range of destinations reflects the global reach of the UAE’s capital, with dedicated freight services to China, east Africa, the Caucasus, Latin America, and the US. Over the past decade, Etihad Airways has become one of the most important airlines in the world. Overall, there was a total of 166,784 aircraft movements to and from the Emirate in 2013, compared with 150,768 in 2012. The majority of passengers fell under the departure bracket, with 8.21 million over the course of the year. A further 8.18 million arrival passengers were recorded by the Abu Dhabi Accountability Authority (ADAA), with just 324,107 passing through as transit passengers.

ON TRACK And on the ground, one of the most revolutionary developments in the development of the Emirate’s transportation infrastructure is the upcoming inauguration of Etihad Rail, the Gulf region’s unified rail network. The first phase of the network is set to be ready for commercial use by later in 2015, while the second and third phases will follow in 2016 and 2018, respectively. Along with Saudi Arabia, the UAE is investing considerably in railway networks, with funding from the latter accounting for 10% of the MENA region’s total investment in the segment. The use of rail freight will drastically reduce the volume of trucks on the roads of the capital. One of the primary benefits of the project will be its environmental impact, and its launch will usher in a new era in sustainable transportation in the UAE. Greenhouse gases are predicted to drop by 2.2 million tons each year, according to Faris Saif Al Mazrouei, CEO of Etihad Rail. In a TBY interview, he noted that this figure represents; “the equivalent of removing 375,000 vehicles off the roads or planting 52 million trees.” The venture is anticipated to generate an increase of AED3.5 billion in GDP within 15 years. ✖

IMPROVING OUR JOURNEYS,

Improving Our Nation THE CENTRE FOR REGULATION OF TRANSPORT BY HIRE CARS seeks to ensure that you have a hasslefree experience when traveling by taxi in the Emirate of Abu Dhabi. It is therefore important to know how the taxis operate in the region and the various ways in which you can make use of them.

• You can book a taxi as well as track your booking via our mobile app “AbuDhabi Taxi” on Android & IOS, or by dialing 600 53 53 53, 24 hours a day, 7 days a week. • You can also hail taxis on the streets of Abu Dhabi. Most shopping centers have specific taxi stands, and most Abu Dhabi roads are equipped with taxi drop-off / pick-up areas. • Customized taxis for people with special needs are available through the Call Center on (600 53 53 53). Special needs taxis are also available at Abu Dhabi International Airport.

PO Box 94400 Abu Dhabi, United Arab Emirates | T +971 2 417 3888 | info@transad.ae | www.transad.ae

AUHTaxi

AbuDhabiTaxi

AbuDhabi_Taxi

abudhabitaxi

Transport

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INTERVIEW

FLIGHT simulator IN NUMBERS Abu Dhabi Aviation

30%

government owned

120

foxed-wing and rotary-wing aircraft owned and managed

In a highly specialized industry, labor represents an important part of success. How does your human capital policy attract the expertise required to support your operations?

When we talk about human resources, we talk about our own business. We have to look at what differentiates one operator from another, in the sense that the same regulation is applied to all by civil aviation, but it doesn’t make a big difference except in the caliber of the people that you use to carry out the task. Therefore, we have been very conscious of the fact that we are a service provider. Our focus and strategy has developed and evolved on providing quality services to our clients, meaning to achieve this we have to attract, train, and retrain human capital, which is what we do now. The main focus of this organization is on the production side, people who work on the anchor floor, engineers, and pilots, to make sure we will always

TBY talks to HE Nadir A. Al Hammadi, Chairman of Abu Dhabi Aviation, on the importance of human capital, providing training, and the offshore oil business.

have the best. Therefore, we that wanted to start a new provide them a decent way business in a new area with of living. To achieve this obnew rules and regulations, jective, we always try to look and they were trying to do at what is important to the it independently. This kind employee. We look at logistics of environment has created support. Graduates travel in a quality team with a high and out and they work from amount of knowledge in the six to six. As a part of our plan, business. After three years, we Abu Dhabi is becoming a busy started to focus in-house, and city, and we offer our own acwe were able to win a similar commodation for employee activity with an oil company families. We started providin the UAE by providing meding accommodation for our ical support. Abu Dhabi Aviasingle workers, but now we tion partners with specialists are moving our plan toward who provide medical care; employee families as well. We we provide the aircraft, and try to maximize what we can this partnership provides the do for them. The other part of ideal solution for our clients. the plan is to ensure that our I believe this is a good strateemployees are aware of their gy, and we are expanding the job, what they want to do, and business and providing more * T h i s a r t wo r k i s c o py r i g h t e d by M u l t i p ly M a r ke t i n g C o n s u l t a n c y a n d when they need to deliver. training courses. We built our Basically, this is our human own simulator, which will resources policy, and I think cover the training needs of over the years it has proven to all our clients in the UAE and be a great strategy, as we have the MENA region. Clients in had some people with us for the Middle East do not need more than 25 years. to go to Europe for training anymore. To expand this The largest share of your busibusiness, we have a separate ness is to support the offshore building just for the simulator, oil industry. In which other secand we are trying to develop tors are you looking to expand? it to be an international hub Offshore is our bread and butfor helicopter training. This ter; this is what we have done will mean that different platfor years. When it comes to forms, aircraft, and manufacother sectors, we started with turers can come here and we search and rescue, and we will be able to offer training gained a significant amount to many clients. Additionalof experience in Saudi Arabia ly, we do fire fighting courses with the Red Crescent. Actuin Europe, seismic work, VIP ally, it is been excellent being transfers, filming, and lifting. part of its program because it For example, to celebrate 100 was just starting up, and we years of Aston Martin in 2013, started with it. It was a chalwe lifted an Aston Martin Vanlenging experience, because quish to the top of the Burj Al we were dealing with clients Arab in Dubai. ✖

BIO HE Nadir A. Al Hammadi was born in 1967 and graduated from Embry Aeronautical University in Florida with a degree in Aviation Electronics. He then continued his studies at Warwick cannot be reproduced or used in any University in Engineering Business Management. His professional career began at Gamco in 1990, and he was later instrumental in the establishment of GAMAERO. In 1996, he joined Presidential Flight and held several key management positions, responsible for Maintenance and Engineering. In 2007, he was appointed as the Deputy CEO of Presidential Flight. In 2009, he joined Abu Dhabi Aviation Board as its Managing Director. Two years later, he was appointed as the Chairman of Abu Dhabi Aviation. He also holds the Chairman’s post at Deco Vision and Tamouh Investment, while also serving as a board member at other private companies.

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INTERVIEW

TBY talks to HE Salem Ali Al Zaabi, Director General of the Federal Land and Marine Transport Authority (FLMTA), on regulating the sector, maritime capacity, and the promise of the GCC railway project.

going places on the economy, the UAE, and neighboring countries. Then, the higher authority of the government will decide to amend it or continue it. What is the primary strategy of the Federal Land and Marine Transport Authority (FLMTA) when it comes to regulating the transport sector?

BIO HE Salem Ali Al Zaabi is the Director General of the FLMTA. Since 2009, he holds the position of Executive Director – Marine and Land Transport Sector. Currently, he serves as the Chairman of United Arab Shipping Company and he is also the Chairman of the Executive Committee and Chairman of Steering Committee of United Arab Shipping Company, the official shipping line owned by the Gulf Countries, Vice Chairman of Gulf Navigation Holding PJSC and Vice Chairman of Emirates Classification Society (Tasneef). He holds Master’s degrees in Administration and International Development in Government Sector from Kentucky State University, US, and has completed several specialized courses in Maritime Studies from renowned institutions such as Cambridge University in the UK and Harvard University in Boston.

How would you assess the contribution of the maritime sector in the national economy?

The FLMTA is the federal authority that regulates land and maritime transport for the whole of the UAE, including railways. For maritime, we are now registering all of the ships in the UAE (except for fishing boats, which is done by the Ministry of Environment). We are the representatives for the country at the International Maritime Organization (IMO). We are the maritime authority for the UAE. The UAE has its own maritime law, which was promulgated in 1981, and we are now trying to update it. In terms of land transport, we are working according to the land transport law, which was approved in 2011.

Of course, maritime transport is one of the main aspects of our work because it is connected with the economy. Most of the imported cargo to the UAE is transported by ships. Even exported cargo mainly goes by ships at a level of between 80% and 90%. Being an oil-exporting country, we export our oil by tankers over water, meaning we depend mostly on the maritime sector. Also, whatever you see transported in trucks is linked with ships. When the ships come to the ports, the trucks take the cargo from them and distribute it to the rest of the country. Also, the UAE has advantages in that it is a transshipment country and a hub for the container industry.

What laws do you have regarding land transport?

How do you see Abu Dhabi’s role in the UAE’s maritime sector?

The land transport law was approved in 2011, and we started to implement it in 2013. It works in three phases. The first is that we have to register the company. We are almost done with this and we are continuing. Now, we are issuing the permission for trucks and buses for transportation. It is mainly in the truck side of transportation, and we began this at the start of September 2014. We are now implementing this law ,and we have to see its impact

Abu Dhabi is now also expanding very quickly. Port Khalifa is one of the most recognized ports in the world because it employs the best technology. The port has serviced more than 2 million containers since opening, while plans to expand this are being created. Also, Kizad is playing a major role because when most people come to discharge cargo, they want the logistics side of things taken care of as well. In Abu Dhabi, Kizad is performing the role of storing cargo

and then shipping it around the world, and is expanding quickly so as to cope with the demand. We see Khalifa Port in the future being one of the leading ports in the region. What kinds of regulations are you looking at for the national railway?

The country is now a part of the GCC railway project. This will change the style of business in the UAE ,and it will provide more services to clients in terms of moving cargo from Kuwait all the way to Oman. The deadline is expected to be in 2018 according to the study, and the UAE has the majority of the area of this project. The UAE has already started construction, and now the first phase of cargo shipping is underway. ✖

IN NUMBERS Federal Land and Marine Transport Authority

110 employees

Maritime represents

90%

of the NTA’s activity

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INTERVIEW

WE’RE on a boat TBY talks to Rashed Mohamed Al Hebsi, CEO of The Emirates Classification Society (TASNEEF), on pioneer new work and environmental standards and the company’s progress and achievements. What led to the establishment of TASNEEF in 2012?

BIO Rashed Mohamed Al Hebsi has a diverse range of experience related to vessels from serving on board, to maintenance, ship construction, systems development, and project management. He graduated from the University of Miami with a BSc in Electronics Engineering, and served in the UAE Navy for 22 years, starting as a Marine Engineer Officer. Al Hebsi worked for two years with the French Navy and DCNS to develop the combat management system for the French Aircraft Carrier Charles de Gaulle. He also served as Project Manager in Stockholm for the UAE Navy’s Tarif Project, and in Rome for the Baynunah Combat System development project. Al Hebsi was part of the Abu Dhabi Class and Falaj II projects including being Project Manager in Genoa for two years.

The concept of ship classification itself started 250 years ago to fulfill a requirement that was badly needed in the maritime industry. More than 12 classification societies have worked in the Middle East region; however, these societies have not provided customized services to meet the immediate needs demanded here. The UAE’s leaders saw a need to have a national classification society to fill certain gaps. TASNEEF is a nonprofit organization that acts as a third party on behalf of regulators and owners to provide inspection, surveys, certification, and consultancy services based on a non-conflict of interest. Part of the services that we have been providing are tailored to the region’s own unique needs, such as weather conditions including extreme heat, dense humidity, and dust, as well as shallow waters and the different types and lengths of waves. These factors impact the operation of vessels in the UAE and the region and have not been well considered previously. TASNEEF has pioneered a new GCC code applicable to ships in the region. How is the code an improvement on current standards?

International Maritime Organization (IMO) regulations and conventions already regulate vessels above 500 tons, but for those vessels below

Launched the Sahara Notation standards for vessels operating in the region in January 2014

500 tons regulatory responsibility falls on the national authorities. Many authorities in different regions of the world are creating and adopting a national safety and environmental protection code for vessels. We have worked hard with the Federal Land and Marine Transport Authority (FLMTA) to adopt the GCC Code for those vessels that are not subject to the IMO standards. This will help better regulate the market, and make sure we have safer vessels. As a result, vessels will be more environmentally friendly with reduced emissions of dangerous gases, such as carbon monoxide and carbon dioxide. The code will control sewage with better treatment plans as well. TASNEEF has signed a landmark partnership agreement with DryDocks World in collaboration with Dubai Maritime City to build the world’s first LNG-powered harbor tug. What is the significance of this achievement for

the UAE and the global maritime industry at large?

There is significant pressure from the IMO to reduce the environmental impact of vessels and they have put in place certain targets leading up to 2035, whereby every five years we have to have a reduction in emissions. LNG as a fuel has zero emissions of dangerous gases. Because of this, the world is now moving toward LNG. Harbor tugs are used continuously in all ports in the UAE and have a direct impact on the coastal and nearby environment. The initiative to design, build, and operate an LNG harbor tug will significantly reduce the direct emissions of dangerous gases. This project is one of the projects that we are most proud of. The agreement has been signed and production will start during 2014. What is your assessment of TASNEEF’s progress and achievements thus far, being one of the youngest classification societies in the world?

We are more dynamic, more technology-driven, and more energetic. In less than two years, we have achieved two awards. We were selected as the best classification society for excellence in maritime services within the entire region. We received a second award at the Sea Trade Maritime Awards for being the best classification society in terms of contribution to the development of the maritime cluster in the Middle East and Africa, including being an active partner with all stakeholders. The reason we were selected for this is because of the innovative solutions we have put on the table. Firstly, the Sahara Notation, and secondly our cooperation with all stakeholders here, especially the FLMTA, to implement the GCC Code promoting safety and environmental protection. ✖

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FOCUS KHALIFA PORT

LET'S TRADE The fifth most productive port in the world is in Abu Dhabi, channeling increased import and export trade through the Emirate at never-before-seen levels, and added capacity enhancements are already in the pipeline. HANDLING Abu Dhabi’s general cargo needs and all of its container traffic is Khalifa Port, the first semi-automated container terminal in the region and the fifth most productive port in the world according to the Journal of Commerce. It has been in operation since 2012 and has succeeded in strengthening the capital’s potential to become an international maritime hub, an ambition the Abu Dhabi Ports Company (ADPC), owner of the port, and the Abu Dhabi Economic Vision 2030 holds high on the development agenda for the UAE capital. With the supply chain connections that exist to the nearby industrial hub, Kizad, the more capacity Khalifa Port adds each year and the more productive and efficient it gets, the more competitive companies at Kizad can be, as trade and logistics infrastructure through the port enable greater market accessibility for goods originating at Kizad. In getting those products out to customers in the market, Khalifa Port has the capabilities to cater to some of the largest ships

Image: ADPC

sailing the seas today with its ability to reach approximately 4.5 billion people within four time zones and direct access to over 50 international locations. As a result, Abu Dhabi is competing with some of the most productive maritime hubs in the region, linking major ports the world over. As an automated port, Khalifa Port offers quick turn-around times for trucks and ships coming through the port that are extremely supportive of increasing volumes and productivity of trade while reducing overall costs. By international standards, Khalifa Port is one of the most efficient and modern shipping ports in the world. One aspect that lends to its status as such is its IT infrastructure, which are considered leading edge and state of the art. This is extremely important in efficiency considering that a single ship that passes through may have thousands of containers on board, and this data needs to be gathered and monitored. This kind of data-processing is incorporated in to Khalifa Port’s systems, offering IT services to trade and export businesses using the port, enhancing reliability of the terminal’s operations. Khalifa Port in turn can use this data to monitor its own efficiency and ensure minimal downtime during trade routes. With the increased capacity enhancement plans in the pipeline, the amount of data Khalifa Port will have stored has no option but to increase. Currently in Phase I of its development plan, Khalifa Port’s annual capacity sits at 2.5 million TEUs and 12 million tons of general cargo. The port is expected to increase its container volume capacity to 15 million TEUs and 35 million tons of general cargo a year once fully completed. With economic diversification plans and projects currently underway for the Emirate, the enhanced capacity will enable import and export trade to reach new heights as a percentage of Abu Dhabi’s GDP. This will also contribute to the non-oil sector growth that the Abu Dhabi Economic Vision 2030 targets and will be an invaluable asset to the Emirate’s goals of moving away from a GDP dependent on oil revenues and expanding its economic offerings. Abu Dhabi’s geographic location and the infrastructure that Khalifa Port provides will enable the Emirate to capitalize on the shifting global trade trends passing through the Middle East. The role Khalifa Port will play to Abu Dhabi’s economic growth in the future will be hard to miss in the years ahead. ✖

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2.7

sqkm offshore area

automated stacking cranes

LOCATED IN Taweelah between

9 super

Dubai and Abu Dhabi

KHALIFA PORT

post-Panamax quay cranes

launched operations in 2012

straddle carries Comprehensive ICT services

KHALIFA PORT the first semi-automated container port in the region and one of the most technologically advanced ports in the world.

KHALIFA PORT CONTAINER TERMINAL several major shipping lines with weekly calls are already operating.

16.5 meters basin deep

Source: Abu Dhabi Ports

IRAN

BAHRAIN

Types of cargo

QATAR DUBAI

Containers

Taweelah ABU DHABI

Roll-on / roll-off (ro-ro)

Reefers General cargo

Project cargo

Dry & liquid bulk

2.5 million TEUs

ANNUAL CAPACITY

12 million tons OF GENERAL CARGO PER YEAR

OMAN

FINAL PHASE

CURRENT PHASE

SAUDI ARABIA

15 million TEUs

ANNUAL CAPACITY

35 million tons OF GENERAL CARGO PER YEAR

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VOX POPULI LOGISTICS AND SERVICES

SUPPLY LINES

The transport sector is an often-unsung segment of the economy, and one that is key to success or failure. A number of companies involved in logistics are investing in the sector to help keep everything moving.

BASSEL EL DABBAGH CEO, Agility (Abu Dhabi) PJSC

he improvement in infrastructure in Abu Dhabi in recent years has been drastic and highly significant. Abu Dhabiâ&#x20AC;&#x2122;s government has developed a great vision for where it wants to be in 2030. Several major transportation infrastructure projects are developing as planned. The Department of Transportation is overseeing the Abu Dhabi Freight Master Plan, which will provide a guiding strategy and policy to deliver the effectiveness of freight governance in Abu Dhabi. Khalifa Port, the first and only semi-automated port in the region, not only increased its capacity, but also increased its efficiency drastically. We feel it first hand by the major improvement in the turn-around time of our trucks. The expansion of Abu Dhabi International Airport, through the Midfield Terminal forecasted to be completed in 2017, will not only double the passenger capacity, but will also have enhanced cargo and maintenance facilities. We are working closely with transportation and logistics stakeholders in Abu Dhabi

to optimize our services. We are an active member of the Abu Dhabi Logistics Action Plan, an initiative launched by the Department of Economic Development and the Department of Transport, which calls for the cooperation between the private and public sectors. Moreover, we signed a MoU with Etihad Rail, and we are working closely with their team to see how we can channel cargo volumes through rail once fully operational, and how to develop logistic services around the rail hubs. We are also closely coordinating with Kizad to offer the logistics services that are sought by companies that are setting up in this industrial zone. We also have an office at the airport, and we are committed to growing our airfreight volumes. Additionally, agility is looking to have a larger presence in the Western Region, because it is an area of growth potential. In 2015, we will focus on offering more marine logistics services to our customers because of the increased activity in this area.

MARTIJN VAN DE LINDE CEO, Abu Dhabi Terminals (ADT)

halifa Port is built to accommodate the growth of the economy of Abu Dhabi. The major import-export markets are in Abu Dhabi and Dubai. That is where shipping lines go first. Transshipment ports, such as Salalah in Oman or Port of Tanjung Pelepas in Malaysia, compete mainly on the cost of transshipment traffic, which means that if someone else is cheaper, and fits into the shipping line network, you have the risk of losing business. There is a trend in the logistics sector to invest more locally in the UAE rather than sending cargo overseas and operate logistic activities abroad, such as packing, warehousing, or distribution. The benefit in the case of Borouge is that Khalifa Port is the primary UAE gateway in terms of transport. All of the production that Borouge does, which will reach about 3.5 million tons of polymers in 2015, will come here first to Khalifa Port and is then sent out to wherever the company has to sell its product. Consolidating logistics here increases cost efficiency and provides better access to the market, giving more flexibility, and reducing their lead-time to sell. It is good for us, because it is an opportunity to tie in our key account and create stronger ties in Khalifa Port. I think you will see more of this kind of thing in the future.

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MELVYN VAZ General Manager, Khalidia International Shipping LLC

he government appointed recognized consultants to look into this issue to find out what could impede progress, and what problems face trade, local transportation, and marine policy. Hence, we have been working with various committees, and we think that things will improve dramatically over the next six months, because now there will be proper guidelines in place; our fears and worries are now being addressed. Finally, we think we will soon perform as well as any European or Western nation. Regulation is quite good in that it follows some of the best practices in the world, because

bureaucracy is minimal and almost everything is online. We have some issues with inspection of cargo by the municipality and other authorities, but otherwise everything is up to standard. The best governance available in the world is in this country. It could not get better because there is no corruption or government interference. The authorities have reduced the amount of red tape, and the law is being properly enforced. It makes it safe to live and work here, and easier to give your best. We make no attempt to cut corners or deceive customers in any way. This, we think, is a strength of ours that has contributed to our growth.

OLIVER WOODMANSEE General Manager, Avis, UAE

have been coming to the UAE for more than 10 years as a tourist, and have always been highly impressed with the sheer scale of ambition and have always received a warm welcome. Living and working here is little different, but the UAE offers an excellent quality of life. Doing business in the UAE has been an incredible experience. There is an ambition and openness, a genuine â&#x20AC;&#x153;can doâ&#x20AC;? attitude that has been lost in many parts of the world. The UAE has been through tough times in recent years, as have many markets. The attitude here has really impressed me, and will be the differentiating factor that will ensure the UAE outgrows many other markets. Every organization can learn from its customers, and Avis is no exception. Avis has a clearly defined strategy that positively encourages customer communication. Avis actively encourages our customers to give us feedback, both good and bad, but most importantly we have a workforce that is empowered to take the right decision in the moment to resolve any customer concerns and take the right action to ensure customer

loyalty. Avis will be looking at a variety of new opportunities in the market; however, of paramount importance is ensuring that Avis provides the products and services that the customer actually wants to buy. Understanding the market today and getting ready for tomorrow are absolutely key to our future investment strategy, and your readers can expect to see new developments specifically designed to meet customer needs. In this light, Avis was awarded the World Travel Awards as the Middle Eastâ&#x20AC;&#x2122;s Leading Business Car Rental Company. This award was a great boost to the whole team at Avis UAE. Ultimately, this recognizes the investment that has been made in our people, fleet, and locations, all designed to ensure that the Avis customer experience is the industry benchmark. Of particular note is our commitment to refresh our fleet to international standards. The UAE has a particular place in the world economy, known for its world leading hotels and airlines, and car rental should be part of that experience. As such, Avis is committed to having the largest range, lowest age, and best specifications of any provider in the market.

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FOCUS DoT’s MASTER PLAN

FARIS SAIF AL MAZROUEI CEO, Etihad Rail

Image: Etihad Rail

FREIGHT SAFE With increasing demand for the movement of goods through Abu Dhabi, the Department of Transport has set forth a plan to strategically address the safety and efficiency needs of the local freight industry while ensuring the sector’s regional and global competitiveness. IN THE FIRST month of 2014, the Department of Transport (DoT) released its Multi-Modal Freight Master Plan (FMP) for the Emirate of Abu Dhabi: Freight 2030. The plan’s inception came in response to increased freight activity occurring in the Emirate across the road, rail, air, and sea domains of the transport and logistics sector, along with expected continued activity in light of several ongoing infrastructure developments in Abu Dhabi’s transportation sector. Following along the same lines of the Abu Dhabi Economic Vision 2030 and the Surface Transport Master Plan, Freight 2030 was designed with both current realities and future growth of freight activity in mind. The plan is injecting new standards of safety and efficiency into the national freight transportation industry; a vital sector in the local economy poised for major growth in the decades ahead. As major local transport and logistics entities, such as the Emirate-wide and soon to be GCClinked Etihad Rail and semi-automated Khalifa Port, continue to attract and facilitate the movement of more and more goods and commodities in Abu Dhabi, increasing trade volumes coming through the Emirate are reaching higher levels each year. Such a rapid transformation in the local economy and increased freight activity has brought fourth a need to address key issues such as truck driver safety, accident

prevention on the road, fuel station availability, and adequate maintenance of trucks. At present, truck safety levels in Abu Dhabi fall below international safety norms, a trend that would likely continue with the increased freight activity the region is seeing if left unaddressed. Improving Abu Dhabi’s safety records, particularly where its roads are concerned, is a major objective of the DoT’s Freight 2030 plan, and it provides transport managers with guidelines on how to appropriately monitor truck driver working hours. It is also seeking to create new laws that limit the risk of accidents resulting from driver fatigue and vehicle negligence. The DoT’s Freight 2030 plan addresses these important safety issues with new regulations and will thus help to promote higher operational standards of excellence within the expanding freight sector in the Emirate, allowing it to meet the rapidly growing demands of local freight transportation. Abu Dhabi’s freight transport industry contributes a significant amount to the capital’s economic diversification goals and to its overall GDP, with the Etihad Rail network alone expected to contribute a $953 million increase in GDP by 2030. Acknowledging the vital importance of the freight sector to the economy, the DoT has developed new laws, regulations, and standards based on industry needs by reach-

As the developer and operator of the UAE’s 1,200km rail network, how is Etihad Rail fostering future development and economic diversification in the country? The delivery of an integrated transport infrastructure is a major part of the UAE Vision 2021 and Abu Dhabi Economic Vision 2030. Once complete, Etihad Rail will provide services for both freight and passengers, offering a range of benefits including lower transportation costs, faster journeys than highway alternatives, and reduced levels of highway traffic. It will promote growth in various business sectors, provide jobs for the local workforce, expand the UAE’s logistics capabilities, and ultimately contribute to diversifying the economy away from its reliance on oil and petrochemicals. Etihad Rail will also open up borders, connect the country’s centers of population and industry, and link to the Gulf and Indian Ocean. As the first of three stages is underway, how has the project progressed so far? We are pleased to confirm that 264km of railway track has already been laid in the Western Region and Stage I was completed in 2014. This means that Etihad Rail is now on course to transport more than 7 million tons of granulated sulfur annually for the Abu Dhabi National Oil Company (ADNOC). Tenders for Stage II are currently in the final stages and Etihad Rail will make an announcement once contracts are finalized.

Transport

>700

117

>255,500

TRUCKS A DAY ENTER PORTS IN ABU DHABI

ing out to freight operators and other major industry stakeholders in early 2015 for their input on areas in need of enhanced regulation in the industry. The result is a dynamic plan that sets the stage for a more transparent regulatory environment and a greater level of communication between the government and private sectors in the freight industry. As Freight 2030 begins to govern Abu Dhabi’s freight sector, operations within this area are expected to improve and reach international standards in safety where they currently fall short. The DoT’s Freight 2030 Plan will help the private sector to conduct their freight businesses and operations with improved safety checks and more efficient integration of regulations between transport modes, thus creating a more effective and more resilient supply chain for businesses utilizing Abu Dhabi’s multi-modal freight transport system, an industry from which Abu Dhabi has a lot to gain as it realizes its economic development goals for the future. As investments in the development of Abu Dhabi’s multi-modal transportation infrastructure continues, the Emirate is set to benefit a great deal from the enhanced safety and efficiency the DoT is promoting in the local freight industry. ✖

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TRUCKS PER YEAR

THE WCA’S GLOBAL CONFERENCE The world’s largest network of independent freight companies, will hold its annual conference in Abu Dhabi at the Abu Dhabi National Exhibition Center in

MARCH 2016

Demand for the movement of goods in Abu Dhabi expected to grow by

280%

BY 2030

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INTERVIEW

TBY talks to Mohamed Al Qamzi, General Manager of the Centre for Regulation of Transport by Hire Cars (TransAD), on using cleaner fuel, the mobile application, and maximizing the efficiency of taxis.

BIO With over 30 years of experience earned from various management positions, Mohamed Al Qamzi currently guides the Centre For Regulations of Transport by Hire Cars, as the General Manager. Throughout his career, Al Qamzi has held key positions in renowned institutions such as Department of Transport Abu Dhabi, TABREED, Emirates Preinsulated Pipes Industries, Ian Banham and Associates Consulting Engineers, to name a few. He holds his Bs. in Economics from the University of La Verne in California. Al Qamzi has also had success as an entrepreneur, having previously established his own managementconsulting firm that specialized in strategic planning, performance management and outsourcing personnel.

HAIL the cab How would you characterize the importance of TransAD’s role in Abu Dhabi’s transportation sector?

We work on the regulation side of the sector with the Department of Transport (DoT) whereby they monitor the entire transportation sector, and we focus on the taxis and limousine business. Our service involves the drivers, the cars, and the companies that are franchised to operate the taxi businesses; we have seven companies under The Centre in total. Our responsibility is to ensure they operate at the quality we require—from the number of cars to the facilities that we offer—and that they offer the best possible service. Our role is becoming increasingly important as the tourism industry in Abu Dhabi and the country as a whole is growing. Abu Dhabi's National Vision 2030 includes several environmentally friendly initiatives. How is TransAD contributing to making transportation an environmentally friendly sector?

We are proud of our efforts; for example, 25% of our taxis run on compressed natural gas, which is around 2,000 out of 7,200 taxis. Airport taxis run on green diesel, which is one of the cleanest fuels, and the 270 newly launched taxis will also run on this fuel. In addition, we also have a small number

of taxis that are hybrid/electric, and we are heading more in this direction. A good example of our commitment is that the hybrid cars are more expensive than a regular car. At the same time, the long-term savings are better. We also have paperless procedures, and communicate with our franchisees regarding policies and administrative orders online, provide documents for drivers, as well as permits and certifications which can be issued and accessed online.

trying to reduce our “dead kilometers,” which is when the taxis run with no passengers. Some 45% of the time taxis are driving around without customers. We encourage people and make it easier to get a taxi through the call center or the mobile application so that the closest taxi can pick up a customer with less wasted time, less wasted fuel, and less damage to the environment.

When you look ahead to the next five years, what are your expectations for how TransAD will evolve?

