Gulf Business - January 2022 by Motivate Media Group

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SPECIAL REPORT: POWER LETTERS 2022 - PREDICTIONS FROM THE TOP

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OUT OF THE BOX P.30

MONEY MATTERS: GCC banking sector outlook

P.60

SPEEDING FORWARD: McLaren Racing CEO Zak Brown

HERE’S WHY EMIRATI ENTREPRENEUR MAHMOUD BARTAWI CASHED OUT OF HIS SUCCESSFUL BUSINESS UNDER500

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CONTENTS / JANUARY 2022

The Brief An insight into the news and trends shaping the region with perceptive commentary and analysis

40 Safety net Cybersecurity has become more important than ever as the region goes digital

43 View from the top

Business leaders reflect on the year gone by and reveal the outlook for the next 12 months

gulfbusiness.com

24 All in good health

Emirati entrepreneur Mahmoud Bartawi on launching Under500, selling it and preparing for his next venture

January 2022

NATIVE MARKETING OPPORTUNITIES AVAILABLE ON EMIRATES Attractions Activities Dining Health & Wellness Study in the UAE Entertainment Properties in the UAE The ‘Enjoy Dubai & UAE’ channels on Emirates’ awardwinning ice platform provide affordable access to one of the largest, captivated and afﬂuent audiences in the world, creating a unique opportunity to showcase your business.

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CONTENTS / JANUARY 2022

59 Lifestyle

Racing ahead: McLaren p.60

Watch time: Bell & Ross p.64

Future mobility: Nissan p.66

“Even before the arrival of this new variant, we were concerned that the recovery, while it continues, is losing somewhat momentum” – IMF managing director Kristalina Georgieva at an event

72 The SME Story Interviews with entrepreneurs and insights from experts on how the regional SME ecosystem is evolving

Editor-in-chief Obaid Humaid Al Tayer Managing partner and group editor Ian Fairservice Group director Andrew Wingrove andrew.wingrove@motivate.ae Editor Aarti Nagraj aartin@motivate.ae aartinagraj Deputy editor Varun Godinho varun.godinho@motivate.ae varungodinho Tech editor Divsha Bhat divsha.bhat@motivate.ae Contributor Zainab Mansoor editorial.freelancer@motivate.ae zzainabmansoor Senior art director Olga Petroff olga.petroff@motivate.ae Art director Freddie N. Colinares freddie@motivate.ae Photographer Joachim Guay

General manager – production S Sunil Kumar Assistant production manager Binu Purandaran Production supervisor Venita Pinto Chief commercial officer Anthony Milne anthony@motivate.ae Group sales manager Manish Chopra manish.chopra@motivate.ae Senior advertising manager Ravi Dutt ravi.dutt@motivate.ae Sales executive Sonal Sawant Sonal.Sawant@motivate.ae Group marketing manager Joelle AlBeaino joelle.albeaino@motivate.ae Group marketing manager Dominic Clerici dominic.clerici@motivate.ae

Cover: Freddie N. Colinares

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January 2022

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OFF THE GRID

The Brief Social Future Finance Energy Workplace

8 11 13 14 18

JAN

Estimated number of individuals worldwide with access to the internet ONLINE

OFFLINE

WORLD POPULATION (In billions)

8 6 4 2 0

4.90b 5.45b

2.94b

1.02b

2005

2010

2015

2021 Source: Statista / ITU

A click away While some pandemic-induced consumer habits have faded, others such as online shopping have retained their stickiness p.09 gulfbusiness.com

January 2022

The Brief / Social COMMENT

Zaib Shadani Founder and managing director of PR and Video production agency Shadani Consulting

Going viral Here are three successful viral campaigns to take inspiration from

23.4

million+

posts to-date and no signs of dying down

the best images are displayed on Apple’s Instagram account, its website and on billboards around the world. Even now, in 2022, the hashtag remains popular and is going strong, with over 23.4 million posts to-date and no signs of dying down. Apple has also been able to capitalise on the popularity of user-generated content (UGC) through its #ShotOniPhone hashtag and continues to encourage people to share their photos and experiences. It comes on the back of a simple hashtag with an even simpler premise. A good UGC campaign is one of the most cost-effective and strategic ways to secure brand awareness and ensure a continuing roster of content with zero investment in its creation. This is one of the most successful viral campaigns for Apple and demonstrates the longevity of a campaign that has truly connected with audiences.

WEETABIX AND BAKED BEANS

Weetabix caused a national uproar when it suggested that there was a new way to eat breakfast. The post from Weetabix’s Twitter account, featuring an image of Weetabix covered in Heinz Baked Beans, with the caption: “Why should bread have all the fun, when there’s Weetabix? Serving up @HeinzUK Beanz on bix for breakfast with a twist,” set Twitter ablaze with reactions from millions of people, including major brands such as Dominos, Amazon and YouTube, all weighing in with their opinions and trying to insert themselves into a trending debate.

very marketer’s dream is to have content go viral. Not only does it help increase sales, but it also enables brands to have more recall, visibility and awareness. There are no rules on how to make content go viral, but there are a few tips and tricks that can increase the chances. Viral campaigns can’t be forced, they happen organically and are the result of connecting with audiences on a personal level. If you are timely, relevant and authentic, with a dash of individuality, uniqueness and good storytelling, your chances are much higher on achieving success. Here are three of my favorite campaigns that show us exactly how it’s done.

APPLE’S #SHOTONIPHONE CAMPAIGN

Apple launched its #ShotOniPhone campaign on Instagram in March 2015 and no one could have predicted the endurance and far-reaching success of the campaign. The campaign urges users to show off their iPhone’s camera features via the hashtag and 8

January 2022

131,000+ likes

68,000 + retweets

gulfbusiness.com

The Brief / Retail

ILLUSTRATION: GETTY IMAGES/AKINDO

The genius of this campaign was the fact that everyone had an opinion and arguably, not since pineapple on pizza has there been such a polarising debate. Even Piers Morgan jumped on the bandwagon and tried it out on live television. With more than 131,000 likes and 68,000 retweets, even people who were not aware of the breakfast cereal became aware of the controversy and as a consequence, the brand itself – demonstrating the tremendous power of a campaign going viral.

A N A LY S I S

KFC TAGLINE CAMPAIGN

During Covid-19, KFC’s slogan of ‘Finger lickin’ good’ came under scrutiny for being insensitive to the needs of the times. But KFC South Africa’s social media team turned the challenging situation into marketing gold by taking a unique and humourous approach – they decided to “borrow” other brands’ taglines such as using Red Bull’s famous tagline of ‘Gives You Wings’ under a bucket of KFC chicken. By tagging the brands that the team was ‘borrowing’ the taglines from, KFC ensured that it kept the conversation going while engaging in cross-brand promotion. Most importantly, the strategy ensured that the brand was top of mind for its humour, rather than other reasons. KFC also took it further with its hashtag of #UntilWeCanFingerLickAgain, asking followers to suggest which other slogans would work best, leading to a number of fun and ridiculous comments. This created more momentum and added life to an already successful viral campaign. gulfbusiness.com

Changing carts The how and where of consumer spending is transforming, driven by digital trends, writes Aarti Nagraj

o one anticipated at the start of the pandemic in early 2020 that we would be at this point in 2022. The global economy has seen tumultuous change, with consumer habits and preferences morphing rapidly to adapt with this evolution. One major trend that has undeniably touched most of us – if not all of us – is the shift to digital. While the pandemic did play a huge role in leading to that change, digital is managing to maintain part of that stickiness, especially in retail, even as the world gradually learns to live with the Covid

88%

of countries saw a surge in the subscription of things in 2021 January 2022

The Brief / Retail

crisis. Shopping online is no longer a fad, or something done as a last resort – it is the preferred option for many consumers, mainly youngsters. In its recently released Economy 2022 report, the Mastercard Economics Institute found that up to 20 per cent of the digital shift in retail is set to remain. “Digital agility has been a key factor for stronger revenues throughout the pandemic. At the core of this digital shift has been e-commerce,” it said. While during the pandemic’s peak in 2020, the global share of online spend was roughly 4.3 percentage points above the pre-crisis trend, it did drop to 0.3 percentage points as of September 2021 as people broke out from lockdowns and rushed back to physical stores. “Overall spending levels for both in-person and online spend remain at unprecedented highs, and the big question as we head into 2022 will be how the composition of online spend settles following the unwind in savings and fade in fiscal support,” the report stated. It found that the share of online transactions increased more in countries with higher pre-pandemic 10

January 2022

levels of digital maturity, further widening the digital divide globally. Looking at the UAE, the online share of spend in the retail sector is on par with the pre-pandemic trend, the report found. It also highlighted another new model gaining traction in the country and globally. “With the global shift to digital showing significant momentum, we discovered a growing trend: the rise in e-commerce subscriptions, such as wine clubs, weekly grocery delivery and clothing. According to our analysis of the subscription economy

IN THE UAE...

Dhs295bn Excess savings expected

1.5x

increased factor of retail subscriptions as a share of total spend from 2020 to 2021

across 32 markets, nearly 88 per cent of countries saw a surge in the subscription of things in 2021 compared to the previous year,” the report added. This new model was prominent among car companies, virtual workout partners, bike rentals and pet services. In the UAE, retail subscription share of total spend increased by a factor of 1.5x from 2020 to 2021. “I think that even before the pandemic, people were creating businesses online first, and then in store, and that’s just a trend that’s been accelerated because of the crisis,” Bricklin Dwyer, Mastercard’s chief economist and head of the Mastercard Economics Institute tells Gulf Business. “So because the supply of everything is just shifting online, it’s going to drive a lot of that demand to be stickier. I think that right now we are going to see some of that over-rotation which is, ‘let’s get back out there, let’s have brunch with friends etc’, but then we are going to cut that proportion of spending back.” The Mastercard report also anticipates major movement this year in terms of consumer saving and spending. “The biggest shift to watch in 2022 will be in household savings – and its potential impact on consumer spending. Fueled by stimulus funds, households have been saving more than they typically do as they have paid down debt, invested, or just put money in the bank. How quickly consumers return to old saving habits is critical for understanding the growth outlook. Notably, the global household savings rate almost doubled in 2020-2021 compared to before the pandemic,” it stated. Consumer spending of built-up savings could contribute an additional three percentage points to global GDP growth in 2022. In the UAE, excess savings are expected to reach about Dhs295bn. “How quickly or slowly consumers spend from their savings will have a ripple effect on the global economy,” the report said. “Globally, economic growth, vaccine advances and digital transformations that have made businesses large and small more resilient, continue to shape the future. It is against this backdrop that we anticipate consumer demand – and spending power – to grow and the experience economy to reemerge next year,” Dwyer added. gulfbusiness.com

ILLUSTRATION: GETTY IMAGES/WE ARE

The Brief / Future

COMMENT

Rehan Khan Principal consultant for BT and a novelist

Finding the right triggers When instilling good practices (habits), we need to make the trigger apparent

he modern office and home are awash with digital distractions. Often the best way to break these interruptions is to institute certain practices (habits). If we have proficient learning habits, we can be prepared and stay on top of issues. If we have prudent financial habits, we can provide for ourselves and our family. Whereas if we are always asking questions of ourselves – “What should I read?” “How much should I save every month?” – we end up with less attentional space and time. Practices (habits) develop over time, but there are four simple stages as to how they form in the first place. These are: trigger, urge, action, return. TRIGGER. Something in our environment triggers us to behave in a certain way. We envisage a return. In traditional civilisations, triggers often relate to matters of food, shelter, cultivation and safety. For most of us living in developed regions of the gulfbusiness.com

world, triggers envisage ancillary returns such as self-gratification, praise, money, friendship, recognition and reputation. URGE. This is the energy behind a habit. It provides the yearning to respond to the trigger. We might not actually desire the habit itself, but we crave the change it brings about. We may not have an urge for coffee in the morning, but we have an urge for the feeling it stimulates, just as we may not have an urge to go to the cinema, but rather an urge to be entertained. Urges will vary across individuals. A glutton, for instance, will have an urge for consumption on seeing a scrumptious platter of food, whereas someone who is more in control of their food urges will not have the same level of craving. ACTION. This relates to the actual performance of the habit, such as drinking the cup of coffee you had an urge for in the morning as you walked past the coffee shop and smelt the coffee being brewed or

watching the movie in the cinema for which you saw an advert on your smartphone. RETURN. This is the payoff and the end of the habit – how we felt after drinking the cup of coffee or watching the movie in the cinema. The trigger alerts us to the return, our urge desires the return, and the action is about acquiring the return. What happens after the return will also determine whether or not you will be influenced by the trigger when you next encounter it. An overeater who falls prey to a coronary heart attack may end up having a life-changing experience and come back months later with more self-restraint. They may avoid watching adverts promoting lavish meals or prevent eating out at shopping malls that are packed with fast-food outlets. They will still be affected by the trigger. They will still have the urge. But if they can avoid the situation, then they are more likely to resist it. When instilling good practices (habits), we need to make the trigger apparent. For example, if I want to introduce good eating habits, I should ensure there is a bowl of fruit on the table in the kitchen as opposed to a box of chocolates. If someone wants to break their bad habit of playing video games until late in the evening, they should pack up their console and peripherals each evening and store them in a cupboard out of sight. If they do not see the game console (the trigger), they are less likely to have an urge to play games late into the night. There is also a reframing method we can use to make difficult habits easier to handle by linking them to a positive experience. We often consider habits as things we need to do or are compelled to do. For instance, we need to wake up, we need to cook dinner, we need to call a customer, and we need to compile a weekly report. Let’s reframe the word “need” with “opportunity”. We have the opportunity to wake up and embrace the morning. We have the opportunity to cook dinner for our family. We have the opportunity to call a customer and deepen our relationship with them. We have the opportunity to compile our weekly report so that management is aware of our contribution to the goals of the organisation. The slight reframing of the language can make a huge difference to the attitude we adopt when trying to instill habits that may otherwise prove burdensome. January 2022

BRAND VIEW

Education trends for 2022 and beyond More and more universities will encourage students in their entrepreneurship efforts and act as incubation hubs, writes Professor Ammar Kaka, provost and vice principal at Heriot-Watt University Dubai 01 STUDENT MOBILITY WILL GROW AGAIN The past year witnessed a significant decline in the flow of international students crossing borders to pursue higher education, owing to the Covid-19 pandemic. However, in 2022, we expect to see global student mobility making a cautious comeback. We are already seeing that several international students are willing to get themselves vaccinated and undergo quarantine in return for on-campus study and the experience of living abroad. There will also be students who begin a study programme in one country, and then look to transfer to a campus in another country to continue learning. While the pandemic is by no means over, student mobility in 2022 is likely to grow and is being driven by a strong desire to get back on track with academic and career goals after months of disruption, the availability of vaccines and the need to ‘not miss out’ on a holistic university experience.

“The ever-evolving job market requires educational institutes to keep up with the changing needs so that they can equip students with the right soft and technical skills”

HOW WE LEARN AND HOW WE TEACH WILL CHANGE The pandemic has already brought about several changes to the way we teach and the way we learn, and this will continue to gain momentum this year. One, the need for lifelong learning will continue to grow and we will also see a change in the profile of learners themselves. For example – the university student of today may not necessarily be an 18-year-old, but a working adult who attends college part time, or may even be juggling childcare. And for this new demographic of learners, universities will look for ways to make education more flexible so they can take it up alongside their daily lives, such as by pioneering new work-based learning, including

apprenticeships, micro credentials and focused online programmes to develop a specific set of skills. Two, the forced adoption of some teaching techniques by the pandemic, such as blended learning, are here to stay and will play a key role in education delivery in 2022 and beyond. Another is assessments, as students will need to adapt to exam settings after at least a couple of years of being assessed by projects or open books exams. Universities too will need to think about how students should be assessed. And three, AI will continue to automate certain tasks, for example grading homework and tests, so educators can focus on other quality tasks such

January 2022

as spending more time with students. Tutoring and self-study programmes will advance even more, and AI will also play an important role in the admissions process.

03 THERE WILL BE AN INCREASE IN INDUSTRY-ACADEMIA COLLABORATION Industry and academia partnerships have several benefits: they give students and faculty additional funding and resources to undertake research as well as diversify their research areas. They give industry a view into what the next big opportunity is going to be and access to talent, and society benefits from a skilled workforce that can positively impact the economy. 2022 will see academia and industry working together to identify major industry challenges and research gaps and trying to find solutions, which will ultimately result in a pathway for commercialisation. More and more universities will encourage students in their entrepreneurship efforts and act as incubation hubs, backed by industry.

04 THE EDUCATION LANDSCAPE WILL BECOME MORE COMPETITIVE The education landscape in the UAE will become more competitive, given the recent growth in this space. We will see more universities coming up, many of them with significant capacity, leading to competition growing quite significantly. Students will have wider choices in higher education as well as access to more scholarships. This could help with bridging the gap, as in the past, some students could not afford to study and live in Dubai. At the same time, education is much more than just textbook knowledge. The ever-evolving job market requires educational institutes to keep up with the changing needs so that they can equip students with the right soft and technical skills. Institutes that pay far more attention to the overall growth of a student will emerge as winners than those that are still focused on just textbook learning. From new work-based learning, including apprenticeships, micro credentials and focused online programmes to develop a specific set of skills, to advocating mental health and physical well-being, institutes should be able to offer developmental growth to students if they want to succeed in a competitive landscape.

gulfbusiness.com

The Brief / Finance A N A LY S I S

Stocking up strong

ILLUSTRATION: GETTY IMAGES/AKINDO

Gulf equities have plenty of catalysts ahead including the World Cup in Qatar and the IPO push across the region

021 has been the best year in more than a decade for Gulf stocks thanks to booming oil prices. And investors expect further gains in 2022, driven by the football World Cup in Qatar and new listings. The region’s stocks are on track for their best annual performance since 2007, with a return of 36 per cent including dividends [as of mid-December]. That compares with 20 per cent for the MSCI World Index, which tracks developed world markets, and a 1.9 per cent loss for the MSCI Emerging Market index. And Gulf equities have plenty of catalysts ahead, according to fund managers and strategists. Dubai has announced plans to list 10 state companies, including the main utility Dubai Electricity & Water Authority, in a bid to lure investors. World Cup-host Qatar, meanwhile, is spending billions of dollars on infrastructure and preparations for the event. With the outlook for oil prices uncertain after 2021’s near 50 per cent gain for Brent crude and with the risks surrounding the Covid pandemic, those initiatives could pick up some of the slack, supporting

gulfbusiness.com

36%

The return, including dividends, expected from the region’s stock markets in 2021

stocks in the six-member Gulf Cooperation Council, according to Mohammed Ali Yasin, chief strategy officer at Al Dhabi Capital. “The outperformance of the main GCC markets will continue in 2022, although with a different momentum in selected markets,” said Yasin. He expects Dubai and Qatar-listed stocks to lead gains in 2022, followed by Saudi and Abu Dhabi. Hasnain Malik, the Dubai-based head of research at Tellimer, sees other potential positive catalysts including the prospect of a renegotiated Iran nuclear deal, a wind-down of the war in Yemen, and deeper normalisation of ties with Israel. The improving geopolitical situation “should make for a healthy backdrop for the GCC,” he said. The outlook for the region’s equities is not without risks: those include the Covid resurgence and its potential impact on travel and the World Cup, as well as rich equity valuations. GCC markets – with the exception of Qatar – are expensive relative to other emerging-market oil exporters. The MSCI GCC Countries Combined Index is trading at about 16 times expected earnings in the next 12 months, a premium of 30 per cent to emerging-market stocks. This compares with an average premium of 13 per cent over the past 10 years. But as Gulf governments carry on with their efforts to diversify their economies and output stays buoyant, earnings growth will remain strong, underpinning equity gains into 2022, said Divye Arora, a Dubaibased portfolio manager at Daman Investments. Dubai’s plans to list a swathe of companies in 2022 are a bid by the emirate to lure investors after years of declining volumes and a string of delistings. Abu Dhabi and Riyadh’s markets have already benefited from an IPO boom this year. Positioning looks favourable also. Global emerging-market active funds continue to be largely underweight in Middle Eastern equities, according to Morgan Stanley, which in November put Saudi stocks back on its buy list. The markets’ small weighting in the MSCI Emerging Markets Index overall is a key factor holding back investors, according to Goldman Sachs Group. Middle Eastern markets are “relatively new to the index in terms of inclusion, and will probably see money migrate over time,” said Caesar Maasry, head of the emerging markets cross-asset strategy team at Goldman Sachs. Still, Gulf “governments are likely to enjoy elevated incomes in 2022,” said Akber Khan, senior director of asset management at Al Rayan Investment in Doha who oversees $1.3bn in assets. “The outlook for Gulf equities is unequivocally bright.” Bloomberg January 2022

The Brief / Energy COMMENT

Khalid Salem President – MENA and GTCC business unit leader – EMEA, Mitsubishi Power

Hydrogen: The path to decarbonisation The Middle East is key to unlocking the true potential of hydrogen in the global energy mix

ILLUSTRATION: GETTY IMAGES/ALFA STUDIO

However, traditional methods of producing hydrogen generate large volumes of CO2, and while clean hydrogen technologies are available, the cost of production remains a factor to consider. Green hydrogen production costs have fallen by 40 per cent since 2015 and are expected to fall further, with projections showing that production costs could decline to $1.4 to $2.3 per kg by 2030. Technology risks combined with significant capital costs, that currently cannot compete with fossil fuel prices and evolving regulatory development, pose challenges to accessing finance. The Energy Transitions Commission (ETC) – an international think tank focusing on economic growth and climate change mitigation, recently announced that decarbonising energy and other industries globally using hydrogen could require investments of up to almost $15 trillion between now and 2050. A GROWING BUSINESS CASE

ith a staggering estimate of $42bnworth of green hydrogen-related projects being planned across the Middle East and North Africa (MENA), there is increasing confidence in the region’s ability to utilise hydrogen as a clean energy alternative. While the element’s rise as an energy source comes on the heels of a wider global shift to a low-carbon economy, the opportunity for hydrogen production in the Middle East is already vast, given the region’s strategic location for potential green hydrogen exports and convenience of renewable energy resources. In 2021, Saudi Arabia announced its ambition to become the world’s top exporter of hydrogen. The UAE is also drawing up a hydrogen roadmap and is looking to add the fuel to its clean energy mix by 2050. Similarly, last year, Egypt also added green hydrogen to the country’s Energy Strategy 2035, with a distinct focus on clean fuel generation and use across sectors. 14

January 2022

GREEN HYDROGEN PRODUCTION COSTS HAVE FALLEN BY

40%

Annual revenues from green hydrogen in the GCC are expected to grow up to $200bn by 2050, according to Dubai-based consultancy Dii and Roland Berger. Energy players are building a business case for first mover projects of industrial scale. The key technology components for hydrogen production and utilisation are available across the globe today. It now needs to be brought up to commercial scale with implementation across sectors that present the most attractive business case – covering key factors such as indirect value creation, local job creation and grid stabilisation. Over the last few years, the versatility of hydrogen has also attracted stronger interest from governments across the region. Saudi Arabia aims to sell hydrogen that will be transported by pipeline to Europe. Simultaneously, oil producers, who are prioritising the gas for export, are looking at possible domestic uses such as in steelmaking. From 115 million tonnes currently, hydrogen use is forecast to grow up to 500800 million tonnes by 2050 – if all potential use cases materialize. It is anticipated to account for 15-20 per cent of total final energy demand. The development of the hydrogen economy and potential localisation of value chain activities will also represent new employment opportunities across gulfbusiness.com

The Brief / Energy

a wide range of positions and skills. The MENA region emerging as a leading player in the hydrogen ecosystem could result in the creation of up to 900,000 direct and indirect jobs in the region by 2050. EVOLVING HYDROGEN TECHNOLOGIES

Research and development is crucial to making hydrogen production cost-competitive with conventional fuels, while minimising the environmental impacts of the process. Realising this opportunity, over the past few years, global spend on hydrogen energy research by national governments and leading energy companies has risen. The main challenge to achieving mass-scale hydrogen demand is the high production cost. Part of our journey to a net-zero carbon future requires investment in technological innovation to make clean energy sources like hydrogen more affordable and widely adopted. This will put us one step closer to creating a strong production and storage chain of hydrogen in the energy industry. For hydrogen technologies to achieve the scale needed for net-zero, the industry needs solid backing from policy makers. A key aspect to develop decarbonisation technologies is a conducive regulatory framework for blue hydrogen including carbon capture and storage (CCS)/carbon capture, utilisation, and storage (CCUS), as well as green hydrogen and its storage.

500-800 MILLION TONNES FORECASTED GROWTH OF HYDROGEN USE BY 2050 CURRENTLY

115 MILLION

“THE UAE’S $160BN ENERGY STRATEGY IS FOCUSED ON ENSURING THAT 44 PER CENT OF ENERGY CONSUMED IN THE COUNTRY IS FROM RENEWABLE SOURCES BY 2050, WITH A FURTHER 38 PER CENT FROM NATURAL GAS. THE HYDROGEN PROJECTS THAT WE ARE SEEING IN THE UAE AIM TO HELP ACHIEVE THESE GOALS”

gulfbusiness.com

The successes of solar PV, wind, batteries, and electric vehicles have demonstrated that technology innovation supported by decisive public policy has the power to drive global clean energy industries. The Gulf region, particularly, has been led by the hydrocarbons industry; today, national oil companies in the Middle East are the primary movers when it comes to research, development, and adoption of hydrogen. The UAE’s $160bn Energy Strategy is focused on ensuring that 44 per cent of energy consumed in the country is from renewable sources by 2050, with a further 38 per cent from natural gas. The hydrogen projects that we are seeing in the UAE aim to help achieve these goals. The cross-market collaboration approach adopted by the UAE – with the recent MoU signing with Japan to jointly consider developing an international hydrogen supply chain, and the MENA Hydrogen Alliance, to offer a platform that builds dialogue and helps formulate joint studies – showcases the nation’s strong emphasis on the transfer of knowledge and experience. However, it will be crucial to promote collaboration at-scale as part of these efforts. Saudi Arabia is also developing the world’s largest green hydrogen project. A joint venture between NEOM, Air Products and ACWA Power will integrate four gigawatts of renewable power from solar, wind and storage into the production of 650 tonnes of hydrogen per day by electrolysis, as well as nitrogen by air separation, and 1.2 million tonnes of green ammonia per year. The project is scheduled to be onstream in 2025. The UAE and Saudi Arabia are moving rapidly towards building a substantial green hydrogen economy. This includes developing roadmaps to accelerate the region’s adoption and use of hydrogen in major sectors such as utilities, mobility, and industry, with the aim of positioning the region as a reliable and secure supplier of hydrogen. Leveraging new technologies can seem daunting, but the potential payoffs are substantial. Converting hydrogen capabilities to existing power systems that are ready for it, can vastly reduce carbon intensity and increase efficiency, responsiveness, as well as the overall performance of power plants and the green energy ecosystem. We are witnessing hydrogen technology being widely implemented across the globe; the end of this decade will continue to see an influx of hydrogen projects. Starting 2025 for first mover projects, followed by others from 2030 onwards, is a period that will notably be recognised as the decade of hydrogen, where it will be commoditised and rolled out on a large scale to truly achieve global decarbonisation. January 2022

The Brief / Alan’s Corner

Alan’s Corner Alan O’Neill Managing director of Kara, change consultant and speaker

Situational leadership

ILLUSTRATION: GETTY IMAGES/JRCASAS

As leaders, we have to treat each and every task we set for our people as being different

fter getting past the usual pleasantries, it was probably 10 minutes before my telephone caller came up for air and took a break. Liz was highly exercised by an infuriating incident that happened that day. She is a very capable project manager with an IT company and her boss Mike had just given her a new project to complete. With no respect for Liz’ experience, capabilities or commitment, Mike felt it was appropriate to micro-manage the situation. Not only did he brief her on the project, but he also ‘helped’ her to construct a detailed plan. That caused enormous frustration and feelings of disrespect in Liz. What a pity. By coincidence, in the same week I had a coffee with an old pal that works in a company that has recently been acquired. George, the new CEO, is still getting to grips with the acquisition. With a hands-off style, he expects senior people to know what to do and to just get on with it. However, as operations manager, my pal Fred is now challenged with a new product stream and supply chain. He is struggling to get to grips with it and is deeply concerned about failing. Clearly, both Mike and George got it wrong. But they’re not alone, as bosses the world over so often get it wrong. Leaders tend to have a primary or default style of management and fail to recognise that not all member of their teams are at the same stage of development. This is probably not surprising given that many leadership theories promote particular leadership traits. Thankfully the world has moved on from Taylorism of the early 1900s, that encouraged a leadership based primarily on the organisation’s needs. Later theorists such as Kenneth Blanchard opened our eyes to the concept of situational leadership. In this model, Blanchard encourages leaders to adapt their leadership style based on the learner’s needs and development levels of competence and commitment. Liz, in my first example, needed to be left alone once briefed. Fred, on the other hand, needed more guidance on what is expected and how to deliver on those expectations in a new operation. HOW TO ADAPT YOUR LEADERSHIP STYLE TO ANY SITUATION

The initial thing here is for leaders to embrace the concept of one-size does not fit all. Both Mike and George will get it right some of the time, for sure. But the risk of getting it wrong is just too great. As leaders, we have to treat each and every task we set for our people as being different. Fred is a very competent operations manager. However he 16

January 2022

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The Brief / Alan’s Corner

is now presented with some new complexity and that needs to be learned. But it doesn’t mean that every other aspect of his job needs to be explained. Hence, without over-complicating it, I’d like to encourage you as a leader to always consider the situation first. 1. Goals. Be very clear on the goals that you want your team member to deliver. Remember SMART goals? Here is a new version: S- Specific, measurable and timebound; M-Motivating; A-Achievable; R-Relevant; T-Trackable. Take time to align both parties on what is expected. 2. Diagnosis. Stand back, slow down a little and consider the learner’s stage of development. Is she/he competent and committed for this task? There are four possible scenarios; D-1: low competence/high commitment; D-2: low competence/low commitment; D-3: high competence/ variable commitment; D-4: high competence/ high commitment. 3. Matching. As a consequence of determining the learner’s level of development, we should

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THE INITIAL THING HERE IS FOR LEADERS TO EMBRACE THE CONCEPT OF ONE-SIZE DOES NOT FIT ALL

therefore adapt our leadership style appropriately. A telling-directive leadership style is appropriate for D-1 level of development. A ‘coaching’ style is right for a D-2. A listening-supportive approach for D-3 and a delegating style for D-4. In other words, four different styles to match four different situations. THE LAST WORD

You’ve heard it said that employees don’t leave organisations, they leave their bosses. I have seen this truth having witnessed it first-hand in the countless employee engagement surveys we have administered over the years. We’re living in the strangest of times and the ‘great resignation’ is real. Never before as much as now, do leaders have to self-reflect on their own leadership style. What’s your primary or default style? How effective is your ability to flex your style to the situation and the individual that you’re leading?

January 2022

The Brief / Workplace COMMENT

Adapting to changing conditions

ILLUSTRATION: GETTY IMAGES/MALTE MUELLER

It is key for employers to understand and address the challenges presented by long Covid in the workplace

David Healy CEO EMEA, Aetna International

ow that vaccines are widely available, talk of Covid-19 has lapsed into post-pandemic ruminations. We reflect on lessons learned for the most part. But on many fronts, we must deal with lingering effects. These are commonly economic, social, or commercial changes – new norms to which we must adapt to. But one such lingering issue that the region is going to have to come to terms with is Covid itself. Vaccinations, ingenious though they are, will not protect us from “long Covid”. Long Covid, also referred to as “postCovid condition”, persists in those who contracted the coronavirus and subsequently recovered. While many may have had slight or no symptoms previously, long Covid can come with hundreds of different complaints. The most common ones reported by patients and clinicians are shortness of breath, sluggish thinking (or “brain fog”) and fatigue. Others include anxiety, chest pain, fever, loss of smell and taste, and depression. People experience their symptoms for anywhere from three to nine months, but given the lifespan of the pandemic, there are a lot of unknowns. The UAE was one of the most decisive countries in its response to the Covid pandemic, including in its action on vaccination. According to the UAE’s National Emergency Crisis and Disasters Management Authority, up to 100 per cent of the country has received at least one vaccine dose and more than 90 per cent are fully vaccinated. But even as things here return to normal, a UAE study held in conjunction with a Covid rehabilitation programme found many here to be struggling with long Covid. EMPLOYER RESPONSE

Long Covid has wide implications for society, and not just for the medical professionals who diagnose and treat it. In the workplace, people living with this long-term ailment will be less productive because long Covid affects their wellbeing and their ability to focus. Employers across the region will need to assess how they maintain a supportive, inclusive environment to deal with this issue. 18

January 2022

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The Brief / Workplace

“WE LIVE IN A TIME WHERE EMPLOYEES, WHETHER SUFFERERS OF LONG COVID OR NOT, MAY EXPECT A COMPASSIONATE RESPONSE FROM THEIR ORGANISATION. FLEXIBILITY, INDIVIDUALISED TREATMENT, INCLUSIVENESS, AND AN EARNEST FOCUS ON HEALTH AND WELLBEING IS A TOP PRIORITY FOR TODAY’S WORKFORCES WHEN ASSESSING THEIR EMPLOYER”

As fatigue and breathlessness are two of the most common symptoms, employers should be aware that job performance is bound to be impacted. Commuting alone can sap a sufferer of their energy reserves. Long Covid has a long reach. It can invade many different parts of the body, affecting the nervous and respiratory systems, the heart, the lungs, and more. Long Covid sufferers must also deal with a range of mental health issues on top of their physical symptoms. And often, long Covid not only varies in its effects from patient to patient but can change from day to day within a given sufferer. For all these reasons and more, it is vital that employers take a personalised, yet flexible and holistic approach to the needs of long Covid sufferers. Healthcare security will be indispensable. Plans will need to allow for different combinations of symptoms. Likewise, corporate policy must reflect those same individual needs. If an employee has symptoms severe enough

to warrant time off, contingencies need to be put in place to accommodate this. Other sufferers may just need an adjustment to their schedule. NEED FOR PRAGMATISM AND COMPASSION

In some other cases, symptoms may be severe enough to be categorised as a disability. Employers must decide if they are going to operate purely within legal frameworks that officially define disabilities or whether they will take a pragmatic approach that examines the needs and wellbeing of the individual and acts accordingly. We live in a time where employees, whether sufferers of long Covid or not, may expect a compassionate response from their organisation. Flexibility, individualised treatment, inclusiveness, and an earnest focus on health and wellbeing – a “lifefirst” approach if you will – is a top priority for today’s workforces when assessing their employer. The region’s professionals,

especially the younger generations, are less tolerant of employer ignorance on physical and mental health issues, especially when it leads to discrimination. Corporate policy that is less than supporting and languishes too much in the legal definition of what constitutes a disability, will prevent people from disclosing illnesses like long Covid. And this is bad for everybody involved. People need to feel safe in coming forward, which leads us to the importance of compassionate management. If the employee has the wrong kind of relationship with the person to whom they would report their affliction, then they are unlikely to report it. It therefore pays to invest in training for line managers which in turn will create an open-dialogue atmosphere where leaders are aware of these health issues and can respond with empathy and compassion. INTO THE UNKNOWN… AGAIN

There is still so much we do not understand about the symptoms of long Covid, and the length of time patients may have to endure them. Sound strategies on occupational health and wellbeing among employers will not only benefit sufferers; they will allow regional businesses to navigate the impact with the same effectiveness they displayed in overcoming other Covid-related issues at the height of the pandemic. I have every confidence that regional stakeholders will recognise the importance of individualised counselling and support for employees dealing with long Covid. I would further expect to see a continuation of the flexibility shown over the past year when responding to the changing expectations of employees regarding health and wellness issues. Open communication is the target here. It will allow us to face long Covid as we faced its pernicious antecedent.