We make approximately 6 million trips per month from one destination to another. We have around 400,000 trips booked via the call center, which is not a large percentage. This is where there is room to improve to get more people to use this service, and right now, some 10% of call center bookings come through the mobile application, which for us makes more sense because we can employ less people. Through the application, the jobs go straight to the driver. With the new meters, which have full navigation systems, drivers can reach a destination taking the best possible route with turnby-turn control. We are always conscious to ensure that nothing is missing, and our aim is to be seen as the number one service in the world. ✖

What we want to do is improve other forms of transportation; we want better bus services, a metro, and a tramway. These will help reduce the number of taxis. It is not our aim to increase taxi use. However, because of the lack of other modes of transport, we need to have the size fleet we currently have, which we might increase until we succeed in building up other modes of transport. We want to encourage the usage of public transport, a taxi is not really considered public transport because they often take a single passenger, which means more traffic and leads to more pollution. With the “AbuDhabi Taxi” mobile application and the call center, we are also

In terms of numbers, what benchmarks do you use to monitor how you are doing?

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The many construction projects completed over recent years have fostered a strong building materials segment.

As more projects get off the ground, a number of companies are offering investment to keep the ball rolling.

Real estate companies are now looking to the future with bright eyes as the market begins to show real signs of stability.

Construction & Real Estate REVIEW CONSTRUCTION

Construction companies are gaining confidence in the UAE and Abu Dhabi once again, as old projects get off the ground and new projects get off the drawing boards.

number of new megaprojects in the pipeline and increased spending going into social infrastructure, it looks like the construction sector in Abu Dhabi and the UAE is running at almost full capacity again. Abu Dhabi is a major driver when it comes to the UAEâ&#x20AC;&#x2122;s construction, and as of May 2014 there were $315 billion worth of projects either underway or planned in the UAE. Of that total, $212 billion worth of projects had already begun. It is estimated that the value of projects by the end of 2014 reached $730 billion according to EC Harris Research. Abu Dhabi is attracting a significant number of projects as well, including Yas Mall, Kizad, Abu Dhabi Midfield Terminal, Reem Island, the Ethihad Rail Project, The Louve, and the New York University on Saadiyat Island, to name a few. There are many more that are either in the planning or design stages, or they are already tendered and underway. In 3Q2014, according to the Statistics Centre â&#x20AC;&#x201C; Abu Dhabi (SCAD), 688 buildings

BACK TO WORK

Image: Unibeton Ready Mix

There is a lot of activity in the cement sector, with Arkan Building Material Company leading the way by opening the largest cement plant in the UAE late in 2014.

were completed. The distribution of those buildings came to 60% of them in Abu Dhabi, 25.3% in Al Ain, and 14.7% in Al Gharbia. There were 413 buildings completed in Abu Dhabi itself, while 174 buildings were completed in Al Ain and 101 Al Gharbia. Of the total 688 buildings, 598 were residential, five were mixed use residential/ commercial, 29 were industrial, 25 were public facilities, and 31 were for commercial purposes. The average cost per sqm during 3Q2014 ranged between $875 and $1,360 according to SCAD. For a building of less than 300sqm, the average cost came in at $890. This rose slightly for buildings between 300 and 599sqm, which came in at $990. The optimum size building to construction was one between 600 and 899sqm, which cost an average of $875 per sqm. Between 900 and 1,200sqm, the average cost was $875 while over 1,200sqm it was $1,360.

MATERIALS Over the past few years, there has been considerable activity regarding construction mate-

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RIAD NASHIF Executive Vice President - Middle East and Managing Director - UAE and Oman, AECOM Image: AECOM

In June 2014, Emirates Steel managed to obtain $1.3 billion of credit by refinancing an existing $1.1 billion facility. Percentage Price Change of Blocks During 2014 Compared to 2013 Source: SCAD 6 4 2 0 -2 -4 -6 -8 -10 Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Percentage Price Change of Cement During 2014 Compared to 2013 Source: SCAD 4 3.5 3 2.5 2 1.5 1 0.5 0 Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

rials. In November 2014, the Abu Dhabi listed-company Arkan Building Material Company opened its $354 million cement factory outside of Al Ain. The greenfield plant will be a huge boost to the sector and increased the Emirates capacity significantly. The plant has an annual capacity of 4 million tons of clinker and 5.7 million tons of cement per annum. The plant will also source all its raw materials from Arkan Building Material Company’s own quarries in Al Ain and Oman. Of the plants total production, 90% will be used for local demand while the remaining 10% will be exported to the GCC. The UAE produces 35 million tons of cement annually and experiences a demand of 10 million tons of cement per year. The plant will help in the economies diversification process and will add value to the local economy. The plant is the largest cement factory in the UAE. This has made Arkan one of the main producers of cement in the UAE, among the 17 registered producers in 2014. There are major international corporations active in the Emirates including Lafarge, Holcim, UltraTech Cement, Binani, and Cemex, which all have active operations. When it comes to clinker, Abu Dhabi’s second largest producer, after Arkan Building Material Company, is National Cement. The company produces 2 million tons of clinker annually between its two mills. National Cement currently operates its plant under a joint venture with Emirates International Investment Company (EIIC). Another major producer of clinker in Abu Dhabi is Nael Cement. Its plant is located in Al Ain and produces 700,000 tons of clinker per year. While Cemex, a major Mexican company in the cement market, doesn’t have its plants in Abu Dhabi, it is still one the main suppliers of clinker to Abu Dhabi with its capacity of 1.6 million tons per year.

How would you assess the current state of the construction market in the UAE, and how is it affecting your strategy? The country is slowly moving into design-build, or EPC construction. The relationships are a little stretched out between consultants, contractors, and clients, and to work in an alliance is still not the norm, although it is moving in that direction. Some of the top equity holders in the UAE are leading the way for change in procurement methods. Clients typically want quality, time, and partners whom they trust. So far, many clients are, or have, partnered with consultants, and some clients are seeing the benefit of partnering with contractors as well, as they are working toward a common goal. This is not easy, however, because it is a change of culture. In fairness, clients have had bad experiences in the past, meaning they are naturally a little wary of going into EPCs or turnkeys. Still, it is changing, and they are starting to see the benefits of partnering with stakeholders such as contractors and consultants. They realize that they can still get the desired quality and low costs even if they partner. It is not like two separate camps anymore; there is a change, and they see the benefits of forming these alliances. AECOM led this type of alliance model in Australia. On a project basis, you create an alliance between all the stakeholders and create a common goal for everybody. This way nobody loses.

Construction & Real Estate

With a number of megaprojects ongoing in the UAE and Abu Dhabi, the price of materials is fluctuating. The average price of cement increased by 3.9% in December 2014 compared to the same month the year before according to SCAD; however, there was a zero percent change between November 2014 and December 2014.

STEEL While the cement industry is performing well, the steel sector is also showing more confidence in the market. In June 2014, Emirates Steel managed to obtain $1.3 billion of credit by refinancing an existing $1.1 billion facility. Due to the increased strength in the economy and the finance sector, the cash-flush banks are now more willing to offer loans at low rates. The facility, which was secured using 19 local and foreign banks, will be used to generate the extra cash. The financing deal was put together in March 2014 and Emirates Steel was able to reduce the rates on its borrowing to around 160 basis points from close to 200 basis points before. The company is planning to spend around $263 million on acquiring new steel assets from General Holding Corp (Senaat), its Abu Dhabi state-owned holding company, to make the company more competitive in the market. Another significant development in the steel sector also involves Senaat, as well as Japanese consortium called JFE Steel Corp. The two companies will enter into a joint venture to establish a steel pipe manufacturing facility in the Khalifa Industrial Zone Abu Dhabi (Kizad). The $300 million investment will have an annual capacity of 240,000 tons of sour grade steel pipe and is expected to come online in 2018. Once operational, around 40% of the output will be exported, with current estimates putting sour grade steel pipe imports into the Middle East around 1 million tons annually. The pipes are most often used in offshore operations due to the pipes ability to prevent corrosion associated

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Percentage Price Change of Steel During 2014 Compared to 2013 Source: SCAD Jan

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with hydrogen sulfide. Senaat also announced in June 2014 that it was going to pump $1.36 billion into local industry over the next two years, partly because of the refinancing deal it secured with the banks. While there is a lot of activity currently underway in the steel sector, prices have seen a decline recently dropping 3.5% between December 2013 and December 2014. Of all the construction materials, however, steel hasnâ&#x20AC;&#x2122;t performed the worst with paints dropping 7.1%, uPVC pipes falling by 7.7%, and power cables declining by 6.3% over the same period of time according to SCAD. On the opposite end of the scale, however, a number of materials have been experiencing an increase in their prices. Concrete increased by 6.9%, apartment wires by 5.9%, and aggregates and sands increasing by 2.9% between December 2013 and December 2014 according to SCAD. The remainder of the materials usually associated with construction have remained relatively stable over the period. There is a lot of optimism running through Abu Dhabi and the UAE, largely because of a renewed interest in megaprojects as well as a number of other smaller projects sweeping across the Emirate. â&#x153;&#x2013;

SAMER TAMIMI Vice-President, Hill International, Inc. Some of our most internationally renowned projects are in Abu Dhabi, including the Grand Mosque, Shams Abu Dhabi, Etihad Tower, Nations Tower, and the ADNOC headquarters, all of which are landmark projects. The upcoming World Expo 2020 will naturally create a new cycle of building in the UAE. The government has also been investing in education, infrastructure, and healthcare projects, spelling ongoing growth of the construction sector.

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INTERVIEW

scaffold IS HIGH TBY talks to Walid Salman, Regional Managing Director of Operations, UAE of Consolidated Contractors International Company S.A.L. (CCC), on the company’s reputation in the region, expansion, and meeting the challenges of Abu Dhabi’s growth. CCC has a well-known reputation in the region as the largest construction company in the Middle East. What factors make CCC one of the top 25 international contractors here?

BIO Walid Salman joined CCC in 1977 after having obtained his degree in Engineering from the University of Beirut. Currently, Walid holds various executive positions including: Regional Managing Director – Operations UAE, CCC President, The Morganti Group Inc. - UAE, Managing Director, CCC Construction Management Division – Jordan, and JV Board Member and JV Representative with Client, Abu Dhabi International Airport Midfield Terminal Project.

The owner of the company’s message has always been to maintain integration with the people in each country where we do business, using the local resources, materials, and companies in all of our projects, in order to build relations with each community. The culture at CCC has a family feel. In each country we operate, we have developed good relations with people from politicians to those working in the construction field. We always start with the aim of building good relationships and delivering on what we have committed to. This is why CCC has become a strong construction company in the Middle East. The UAE in particular has been one of the main areas where we have grown and expanded in the GCC. Are there any new areas where you are looking to expand?

We expand wherever the market is hungry for our existence. We are considering Brazil. We are bidding for some projects in Canada. We have diversified our experience in many fields, including oil and gas, infrastructure, heavy and light civil projects, and we are able to diversify from sector to sector depending on market needs.

• Largest construction company in the Middle East, and 21st in the world • Operations in 48 countries

Are you looking for any future JVs or partnerships here in the UAE?

One of our main interests is to work with others, primarily with local contractors in areas where they can add value such as in equipment, supplies, and manpower. Today, we are also bidding with many European companies for the museum series, the Guggenheim, and Khalifa Medical Care City, where we are bidding with Chinese and Italian companies. We are always looking to gain experience from others to continuously develop and improve our capabilities. We work with others to get a sense of how they handle issues. In an international market, we need this kind of diversified experience. In the UAE market, what type of projects are you focusing on?

In the wider UAE, our main focus is oil and gas, heavy civil works, and infrastructure projects. As an experienced contractor, we know that the money is in engineering and

procurement—construction is the low margin side. We created an EPC arm to handle our EP for the company. It is a venture between CCC and the Japanese company Chiyoda CCC Engineering Ltd. (CCEL), and we have succeeded in winning projects in the oil sector. This is where we try to cover areas that we believe will improve our capabilities in EPC roles. For infrastructure projects, we are bidding for the next phase of Etihad railway projects. We are bidding for Metro Abu Dhabi in a joint venture with Bechtel and Zublin Construction, and we are also bidding for the Guggenheim Museum—both major projects. We are one of the main contractors starting the road, highway, port, and airport construction projects within the UAE. Looking ahead five years, in what areas do you envision CCC playing a key role in Abu Dhabi?

We always have internal sessions to discuss future expectations, how we plan on developing our capabilities, and what our goals are in each country and region. We study each sector and we focus on each field depending on the development needs in each country. With the Abu Dhabi Vision 2030, one of the main goals is to heavily invest in power and electricity, and this is one of the major sectors that we are focusing on now in addition to contributing to the infrastructure projects, industrial zones, and the water sector. ✖

Construction & Real Estate

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REEM MALL FOCUS

EMPORIA EXTRA The Kuwait National Real Estate Company (KNREC) will begin construction in Abu Dhabi this year on its largest project to date, a megamall that will add to the Reem Island master development taking shape in the Emirate. YEARS OF DELAYS since 2008 slowing progress of KNREC's new retail development in Abu Dhabi have come to an end. Valued at $1 billion, KREC’s Reem Mall will be bringing a variety of shopping, dining, and entertainment options to one of Abu Dhabi’s most prime locations, Reem Island, a mixed-use island development that is expected to house over 200,000 residents in the years ahead as a major pillar of Abu Dhabi’s Urban Infrastructure Framework Plan 2030. Construction is set to commence this year in 2015 and at 2 million sqft, it’s KNREC’s largest project thus far. The construction consultancy in charge of delivering the project is Mace, whose experience in retail developments in the UAE precedes it. Projects such as the Deira City Center malls, the Mirdiff City Center, the Mall of the Emirates, and the upcoming Khor Dubai are some of the company’s contributions to the local retail industry and infrastructure of the Emirates. For Abu Dhabi, the Reem Mall project being developed in partnership with the United Projects for Aviation Services Company (UPAC) follows along the same trend occurring in local real estate and construction developments, which is to create complete communities catering to the influx of people moving into the brand new, residential developments popping up on Reem Island, as well as Al Maryah Island, Saadiyat Island, Yas Island, and Lulu Island with a particular focus on family-oriented community development. In these mixed-use developments, commercial and office space is also a part of the mix and Reem Mall will serve that demographic as well. Affirming a current growth period in retail construction in Abu Dhabi, the $1 billion project is being designed and constructed at a time when additional malls—from the Tourism Development and Investment Company’s (TDIC) on Saadiyat Island to the Al Maryah Central—are adding to Abu Dhabi’s steadily expanding urban landscape. With increasing transportation linkages planned, Reem Island is growing increasingly connected to the rest of the islands, some of the most prominent areas in Abu Dhabi. The Abu Dhabi metro is set to provide convenient access between Reem Island and Yas Island, Saadiyat Island, and the Abu Dhabi airport come 2016 and 2017 while Al Maryah island, Abu Dhabi’s blossoming financial district, and the Tourist Club area will also connect to

Reem Island through four bridges planned to begin construction this year, as well. In the context of Abu Dhabi’s infrastructure development plan, the NREC’s Reem Mall is positioned to be a valuable asset for both development stakeholders, residents of Reem Island, as well as the wider main island of Abu Dhabi. Its central location and growing transportation accessibility will bring Abu Dhabi closer to its Vision 2030 and after nearly a decade of delays, the long-awaited start of construction will further contribute to the high-value space being developed on Reem Island along with major developers Aldar, Tamouh, and Reem Investments. That the NREC, with over 40 years experience in the real estate and construction industry, has selected Abu Dhabi as the location for this megaproject also speaks to the valuable growth opportunities that exist in the Emirate, opportunities that are based on the long-term vision for the development of Abu Dhabi. With 2015 now established as the year construction of Reem Mall will begin, the journey has now begun as the NREC builds their largest project to date in Abu Dhabi. ✖

As construction in the Emirate proceeds apace, familiar skylines are transformed

Image: Tamouh Investments

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FORUM BUILDING MATERIALS

BRICK by BRICK

The many construction projects completed over recent years have fostered a strong building materials segment.

KAMIL ABU GHANEM

ABDALLAH MASSAAD

JEAN-FRANCOIS DUFOUR

Owner and General Manager, Al Hashem Marble Company (AHMC)

CEO, RAK Ceramics

General Manager, Unibeton Ready Mix

e specialize in the supply and installation of natural and reconstituted stone and mosaics and have built a very good reputation as a company over the years. AHMC has always had a full order book, even during the recession. We still participate in tenders, and price is always key. There used to be some 20 to 30 marble companies in the Emirates; now there are over 450. For large projects such as the Louvre Museum in Abu Dhabi, the competition was limited to four or five companies. This is because the majority of companies are suppliers without installation services, whereas we do everything. The marble business is composed of many segments. A company that simply quarries and sells a block of marble does not really bother where it goes or how it will be processed. In the stone industry, you canâ&#x20AC;&#x2122;t change quality because you canâ&#x20AC;&#x2122;t change nature. However, the real professionalism is in how you deal with them, as we are shaping nature. Half of the quality comes from the selection of the stone itself, and the other half is in the processing and the workmanship you can add.

e began with wall and floor ceramics in 1991, and later moved into vitrified glazed, unglazed, and all types of ceramic and porcelain products. We continued to develop and added grout and adhesive products through a joint venture with an American-based company, Laticrete. This enabled us to provide full service installations to clients such as Ferrari World, Burj Khalifa, the Grand Mosque in Abu Dhabi, and other large-scale projects. In 2006 we expanded into tableware with the formation of RAK Porcelain, and to date have produced 24 million pieces of tableware. Today, all Emirates Airline lounges around the world use RAK porcelain and within several luxury hotel chains, including Rotana, Hilton, Waldorf, and JW Marriott, we are the main tableware supplier. In 2007, we formed Kludi-Rak, a joint venture with a well-known German company, Kludi specializing in luxury faucets. Thanks to our continued product innovation, brand name, and quality, we are recognized as a leading ceramics manufacturer. Over 70% of our capacity is based in the UAE, where 20% is sold domestically and 80% is exported, making the UAE our export hub.

ur quality is what differentiates us from the rest of the competitors. We have always strived for challenging projects and have worked on many bridges and high-rise towers in Abu Dhabi and Dubai. If you take Saadiyat Island as an example, we have completed most infrastructure projects and most of the hotel projects there. Companies now look for better service, as most can produce concrete. Meeting the requirements of customers on challenging projects is what makes Unibeton different. We are proud of the fact that we have a 15% market share in the UAE. Over the years we have established a strong network of companies. One of our main goals is repeat business. It would be easy for Unibeton to deal on villa projects around the Emirates, but this is not our core business activity. Our core business lies in challenging projects. There are only a handful of companies that can compete in this arena, and Unibeton is certainly one of them. This is why we are working on highrise towers where pumping technology is an important asset. This is why we are able to maintain our market share because people believe in us.

Construction & Real Estate

THEBUSINESSYEAR

SAMEER DABBAS,

NABIL AL ZAHLAWI

FAROUK K. TOUKAN

CEO, Hadeed Emirates Contracting (HEC)

Managing Partner, N.F.T. Specialized in Tower Cranes L.L.C

Executive Partner and Co-Founder, CICON Building Materials

hen we started in 2001 we were relatively unknown, and we had to invest a lot of energy towards sales and marketing to prove ourselves. It took us about three years to establish a reputation. After the second quarter of the period where we had to prove ourselves, deliver on time, satisfy our clients’ requirements, and our efforts paid off by being in Abu Dhabi because it is a very unique environment. You have to be open-minded here and understand all mentalities in order to deal with people in both the private and government sector. Zamil Steel is one of our partners with whom we have established mutual trust over the years, counting on their experience and engineering background when it comes to complicated, specialized projects. We have other partners that we also deal with internationally, not only related to steel structures. The stability of Abu Dhabi is the backbone of our success. We could not have sustained all of this growth in the last 14 years without it. It also helps us to attract talented professionals from all over the world.

hen you have any type of recession or slow momentum in business activities, people are not keen to invest their money. That is where rentals come in. As a dealer for the French company Potain (now Manitowoc after being bought by American interests), we realized that people do not want to buy cranes because of market instability. The shift into the rental market was a good move for us. NFT supplies cranes to the Louvre Museum project on Saadiyat Island, where we have around 14 to 15 cranes. When we supplied cranes to build the new ADNOC headquarters in Abu Dhabi, which was 400 meters high with a major lifting capacity, we were the only company that could supply the full turnkey job at that scale at the time. You have to go for a high-speed winch and big lifting capacity, with less manpower for major projects. This means we have to keep investing in new technology and new assets. We have a technical department that develops the ideas and everything in-house, and then we share that with our manufacturing supplier to come up with the best lifting solutions for any project.

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ICON Building Materials started in Abu Dhabi in 1968. We were the first company to import deformed steel bars in 1971. Before they had been using mild steel bars, which are no longer used. The difference then was that the deformed bars were a little more expensive, but had more strength. It did not take us long to convince consultants and contractors to understand this and accept the change. The UAE went from having two factories in 1995—of which CICON was one—to more than 25 plants now. We were also the first to introduce couplers, which are used to connect one steel bar to another. Steel bars come in 10, 11, and 12-meter lengths, but couplers can extend the length. They have now become an industry standard. Most of our work now has to do with the cutting, bending, and epoxy coating work. We have a capacity of 60,000 tons per month, the largest in the whole region. We stand out in the market because we have one of the largest and most capable teams of engineers to support the operation, which no other company has to this level.

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FOCUS STRATEGIC TUNNEL ENHANCEMENT PROGRAM

TUNNEL VISION Abu Dhabi’s sewerage and wastewater treatment systems are being revamped to meet the demands of a growing population, constructing a system that will see 100% re-use of sewage in the Emirate in the decades ahead. CITIES, both developed and developing tend to be identified by the buildings and structures that make up their skylines; and the more iconic, the better. Sydney has the Opera house, Paris the Eiffel Tower, Cairo the Pyramids. Bridges, high-rise buildings, glittering hotels, vibrant shopping malls and market squares, and unique architectural styles and designs that incorporate aspects of the local heritage and culture all become part of a city’s image. An aerial look at Abu Dhabi’s landscape would immediately draw attention to landmark structures like the Sheikh Zayed Mosque, the Etihad Towers, the Louvre coming to life on Saadiyat Island, the Hyatt Capital Gate—the farthest-leaning man-made building in the world, or the first circular disc-shaped building in the Middle East, the Aldar headquarters building in Al Raha Beach—just to point out a few. But when it comes to developing urban infrastructure, what often goes unnoticed and unseen by most is what lies behind the “image factor,” or rather beneath it, deep underground in its sewers. Back in 2008, the Abu Dhabi Sewerage Services Company (ADSSC) initiated the construction of a Strategic Tunnel Enhancement Program (STEP) for the Emirate of Abu Dhabi, a 48-km deep-tunnel network that would use gravity and hydraulic pumping systems to redirect Abu Dhabi’s wastewater from the city central areas to treatment facilities further out—adding capacity to the network and reducing the risk of flooding and unpleasant odors reaching the city streets. Previously described as a strained system, the project enhances Abu Dhabi’s sewerage networks as it takes into account the major social, economic, and environmental factors that come along with a growing city like Abu Dhabi and the impact they have on urban sewerage systems. The deep-level aspect of the tunnel project and the wastewater re-use technology plans in the works have set new standards and new records for Abu Dhabi’s urban environment, paving the way for sustainable urban development moving forward. With the expectation of Abu Dhabi’s local population to surpass 5 million by 2030 comes a strong need to plan ahead, which Abu Dhabi

has done with vision and foresight. As per the criteria laid out in the Abu Dhabi Urban Structure Framework Plan 2030, the UAE capital city has been taking forward-thinking measures to not only accommodate the growth but ensure that the Emirate’s cityscape evolves sustainably, in line with specific environmental criteria. The ADSSC’s tunnel enhancement project is one of the most vital and strategic projects in the plan. Though not the most fashionable or visible, it ensures that Abu Dhabi can grow sustainably and that its physical infrastructure can accommodate the anticipated population growth in the coming years. The construction of a new sewerage tunnel system in Abu Dhabi replacing the old tunnels makes Abu Dhabi’s urban infrastructure more robust and able to withstand the added demand that will be placed on the system, which is estimated to be 1.7 million m3 of sewage in 2030. From the previous 400,000 m3 capacity of the old system, the ADSSC’s tunnel enhancement enables Abu Dhabi to continue its city growth and expansion plans into the future without a hitch. Furthermore, with increased urban population comes increased demand for water, a precious and scarce resource particularly in the desert climate of the Middle East. The eco-friendly design of the new sewerage system is aimed at increasing the re-use capabilities of Abu Dhabi’s wastewater, roughly 40% of which is being directed in the sea rather than treated for reuse, with the ultimate aim of having 100% reuse capabilities over the next five years. With the population of Abu Dhabi expected to exceed 5 million in 2030 comes a vital need to examine the impact an expanding population will have on the city’s urban infrastructure. The construction of an enhanced sewerage and wastewater system strengthens Abu Dhabi’s ability to continue its economic development sustainably. Merging Abu Dhabi’s need to accommodate its growing population, increasing demand for potable water and address the issue of water scarcity and environmental protection all at once is exactly what the ADSSC’s sewerage project does and will ensure Abu Dhabi continues along its path towards attaining its desired status as the sustainable capital of the Arab world. ✖

SEWER TUNNEL

42km

long; diameters range from 5-8m meters along the tunnel

ABU DHABI SEWERAGE SERVICES COMPANY (ADSSC) HAS

41 treatment plants to purify Abu Dhabi’s wastewater

ABU DHABI GENERATES

310

million m3 of sewage a year or 850,000 m3 of sewage per day

Construction & Real Estate

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INTERVIEW

TBY talks to Alan Thomson, Managing Director of Abu Dhabi Sewerage Services Company (ADSSC), on maintaining a safe and healthy environment for the residents of the Emirate.

A LOT GOING ON underground ADSSC increased from a 12% Emiratization rate in 2006 to 72% in 2012. How do you manage to attract and keep Emiratis on your staff?

We work closely with other stakeholders in terms of Emiratization. We have a large number of graduates coming into the business, and we try and provide them with the best training possible. Some of them go on to work closely with contractors, meaning that they learn about how the private sector operates as well as how a government business works. We are able to retain them because they enjoy the work, the atmosphere, and the positive aspect of learning and contributing to Abu Dhabi’s society. We have been successful in this regard. What ongoing projects do you have to prepare for the upcoming population increase?

ADSSC has recently completed four large treatment plants for Abu Dhabi and Al Ain to cater for the increased volumes there. We also have a sewer tunnel project, the Strategic Tunnel Enhancement Program (STEP), which will treble the current capacity of wastewater flows and prepare Abu Dhabi for the next few de-

cades. We are putting in a system that will replace 35 pumping stations with one. It will use gravity to move the wastewater from the city out to our treatment plants, which are located on the mainland. We are constantly looking at providing for the future. To build sewage infrastructure takes several years. You have to plan it well in advance, because as more people come into the area, you have to think about how you plan downstream. New development impacts on the downstream development, meaning you have to allow for downstream flows when you examine upstream development. What kind of partnerships are you looking for?

We are looking for partnerships where we are all working together as opposed to against each other. We obviously entered into contracts with consultants and contractors to deliver services. We expect high-quality service, but we also look for long-term relationships where we work in harmony with these contractors and consultants. As time goes on, they understand our business better so they can produce a better service for

us. A good example is our four operating contracts. When we awarded these contracts, they were awarded for seven-year periods. STEP represents another good example of how we run a long-term project. Our program managers are from US consultancy CH2M Hill, and we have been working in partnership with them since 2008 when we first embarked on STEP—and they will be here until 2016, when we finish. Our working relationship is such that they are in this office, working with our people. This goes back to retaining Emiratis. By working closely with the private sector, we can get people trained to the highest of standards, which helps retain the staff as well.

IN NUMBERS Abu Dhabi Sewerage Services Company

650 employees

STEP program to finish in

2016

How do you want to promote yourself within the community?

We want to promote ourselves as an environmentally friendly, sustainable business. In order to achieve our goal of being a world-class provider of services, we need to have that recognition. Only through branding and interaction with our government and citizens will we gain that recognition. Typically, people do not recognize a utility business such as power, water, or sewage until something goes wrong. When it goes wrong, it is a big problem. Fortunately, it doesn’t go wrong very often. To a certain degree, we enjoy being anonymous because we can just get on with our work; however, we do want people to understand what this service is about, and that it does cost money. If you didn’t have water and sanitation, everyone’s health would suffer. Therefore, it is an important service, and one that people should not take for granted. People should recognize that it is expensive to run a sewage or water business, especially in the desert. People should value and respect it, not waste it. ✖

BIO Alan Thomson joined ADSSC as Managing Director in 2005, a few months after the company was established. His previous experience includes senior roles at Thames Water, West of Scotland Water, Mouchel Parkman, and RPS, covering the whole water cycle. He has a degree in Civil Engineering and an MBA from Strathclyde Business School. His professional interests include organizational strategy and operational management.

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Office space in Abu Dhabi is currently quite reliant on government entities when it comes to occupying its stock; however, a number of free zones look to address this by balancing the public/private occupancy rate.

Review

R E A L E S TAT E

A PLACE TO RENT

The crash of 2008 is still fresh in the minds of many realtors; however, the residential market has experienced a few years of rising house prices that are likely expected to stabilize. House prices fell by 55% from its high in 2008 to its low in 2012. According to JLL, prices then rose by 25% per year for two years providing a compound interest of 56%. In 4Q2014, house prices were flat after falling oil prices and equities markets, as well as weaker investor sentiment affected the sector. This was the first time since the beginning of 2013 that prices didnâ&#x20AC;&#x2122;t rise. This slow down in rising prices may come as relief to some with JLL suggesting it may well take some of the heat off the market. Rental prices have also been increasing for the past few years; however, due to a relative shortage of quality products prices will most likely not fall but continue on a steady and stable rise. In 4Q2014, rental prices increased by 4%. Still, there are concerns that because of the slump in oil prices, government spending in the short term is likely to drop; however, projects started before the falling oil prices will still continue, helping to create jobs and cater to the rising demand for residential property.

RESIDENTIAL To help better monitor rental prices in Abu Dhabi, in February 2014 it was announced a rental price index would be compiled to better inform renters and landlords of market conditions. The index will be governed and complied by the Department of Municipal Affairs, the Department of Economic Development, the Urban Planning Council, and the Abu Dhabi Council for Economic Development. According to JLL, the average price of a two-bedroom apartment rose from $32,000 in 1Q2013 to 35,300 in 2Q2013, and then to $38,100 per annum in 4Q2014. It is hoped that the index will help to regulate the market and provide renters with a better idea of market prices. The index and its organizers will also help settle disputes between landlords and tenants. The index will be welcomed by many tenants as since the government removed the rental increase cap of 5%, some people felt some landlords might abused the lack of a cap; however, there is little evidence to suggest widespread rental hikes with Bayut.com suggesting a 2.9% increase on a quarter to quar-

ter basis in 2Q2014, while as mentioned above in 4Q2014 rental prices increased by 4%. According to the Abu Dhabi Residential Property Price Index: Rental Prices, between January 2014 and September 2014 the index (January 2009=100) rose from 63.4 to 66.5, which represented a 4.89% increase. The current stock, as of 4Q2014, stood at 246,000 units according to JLL. Over 2015, 7,000 more units are expected to come online while in 2016 a further 11,000 will be completed. A number of new residential projects were announced in 3Q2014, including Mamsha Al Saadiyat, which will be the first residential project within the Saadiyat Cultural District. The project will comprise of nine low-rise building that will feature townhous-

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es and apartments. Most of the future stock planned for Abu Dhabi will be concentrate in large developments, such as Rawdhat Danet and Reem Island, while a significant amount will also come from national housing developments. Construction work on three residential buildings within Meena Plaza in Port Zayed also restarted toward the end of 2014 after construction was suspended. In addition to this, Aldar Properties announced the sale of the B2 building on Reem Island to MAG Group and Fortune 5 Investments.

OFFICE Office stock over the next two years is set to increase; however, over the past six years since the crash, rental prices have gradually fallen from a high of nearly $1,089 per sqm per month in 4Q2008 to $419 per sqm per month in 1Q2014 for Grade-A office space. As of 4Q2014, Abu Dhabi total stock stood at 3.2 million sqm, while over 2015 a further 232,000sqm will come online and another 80,000sqm is expected for 2016. Vacancy rates in 3Q2014 stood at 25%, a drop on the same period the year before when vacancy rates were 38%. Grade-B office stock averaged at $321 per sqm per month according JLL in 1Q2014 and prices remained

stable; however, this is expected to decrease as new stock comes online. Demand for office space is largely led by government entities, with the largest occupiers being government organizations, publicly owned banks, and sovereign wealth funds, many of which have purpose built head quarters. Foreign companies have been showing a growing interest in setting up in Abu Dhabi, but currently they demand smaller scale buildings. This area of demand is largely dominated by professional services, financial services, and engineering and construction service companies. Unfortunately, a lack of supply in small size, Grade-A office space is acting as something of a barrier to more companies setting up shop in the capital. Because of this, the office sector is somewhat reliant on the government to expanding and encouraging the economy while also increasing private sector activity to balance the sector. A number of government-backed free zones are set to try and do just that. Al Maryah Island, Global Marketplace, Masdar City, twofour54, Kizad, and Skycity are just a few of the up and coming free zones with new office space looking to cater to the private sector with incentives and tax breaks, as well as ample Grade-A stock for international and domestic companies.

D ecovisi on LLC Tel. +971 2 499 5444 | Fax: +971 2 499 5400 | Email: decov@decovision.ae | Website: www.decovision.ae Address: Vision Twin Towers, Tower 2, Mezzanine Floor, Najda St. | P.O. Box 73814, Abu Dhabi, UAE

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Office stock over the next two years is set to increase; however, over the past six years since the crash, rental prices have gradually fallen from a high of nearly $1,089 per sqm per month in 4Q2008 to $419 per sqm per month in 1Q2014 for Grade-A office space. As of 4Q2014, Abu Dhabi total stock stood at 3.2 million sqm.

RETAIL

Image: Hill International, Inc.

Shopping centers and the UAE almost go hand in hand, so it might be a surprise to some that between the end of 2013 and 3Q2014 there were no deliveries of new stock onto the market in the retail sector. In 4Q2014, however, 416,000sqm of gross leasable area (GLA) came online taking Abu Dhabi total capacity to 2.62 million sqm of GLA. This new delivery was largely offered in the form of Yas Mall on Yas Island, Capital Mall with 9713 BMC, National Towers on the Corniche, and Al Shamkah Community Mall in Al Shamkah. Vacancy rates stood at a modest 2% in 3Q2014, which was the same the period the year before according to JLL. In 2015, another 42,000sqm of GLA is currently under construction and is expected to be available while over 2016 a further 95,000sqm of GLA will come online. Average retail rental prices have remained relatively stable at around $816 per sqm per annum on Abu Dhabi Island in 3Q2014, up from $544 per sqm per annum in 3Q2013 according to JLL. This slight rise has been attributed to the increased footfall currently being experienced as new malls become more established and well known in the city. While average retail rental prices off Abu Dhabi Island have fallen slightly from $517 per sqm per annum in 3Q2013 to $506 per sqm per annum in 3Q2014 according to JLL. Abu Dhabiâ&#x20AC;&#x2122;s real estate sector appears to have put the dark days of 2008 behind it, and residential prices are slowly rising. Worries about excessive rental hikes after the scraping of the price caps appear to be unfounded at the moment but the fear is still murmuring around the sector. In regard to office space, large vacancy rates and a reliance on government entities for occupation could cause problems, especially as since oil prices are down and government spending is not expected to drastically increase. However, a number of new free zones are hoping to attract a myriad of foreign companies to the Emirate. The retail sector is holding strong while prices remaining stable and vacancy rates low. â&#x153;&#x2013;

Construction & Real Estate

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REAL ESTATE SERVICES B2B

ABDULLAH SAEED KHALFAN AL QAMZI Managing Director, Khidmah LLC

JOE ONG Managing Director, Tamouh Investments LLC

CREATING foundations As projects get off the ground, a number of companies in Abu Dhabi are offering services and investment to keep the ball rolling. What factors contributed to this growth and how are you carrying it into 2015? ABDULLAH SAEED KHALFAN AL QAMZI The services industry has seen increased demands across the board, and that is where we can capitalize. It is something that has contributed to our success. Khidmah is not going to grow unless what we are doing is being well received by the market; additionally, the relationship between previously unassociated activities—property management, strata management, and facility management—have more synergy at Khidmah today. They capitalize on the proximity to each other under the one umbrella, providing a full service to a unified standard. This concept has been successful and proved itself with the growth we have had over the

past six years. Since its inception, Khidmah has grown 100% per year. We are still maintaining that trend, and in 2015 we are even expanding beyond our borders. We are very much a national company, licensed and offering services in most of the Emirates, including Abu Dhabi and the Western Region. In addition to our national coverage, we are expanding our GCC presence as well. As of today, we are in the final stages of licensing an office in Saudi Arabia, and we are also expanding Khidmah offices across the rest of the Emirates. JOE ONG Looking ahead, we are positive about the market dynamics, and we believe that we will see more people coming into Abu Dhabi in 2015. Probably in a year or so, it will be a different kind of market. For developers like ourselves, the first question we ask whenever there is a planned project is, “is the infrastructure there?” In Abu Dhabi, we know it is. Then, our role is to do what it takes to build sustainable, smart, and environmentally friendly developments, and bring in new concepts to the city. In the future, we ultimately plan to cater to the end users and we will be adapting our strategy accordingly, allowing us to engage in a direct relation with the buyers, and understanding their preferences better. Adopting green solutions and smart technology are two major aspects of Khidmah’s services. What are some services you offer in that regard? ASKAQ One of the initiatives that we are using at the moment is drone technology and robots with thermal cameras. This combines technology with a green impact as it allows us to handle building inspections to find leaks and so fourth with thermal imaging. The drones add value because they increase

our range. We can investigate towers to see, for example, where cold or warm air might be escaping. We can identify where the leaks are and stop them, and, therefore, reduce the cost of operations. It is more environmentally friendly, and reduces the carbon footprint of the structure. Khidmah always has a project on hand, we are always thinking outside of the box and thinking of how we can reduce energy consumption and be more effective, efficient, and eco-friendly, ensuring that all the lights are LED, for example. One of my favorite projects that I worked on was the zero carbon footprint mosque, where we not only reduced the actual cost, but also the energy consumption of that structure by 40%. How does Tamouh’s slogan “Ambitions Unlimited” reflect the objectives of the company? JO When we started the company, there was a lot happening in Abu Dhabi and the company’s strategy was still taking shape. We weren’t particularly focused on creating a specific type of apartment or building; rather, our ambition was to contribute to the development of Abu Dhabi, which we believed was unlimited. At the time, the government was heavily promoting the industrial, education, and the healthcare sectors, which first created demand for residential units, then for commercial space. This is when we started planning the development of Reem Island. Subsequently, there was a larger demand for leisure activities and our ambition was to cater to all those needs; therefore, we created a sports and adventure facility, Wadi Adventure in Al Ain. As long as Abu Dhabi is evolving, our ambition is to be a part of this development and build communities and projects that add value to the quality of life in the capital. ✖

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VOX POPULI REALTY

MARKET WATCH

Real estate companies in Abu Dhabi are now looking to the future with bright eyes as the market begins to show real signs of stability. While there is slight slow down in rental prices, it is not expected to significantly affect the market.

BEN CROMPTON Managing Partner, Crompton Partners Estate Agents

bu Dhabi is a large city; however, it is small enough that one company can still cover the whole area. When we started, our first steps were to visit all of the major compounds and buildings to build up our knowledge base. We needed to make sure that we knew every single building that our target audience would be looking for, even before we started. Over the last two years, we have seen more and more people coming into Abu Dhabi. There are many large government projects being undertaken at the moment, such as Etihad

Rail, the Midfield Terminal, the Louvre, and Guggenheim for example. The government is hiring, and with government hires other companies are boosting their headcount as well. We see the leasing market is slowing down as of 4Q2014 in Abu Dhabi; hence, it will be interesting to see events unfold through 2015. Abu Dhabi has huge financial reserves, meaning it can certainly weather prolonged any reduced income from oil and we expect it to keep investing, so in the short term, rent will continue to go up and the population of Abu Dhabi will increase.

y view is that the residential market will eventually stabilize, because there is definitely something behind the 6% figure. If it was only 6%, and there were no people to pay for it, then it could have never been sustained because it is all market-driven. Two years ago, the Abu Dhabi Government announced that it was putting $1.36 to $1.63 billion into the economy, a move that would push all sectors and gain influence on real estate in particular. Today, any factory, retail, or tourism project requires real estate. Checking on demographic reactions, we can see that a population comprising a lot of elderly people normally leads to an economic slowdown. The majority of UAE residents are between 15 and 60 years old who spur a lot of economic activity; we can thus expect the rental market to sustain its current growth. The aspect that I advise caution against is

regional unrest, whether at the economic or political level. We have to be pro-actively prepared for this type of situation and consider the impact of responsive legislation and regulation. The UAE is well known for its stable political and economic environment and its ability to introduce effective policies.

MASOOD AL AWAR CEO, TASWEEK

KHALDOUN MOHAMMAD SALEH General Manager, Wahat Al Zaweya

ahat Al Zaweya will be a residential city that will include all the supporting amenities and facilities for residents living there. Looking back at the history of Wahat, you can understand the city that is in the center of the UAE. Wahat is located on the Dubai-Al Ain road, between the two cities and the project itself is at the center of the UAE. It is a 30-minute drive to reach Dubai, 30 minutes to reach Al Ain, 45 minutes to Abu Dhabi Airport, and about the same dis-

tance from the Northern Emirates. In addition, we found a niche market, which is actually in the local community. Most Emiratis would like to have a second home, which is not too far away. Of course, if you live in Abu Dhabi, Dubai, or Al Ain, you are not too far away. They would like to buy regulated land in order to build their second home, which would be a regular home on a slightly larger plot of land than usual, meaning about 1,500 to 3,000 sqm, which is the size of plots in Wahat Al Zaweya.

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TBY talks to Iqbal Hamza, CEO of Agthia, on segment-specific strategies, and the broader economic outlook.

HE Dr. Rashid Mohammed Khalfan Al Shariqi, Director General of ADFCA, on the commitment to food security.

A decrease in local wild fish supply over the past decade has opened the way for sustainable aquaculture farms.

Agriculture, Fisheries & Food REVIEW

Food security is a crucial global issue, resulting from various economic and social challenges and all with political, strategic, and international ramifications. Abu Dhabi is leading the way in innovative research and development policies.

lthough there are numerous challenges facing the agriculture and aquaculture sector, the Emirate of Abu Dhabi’s policies and programs have yielded significant benefits, not only in terms of this sector's economic output, but also in terms of food security. Some of the main issues facing the agricultural sector include water scarcity, high levels of soil salinity, severe temperatures that are often not optimal for animals or fish, and pressing humidity. Yet with government guidance and private sector innovation, the agriculture industry in the UAE is undergoing rapid diversification, which is contributing to the strength of the sector. Primary exports include dates, vegetables, poultry, fish, eggs, and dairy products. At the national level, the Ministry of Economy is establishing a strategic food reserve that would help vary the nation’s agricultural base and protect against any short-term food shortages. The Federal National Council, which has members from

FUTURE HARVEST

Image: Floppy Sprinkler

The UAE food market exceeded $4 billion in value in 2014 with forecasts suggesting that it will grow between 4% and 5% annually in the coming years.

different Emirates throughout the country, is recommending specific subsidies for food and agricultural investments as part of the development of a national food policy. Seen as a key industry in the Abu Dhabi Economic Vision 2030, the market for food products is also driven by the Emirate’s rapid population growth in recent years. The UAE food market exceeded $4 billion in value in 2012 with forecasts suggesting that it will grow between 4% and 5% annually in the coming years. The main agricultural commodities available for consumption and sale are wheat and wheat-based products, rice, sugar, milk, soya bean oil, nuts, and poultry. Livestock is central to the sector, as it contributes to the diversification of small farm income sources, food security, and job creation, and also provides some assistance for domestic needs—many households raise animals to meet their everyday dietary needs and sell the surplus stock on the market. The livestock sector, which includes commercial

ABU DHABI 2015

Manufacturing companies and investors—particularly in the food production sector—are taking advantage of the mega industrial hub Kizad, boosting local food manufacturing to meet growing demand in the GCC. Khalifa Industrial Zone Abu Dhabi (Kizad), one of the largest industrial developments in the world, has become synonymous with industrial growth in the Emirate since its launch in 2012. This has been particularly true over the past few years as more leading local and multinational companies have set up shop, injecting strong FDI into the Emirate—creating jobs and spurring industrial sector growth within the capital’s non-oil economy. Developed and operated by the Abu Dhabi Ports Company (ADPC), the industrial hub offers international companies and investors competitive edge and market accessibility. In addition to the tax-free environment, Kizad offers several commercial advantages, targeting various sectors. For food production in particular—a key industry for the Abu Dhabi’s Economic Vision 2030, and in the GCC as a whole—the ability to manufacture locally will offer companies a significant advantage over the cost of importing. Through lease agreements reaching up to 50 years, establishing operations at Kizad comes with the benefits of lower energy and labor costs, reducing overall operating costs and increasing competitiveness. Additionally, on-site support services and facilities are available to ease the application processes for required business licenses and permits. Proximity to key midstream and downstream producers is another added bonus of Kizad’s vertically integrated clustering model. Location-wise, Kizad is situated at a strategic mid-way point between Abu Dhabi and Dubai in Taweelah, an area linked to multi-modal transportation infrastructure projects, many of which are undergoing capacity enhancements. From Kizad, goods can be distributed and exported to approximately 4.5 billion consumers in four time zones around the world vis-a-vis the surrounding transportation and logistics options integrated into Kizad’s master plan layout. The Khalifa Port, Abu Dhabi’s four airports, the UAE’s highway network, and the Etihad Railway that will link the Emirates to the GCC rail, all give companies direct access to regional and global markets. As per Kizad’s dual free-zone and non-free zone policies, companies can choose to be 100% foreign-owned or opt for joint venture ownership status with part local-ownership, an option that comes with customs and duty-fee exemption advantages.

150,000 jobs both directly and indirectly Total planned area of industrial and manufacturing facilities

417km

Operated by the Abu Dhabi Ports Company (ADPC), the tax free zone was launched in 2012, from which goods can be exported to approximately 4.5 billion consumers in 4 time zones around the world.

60-80% of goods manufactured to be exported around the globe

4.5 times area of Abu Dhabi

2/3 area of Singapore

1 2 3

Phase I of III of Khalifa Logistics Park completed

TARGETED SECTORS

Food

Logistics

Healthcare Pharmaceuticals Paper equipment products

Engineered Aluminum metal products

Steel

Low cost utilities, excellent transportation, and road access to local and regional markets create an ideal environment for upstream, midstream, and downstream food producers to invest in Kizad.

UAE FOOD MARKET

Exceeded Expected to grow between

4 & 5% annually

Billion USD

in 2009

Source: KIZAD

ADVANTAGES OF KIZAD

Expected to create over

KIZAD

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farms and fisheries as well as animals, focuses on using advanced methods for breeding, especially with poultry and cattle. According to the Statistics Centre Abu Dhabi (SCAD), Abu Dhabi’s developing livestock and dairy industry, a vital part of the agriculture sector, has shown vibrant business activity in recent years. A 2013 SCAD survey on livestock and dairy farms in Abu Dhabi, revealed an increase of 35% growth in the production of eggs, adding up to approximately 203 million eggs, worth approximately $22 million. SCAD mainly examined five larger farms having an estimated combined capacity of 1.6 million chickens. They did however note a fall of 1.4% in poultry meat production to 17,000 tons in 2013. Poultry meat production was valued overall at $63 million. The survey also examined seven broiler farms having an estimated combined capacity of 1.5 million chickens and covered 13 dairy farms with an estimated total capacity for breeding 22,000 cattle, revealing a rise of 8.2% growth in the overall number of cattle to 18,907 head in 2012, with 9,304 calf births in the year. SCAD livestock data included a detailed statistical analysis of the Emitrate’s livestock sector for 2013. The key indicators of Abu Dhabi’s livestock sector included 22,974 total animal holdings, with 1,780,061 head of sheep, 1,214,478 head of goats, 25,615 head of cattle (including 8,821 dairy cows), and 359, 279 cam-

els. Commercial farms were examined as well. Abu Dhabi has seven broiler farms and five layer farms, as well as two commercial cattle farms, which produce approximately 87,386 tons of cows’ milk, 21,386 tons of chicken meat, and 248 million eggs per annum. The Emirate’s farms also produced 107,763 tons of manure.

SUSTAINABLE COASTS Fish and fisheries are also vital to Abu Dhabi’s agriculture sector. The Emirate has approximately 4,580 registered fishermen, working out of 1,100 licensed boats. In 2013 they caught over 3,862 tons of fish, valued at approximately $23 million. These numbers might seem modest, but they do not include the most important aspect of the fishing industry; namely aquaculture. Aquaculture is the practice of using controlled and technically innovative man-made environments to promote the growth of fish for food. Aquaculture is used to enhance fish stocks or for economic purposes, and currently it contributes over 50% of the world's fish supply for human consumption, making it an important aspect of the world's overall food supplies. According to the Food and Agriculture Organisation (FAO) of the UN, aquaculture output worldwide will contribute more than 62% of the world’s seafood supply by 2020. Abu Dhabi's aquaculture sector is in its early stages but it has been identified as a priority sector for

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JOHANN HIEMSTRA Owner and Managing Director, Floppy Sprinkler Irrigation started in Iraq in the gardens of Babylon in 6000bc. They irrigated those gardens through furrows, and that lasted for thousands of years until the invention of the first sprinkler. Now with the Floppy Sprinkler, we can irrigate any size and shape of land, even steep slopes, helping to make farming profitable in harsh climatic conditions.

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development by the government, and is built around the notion of technical innovations which are vital to its success. A number of well-known examples are leading the way, from both the public and private sector. The Abu Dhabi Marine Centre projects that the Emirate will be able to increase fish production to 10 million by 2017 and has re-introduced a number of specific species that were dwindling in recent years. Through the technical know-how of the Sheikh Khalifa Marine Research Centre Abu Dhabi it will increase the number of fish it produces to its maximum capacity, helping to ease the pressure placed on the country’s fish stocks by the increasing population, pollution and overfishing. Government studies have shown that the overall number of commercial fish in the UAE has declined by 80% in the last 30 years and the Centre’s own stock assessment suggests that 71% of Abu Dhabi’s fish resources are over-exploited, with a number of key species currently at some degree of risk through excessive and environmentally short-sighted fishing methods. Five specific species were identified for fish farmers in the early stages of the overall aquaculture development plan which was formulated by the Environment Agency Abu Dhabi (EAD) in collaboration with other government departments, fish farmers, NGOs, and researchers. These species were hammour (grouper), cobia, seabream, yellowfin tuna, and abalone. These five species are in high demand in both local and global markets but their stocks have been dwindling due to overfishing. Moreover, work on the development of a 360,000sqm fish reserve in Dhadna has commenced under the direction of HH General Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces. This reserve will see the construction and deployment of environmentally friendly artificial reefs which will become a primary feeding area for bottom dwelling fish off the coast of Fujairah. Several traditional fishing spots which have been abandoned will be revived by the use of these artificial reefs, and will encourage environmentally friendly and economically sustainable fishing. The Abu Dhabi government’s investments in aquaculture will contribute significantly to the protection of the marine environment and sea biodiversity in general, and encourage the fish industry and fish farming in particular. It has already established and now manages a number of designated Marine Protected Areas (MPAs), which are already showing positive results for a number of habitats and species. By establishing environmentally sustainable reef habitats and educating fishermen and producers on the importance of replenishing fisheries, which have dwindled in the eastern coast region by 94% since 1978, these initiatives will also feature the establishment of a fish reserve of 450 environmental-friendly caves in Dhadna, the first of its kind in the region. By increasing its contribu-

tion to national fish production to about 25% by 2021, Abu Dhabi’s initiatives are designed to allow the UAE to maintain its leading regional position in the sector.

INVESTING IN SECURITY Yet these actions are not purely economic. Central to all of the investment, research, and environmental protection efforts underway is the concept of food security. The official definition of food security adopted by the Emirate is "to enable all citizens and residents of the UAE to have access to safe and healthy food with sufficient nutritional value and in a safe manner, under all circumstances, including in cases of emergency and crisis situations.” The government is working with the private sector to implement food security strategies in the Emirate, by developing policies and legislation for food security, overseeing the foundation and management of emergency stockpiles of food, preparing contingency plans for possible shortfalls, monitoring and analyzing local, regional and global food markets, and coordinating with investors on domestic and foreign production in the food sector to support and achieve food security in the Emirate. As the world’s population grows, and global natural resources are diminishing in many key areas, the UN estimates that the world has to find a way to produce 56% more food by 2050, and innovation is seen as central in assuring food security for the future. Innovation in food production is seen as the only real chance for feeding growing populations while using resources more productively and with the least amount of environmental damage. Innovation for food security has the potential to offer solutions to combat global warming, provide technologies that can improve nutrition and social prosperity in developing countries, and be a renewable source of clean energy. Future oriented as always, the government of Abu Dhabi is focused on securing food supplies. As HE Dr. Rashid Mohammed Khalfan Al Shariqi, Director General of the Abu Dhabi Food Control Authority (ADFCA), told TBY, “The center operates on a strategy aimed at maximizing the production of locally cultivated foods through the use of modern technology, the management of natural resources efficiently, and the promotion of agricultural investment abroad.” The center aims to provide all citizens and residents of the Emirate access to healthy food with proper nutritional value and has managed the organization of strategic stockpiles, enough for every resident in the event of an emergency. With its focus on security, sustainability, and strategic planning, it exemplifies the overall policy of Abu Dhabi; planning for the future and using its resources to encourage innovative and forward looking policies to address potential problems both at home and beyond. As with so many other sectors, the Emirate is providing an example for the wider world to learn from. ✖

FADY ANTONIOS President and CEO, National Food Products Company (NFPC) How has the growing food segment affected your management priorities at NFPC? There are not many companies that can expect 20% to 22% YoY growth. This implies a persistent pressure to expand our facilities, and explains why we are moving to Kizad where we leased a 752,000sqm plot of land, the largest plot available in the area. There, we will build a 300,000sqm food production facility with state-of-the-art equipment, fully automated operations, and high-base storage, which will reduce manpower requirements. We have a terminal for the Etihad Railway on our plot, meaning we will be using rail to simplify our transportation and logistics operations. We can load more than 60 trailers per hour at the Kizad plant, which works out to one every minute. The railway is really a great solution for us, because the NFPC is present in many markets, and exports a lot. We mainly focus on Saudi Arabia at the moment, where the market is difficult to reach, as well as Egypt. We are currently present across the GCC, with the exception of Saudi Arabia. Our main markets are the UAE and Oman, where we also have manufacturing facilities.

Agriculture, Fisheries & Food

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GUEST SPEAKER

DAIRY tale

ate favorable conditions for the segment. Growth is mainly driven by poultry and large animal feed.

TBY talks to Iqbal Hamza, CEO of Agthia, on performance in its second year of operations, segment-specific strategies, and the broader outlook for economic growth. How would you assess Agthia’s overall performance for the past year?

We are quite satisfied with our overall financial and business performance. We have continued to advance our strategy of driving profitable growth across our core businesses, implementing cost saving initiatives, diversifying and launching new products, expanding our distribution reach, enhancing the in-store presence, and at the same time addressing underperforming businesses. In addition, we also continue to enhance our manufacturing capabilities and remain focused on improving operating and cost efficiencies. Furthermore, the company’s business and financial fundamentals are strong with a solid balance sheet to support our expansion plans. Agthia recorded net sales of approximately $326 million for the first nine months of 2014, an increase of 9% over the same period in 2013. Our net profit stood at $41 million, which represented a 26% increase YoY. To what do you attribute the 10% YoY increase in net sales within the consumer division, and what is your near-term focus in the water, beverages, food, and dairy segments moving forward?

The bottled water, beverage, and dairy segments are growing categories and provide us with opportunities to further strengthen our position by gaining market share, expanding distribution

reach, strengthening in-store presence and enhancing our product offerings to consumers. In addition to this, there are M&A opportunities within these categories, which is part of our growth strategy. How have the company’s recent expansion projects added value to Agthia, and what projects are currently underway?

We have been growing faster than the category in all our key businesses, and our overall sales CAGR over the last seven years has been 19%. In order to meet the increasing demand for our products we have set up our distribution center in Abu Dhabi and expanded our production capacity for bottled water, flour, and animal feed. In addition, we have invested in new categories, for example dairy and frozen baked products. We have plans to further expand production capacity of bottled water and feed, and set up a distribution center in Dubai. All these initiatives obviously have resulted in delivering strong sales and profit growth. As far as dairy and frozen baked products investments are concerned, these are new categories we have entered recently and will take some time to become profitable. In light of Agthia’s second year of increasing total net sales, total volume, and total profit figures, what opportunities do you see for future growth in the industry?

All product categories that we compete in are growing. Our

What is your outlook on continued economic growth in the region in 2015 and beyond?

IN NUMBERS Agthia

Over

2,100 employees

Abu-Dhabi based Food and Beverage Company established in

2004

Although regional economic growth uncertainty and the commodity market volatility suggest challenges, the company’s strong balance sheet along with a clear strategy to continue driving profitable growth across our core businesses, improving profitability, diversifying and launching new products, and expanding our distribution reach provides us with reason to remain optimistic on the company’s prospects for future revenue and profit growth. The focus will also be to capture the white spaces within our existing geographies, and at the same time evaluate expanding distribution in Egypt and entering the Saudi Arabian market. ✖

BIO sales growth is ahead of the category growth and will further strengthen our market position. We expect growth in the food and beverage sectors in the UAE and wider GCC as the population and tourism grows. Consumers are becoming more health conscious, which in future will involve adjusting our strategy in line with change in consumer behaviors. Furthermore, we also expect some consolidation happening in the food industry in the years to come. How have government initiatives promoting food security and domestic production impacted agri-business in the UAE?

The UAE government’s initiatives to promote food security and encourage domestic food production, has helped to cre-

Iqbal Hamza joined Agthia as the Group CFO and Company Secretary mid 2006, and became the CEO of Agthia Group in October 2014. Prior to his appointment at Agthia, he was the Regional Finance Director of Gillette Russia, Republics and Baltics, based in Moscow. Before moving to Russia he was the Regional Finance Director for Middle East and Africa based in Dubai. He commenced his career in 1989 with The Gillette Company and has held various key senior financial positions during his 17-year career with Gillette. By profession he is a Chartered Accountant and a Chartered Corporate Secretary.

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INSIDE PERSPECTIVE

PRESCIENT matters HE Dr. Rashid Mohammed Khalfan Al Shariqi, Director General of the Abu Dhabi Food Control Authority (ADFCA), on the Emirate’s commitment to viable food security strategies, finding technological solutions for climatic impediment to agriculture, and creating a food storage hub for the region.

On behalf of the ADFCA, I commend the efforts made to highlight important innovations, solutions, and creative ideas within the agricultural sector. The UAE President, His Highness Sheikh Khalifa bin Zayed Al Nahyan and His Highness Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, Chairman of the Executive Council, inspire us with their sustained efforts in achieving food security. I would like to express gratitude to our leaders for leading by example. On his part, His Highness Sheikh Mansour bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Presidential Affairs and Chairman of the Abu Dhabi Food Control Authority, leaves no stone unturned in spearheading measures that translate our leadership’s vision of achieving food security. The Global Forum for Innovations in Agriculture (GFIA) 2015 hosted in Abu Dhabi is one such initiative that has proved highly successful in its capacity to generate tangible outcomes. Several years ago, the world food crisis resulted in increasing food costs to alarming levels. The growth in population and the lack of natural resources impelled countries to take action towards achieving food security. For us in the Arab world, the food crisis represents the biggest challenge. The population of the Arab world by the year 2030 is expected to double, reaching up to 480 million people. This triggers serious concern and calls for action in the region to ensure availability of safe and

nutritious food to meet the needs of an increased population. In the UAE, and Abu Dhabi in particular, we hold the belief that there is no security, no stability or progress, and no future without healthy people. The vision of our leaders on the issue of food focuses on the greater happiness of all humanity. Our leaders are keen to provide the necessary facilities to ensure that citizens and residents of the UAE have high quality foods based on the safety standards issued. The Food Security Center Abu Dhabi was established in order to secure food supplies for citizens and residents. The center operates on a strategy aimed at maximizing the production of locally cultivated foods through the use of modern technology, the management of natural resources efficiently, and the promotion of agricultural investment abroad. The center also aims to benefit from the country’s position as one of the most developed and prosperous markets in the region. We recognize that international trade traffic growth across the UAE contributes significantly to the convenient accessibility of secure food supplies. We are working on multiple axes to support the entire food security gamut. We are focused on creating non-traditional solutions through strategic inventory management. We are also focused on leveraging modern technology towards the formulation of food policies. The Fujairah Strategic Storage Project is a great example. The project allowed the stor-

age of grain in the most important strategic location of the Indian Ocean and the Arabian Gulf. We are able to benefit from all the initiatives and food security support projects and the infrastructure services from the government such as the mega-storage warehouses in the Khalifa Industrial City (Kizad), which includes a storage area of more than 220,000 square meters. I am confident that collectively, we can work towards achieving regional and global food security for generations to come. ✖

BIO HE Rashid Mohammed Khalfan Al Shariqi received an MSc degree in Environmental Science in 1997 (with honors) from the UAE University, and a bachelor’s degree in agricultural science (with honors) in 1984 from the College of Agricultural Sciences, UAE University. He is currently the Director General of ADFCA, and has also served as a Federal National Council member since 2007. Throughout his career, he has run the Prevention and Agricultural Guidance Department at the Ministry of Agriculture and Fisheries, served as director of Research and Agricultural Production Department, before rising to Under Secretary at the Ministry.