LONG COVID, ALSO REFERRED TO AS “POST-COVID CONDITION”, PERSISTS IN THOSE WHO CONTRACTED THE VIRUS AND SUBSEQUENTLY RECOVERED

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January 2022

The Brief / Infographics

Youth focus: Changing trends Almost half of young Arabs (48 per cent) are confident that they will lead a better life than their parents, finds the 2021 edition of the annual ASDA’A BCW Arab Youth Survey

ENTREPRENEURIAL SHIFT A growing number of Arab youth are interested in starting their own business within the next five years

43% 40%

Showing % of ‘yes’

31%

2020

2021

2018

2019

2020

YOUNG ARABS IN THE UAE, EGYPT, SAUDI ARABIA, OMAN AND KUWAIT ARE MOST CONFIDENT THEIR VOICE MATTERS

January 2022

GCC

49%

North Africa

48%

Levant

29%

WHILE THE UAE HAS PROSPERED FROM ITS IMMENSE HYDROCARBON RESOURCES, HOLDING THE WORLD’S SIXTH LARGEST OIL RESERVES, IT WAS THE FIRST COUNTRY IN THE ARABIAN GULF TO ACTIVELY PURSUE AN ECONOMIC DIVERSIFICATION STRATEGY”

34%

2021 UAE EGYPT SAUDI ARABIA OMAN KUWAIT

81% 70% 68%

100% 99% 94% 91% 91% 90% 94%

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THE BEST IS YET TO COME: OPTIMISM IS HIGH FOR THE FUTURE

2017

2018

58%

YOUNG ARABS BELIEVE THE COUNTRY WITH THE GREATEST INFLUENCE IS THE US, FOLLOWED BY SAUDI ARABIA AND THE UAE United States Saudi Arabia

60%

2020

2019

11%

China

11%

Iran

The UAE is the nation most young Arabs want their own countries to emulate for the 10th successive year

United Russia Kingdom

CANADA

GERMANY

FRANCE

11%

Pakistan

12%

India

12%

France Germany

Turkey

UAE

16%

Egypt

2021

28%

23%

Israel

50%

59%

46%

29%

UAE

of Arab youth are optimistic

51%

The message of Arab youth is not hard to divine. Decision makers 10% across the MENA region can harness 8% the positive energy of their young people to build 8% fairer, more inclusive, more 7% prosperous, and more sustainable 5% societies for all. Our young citizens will be 1% committed partners in that effort” 10%

— Sunil John, MENA president of BCW

AN OVERWHELMING MAJORITY OF ARAB YOUTH ARE CONCERNED ABOUT THE QUALITY OF EDUCATION IN THEIR COUNTRY GCC

North Africa

Levant

85%

88%

87%

Source: ASDA’A BCW Arab Youth Survey 2021 gulfbusiness.com

January 2022

The Brief / Lightbox

Residents gather by a collapsed house in Hernani town, Eastern Samar province in the Philippines on December 17, 2021, a day after Super Typhoon Rai pummelled the southern and central regions of the country 22

January 2022

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January 2022

PHOTO: ALREN BERONIO/AFP VIA GETTY IMAGES

FEATURES / COVER STORY

10:10

TIME FOR THE MAIN COURSE

January 2022

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FEATURES / COVER STORY

EMIRATI ENTREPRENEUR MAHMOUD BARTAWI SOLD HIS SUCCESSFUL HEALTHY FOOD BUSINESS UNDER500 TO KITOPI. NOW HE IS READY TO LAUNCH HIS NEXT VENTURE. HE TELLS AARTI NAGRAJ WHY HE IS CONFIDENT ABOUT ITS HEALTHY FUTURE PHOTO: JOACHIM GUAY

gulfbusiness.com

January 2022

FEATURES / COVER STORY

ahmoud Bartawi did not grow up with a garage of fancy luxury cars paid up for and ready to whiz him across the streets of Dubai. Although the son of a prosperous Emirati businessman, he had to earn money the hard way. “My father never gave me any money to launch anything. I actually had to work part-time jobs when I was in university. While that is common in other parts of the world, it is not the case here. I was fortunate to be one of those people who had that opportunity. And I think that gave me independence,” the young businessman says. Sporting a T-shirt and jeans during our chat, Bartawi blends into the image of a ‘new-age entrepreneur’. He’s extremely candid both on- and off-record and visibly zealous about what he does. Having worked at several banks, Bartawi honed his skills in the financial world. Bartawi’s entrepreneurial itch began when he felt “policies” in his corporate role did not offer him the flexibility to serve his customers the way he – or they – deserved and expected. “My drive, to find a better way to do things, would come into clash with policy. Policy is what is set up by corporations to have people work within the box. I always felt that my drive to serve my customer was above and beyond the limitations set by my job title, my position and sometimes by experience. I felt like I could do better, like I could go the extra mile. And I think for anyone to have a successful drive and to do something that they’re passionate about, it needs to be something that’s done for themselves first,” he says.

BIG BITE

Having introspected, Bartawi recognised that his passion lay down a different path. “I recall going on early morning walks with my father, at 5.30am along the beach, where he would speak to me about various things including the need to stay fit and healthy. He taught me some very important life lessons on those morning walks. He would talk to me a lot about food, about how there is a cure for everything in nature, and he told me about his walks and how he stayed young by doing them. And these things, they really began to shape the way I looked at things,” he says. “The morning walks with him taught me to be independent and to be health conscious.” As someone who was always scouring the city for healthy food options, Bartawi found a gap in the market for discerning diners. “At the time, people would consider 26

January 2022

healthy food as hospital food which did not taste good. So I thought to myself, what if I created a restaurant that was for healthy food but also food that tasted really, really good. What we ended up doing was getting an Italian fine dining chef and pairing him with a nutritionist who calorie-counted these tasty dishes, and we launched a brand called Under500. That was the first brand that we launched. I was the first consumer of the product and seeing other people enjoying it only motivated me to dedicate more time towards it. I kept my bank job – obviously when you’re used to a fixed income, it’s very hard to just quit and try your passion. But after twoand-a-half years, we were able to create a business where I was able to quit my job and start doing the thing that I enjoyed doing. We believe that everyone should be eating healthy and that’s the reason we did that business.” gulfbusiness.com

FEATURES / COVER STORY

Bartawi and his team started Under500 – which as its name suggests, offers food that is less than 500 calories

HEALTHY PORTION

That the healthy food industry across the region is booming is hardly surprising. Over 50 per cent of consumers surveyed across the GCC “ate healthily”, at the very least during the week, KPMG’s 2019-2020 GCC Food & Beverage report found. To meet growing demand, some F&B operators ventured out with new health food concepts, while others altered their menus to include vegan and vegetarian options. “Though still not a major opportunity, the trend should not be overlooked by operators today,” the report stated. Another report by Frost & Sullivan also highlighted the increased shift towards the healthy eating space – specifically in Saudi Arabia and the UAE. By the end of 2020, the health and wellness F&B market in this region is estimated to have reached $14.56bn at a compound annual growth rate (CAGR) of 10.9 per cent, the KSA and the UAE’s Health & Wellness Food & Beverage Industry Outlook 2020 found. Just the UAE and Saudi Arabia, combined, account for nearly 85 per cent of the GCC health and wellness market. “Proactive efforts by the GCC governments have formulated regulations to enhance awareness about healthier food that provides medical

50%+ OF CONSUMERS SURVEYED ACROSS THE GCC “ATE HEALTHILY”, AT THE VERY LEAST DURING THE WEEK

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benefits because of the recent upsurge in incidences of lifestyle disorders in the region, such as cardiovascular, bone and joint disorders, and diabesity (the combination of diabetes and obesity),” said Satvik Jaitly, Chemicals, Materials and Nutrition consultant at Frost & Sullivan. “We expect the next five years to be critical, with the health and wellness F&B market becoming more mainstream thanks to rising consumer awareness influenced by social media and connected consumers.” The report also highlighted the trend towards caloriecounting as well as the need for operators to accurately understand consumer behaviour to better increase their reach within the market. Bartawi and his team started Under500 – which as its name suggests offers food that is less than 500 calories – with just two outlets in 2016. “It was very challenging. I even remember doing deliveries to customers myself sometimes because there wouldn’t be a bike. But the experience was something that helped me grow,” he recalls. Following its launch, the brand expanded via franchising, even signing on 20 units in Saudi Arabia. The company also tied up with cloud kitchen platform Kitopi as one of its first brands, expanding to the UK and the US and launching multiple virtual healthy food brands. This turned out to be a key decision for its future. January 2022

FEATURES / COVER STORY

I THINK THAT SELLING UNDER500 HAS ALLOWED ME TO FURTHER REALISE MY VISION, BECAUSE I CAN CREATE A PLATFORM WHERE I CAN BRING TOGETHER ALL THE HEALTHY FOOD RESTAURANTS FOR PEOPLE LOOKING TO GO HEALTHY. IT IS MUCH MORE CHALLENGING, BUT I THINK IT’S ALSO MUCH MORE SATISFYING TO KNOW THAT I’M SOLVING A BIGGER PROBLEM”

BRING THE CHEQUE

An exit strategy is always an important aspect of any entrepreneurial venture – whether that takes a few years or decades. Bartawi deliberated on his exit plan and managed to cash out of his business last year. Kitopi, which has received several rounds of funding since its launch in 2018, announced in February 2020 that it was able to support Under500 “double its revenue year-onyear and scale internationally”. After it raised $415m in a series C funding round in July 2021, it announced in November that it was investing in five regional F&B operators as part of its next phase of growth, including Under500. “The decision to invest in brands has come following our conviction that in a post-pandemic world, operating, 28

January 2022

growing, and scaling brands have become increasingly complex,” the company said in a statement. “The new strategy will allow brands to leverage Kitopi’s proprietary technology and infrastructure to grow at an accelerated pace while preserving the customer experience.” Bartawi remains tightlipped about how much he sold the business for, but says the amount was eight times Under500’s EBITDA. “I think the vision for Kitopi was always for them to acquire their brands and towards the end, that’s exactly what they did. They raised the money and they’re going to develop numerous new kitchens – and hence it makes sense for them to reduce paying out royalties and just buy out their brands. I can proudly say that Under500 is one of the top brands with the highest retention on Kitopi, and I think that has to do with it gulfbusiness.com

FEATURES / COVER STORY

TAKEAWAYS: TIPS FOR ENTREPRENEURS

BY THE END OF 2020, THE HEALTH AND WELLNESS F&B MARKET IN THIS REGION IS ESTIMATED TO HAVE REACHED

Find a problem that’s big and create a business that can solve it. A business is basically a gap between a problem and a solution. If it’s a small problem that you’re trying to solve, then it’s not that valuable. Start spreading your idea, whatever it is that you’re passionate about. As an entrepreneur, you are always scared that someone copies your idea. In reality, it is only if everyone is trying to achieve the same thing that the problem will be solved. But for that, ideas need to be discussed. If someone was going to take it and do it themselves, it’s good for them. But usually, if you’re the most passionate one in the room, it’s you who would attract the most passionate people and achieve the goal. Look at your time – what is the thing that you spend most time on? I know that there are people who spend their time in music and others who spend time playing football and they all become really good at what they do. And if that thing can address a big problem, you will attract a team that is also passionate to join you. Ensure you take the right advice – it should not come from people that are in high positions in corporations. It should come from people that actually created startups – that’s the only way someone could understand this journey. There’s no shortcut to it; you need to undergo the experience yourself. gulfbusiness.com

$14.56BN

MEALZAP IS SET TO LAUNCH IN THE UAE IN Q2, WITH INITIAL PLANS TO OPERATE IN THE EMIRATES, SAUDI ARABIA AND KUWAIT. “WHY WE CHOSE TO LAUNCH IN THOSE MARKETS IS BECAUSE THEY HAVE AMONG THE HIGHEST OBESITY RATES IN THE WORLD. SO ROUGHLY 31 PER CENT OF THE POPULATION IS OBESE”

being healthy. I think there’s still a gap in the market and there’s a lot of healthy food brands coming out. I see huge growth in this space and the reason we sold Under500 was to actually create an aggregator where we can have a place for this community of new and existing healthy food restaurants to connect with a group of healthy eaters. It’s a niche platform that’s going to become the next big thing, in my opinion.”

GROWING APPETITE

Bartawi has already created a team and started to develop his “next baby”. Called Mealzap, the platform is a niche food aggregator for healthy food brands where users can choose from a pre-set plan or customise their own meal plan. The platform will offer the ability to filter dishes by allergies and preferences such as vegan, low-carb and keto. In the backend, its machine learning AI-based platform will study user choices and create algorithms that will support customised options. Mealzap is set to launch in the UAE in the second quarter, with initial plans to operate in the Emirates, Saudi Arabia and Kuwait. “Why we chose to launch in those markets is because they have among the highest obesity rates in the world. So roughly 31 per cent of the population is obese. Obesity is linked to heart disease and many problems, so I want to support people in this region to become healthier,” Bartawi explains. The growing number of cloud/dark kitchen concepts tailored towards the healthy space is also another driver to begin the brand in these markets, he adds. He is also clear that the long-term plan remains to go global. “I think the world needs more healthy eaters and more healthy brands to come together. People who are not healthy must start looking at it as something important. We are at this age in time where everything is accessible, and this should be at the top of the list. My vision is to serve healthy food. I think that selling Under500 has allowed me to further realise my vision, because I can now create a platform where I can bring together all the healthy food restaurants for people looking to go healthy. It is much more challenging, but I think it’s also much more satisfying to know that I’m solving a bigger problem.” His own vision mirrors that of Mealzap: “My father passed away in 2010 but I’m hoping that in my personal journey I can shape the lives of my children, my friends’ children and everyone that I meet. I think there’s no reason why someone should not be eating healthy. It’s all about the awareness. And this is the right time. I am really looking forward to seeing change. And that would only motivate me to go further.” Clearly, his new menu is ready. January 2022

FEATURES / BANKING

BANKING ON BANKS WORDS: ZAINAB MANSOOR

January 2022

gulfbusiness.com

FEATURES / BANKING

GROWING CUSTOMER AWARENESS AND THE RECENT GLOBAL HEALTH CRISIS HAVE ENCOURAGED REGIONAL BANKS TO RAMP UP THEIR OFFERINGS

he traditional world of banking is at an inflection point. The economic upheaval posed by the Covid-19 pandemic, the resurgence of new variants and an accelerated demand for digital services have disrupted the traditional banking and wider financial services equation. More so, the emergence of new-age players dominating the customer interface and a rising mandate for greater value propositions within the existing product mix is driving incumbents to revisit their value chain, reassess their strategies and reposition themselves amid the evolving ecosystem. Numbers back the momentum: Up to 45 per cent of traditional retail bank customers in the UAE are ready to switch to competitors within the next six months, a recent study by Arthur D. Little and M2P Solutions revealed. “Low rates, regulatory changes, and various new players entering the financial services landscape – including fintech companies, retailers, and telecommunications providers – are behind this trend,” the report stated. However, banks are taking steps to address this issue, with the study finding that 61 per cent of 2,000 customers surveyed ready to turn to their primary bank for a ‘beyond banking’ proposition, as are 70 per cent of customers aged 25-44. Pierre Mariani, partner, Financial Services Practice, Arthur D. Little Middle East, said: “Evolving customer demand accelerated digital transformation and the entry of new players is disrupting the traditional business models of UAE banks. These trends will continue to reshape the financial sector in the years to come, and banks that fail to embrace the change and make the necessary adjustments to serve their clients beyond existing services will inevitably fall behind.” gulfbusiness.com

Traditional landscape

GCC banks, holistically, have had an encouraging year. Lending activity remained robust during Q3 2021 resulting in record high loan books, a report by Kamco Invest, which analysed financials reported by 60 listed banks in the GCC for the third quarter revealed. Aggregate gross loans at the end of the quarter reached $1.71 trillion, up 1.7 per cent q-o-q and 6.8 per cent y-o–y. “Economic indicators remained strong in the GCC and sentiments remained elevated, especially with the recovery in oil prices as well as the almost complete removal of Covid-19 related restrictions on business activity. Vaccinations rates also remained one of the highest in the region, giving further confidence to the governments to resume some of the vulnerable sectors, including airlines and tourism. This was reflected in the PMI figures for UAE and Saudi Arabia that remained consistently and comfortable above the growth mark of 50 at 57.7 and 55.7 during October 2021, respectively,” the report suggested. Total banking sector net profits also reached $9.4bn in the third quarter of 2021 as compared to $8.3bn during Q2 2021. However, profits continued to remain below the pre-Covid levels of $10.2bn reported in Q3 2019. Meanwhile, total bank revenue for GCC lenders increased by 3.3 per cent q-o-q to reach $22.6bn during Q3 after seeing a slightly higher growth of 3.5 per cent during the previous quarter with revenues of $21.8bn. “Banks have showed resilience in 2021 and we expect that this trend will continue in 2022 absent any pandemic related risks. While the GCC economies are recovering thanks to higher oil prices and increasing government spending, some sectors remain under pressure such as aviation, hospitality and real estate development. The increase that we observed recently in real estate prices in the UAE may be short-lived as the structural oversupply of residential properties will challenge price increases over the long term, making the recovery fragile. We expect banks’ asset quality indicators to deteriorate only slightly as regulatory forbearance measures helped the corporate sector to deal with the negative effects of the pandemic,” explains Mohamed Damak, senior director, Financial Institutions Ratings, S&P Global Ratings. “We expect the NPL (non-performing loans) ratio to rise in the next 12-24 months without exceeding 5-6 per cent, compared with 3.7 per cent as of September 2021. Under our base case scenario,

January 2022

FEATURES / BANKING

we expect the Fed to start tightening from September 2022, which will prompt a similar reaction from the regional central banks to maintain their peg. Banks will benefit from such an increase – assuming no impact on asset quality (in case of faster than expected increase in rates). At the same time, lower global liquidity is likely to have a limited impact on GCC banks thanks to their strong net asset position or limited net debt position.”