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GUEST SPEAKER

key TAKE outs TBY talks to Chris Hegadorn, Director of the Office of Global Food Security of the United States Department of State, on climate-smart food security and how the US and the UAE can work together. Abu Dhabi played host to the second Global Forum for Innovations in Agriculture in 2015. What were the main objectives of your visit to the event, and what were some of the major take-aways?

My primary objective in coming to GFIA was to demonstrate the US government’s strong commitment to global food security and promote climate-smart agriculture—in essence, what we often refer to as “climate-smart food security.” As Secretary Kerry mentioned in his videotaped remarks for the conference, this is a global issue that needs a unified, global response. Our office at the Department of State, working with our colleagues in the Department of Agriculture, the US Agency for

International Development, and many other agencies, are working collectively to support climate resilience at home and through our international development work abroad. One important element of that work is through membership and support for the Global Alliance for Climate Smart Agriculture (GACSA), launched at the UN Secretary General’s Climate Summit in September 2014. The Global Alliance serves as a focal point for a multilateral and multi-sector approach to addressing the immediate threat of climate change to food production, including in the land/crops, fisheries, forestry, and livestock sectors. With a dedicated, collective effort from all sectors of agriculture, and from both public and private contributions, we can help farmers to improve their productivity, adapt to climate change, and where possible help ensure that agriculture has a positive role in net emission of greenhouse gases. It was clear in Abu Dhabi that there is a tremendous energy around ensuring global food security and improved nutrition outcomes, with a multitude of organizations and experts all committed to sustainable ways to address hunger and malnutrition. Pushing sustainable, innovative agriculture practices into the 21st century, while assisting poor and vulnerable farmers, especially women smallholder farmers in the developing world, is an imperative that clearly was a priority at GFIA. Where do you see opportunities for the UAE, and Abu Dhabi in particular, to work with the US in addressing global food security challenges?

First, I wish to acknowledge the leadership and commitment from the government of the UAE, for not only hosting the GFIA conference in 2015, but also for hosting the Abu Dhabi Ascent meeting last April, 2014, which served as an

important milestone for the eventual launch of the Global Alliance. We look forward to the UAE joining the Alliance, and to its continued leadership and support for innovative solutions to agricultural development, in the Middle East and further afield. In remarks I made during a panel session on climate-smart agriculture during the GFIA conference, I referenced the commitment by the UAE Minister of Environment and Water, Dr. Rashid bin Fahad, to identifying and adopting critical innovative ways to grow crops in a tough environmental location. The UAE understands, as well as any country, the tremendous challenges associated with climate change, limited water resources, and the criticality of an open, transparent international trading system to sustainable food security. As Dr. Rashid has said publicly, the international community cannot guarantee food security unless we curb the harmful impacts of climate change. The UAE continues to play a critical role in the Near East and East African regions, especially in regard to innovative agriculture and addressing climate change. We welcome their commitment to sustainable, responsible agricultural investment and development, and look forward to a continued fruitful partnership both in GACSA, and regionally. As the UAE invests in agricultural land abroad, what role can the UAE play in leveraging innovative and smart solutions for the development of the agriculture and food production sectors worldwide?

The UAE has already had a profound impact and catalyzing effect on regional innovation and smart solutions to food security and agricultural development. The technical, financial, and policy-based understanding the UAE brings to agricultural land abroad has been instru-

mental in countries, such as Algeria. However, the ability to leverage regional capacity on a global scale and find mutually beneficial areas of focus is critical for moving UAE’s agenda forward. Having access to climate smart agriculture experts, experienced local farmers groups, governments, civil society, businesses, and multilateral agencies will provide a space where innovation and smart solutions can be developed, adapted, and adopted. The GACSA offers a unified platform that encourages regional collaborations as climate change does not follow national borders. As I mentioned in my talk at Abu Dhabi, time is not on our side. The clock is ticking and people are suffering. GACSA will be critical for the international development agenda as we work together to end the scourge of hunger. ✖

BIO Chris Hegadorn is the Director of the Office of Global Food Security at the United States Department of State, which is responsible for the diplomatic component of US food security policy. Hegadon served previously as Deputy Director of the Office of Israel and Palestinian Affairs, as Alternate Permanent Representative at the US Mission to the UN Agencies in Rome, and served tours in Baghdad, Cairo, Pretoria, and Beijing. Before joining the State Department, Chris worked on Capitol Hill and at the Department of Agriculture’s Food and Nutrition Service. He has degrees from Bryant University, the University of Pittsburgh, and the National Defense University.

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FOCUS FLOPPY SPRINKLER TECHNOLOGY

Image: Jenaan Investment

RAIN ON DEMAND Abu Dhabi-based agricultural investment company Jenaan Investment has partnered with South African company, Floppy Sprinkler, to bring advanced irrigation systems to some of the world’s most arid agricultural landscapes in Africa.

WHAT BROUGHT Jenaan Investment, an Abu Dhabi-based agricultural investment company, and Floppy Sprinkler, a South African irrigation system company with over 25 years in business together? The urgency of Abu Dhabi’s food security needs and the desire to challenge and improve upon conventional irrigation systems in the agricultural industry around the world—bringing “rain on demand” to the deserts of Africa’s agricultural landscapes. While growth and rapid development mark the economic environment in Abu Dhabi, one looming challenge that underpins this growth is the issue of food security. The partnership between Jenaan Investments and Floppy Sprinkler grew out of Abu Dhabi’s need for farmland abroad in order to secure its food security future at home, which as CEO of Jenaan Investment, Mohammad Al Falasi explained, it cannot sustain at present levels of local agricultural production, “The needs of our country here in Abu Dhabi will not be met without the African countries. We are investing in other

Agriculture, Fisheries & Food

The heat in the UAE means that innovative tech is required to get the most out of the land

countries like Spain and the US, but our investments there are limited in terms of space, acquisition and ownership of land. Africa is the solution for us, and if the government continues with their plan of food security, they have to look at Africa.” The Floppy Sprinkler system came into play when Jenaan Investments sought out the most economical and effective solution to the issue of irrigating its land investments in arid climates such as those it was encountering in Africa. Al Falasi described his search for the ideal irrigation system, “We found that the Floppy Sprinkler irrigation technology was the best solution although it had not been used on as large a scale as what we were going to require. We did our research and modified the Floppy Sprinkler to made it more efficient for a large scale.” This partnership model between Jenaan Investments and Floppy Sprinkler is one that has multiple stakeholder benefits across the farming and agricultural industry, from contributing to meeting Abu Dhabi’s food security needs, to improving innovative methods in irrigation management— crucial in light of the world’s diminishing water supply, and helping to reduce operational costs for local farmers in Africa. It is also a model of how leveraging financial capital, which Jenaan Investments had, can bring new technologies, which Floppy Sprinkler brought into the picture, into the agricultural industry and challenge conventional methods for the betterment of all involved. Particularly for farmers, the Floppy Sprinkler has proven to be a viable solution to irrigating in dry climates, such as those in Sudan, where most of Jenaan Investments’ land is located. When compared to conventional irrigation systems, the Floppy Sprinkler technology showed significant water and energy savings. Furthermore, the system also comes with reduced labor costs, reduced consumption of resources, reduced overall maintenance costs, coupled with increased yield and quality of produc-

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tion—all attractive factors for farmers looking to increase competitiveness in the farming business. The Floppy Sprinkler irrigation system is also considered a zero maintenance system—an attribute manual laborers and farmers greatly appreciate the advantages of. All benefits lie in the design of the system, which is a patented silicon nozzle that allows water to be dispersed in a spiraled formation while rotating 360 as it does so, creating water droplets mimicking natural rain. The slow irrigating method of the system dramatically reduces water wastage; a major issue in the farming industry, as currently 70% of the world’s water supply is allocated toward farming. However, despite the water saving and increased yield benefits that the Floppy Sprinkler technology provides, the challenge moving forward will be to change the behavior of farmers who are used to the older systems. Jenaan Investments and Floppy Sprinkler seek to put an end to wasteful agricultural practices with the technology, and make way for a secure food future in line with sustainable practices. ✖

DR. KAMEL ABDALLAH CEO, Exeed Industries Agriculture is widely considered a matter of national security. For the GCC, this matter is more of a challenge because the percentage of our land that can be used to produce food represents less than 8% of the total size of the country, given that we have such large deserts. As a result, up to 80% of the food supply is dependent on imports. The government has been actively pursuing an agricultural policy that includes the private sector and looks at availability and affordability of agricultural produce.

MOHAMMED AL FALASI CEO, Jenaan Investment What kind of support has Jenaan Investment had from local authorities in addressing Abu Dhabi’s food security challenges? Jenaan Investment started in 2007 with a contract with the Abu Dhabi Food Control Authority (ADFCA). At that time, the Abu Dhabi’s government through ADFCA wanted to establish a relationship with the private sector to help in acquiring its food security plan. However, this contract only covered the animal feed sector. We were able to renew the contract for another five years beginning in 2015. The most important thing is to have government

support. This enables Jenaan to expand to other countries, such as Sudan or Egypt, and find the best way to invest there. We would not be able to go at this alone or play an important role in the food security plan without the government’s support. The agriculture business is not profitable in the short term. You have to wait for several years to start, and that is why it can be difficult to get investors interested. We need to encourage farmers and investors to change their attitude regarding agriculture being a profitable business, and this can only happen with the support of governments.

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B2B SEAFOOD

AHMED AL DHAHERI

DR. S.D. GOPAKUMAR

Managing Director, Emirates AquaTech LLC

General Manager, Al Jaraf Fisheries LLC

How does your expertise and position in the regional market allow you to reach consumers with varied tastes and expectations?

DR. S.D. GOPAKUMAR We are mainly focused on shrimp and we have developed a new system called multi-trophic utilization. Shrimp are always lying on the bottom of the water, so the column of water is not exploited. We have used some systems, called Cage systems, where we introduce fish. Now, both the layers are utilized, which is why it is called multi-trophic utilization. The shrimps are at the bottom of the pond and the fish are at the surface layer. With this new system we are planning to increase our capacity from 2 tons to 2.5 tons per day, which will include 80% shrimps and 20% fish. Regarding our contribution to the UAE market, if you take Abu Dhabi alone, we are catering for around 60% of the shrimp and altogether in the UAE, the amount is around 40%. One important factor is that if Al Jaraf Fisheries was not supplying the shrimp, 100% would need to be imported from different parts of the world to the UAE. We are the only company with indigenous production. From a business perspective, shrimp farming is an excellent opportunity in the UAE because nobody can catch shrimp from the sea—the UAE government banned shrimp fishing in the 1980s.

AHMED AL DHAHERI Most of our processes are automated, which is why we only have a few people involved in the production process that is spread over 50,000sqm. We have smoking facilities in-house as well so we can smoke our own fish and even provide for others. We have all our production and packaging facilities available onsite. We have successfully managed to acquire five different quality and safety certifications, which is rare for an aquafarm to have. We managed to do it all for the sake of having high-quality caviar and sturgeon meat for the public. With the capacity and technology we have, and the experience that we possess, we work hard to provide the right environment for the fish to live much like their natural habitat. We are happy that wellknown Michelin Star chef Alain Ducasse has endorsed our product and said it is some of the best-farmed caviar he has ever had.

teach a man TO FISH Aquaculture is at the forefront of efforts to promote food security and develop products for international consumption. How does it feel to be a producer of UAE products that are being distributed worldwide? AAD Whether it is the US, Europe, Asia, Australia or Australasia, it is a proud step forward to be able to go and prove that products that are being produced in Abu Dhabi, in an area where no one thought caviar could be produced, are being done well. It’s so exciting and fulfilling. We know that we are not only producing caviar for the economic benefits, but also for the environment. The sturgeon fish are an endangered species at a depletion stage. At the moment, we have over 300,000 fish from small to large ones, and that number is going to grow. People can recognize farms for fish as a good alternative to natural habitats, with the same taste and quality, maybe even better because the quality is controlled. With farmed caviar like ours, we can reach a stage where we can be producing on a daily basis without worrying about the fish being depleted.

How do you think the local aquaculture industry will evolve in the near future and what will the role of Al Jaraf Fisheries be? SDG Very few players are coming into the aquaculture business. However, I think the problem is the availability of land. We are now planning to make a closed system rather than an open system that spreads over 100 hectares. Under a roof we can make a small facility within 2 to 5 hectares. All the constraints like weather conditions and temperature can be controlled and the intensive farming of shrimps and fish can be done with that type of facility. It is very popular in the US and Europe. The only issue is that it is an investment, and it is almost three times more expensive than an open-type of aquaculture system. I hope in the near future more people will come into the industry. We even have some locally adapted technology they can use to get started. We are not only producing, we are also trying to show the way for others. We have the technology and are ready to transfer it to other entrepreneurs so that the country can become self-sufficient rather than importing 90% of its seafood needs. ✖

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AQUACULTURE FOCUS

The UAE has experienced a decrease in local fish supply in their natural habitat over the past decade, opening the way for sustainable aquaculture farms to come into play as a viable option for meeting growing seafood demands.

SUSTAINABLE SUPPLIES WHEN IT COMES TO food production and

EMIRATES AQUATECH FIRST AQUAFARM for sturgeon and caviar in the Middle East and

THE LARGEST in the world

ABU DHABI’S WILD FISH STOCKS (Hamour, Shaari, Farsh)

HAVE DECLINED BY 80% in the last 40 years

Source: Environment Agency Abu Dhabi

supply in the UAE, fish is a staple food. Historically, fishing on the UAE’s coastlines has been a major livelihood and pastime for millennia. Today, new environmental realities have called for a change in traditional fishing practices to control overfishing. As is the case in oceans across the world, the UAE’s wild stock of fish has been decreasing over the past decade. This has been occurring as both population growth and consumer demand for fresh fish is rising. To adapt, fishing license restrictions and seasonal fishing bans have been implemented by the UAE’s Ministry of Environment and Water to protect marine species in an effort to support the fishing profession and health of maritime species at the same time. As neither the growth of the UAE’s population nor the demand for seafood show any signs of slowing down, there is a clear opportunity for further investment and innovation in the UAE’s sustainable aqua-farming industry, an industry that is relatively underdeveloped but growing in Abu Dhabi. It has been estimated that over 50% of fish for human consumption today is the result of aquaculture, that is, the farming of fish and seafood products. Several factors indicate the time is ripe for investment in the Abu Dhabi’s aquaculture industry, an industry that is just beginning to take shape. For starters, though the UAE possesses some of the highest food security levels among the GCC, it still imports roughly 80% of its food supply, making food security an issue of strategic national importance is a priority for the government of Abu Dhabi, in particular. Secondly, in contributing to local food supply, the domestic agriculture sector is limited due to the arid, desert climate and water issues experienced by agro-producers, devaluing the cost-benefit equation for many local farmers. Thirdly, the UAE boasts some of the highest rates of food wastage in the world, an issue that brings up the need to create consumer awareness around the fact that resources used to produce food are not unlimited. Fourth, even with the seasonal restrictions placed on the fishing industry, particularly during critical times of marine

species life-cycle, the demand for fish in the UAE exceeds the supply local waters are able to sustainably provide. In light of these realities, there exists in Abu Dhabi the opportunity to address food supply challenges, at least in part through sustainable aquaculture farming, in ways that reap both environmental and economic rewards. When describing his successful sustainable aqua farm business model, Ahmed Al Dhaheri, Managing Director at Abu Dhabi-based Emirates Aquatech, producer of the UAE’s first and only locally made caviar explains, “We know that we are not only producing caviar for the economic benefits, but also for the environment. The sturgeon fish are an endangered species at a depletion stage… With farmed caviar like ours, we can reach a stage where we can be producing on a daily basis without worrying about the fish being depleted.” The Environment Agency Abu Dhabi (EAD) is laying the foundations for a competitive aquaculture industry to develop by licensing the commercial activities of the emerging aquaculture sector and supporting the transfer of technology and techniques that meet its sustainability and resource efficiency guidelines. The EAD, and other relevant bodies, however, are merely liaisons and facilitators—the development of the sector relies on private sector investment. There is potential for investors to capitalize on the opportunities of Abu Dhabi’s aquaculture industry, which is in a position to supply the market with a high quality varieties of fish and seafood products without interfering with the biodiversity of wild marine populations and without the season-based restrictions that wild fishing imposes. Sustainable aquaculture farming makes it possible to control quality and monitor the lifecycle of the seafood product and is a viable means of adding to the local food supply. As the local population increases rapidly, placing more demands on the food supply to support growth, there is opportunity for the aquaculture industry to shift toward modern, sustainable fish farming techniques and develop into a viable domestic producer that will serve Abu Dhabi and the UAE for the longterm. ✖

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TBY talks to HE Prof. Maha Taysir Barakat, Director General of Health Authority-Abu Dhabi, on the five-year strategic plan.

As the reputation of Abu Dhabi grows, more world-renown hospitals are looking to set up medical campuses in the Emirate.

Key healthcare providers about tailoring strategies to meet local demand, and the defining issues for the future of of the sector.

Health REVIEW

With over four decades of medical advances under its belt, the private sector is ensuring that residents have the best treatment available, thanks to a government directive that promotes market-based corrections for healthcare.

he people of Abu Dhabi are an overwhelmingly young and healthy lot. And should one of them fall ill, he or she can count on some of the best healthcare available to ensure a speedy recovery. Over the years, the variety of treatment options has grown, due to a topdown directive to promote private sector treatment. The Health Authority—Abu Dhabi (HAAD) drew on the experiences of successful private practices in an effort to let the market relieve pressure on state-run hospitals. In a 2014 publication HAAD noted that, “based on positive experience both locally and regionally, [HAAD] would like private operators to provide most healthcare, as well as to continue to add required new capacity. Private investors are generally more responsive to market needs than the public sector.” The statement went on to add that “during 2013 the private sector was responsible for 74% of the growth in physician numbers and most of the growth in facilities.”

HEALTHY, WEALTHY & WISE

Image: Imperial College London Diabetes Centre

In late 2014, HAAD released the details of its strategic plan for the healthcare sector through 2019. The plan identifies seven major priority areas where further development is the most required.

The Emirate’s statistical center SCAD reported in their 2014 yearbook that as of 2012 Abu Dhabi had 2.4 physicians for every 1,000 residents, as well as 1.8 hospital beds and 5.3 nurses. This translated into 5,528 physicians and 12,375 nurses. The activities of these medical professionals were accommodated in 39 hospitals with a collective bed count of 4,226, as well as in 540 health centers and 316 clinics. These facilities and professionals serve a population of 2.73 million according to HAAD. Of the 2.73 million residents of the Emirate, 18% are nationals, and 69% are under 30 years of age. The remaining expatriates fall mostly between the ages of 20 and 40. Put another way, the geriatric wards are far from overflowing. And thanks to mandatory insurance that was introduced in 2006, all residents have access to high quality care. Buoyed by the affluence of the Emirate’s population, HAAD wields a mandate to

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According to HAAD’s 2013 statistics, injuries are the second leading cause of death, at 19.6%. The leading cause of fatal injuries is road deaths, with 62%. This startling statistic speaks to a need to also educate drivers, and enforce proper driving practices through cooperative efforts with other government organizations.

advance the Emirate’s healthcare capabilities as far as modern science allows. HAAD describes itself as the regulative body for the healthcare sector in charge of ensuring excellence and monitoring the health of the population and performance of the system. In late 2014, HAAD released the details of its strategic plan for the healthcare sector through 2019. The plan identifies seven major priority areas where further development is the most required. HE Dr. Mugheer Khamis Al Khaili, the Chairman of HAAD, introduced the new strategy: “Today we enter a new phase in the healthcare sector as we aim to take it to the next level of advancement. The foundation is set, and it is now the time for innovative and better quality services. We will be working with both private and public sectors to ensure the implementation of the initiatives.” Dr. Al Khaili added that, “The Healthcare sector is a top priority in the Abu Dhabi Government agenda, and we look forward to deliver the set outcomes as we move towards achieving Abu Dhabi’s vision 2030.” To promote these developments, the organization is pursuing 58 initiatives in seven areas. The first is improving the continuum of care. This means tackling gaps in healthcare services and ensuring that treatment options in the country are on par with—and as comprehensive as—those in other advanced countries. This incudes improving healthcare services in rural areas and introducing mental health programs. The second pillar of these advancements is improving the quality of healthcare through the Jawda Initiative that will monitor the quality of healthcare

delivery, and eventually link benchmarks to incentives and other measures. In addition, HAAD will support research and innovation to achieve these objectives. The third pillar is attracting and retaining a qualified workforce. In this regard, a MoU was signed in November 2014 between HAAD, Abu Dhabi Healthcare Services Company (SEHA), Tawteen Council, and Higher Colleges of Technology (HCT) to attract, train, and recruit UAE nationals seeking careers in the industry. The fourth pillar is enhancing the emirate’s emergency preparedness with a focus on the Weqaya program for UAE Nationals, injury prevention, mother and child care, occupational health, combating and preventing communicable disease, updating vaccine programs, reducing hereditary illnesses, and improving the oral health of children. Recent diagnoses of MERS in the highly travelled region have driven home the importance of a contingency plan for the outbreak of infectious diseases. The fifth pillar is of special importance, in part because its scope extends beyond the immediate healthcare realm into lifestyle choices and habits of residents—wellness and prevention of disease. According to HAAD’s

MOHAMMAD HUSSAIN AZED CEO, Wellpharma Medical Solutions LLC (WMS) Our biggest challenge is in the registration of our full range of products with the Ministry of Health. Each product registration takes time since we need to produce the stability study data of each product before being approved. We are taking this process in steps, and hopefully we will be overcoming them in the near future. However, some 50% of our products have already been registered so far. Around the middle of 2015, we will have more.

A HEALTHY LIFESTYLE IS YOURS TO HAVE Diabetes can be managed and even prevented. Imperial College London Diabetes Centre provides the highest specialised patient care, from first diagnosis to the management of all complications associated with diabetes including Endocrinology, Cardiology, Ophthalmology and Podiatry.

Consult with our specialists, and enjoy a healthier, fuller lifetime. We work with all the major insurance providers. Abu Dhabi: +971 2 4040800 Al Ain: +971 3 7464800

www.icldc.ae www.diabetesuae.ae

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2013 statistics, injuries are the second leading cause of death, at 19.6%. The leading cause of fatal injuries is road death, at 62%. This startling statistic speaks to a need to educate drivers and enforce proper driving practices through cooperative efforts with other government organizations. The Emirate also has a high rate of lifestyle related disease, such as diabetes, cardiovascular disease, and obesity. Cardiovascular diseases alone accounted for 36.7% of deaths in 2013. The five-year plan calls for major changes to the way that residents conduct their daily lives in order to avoid an impending healthcare crisis. The sixth initiative calls for “value for money” and cost effectiveness. This directive involves monitoring services, addressing health insurance premiums, and a network of medical laboratories to achieve savings. The final initiative is the promotion of e-health services. HAAD is in the process of creating a health information platform to enable the exchange of data between healthcare providers, which will facilitate the other priorities as well. According to SCAD, Abu Dhabi has one of the highest population growth rates in the world, at 7.7% per annum. From a healthcare perspective—especially on the investment side—current facilities will only be able to accommodate the Emirate's population for a limited time. Future residents, whether born in the Emirate or abroad, will place strain on the system that only increased capacity can mitigate. As the population grows, lifestyle-related diseases are a growing cause for consternation, with diabetes, cardiovascular disease, and cancer all on the rise. Diseases in these categorizations put strain on outpatient care as well as on hospitals. However, Abu Dhabi’s market based strategy is paying off, and private sector providers are identifying demand and moving in to accommodate it seamlessly. The HAAD’s 2013 data showed that since the end of 2012, there was a 22% increase in the number of licensed physicians and dentists plying their trade in the Emirate. At the same time, HAAD estimates an 11% growth in licensed facilities. This trend bodes well for recruitment consultants. By 2022, HAAD estimates that 4,800 additional doctors and 13,000 nurses will be require to fill future openings. Since non-nationals will fill many of these positions, high turnover is a factor, in which case the health authority has projected that up to 1,700 doctors and 2,900 nurses will have to be recruited annually. At this rate by 2020, demand for hospital beds will also grow by 2,200. As of 2014, there were 16 hospitals under construction, with the potential to add up to 2,859 beds, signaling significant future capacity to meet required demand.

Source: Imperial College London Diabetes Centre

Total Claims (in thousands) Source: SCAD 25,000 20,000 15,000 10,000 5,000 0 2009

2010

2011

2012

2013

Looking to the future, HAAD has identified areas where additional capacity is especially urgent if the Emirate is to maintain its high standards of healthcare. These gaps exist in intensive and critical care, emergency care, neonatology, pediatrics, oncology, orthopedics, rehabilitation, and psychiatry. In addition, sub-specialty gaps exist in pediatrics and pediatric surgery. In the treatment of adult surgical sub-specialties, neurosurgery, plastics, and surgical oncology are all currently undersupplied. By 2016, at least some of these gaps should be addressed, starting with significant inpatient capacity increases that started in 2014, with more to come in 2015. ✖

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INTERVIEW

clean BILL TBY talks to HE Prof. Maha Taysir Barakat, Director General of Health Authority—Abu Dhabi (HAAD), on how it will implement the five-year strategic plan and its key priorities. As Abu Dhabi’s healthcare sector embarks on a new phase of reform through HAAD’s fiveyear strategic plan, how do you characterize the importance of the Health Authority’s role within the sector?

The HAAD is the regulatory body of the healthcare sector for the Emirate of Abu Dhabi and ensures excellence in healthcare for the community by monitoring the health status of the population. HAAD defines the strategy for the health system, the health status of the population, and the performance of the system. In addition, HAAD shapes the regulatory framework for the health system, inspects against regulations, enforces standards, and encourages adoption of best practice and performance targets by all healthcare service providers in the Emirate. HAAD also drives programs to increase awareness and adoption of healthy living standards among the residents of the Emirate of Abu Dhabi in addition to regulating scope of services, premiums and reimbursement rates of the health system in the Emirate of Abu Dhabi. What are the key objectives laid out in HAAD’s five-year strategy?

Improving the availability and access to a full spectrum of health care services across the entire Emirate is a key priority. We have developed both the Health Statistics reports and the Capacity Master

Plan, which use data to identify capacity gaps, enabling us to determine how best to fill them—be it through private or public sector investment—with avoidance of duplicated efforts. Ultimately, this will minimize the need for patients to seek medical treatment abroad, which has a significant financial impact, as well as improve access to care in rural areas. Currently, under-serviced areas include intensive and critical care medicine, emergency care, neonatology, pediatrics, oncology, orthopedics, rehabilitation and psychiatry. Sub-specialty gaps also exist in pediatrics and pediatric surgery, as well as adult sub-specialties such as neurosurgery, plastics, and surgical oncology. It is imperative that we are transparent about what services are lacking in order to encourage investors to participate in those areas. Another important element in elevating the quality of care is the implementation of initiatives to attract, train, and retain healthcare professionals, with a specific focus on increasing the number of Emiratis in the sector. Currently, there is high medical staff turnover and few Emirati physicians and nurses. This must be addressed if we are to create a sustainable industry. We are working with institutions like SEHA, Tawteen Council, and the Higher Colleges of Technology to develop programs with this aim. UAE University already has a medical school in Al

Ain and Khalifa University is planning to establish one as well. Sheikha Fatima College of Health Sciences has also expanded to provide degree programs in fields including nursing and paramedics. The next priority of our strategy is emergency preparedness. We were under heavy pressure during the Middle East Respiratory Syndrome Coronavirus (MERS-COV) in 2012, but our systems were able to cope with it very well and contain the infection. We optimized the way that the hospitals dealt with patients who had the virus. Thankfully, we have had zero cases of Ebola, but several suspected cases were managed according to international best practice. The final priority is public health, where we go by the adage that prevention is better than cure. A healthy diet and lifestyle is important, and that applies to non-communicable disease. Tackling smoking is an important part of this. Abu Dhabi has successfully hosted the World Congress for Tobacco or Health in March 2015. For communicable disease, vaccines are essential. The Emirate is now going through a revaccination of Polio and Measles through a nationwide campaign to make sure we have 100% participation. In a very short period of time, Abu Dhabi has evolved to the point of 100% compliance with an e-claims system, ensuring that all patient interactions with health care providers are recorded electronically. We are

still optimizing and fine-tuning the system, with the most recent changes encompassing the introduction of diagnosis-related groups (DRGs). However, the continued enhancement of our health care informatics and e-health platform will enable further exchange of data among providers, which will then give us the ability to achieve our goals on our specified priority areas of focus. ✖

BIO HE Prof. Maha Taysir Barakat is the Director General of the HAAD. Previously, she was Medical & Research Director and Consultant Endocrinologist at the Imperial College London Diabetes Centre (ICLDC) in Abu Dhabi, and Reader at Imperial College London. In 2013, she became a visiting Professor at Imperial College London. She is on the Board of Trustees of the Family Development Foundation, and a Member of the Board of Directors of Shelters for Women and Children (Ewaa). For her work in the community in the UAE, she was appointed an Officer of the Order of the British Empire in 2010, and was awarded the Abu Dhabi Prize in 2011, and given the Imperial College Medal in 2013.