Impetus for the future

While banks may have posted healthy returns and do aim for their bottom-line to reflect pre-pandemic growth, embracing the future also necessitates that they either adopt or review their digitalisation strategies and ensure product innovation. According to a research study commissioned by Avaya and conducted by Davies Hickman Partners, six trends that are changing GCC banking include: Payments; mobile and omnichannel; customer data, analysis and segmentation; hybrid working and video; cloud and regulation; and fintech and innovation. Regulators across the GCC are also increasingly working to create an environment which fosters more sandboxing and innovation, although the pace varies amongst regulators, notes Asad Ahmed, managing director, Financial Services, Alvarez & Marsal. “Saudi Arabia, for example, has recently licensed two digital banks and 16 fintech companies related to digital insurance and consumer loans. UAE too has licensed two digital banks and their final approvals are believed to be imminent. In our view, the new digital banks will introduce positive competition within the banking sector. It will encourage banks to provide services and products which have a greater customer-centric focus and will also help lower operating costs. Furthermore, the entry of digital banks in the sector will energise digitisation among the existing conventional banks. “The UAE Central Bank has also announced its 2023-2026 strategy, which includes issuing a digital currency and driving digital transformation in the nation’s financial services sector by utilising AI, big data solutions and developing a strong and secure financial cloud infrastructure. All of these measures will be simulated throughout the regional banking space as others look to implement their digital strategies and find the best practices,” explains Ahmed.

GCC BANKING SECTOR NET PROFIT

Q2 2021

Q3 2021

$8.3BN $9.4BN 32

January 2022

THE UAE CENTRAL BANK HAS ALSO ANNOUNCED ITS 2023-2026 STRATEGY, WHICH INCLUDES ISSUING A DIGITAL CURRENCY AND DRIVING DIGITAL TRANSFORMATION IN THE NATION’S FINANCIAL SERVICES SECTOR BY UTILISING AI, BIG DATA SOLUTIONS AND DEVELOPING A STRONG AND SECURE FINANCIAL CLOUD INFRASTRUCTURE” More so, the use of digital channels and a greater need for an omnichannel experience has thwarted in-person branch interactions. “Most executives say their banks are pursuing an app-centric banking relationship with both the SME and consumer segments, and that they have seen substantial increases in mobile banking interactions as a result of Covid-19,” the Avaya study noted. However, Damak at S&P Global Ratings stresses that the human element will always be required. “In the next couple of years, we expect banks to continue to invest in their digital capabilities and to look for opportunities to further cut their costs (either by moving staff to cheaper locations or by cutting their branch network). That said, while the local authorities in several GCC countries are encouraging fintech through accelerators and sandboxes, we don’t expect a significant disruption of banks’ business because of fintech. Customers in the region still value the human interaction and advice they get through their banking relationship.”

What next?

Besides digitalisation and customer-centric initiatives, the underlying economic landscape will also be instrumental in determining the future of the regional banking ecosystem. “Volatile oil prices and the Covid-19 pandemic have significantly impacted the economic activity in the region, making it harder for banks to grow organically. Going forward, we will see a push toward M&A-led expansion in the sector. It is expected that in five years’ time there will be fewer large banks than there are today. The apex bank in the UAE has recently announced a new rule requiring domestic banks to have a minimum paid-up capital of Dhs2bn by 2023; the regulation is expected to drive the next wave of consolidation in the domestic banking sector,” says Ahmed. “Moreover, fintech companies are expected to stimulate M&A activity as well, with the potential to exert pressure on specific services (such as remittances, payments etc.) of traditional banks.” Damak agrees that the payment and money transfer industry will face disruptions. “Another industry that could be disrupted is investment banking and particularly debt issuance. Standard legal documents and platforms using blockchain technology could challenge banks’ well-established position and offer cheaper and more efficient avenues for the financing of the economy.” gulfbusiness.com

BRAND VIEW

The missing links Supply chain blockages have caused major disruptions to the semiconductor industry, writes entrepreneur and investor Shailesh Dash, who shares his perspective in this monthly column

he global supply chain crisis has turned out to be much bigger than the Covid-19 pandemic. From massive dislocations in the container market, shipping routes, air cargo, roads, rail lines and warehouses, to a shortage of logistics workers – all of these factors have strained the global supply chain. As Covid-induced lockdowns are easing, consumer demand is expected to increase substantially going forward. However, supply chains that were disrupted during the crisis are still facing huge challenges and are struggling to get back on track. This, in turn, has led to an anarchy of sorts amongst manufacturers and distributors who are unable to produce or supply to the tune they did during the pre-pandemic era. Stress on the global supply chain started during the ‘trade war’ between the US and China. Several tariffs and sanctions were bilaterally imposed by the two countries, creating volatility in demand and supply. This unexpected shift in trade put the initial stress on the global logistics industry. The crisis further unfolded as industries around the world were forced to shut down amid the pandemic and weak links across the global supply chain began to surface. The lack of workers across the supply chain resulted in congested ports, stalled ships, overloaded warehouses, delays, empty shelves, and eventually higher prices. Amid higher consumer demand, freight rates for merchandise coming from China to the US and Europe soared, while a shortage of truck drivers exacerbated the problem of getting goods to their final destinations. Multiple industries have been affected by the supply chain blockages, leading to a shortage of not only essentials like food items and medicines, but also technology components, electronics and automotive sectors. Continued delays in the delivery of key inputs is likely to cause a decline in manufacturing, making economic recovery from the pandemic-led slowdown even more difficult. This is already visible

in some sectors such as automotive. Toyota Motors, for example, planned a worldwide production cut of 40 per cent in September 2021 due to the computer chip shortage. Similarly, Ford Motors plans to abandon a plant near Kansas City that manufactures its profitable F-150 pickup truck, while General Motors has stopped most of its truck production in North America, closing four of its plants because of the chip shortage. US car production dropped by 72 per cent in the year to August 2021, with just under one million new vehicles being built compared to 3.6 million during the same period in 2019. Similarly, the German automotive industry faced the worst semiconductor supply shortage in 30 years with over 80 per cent of the companies in the sector affected, while Mexico’s manufacturing experienced a 27 per cent drop in July 2021 due to the lack of semiconductors. The semiconductor industry was one of the few industries to exit 2020 with resilience. Global semiconductor revenues grew 6.5 per cent to $439bn during the year, as the new lifestyle triggered by the lockdown restrictions boosted demand for at-home applications for work, education and entertainment. However, microchips and other semiconductors – which form the core for billions of products such as smartphones, data centres, computers and vehicles – faced the direct impact of the global supply chain crisis. The inexpensive chips have now started to cause losses worth billions of dollars to major industries

“There is now an urgent need for companies to move from ‘just-intime’ to ‘just-in-case’ production processes and build a resilient inventory strategy”

across the globe. According to Goldman Sachs, approximately 169 industries have been impacted by this shortage. At the heart of the supply chain crisis for semiconductors lies the market concentration of manufacturers. Over half of all the chips supplied globally are manufactured by Taiwan Semiconductor Manufacturing (TSMC), which supplies US majors such as Apple, Qualcomm and Amazon cloud computers. TSMC controls more than half of the made-to-order chip foundry market and has a lock on topend technologies used in components for smartphones, servers, games consoles and even weapon systems. Notably, 94 per cent of the company’s production capacity is geographically concentrated within a 100 mile radius, significantly aggravating the problem of the already pressurised global supply links. On the other hand, with Malaysia – the largest supplier of ECUs – returning to normalcy, the automotive industry in the Far East and Asian regions is recovering with semiconductor supplies anticipated to resume by the first quarter of 2022. There is now an urgent need for companies to move from ‘just-in-time’ to ‘just-in-case’ production processes and build a resilient inventory strategy. Additionally, it is important to consider geographical diversity of supply chains, with more flexible systems that are highly adaptable to changes. Companies should also adapt or redesign micro supply chains for critical components rather than applying a one-size-fits-all supply chain procurement model. This is increasingly important for the chip industry. While shortterm measures can ease the situation temporarily, companies will have to adapt newer methods of production and distribution in the longer run to ensure continuity and growth in the face of a crisis.

FEATURES / BLOOMBERG

SUPPLY CHAIN WOES: CRISIS PEAK IS A MIRAGE THE FRAGILE GLOBAL TRADING SYSTEM FACES MONTHS OF ADDITIONAL PAIN AND REMAINS AT RISK OF COLLAPSING AGAIN FROM EVEN ONE UNFORESEEN SHOCK

line of more than 80 container ships waiting to dock at the ports of Los Angeles and Long Beach, California, was cut in half in late November – or so it seemed. Turns out the vessels disappearing from the queue were merely hiding from it, loitering in the Pacific out of reach of the official count. The actual bottleneck at midweek stood at 96 ships. In a recurring theme in economies from Germany to the US, progress repairing this supply snarl proved to be a mirage. As the year supply chains went haywire winds down, logistics experts are struggling to distinguish between the rays of real improvement and the false dawns. Even if the optimists are proved correct in detecting a peak in the gridlock, the fragile global trading system faces months of additional pain and remains at risk of collapsing again from even one unforeseen shock.

January 2022

gulfbusiness.com

FEATURES / BLOOMBERG

121 % SURGE

YEAR-OVER-YEAR

Now long-term contract rates for containers are heating up, with a 16 per cent jump in November

“I wouldn’t necessarily call this a bottom,” said Jennifer Bisceglie, the CEO of Arlington, Virginia-based Interos, a supplychain risk management company. She sees any return to normal as an 18- to 24-month transition, partly because companies are grappling with pandemic challenges alongside efforts to fortify supplier networks with digitisation. Among the signs of a nascent turnaround is an Oxford Economics report released last month that showed an easing of US supplychain stress in November. But the fallout from the new coronavirus variant, which triggered another round of restrictions ahead of the Christmas travel season, “risks slowing the pace at which supply-chain problems are resolved, and could unwind the progress achieved thus far,” it said. “It’s far too early to say we’ve seen the peak of supply-chain disruptions,” said Oren Klachkin, lead US economist at Oxford Economics. “The situation is very fluid and the omicron variant could make the situation worse.”

No relief in sight

The monthly US Logistics Managers’ Index released in early December hardly showed a lurch toward normal, either. The main gauge climbed for a second month in November, reflecting warehouse costs that jumped to a record, as well as rising inventory and transportation expenses. Respondents to the LMI’s survey don’t anticipate any significant relief over the next 12 months. Zac Rogers, who helps compile the LMI as an assistant professor at Colorado State University’s College of Business, said the worst is probably over in the mismatch between logistics capacity and demand. Still, he cautions that passing the bottom doesn’t mean supply chains are in the clear or can’t return there. Rogers points to the ongoing semiconductor shortage as the heart of the problems because it means, for instance, a new class-8 truck ordered today won’t be finished until February 2023. “We still have a long way to go until things are back to normal,” he said. “We aren’t going to wake up on January 1 and suddenly have all of the trucks and storage gulfbusiness.com

72,000 HEAVY GOODS VEHICLE DRIVERS

DROPPED BETWEEN THE SECOND QUARTERS OF 2019 AND 2021

that we need to get costs to go down in any meaningful way.”

Ocean shipping

Capacity constraints continue to keep ocean shipping rates at high levels. The price for a 40-foot container to the US West Coast from China inched back up during early December to $14,825, according to Freightos data that includes surcharges and premiums. While that’s down 28 per cent from a record of $20,586 reached in September, it’s still more than 10 times higher than it cost in December 2019. Many observers note that those headline-grabbing rates reflect the spot market, and most big retailers and manufacturers pay lower rates spelled out in annual contracts typically renewed with the carriers around April each year. Now long-term contract rates for containers are heating up, with a 16 per cent jump in November leading to a 121 per cent surge year-over-year, according to Xeneta, an ocean-and air-freight marketanalytics platform. “It’s difficult to see a change of course ahead, with the fundamentals stacked very much in favour of the carrier community,” Patrik Berglund, CEO of Oslo-based Xeneta, said in a online post. “In short, they’ve never had it so good, while many shippers, unfortunately, are well and truly on the ropes.”

Air freight

Pressure is also unrelenting in the aircargo market, where rates are still climbing amid demand fuelled partly by the delays and soaring costs for ocean freight. As the Federal Reserve’s most recent Beige Book noted, the cost of transporting goods on ships recently exceeded the cost on airplanes. So analysts say there’s little reason to expect air freight rates will go down in the short run. Camille Carenton, a senior air cargo manager with Flexport, said last month that demand is “really strong” and is leading to backlogs at US and European airports, with delays ranging from two to seven days.

“The past few months have seen a rare convergence of limited capacity, higher demand, and a peakier peak season but the elevated prices so far are still likely more seasonal than anything,” said Eytan Buchman, chief marketing officer at Hong Kong-based Freightos, an online cargo marketplace. “That doesn’t mean the worst isn’t over though.”

Europe’s struggles

In the Euro area, a Bloomberg Economics gauge shows supply conditions cooling down from heightened levels. Whether that trajectory lasts depends on whether the virus can be controlled. In Germany, a survey in December showed investor confidence about the current environment dropped to a six-month low as the country reintroduces restrictions to curb virus outbreaks. German manufacturers have been held back for months by global supply problems. Underscoring their challenge, data on factory orders showed a slump that was far worse than any analyst predicted. On top of that, consumers are being squeezed by the fastest inflation since the early 1990s. “Persisting supply bottlenecks are weighing on production and retail trade,” ZEW president Achim Wambach said in a statement. “The decline in economic expectations shows that hopes for much stronger growth in the next six months are fading.”