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HOSPITALS B2B

DR. SHABEER NELLIKODE Managing Director, Universal Hospital LLC

CLANCEY FRANCISCO PO CEO, Burjeel Hospital LLC

ANYTHING you need Hospitals in Abu Dhabi have set their sights beyond the Emirate, and patients from abroad have responded. What are some challenges that the healthcare sector currently faces, or will contend with in the near future? DR. SHABEER NELLIKODE Healthcare delivery is a vast field. Due to the changing healthcare outlay in Abu Dhabi, new processes such as submissions to insurance companies are being added. Gaps are being created in various positions such as physician assistants or medical coders. Extensive training of nurses is required to enter ICD-9 and CPT codes for process completion. There is a dearth of skilled professionals in fields such as hospital management, medical communications, and media. If we take a look at the comprehensive picture, hospitals have a few selective skill sets available with an

immediate need to train people in allied services. We have identified many surrounding Arabic individuals interested in these jobs who are actively pursuing their required practical education to master these specialties. More needs to be done to promote healthy living here. In addition, a high prevalence of smoking aggravates the situation. We are also in active partnership with various governmental organizations including Abu Dhabi municipality and various schools to provide preventive community health and awareness programs. CLANCEY FRANCISCO PO The most important human resource requirements in hospitals are doctors and nurses. Our need in the near future will be triple what we currently have. These cannot be sourced from the local market; therefore, we will have to go to countries that produce high-caliber medical staff, particularly those from Western countries where we know that the level of healthcare is above average. From the practicing perspective, lifestyle related diseases are already a serious concern. Burjeel Hospital and its management believe in the philosophy that prevention is better than a cure. One of the main drawbacks in our society is the sedentary lifestyle culture. We as leaders in healthcare have taken the mantle of providing good preventative medicine to the people of Abu Dhabi. Patients are growing increasingly mobile. How is this affecting your strategy? SN Many patients from Africa, Afghanistan, and other parts of Asia travel to India to avail themselves of affordable and quality healthcare options. In

the Gulf region, Jordan has a similar reputation for quality in healthcare services. Our perspective at Universal Hospital has been to employ sincere, hardworking, and informative health care professionals from all over the world to provide better services to the patients compared to other countries. Further, the advantage of having two centers at Abu Dhabi and Sharjah, and the liberty of having patient friendly visa services in the UAE provides us extra mileage to take care of international patients. Instead of “medical tourism”, I would like to coin the term “Expert International Healthcare Management” for the services rendered by our centers. CFP We at Burjeel made medical tourism part of our strategy even before we opened. We have contacts with private medical air ambulances and can pick patients from any part of the world. Additionally, all elective surgeries are being conducted for patients who wish to travel from abroad. We would like to bring finesse in “medical concierging,” which is a term that we coined. Burjeel will open representative offices in Kenya, Nigeria, Yemen, Sudan, and Oman—the first five countries we would like to target for medical tourism. In ten years time, Burjeel, and indeed its parent company VPS Healthcare Group, will dominate the healthcare market. We will become market leaders with all types of hospital and community clinics in every town and city in the MENA region. The government in Abu Dhabi in particular has given tremendous support to the privatization of healthcare facilities. This has indeed helped the residents of Abu Dhabi. ✖

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FOCUS MEDICAL CAMPUSES As the reputation of Abu Dhabi grows, more world-renown hospitals are looking to set up medical campuses in the Emirate, with the Cleveland Clinic, Johns Hopkins, and the New England Center for Children some of the first to take the step.

CARE AND PATIENTS IN THE FIELDS OF education and healthcare, the US and the UAE, and particularly Abu Dhabi, have made many agreements and partnerships. The Emirate is looking to address a number of lifestyle diseases cropping up among its population as well as increase its potential as a medical tourism destination. The sector is also looking to reduce the number of its own citizens traveling to hospitals outside of Abu Dhabi by improving the quality and availability of its medical services by increasing funding as well as partnering up with reputable international organizations. One of the newcomers to the sector, the Cleveland Clinic Abu Dhabi, which is developed and owned by the UAE government, is on track to open in 2015. The high-tech and aesthetically stunning, multi-specialty hospital is modeled off the successful and well-renowned Cleveland Clinic based in Ohio, US, ranked one of the top four hospitals in the nation by the US News and World Report 2014-15 “Best Hospitals” rankings. From Ohio to the UAE, the Cleveland Clinic model brings with it nearly 100 years of clinical expertise. More than a hospital, the Cleveland Clinic Abu Dhabi resembles a luxury hotel on the outside and is more aptly described as a medical campus, with specialized institutes that are formulated off of the US-based clinic but adapted to meet the needs of the Abu Dhabi population, in which lifestyle diseases such as diabetes, obesity, and cardio-

Image: Cleveland Clinic Abu Dhabi

vascular issues are on the rise. The Cleveland Clinic is an example of how a successful model from abroad was identified and is being introduced to Abu Dhabi in order to address the growing demands of the local healthcare sector, an effort in which stakeholders such as Mubadala, the Abu Dhabi government-owned investment and development company, the UAE government, and Cleveland Clinic as operator have played a key role in making the project a reality. When speaking about the uniqueness of the Cleveland Clinic model and approach to care, CEO of Cleveland Clinic Abu Dhabi, Marc Harrison, explained, “Philosophically, we put the patient in the center of everything we do. Sitting around the executive table, you will hear us ask questions such as ‘What is the right thing for the patient?’ We make our business decisions around exactly what is best for the patient. In this model, physicians will be evaluated based on service quality and patient outcomes, not patient volumes.” While the Cleveland Clinic is new to the Emirate, Johns Hopkins Medicine has been around for some time. In 2006, the General Authority for Health Services signed a 10-year affiliation agreement with Johns Hopkins Medicine, the world-renown Baltimore-based medical-university. Under the terms of the agreement, Johns Hopkins would gain complete managerial oversight of Tawam Hospital. It is one of the Emirate's largest hospitals, with 469 beds, as well as one of its most prestigious. When taking over the hospital, Johns Hopkins set out a number of long-term targets that they hope to complete over the term of the agreement. These goals included the establishment of international healthcare standards in Abu Dhabi, the promotion of public awareness and healthcare issues in the community, the evaluation and oversight of future contracts awarded to hospital management companies, provision of training to national staff, and planing for the future healthcare needs of the Emirate. Johns Hopkins Medicine is has some of the best physicians, researchers, and educational staff in world, evidenced by the fact it was ranked the number one hospital in the US for 21 consecutive years from 1991 to 2011 and then again in 2013. The authorities in Abu Dhabi are hoping that the partnership will be able to bring some of the hospital's vast experience to the Emirate and in turn bring other hospitals with it, such as the Cleveland Clinic. ✖

DR. MARC HARRISON CEO, Cleveland Clinic Abu Dhabi What are the particular needs of the Abu Dhabi population? As we thought about the kinds of specialists we want to attract here and the sort of Institutes we want to focus on, we wanted to make sure that we sincerely meet the needs of the population that resides here. Our five Centers of Excellence include the Heart & Vascular Institute; the Neurological Institute; the Digestive Disease Institute; the Eye Institute; and the Respiratory & Critical Care Institute. That doesn’t mean we don’t do other things here; all in all, there will be more than 30 medical and surgical specialties. The real focus is on what the healthcare needs of the population are. The health issues we see here are the same ones occurring in the rest of the developed world; issues around lifestyle that are associated with choices and circumstances, such as lack of physical activity, obesity, or choosing to smoke. How is Cleveland Clinic Abu Dhabi involved in educating the community about preventative healthcare? I am really passionate about the idea of wellness. In our pre-operational phase, we’ve been quite involved in the community and have carried out various promotional activities to support wellness. Internally, we offer a number of wellness initiatives for our Caregivers, the unique name we give to our employees, such as complimentary yoga classes every week.

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I got THE PILLS TBY talks to two key healthcare providers about tailoring strategies to meet local demand, and the defining issues for the future of the Emirate’s healthcare sector.

DR. KASSEM ALOM Founder and Vice Chairman, Al Noor Hospitals Group Plc

DR. SHAMSHEER VAYALIL Managing Director, VPS Healthcare

What strategies ensure success in the local market? DR. KASSEM ALOM Our main strategy has always been to bring medical facilities to where the patient is. This has led the group to achieve steady growth every year since the company was founded, achieving more than 20% growth each year. In 2014 we saw 21% growth. Two years ago we opted to register as a listed company in London with an IPO, and we did very well. Our share at the time was $8.51 and now it is around $15. We have been expanding every year, adding doctors and facilities. We were the first in Abu Dhabi from the private sector to have an IVF center, to offer cardiac surgery, plastic surgery, and to develop facilities dedicated to sports medicine. Today, all of our facilities are accredited by Joint Commission International (JCI), an international organization for hospitals in the US. We have more than 500 full-time doctors working on our staff, in addition to around 4,000 employees. We see more than 6,000 patients every day in our three hospitals and 15 medical centers distributed throughout Abu Dhabi in the western region of Al Ain, in the industrial areas including Mussafah, and in rural areas. Our aim is to create services where they are needed by the society and patients, so they do not have to go abroad. We always try to be the best. DR. SHAMSHEER VAYALIL It is always about creating centers of excellence and service-line optimization. In healthcare, we have limited resources available, especially in high-end services. There is always a limitation in getting people into the system. We don’t try to replicate all specialties in one unit, instead, we identify one area—for example a cardiac center—and

all cardiac cases are referred to this center. We make sure a minimum level of cases is maintained for surgeons and doctors to retain their skills. We focus on volume-based competency. We look at quality from various angles and make sure we deliver healthcare in the most comfortable and trusted environment. What are some immediate health concerns that Abu Dhabi will have to contend with? KA Abu Dhabi still needs facilities. There are gaps in the healthcare sector and we are trying to fill these gaps by opening facilities in order to shorten the waiting time, to see all patients, to create facilities not previously available, and to serve the patient wherever they are. We want to provide society with high quality healthcare, not just high quantity. We have faced some challenges in trying to accomplish this, mainly with the workforce. We have had to bring doctors from abroad, license them, and wait for them to accept our offer. We have to do the same for our medical staff, and create an environment for them to stay because there is a world shortage of doctors, but more in nurses. Fortunately those who come to this country like it and decide to stay. SV There was a time when infectious diseases were the greatest headache; however, now with luxury and affordability, lifestyle diseases are the fashion. We need to educate people in terms of their lifestyle, food habits, the need to exercise, and how to combat diabetes, for instance. With more economic changes occurring in the UAE, we also have to factor in neurological problems that can arise such as anxiety and depression. You tend to see these types of illnesses more often now. ✖

COMMUNIQUÉ

WELL AWARE TBY talks to Dr Saf Naqvi, Medical Director, Consultant Physician, and Endocrinologist at Imperial College London Diabetes Centre, on the importance of raising awareness of the disease, and what sets the Centre apart. Why is Imperial College London Diabetes Centre so committed to raising public health awareness in the UAE? When Imperial College London Diabetes Centre opened in the UAE capital, Abu Dhabi, in late 2006, the topic of personal health and wellness was considered a very private conversation. These issues rarely touched the public domain, including the media, with individuals often choosing not to discuss their health with family members, let alone friends and colleagues. Therefore, from the word go, it was clear to us that the state of the nation’s health is a conversation that must be had every day. Just a few months after the center opened its doors to offer world-class treatment to manage and even prevent diabetes, Imperial College London Diabetes Centre activated its promise to public health awareness by launching the nationwide campaign, Diabetes-Knowledge-Action. Today, Imperial College London Diabetes Centre’s commitment to public health awareness makes Diabetes-Knowledge-Action the UAE’s longest running public health awareness campaign. Indeed, we are noticing a tipping point as more and more individuals, organizations, and media titles not only engage in the topic, but also specifically discuss the attributes of embracing a healthy lifestyle. The importance of this conversation can’t be understated as a look at the latest figures in the International Diabetes Federation’s Diabetes Atlas, November 2014 showed that more people than ever are living with diabetes— some 387 million people worldwide. This is up

from 286 million in 2007 when Diabetes-Knowledge-Action was launched. What is Imperial College London Diabetes Centre doing to help engage the public embrace of health and wellness? Imperial College London Diabetes Centre works closely with various health bodies, government and private hospitals, and primary care services within the UAE to facilitate a holistic approach to treating diabetes. Aside from offering world-class treatment at our two centres, one each in Abu Dhabi and Al Ain, Imperial College London Diabetes Centre’s emphasis on public health awareness also continues. As mentioned, our public health awareness campaign, Diabetes-Knowledge-Action, is focused on sharing information, facts, tips, and stories surrounding diabetes prevention, symptoms, and lifestyle support activities. The campaign message stands loyal to the attributes of a healthy lifestyle in keeping diabetes and its related complications at bay. A healthy lifestyle is achieved by embracing a balanced diet and at least 30 minutes of brisk exercise each day, while maintaining a normal body weight. Our team coordinate many events, workshops, seminars, and presentations, visiting schools, universities, and companies, often with two or more events each week. Indeed, the campaign has helped place diabetes and a healthy lifestyle firmly in the public arena. In the first three months of 2007, records show that Imperial College London Diabetes Centre was alone in releasing news stories and articles about diabetes and the positive outcomes of a healthy lifestyle. By the end of that year, a handful of other organizations had joined in the conversation and the local media were regularly calling in to the center for material and comments to support articles about a whole host of personal health issues. Today, in the era of Facebook, it is thrilling to see personal wellness and a healthy lifestyle positioned regularly as trending hot topics, with Imperial College London Diabetes Centre and Diabetes-Knowledge-Action still enjoying a leading share-of-voice. ✖

ABOUT IMPERIAL COLLEGE LONDON DIABETES CENTRE Imperial College London Diabetes Centre is a one-stop, state-of-the-art, out-patient facility that specializes in diabetes treatment, research, training, and public health awareness. The Centre was established in Abu Dhabi by Mubadala Healthcare, in partnership with the UK’s Imperial College London, in 2006 to address the growing demand for diabetes care in the UAE. A second facility in Al Ain opened in 2011. Together, the centers have offered diabetes prevention, education, and treatment during almost 800,000 patient visits. DiabetesKnowledge-Action is Imperial College London Diabetes Centre’s awardwinning public health awareness campaign. It was launched in 2007 under the patronage of HH Sheikha Fatima bint Mubarak. Imperial College London Diabetes Centre holds the Joint Commission International (JCI) Clinical Care Program Certification (CCPC) in Diabetes Management and JCI Accreditation for Ambulatory Care, awarded in 2010 and again in 2013. The 2010 award made Imperial College London Diabetes Centre the only healthcare provider worldwide to hold both certifications and the first facility in the Middle East and third globally to hold JCI’s highly-acclaimed CCPC specifically for the clinical management of diabetes.

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INTERVIEW

a healthy OPTION

That’s something we take very seriously. What is your outlook for the future? What will it take to reduce the number of patients with diabetes in the UAE?

TBY talks to Dr Saf Naqvi, Medical Director, Consultant Physician, and Endocrinologist at Imperial College London Diabetes Centre, on diabetes in the UAE, and the importance of a healthy lifestyle. Why is diabetes so prevalent in the UAE?

There is more than one reason. If we benchmark Type I diabetes, for example, against the global market, it’s not significantly higher. We don’t have that big of a problem with Type I, which mainly affects children. Our biggest problem is with Type II. Type II is lifestyle-related—diet and exercise. As the UAE and its neighbors embarked on a rapid development, the traditional and somewhat simple diet synonymous with the region, was swiftly joined by fast-food products on every corner. In tandem, as the city infrastructure developed, the uptake of an exercise practice seemed to wane in general. The result is that the nationwide obesity rate is on the high side. Indeed, it is a regional issue, with Kuwait and Saudi Arabia very much alert to the challenge. In general, people walk a lot in Europe; much more than here.

IN NUMBERS Imperial College London Diabetes Centre

400

employees

800k

visits since 2006

The UAE ranks

16th

worldwide for diabetes prevalence

How do you make exercise part of the culture?

Imperial College London Diabetes Centre’s public health awareness campaign, “Diabetes-Knowledge-Action” has a year-round community outreach calendar. We go to schools and organizations with our Healthy Lifestyle interactive workshops; we host an annual walk—this year #Walk2015—and it is complemented by a nationwide grass roots campaign dubbed #TakeAStepForDiabetes. We also encourage companies and community associations

to host simple, interactive activities, like “Take The Stairs” days, and we encourage all of our patients to see a specialist nurse, lifestyle educator, as well as our dietitians as part of ICLDC’s diabetes management care. Our treatment includes not only medication, but the full spectrum of care for diabetes. What strategies do you promote to prevent or reverse diabetes?

We have a very active outreach program. We do shows on TV

and interviews on the radio, and run an extensive calendar of events. When it comes to the diabetes message, our PR campaign tends to account for more than 40% of the media voice, more than any other organization. We place emphasize on building knowledge through education and awareness and encouraging action through the calendar of activities. Continuous education is extremely important to us. Through our link with Imperial College London (ICL) we host a lot of speakers at our conferences for the medical sector. The conferences are held here at the center and elsewhere in the capital. We also host an Advanced Diabetes Conference every year. What are the benchmarks you look at to assess the success of your Centre?

We keep track of all the important indicators for diabetes, and we publish an annual outcomes report. HbA1c is the best indicator of controlled diabetes versus uncontrolled diabetes. If the value is seven or below, that is considered controlled diabetes. It decreases the risk of cardio complication, kidney failure, and other related conditions. If it’s above that, it’s considered uncontrolled diabetes. We also keep track of the lipid profile (cholesterol) and cardiac risk profile. BMI and blood pressure are also monitored. Of course, we also have targets for patient satisfaction and communications outreach, as well as targets for physicians’ education and staff education.

It will take an ongoing commitment to education, and it has to start at a young age. We engage with children of all ages, some as young as five or six years old, and we talk to them about a healthy lifestyle. We encourage them to join sports teams and be active. We host celebrities to help reinforce our healthy lifestyle message. It’s been successful. In 2013 we had Laila Ali, the boxing champion and daughter of Muhammed Ali. She came and talked to the kids and she did a great job. Recently we hosted US All-Star basketball legend, Kareem Abdul-Jabbar. It’s something these kids won’t forget easily. The target right now is to prevent diabetes from happening by encouraging people to take responsibility for their own health and realize that this disease is preventable. ✖

BIO While harboring a special interest in thyroid disorders and insulin treatment, Dr Saf Naqvi also carries out complex hormone investigations. He is a Certified General and Metabolic Physician, specializing in management of hormone disorders. Dr Saf, as he is affectionately known by colleagues and patients, brings with him a wealth of experience, gathered from a career in the UK. Having led diabetes care in hospitals and the community, he has helped develop high standards wherever he has been. He was appointed Deputy Chairman to the newlycreated Medical Board at ICLDC in 2013, and made Medical Director of ICLDC in 2015.

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INTERVIEW

to the RESCUE How do you invest in the training and development of your staff?

TBY talks to Robert Ball, CEO of National Ambulance, on investing in staff, enhancing efficiency, and future growth.

BIO Robert Ball is the CEO of National Ambulance, a company that provides emergency pre-hospital care in the UAE to the public and private industries. He was a founding member of the National Ambulance Company and appointed as CEO shortly after joining the company as the COO. Together with his Deputy Ahmed Al Hajeri, they are responsible for the development of National Ambulance as the leading pre-hospital care organization in the UAE.

Our training is specific to our needs and is a major part of our core business. Our training team covers all areas from basic life support to pediatric to advanced coronary care life support. Our trainers are in-house, and our courses are registered with the Health Authority Abu Dhabi (HAAD) where they are scrutinized and accredited. We even have hospitals that are asking us to come and train their staff. Training, for us, is a part of our DNAâ&#x20AC;&#x201D;it is what we do. Our staff has a tough job to do. It is essential for us that we look after our staff. Our turnover rate is less than 2% over four years, which we are very proud of.

IN NUMBERS National Ambulance

24 ambulances

200 EMTs in place

How has your fleet grown over the years, and how are you looking to develop it further?

What sort of operational model do you implement at National Ambulance?

Our fleet has increased over the past four years to just over 100 vehicles. Ahmed Al Hajeri led the design of the vehicles so they would meet the demands of the environment we work in. The fleet is deployed across the UAE. The largest public deployment of our ambulances is in the Northern Emirates. We are providing a basic life support service in the Northern Emirates with 24 ambulances operating 24/7. We have invested in brand new ambulances based on the Mercedes-Benz 324 chassis, which is a reliable frame for this type of service. We get them sent directly from Germany to our Ambulance converter in the UK, and then we ship them here. The Northern Emirates has the most advanced ambulance fleet in the Middle East. We are currently in Phase I of this project; in Phase II we will add more vehicles and crew.

There are two different models. The Franco-German model is where a doctor is part of the ambulance crew, and they go from the hospital to the patient and back. What we provide is an Anglo-American model of service where we have emergency medical technicians and paramedics as the team to go to the patient and take them to the most appropriate hospital; that is the model that works best here. EMTs have a scope of practice that allows them to provide basic life support skills, while paramedics have a more advanced scope of practice that allows them to provide additional interventions and provide Advanced Life Support. What sort of technology do you use to enhance efficiency and reduce response times?

Response times are one met-

ric that is often used when people look at ambulance services. It is important that patients receive the most appropriate level of care as quickly as possible. In the Northern Emirates, we are continuing to improve our response times. As our fleet increases this will allow more ambulances to be deployed in the area. In terms of technology, we use computer-aided dispatch. One of the challenges here in the UAE, and something people take for granted in the US for example, is that you can pick up the phone, order something, and get all the information through the call line number identification. That system is being rolled out progressively in Abu Dhabi and Dubai and will eventually be rolled out in the rest of the UAE. We have also implemented a pre-alert system that allows our dispatchers to advise a receiving hospital if a serious injury is coming to their emergency department. Looking ahead to 2015 and beyond, what are your growth aspirations and expectations moving forward?

We have seen a continued demand for our services from a wide range of sectors including oil and gas, the government and the private sector. Locally in Abu Dhabi a tender is being considered to privatize the service. We have registered our interest and look forward to the process continuing. Regardless of that tender the UAE is growing at an amazing rate. Our services are recognized as best practice so I am confident that we will see more opportunities. â&#x153;&#x2013;

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HH Sheikh Hamdan Bin Mubarak Al Nahyan, Minister of Higher Education and Scientific Research, on long-term strategies.

Dr. Addel Al Ameri, Managing Director of Abu Dhabi Vocational Education and Training Institute, on meeting the needs of industry.

The National Library of Abu Dhabi is a gem of knowledge, culture, and history, facilitating the dissemination of literature.

Education REVIEW

“A” FOR ABU DHABI Finding a balance between serving dynamic multinational communities as well as promoting Emiratization, the education sector is active in promoting both its domestic workforce and exchange programs.

ith an average of only 14.4 pupils per teacher and 22.4 pupils per classroom, according to Abu Dhabi’s statistical center SCAD, the education system is marked by careful attention to quality, tied to the Emirate’s broad-reaching vision for social development that places high value in individuals and their unique skills and contributions to the community. As a part of Abu Dhabi’s 2030 Vision to transition from a carbon-based to a knowledge-based economy, heavy investment in the education sector—particularly higher learning—has become a crucial focus for the government, encouraging strong participation from the private sector as represented by the Abu Dhabi Chamber of Commerce and Industry (ADCCI). Most centers of higher learning have developed innovative ways to engage with the private sector, by offering students hands-on experience and valuable career opportunities, through conducting case studies, participating in entrepreneurship contests, and more. Students at the Abu Dhabi School of

Image: Abu Dhabi Vocational Education & Training Institute (ADVETI)

Energetic collaboration between government institutions and the private sector creates mutually beneficial results for students and companies, building local talent through technical degrees and scholarship programs.

Management (ADSM), for example, are required to conduct field research in companies of their own choosing, informs ADSM’s President and Provost Dr. Abdullah A. Abonamah. Particularly appropriate for 2015, “The Year of Innovation,” Abu Dhabi’s educational institutions are defined by advanced, state-of-the-art facilities with the latest technologies being increasingly integrated into a digitalized curriculum, which champion creativity across fields of study. “Innovation is a culture, not a product … It is a long-term commitment to change the way we think about creativity,” Abonamah told TBY. “It is only when you engage the society and the community that you begin to see the benefits of innovative thinking. Our experience has been that when we challenged the students and provided them with the right environment, they became extremely creative.” Abu Dhabi’s education system is divided into three main categories: public schools, private schools, and higher education institutions, according to the Abu Dhabi Educational Council (ADEC). The are 43%

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more government schools than private schools in Abu Dhabi, with a total of 450 schools. There 5,382 classrooms, 125,263 pupils, 10,812 teachers, and 2,118 administrators in 264 government schools; 9,144 classrooms, 200,628 pupils, 11,761 teachers, and 6,355 administrators in 185 private schools, according to the most recent information from SCAD. Non-citizens are a primary demographic in schools, particularly in private schools where expatriates dominate enrollment, where 81.9% are non-citizens and 18.1% are Emirati citizens; in government schools 68.9% are citizens while 31.1% are non-citizens. Non-citizens also make up the majority of teachers in both government and private schools; 3,803 teachers in government school are expats while 3,024 are Emirati citizens, and in private schools 11,712 teachers are non-citizens compared to only 49 citizens, according to SCAD. Public schools are comprised of a voluntary kindergarten level, followed by Cycle One for grades one though five, Cycle Two for grades six through nine, and Cycle Three for students grades 10 through 12. The public sector also includes special education services and adult education—the Emirate offers over 100 literacy centers, adult education centers, and home schooling services. There are around 185 private schools in Abu Dhabi, the Al Ain region, and the Western region, and are a crucial foundation required to achieve Abu Dhabi’s Economic Vision for 2030, according to ADEC. Higher education is overseen by two government bodies: the Ministry of Higher Education and Scientific Research (MoHESR) that operates the federal level accrediting institution and programs; ADEC is the second body, operating at the Emirate level, is responsible for establishing academic institutions and bodies in coordination with MoHESR. ADEC’s three main operation axes are to elevate the quality of higher education, promote and incentivize research and scholarship, and aligning higher education with the labor market and socio-economic needs.

TAKE ME HIGHER Abu Dhabi’s cosmopolitan culture and high-quality education makes it among the top destinations worldwide for international students, with growing demand from Africa, Asia, and Europe in particular. Students from all over the world come to Emirate via exchange programs or to enroll in permanent degree programs, while Abu Dhabi also sends many Emiratis abroad to universities in North America and Europe. Abu Dhabi’s prestigious higher learning offerings include campuses from New York University and the Paris-Sorbonne University Abu Dhabi. The multi-national culture of ALHOSN University is host to students from 41 nationalities, and has a designated American corner that operated as a cultural hub between the UAE and the US, supervised in cooperation with the US embassy, informs its Vice Chancellor and CEO Prof. Munther Talal Momany.

Established in 2003 and currently hosting approximately 6,000 students from 60 nationalities, Abu Dhabi University (ADU) began implementation of their new five-year strategy for 2014-19 last year, which aims to increase ADU’s standing to a world-class university and one of the best in the UAE. In 2013 they started the US’s Western Association of Schools and Colleges (WASC) accreditation process, and 2015 will be a continuation of the process. By distinguishing itself on an international level with their affiliations with Purdue University, University of London, or California State Business Incubator center, and having a general culture of innovation, ADU’s priority is also to develop the domestic workforce and address the socio-economic needs of Abu Dhabi and the Gulf region. According to ADU’s Chancellor Dr. Nabil Ibrahim, 90% of the university’s graduates are placed in jobs shortly after matriculating. Over 2012-13, at total of 50,754 students were enrolled in Abu Dhabi’s higher education institutions, 39,146 of which were citizens and 11,608 were non citizens. In the same year a total of 9,087 students graduated from higher learning, 6,406 represented by citizens and 2,681 non-citizen graduates, according to SCAD, the Ministry of Higher Education and Scientific Research, UAE University, Zayed University, and the Higher College of Technology. Of the Emirate’s eight universities, two are government run, and the remaining six are private. There are 13 private colleges, one government college—Emirates College for advanced Education (ECAE)—and five private institutes of higher education. ECAE provides Emirati students with free tuition and a monthly stipend, though is also open to citizens of any country. They are accredited by federal and international agencies, following the Singaporean education system.

GETTING TECHNICAL With the largest student population in the UAE and 17 campuses, the Higher Colleges of Technology (HCT) has a relationship with the Abu Dhabi National Oil Company (ADNOC) to develop engineers and technicians for the oil and gas industry, which is among many of their programs to meet the demand of both the private and public sector growth, as outlined by the 2030 Economic Vision. Founded in 2005, the Institute of Applied Technology (IAT), the state-of-the-art institute had 2,799 students enrolled and 480 graduates in 2013, according to IAT. IAT champions Career-based Technical Education (CTE) in English at the secondary and tertiary levels, encompassing higher learning start-ups in aviation, logistics, and nursing. The institute’s directorate is located in Abu Dhabi with seven campuses across the United Arab Emirates in Abu Dhabi, Al Ain, Dubai, Ras Al Khaima, and Al Fujairah. The Abu Dhabi Vocational Education and Training Institute (ADVETI), operating under the umbrella of the Abu Dhabi Centre for Technical and Vocational Education and Training (ACTVET), is responsible for strategy planning and

BRENDAN LAW Headmaster, Cranleigh Abu Dhabi and Director of Education, Tourism and Development Investment Corporation (TDIC) As the only boarding school in the UAE, how do you see the boarding concept fitting into the educational landscape in Abu Dhabi? Schools like Cranleigh identify that families want to be families together, whilst also enjoying the benefits of boarding, and I share this view. We want to provide a boarding-style program within an extended day school program, where every child has a full program of education that goes well beyond the classroom. At Cranleigh Abu Dhabi, we too focus heavily on our academic curriculum and ensure excellence. How important is it to create a leading role for Cranleigh in Abu Dhabi? When people consider education in Abu Dhabi, I would like there to be an immediate association with Cranleigh and for us to be seen on the international scene as a beacon school; a flagship for Abu Dhabi and the region. I have no doubt that we will achieve that because of our unique position at the gateway of the cultural and business districts in Abu Dhabi. The cultural heritage of 150 years of Cranleigh links into the incredibly modern and vibrant city of Abu Dhabi, which is going to be a cultural hub within the UAE, led by the vision of Saadiyat and our part in that.

Education

Higher Education Students by Sector and Citizenship % (2012-14) Source: Ministry of Higher Education & Scientific Research, United Arab Emirates University, Zayed University, and the Higher Colleges of Technology Government Education

Private Education

10 90

Citizens

42 58

Non- Citizens

implementation in the educational sector, in addition to licensing and monitoring the programs offered. By targeting sectors outlined for development in the 2030 Economic Vision, ADCVET’s curricula target the oil and gas and energy industries, as well as media, government, and the metals manufacturing sector. ACTVET’s curricula and similar vocational and technical institutes in Abu Dhabi is a part of the UAE’s greater goal of Emiratization, to boost employment and career opportunities for Emirati citizens, particularly for placement in administrative and executive positions. ALHOSN University employs a policy that “encourages any local faculty members to come and join us and teach our students,” and hopes to increase their full-time faculty, according to Prof. Momany.