UK trucker shortages

In the UK, the economy is still grappling with strains ranging from crammed ports to truck driver shortages. AP Moller-Maersk A/S recently said it’s omitting until March some container services through the congested Port of Felixstowe, Britain’s busiest container gateway, and routing UK cargo on shuttles from mainland Europe. A lack of lorry drivers is still perhaps the biggest cause of British cargo backlogs. Logistics UK said in a report in December that the number of heavy goods vehicle – or HGV – drivers dropped by 72,000 – or 24 per cent – between the second quarters of 2019 and 2021. British logistics companies are taking steps to boost training, recruitment and pay, “yet there remains concern that some supply-chain disruption will continue in 2022 until these crucial roles are filled across the industry,” the report warned. Bloomberg January 2022

Porsche saw strong performance in the Middle East in 2021, backed by new models and local collaborations. Dr Manfred Bräunl, CEO of Porsche Middle East and Africa, reveals the brand’s mobility strategy going forward

Racing towards the future We are two years into the pandemic now. What have been some of the biggest learnings from the pandemic for you personally as a luxury car industry CEO and business leader? Has anything changed for the long-term? During the height of the pandemic, we reviewed our processes and reassessed how we engage with our partners, customers and brand enthusiasts. We embraced this period as an opportunity for innovative communication measures that have been incorporated into our business for the long term, such as virtual sales consultations that customers can easily access through our website, virtual roundtables with our partners, and online training modules. Needless to say, these communication measures will not replace face-to-face meetings, but enhance our relationships with internal and external stakeholders as well as efficiencies. We saw the potential to enrich the interaction with our community, focusing on exciting and attractive new formats, such as our high-speed drone video Drive2Extremes to launch the all-electric

Taycan Cross Turismo. In 2021, we also focused on face-to-face interactions and looked at new and innovative ways to engage with our customers and brand enthusiasts. Our partnership with DRVN Coffee is a good example. It allows us to showcase some of our most exciting cars, including rare classics and concept cars, in a unique way. Then of course we celebrated a huge success with our first ever ‘Icons of Porsche’ festival, where we brought the community together to share their passion. From a business perspective, we learned that a high degree of flexibility and an innovative Dr Manfred Bräunl, CEO of approach across all areas of Porsche Middle East and Africa business is the only way forward. At our organisation, change is We know that the region is home to a welcome, and innovations are desired. variety of rare and unique classic Porsches, and our plan was to bring them What was the underlying motive of the together with the local community in an Icons of Porsche event held at the Dubai event focused on car culture in a familyDesign District in November? What friendly environment. Our idea was to pilot were some of its biggest highlights? a new concept and do what we do best:

“We were amazed by the results: ‘Icons of Porsche’ attracted over 7,000 attendees and over 1,000 Porsche cars, not only from the UAE but also from the rest of the Middle East”

showcase our unique brand heritage in an attractive way. We were amazed by the results: ‘Icons of Porsche’ attracted over 7,000 attendees and over 1,000 Porsche cars, not only from the UAE but also from the rest of the Middle East. We are proud to say it was the largest gathering of legendary vehicles from the Porsche Museum outside of Germany in 2021. In addition, visitors had the chance to see visionary design studies from the Porsche Unseen series on display for the first time at a public event outside of Germany. I was personally grateful to be able to meet hundreds of classic car owners from across the GCC who made the journey to participate in our event, displayed their own beloved icons at the festival and participated in Porsche parades. We plan to make this an annual event moving forward. Will this Porsche festival, or something along similar lines, be replicated in other markets under your watch: for example in Saudi Arabia or Qatar?

Our objective is to find new and exciting ways to engage with our customers, and we plan to work with our local partners in each market to explore all possible options to do that. The regional festival will always be our landmark event, but I have high hopes that we will find other new and attractive platforms to connect with our fans and customers, both current and future, at a local level. ‘Icons of Porsche’ has shown us that we are on the right track, that the brand is strong and that people are interested in joining the Porsche family, whether they own a car or not. Tell us about the partnership with DRVN Coffee. What are the future plans for that collaboration? We have partnered with DRVN Coffee to bring the brand closer to the public, and to engage with the community in a casual

and entertaining format. While enjoying time with family and friends, guests can enjoy some of Porsche’s most exciting classic models and concept cars. For the past couple of months, café visitors and motoring enthusiasts have been able to enjoy iconic vehicles from the Porsche Museum including the Porsche 935/78 ‘Moby Dick’, the Porsche 356 ‘No. 1’ show car, a rare Porsche 959, in addition to one-off concept cars like the Porsche 919 Street and the Porsche Vision Spyder. We chose DRVN Coffee because it is a stylish urban space that matches Porsche’s brand identity well. In addition, its proprietors share an intense passion for the automotive world, making them the ideal partners for an activation like this. Porsche is a brand that invokes passion, and we see that passion manifested in the moments where customers, enthusiasts and their families can experience the brand together on different levels. Why are these types of partnerships important to you? For the past seven decades, Porsche has created some of the world’s most iconic automobiles that represent historical turning points in design, engineering, and racing prowess. Our heritage and unwavering commitment to our roots matched with the best technology for the perfect sports cars of tomorrow – that is what makes our brand unique and strong. We are looking at ways to bring this passion to this part of the world, far away from Porsche’s magnificent Museum or factory. Partnerships with like-minded brands as well as new marketing ideas and retail concepts allow us to come even

closer to our audience and connect with them in new and exciting ways. Can you give us a business overview of sales and volume of Porsche’s Middle East business? Despite many global challenges since early 2020, we have continuously enhanced our business performance indicators in various ways and are able to enjoy a strong outlook for 2022. In 2021, we enjoyed our best first halfyear result in the past five years with a growth of 46 per cent, with the highest first half order intake in five years, and the largest order bank in six years. From Q1 to Q3 of 2021, we delivered more than 5,300 new cars, representing an increase of almost 10 per cent over the previous year. We have seen very strong demand, with orders up by 40 per cent compared to 2020 and the number of vehicles ordered more than doubling during the past 12 months. In the Middle East, a region well-known for its passion for SUVs, the Macan has been our biggest seller, accounting for 35 per cent of all sales, with the Cayenne following closely with 33 per cent. But also, the two-door sports cars were in high demand; every fifth Porsche sold is a 911 or 718, equating to a 20 per cent model share. High-performance specifications are especially popular, with the 911 GT models representing over a third of all 911 orders. The new 718 Cayman GT4 RS has also proved to be highly popular since it was revealed at the LA Auto Show in November 2021. Our brand is strong in all markets, with our top three fastest growing markets being Saudi Arabia, India and Morocco. You introduced the Taycan about a year ago. What are some of the plans for other electric models to be brought to the Middle East? Porsche is continuously pursuing and investing in sustainable mobility. The Taycan range is currently being expanded with the Cross Turismo variant. Our plans do not stop here. In 2022, we will also launch the Taycan GTS, the first representative of the model series to hit the 500-km mark with a driving range of up to 504 km. The next fully electric model to be introduced will be the

“Over the next five years, Porsche will invest around EUR15bn in electric mobility, sustainable production and digital transformation, with an aim to be fully carbon neutral in products and operations by 2030” Porsche Macan, set to launch in 2023. This will be followed by a strong electrification programme, which will see around 50 per cent of all Porsche vehicles sold being an electric or hybrid drive by 2025, with at least 80 per cent set to be electrified by 2030. Over the next five years, Porsche will invest around EUR15bn in electric mobility, sustainable production and digital transformation, with an aim to be fully carbon neutral in products and operations by 2030. However, although Porsche will become more electric, it will not be entirely so. As a historic favourite and an iconic model for the brand since its earliest days, the Porsche 911 is not planned to be offered as an all-electric drive. Combustion engines still have a lot of potential when it comes to meeting stricter environmental regulations, and Porsche is developing its product lines along the three pillars of fuel-efficient combustion engines, low-emission hybrid models and all-electric vehicles. What sort of an appetite for EVs are you witnessing in the region? We’ve seen very positive first feedback from customers and enthusiasts – demonstrated by a strong order bank for the Taycan. In the UAE, where the EV charging infrastructure is already widespread and growing, we recorded an

almost 20 per cent model share. This demonstrates that the market is receptive to EV models and appreciates the performance and efficiency they can offer. People are willing to adapt their desires if they are convinced that a new product meets their needs and expectations. Therefore, following the initial Taycan launch phase, we focused on providing extensive test-drive opportunities. It’s the best way to showcase the incredible performance, instant torque, and rapid, linear acceleration at full power that can be offered by our high-performance allelectric Taycan. What are the most pressing challenges that are hindering the rollout of EVs both globally and also specifically here within the region? The UAE and the other GCC governments are doing a lot to increase sustainability and reduce CO2 emissions, especially by focusing on the charging infrastructure to make the use of battery-powered electric vehicles viable and encourage their sales by reducing owners’ range anxiety. Other governments are not yet that advanced and this is where automotive manufacturers need further support. Our local investors are backing the drive to reduce CO2 emissions through our Porsche Destination chargers to provide conveniently located charging points at popular locations such as hotels and malls.

5,300 NEW CARS DELIVERED FROM Q1 TO Q3 OF 2021

It is important to note that most Taycan drivers can charge their car comfortably at home, thanks to the on-board AC charger with 11 or 22 kW using alternating current. And, with a range of up 484km in the Taycan, there is almost no difference to internal combustion vehicles with regards to everyday use. Can you tell us about your sports initiatives within the region? What are your plans for motorsport within the region? Also, are you looking to branch out into additional categories (E-sports, UFC, etc.)? Porsche is a brand that was born on the racetrack. Therefore, since 1948, sport is an important part of our DNA. As a sports car brand with over 70 years of legacy in motorsport, we are passionate about competing and winning. Our engagement across the globe allows us to test technologies on track before road use. Our presence and success in Formula E with electrically powered racing cars, for example, lays the foundation for future mobility solutions. On a regional level, we are focusing on expanding the Sprint Challenge Middle East by developing a new concept to enhance the attractiveness of motorsport to our fans and customers. In addition to developing regional race drivers and giving them a platform to compete with international talent, we also need to ensure that this gets translated into opportunities for the wider community. We have plans for 2022. What are some of the biggest milestones you want to achieve in 2022? From a product perspective, we start

the year with the introduction of the latest Macan, our best-selling model in this region. During the second quarter, we will launch the 718 Cayman GT4 RS and expand the Taycan range with our Taycan GTS. On the business side, we will focus on consulting with Porsche India to support the set-up of four new centres set to open in the first half of 2022 and launching several new initiatives to further enhance brand awareness across the sub-continent. Other network expansion plans include locations in Saudi Arabia and Morocco. We will also see a focus on new retail formats and ways to engage with audiences closer to locations where they spend their leisure time. A good example is Porsche Centre Egypt’s moving Porsche Now Pop-up store that is currently in El Gouna (Hurghada region). And finally, we are already working on plans for the second instalment of our regional event ‘Icons of Porsche’ which is set to be even better and bigger than the first version. What plans does Porsche have for Saudi Arabia, a market that is booming and has showcased ambitious

An increase of almost 10 per cent over the previous year

projects such as the Red Sea, Oxagon and NEOM wherein it wants to redefine the traditional ideas of mobility? Saudi Arabia is one of our fastest growing markets with immense potential. The government’s investment in infrastructure, and legal changes such as enabling women to drive, have created new opportunities for car manufacturers. Our partner in the kingdom, Samaco Automotive, is established as one of the leading importers and is heavily investing in facility upgrades across the country. The recently opened showroom in Riyadh is the first in the Middle East to showcase the new corporate architecture and features an integrated Porsche Design Shop-In-Shop. Together with our importer, we are constantly working on developing new ways to engage with our customers in the kingdom and creating opportunities to meet new ones. During recent months, the local team has implemented new sales and service offers and modernised processes by expanding the online offering, including a pilot to extend the vehicle warranty fully online. With a clear roadmap ahead, current results show we are moving in the right direction: third quarter results of 2021 showed an increase in new car deliveries of 26 per cent compared to the previous year. What are some of the objective success metrics that you aim for Porsche Middle East to achieve in 2022? We already have fantastic success to build on in the near future. From a business perspective, we are looking positively towards 2022. By the end of Q3-2021, we recorded our highest ever order intake since 2015 and the largest order bank since 2013. The new Macan and Cayenne are in high demand, while the 911 line-up continues to be popular, especially the GT models which account for one third of all 911 orders in the region. We have also been delighted to see strong interest in the new 718 Cayman GT4 RS, which went on sale mid-November.

FEATURES / CYBERSECURITY

NAVIGATING

THE CYBERTHREAT

As the Middle East moves faster in terms of digital transformation, it has become an appealing target for malicious cyber attackers. The growing number of sophisticated attacks has raised questions on how businesses can keep themselves safe and secure WORDS: DIVSHA BHAT

January 2022

LANDSCAPE

ince the beginning of the Covid-19 pandemic, IT professionals in various industries have encountered the task of supporting hybrid and remote working environments. Even as we see the situation in the Middle East easing, digital transformation and distributed working trends are continuing to grow. Unless organisations have appropriate cybersecurity solutions, this will result in vulnerabilities and increased risks. Hence regional governments are striving to create a safe and secure digital environment. gulfbusiness.com

FEATURES / CYBERSECURITY

A STRATEGIC APPROACH

Andrew Schumer, technical direcIn the United Arab Emirates, the government has launched the tor at Axon Technologies, says: “Earlier National Cybersecurity Strategy, which aims to establish a safe organisations focused on digital transand solid cyber infrastructure that empowers businesses to thrive. formation, but now they heavily focus on The strategy is based on five pillars and 60 initiatives, aiming to what happens post transformation. As a mobilise the whole cybersecurity ecosystem across the country. result, we are witnessing large amounts In Saudi Arabia, the government has established the National of phishing, malware and ransomware Cybersecurity Authority (NCA) to be the entity in charge of attacks.” Schumer believes that effeccybersecurity. The NCA has both regulatory and operational Andrew Schumer tive cyber defence is a mixture of right functions related to cybersecurity. It works closely with public and people, processes and technologies. “We private entities to improve the country’s cybersecurity posture to provide end-to-end services to help organisations predict, presafeguard its vital interests, high-priority sectors, and government vent, detect and respond to attackers before, during and after an services and activities in alignment with Vision 2030. incident,” he adds. Recently, the kingdom also launched a series of technology Mahmoud Samy, vice president – regional sales EMEA at initiatives worth over $1.2bn to improve the digital skills of Forcepoint says that IT and security teams have had the unenviable 100,000 Saudi youngsters by 2030. Among the initiatives was job of ensuring business continuity throughout the rapid digital @HACK, the cybersecurity event organised by the Saudi transformation phase. “Today’s reality is that people are working Federation of Cybersecurity, Programming, from everywhere, which means the boundaries and Drones (SAFCSP) and Informa Markets, in “You cannot of enterprises are no longer physical boundaries. association with Black Hat. The three-day event, In this perimetre-less networking environment, protect what which took place from November 28-30, 2021 was organisations must protect their sensitive data aimed at redefining the future of cybersecurity you cannot see. with a 360-degree approach. in the region. During the event, cybersecurity To reduce the Experts urge organisations to deploy a holistic experts, ethical hackers, risk and IT professionals, risk of being approach by making sure that they understand government policymakers, researchers and all the risks and team up with companies that can academics, and other stakeholders in the security attacked, a support them. sphere discussed the emerging security risks, specialised third Cybersecurity company Tenable advises CISOs cybersecurity best practices and new solutions to party check is to take a risk-based view of the organisation’s address the wide-ranging issues facing the global a must. Also, entire attack surface to identify, investigate and sector today. prioritise vulnerabilities quickly. Other highlights of the show included a businesses can “You cannot protect what you cannot see. SAR1m hacking contest, participation from ICT never have one To reduce the risk of being attacked, a specialcompanies and 600 hours of advanced training silver bullet to ised third party check is in cybersecurity. a must. Also, businesses reduce the risk Over 200 expert speakers presented briefings on can never have one silver the latest developments in security. “What Riyadh of a cyberattack” bullet to reduce the risk of has accomplished in one year would take 15 years a cyberattack. It’s about anywhere else,” said Steve Wylie, vice president, Cybersecurity an equal partnership, which means an Market at Informa Tech, in a statement. organisation might need multiple techMoving to Oman, one of the government’s initiatives, the Oman nology partners to work hand in hand and National Computer Readiness Team (OCERT), was launched address the cybersecurity breaches and to create a secured cyber environment for the country. This risks,” says Maher Jadallah, senior director initiative is considered the focal point for cybersecurity incidents – Middle East and North Africa at Tenable. Maher Jadallah in the sultanate. It also aims to develop security information HOW CAN BUSINESSES PREPARE? strategies to preserve governmental and private entities’ The digital world is changing on a daily basis with technological online existence. advances in cloud computing and 5G networks, thereby forcing A COLLABORATIVE APPROACH hackers to adopt new attack methods. While digital In line with the region’s robust cybersecurity transformation has many benefits, cybersecurity needs to foundation, private sectors are also helping be of utmost priority. Cybersecurity should not only concern organisations safeguard their sensitive data. the IT and security departments but the entire organisation. According to research by cybersecurity comBusiness leaders should take the time to identify the cyber pany Proofpoint, chief information security risks that their companies face. officers (CISO) in the UAE and Saudi Arabia To proactively manage risks, in the long run, businesses have seen increased targeted attacks in the past also need to create a robust foundation for cybersecurity. year. With cybercrime growing, the role played Organisations can achieve this by identifying the potential by cybersecurity companies has become even risks, having complete visibility of networks and ensuring the Mahmoud Samy more vital, the company stressed. continuous monitoring of connected devices. gulfbusiness.com

January 2022

BRAND VIEW

While we continue to focus on user acquisition, we are working on some interesting revenue models where brands and sports franchises can collaborate with us to reach Middle East sports fans. We are also looking at sports tourism, which will further enhance the experience in the region. Additionally, we are working on an online sports store that will be targeted towards the platform’s users. We are also looking at tie-ups and barter deals with large brands and sport franchises to enhance our reach within the region. We recently collaborated with Delhi Bulls – Abu Dhabi T10 team to promote the app in the Middle East.