SCHOLARSHIPS AND INTERNSHIPS Scholarships and internships in the Emirate are also geared to developing specific skills in the community and add to local talent in the city. Scholarship and internship opportunities in science and technology, teaching urban planning, food control, and transportation are a direct reflection of the social and economic needs in Abu Dhabi’s rapidly developing marketplace. ADET’s urban planning four-year scholarship provided on behalf of the Abu Dhabi Urban Planning Council (UPC) is offered to both undergraduate and graduate UAE nationals. Students sponsored by ADEC’s urban planning scholarship complete internships at UPC during their stud-

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ies, where they will be hired after they graduate. The scholarship provides full tuition, between $4,000 and $7,000 a month stipend depending on their degree, medical insurance, travel fees, test fees, additional worships and conferences, along with accommodation fees, a laptop, guidance and counseling, and more. Medical scholarships are also a focus of ADET’s funding, to contribute to Emiritization and advancement of Abu Dhabi’s healthcare system. The Physician Study Leave program offers Emirati citizens with at least two years experience in a government hospital the opportunity to major in needed specialized fields. Contrary to many programs elsewhere in the world, interns are often well funded and supported by ADEC, in a diverse range of sectors in the Emirate and abroad, though strategic partnerships with various public and private companies and institutions. The Airbus internship program in Toulouse France for UAE nationals is offered to engineering students to gain experience in aerospace, and provides a monthly salary equivalent to $1,742, a monthly food allowance of $1,525, and monthly transportation allowance of $898, according to ADET. ADET, along with MoHESR is—according to the Minister of Higher Education and Scientific Research, HH Sheikh Hamdan Bin Mubarak Al Nahyan—“creating a generation of citizens confident in their leadership abilities, in their land, in their homeland, and in the potential of their State to strengthen the union through this generation.” ✖

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lead EDUCATOR TBY talks to HH Sheikh Hamdan Bin Mubarak Al Nahyan, Minister of Higher Education and Scientific Research, on long-term strategies, opportunities in the sector, and reform. How is the Ministry of Higher Education progressing in implementing its 2010–2020 strategy?

BIO HH Sheikh Hamdan Bin Mubarak Al Nahyan joined the Federal Government in 2004, as the Minister of Public Works (2004-2013). He is currently serving as the Minister of Higher Education and Scientific Research, and he is also the President of the UAE University. He maintains other positions including Chairman of the Board of Directors of Royal Jet and the National Institute of Tourism and Hospitality. He obtained his Bachelor’s degree in Economics and Management from the UAE University in 1982, and possesses distinct expertise in management and aviation, acquired in his academic studies, training courses in the UK, and practice by virtue of its responsibilities. He was awarded an honorary uniform from the Union of Pilots and Airmen (London), and VIP membership in the Royal Society of Aviation in 1999.

When the 10-year strategy was announced in February 2010 as a national document to achieve the UAE Vision 2021 on its Golden Jubilee, it was aimed at making the UAE among the best countries in the world, according to four pillars: an ambitious and confident people maintaining their heritage, a strong union united by a common destiny, a competitive economy led by the UAE citizens distinguished by creativity, and knowledge and the quality of a good life in a nurturing and sustainable environment. The Ministry draws its strategy from these four pillars, bearing in mind creating a generation of citizens confident in their leadership abilities, in their land, in their homeland, and in the potential of their State to strengthen the union through this generation; hence, it could not only keep up with the developments, but to lead and always be in the foreground, and the road to this is knowledge and sustainable knowledge in all areas of life. We developed our strategic plan for 2014-2016 in order to contribute to the achievement of the knowledge society and the development of higher education and scientific research in the state. In addition to the establishment of the National Committee for Scholarships, with the aim of ensuring complementarity and coordination between

scholarship authorities in the state, we aim to guide the system of scholarships and grants in line with the laws of the Ministry and to develop a strategy and performance indicators for the scholarship system to meet the needs of the labor market in the State. The signing of several agreements and memorandums of understanding (MoUs) with countries that have pioneering experiences in higher education and scientific research to raise the e-readiness and transformation of our services into smart services for more convenience for the customer have increased well-being and happiness indicators in the UAE under the guidance and initiatives of our wise leadership. What opportunities do you see for educators, entrepreneurs, investors, and education businesses in the higher education sector in the UAE?

The higher education system is a consistently integrated one; any change that occurs in one of the paths is definitely followed by change in other paths; the UAE market is a promising market and an attractive environment. In addition to local investments, foreign investment in the state reached $14.4 billion in the year 2014. Education and communication technology is considered one of the sectors with the most investment. The UAE is the first among Arab countries in attracting FDI due to sustainable infrastructure, pro-business legislation and regula-

tions, safety and security, and harmony between more than 200 nationalities living in the UAE. In addition to a Stateled green economy initiative regionally and its adoption of green technology, this means growing opportunities for innovation, scientific research, inventions, and academic study in the various fields of science. The state attracts prestigious top universities to set up branches in the UAE, and studies indicate that the number of students in GCC countries is continuously growing, and it is expected to reach 11.6 million in 2016. And through local or international exhibitions held in the state, which specialize in education and employment, the UAE environment is one of the most attractive environments for investment in education, and investment in some Emirates is expected to grow by 60% by the year 2020. What legislative reforms have been key to the education sector’s development in the UAE?

All the affairs of higher education and scientific research are continually discussed under the umbrella of the Federal National Council, and take all appropriate decisions consistent with the vision and ambition of the UAE in cooperation with the relevant institutions and bodies. The Ministry does not work in isolation; on the contrary, it is the federal agency most interconnected with others, and the proposals submitted by the Ministry or other relevant actors are discussed in order to develop or update some systems so as to improve and keep up with changes on the global education front, however big or small these proposals might be. ✖

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THOSE WHO CAN TBY talks to Prof. Dr. Mohamed Yousif Baniyas, Vice Chancellor of Emirates College for Advanced Education (ECAE) and Higher Education Advisor at the Abu Dhabi Education Council (ADEC), on achieving excellence, the virtual classroom, and the teaching profession. How do you define excellence in the context of ECAE’s fiveyear strategic plan (2013-18) to establish itself as an institution with a reputation for excellence?

We define excellence through various measures, one being program excellence, whereby we make sure our graduates are well placed in the market after they graduate. We also consider accreditation a key measure of excellence. ECAE is in excellent standing in terms of accreditation, both nationally and internationally. Another factor is ensuring we recruit faculty from high-quality universities. We initially had only 10 faculty members with PhDs, whereas now we have recruited an additional 13 over the past year. The other strategic goals of the college include research, partnerships with our stakeholders, and serving the community. We plan to continue improving the core of our business, focusing on operational effectiveness and efficiency. We want the college’s operations to be transparent

IN NUMBERS ECAE

undergraduate programs

yet manageable, staying true to the needs of the market and the nation. What were the objectives behind the recent launch of ECAE’s Virtual Classroom program?

The aim of the Virtual Classroom program, which we developed in partnership with the University of Central Florida, was to give our students and teachers the opportunity to develop practical teaching abilities early on in their studies. We believe that you cannot just learn through theoretical learning; you need practi-

cal application. In the virtual classroom, our students have to manage a simulated classroom and learn to deal with different kinds of common problems, such as the sleeping student, the inattentive student, questions that may be posed by students, and so on. In this way, students can practice dealing with real classroom situations without having to actually deal with a classroom in reality. We are also currently working on building a science simulation lab where not only the students are simulated, but also the topics and experiments. How do you encourage students to enter the teaching profession?

Traditionally, there has not been much interest on the part of Emiratis to pursue a career in education. Our job is to show them that teaching is the basis of all professions. Whether you want to become a lawyer, a doctor, or an engineer, it all starts with education. We try to show them that national prosperity is tied in with education, and developed countries in the world all exhibit high levels and standards of education. We have also diversified our education programs at ECAE to be fully in line with what our students want and expect. We have started seven new programs at the undergraduate level, namely: early childhood, educational counseling, physical education, special needs education, behavioral therapy, educational technology, arts and music, and science and math. We also started a Master’s program in 2013 al-

lowing graduates to have the chance to further specialize in their field. Additionally, the Abu Dhabi government has developed a new salary structure for teachers, which is a big incentive for those considering teaching as a career. Nevertheless, society needs to change its perception and approach to teaching. Education is important, and without it you cannot have success in any profession. ✖

BIO Prof. Dr. Mohamed Yousif Baniyas obtained his PhD in Pharmacology from the University of Wales, Cardiff, in 1993. His Clinical Qualifications include Diplomate Certification by: American Board of Applied Toxicology, American Board of Forensic Examiners, American Academy of Pain Management, and American Psychotherapy Association. He is a Fellow of American College of Clinical Pharmacology, Fellow of American College of Forensic Examiner, Fellow of Royal Society of Public of UK, Fellow of American Psychotherapy Association, and Honorary Fellow of the Faculty of Occupational Medicine of Ireland. He recently joined ECAE as Vice Chancellor/CEO and was appointed Higher Education Advisor at ADEC. He has had an extensive academic career since joining UAEU in 1993.

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RESEARCH and development Could you tell us about your experiences in the UAE and what led you to join the PI?

TBY talks to Dr. Thomas Hochstettler, President of the Petroleum Institute (PI), on how the Institute is expanding, and its plans for new research fields.

Working in the UAE, I came to know and respect the PI as one of the foremost institutions of higher learning in the country. The PI has taken as its specific mission the education of young Emirati nationals for successful careers in the oil and gas industry, and particularly in the ADNOC Group of companies. I have always been supportive of educational innovation, and in the late 1990s, I was a founder of a new university in Germany, Jacobs University at Bremen. So taking the reins at the PI, which has all of the excitement and freshness of a young enterprise, was a natural step for me. Can you describe the transition that is taking place at the PI?

BIO Dr. Thomas Hochstettler was educated in history, economics, and business in the United States and Germany, and he has taught at the University of Michigan, Bowdoin College, and Stanford University. He subsequently served as a senior administrator at Rice University, Lewis & Clark College, and the German Jacobs University. Since 2009, He has worked in the UAE, first as Provost at the American University of Sharjah and now as the President of the Petroleum Institute in Abu Dhabi. He currently chairs the Board of Directors of the International Student Exchange Program of Washington, D.C.

It may seem strange to speak of such a young institution (the PI was founded in 2001) as being in a state of transition, but in fact the PI is in the process of reinventing itself. The PI spent its first decade establishing itself as a top-tier educational institution, where high-quality teachers have been teaching an increasingly well-qualified student body in engineering. In the last few years, the PI has moved into advanced research across a broad range of fields related to energy, and is engaging ever more with our sister institutions in Abu Dhabi, expanding the number of research projects we are pursuing. Enhanced oil recovery (EOR) is a major focus for our research, but we are also expanding our research portfolio to include projects in sustainable energy. We will be increasing our overall enrollments in the next five years by 50%.

What are some of the main subjects studied for research at PI?

The new ADPIRC that we are building on the PI campus has dedicated space to a wide variety of topics. EOR continues to offer a fertile field of research, as our research engineers seek innovative ways of raising the rate of return on existing fields and of finding new ways of tapping into reserves that had at one time been thought to be outside the range of profitability. Many technical fields are now converging, with big data reservoir simulation, microscopic and submicroscopic core analysis, and research on the use of electrokinetics to raise recovery rates now on our agenda. How is sustainability being integrated into the oil industry?

One of the major challenges of the industry today is how we can implement a green agenda to ensure sustainability and environmental friendliness. Our task is to extract the mineral wealth of the earth at the same time that we bequeath to future generations an environment where people

can live healthy, prosperous lives. All of that is in balance at this moment in history. I think as we begin to look at the future, we are also beginning to think about sustainability and the combination of fossil-based fuels and the industries associated with them with the mandate to create a sustainable economic, social, and cultural future for the nation. We are beginning to look at solar power. We have always had some of our courses, clients, and majors focus on sustainability, but it is becoming increasingly important so we are focusing on that even more. We are partnering more with Masdar in that regard. What kind of increases in enrollment are you expecting?

We currently have about 1,400 students and will be going up to about 2,150, which is still relatively small but we think that is the right size. We expect the student body to increase by about 50% over the next five to six years, and we are building facilities and hiring faculty and staff with that in mind. â&#x153;&#x2013;

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VOCATIONAL EDUCATION FOCUS

PATHS TO SUCCESS Abu Dhabi has made a name for itself as the center for Emirati careerbased education to address the need for local professionals as the UAE capital city progresses toward realizing its Economic Vision 2030. A KEY DEMOGRAPHIC FIGURE for the Emirates is the ratio of UAE nationals to expatriates in the local workforce. Emiratis are the minority in the UAE, a reality that also exists in many other GCC countries. However, Abu Dhabi’s efforts to address this trend are commendable, indicative of the foresight leaders in the Abu Dhabi Executive Council have had in ensuring that locals can sustain the rapid economic growth occurring in the capital city, the neighboring Emirates, and the nation at large. The angle from which Abu Dhabi is addressing this issue is through career-based technical education, a model aimed at equipping Emiratis with the skills and qualifications necessary to fulfill the workforce needs of major employers in the local market. It is an effort adamantly supported by both public and private sector stakeholders spearheaded by the Abu Dhabi Center for Technical and Vocational Education and Training ACTVET. Created by the Abu Dhabi Executive Council in 2010, ACTVET is the umbrella organization initiated by the Crown Prince HH Sheikh Mohamed bin Zayed Al Nahyan to oversee technical and vocational training in the Emirate and boost the level of Emiratiziation in the country. ACTVET’s operating duo, the Institute of Applied Technology (IAT) and the Abu Dhabi Vocational Education and Training Institute (ADVETI), are in charge of executing ACTVET’s strategy and producing graduate outcomes that meet the Emirate’s sector-based employment targets. Both entities work directly with industry stakeholders in developing their programs to achieve this, bridging the gap between education and career. Attracting Emiratis into technical fields begins at high school. “High school is the key to building a good breed of graduates who can pursue education at a later stage,” says Dr. Abdullatif Al Shamisi, Managing Director of the IAT, the first of the two ACTVET entities founded in 2005. The institute has high school campuses spanning the Emirates of Abu Dhabi, Dubai, Al Ain, Ras Al-Khaimah, and Fujairah where the aim is to inspire young nationals toward careers in math and science-based fields. Dr. Al Shamisi explains the ethos behind IAT’s high schools by saying that, “Emiratis cannot just be in executive roles. They have to sweat it from the begin-

Created by the Abu Dhabi Executive Council in 2010, ACTVET is the umbrella organization initiated by the Crown Prince HH Sheikh Mohamed bin Zayed Al Nahyan to oversee technical and vocational training in the Emirate. ning. Finance is not a real motive. Being loyal to your country, giving back to your country is the real motive.” Through integrated curriculum, the high schools feed into IAT’s two higher education entities: the technology arm, Abu Dhabi Polytechnic, and the health sciences arm, Fatima College of Health Sciences. Both entities partner with relative industry leaders such as Siemens, ENEC, SEHA, and HAAD, including universities abroad to develop curriculum that is on the cutting-edge of technology, innovation, and industry trends. Graduate outcomes have been highly successful in matching students to careers as a result. “Our graduates hit the ground running once they finish school,” confirms Dr. Shamisi. ✖

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bridging THE GAP TBY talks to Dr. Addel Al Ameri, Managing Director of Abu Dhabi Vocational Education and Training Institute (ADVETI), on meeting the needs of industry and cooperation with other institutions. What were the objectives behind the establishment of ADVETI in 2007?

ADVETI is one of two operators in the Emirate of Abu Dhabi under the umbrella of the Abu Dhabi Centre for Technical and Vocational Education and Training (ACTVET), the second operator being the Institute of Applied Technology (IAT). The idea behind the establishment of ADVETI was to train and provide UAE nationals with the skills required for employment that go beyond the essential technical skills and competencies required by a specific occupation. For example, mechanical engineering technicians need to be able to do more than simply handle technical aspects of a job such as the assembly and disassembly of a piece of equipment or machinery, they must also be able to communicate effectively, both in writing and orally. Occupational skills are vital. How do you develop your programs to meet the needs of industry and the greater economy?

In building our programs and curricula, we refer to the Abu Dhabi Economic Vision 2030 and target those sectors identified as critical for the economy of Abu Dhabi. Sectors identified as major players in a knowledge-based economy are the ones addressed by our programs. As a result, we target the oil and gas industry and

also energy and power generation. Currently, we are working with the Emirates Nuclear Energy Corporation (ENEC) on a program to develop the nuclear professionals they require. Media is another key industry identified in the Abu Dhabi Economic Vision 2030, and we have built close relationships with the major employers in that sector. We offer a program in creative media production, for example, to equip UAE nationals for the needs of that

BIO In a career spanning over 23 years, Dr. Addel Al Ameri has made major contributions to the fields of education, human capital development, strategic planning, and change management for the Abu Dhabi government in the UAE. As Managing Director of the Abu Dhabi Vocational Education and Training Institute, he now applies experience of leadership development programs, together with first-hand knowledge of the worlds of industry and commerce, to promote the development of young Emiratis as future leaders and certified trainers in diverse occupational sectors across the nation.

industry. We partner with all major industries in the media, energy, government, and steel and aluminium manufacturing sectors, at both local and federal levels. For example, there is a huge demand for inspection professionals at Abu Dhabi Municipality. This is a new occupation that the Municipality wants to Emiratize, ranging across business inspection, safety inspection, health inspections, electrics, and so on.

IN NUMBERS ADVETI

Total number of students in the system

5,750 +

What are some of the key areas of cooperation you have with other institutions?

As a training provider, we do not limit ourselves to just one training partner. We work not only with TAFE, but also with BTEC from the UK, which is more familiar to the oil and gas industry. For logistics management, our partner is the Chartered Institute of Logistics and Transport (CILT). We are also now developing programs with the Chartered Institute of Purchasing and Supply (ClPS) for procurement training. Our strategy is to approach the best training and professional bodies and partner with them. We assess their training packages and the needs of the industry, and incorporate that knowledge into our programs. Of course, in order to deliver their training programs tailored for our market, we obtain prior permission and agreement from the quali-

fication owners to undergo our own customizations, and then present them to the employers. Once everyone is in agreement, we sign an MoU in order to secure sponsorship for the students in these programs. Creative Media Production is an example of a BTEC program offered by Edexcel, one of the major training awarding bodies in the UK. In 2013, we signed an MoU with the Abu Dhabi National Oil Company (ADNOC). Emirates Steel is another of our partners and we are also involved with the Federal Electricity and Water Authority, akin to the Abu Dhabi Water and Electrical Authority, but at federal level. Overall, we have already signed some 32 MoUs. They are generally of three to five years duration, after which they are reassessed. â&#x153;&#x2013;

Education

THEBUSINESSYEAR

Image: The Petroleum Institute

Abu Dhabi is becoming something of a global campus

Image: New York University Abu Dhabi (NYUAD)

Image: Higher Colleges of Technology (HCT)

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TOP CAMPUS

PROF. BRUCE TAYLOR President, Emirates College of Technology (ECT)

e already have an internal research seminar series and routine faculty meetings teams that are delivering a program. We have guest speakers and research presentations by our own faculty, the majority of which in 2014 have been in the area of business. Many of our colleagues who are active in research are actually continuing work they may have been doing in their doctoral study, in post-doctoral assignments, or as faculty members in other institutions before they joined ECT. We think those partnerships are valuable, and we work with the faculty to continue those partnerships and encourage them to sustain those programs with others, while of course requiring them to put ECT on their publications. Over time, we will enlarge and enhance our research support, and we will develop other connections, either locally or internationally that will support our faculty in conducting research. Publicizing research achievements is one of the best things we can do to support a research culture.

DR. ALFRED BLOOM Vice Chancellor, New York University Abu Dhabi (NYUAD)

n 2014 alone, NYUAD faculty members published 12 books, edited 21 books and chapters, published 112 journal articles and 64 conference proceedings, and filed for seven patents. Every day brings a new collaboration in our academic and research pursuits, cooperation that is forged locally, regionally, and internationally. Our faculty, students, and staff collaborate frequently with students and staff in federal and private universities throughout the country, participating in programs on public health, environmental protection, Arabic education, sustainability, and much more. Today, five years after opening our doors, we have educated classes of students who are not only prepared to excel across the paths of life they choose, but to build bridges across differences anchored in the recognition of human commonality. Our institution has nurtured a faculty whose research productivity has been truly exceptional in both quality and global implication.

By ensuring that their researchers have cuttingedge facilities and strong institutional support, universities are making impressive strides to catch up with more established institutions worldwide.

DR. ABDULLAH A. ABONAMAH

DR. NABIL IBRAHIM

President and Provost, Abu Dhabi School of Management (ADSM) and CEO of UAE Academy

Chancellor, Abu Dhabi University

ur partnership is with the Imperial College, London Business School, which is one of the worldâ&#x20AC;&#x2122;s premier universities. Our community engagement model is in the process of proactively liaising with the business community to create content that is industry driven. As a new college, we are developing our relationships, but we are planning a roundtable event early in 2015 in which faculty from ADSM will meet business leaders to discuss challenges with a focus on innovation and entrepreneurship. We will discuss issues regarding how to improve market conditions during a downturn. We are after better products, efficiency, and more attention to the customer by either growing horizontally through market expansion, or internally improving. Of course, the best thing is to do both, but if you cannot do one, do the other. Many organizations are looking at improving their internal processes.

bviously, any successful partnership requires a certain mutuality of benefit, so they have to gain something from collaborating with us and vice versa. There is no doubt that universities such as Purdue University, University of London, or California State have much offer. They have the experience, the history, and a global track record of excellence. ADU can benefit a great deal from that experience, likewise we have the advantage of attracting the best and the brightest faculty worldwide, and indeed, our faculty comes from all over the world, with unique talents. Universities abroad can benefit from the active and bright talents that we boast at ADU, and jointly can achieve more than they could do independently. So that is how we see our partnership. We partner also on student exchanges, which again benefits all participants, and in faculty exchange, curriculum development, and partnering developing programs, and then offer these jointly as we have with Purdue University.

Education

PROF. MUNTHER TALAL MOMANY

DR. AHMED GHONIM

Vice Chancellor & CEO, ALHOSN University

President of the University College, Al Khawarizmi International College (KIC)

e recently received three accreditations from the American Board of Engineering Technology (ABET). We received these for software engineering, civil engineering, and for industrial and mechanical engineering. This is a continuous process and we are proud of it. This new achievement will increase the interest in ALHOSN University. ABET is a non-governmental organization and is located in the US; it accredits post-secondary education programs in applied sciences, computing technology, and engineering technology. It is one of the most respected accreditation organizations in the world and the US. With 75 years of experience in quality assurance and accreditation, that really adds value to any institution. Aside from that, in order to be a licensed professional in engineering in the US, you have to graduate from an ABET-accredited program; therefore, all of these factors really add value to our university. This will give us and our students a competitive advantage, not just in the market of the UAE or the Middle East, but anywhere in the world.

he research center will provide everything they need for creative research, not just for the university, however, but for the country as a whole. We want our research facilities and staff to serve the vision of Abu Dhabi and the UAE. We are in constant contact with all relevant governmental institutions to align our research with the direction of the country. We direct our staff and dean of research to target the general vision of Abu Dhabi and the UAE. KIC has a strategic plan for 2013-2014 that seeks to create two research projects per staff member per year within the next five years. We need research to be remarkable and creative, and directed toward Abu Dhabi first, and then the region. KICâ&#x20AC;&#x2122;s staff will not just be focusing on scientific research, but also applied research. We want more than 80% of our research to be applied by different institutions, and we have an agreement with governmental bodies to help us apply our research in various fields; an example of applied research is IT.

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DR. TOD A. LAURSEN MOHAMMAD President and Professor OMRAN AL SHAMSI of Mechanical Engineering, Khalifa University

CT is a major focus for the university. We already have the Etisalat BT Research Centre that will continue to grow and flourish. We have a new Aerospace Research Centre that we are undertaking with Mubadala Aerospace, and its focus is composite materials and airframe structures. One of the major stakeholders there is Strata Manufacturing PJSC (Strata) based in Al Ain. With both the Boeing and Airbus contracts that are coming to the UAE, there is a competitive opportunity for the UAE to lead in the automation of composite manufacturing. The question is, can we increase reliability while also reducing the cost by using more automation? The Aerospace Research Centre is a major new research center that is just getting going. We also have a Semiconductor Research Centre that we opened in collaboration with Mubadalaâ&#x20AC;&#x2122;s Advanced Technology Investment Company (ATIC), which is now entering its second year. Robotics is going to be a large deal for us along with high-performance computing and big data.

Chancellor, Higher Colleges of Technology (HCT)

earning by doing allows students to adapt more quickly to new environments, much more so than graduates from other universities. But industry needs are changing; for example, if you look at the oil industry, which is implementing a lot of new technology. We need to enable our students to adapt to this. At the aviation industry in the UAE, it is becoming a major player in this worldwide sector, with Emirates, Etihad, and even Air Arabia, and graduates are needed in this field. In addition, within the banking industry, the UAE is now a hub for the region, and so we now need to develop our graduates to work in that sector. We are also working with the insurance industry, because that is also a major business in need of new initiatives. Industry stakeholders need graduates who can enter the workforce with the confidence, skills and knowledge to succeed in these important fields, and the HCT is working to ensure this happens with our graduates.

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FOCUS THE NATIONAL LIBRARY

The National Library is a central hub for Arabic literature and translations

Image: Step

HOUSE OF KNOWLEDGE The National Library of Abu Dhabi is a gem of knowledge, culture, and history, facilitating the dissemination of literature to and from the Arab world and symbolizing the importance of education in Emirati society.

AS THE UAE CELEBRATED it 43rd anniversary in 2014, the Abu Dhabi Tourism and Culture Authority’s (TCA) National Library project celebrated its 33rd year since being established in 1981. It officially began serving the public three years later in 1984, and has seen significant expansion and development since then, dotting neighborhoods across the Emirate with more and more physical library branches while also enhancing its local and worldwide reach into the online world of digital publishing, mobile libraries, and various other e-services. A token of Abu Dhabi’s growing reputation as a cultural and intellectual capital in the Middle East, The National Library is tasked with the important job of compiling and safeguarding all national literary information, from books to periodicals, to historical documents and electronic materials, such as e-books and audio books. It is also associated with several region-leading initiatives that promote the exchange of literature and knowledge to and from the Arab-speaking world, valuing the importance and power reading can have on igniting economic development and traversing cultural boundaries. Not only does the National Library offer easy access to information through its resources and archives, but it also provides significant support to spur the creation of local, Emira-

ti intellectual content, be it short stories and novels, poetry, scientific research, or children’s literature. These subjects are gaining greater exposure in the region and worldwide through several programs, one in particular being the well known and ever-growing event, the Abu Dhabi International Book Fair (ADIBF). The ADIBF, a TCA project associated with the National Library, attracted 15% more visitors YoY in 2014, including many of the world’s leading publishers and booksellers. The event offers access to professionals in the book industry, such as publishers, distributors, and other literary industry players from the MENA region and abroad, giving the opportunity for them to convene and coordinate deals with local writers, bringing Emirati writing to wider audiences through subsidized translation offers facilitated at the event. Today, Arabic writing is being translated into English, Urdu, Italian, French, and many others languages from around the world through initiatives such as these, increasingly making Abu Dhabi a prolific destination in the world of publishing. While more Arabic and Emirati content is being translated and distributed outside of the UAE, more content is coming in as well. A key goal of the National Library is to support the translation of literature from other languages into Arabic. It’s affiliate project, the Kalima initiative, along with the Abu Dhabi Translation Conference, work to translate various literature into Arabic, further encouraging reading and the exchange of ideas and culture to Arabic speaking societies, of which there are roughly over 200 million in the world. Each year, Kalima selects 100 classic and contemporary titles to be translated into Arabic. According to SCAD, back in 1971 when the UAE was first founded, the illiteracy rate in the Emirate was 75.12% of the population over 10 years of age. The most recent data from SCAD indicates Abu Dhabi today may have one of the lowest illiteracy rates in the entire Gulf region, with 6% illiteracy recorded in 2011. It is shopping that is most often referred to as one of the most popular national pastimes and means of entertainment in the UAE, but reading may have the potential to be a close second as the National Library seeks to enhance literacy rates even further through its various translation initiatives, increase in physical branches, and extension of its archives to a wider audience online. The UAE’s National Library supports the nation’s shift toward a knowledge-based and diversified economy by its very presence as an institution of nearly 35 years of influence. As is the case with other national libraries the world over, it symbolizes the importance of education, the pursuit of knowledge, and the perseverance of historical and cultural artifacts of Emirati, Arab, Islamic, and universal significance and is an invaluable treasure of knowledge in the country and the world. ✖

Education

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THROUGH ITS MOBILE LIBRARIES, EXTENSIVE E-SERVICE CATALOGUE, E-SHOPPING LIBRARY, AND VARIOUS PHILANTHROPIC PROJECTS, THE NATIONAL LIBRARY HAS DEVELOPED INTO ONE OF THE GREATEST RESOURCES IN THE WORLD FOR ARAB, ISLAMIC, AND GLOBAL HUMAN THOUGHT. Source: Abu Dhabi Tourism and Culture Authority

BRANCHES

Al Bahia Library

Al Nahyan Library

Al Ain Mall Library

Khalifa Park Library Mazyad Mall Library

Al Marfaa Library

PROJECTS Established in

1981 300,000+ titles in Arabic

100,000+ titles in foreign languages

4k+

Arabic and Islamic manuscripts

Sheikh Zayed Book Award

AED7 million

presented annually to Arab writers, intellectuals, and publishers [$1.9 million]

Abu Dhabi International Book Fair The worldâ&#x20AC;&#x2122;s fastest growing book fair

500,000+

titles on display annually

Qalam Initiative to develop and help young

local writers Kalima

100

classic and contemporary titles translated into Arabic annually

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INTERVIEW

GOT your back

IN NUMBERS Rabdan Academy

Campus opening in

2015

TBY talks to Dr. Faisal O. Al Ayyan, Executive Vice President of Rabdan Academy, on the Academy’s approach to education and emergencies and the costs of being unprepared.

1,100 student capacity

What is the unique approach the academy has to education and training in the fields of safety, security, defense, emergency preparedness, and crisis management?

Rabdan Academy was established under Law No. 7 of 2013 issued by the President of the UAE and Ruler of Abu Dhabi, HH Sheikh Khalifa bin Zayed Al Nahyan, on October 21, 2013 in order to develop the nation’s future leaders in the fields of safety, security, defense, emergency preparedness, and crisis management. It was built from the ground up as a world-class, professional education institution to help agencies and professionals plan and conduct their operations professionally, in support of each other, and with the flexibility to meet the national security objectives for today and tomorrow. It is the first academy in the UAE with a dual-sector system; for example, it combines vocational/skill-based education and higher/academic-based education, and is the first in the world to combine safety, security, emergency, and crisis management under one structure. As part of the UAE Vision 2021 and the Abu Dhabi Vision 2030, what role does Rabdan play in building national capabilities in the defense sector?

Rabdan Academy will play a key part in developing the future leaders and managers of

all organizations tasked with keeping the citizens, residents, and visitors of the UAE safe. This will also add to the aim of protecting the valuable natural resources, the growing economy, and the critical national infrastructure. We ensure that all organizations are aware of the national strategy and our role in it. It is our job to develop internal capabilities in this area and support government entities. Our stakeholders need locally trained professionals in crises and disasters. We are looking at what is available on the market and adapting to that. The need is growing. As such, the Academy operates in accordance with the guidelines and principles of the UAE Vision 2021 and Plan Abu Dhabi 2030 and Economic Vision. It is making a significant contribution to the future prosperity of Abu Dhabi. How are Rabdan Academy’s facilities organized?