Racing ahead Young Dubai resident Amit Singh launched a new sports fan engagement app in the Middle East called Boomer11 last year. Here’s why he is confident the startup will achieve its goal Why did you decide to set up Boomer11? I returned home to Dubai at the start of the pandemic from the UK where I was studying business. With remote classes, I wanted to start something of my own in my free time to pursue my passion for technology, sports and gaming. During my research, I realised that we have a great sports ecosystem in the Middle East where sports like football, cricket and basketball are followed by millions of people, but unlike the UK, US and India, there are no sports fan engagement apps with a focus on regional audiences. Hence we launched Boomer11 as a mobile-first, free-to-play app which offers features such as daily fantasy sports, quizzes, match updates and real-time scores so that users can be more involved in the sports they love and participate in sharing and discussing sporting moments that matter to them. The daily fantasy sports feature lets users create a fantasy team based on real-life matches like IPL and football leagues to score points and win prizes or Boomer coins. Boomer coins can be redeemed for prizes or branded merchandise on the app. Overall, we want to provide a highly interactive gamified experience for multiple sports adapted for fans in the

Middle East. Boomer11, which is also available in Arabic, has largely operated in stealth mode following the launch of our Android app in March 2021. So far, despite minimal marketing spend, the app has 15,000 users from the Middle East with an active user spending approximately 30 minutes on the platform daily. Can you share any investment details? We are currently bootstrapped with initial funds raised from friends and family and are concentrating on strengthening our operations, adding users and increasing our reach in the region. In the future, for scaling up the business, we may seek external funding. What is your business and revenue model? By offering ‘freemium’ formats for multiple sports like cricket, football and basketball on our platform, we aim to bring together all sports fans under one roof to fulfil their engagement needs.

80%

OF OUR CURRENT USERS ARE FROM UAE

Looking ahead, what are your projections for Boomer 11? In the GCC countries, there are no apps for daily fantasy leagues for cricket and football. Based on PWC Middle East’s sports survey, enhanced sports fan engagement is a massive opportunity; we would like to make the right investments and collaborate with the right brands/partners to reach a strong audience of 90 million sports enthusiasts in the region. With Boomer11 we have a first mover advantage. We plan to keep the core feature of the app free-to-play and concentrate on other models for revenue. There is a lot of stickiness on the platform and so in the coming years we hope to make a big dent in the sports ecosystem in the Middle East. We would also love it if we can enable people’s esports career with Boomer11 in some way or the other. In terms of expansion, while 80 per cent of our current users are from the UAE, we intend to take the app to countries such as Saudi Arabia, Qatar, Bahrain, Egypt, Oman and Kuwait. With many popular sporting events expected this year, our first milestone is to reach 500,000 users in 2022. Looking at our current growth, we believe the opportunity is just massive. With encouraging support from the UAE government for startups, we aspire to be one of the 20 unicorns that the UAE aims to have by 2031.

We intend to take the app to countries such as Saudi Arabia, Qatar, Bahrain, Egypt, Oman and Kuwait

SPECIAL REPORT

WE HAD A TUMULTUOUS 2020 AND A TOUGHER 2021. BUT WE HAVE ADAPTED AND EVOLVED WITH THE AWARENESS THAT CHANGE IS HERE TO STAY

SPECIAL REPORT

Hamad Buamim PRESIDENT AND CEO, DUBAI CHAMBER

he Covid-19 pandemic profoundly changed and redefined the way we live and conduct our businesses. The path of economic recovery has been one of resilience, hope and foresight and has reminded us that the journey we face today, as nations, can only be solved by shared, coordinated and equitable responses – and that these challenges go beyond the pandemic, from environmental concerns to ensuring long-term sustainable growth. It has also taught us that a prosperous future relies on our ability to adapt, innovate and leverage advanced technologies to address new challenges. The fruits of our efforts are apparent in Dubai’s economic indicators, which are showing signs of strength and recovery. Dubai’s non-oil foreign trade reached Dhs722bn in the first half of 2021, marking a 31 per cent year-over-year increase, while exports alone surged 45 per cent, reflecting the emirate’s commitment to diversifying its economy. We are also witnessing the impact of Expo 2020 on various economic sectors as it further cements Dubai’s position as a land of opportunity, green economy, a global hub for innovation and a test bed for cutting-edge technologies and solutions from around the world. Dubai Chamber, as the official business integration partner for Expo 2020 Dubai is working to attract more than 100,000 companies to Dubai to participate in the mega event. The Chamber is bringing together business communities from around the world as it hosts high-profile forums that are designed to foster economic partnerships and boost cross-border cooperation. With more than 275,000 members, Dubai Chamber is now operating under a new threechamber structure designed to implement a more specialised approach to supporting businesses. Dubai International Chamber is supporting ongoing efforts to boost the emirate’s trade to Dhs2 trillion over the next five years and attract multinational companies from around the world to the emirate. Dubai Chamber of Commerce continues to represent the traditional sectors, while Dubai Chamber of Digital Economy is focused on startups, as well as high-tech and innovation-focused growth sectors. I am confident that this approach will cement Dubai’s position as a global business hub and catalyse the emirate’s economic growth and competitiveness. We will continue to explore new markets and opportunities through our trade missions, flagship events and international offices, while furthering our quest towards innovation and sustainability. We have a lot to look forward to in 2022 as Dubai pushes ahead with a new vision and enhances its value proposition to businesses and investors. We, at Dubai Chamber, are very excited about what the future holds and the many new frontiers we will explore. We will spare no effort to ensure that 2022 is a year of new milestones that will be written in Dubai’s next chapter of growth.

Dubai International Chamber is supporting ongoing efforts to boost the emirate’s trade to Dhs2 trillion over the next five years and attract multinational companies from around the world to the emirate” 44

SPECIAL REPORT

Saif Humaid Al Falasi GROUP CEO, ENOC

021 was a significant year for the UAE since it began hosting the ‘world’s greatest show’, Expo 2020 Dubai. The country continues to serve as a model for how public and private collaboration has helped address the challenges imposed by the pandemic through resilience and preparedness to stage a world-class event during challenging times. 2021 was also a milestone year with the UAE celebrating its 50 glorious years. The country’s leadership has led and implemented extensive economic diversification efforts that position it as a model nation in driving sustainable growth. For ENOC, as a leading energy player and the official integrated energy partner of Expo 2020 Dubai, 2021 was a remarkable year. Besides new project launches and introducing new and innovative programmes, our highlight was our participation at the event. Our team worked continuously to support the UAE and participate in the world-class event that allows us to represent the energy industry at a global scale. Our plan has been to lead as an example in the energy sector on how a retail energy service provider can showcase advances in the sustainable use of energies. Our efforts are aligned with our government’s national goals including the Dubai Integrated Energy Strategy 2030 and Dubai Clean Energy Strategy 2050 and we will continue to stay committed to fuelling the needs of UAE customers and investing in our country’s infrastructure. We are committed to developing a robust retail infrastructure to serve the UAE for the next 50 years. The future looks bright: According a recent report by The Economist Intelligence Unit, global energy consumption is expected to rise by 2.2 per cent in 2022, while Fitch Ratings stated that the UAE’s economy is projected to grow 5.8 per cent next year.

2021 was also a milestone year with the UAE celebrating its 50 glorious years. The country’s leadership has led and implemented extensive economic diversification efforts that position it as a model nation in driving sustainable growth”

From a strategic perspective, three key priorities will drive our business in 2022: 1. Focus efforts and investments in the UAE across all businesses to execute plans efficiently. There are several expansion plans in place and the next five years will see continued growth through our diverse businesses such as the refinery, service station network, and storage capacity; increasing market share of diesel, jet fuel, LPG, and other products; and ensuring high profitability due to our privileged position in the local market. 2. Steady international expansion while developing capabilities to compete in cross-segment projects. A three-point plan envisages the development of integrated downstream value-chain projects to build capabilities for future growth; making integrated rather than solo investments to extract maximum value-chain synergies across our diverse businesses; and exploring further investments across the group. 3. Integration of our energy value chain by creating synergies across upstream, midstream, and downstream businesses. We will be exploring additional upstream growth to balance the value chain and capture opportunities in the low-price market environment. Our growth strategy will continue to reinforce ENOC’s position in Dubai and globally, and expand the upstream portfolio.

SPECIAL REPORT

Arif Amiri CEO, DIFC AUTHORITY

uring 2021, there was a noticeable shift in optimism across the UAE, as one of the best vaccination programmes in the world rolled out, recovery came in oil production and we saw a rebound in tourism which has been supported by the successful start of Expo 2020 Dubai. While analysts predicted the road to recovery will take a while globally, the UAE – and Dubai in particular – is quickly closing the gap owing to the country’s strong response to the pandemic. The International Monetary Fund expects the UAE economy to grow from 2.2 per cent in 2021 to 3 per cent in 2022. Average growth between 2022 and 2026 is expected to be 3.3 per cent, reinforced by the improved performance of the oil and non-oil economy, macroeconomic stimulating policies and the recovery of tourism. DIFC performed extremely well during 2021 and continues to be a key contributor to the UAE’s economic growth and success. Amidst a global pandemic, DIFC achieved its 2024 Strategy growth targets three years ahead of schedule in the first half of 2021. The total number of active registered companies now stands at more than 3,300, reinforcing Dubai’s status as a leading global financial centre. Dubai has an ambition to be a global hub for technology and innovation. DIFC is playing a significant role in delivering this ambition. Exponential growth in recent years has come from these kinds of businesses joining the centre. The DIFC Innovation Hub was inaugurated in 2021. As the region’s first ecosystem dedicated to bringing the fintech and innovation community together to shape the future of finance and the economy, it has been so successful that we are quadrupling the size of the hub to 315,000 sq ft in the coming years. Over 400 technology and innovation firms, ranging from startups to global unicorns, now call DIFC home – that’s more than 60 per cent of all those in the GCC. In the year ahead, DIFC will focus on creating a thriving business environment that will support entrepreneurship, ultimately driving the future economy. Fortunately, critical enablers for innovation including investment in research and development, supportive policy and legal frameworks, and measures to attract foreign investment are present in the UAE and are high on the list in our economic strategy. Over the years, we have introduced and amended laws and regulations to support DIFC as a global business and innovation hub, which has attracted a number of global firms to the centre, where they can easily do business. Not only has this laid a solid foundation for DIFC’s growth in 2022, it also helps Dubai become a global hub for technology and innovation. We recognise the massive potential and impact of innovations pioneered by the finance industry crossing over into other applications. Innovation has become fundamental to our survival, sustainability and growth – and our region presents compelling opportunities for innovation companies, both homegrown and those looking at international expansion. We see the waves of disruption accelerating, and we expect them to continue to dramatically transform our lives while creating trillions of dollars’ worth of new industries across the world and here in the region. DIFC will capitalise on the immense opportunities in emerging financial segments and enabling technologies. These will deliver significant job creation and economic benefits in line with our vision to drive the future of finance. We will also continue to strengthen UAE competitiveness through inter-regulatory collaboration with the UAE Central Bank and other industry partners to drive the digitisation of the industry, shape the future of open finance and adoption of common standards for enabling technologies. The future for finance is exciting. The future of finance is happening here and now.

Dubai has an ambition to be a global hub for technology and innovation. DIFC is playing a significant role in delivering this ambition” 46

SPECIAL REPORT

f I had to describe 2021 with just a few words, I would have to call it “the comeback year”. After a tumultuous 2020, the global economy began its gradual return to normal – albeit a new normal. We are far from out of the woods, but we have seen airports, hospitality establishments, offices and everything in between slowly go back to welcoming visitors and workers on their premises. While 2020 undoubtedly brought an unprecedented set of challenges, we, at Sharjah Media City (Shams) still managed to buck the trend and register a notable growth in the number of registered companies compared to 2019. Things looked up even more in 2021, where we recorded substantial growth in the number of registered companies in the first half of the year, compared to the same period in 2020. We have been busy on the initiatives front as well. In 2021, Shams premiered the 218 film project – the first crowdsourced film in the Arab world, and the first of many productions under our ambitious ‘UAE Entertainment Experience’ initiative, which was designed to develop the film industry infrastructure in the emirate. Ultimately, our goal is to establish a dynamic filmmaking industry that reflects the realities of Emirati and Arab societies, empowering a new generation of bold and innovative filmmakers. Another major milestone that stood out for us in 2021 was the launch of Shams Talks, an interactive digital initiative that seeks to support entrepreneurs and embed the media sector deep into the integrated economic system both in Sharjah and the UAE. The series tackles important topics with knowledgeable experts and stakeholders; each episode ends with useful takeaways that can be implemented to enhance the business environment, develop media practices and bring them into the 21st century, upskill human resources and entrepreneurs, and explore international success stories and best practices. Sharjah Media City has also brought the renowned Connected Circles initiative to the Middle East. The Amsterdam-based scale-up is a leader in data analytics on LinkedIn for employee advocacy and thought leadership with much to offer the region. While 2021 was “the comeback year” in every sense of the word, it was far from being the end of the line. The world is now setting its sights on “building back better”, as the United Nations has put it. As the world edges closer and closer towards normalcy, the year 2022 looks likely to be a year of “returning to growth”. Nations on every side of the planet will be working to recuperate the losses incurred during the past two years, but also looking forward to progression on all fronts that include development of talent and enriching the media scene. This gives us an advantage here at Shams, given that we enjoyed growth in the number of registered companies even in the midst of the pandemic. Things can only improve from here, and we can confidently say that in the year ahead, the only way to go is up.

Dr Khalid Omar Al Midfa CHAIRMAN, SHARJAH MEDIA CITY (SHAMS)

We have been busy on the initiatives front as well. In 2021, Shams premiered the 218 film project – the first crowdsourced film in the Arab world, and the first of many productions under our ambitious ‘UAE Entertainment Experience’ initiative, which was designed to develop the film industry infrastructure in the emirate”

SPECIAL REPORT

Colm McLoughlin EXECUTIVE VICE CHAIRMAN AND CEO, DUBAI DUTY FREE

021 started very well for Dubai Duty Free and despite the challenges of the pandemic, we achieved some great results, including returning to profitability in January, as well as expanding our retail operation. From January until mid-December 2021, our sales reached $911m, which is 40 per cent higher than the same period in 2020 although 52 per cent lower than sales in 2019, which was a record year. Currently, sales are more than 10 per cent above passenger numbers and spend per head increased to around $54 vs $39 in 2019. This is due to a number of factors, including the pent-up demand from people who may be travelling for the first time since the outbreak of Covid-19. With Dubai International Airport returning to 100 per cent capacity in November, Dubai Duty Free is now fully operational (apart from Al Maktoum International Airport which remains closed) with about 134 stores open. These include the opening of the forecourt public shop at Terminal 3 in April and a new 100sqm Christian Dior in Concourse B in October. Two more luxury boutiques will be opening in the coming weeks, including a second Christian Dior in Concourse A and a 254sqm Louis Vuitton shop in Concourse B, which we are very excited about. The Airport Council International (ACI) forecast that global passenger traffic volume in 2021 would reach half of what it was in 2019 with traffic for 2021 totaling only 4.6 billion of the 9.2 billion passengers served two years ago. Despite a delayed recovery as compared to earlier forecasts, the trend of gradual reopening brings a renewed optimism that air travel could see an uptick in 2022, moving the travel retail industry closer to its recovery. Although there are still many bumps in the road to full recovery with the emergence of new Covid-19 variants such as delta and omicron, overall the broad trend is onward and upward. Looking ahead to 2022 and beyond, we are very optimistic from the larger business perspective. We have now recalled 1,500 employees, bringing our workforce back to over 3,800. Regarding store development, we never took our foot off the accelerator during the pandemic and continued to work on several projects to enhance our operations and provide more shopping experiences for our customers. 2022 will be defined by a stronger and broad-based recovery, with a better revenue stream, a better feeling in terms of the employees and some amount of redevelopment both in stores and in certain categories. Dubai International Airport is forecasting around 56 million passengers and we expect our revenue to continue to grow in line with that or slightly ahead of the passenger growth. Our industry has always been resilient, we’ve faced major challenges over the years, and I have to say that I was heartened by the way our staff and the wider industry has pulled together since the start of the pandemic. While we have to be realistic and acknowledge that it is going to take time for things to come back to where we used to be, we are determined to make Dubai Duty Free a ‘re-success’.