Our campus is a state-of-theart facility and a center of excellence that can accommodate up to 1,100 students. The new campus reflects the academic identity of the institution in terms of design, facilities and architectural style. It integrates a wide range of the latest technologies including audio-visual media, smart boards, and international databases. The technology we have in our facilities enables us to be connected with dif-

ferent universities in the US and the rest of the World for future collaborations. We can also connect to different schools in the UAE with our university. What are the cost implications of being unprepared for crises?

To give one example, the outbreak of foot and mouth disease in the UK in 1967 cost the economy about £300 million. In 2001, it represented a £3 billion to £20 billion loss for the economy. The reason is that they were not prepared to handle foot and mouth at that time. In 2007, it cost them £47 million. From £3 billion to £47 million is a significant change. Once you have a plan, the people, and the tools and equipment to manage such situations, as well as organizations willing to help that know their roles and responsibility and have no gaps between them, you can work together as a complementary base with mutual objectives. With all of these in place, these costs can be eliminated. The UAE has excellent capabilities. We aim to make the Abu Dhabi and the UAE one of the top 10 in the World in terms of safety and security. We continue working to ensure, we have the same capabilities as the people working against us in crime. It is like a virus and anti-virus. For that reason, we are working to make sure our level of preparedness is high. ✖

BIO Dr. Faisal O. Al Ayyan is a senior executive with over 10 years of experience in the leadership of many complex programs and projects. He is currently the Executive Vice President of Rabdan Academy, a new educational institution that has a pioneering new approach to training and education in the areas of safety, security, defence, emergency preparedness, and crisis management. Key to his success is his ability to analyse and define the nation’s requirements and to fully understand the framework toward a more resilient nation. Before joining Rabdan Academy, he held several key posts in major organizations, such as Critical Infrastructure and Coastal Protection Authority, Tawazun, and Khalifa University.

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HE Sheikh Nahyan Bin Mubarak Al Nahyan, Minister of Culture, Youth, and Community Development, on success in sport.

Saadiyat Island is set to become one of the world’s great cultural centers, as an epic development program nears its completion.

HE Aref Hamad Al Awani, General Secretary of the Abu Dhabi Sports Council, on the role of sports in the Emirate.

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Tourism, Culture & Sports REVIEW

WORK HARD, PLAY HARD An award-winning travel destination known for its five-star hotels, entertainment venues, and high-quality tourist authority, growth for the sector from the short- to long-term is only expected to increase.

nherently cosmopolitan, innovative, and visionary at its core, the UAE’s capital city is known for attracting a dynamic mix of visitors for business and leisure alike. “More than just falconry and camel racing and skiing in the mall,” the city’s offerings to tourists strategically cater to the refined and varying interests of its global clientele, as the UAE Minister of Culture said in an exclusive interview to TBY. Last year a record 3.49 million tourists visited the emirate, according to the Abu Dhabi Tourism and Culture Authority (TCA), and numbers are only expected to grow this year. Targets for arrivals in 2014 were exceeded by almost 400,000, increasing by 25%, and the 2015 target is 3.5 million. The city is host to major international cultural events such as Abu Dhabi Art, which gathers the world’s leading modern and contemporary art galleries in a diverse program celebrating the UAE’s rich cultural landscape. The sixth edition of Abu Dhabi Art, hosted

Source: FLASH Entertainment

The growing potential of MICE and business tourism is actively being explored by various public and private initiatives and programs in energy, petrochemicals, pharmaceuticals, healthcare, financial services, and telecommunications.

by TCA, was held November 2014 at Manarat Al Saadiyat on Saadiyat Island. The government’s strong support of a variety of sports programs and the city’s state-of-the-art stadia has contributed to the distinction of the World Travel Awards’ “Leading Sports Tourism Destination” for 2014. TCA was also distinguished last year by the World Travel Awards as “Leading Tourism Board,” and was named “Best Tourism Authority” in the UAE at the 2014 Middle East and North Africa Awards (MENA) “Powered by Service Quality” event. Abu Dhabi was also honored by the reputable UKbased Travel Agents Choice Award as “Destination of the Year.” In terms of arts and culture, nightlife, entertainment, education, health, business, and more, Abu Dhabi’s cutting-edge tourism industry focuses on the high end, with something to offer for all tastes and ambitions.

BE MY GUEST Landmark, luxury hotels like the Kempinski’s Emirates Palace and the Shangri-La are a

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major draw for the predominantly high-end tourism sector, with five star accommodations accounting for the largest segment—21% of hotels and apartments and 34% of rooms earn a five star rating. Emirates Palace features a 1.3 km private beach on a private marina overlooking a private natural bay; opulent, traditional Arabic architecture with 114 18-meter-high domes; ornate hotel rooms; and gold and marble-lain luxury suites. The Shangri-La’s hotel complex is connected by a winding waterway, leading to the hotel’s own souk selling traditional artifacts, paintings, jewelry, and clothes. Hotel occupancy rates increased by 6% compared to 2013, reaching 75% capacity in 2014. Notably in July 2014, occupancy rates reached 55%, exceeding Dubai (50%) for the first time, according to Jones Lang LaSalle. However average daily rates declined in 2014 to $133 from $142 in 2013. Interest from international travellers increased in 2014, particularly with a rise in Chinese visitors, with approximately 60,000 checking into hotels and resorts in 1H2014, contributing to over 105,000 room nights, according to TCA. Hotel guest growth rates in hotel guests from Europe rose by 38%, while guests from the US rose by 48% in 2014. Growth rates for UAE nationals increased by 14% in 2014, with Asia rising by 37%, primarily driven by 148% growth from China and 34% growth in guests from India, while growth in guests from Russia decreased by 13%, informs TCA. As part of the partnership between TCA and the Chinese Tourism Ministry to boost visitors from China, Mandarin-speaking concierges and Chinese television channels are expected to become regular fixtures in Abu Dhabi hotels and attractions, reported The National. A new “Welcome Chinese” certificate is being issued by the China Tourism Authority and the Shanghai-based consultancy Select Holding to more than 30 hotels and attractions in Abu Dhabi. In addition to having a Mandarin-speaking staff, certified hotels will need to provide CCTV channels, UnionPay bank card payment service, kettles in rooms, a Chinese menu, among other offerings. The growth rate of Chinese tourists to Abu Dhabi last year was largely due to 10,000 agents from the Chinese cosmetics company Nu Skin, visiting on an incentive tour. While the average stay for Chinese tourists in 2014 was 1.67 nights, it is expected to increase to two days in 2015, according the Chinese Tourism Authority. The supply of hotel rooms increased by 8.3% between 2013 and 2014, rising from 25,671 available rooms to 27,795. The planned future supply of rooms to Abu Dhabi’s hotel capacity will add 1,850 rooms in 2015, 800 in 2016, and 1,500 in 2017. In 2014 the number of hotel establishment guests rose by 25% compared to the previous year, reaching a total number of hotel guest arrivals at 3.4 million according to the TCA. Guests nights for the entire year of 2014 rose by 19% to 10.5 million total guest nights, and the average length of stay for Abu Dhabi hotels last year decreased by 4% YoY. Total hotel revenues reached $1.71 billion in 2014, rising

14% YoY, with room revenue increasing by 15% and food and beverage revenue increasing by 11%. Three hotels opening during December 2014; the Courtyard Marriot in Abu Dhabi City, a four star hotel comprised of 195 rooms; the 230 room deluxe hotel apartment complex Bin Majid Tower Hotel Apartment also in Abu Dhabi City; and Ayla Bawadi Hotel in Al Ain City, a three star hotel comprised of 90 rooms.

STAY A WHILE Following a global trend toward long-term accommodation, there has been a marked increase in demand for apartment-style hotels for longer stays in the city, particularly in areas such as Yas Island, according to Jones Lang LaSalle. The highest occupancy rate for 3Q2014 in Abu Dhabi was recorded by hotel apartments at 76.6%, compared with a 63.3% occupancy rate for hotels in the third quarter of 2014. In 3Q2014, two hotel apartment buildings opened—Adagio Al Bustan on Airport Road and Grand Mercure Residence on Zayed the 1st Street, with the Capital Centre Arjaan and Danat Residences having opened the end of 2014 and early 2015 respectively. Danat Residences feature 186 fully equipped luxury apartments with the use of extensive hotel amenities and recreational facilities such as fine dining restaurants, rooftop swimming pools, meeting rooms, strategically located minutes away from Abu Dhabi Exhibition Centre and major embassies and government offices.

SPORTS AND ENTERTAINMENT While Abu Dhabi may not be known for winter sports, its ice hockey team is becoming one of the top Division III teams in the Asian league, which is just one of the many surprises of the emirate’s vibrant sporting scene. “Whether its water sports, such as sailing and swimming, or equestrian sports, polo, or camel racing, there is a strong historical connection between the people of the UAE and sports, both traditional and modern,” HE Aref Al Awani, General Secretary of the Abu Dhabi Sports Council (ADSC) told TBY. Since the sports council was created in 2006, it has successfully hosted several tournaments from various sporting disciplines and played a leading role in supporting women in sports, such as founding the Sheikha Fatima bint Mubarak Sports Academy for Women's Sports. In 2015, the Emirate will host the finals for the Cycling World Tour and the ITU triathlon, in addition to making bids to host the FINA swimming 10K World Open Water Swim Tour, the Asian Cup 2019, and the FIFA World Cup. ADSC also founded an Aero Sports Club in November 2014 geared toward enthusiasts of air shows and air sports, such as skydiving. ADSC is also keen to involve more private companies to participate and host sporting events, and companies such as HSBC, Etihad, Mercedes Benz, Borouge, and Abu Dhabi National Oil Company (ADNOC) are already active contributors to the community. Working closely with ADSC, Zayed Sports City recently received the

MUBARAK AL SHAMSI Director, Abu Dhabi Convention Bureau What were the reasons behind the establishment of the Abu Dhabi Convention Bureau in 2013? The bureau was established to encourage business events to take place in Abu Dhabi. We could see great potential in business events interested in coming to Abu Dhabi, and we needed to address that. We work closely with our stakeholders, various venues, Abu Dhabi National Exhibition Centre (ADNEC), airlines, hotels, and other tourism-related businesses. Once we were established, we had a clear set of targets to reach. We created a number of programs and incentives to attract more businesses to Abu Dhabi. We have given the best of what we could give to make the business environment more hospitable. What makes Abu Dhabi a destination of choice for business events and conferences? Abu Dhabi has heavily invested to develop great tools, such as infrastructure and other business elements. Today, Abu Dhabi enjoys beautiful facilities and excellent venues for conventions. On top of that, Abu Dhabi is in a prime location. It is at the center of the world, and has great connectivity thanks to Etihad. These elements are crucially important for us and, of course, for the business events industry.

ABU DHABI SPORTS HUB ABU DHABI SPORTS COUNCIL â&#x20AC;&#x201C; Now Ready for the International Arena

FINA 10 km Marathon Swimming World Cup

The President of the UAE Cup Series

Mubadala Tennis Championship

Abu Dhabi HSBC Golf

ITU World Triathlon Series

Fencing Asia Championship for Juniors and Cadets

World Professional Jiu-Jitsu Championship

Formula 1 Etihad Airways Abu Dhabi Grand Prix

UIM Formula1 Powerboat World Championship

Red Bull Air Race

Abu Dhabi Sports Council AbuDhabiSC

Volvo Ocean Race

www.adsc.ae

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award for “Best Sport and Recreation Venue” in the MENA region at the Sports Industry awards. In 2014, the venue hosted approximately 20 international football teams, and is already in discussions to host 40 international teams to train during their off seasons in 2015, according to its General Manager Barry Bremner.

BUSINESS TOURISM In addition to cultural, sporting, and entertainment events, the growing potential of MICE (Meetings, Incentives, Conventions, and Exhibitions) and business tourism is actively being explored by various public and private initiatives and programs. Aligned with the Abu Dhabi Government’s 2030 Economic Vision, the Abu Dhabi Convention Bureau is working with TCA, stakeholders, various venues such as the Abu Dhabi National Exhibition Centre (ADNEC) and Al Ain Convention Center, airlines, hotels, and other tourism-related businesses to catalyze innovative and viable business events in areas such as energy, petrochemicals, metals, aviation, pharmaceuticals, healthcare, education, transport, media, financial services, telecommunications, and more. Well positioned as a global MICE destination due its state-ofthe-art venues, strong governmental support, and prime geographical location, the Convention Bureau boasts competitive average room rates compared to other destinations, particularly in terms of value of services and facilities.

Now under development and planned for 2020 completion, the Saadiyat Islands is slated to become the next international business hub. St. Regis Saadiyat Island resort will include five meeting rooms and a 3,000 sqft ballroom ideal for conferences and exhibitions, and the Hilton resort’s conference facilities are designed to accommodate up to 800 guests. ✖

JOHN LICKRISH CEO, FLASH Entertainment In 2014, we hosted around 60 live events. Many more artists are aware of Abu Dhabi and of performing here, and they have begun incorporating it into their concert and tour schedules, which has made it easier for us to bring them here. Our aim was to make Abu Dhabi an established and important stop on any international tour, through which artists can come on their way to or from Asia, South Africa, Turkey, and India, for example.

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Tourism, Culture & Sports

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INSIDE PERSPECTIVE

HE Sheikh Nahyan Bin Mubarak Al Nahyan, Minister of Culture, Youth, and Community Development, on the human spirit behind success in sports, its benefits, and the gaps it can bridge.

positive, mental attitude BIO Both global and domestic motives mark the sporting scene in the UAE. The global motive is a natural component of our global society. The UAE is a cosmopolitan destination and a global crossroads. People living and working in the UAE become global citizens—people whose scope of vision, understanding, and interest traverses national borders; people whose guiding values are more universal than provincial. And they all bring to our country the sports of their countries. The sports of the UAE are much more than just falconry and camel racing and skiing in the Dubai Mall. Early in 2014, the government of India ruled that during the extended period for national elections, it could not provide security for the first 20 matches scheduled for the Indian Premier League (IPL). Thus, the IPL relocated the matches to our magnificent stadia in Abu Dhabi, Dubai, and Sharjah. Fans completely filled the stadiums for those 20 matches during the last 15 days of April. The sport, by the way, was cricket. We cherish the bridges that cricket has built between the internation-

al communities within the UAE. These bridges are a vital part of a complex crossing system that also features rugby, football, and basketball, and these sports bridge the gap for races of all kinds. They are representative of an extensive inventory of sporting bridges in the UAE, bridges crossed daily by our global population. Sports demand dedication, practice, coordination, balance, alertness, concentration, technique, judgment, discipline, patience, daring, civility, and teamwork. Those are also the attributes that strengthen individuals and increase their ability to make a positive difference in their communities. Our UAE leadership values those attributes. His Highness the President, Sheikh Khalifa bin Zayed Al Nahyan, has said that our country “has relied, and will continue to rely, on the rich and diverse contributions of its true wealth, its people, to guarantee its prosperity.” Our true wealth lies in people with the attributes that are also valued by the sports that appeal to our global population. Here in Abu Dhabi, His Highness Sheikh Mohamed bin Zayed Al Nahyan, the Crown Prince

HE Sheikh Nahyan Bin Mubarak Al Nahyan received his education from the British Midfield School until the high secondary level. Afterwards, he joined Majdolin faculty at Oxford University-UK. he has been appointed as Minister of Higher Education and Scientific Research since February of 2006. Before this, he served in the position of Minister of Education during the period from 2004 to February of 2006. He has also served the position of Minister of Higher Education and Scientific Research from 1990 until 2004. He is also Chancellor of two of the UAE's three governmentsponsored institutions of higher learning: United Arab Emirates University, established in 1976, and the Higher Colleges of Technology, established in 1988; he is also President of Zayed University, established in 1998. Meanwhile, His Excellency has also been the chairman of several ministerial committees including the Ministerial Committee for Education and the National Committee for Workforce Planning.

of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, believes strongly in the value of sports to a well-developed society. His strong support of the variety of sports played in the UAE helps everyone in our country to enjoy the benefits of athletic competition in improving the quality of our lives and in advancing the values of peace and understanding, both domestically and globally. In the UAE, you will notice that global motives intertwine with domestic motives in regard to our support of major international sporting events. We embrace sports because we hope to see UAE citizens as well as all of our residents from around the world participate in sports and reap the benefits for mind and body so generously offered by sports. Our children and our young men and women are our primary concern. If the Roman poet Ovid is right that “nothing is stronger than habit,” then we must encourage our young people to develop in a safe way with the healthiest habits. The danger for them, and for our country’s future, lies in their not developing those habits. To embrace sports is to embrace life. I highly recommend it and wish for you all a wholly productive conference. Women as well as men can excel in the competition and achieve success. And that in appreciating achievement in the sports world, we honor the human spirit, the hard work, the endurance, and the focus that success requires. ✖

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FOCUS MUSEUMS

TREASURE ISLAND Saadiyat Island is set to become one of the world’s great cultural centers, as an epic development program for franchises of the Louvre and Guggenheim nears its completion. By 2020, Saadiyat Island will have an awful lot to show for a mere 27 sqkm of sand. The island’s Cultural District alone will soon be home to the Zayed National Museum, Louvre Abu Dhabi, and Guggenheim Abu Dhabi, each one an architectural—not to mention international—venture of epic proportions. Alongside will be a Performing Arts Center and Maritime Museum, as well as luxury villas, business and retail parks, and 29 state-of-the-art hotels. The Louvre Abu Dhabi is scheduled to open its doors in 2015, followed by the Zayed National Museum in 2016 and Guggenheim Abu Dhabi in 2017. Work on a 168,000 sqm ritzy shopping mall linking the three museums started in 2014 and is due to be completed in 2017. The Tourism and Development Investment Company (TDIC), the local developer behind this transformation, is the main investor in the Saadiyat project, and issued bonds and a sukuk worth $1 billion each at the project’s outset in 2009, according to The National. The entire development is set to cost a cool $27 billion by the time the island is fully open in 2020.

DESERT ISLAND DISCS Of the three main museum projects, the Louvre Abu Dhabi is perhaps the most ambitious, and is scheduled to open its doors later in 2015. Construction is estimated to cost a little over $108 million. A floor space of 24,000 sqm will host a revolving program of art exhibitions and loans from, or in collaboration with, the Louvre in Paris, as part of a 30-year agreement between the governments of France and the UAE worth $747 million. Abu Dhabi paid an estimated $525 million to acquire the Louvre name. The museum itself, bathed in light, is designed by French architect Jean Nouvel, who describes his vast “floating” dome as “an island on an island.” Guggenheim Abu Dhabi, designed by Frank Gehry, opened to a select few in 2014, and is a world-class contemporary museum. Site-spe-

cific installations and exhibitions generate scholarship-supported education on modern art from around the world. Beneath the wind tower-shaped cones, evoking traditional Gulf architecture, the November exhibition, “Seeing Through Light: Selections from the Guggenheim Abu Dhabi Collection,” featured pieces by 19 international artists from the 1960s to the present day, including works by Larry Bell, Dan Flavin, Robert Irwin, and Arab artists Mona Hatoum, Monir Farmanfarmaian, Samia Halaby, and Y.Z. Kami. The largest of the Guggenheim museums (the others are in New York, Venice, and Bilbao), Guggenheim Abu Dhabi has a floor space of 41,800 sqm and the museum’s inauguration is scheduled for 2017. The island’s Cultural District will also be home to the Zayed National Museum, built to reflect the late ruler’s cultural vision and showcasing the history of the UAE before the oil-age: the culture, science, and learning of the Islamic world, faith, falconry, as well as the fauna and flora of the UAE. The late Sheikh Zayed bin Sultan Al Nahyan was a visionary when it came to managing and building upon the oil riches of his small country—and an avid environmentalist with a passion for falconry, which is reflected in the Norman Foster-designed building, whose 125-meter steel spires splay like the feathers of a giant falcon into the sky. The Maritime Museum and the Museum of Performing Arts will also form part of this complex. Such a cultural and architectural undertaking is all but unprecedented in recent history, and certainly since the building of the great American museums in the 1770s. Those early institutions marked the beginning of an era of publicly accessible collections that has lasted to this day and arguably has changed the very concept of education in the West. The new museums of Abu Dhabi harbor no less an ambition, and are set to do the same for the Middle East region. Expect to see a lot more treasure—and people—on this island. ✖

Tourism, Culture & Sports

AN UNPRECEDENTED CULTURAL AND ARCHITECTURAL UNDERTAKING, SAADIYAT ISLAND'S CULTURAL DISTRICT WILL BLEND RICH EMIRATI NATIONAL HERITAGE WITH INTERNATIONALLY ACCLAIMED ARTISTS FROM THE MIDDLE EAST AND AROUND THE WORLD Source: TBY Research

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ZAYED NATIONAL MUSEUM RETAIL COMPLEX

GUGGENHEIM ABU DHABI LOUVRE ABU DHABI

GUGGENHEIM ABU DHABI

Opening in

2017

41,800 largest sqm floor space

of the Guggenheim museums others are in New York, Venice, and Bilbao

Z AY E D N AT I O N A L MUSEUM

Opening in

2016 125

meter steel spires

permanent galleries inspired by Sheikh Zayedâ&#x20AC;&#x2122;s belief in education, conservation, heritage, and culture

LOUVRE ABU DHABI

Opening in

2015 24k sqm floor space

525

million USD to acquire the Louvre name

108

million USD in construction

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B2B HOSPITALITY EXPANSION

MOHAMMAD ABDUL SALEEM Owner & Managing Director, Gromaxx Hotels Management LLC

rooms FOR ALL Abu Dhabi offers many attractions to draw in tourists and the hotels of the Emirate cater to every demand, both for the business or leisure traveler.

ATEF ELIAS General Manager, Grand Millennium Al Wahda

How has your hotel grown to cater to the demands of the tourist? MOHAMMED ABDUL SALEEM From its first hotel apartment in 1994, the Al Hamra Plaza in Abu Dhabi, the group steadily grew by adding more hotels, including Ramada Corniche, Howard Johnson Hotel, Ramada Down Town Hotel, Tryp by Wydham, Emirates Plaza Hotel in Abu Dhabi, as well as a number of hotel apartments, including Eclipse Hotel Apartments, Ivory Hotel Apartments, Phoenix Plaza Hotel Apartments, and Down Town Plaza Hotel Apartments. These were followed by Howard Johnson Hotel in Dubai City, Plaza Hotel in Fujairah, and Dunes Hotel in Doha, which was managed by the group from 2010 to 2013. Other services that we have been added include Sparkle Laundry & Dry Cleaners, Oasis Spectrum Real Estate, Phoenix for Hotel Supplies and Trading, and Phoenix Decoration. All these hotels have fine dining restaurants and prestigious clubs of national and international repute. Now, the group operates a total of four international standard hotels, four elegantly furnished superior hotel apartments, a state-of-theart industrial laundry and dry cleaning unit, and many other property related establishments.

The company has spread its wings and grown tremendously. Our group offers the best technical and operational expertise to the industry. Being associated with the international chains known as the Wyndham Group, our group has set its own standards that match any international brand norms. We have two new hotels opening in 2015: the Tryp by Wyndham Hotel, which opened in March, and the Regency Hotel. Our target is to manage and operate a five-star hotel in 2016. ATEF ELIAS The Grand Millennium Al Wahda Hotel offers essential, and inter-related, practices in catering to business and leisure travelers in the context of these realities. Our hotel can be found prominently located in the city center, which is near the business hubs and exhibition centers, which makes it ideal for business accommodation, meetings, and conferencing. We offer both self-catering apartment-style accommodation and full service-luxury hotel rooms, appropriately presented and suited to the location. In addition, the hotel features renowned and award-winning restaurants, such as Toshi, Porto Bello, and Porters Pub. As hoteliers catering to business travelers, our goal is to make available a seamless, effortless, and enjoyable travel experience, not just a bed for the night. As a total package, our staff delivering the high standard of service is the essential factor in creating a guest experience that is unique to our brand and that needs to be communicated to our guests. A comfortable bed is a wonderful thing, and most travelers expect to have one. Many of our guests comment that the Grand Millennium Al Wahda Hotel bed is one of the most comfortable they have ever enjoyed. But, to a large degree, a sense of comfort is created by interpersonal relationships. For us, this means staff-guest interactions. A female guest traveling alone will feel comfortable entering a restaurant or bar in part because it looks inviting, but mostly because of her experience with

staff and the ambiance they help create make her feel welcome, safe, and relaxed. In the current economic environment, I cannot overemphasize my conviction that, above all else, value is what we must offer and the message we must communicate. What are some aspects of Abu Dhabi that attract visitors to the city? MAS The busiest period for us is from October to March, because there are many events and exhibitions that attract businessmen and visitors to Abu Dhabi. Some of these events include Formula One, music festivals, air shows, the ADIPEC Oil and Gas Exhibition, IDEX, and the Abu Dhabi International Book Fair. We also have year-round attractions, such as Ferrari World, Yas Waterworld, desert safaris, and camel riding. We are looking to make Abu Dhabi a destination and highlight it to the whole world as it has so much to offer to international travellers. How would you define quality customer service in the hotel industry? AE Quality is the consistent delivery of service that meets the standards set by the corporation or owners of a hotel. Guests expect quality service and reward it with loyalty and referrals. When guests know they can expect to receive the same level of service every time they visit, you have achieved effective quality management. Employees in the hotel industry are all expected to provide exceptional customer service. From the housekeeper who tidies up the room to the front desk, to the maintenance staff and general manager, employees working in hotels must undergo continual training and mentoring to remember their mantras. Employees in the hotel industry are all expected to provide exceptional customer service. Effective quality managers include customer-service appraisals in their regular reviews. Individual staff members are rated and promoted based on their performance. â&#x153;&#x2013;

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D E S T I N AT I O N S A A D I Y A T I S L A N D

THE SOLE DESTINATION Saadiyat Island, the government-owned TDICâ&#x20AC;&#x2122;s premier development project, is a prime residential, educational, leisure, and cultural destination unfolding 500 meters off the coast of Abu Dhabi. A cosmopolitan collection of elite venues and districts, it is positioned to become a magnetic attraction and a world-class cultural hub for tourists and locals alike.

Source: tdic.ae

Residental

Cultural

Retail

Hotels & Resorts

Beach Club

Golf Club

Education

Tourism, Culture & Sports

On what was once merely sand, seven unique districts are culminating into a rich and diverse destination that is garnering local, regional, and international appeal. Inspired by and built in harmony with nature, characteristics of Emirati culture steeped in Arabian traditions and transnational modernity are reflected in the architecture, concepts, and design of the island’s master plan, which since its announcement has progressed toward its ultimate completion by 2020. Owned by the Abu Dhabi Tourism Authority (TCA) and developed by the Tourism Development and Investment Company (TDIC), what has been achieved thus far and what is to come is nothing short of groundbreaking for the city of Abu Dhabi. Saadiyat Cultural District: 2.43 million sqm The UAE’s cosmopolitan yet national character is on display at the Saadiyat Cultural District, which houses venues dignifying cultural traditions and embracing modernity, culture, and art. The Zayed National Museum will honor the late founder of the country and is being built in proximity to the iconic Louvre Abu Dhabi and Guggenheim Abu Dhabi museums. The Performing Arts Center completes the mix that is sure to become a permanent fixture within the global art scene for leading exhibitors, artists, musicians, producers, and performers from around the world. Saadiyat Marina: 3.7 million sqm The Marina district is a waterfront area designated as the island’s commercial center. New York University (NYU) Abu Dhabi—one of three of NYU’s global network of campuses— is located in the Marina plot where boutiques, cafés, restaurants, residential and commercial space, and a harbor with a 1,000-vessel capacity have been laid out along the bayside. The UAE’s Maritime Museum is fittingly located here as well, highlighting Abu Dhabi and the

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region’s seafaring history when dhow-making and pearl-diving were vital to daily life. Saadiyat Beach: 9 km of white sand Saadiyat Beach carries the distinction as the leisure and recreational district of the island, housing five-star resorts, luxury residential properties overlooking the Gulf, private and public beach clubs, and the Saadiyat Beach Golf Club, known as the first and only daily pay and play facility in the region. The beach is developed in harmony with the Hawksbill turtles, whose natural habitat near the coast is being preserved by the TDIC and the Environmental Agency Abu Dhabi. Saadiyat Reserve: 4.68 million sqm The attention to environmental sensitivity is clear here as wildlife, wetlands, and mangrove forests populate the Saadiyat Reserve district. Unharmed and untouched, native plants are able to thrive throughout development. Luxury homes and hotels are also present in the area including a Championship Tidal Golf course, a first of its kind in the world where the course has been integrated into the plateaus of the wetlands, leaving the natural wildlife undisturbed. Saadiyat Promenade: 931,000 sqm The promenade is geared toward family-friendly leisure and entertainment activities where resorts, restaurants, cafés, shops, and markets span the boardwalk situated right by the beachfront. Saadiyat Retreat For those seeking calm and tranquility, there are a number of spa facilities located in the Saadiyat Retreat offering peace and seclusion at the northeastern edge of the island. Villas, hotels, residences, and apartments in this district are exclusive, some of which are built in gated-communities and private areas. ✖

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FOCUS YAS MALL Over 15 malls exist already in Abu Dhabi, but none match the scale and scope of Yas Mall

THROUGH THE ARCADE As the latest retail and leisure addition to the Yas Island development, Yas Mall holds several leading distinctions and standout features, and is expected to attract visitors in record numbers to Abu Dhabi as the largest enclosed shopping center in the Middle East.

IN LIGHT OF STEADY POPULATION growth, higher consumer spending in the local community, and growing regional and international travel appeal, leisure and retail offerings are key elements of Abu Dhabi’s tourism attraction. Yas Mall is expected to significantly increase tourism to the area and further support Yas Island’s role in the capital’s tourism project as a multifaceted leisure and entertainment destination, which houses several other attractions, such as the island’s seven hotels, Yas Waterworld, Yas Marina Circuit, Yas Links Golf Course, du Arena, O1NE Yas Island, Ferrari World, and Yas Marina, with more on the way. Over 15 malls exist already in Abu Dhabi, but none match the scale and scope of Yas Mall. It is Abu Dhabi’s largest and first super-regional mall with 235,000 sqm of gross leasable area (GLA). It has been designed to attract residents and visitors of various nationalities by the millions, with over 400 world-class shops from high-end to department stores, multi-cuisine restaurants and a food court catering to international tastes, and an overall indoor city design with a spacious, family-friendly atmosphere. Leading local and international brands, many of which are new to Abu Dhabi, have gone large in the mega-mall, such as Debenhams that plans to build its largest store outside the UK, Zara establishing its largest branch store in the Gulf, and the Chalhoub Group set to open the world’s biggest department store, Chalhoub Department Store by end of 2015. Newcomers to the region include the first Lego Concept store, a Brook’s Brothers, and the world’s largest Rogo’s

Rollercoaster Restaurant, a restaurant where food is sent directly to each table on mini roller coaster tracks. Apart from shopping, Yas Mall offers several entertainment and activity options for adults and kids to get involved. Children can enjoy activities in a vibrant playground atmosphere at Fun Works. Visitors can take part in iPILOT, a simulated experience of flying an Airbus A380 where you can virtually take off and land in more than 24,000 airports around the world. SnowCity is Abu Dhabi’s answer to Dubai’s indoor ski slope, with several snow activities from bumper cars to sled tracks, and electric snowmobile rides. Another prime entertainment attraction is the XD theater, Abu Dhabi’s largest MAX screen where you can take part in a 4DX cinema experience, involving audiences in the movie by engaging all five senses through special effects. There is something for everyone beyond the standard shopping mall environment. For the Yas Island development, Yas Mall is a valuable addition to the existing and planned infrastructure that is to come to the capital in the next few years. Yas Mall will be a major attraction and springboard for future projects on the island leading up to 2030. Not all stores are open in the mall, and yet 20 million visitors are expected during 2015, the mall’s first full year of operation. Whether it is families with children, young couples, visiting relatives, expatriates, or locals, Yas Mall has been created with everyone in mind and is expected to bring in 30 million visits per annum come 2030. Developers have taken notice of Abu Dhabi’s undersupplied market, and high-spending consumers have more grand mall openings to look forward to in the coming years. New planned malls in the works including TDIC’s District mall on Saadiyat Island and Gulf Related’s Sowwah Central on Al Maryah Island, both scheduled to open in 2017. The opening of Yas Mall has achieved several firsts for Abu Dhabi and the region, as it continues to develop into a world-class tourism destination. ✖

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INTERVIEW

SPRINT to win TBY talks to HE Aref Hamad Al Awani, General Secretary of the Abu Dhabi Sports Council (ADSC), on the role of sports in the Emirate and UAE. How are sports a part of the culture in Abu Dhabi and the UAE?

Whether water sports, such as sailing and swimming, or equestrian sports, polo, or camel racing, there is a strong historical connection between the people of the UAE and sports, both traditional and modern. The late Sheikh Zayed continuously supported sport and the construction of sporting venues. In 1979 we hosted the qualifications for the Asian Cup at Zayed Stadium, our national stadium, which still hosts many leading football and sports events today. We also had an ice skating rink built in Zayed Sports City around the same time. We are proud today that the Abu Dhabi ice hockey team is becoming one of the top Division III teams in the Asian league. This is from a city not known for its winter sports. We also founded the Sheikha Fatima bint Mubarak Sports Academy for Women’s Sports to raise awareness and education about sport for

BIO HE Aref Hamad Al Awani has a degree in Business Administration and Bank Services from UAE University. He has over 16 years of experience in the management of administrative and sporting affairs. He is currently the General Secretary of the ADSC.

women, and to sponsor some of Abu Dhabi’s female sporting talents. These and other sporting developments in Abu Dhabi began with Sheikh Zayed’s vision, and continue today with our leadership and our passion for sport. The role of sport is very important for our communities, our families, and our country. What is the next phase of development for the sports sector in Abu Dhabi?

At this stage we are trying to bring in more sporting events that have a direct benefit on the community and individuals using a one-to-one or B2B approach, thus promoting sport as a lifestyle. We would like to keep our calendar busy throughout the year, but we are selective in what we host, mainly choosing events that have an international appeal, while not overlapping with local sporting events. We are also aiming to establish different classes of tournaments. There is a need for a mix between hosting official tournaments sanctioned by world federations and other countries, and having exhibition tournaments with a more social appeal. Part of our vision now is to concentrate on hosting sanctioned tournaments that are part of the tournament calendars of world federations. How important is it for private-sector companies to play a role in promoting sports and sporting events in Abu Dhabi?

Commercially, we would like to bring on board more com-

General Secretary of the Abu Dhabi Sports Council (ADSC) • Cycling World Tour to be held in Abu Dhabi in October 2015 for the first time • Hosted the Volvo Ocean Race • Hosted the Youth Football World Cup 2014 • Hosted the World Bowling Championship 2014

panies from the private sector to show them that they can participate in sports by sponsoring social events or big international events. Major companies such as HSBC, Etihad, Mercedes Benz, Borouge, and ADNOC are doing a very good job. They are giving more, and truly understand the role they can play within the sporting community. They believe in the message that sports can deliver. When companies sponsor or work in partnership with an event they see immediate economic returns. What is your main aim as you look to the future of sport in Abu Dhabi?

Now with both the infrastructure in place and the government support, there is an opportunity to have more champions in different sports, whether it is running, cycling, the triathlon, or tennis. This is what we are working toward and planning for in the future. As an example, Mohammed Khalifa Al Qubaisi is the President of the Emirates Bowling Federation; he is very successful in his career working with ADNOC, but in 1983 he was also the World Bowling Champion. We also have two chess world champions. These sporting figures act as role models. We would like to nurture more sporting heroes in different disciplines. For our champions it is a great source of national pride and the whole country gets involved. ✖

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B2B SPORTS

in the GAME BARRY BREMNER General Manager, Zayed Sports City

SHEIKH KHALID BIN FAISAL AL QASSIMI Chairman, Abu Dhabi Racing

You organize many events in different sporting fields. How does this contribute to your longterm growth strategy? BARRY BREMNER In 2013, ZSC hosted 145 events, with the majority being our own in addition to a number of high profile third party events. When Abu Dhabi Education Council (ADEC) took over the site four years ago, only six events took place each year. This has been a core component in increasing our customers from 400,000 in 2009 to 1.2 million customers in 2013. Our initial two-year strategy was to develop the correct facilities on the site. We constructed additional pitches, invested in bowling, and attracted new sporting partners. For example, we have PSS Tennis providing high performance tennis coaching and Emirates Aikido offering martial arts training on site. We have also expanded our service offering with over 27 different sport onsite. Our longer-term strategy has always been to attract international sporting and entertainment events. We have had great success in this area, having secured a long-term agreement for the WWE to come on an annual basis to Zayed Sports City. We have Mubadala World Ten-

Abu Dhabi is quickly becoming an international sporting and tourism destination; TBY catches up with two of the key players at the center of the sporting world in the Emirate.

nis— which is in its sixth edition, the Harlem Globetrotters, and we hosted the FIFA World Club Cup in 2009 and 2010. There are a number of bids for large international football tournaments coming up between 2017-19 and we hope to be an integral part of these events. We have also seen more international sports tourism coming to ZSC. In 2014, we hosted around 20 international football teams. We get a lot of interest from the Bundesliga and English Premier League in addition to a number of National teams to come here to do their warm weather training, We are already in discussions for 2015 in relation to hosting 40 international teams looking to come and train at Zayed Sports City in their off season. Our strategy is to satisfy the local market and to develop Zayed Sports City as an international sports hub. SHEIKH KHALID BIN FAISAL AL QASSIMI We’re planning all sorts of different and alternative ways to reach out and attract more young drivers and potential drivers, in all categories, styles, age levels, and types of racing, and to go to them where we can, instead of expecting them all to come to Yas Marina. We want to go to schools and colleges; it can be in the city or in outlying areas, municipalities, and towns. We’ve been working closely with Daman, who gave their name to our Speed Academy through their support. They are our strategic

partners, as is the Abu Dhabi Sports Council, Citroen, and Total, another French company that is very closely aligned with Citroen. Besides them, we also have sponsors, but sponsors come and go from event to event. Partners develop with you. The structure of our company will continue to grow. Where do you see sport headed in Abu Dhabi in the next few years? BB There is a clear demand for entertainment of all sorts within the UAE given it’s a cultural melting pot of people from so many different countries with significant disposable income. The UAE and Abu Dhabi have become the destination of choice for both residents and tourists, and entertainment is one of the key ingredients to the long-term success of the 2030 vision and strategy. SKBFAQ There was nothing here back in 2004-05. We signed a contract with Ford to do a world championship at that time, and that was the first such event that we staged. We have the Yas Marina Circuit, considered the best in the world. So we are headed in the right direction. Our aim is to make it a global hub for motorsports, and I think we can achieve this. Abu Dhabi is already on the map; we want to make it one of the most important destinations in the world. The future is bright, but also challenging. ✖

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187

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Abu Dhabi and the UAE are tax friendly places for businesses and workers alike looking to establish themselves.

Where to Stay: A concise guide to the best hotels when visiting Abu Dhabi.

Some helpful tips and useful contacts that will help get you through the first few days in Abu Dhabi.

Executive Guide REVIEW LEGAL

Establishing an a business in a foreign country can often be a complicated task; however, Abu Dhabi, and the UAE as a whole, has attempted to make the process as stress free and user friendly as possible.

CONDUCTING BUSINESS F oreign investors can carry out activities in the UAE only after being registered and licensed by the relevant authorities in the UAE. In general, a foreign investor can establish a suitable business presence on either the UAE mainland, commonly known as onshore, or a business presence, also known as offshore. An offshore business typically refers to a registration in one of the UAE free trade zones. In terms of the legal forms, UAE Company Law provides the regulations governing the operations of foreign business. The Federal Law provides seven categories of business organization: limited liability company (LLC), branch, partnership, joint venture company, public shareholding company, private shareholding company, and share partnership company. However, owing to certain restrictions, the choices commonly adopted by foreign companies are generally limited to a LLC or a branch. The other options, for example partnerships and joint ventures, are usually not favored by foreign investors. As per the UAE Commercial Companies Law, the foreign ownership of a LLC may not exceed 49%, with the balance of 51% to be held by a UAE national. The UAE Commercial Companies Law is currently being re-drafted, and the new law is expected to allow 100% foreign ownership (subject to approval from the relevant authorities) for specific industries set up onshore. However, there are no further details at this time as to how this new law will apply. A branch is an extension of the foreign parent

company. As such, it is wholly owned by its parent company, and there is no requirement for UAE nationals to take an equity interest in the business of the branch. A representative office is broadly similar to a branch, except in that a representative office is only permitted to promote its parent companyâ&#x20AC;&#x2122;s activities and is not permitted to undertake any income earning activities.

FORMING A BRANCH OFFICE Approvals A foreign company may establish a branch in Abu Dhabi provided it has been approved by the Executive Council and the Federal Ministry of Economy and Commerce, it is granted an appropriate license from the Abu Dhabi Municipality, and has been accepted as a member of the Abu Dhabi Chamber of Commerce. Additional specific approvals may be required from various Federal Ministries and local government departments depending on the intended activities of the branch. Appointing an agent Foreign companies wishing to establish a branch office in Abu Dhabi must appoint a local agent by entering into a national service agency agreement with a UAE national or a company wholly owned by UAE nationals, which, for an annual fee, will act as its national agent. The national agent will not be liable for any of the obligations or liabilities of the foreign companyâ&#x20AC;&#x2122;s branch operations. The role

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of the national agent is usually administrative only, for example obtaining and renewing the necessary licenses, which are required to enable the branch to carry on its business. The national agent may agree to provide additional services on an ongoing or ad hoc basis for an additional fee. National service agency agreements usually provide for the payment of a fixed annual fee, a commission to an agent, or a combination of both. Procedures In addition to entering into an agency agreement, certain procedures must be followed involving the provision of prescribed documentation, board minutes and company accounts, and the depositing of $68,000 in a local bank account to serve as the “capital” of the branch before the branch is registered. The branch capital is frozen until the branch is registered after which it may be used to fund the activities of the branch. The registration procedure may take some months to complete. A registered Abu Dhabi branch office of a foreign company is not required to appoint a commercial agent as well as a national service agent or have a local UAE partner or shareholder, as the case may be. Branch offices cannot sell or distribute goods but can provide a service; unless they are branch offices of UAE registered companies. Once established, the branch must prepare local accounts, which must be audited by local auditors. Audited branch accounts should be filed with the Abu Dhabi Ministry of Economy and Commerce on an annual basis as part of the license renewal process. These accounts will not be published. Registration The registration of a branch office will enable a foreign company to establish a local presence in Abu Dhabi and to obtain a trade license in its own name. All branches of foreign banks must obtain the approval of the UAE Central Bank before they can commence operations. No new licenses have been granted to foreign banks for some time. Limited liability companies (LLCs) LLCs can be established in Abu Dhabi by foreign companies to conduct most types of business provided that the foreign investor holds not more than 49% of the shares. At least 51% of the company’s share must be held by one or more UAE nationals, or by a company wholly owned by UAE nationals. There is a minimum of two and a maximum of 50 shareholders. The liability of shareholders is

The registration of a branch office will enable a foreign company to establish a local presence in Abu Dhabi and to obtain a trade license in its own name. All branches of foreign banks must obtain the approval of the UAE Central Bank before they can commence operations.

limited to the amount unpaid on their share capital. The minimum share capital is $41,000 fully paid up. Shares must be of a nominal value of at least $272 each. Because of the local ownership requirement, it is advisable for the foreign company concerned to enter into various ancillary agreements with the local shareholder(s) to regulate the management of the company, payment of capital, ownership of intellectual property rights, and the distribution of profits. Some such agreements may be of uncertain legality. It is important that professional legal advice be sought in this regard at an early stage. LLCs need a trade license, as well as other licenses and registrations, to enable them to carry on business in Abu Dhabi. An LLC is not permitted to carry on the business of insurance, banking or the investment of money for third parties. There has been considerable speculation that the local ownership requirement may be relaxed. No firm proposals have yet been issued. Free zone Investors also have a choice to set up operations in one of the free trade zones in the UAE. A free trade zone is a geographical area within the UAE that has been established by the UAE government to generally encourage FDI into the UAE, and, as such, there are generally no foreign ownership restrictions, unlike onshore entities. That is, foreign investors can set up 100% fully owned entities in the free trade zones. The principle drawback of a free trade zone is that entities registered in the free trade zone are not permitted to conduct commercial activities in the UAE, outside of the free trade zone. Currently, there are over 25 established free trade zones in the UAE. Abu Dhabi has established a free zone on Saadiyat Island, which is run by the Saadiyat Free Zone Authority (SFZ). Other famous free zones in Abu Dhabi include, TwoFour54, Khalifa Industrial Zone Abu Dhabi (Kizad), and Masdar Free Zone. ✖

Executive Guide

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TAX REVIEW

number

CRUNCH Abu Dhabi and the UAE are tax friendly places for businesses and workers alike looking to establish themselves in the Emirates. The federal government of the UAE has not promulgated any tax laws. Most of the individual Emirates have issued corporate tax decrees, but, in practice, taxes are only imposed on oil and gas producing companies at rates set forth in their government concession agreements, and on branches of foreign banks at rates set out in specific tax decrees or fixed in agreements with the Rulers of the Emirates in which the branches operate. The income tax decrees that have been enacted in each Emirate provide for tax to be imposed on the taxable income of all bodies corporate wherever incorporated, and their branches that carry on trade or business, at any time during the taxable year through a permanent establishment in the relevant Emirates. Bodies corporate are taxed if they carry on trade or business directly in the Emirate or indirectly through the agency of another body corporate.

TAXATION IN ABU DHABI According to the Abu Dhabi income tax decree, all companies carrying on trade or business in Abu Dhabi are required to pay tax on their earnings. The rates of tax are on a sliding scale up to a maximum of 55%. In practice, however, only: a) Oil and gas producing companies pay tax at rates specified in the relevant concession agreement. Oil companies also pay royalties on production; b) Branches of foreign banks pay tax at a flat rate of 20% on annual profits. The taxable income of banks is calculated by reference to their audited financial statements.

The Abu Dhabi income tax decree of 1965 specifies that an organization that conducts trade or business in Abu Dhabi shall be subject to taxation as follows: TAXABLE INCOME EXCEEDING AED

NOT EXCEEDING AED RATE %

1,000,000

EXEMPT

1,000,001

2,000,000

2,000,001

3,000,000

3,000,001

4,000,000

4,000,001

5,000,000

5,000,001

A â&#x20AC;&#x153;chargeable personâ&#x20AC;? means a body corporate wherever incorporated, or each and every branch thereof, carrying on trade or business at any type during an income tax year through a permanent establishment situated in the Emirate whether directly or through the agency of another body corporate, and not entitled under an agreement with the Ruler to an exemption from liability to income tax. Two or more such branches of a body corporate carrying on trade shall each be treated as separate chargeable persons. The fact that a body corporate has a secondary body corporate carrying on trade or business through a permanent establishment in the Emirate shall not in itself constitute that parent body corporate as a chargeable person.

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“Carrying on trade or business” means: a) Selling goods or rights in such good in the Emirate; b) Operating any manufacturing, industrial or commercial enterprise in the Emirate; c) Letting any property located in the Emirate; or d) Rendering services in the Emirate, excluding the mere purchasing of goods or rights in such goods in the Emirate.

VALUE ADDED TAX

A chargeable person in Abu Dhabi shall be charged taxes on a sliding scale as, except that the tax charged shall be reduced by the credit aggregate of oil dealt in for that fiscal year as long as the total of all reductions granted to all chargeable persons in that fiscal year shall not exceed the credit aggregate of oil dealt in for that fiscal year. Taxable income is computed after the deduction of all costs and expenses incurred by a chargeable person earning such income. Deductible costs and expenses include acquisition cost of goods, the expenses of operating the business, allowances for depreciation, obsolescence and exhaustion of both tangible and intangible assets, and losses sustained by the chargeable person in connection with the business.

Municipal taxes are imposed on hotel services and cinema shows. Service charge percentages vary among the Emirates. A service charge of 5-10% is charged on food purchased in restaurants. Hotels charge a 10-15% service charge per night on room rates. These charges are usually included in the customer’s bill, which the municipality will collect from restaurants and hotels. Hotels also charge an additional 15% service charge on the services they provide. In most of the Emirates, property tax is payable by residential and commercial tenants by reference to the annual rent of residential property, generally at a rate of 5%, and for commercial property at a rate of 5-10% payable to the local Municipality.

INVESTMENT INCENTIVES

A sale registration fee of 1% of the value of the sale is imposed on the seller, payable to the Abu Dhabi Land Department. A purchase registration fee of 1% of the value of the sale is payable by the buyer of the property. The rate can differ in other Emirates.

Abu Dhabi has free zones, which offer tax and business incentives aimed at making Abu Dhabi a global business and commercial center. The incentives usually include tax holidays for a guaranteed period (most free zones offer a tax holiday of 50 years), 100% foreign ownership, no customs duty within the free zone, and “one-stop shop” administrative services.

TBY would like to thank Merali's for compiling this analysis.

SOCIAL SECURITY The UAE does not impose social security taxes on expatriates. UAE-national employees contribute to retirement and pension funds in accordance with specific regulations.

MUNICIPAL TAX AND PROPERTY TAX

REAL ESTATE SALE/PURCHASE FEE

FOREIGN-EXCHANGE CONTROLS

There are no withholding taxes in the UAE.

There are no exchange controls on the remittance of profits or repatriation of capital, and there are virtually no restrictions on foreign trade.

PERSONAL INCOME TAX

TAX TREATIES

No personal taxation currently exists in the UAE.

The UAE has entered into tax treaties with several countries, including Algeria, Armenia, Austria, Belarus, Belgium, Bulgaria, Canada, China, the Czech Republic, Egypt, Finland, France, Germany, India, Indonesia, Italy, Lebanon, Malaysia, Mauritius, Morocco, Mozambique, New Zealand, Pakistan, Poland, Romania, Singapore, South Korea, Spain, Sri Lanka, Syria, Tajikistan, Thailand, Turkey, Ukraine, and Yemen. Treaties have been concluded with Bosnia-Herzegovina, Jordan, Luxembourg, Malta, Mongolia, the Netherlands, Philippines, Seychelles, Sudan, Tunisia, and Uzbekistan; however, they have not formally entered into force. ✖

WITHHOLDING TAX

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

There is no value added tax in the UAE at present.

CAPITAL GAINS There is no capital gains tax in the UAE. For taxpaying entities, capital gains are taxed as part of business profits.

CUSTOM DUTY Customs duties are very low, and there are many exemptions. They are generally levied at the rate of 5%. Goods imported and intended for re-export often benefit from customs duty as do manufacturers on the import of their machinery, raw materials, and spare parts used for industrial purposes.

Bumper years, growth years, record-breaking years, challenging years. The key players and their stories are all in The Business Year.

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WHEN IN ABU DHABI...

WHERE TO STAY 01 Emirates Palace, Abu Dhabi West Corniche Road, Abu Dhabi T +971 2690 9000 www.kempinski.com

Rooms Featuring 394 luxurious rooms and suites carefully designed and furnished to offer guests superior comfort. Guest Services The hotel features two lushly landscaped swimming pools for adults and children. Throughout its 85 hectares of gardens and manicured lawns, Emirates Palace offers state-of-the-art fitness centers, tennis courts, football pitch, cricket pitch, and Anantara spa. Dining Emirates Palace boasts the finest global cuisine across 14 restaurants, cafés, and lounges to create a dining experience beyond compare. usit Thani Abu Dhabi D 925 Muroor Street, Abu Dhabi T +971 2698 8888 www.dusit.com 02

Rooms 402 guest rooms are on offer as well as 131 deluxe serviced apartments. Guest Services Airport limousine services, beauty and hairdressing salon, complimentary Wi-Fi throughout the hotel, Namm Spa with eight treatment rooms, outdoor swimming pool, retail outlets, safety deposit boxes at front desk, and valet parking and regular parking facilities. Dining Urban Kitchen is a contemporary venue specializing in international and Arabic cuisine, daily theme nights, buffets and all day dining. Benjarong is Dusit International’s signature restaurant serving authentic royal Thai specialties. The Capital Grill is a modern steakhouse. Orchid is the gourmet lobby lounge for drinks, refreshments and afternoon tea. he St. Regis Saadiyat Island T Resort, Abu Dhabi Saadiyat Island T +971 2498 8888 www.stregissaadiyatisland.com 03

Rooms 377 rooms and suites decorated in cream and light blue.

Guest Services St. Regis butler service, iridium spa, Sandcastle Club, and a pristine beach. Dining 55&5th, The Grill, Sontaya, Turquoiz, Olea, The Manhattan Lounge, and The Drawing Room offer guests a wide variety of dining experiences. 04 Jumeirah at Etihad Towers West Corniche, Ras Al Akhdar, Abu Dhabi T +971 2811 5555 www.jumeirah.com/abudhabi

Rooms 382 uniquely designed, spacious, and elegant rooms and suites offer fully integrated lifestyle technology. Guest Services Swimming pool and private beach, Talise spa with 13 treatment suites, dedicated club executive lounge with all day food and drinks, internet lounge, shower suites, business center with four meeting rooms, and the Mezzoon Ballroom, which seats up to 1,400 delegates. Dining From light snacks to fine dining, from Lebanese to Japanese, and from tea in the Lobby Lounge to cocktails on Level 62, Jumeirah at Etihad Towers delivers it all with panache. 05 Grand Millennium Al Wahda Hazza Bin Zayed Street, Abu Dhabi T +971 2443 9999 www.grandmillenniumalwahda. com

Rooms 844 stylish and contemporary rooms from Superior Room to Presidential Suite and

Penthouse. Guest Services 24 different meeting and event rooms of a variety of sizes, designed to cater to any event; Al Wahda Health Club with a spacious gym, Jacuzzi, steam room, sauna, relaxation lounges and roof-top swimming pool; Zayna Spa with 11 luxurious treatment rooms. Dining Porto Bello restaurant; a gourmet breakfast buffet at All Day Dining; Lobby Lounge; Toshi Asian restaurant and Porters Pub. 06 Yas Viceroy Abu Dhabi Yas Island, Abu Dhabi T +971 2656 0000 www.viceroyhotelsandresorts. com/abudhabi

Rooms 424 Deluxe rooms are spacious at 54 sqm, and are appointed with bespoke furniture and custom fabrics. 75 spacious suites ranging from 102sqm up to 409sqm. Guest Services Complimentary transfers and access to Yas Beach, complimentary shuttle service to several attractions on Yas Island including Yas Waterworld and Ferrari World Abu Dhabi, complimentary Wi-Fi, complimentary access to our dedicated family pool and adult only pool, a luxury spa featuring eight treatment rooms with a sauna and steam room, and a state-of-the-art fitness center. Dining There are 11 dining and lounging venues at Yas Viceroy Abu Dhabi showcasing cuisine from all corners of the globe from lavish Mediterranean choices

and house-made Italian pasta to Southeast Asian specialties and Japanese Teppan. Skylite is Abu Dhabi’s favorite rooftop lounge. The Ritz-Carlton Abu Dhabi, Grand Canal Khor Al Maqta’a, Abu Dhabi T +971 2818 8888 www.ritzcarlton.com/AbuDhabi 07

Rooms 447 luxurious guest rooms and suites, as well as 85 private villas. Guest Services The beach resort boasts The Ritz-Carlton Club, a private floor offering five complimentary food and beverage presentations throughout the day with dedicated concierge service. Dining Giornotte, The Forge, the Abu Dhabi Lebanese restaurant, Mijana, and Li Jiang are some of the restaurants available to guests. For those who enjoy a more casually luxurious experience, there is Al Fresco, a breezy pool and beach restaurant, as well as two poolside bars, and a Lobby Lounge and bar. 08 Ramada Abu Dhabi Near Corniche, Abu Dhabi T + 971 2401 9000 www.ramadaabudhabi.com

Rooms 235 deluxe rooms, executive rooms & Suites. Guest Services 2 meeting rooms for up to 50 guests theater style, 20 guests board room style, 75 guests cocktail party style, 30 guests classroom style, Wi-Fi, Fitness Centre, outdoor swimming pool, Ramada Spa, and Miss Harmony

Executive Guide

Ladies Saloon. Dining Lemon Lounge all day dining buffet style restaurant; Front Page CafĂŠ; Kareems restaurant (Indian restaurant); and View@20 poolside snack restaurant. 09 Al Ain Rotana Hotel P.O Box 1210 Sheikh Zayed Road, Al Ain, UAE T +971 0375 4511 www.rotana.com

Rooms 246 rooms, suites, villas,

and chalets. Guest Services Fully equipped gymnasium, fitness studio, sauna, Jacuzzi, steam room, massage room, squash court, tennis court, pool, childrenâ&#x20AC;&#x2122;s pool, room for guests with special needs, Wi-Fi, business center, gift shop, beauty saloon, barber shop, and car and limousine rental service. Dining Moodz is a contemporary lounge bar with an exceptional interior and resident DJ. Min Zaman is an authentic Lebanese restaurant with shisha, singers, and belly dancers. 10 Wyndham Abu Dhabi Khalifa str, Business District T +971 2202 3555 www.tryphotels.ae

Rooms 146 units including

191

Standard, Deluxe, Executive rooms as well as Executive suites. Guest Services banquet (meeting) room, valet parking, Wi-Fi, health club, outdoor swimming pool with Jacuzzi, steam room, sauna, spacenter, and a ladies saloon, which includes nails and hair styling services. Dining Indian restaurant, all-day dining restaurant, and rooftop poolside lounge snack bar.

local newspaper, all guest rooms with data port and voice mail, Wi-Fi, fully equipped kitchenette in all suites, roof top swimming pool, gym, Jacuzzi, steam and sauna, business center available from 8:00 AM to 6:00 PM, and complimentary 24-hour valet parking service. Dining Close by to some of the best restaurants that Abu Dhabi has to offer.

11 Vision Hotel Apartments Tourist Club Area, Abu Dhabi UAE T +971 2699 2666 www.visionhotels.com

Vision Links Hotel Apartments Al Nayhan Area, Muroor Road, Abu Dhabi UAE T +971 2693 3000 www.visionhotels.com

Rooms 125 including 36 Studio suites, 71 Junior Suites, and 18 Executive Suites Guest Services 100 Satellite TV channels, sameday laundry, complimentary daily

THEBUSINESSYEAR

Rooms 74 including 14 Studio Apartments, 50 One Bedroom Apartments, and 10 Two Bedroom Apartments Guest Services 100 Satellite TV channels, same day laundry, complimentary daily local newspaper, all guest rooms with data port and voice mail, Wi-Fi, fully equipped kitchenette in all suites, roof top swimming pool, gym, Jacuzzi, steam and sauna, business center available from 8:00 AM to 6:00 PM, and complimentary 24-hour valet parking service. Dining Close by to some of the best restaurants that Abu Dhabi has to offer.

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HELPFUL HINTS Useful Numbers EMERGENCY TELEPHONE NUMBERS POLICE 999 CIVIL DEFENSE 997 AMBULANCE 998 FIRE EMERGENCY 999

Eating, drinking, or smoking in public is not recommended during the holy month of Ramadan, which should begin on June 18 in 2015 and will continue for 30 days.

Alcohol should only be consumed in designated areas, typically in areas attached to hotels and resorts.

Only wear beach clothing at the beach or in resort areas. It may cause offense in other public areas.

COAST GUARD 996 MUNICIPALITY 993 WATER AND ELECTRICITY 991 or 992 WEATHER FORECAST +971 (2) 666 7776 EXT. 221 ABU DHABI INTERNATIONAL AIRPORT +971 (2) 575 7500

EMBASSIES IN UAE ARGENTINA www.eearb.cancilleria.gov.ar/en AUSTRALIA www.uae.embassy.gov.au AZERBAIJAN www.azembassy.ae BELGIUM www.countries.diplomatie.belgium.be

Women have to cover their shoulders and knees in government buildings.

To purchase a local SIM card in the UAE, you must present an Emirati ID or passport as identification.

In order to rent a car, foreign visitors must have an International Driving Permit and submit a copy of their passport and visa.

CHINA www.ae.china-embassy.org/eng GERMANY www.abu-dhabi.diplo.de/Vertretung/ abudhabi/en/Startseite.html FINLAND www.finland.ae/Public/Default.aspx FRANCE www.ambafrance-eau.org THE NETHERLANDS www.uae.nlembassy.org/locations/ embassy-in-abu-dhabi.html NORWAY www.norway.ae/Embassy/embassy/#. VNhkfvmUd6A RUSSIA www.abudhabi.emb.mfa.gov.tr SWITZERLAND www.eda.admin.ch/abudhabi

There are no taxi ranks so it is advisable to call for, or hail one on the street.

In formal settings, be aware that some women may not wish to shake hands with men, and vice versa, due to cultural considerations.

It may be seen as impolite to refuse drinks or food offered in a meeting, especially in someoneâ&#x20AC;&#x2122;s home.

TURKEY www.abudhabi.emb.mfa.gov.tr UK www.ukinuae.fco.gov.uk/en US www.abudhabi.usembassy.gov

ENSURING HEALTHCARE FOR ALL

For investment opportunities visit www.haad.ae/statistics 00971 -2 - 419 3271 or email invest@haad.ae

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