With Dubai International Airport returning to 100 per cent capacity in November, Dubai Duty Free is now fully operational (apart from Al Maktoum International Airport which remains closed) with about 134 stores open”

John Pagano CEO, THE RED SEA DEVELOPMENT COMPANY AND AMAALA

he world over, we are witnessing tourism gather pace in its recovery. A renewed sense of optimism is driving economic resilience and agility, while travel aspirations remain unabated. As I reflect on the tumultuous period of the past two years, I see no better time than now for us to galvanise action towards effectively balancing the needs of the people, planet, and prosperity. Industry recovery must stay grounded in sustainability if we are to build back better. In 2021, world leaders were laser-focused on tackling sustainability. I was honoured to speak at global forums like SKIFT, World Travel Market, the Saudi Green Initiative and the Future Investment Initiative and witness first-hand how closer industry collaboration is shaping a new frontier for tourism development. In a milestone year for Saudi Arabia, we saw climate action prioritised, with the kingdom’s pledge towards net zero carbon emissions by 2060 setting a precedent like no other. For us at The Red Sea Development Company (TRSDC), it represents renewed confidence in our approach to deliver large-scale sustainability. Our approach not only defines success based on economic value, but applies a regenerative lens to go beyond simply protecting the ecosystems, communities, and biodiversity that surround us, to actively enhance it. We are committed to achieving a net positive conservation benefit of 30 per cent by 2040 by enhancing key habitats of coral, mangroves and seagrasses to allow biodiversity to flourish and to provide safe havens for rare species such as green and hawksbill turtles, sooty falcons and more. This also means committing to carbon neutrality once fully operational and we’re well on the road to success with the delivery of our utilities infrastructure. This approach will enable us to operate off-grid and powered solely by solar energy, saving upwards of one million tonnes of CO2 emissions between The Red Sea Project and AMAALA. What I’m most excited about is the blueprint that these commitments help establish for the tourism and hospitality industry in 2022 and beyond, both here in Saudi Arabia and further afield; a way forward that is revitalised with responsibility, resilience, dynamism, and agility. Industry trends reveal that environmentally conscious and responsible leadership continues to drive consumer preference, with 83 per cent of respondents surveyed by the World Travel & Tourism Council and Trip.com Group identifying sustainability as their top travel priority. Our sophisticated regeneration strategies will ensure visitors witness one of the last undiscovered places on the planet. Our ambitious goals have already received global acclaim by renowned organisations and by the time guests arrive, we will have also piloted innovative technologies – for example, offering bottled water made from sunlight and air with Source; turning sunlight into seafood with Blue Planet Ecosystems; and

Our sophisticated regeneration strategies will ensure visitors witness one of the last undiscovered places on the planet” partnering with Red Sea Farms for a sustainable food supply chain using sunlight and saltwater. We are conscious that we don’t yet have all the answers but working with such partners is helping us find the solutions to some of the world’s most critical challenges. Social impact is another crucial element that is bound to yield dividends, as travellers become acutely aware of their impact on the communities they visit. According to American Express, 59 per cent of global tourists want to participate in philanthropic holidays – or “philantourism” – to experience local culture and boost surrounding economies. Aligned with this interest, we have given great thought to how we can promote wellbeing, prosperity and long-term value for our people, partners, and communities. Not only are we actively shaping diverse professional development opportunities for our employees through dedicated training programmes across vocational and digital education, but we are also developing socioeconomic opportunities across local communities such as advancements in agriculture through a partnership with social investment company Ethmar and private foundation Ghoroos. We are also witnessing an unprecedented increase of technology in the travel lifecycle. Our uniquely personalised experiences and 52 smart services will enable us to stay ahead of consumers’ diversified needs, while enhancing guest experiences in inspiring new ways. In parallel, our smart and sustainable mobility strategy will augment community connectivity with electric vehicles that utilise clean technologies. Understanding these emerging trends is imperative for us to adapt and pivot towards a greener, more equitable future – particularly as we gear up to welcome our first guests by the end of this year, when the first hotels open. Nine hotel management agreements have already been signed to bring world-leading luxury hospitality to our destination, while full development of the first phase is on track for completion by the end of 2023.

SPECIAL REPORT

Nabil Habayeb SENIOR VICE PRESIDENT – GE, PRESIDENT AND CEO – GE INTERNATIONAL MARKETS

These priorities are a further reflection of our ambitions for this year in line with our plans to form three public companies focused on healthcare, aviation and energy”

eflecting on the last 12 months, 2021 was a truly unique year. Unlike the largely difficult 2020, many of us were able to find cautious optimism, even as we continued to grapple with ups and downs. The optimism came from, among other things, the increase of “silver-lining” thinking that focused on what we have learned from this crisis, and an acceptance that the world will never be the same – for better or worse. We know the challenges are not yet behind us, with new variants continuing to impact us all. However, the pandemic has highlighted businesses’ need and ability to strengthen the agility and resilience with which they approach daily operations, in order to meet their short-, medium-, and long-term goals. This is a good thing, as change will continue to be the constant of our lives. New realities call for us to be better prepared, and GE is rising to the challenge. That is why we focused on three core priorities in 2021 and will continue to build on them into 2022. The first is the need to address the energy trilemma: a global imperative to balance energy availability and affordability, while expanding more sustainable energy systems. This requires a broad mix of technologies, with a focus on renewables, hydrogen, natural gas, smart grids, digital and carbon capture technologies. The energy transition is an organisational ethos at GE. Having announced our own goal to be carbon neutral by 2030, we further ramped up our ambition to be a net zero company by 2050 – encompassing the Scope 3 emissions from the use of our products. The second key priority for us is to build solutions related to precision healthcare. Precision health is about leveraging digital solutions and data to address disease prevention and detection, and to determine the best course of treatment for each individual patient. By merging clinical medicine with data science and applying advanced analytics, we are working towards delivering better healthcare to more people, across every touch point in health delivery. The third transformational element is the future of flight. With our partners, we are focused on solutions that seek to make aviation more seamless and sustainable. We are doing this through initiatives such as the recent flight with United Airlines, which was the first commercial flight with passengers on board to use 100 per cent drop-in sustainable aviation fuel (SAF) for one of the aircraft’s two engines. Recent flights operated by Etihad Airways and British Airways also used a fuel mix containing SAF, and GE Aviation is also working with Emirates on plans to test 100 per cent SAF in 2022. These priorities are a further reflection of our ambitions for this year in line with our plans to form three public companies focused on healthcare, aviation and energy. As independently run companies, we will be better positioned to deliver long-term growth and create value. Each company will benefit from a deeper operational focus, accountability, and agility to meet customer needs; strategic and financial flexibility to pursue growth opportunities; and business- and industry-oriented career opportunities and incentives for employees. Much of our work in 2022 will focus on this next chapter in GE’s legacy, while remaining dedicated to the key themes that make GE the company – soon, the companies – of the future. Three times stronger, we will continue to rise to the challenge of building a world that works.

Mohammed Amin

SPECIAL REPORT

SENIOR VICE PRESIDENT – MERAT, DELL TECHNOLOGIES

he world as we know it is dramatically changing. 2021 was a year of recovery and resilience, and one that brought with it extraordinary shifts in the way we live and work. Technology has been an important pillar throughout it all, helping the world to connect and collaborate, as it transformed the fundamentals of healthcare, commerce, education and financial services across the global economy. We’ve seen how organisations were required to be digital at heart to succeed, as the speed of disruption and transformation continued to accelerate. Innovation and sustainability have taken centre stage and have been a focus as the world emerged post-pandemic. Over the past year, customers looked to Dell Technologies for our end-to-end product lines that helped businesses transform their IT strategies and infrastructure. From creating remote workforces with our lineup of laptops and monitors to virtualised infrastructure – to protecting critical data and applications, we were able to cater to our customers’ evolving needs. We are currently working with several organisations across multiple sectors to move them from their legacy infrastructure to a digital infrastructure that deploys and supports emerging technologies. Our line-up of product lines extends across our storage, servers, data protection and networking portfolio. We also expanded our as-a-service capabilities, offering flexible payment options so that organisations have greater access to technology across Dell Technologies’ infrastructure stack including compute, storage, networking, virtualisation, and data protection. We had our best third quarter in Dell Technologies history, with record revenues of $28.4bn, up 21 per cent. This was driven by growth in all business units, customer segments and geographies, as well as broad strength across commercial PCs, servers, and storage. Our primary focus in the coming months is to help regional organisations accelerate digital transformation initiatives as we work together to power local and national innovation agendas. We have a unique role to play in transforming the future for the better. A key priority for us is our ‘Progress Made Real 2030 Social Impact Vision’, designed to enhance Dell Technologies’ purpose of using technology to drive human progress. The goals are centred around four focus areas: advancing sustainability, cultivating inclusion, transforming lives, and upholding ethics and data privacy. For each pillar, there is an aspirational moonshot goal and across Middle East, Russia, Africa, and Turkey region, we have various programmes in place – from providing tech access to underserved communities to youth skills training and sustainability initiatives. There’s a lot of excitement going into 2022. Big shifts are coming with emerging technologies such as edge, 5G and data management broadening the technology ecosystem like never before, not to mention shifting demands on security and technologies that will shape the next three to five years such as digital twins, quantum computing and intelligent connected vehicles. Data management will become a new class of workload, with edge becoming the new frontier and serving as the battleground. Additionally, we’ll see the acceleration of private mobility, with more of the cloud and IT industries involved in the path to 5G, shaping telecom’s future. Cybersecurity will also have a significant impact, as the industry will also move from a discussion of emerging security concerns to a bias towards action. I’m hugely optimistic about what the future holds. The coming year will see technology have a substantial impact on the world with the changes driven by a stronger sense of purpose, and each one of us will have an important role to play in this journey.

We had our best third quarter in Dell Technologies history, with record revenues of $28.4bn, up 21 per cent. This was driven by growth in all business units, customer segments and geographies”

SPECIAL REPORT

Mohammad A. Baker DEPUTY CHAIRMAN AND CEO, GMG

ver the past several years, the industries we operate in at GMG have been experiencing significant disruption. Whether through climate change, rapid digitalisation, the Covid-19 pandemic, or other forces, many business models have now fundamentally changed. Yet despite the challenges faced around the world in 2021, a clear socio-economic revival was underway. We saw extraordinary resilience from communities in rebounding from global challenges. Many nations in the Middle East in particular have continued to progress on their ambitious national development visions. Great efforts have been made to increase the ease of doing business, to spur entrepreneurship and to open borders to foreign investment and talent. This recovery was perhaps no more evident than in the Middle East’s retail sector. The industry’s revival has heralded a broader recovery of the region’s economy. In our home market of the UAE, for example, the retail sector recorded a string of positive gains in recent quarters. This has included a rise in footfall at retail outlets and a continued surge in e-commerce transactions. Combined with strong public-private collaboration on industry reforms, the UAE was actually positioned 14th globally in Kearney’s latest Global Retail Development Index. Amidst this environment, we at GMG have recognised that communities and governments around the world are striving to progress sustainable development goals that are often anchored in personal wellbeing. The size of the global wellness market – considered a subset of the wider “wellbeing” concept – has expanded considerably in recent years. McKinsey & Company has estimated the global wellness market at more than $1.5 trillion with annual growth of 5-10 per cent as consumers view wellness across dimensions such as better health, fitness, nutrition, and more. At GMG, we therefore set ourselves a new purpose-centric vision in 2021 to inspire people to win in ways that make the world better. We are doing this by daring ourselves and others to develop better products and experiences that change lives. This has included redesigning our business to reiterate our mission to promote healthier and more active lifestyles through four main business verticals – GMG Sports, GMG Food, GMG Health, and GMG Consumer Goods. As a result of our restructure and global launch, we were proud to announce plans to double our global workforce by 2025. Looking ahead, in 2022, I am optimistic that communities around the world will not just survive but thrive. There will continue to be significant societal shifts and changes in consumer behaviour due to factors like the fourth industrial revolution. With that, we see potential in every market we operate in. We’re looking forward to exploring opportunities across new product categories, markets and sectors. In addition to expected growth in our sports and health divisions, we are especially excited about our food manufacturing vertical, which will now leverage five state-of-the-art factories to cover six dedicated product lines all under one roof within 2022. Geographically, we also have ambitious plans for our Asian markets in 2022 and will build on recent investments in markets like Saudi Arabia, Egypt and Iraq. Whether it is acquiring new international brands or developing homegrown concepts, when an opportunity presents itself, we go after it. This is the drive that keeps pushing us to move forward, to be the change, and to remain a trusted partner.

This recovery was perhaps no more evident than in the Middle East’s retail sector. The industry’s revival has heralded a broader recovery of the region’s economy”

SPECIAL REPORT

Bal Krishen

As the pandemic enters its third year in 2022 and everyday life takes on some semblance of normalcy, the Fed’s hawkish decision may spark market volatility. In addition, fourdecade-high inflation could induce the Fed to announce a more rapid tapering of its bond purchases and potential rate hikes in 2022”

CHAIRMAN, CENTURY FINANCIAL

021 was an eventful year for the financial markets, with all three major averages recording all-time highs, the crypto-mania continuing with Elon Musk’s favourite – dogecoin taping a 200 per cent surge. The year witnessed record-high trading volumes, much of which was driven by retail investors who were continuing the high level of engagement that began in 2020, benefiting Century Financial Consultancy. New offers such as fractional trades and record market volatility helped brokerage companies to capitalise on a new class of retail investors. The ongoing stimulus, Fed’s dovish stances, and swift vaccine programmes enabled index averages to continue the upward momentum, and any minor correction was viewed as a “buying the dip” moment. On the regional front, Abu Dhabi’s bourse ADX marked a milestone by crossing the Dhs1 trillion market cap threshold, making it one of the best-performing indexes, right before the mega event Expo 2020. Additionally, Abu Dhabi has proposed a regulatory framework to allow the listing of blankcheque companies, potentially opening the door to a slew of Gulf-focused deals involving special-purpose acquisition companies, prompting more companies to go public and eliminating the pre-IPO hassles. ADX had a historic IPO year with four mega-companies listed on the local bourse. These new listings likely opened further avenues for new entrants, including citizens and expats, to participate in the UAE growth story. Even Dubai launched a new initiative to list

Dubai government-owned companies on the DFM that will likely help the local bourse leapfrog to the next level. As the pandemic enters its third year in 2022 and everyday life takes on some semblance of normalcy, the Fed’s hawkish decision may spark market volatility. In addition, fourdecade-high inflation could induce the Fed to announce a more rapid tapering of its bond purchases and potential rate hikes in 2022 that could slow economic growth. A sudden policy shift by central banks anxious to tame surging inflation could be one of the downside risks for global stocks next year. Nevertheless, 2021 was a year of recovery, and 2022 could be a year of resilience – investing in reshoring supply chains, digitalising businesses, innovating in healthcare, and building a more sustainable planet. Moreover, with the number of vaccinated individuals increasing across the globe and Covid-19 variants such as omicron reportedly causing milder symptoms in those who have received the shots, the re-opening of the economies worldwide will remain amidst changes occurring in major countries. 2022 could be a year where we see several breakthrough technologies and trends gaining momentum such as Metaverse, decarbonisation, blockchain, robotics and electric vehicles, among others. Century Financial Consultancy will benefit from the investor’s quest to participate in the new wave of technology. It may be challenging for layman investors to keep abreast of the latest trends in the financial markets owing to their dynamic nature; that is when the professional services of firms such as ours could help more than ever.

SPECIAL REPORT

Rizwan Sajan CHAIRMAN AND FOUNDER, DANUBE GROUP

or most businesses, the year 2021 was a year of adjustment and consolidation. However, for Danube Group, it was a year of growth and expansion. When the Covid-19 pandemic forced a lockdown in March 2020, we took a few important steps. One of them was not to panic and take a realistic view of the business activities. Covid-19 is a short-term challenge and it should not affect the long-term sustainability of our business. The lockdown gave us more time and we took this opportunity to listen to the team members – getting to know them better and develop a new strategy for sustainable growth. So, when the lockdown was lifted, we were ready with a new strategy – that combined offline and online sales. We were quick to get back on our feet and by August-September 2020, we charted our growth plan. As a result, by the beginning of 2021, our business started to grow. So, unlike other businesses, we were back in the growth mode from the beginning of 2021.

Some sectors will take time to fully recover – maybe in 2022 or 2023. But the mood is upbeat and investor confidence is back” 54

In June 2021, we launched a new hospitality solutions division for the tourism, hospitality and hotels – sourcing some of the best products and services from all over the world. We also launched our new residential property – the Dhs475m Skyz project in Dubai – due to increased demand for new homes. Danube Homes – our home improvement division – has started to grow internationally through franchise agreements. We opened our showrooms in Uzbekistan and Nepal this year and are planning to take Danube Homes to more than 50 countries worldwide. In fact, we are aiming to take the brand to every country where Emirates Airline flies to. The pandemic has changed customer behaviour. We know that customers might not come to our showrooms the way they used to earlier due to the change in their preferences. Therefore, we have to take the showroom to the customer’s homes. Since we had already developed the soft infrastructure for e-commerce sales prior to the pandemic, we took the opportunity during the pandemic to sharpen our focus on our e-commerce platform. Our digital channel has picked up significantly. Sales are shifting from offline to online gradually and so we have to convert our facilities to become fulfilment centres. Looking at the UAE, some sectors are performing better than others, such as the real estate sector, which has seen an increase in the number of transactions and the recovery of the lost value of properties. This growth has been led by the UAE’s immigration reforms, reduction of fees and charges and the decision to eliminate the requirement to mandatorily have an Emirati sponsor for local companies. We have seen a lot of wealthy people from different countries relocate to the UAE. Some sectors will take time to fully recover – maybe in 2022 or 2023. But the mood is upbeat and investor confidence is back. Foreign investors are setting up companies and relocating their families to the UAE due to the safety, security, quality of life, world-class infrastructure and connectivity and ease of doing business that it offers. This is creating employment. The retail sector is picking up and so is tourism and hospitality. I think by the first quarter of 2022, most industries will recover substantially. However, the full recovery will depend on how the Covid-19 situation changes in other countries as well as the spread of new and deadly variants – that might put things in jeopardy. With the new omicron variant, for example, we have to re-assess the situation and the outlook – if it gets out of hand. So, although we remain careful in our projection for the future, we nevertheless, remain positive. For Danube, 2021 was a year of return to growth and 2022 will be a year of continued growth and expansion – into new verticals and new territories. I believe we now have a solid track record and a strong team to become a global business. We will grow vertically and expand our business horizontally – by entering new markets and developing the business in those countries. But surely, the company is back on a solid growth mode.

SPECIAL REPORT

Alisha Moopen DEPUTY MANAGING DIRECTOR, ASTER DM HEALTHCARE

We introduced the E-ICU model during the peak of the pandemic and lockdown which ensured that our best critical care experts across operations in different countries could come together to form a central expert hub to provide the best medical care to a large number of critically ill Covid-19 patients”

he last two years have been the toughest in the recent history of healthcare with the pandemic creating havoc with healthcare systems worldwide. Aster DM Healthcare remained right in the epicentre of managing the pandemic, serving a large number of Covid-19 positive patients who sought care with us across countries, and also working in partnership with governments to strategise and implement Covid management protocols to address the crisis. While Covid took a major toll on our business, we were required to be operational and even expand capacity on several occasions to ensure that we serve and help as many people as possible. This pushed us to adapt quickly, innovate to introduce new solutions and optimise to bring in best operational efficiency. The year 2021 proved to be turn-around year for Aster where many of these strategies were put into action and we are now set on the path to ensure sustainable and accessible quality healthcare for all. Digital transformation and the use of technology has become integral to our core operations with the adoption of efficiency measures. For example, we introduced the E-ICU model during the peak of the pandemic and lockdown which ensured that our best critical care experts across operations in different countries could come together to form a central expert hub to provide the best medical care to a large number of critically ill Covid19 patients. Similarly, during the second surge in India, over 100 Aster doctors from the GCC came forward to provide free teleconsultation to Covid-19 patients based in India who had no means of accessing medical care. While all of us at Aster believe that technology – or rather the right use of technology – is going to be a powerful changemaker in healthcare, I do think the current wave of quick service companies or restaurants or supermarkets that promote healthcare is not the way forward. It’s unsettling to see people selling services to mop homes and do nose swabs in the same service menu. While our desire for convenience is important, the access to quality healthcare that people can trust is paramount. Also, having a holistic view of a patient, where a health partner looks at the full history of a patient and supports his health journey, rather than episodic intervention to help just access care, is important. This is where a seamless omnichannel integrated approach becomes extremely important and key for the future of healthcare. And only those organisations that truly place your wellbeing and your convenience as complementary drivers will stand the test of this new rage of health-tech boom that we see. While the opportunities are endless, let us not allow healthcare to be sold as a commodity. Health is the most powerful and dynamic state of being, and we as Aster are excited about the power of technology in the hands of the right healthcare providers to change the rules of healthcare for better outcomes and service levels.

SPECIAL REPORT

Yousuf Fakhruddin CEO, FAKHRUDDIN PROPERTIES

ustainable designs, infrastructure and development for all kinds of spaces is not a requirement for the future anymore – we need it now. The remarkable year that 2021 was, it brought along a plethora of learning lessons along with potential solutions in tow, especially for the built environment. Infrastructure and real estate developments need to prioritise environment-friendly architecture and design today for a viable tomorrow. Embedding sustainable practices, solutions, materials, technology, and renewable energy across the entirety of our developments and cities is the only way to protect our world. The pandemic has taught us some valuable lessons. One of the most important ones is that the road to recovery, be it economic or environmental, can be paved by using efficient and environment-friendly solutions. This holds even more true for the construction and real estate industry as the future of any to-be smart city looks bleak without integrating environmentally friendly buildings and spaces. The crises that we have all been struggling with over the past few years highlight the fact that prime metro cities may cease to remain habitable for our future generations if the environment from which we derive everything is not conserved actively. Routine practices and lifestyle habits of inhabitants of a city or a region can be improved through greener construction and real estate development practices. The past year has been one of the most transformational ones, especially when one considers people’s and businesses’ approaches towards the environment and the concept of sustainability in general – it has become more real than they ever wanted to believe it to be. The way individuals look at their personal wellbeing and living space has elevated quite a bit as they are now more focused on the holistic wellbeing of themselves and the planet. Environmental mindfulness is beginning to see a dramatic rise in importance among consumers, businesses, and governments as they now work on a sustainable and technology-driven future that is genuinely viable. As consumers consider sustainability an essential aspect of their everyday lives and as governments push for greener initiatives, installations, ideas, and innovation, it is now the solution provider’s responsibility to design better offerings for everyone. The year 2022 will see a lot of focus on developing a lowcarbon, sustainable and green global economy. We at Fakhruddin Properties are consistently focused on meeting the critical requirements of sustainability and ensuring that care for the environment remains at the centre of our business vision for our future developments. We truly appreciate the UAE’s progressive and considerate leadership doing a great job at driving sustainable real estate development and creating several opportunities pertaining to investment in sustainable projects. Here’s to hoping that 2022 sees a more comprehensive adoption of a sustainable approach towards urban development in the industry to reduce the pressure on our natural ecosystems and give our future generations a better place to thrive in.

The past year has been one of the most transformational ones, especially when one considers people’s and businesses’ approaches towards the environment and the concept of sustainability in general – it has become more real than they ever wanted to believe it to be”

Mohamed Ebeid CEO, EFG HERMES’ INVESTMENT BANK AND MEMBER OF THE GROUP EXECUTIVE COMMITTEE

021 was definitely a great recovery year for EFG Hermes’ Investment Bank. We saw a lot of ECM (equity capital market) deals and M&A (merger and acquisition) transactions across different jurisdictions – it’s actually going to be a record year for us. So it’s not just recovery from Covid-19, but we definitely saw a large number of transactions, lots of change in hands in terms of private assets, a number of privatisations, ECM and DCM (debt capital market) deals across the board. We worked on three IPOs that came out from Abu Dhabi in 2021 as well as an acquisition for Aramex on DFM. We also worked on three other IPOs in Saudi along with an accelerated equity offering there recently. In Egypt, we closed three accelerated equity offerings, out of which one was the first dual listing of a London listed company on EGX. We think there is a lot more room for offerings and there is significant investor interest that’s coming in the MENA region and it’s not just the index trades that we’ve seen in the past few years; currently we can see broad interest and reallocation of assets and equities across the board, which is very interesting. Overall, we have seen lots of recovery in 2021, leading to some of the recovery themes that we are expecting to happen in 2022. One of them was the hike in energy prices in 2021. Our expectations are that oil prices will remain high – at around $70 per barrel on average in 2022 as well. So this will lead to a better balance sheet for oil exporting countries. Number two, they will reshuffle those proceeds into non-oil generating assets. We have already seen a spillover of liquidity because of this everywhere in the region. And the low interest rate environment also helped in the recovery. But for 2022, while we expect oil prices to remain high – and this is going to help the region – there are more expectations of rate hikes rather than rate cuts, which is going to be a little bit negative on EM (emerging market) economies. But in terms of the GCC, we expect to see a recovery on the banking side, especially given the peg to the US dollar that we follow. Tourism and trade will also continue to recover in frontier emerging markets. Overall, in 2022, we do expect volatility coming from whatever Covid-19 variant is there at the time. Definitely, we will live with this virus for quite some time ahead, but we think that the main point we should be focusing on is hospital admittance rates. If they are very low and death rates are low, then even if the case numbers are high, it will be positive, because that means that Covid-19 is getting to be more of a normal flu rather than a pandemic. We all hope that this will start to happen in the next few months or a year or so, but hopefully, this is the way that we can get out of this crisis. While there will always be volatility coming back and forth because of that, we have to ignore it and look at the bigger themes.

But for 2022, while we expect oil prices to remain high – and this is going to help the region – there are more expectations of rate hikes rather than rate cuts, which is going to be a little bit negative on EM (emerging market) economies. But in terms of the GCC, we expect to see a recovery on the banking side” For EFG Hermes, from an investment bank perspective, we definitely want to continue remaining the number one player in ECMs in the frontier emerging markets where we operate. We want to continue operating in the equity offerings in the UAE – whether that’s in DFM or ADX. We are also planning to have a big push in Saudi as we had a very successful year there in 2021. Another area we are looking at is further working with the Egyptian government on the privatisation programme. We also want to make sure that we are still dominant on the brokerage side and on the research side with our globallyranked product. On a different note, we are also hoping that we can go back again to physical conferences this year – we have our ‘One on One’ conference scheduled in March. We are expecting around 200 companies to be presenting and around 800 investors to attend from across the world. I hope it will be feasible to have the event – we are optimistic about it.

SPECIAL REPORT

"THE CHALLENGES OF THE NEXT 50 YEARS MAY WELL BE GREATER AND AS A PEOPLE AND A GOVERNMENT, WE MUST THEREFORE INTENSIFY OUR EFFORTS TO PREPARE OURSELVES...FOR A RAPIDLY CHANGING FUTURE" S H E I K H M O H A M E D B I N Z AY E D A L N A H YA N , C R OW N PRINCE OF ABU DHABI AND DEPUTY SUPREME COMMANDER OF THE UAE ARMED FORCE S

JAN

Lifestyle

Marking time Carlos Rosillo, CEO and co-founder of Bell & Ross, has built one of the world’s leading independent watch brands by demonstrating the importance of always working with the right partners p.64

“Thousands of people have climbed Everest, about 550 people have been into space and yet there are only 164 people who have played in the Ryder Cup for Europe” —Paul Casey

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Oswalds Mill Audio Museum Speaker Originally built for the Guggenheim Museum of Art in New York City, this speaker, made from Pennsylvania ash wood, is reportedly capable of “concert level output” January 2022

Lifestyle / Auto

In the fast lane Zak Brown, CEO of McLaren Racing, understands the business of motorsports. Making sure that the team remains commercially sound, expands its racing portfolio, and makes a consistent push to finish on the podium, is a balance that Brown strikes effortlessly BY VARUN GODINHO

he 2021 F1 season was definitely one for the history books. In one of the most fiercely contested battles in recent memory, Red Bull’s Max Verstappen overtook seven-time world champion Lewis Hamilton in the final lap of the year’s closing race in Abu Dhabi to secure his first world title. The world’s fastest sport delivered a season that fired on all cylinders. 60

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Among the 10 teams participating were McLaren Mercedes. In F1, McLaren is the second oldest active team, as well as the second most successful Formula 1 team – behind Ferrari – having won 183 races, 12 drivers’ championships and eight constructors’ championships. Currently helming McLaren Racing and calling the shots at the outfit is CEO Zak Brown. “It’s highly likely we’ll finish fourth [in the Constructors’ Championship],” Brown

correctly predicted to Gulf Business just ahead of the final race in Abu Dhabi last year. “That’s probably the only disappointing part to the season.” But the 2021 season as a whole has been far from disappointing for McLaren Racing; in fact it’s been one of its best in over a decade. At the Italian Grand Prix in Monza, McLaren scored its first victory in 10 years, with its two drivers – Daniel Ricciardo and Lando Norris – notching a one-two position on the podium, sweetening that victory even further. The team also had more poles in 2021 than it did in 2020, including a longawaited one in Russia. On the prospects of McLaren building on that momentum for 2022, Brown is refreshingly pragmatic, with none of the chest-thumping hubris that is characteristic of most racing bosses. “I think it’s great we won our first race this year [2021]. We need to be careful not to raise expectations to an unrealistic level. “I don’t want to say our goal in 2022 is to win two [races] – our goal is to continue to get closer to the front of the field. gulfbusiness.com

Lifestyle / Auto

Zak Brown, CEO of McLaren Racing

“Of course, we’re going to give it everything we’ve got. But we still have a couple of years of technical catch-up that we just can’t accelerate any further or faster than we are. We still have technical infrastructure that we’re catching up on, most notably our windtunnel. I’m not going into next year [2022] thinking we’re going to be a championship contender.”

ne of Brown’s chief roles is to ensure that McLaren Racing is not only technically sound, but financially robust as well. At the close of the 2020 season, McLaren finished third in the constructors’ championship, which meant significant amounts of money to further its racing ambitions. That same day as the final race in 2020, US sports investment group MSP Sports Capital invested GBP185m to acquire an initial 15 per cent stake in the outfit, that will increase to 33 per cent shareholding by the end of 2022. At the time the deal was struck, it valued McLaren Racing at GBP560m. “Generally, the majority of other team bosses have more technical backgrounds – that’s where they spend their time. I spend mine on the commercial side. Clearly our racing portfolio references are very attractive to corporate partners. We have a sophisticated understanding of what partners want to get out of a relationship with McLaren, and we work hard to understand their business and really focus on growing their business [as well],” says Brown. Its F1 partners include Richard Mille, Dell Technologies, British American Tobacco, Cisco Webex and Coca-Cola, among several others. McLaren hasn’t selected a title sponsor for its F1 team, and it’s a decision that Brown is happy to maintain. “We’re ahead

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“I think it’s great we won our first race [in 2021]. We need to be careful not to raise expectations to an unrealistic level” of our business plan as far as where we want to be with our corporate partner portfolio to elegantly sell the car – you don’t want to turn [the car] into a patch of logos. Ultimately, we have a big partner on the side, and the rear wing. We’re not actively pursuing a title sponsor in our business plan and that is a conscious, deliberate decision that I made when we started. “I’d rather not have all my eggs in one basket because our partners contribute a lot to our business growth and our brand.

We’re not averse to having a title partner, but the way we’ve built our commercial proposition, we don’t need one.” Formula 1 introduced a budget cap for teams of $145m for the 2021 season, and plans to drop that to $135m by 2023, giving newer teams a fighting chance to compete with the big names such as Ferrari, Mercedes and Red Bull whose previous annual budgets are believed to have exceeded $400m each. The new budget caps were drawn up alongside a fairer distribution of prize money and increasing the share of F1 revenue that smaller teams are entitled to. In October last year, Mercedes boss Toto Wolff added that the 10 teams currently on the grid were on the verge of all becoming profitable. “I think the health of the teams has never been stronger. In Formula 1, there have always been two or three teams in trouble at any one time. Now, you have 10 very well-funded teams by very credible individuals or investment groups,” says Brown. “You know, Sauber was saved by Finn Rausing a few years ago [when] it was headed in the direction of administration. And here it is a couple of years later turning around $400m for the racing team.” January 2022

Lifestyle / Auto

An ‘anti-dilution fund’ was reportedly introduced by way of the confidential Concorde agreement struck between F1 owners Liberty Media, the teams and the FIA that made any new team wanting to enter F1 pay a $200m fee, which will be shared by the existing teams. This will offer a sense of security to those teams currently on the starting grid. “I’m now getting calls on a routine basis from very significant sports investors who are really keen on buying Formula 1 teams, and there’s no team to buy. So it’s become a seller’s market, and no one wants to sell,” adds Brown. The Middle East is a market that is very much on the radar of F1. The first-ever races in Saudi Arabia and Qatar were held in 2021. Those races will continue to be held alongside the ones in Bahrain and the UAE (the latter recently signed an extension to continue hosting the race until at least 2030). Showing deeper commitments to the region, in 2018, McLaren signed a fiveyear R&D agreement focused on extreme performance technology with the King Abdullah University of Science and Technology (KAUST) in Jeddah. The partnership aimed to jointly research areas of computational fluid dynamics, fuels and lubricants, machine learning, advanced mathematics as well as sensors and electronics. “KAUST is a great partnership. We like working with students. KAUST is a first-rate campus. We are working together around STEM to develop various technologies. We have a history of working with students and universities. Our F-duct was co-developed out of a university. You get fresh thinking out of students. We enjoy partnerships like that and they make a 62

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“What is sure to have a seismic impact on teams, drivers and managers, both on and off the track, is the mega F1 rule changes that will come into effect this year” real contribution to, at the end of the day, making us go faster,” says Brown. In another sign of its collaboration with entities within the region, on the eve of the Abu Dhabi race last month, McLaren Racing, as part of the ‘Driven by Change’ initiative, unveiled a one-off livery on the car. The creative reins for that livery were handed to UAE-based artist Rabab Tantawy. The initiative will see McLaren’s partner, British American Tobacco, provide further opportunities for underrepresented creatives throughout 2022 to showcase their work across its various platforms.

utrageous driver shenanigans, acidic inter-team rivalries, and sometimes controversial team owner decisions mean that F1 is as much a sport as it is a source of entertainment. That aspect of it was seized on

by Netflix, whose Drive to Survive series, now in its third season, offers an all-access pass into the behind-the-scenes trappings of F1. It has opened up the sport to a wider audience, much larger than its traditional fan base. “I think Netflix has done absolute wonders for our sport. I can’t recall another media platform that’s had the impact that Netflix has had. Formula 1 has such an interesting storyline to it on and off the track.” What is sure to have a seismic impact on teams, drivers and managers, both on and off the track, is the mega F1 rule changes that will come into effect this year – believed to be the biggest changes in four decades. With fully shaped underfloor tunnels, cars will use ground effects to generate downforce in a system last seen in 1982. Also in 2022, the cars will shift from 13-inch to 18-inch tyres, while the newlyintroduced aerodynamic regulations aim to reduce “dirty air” that results in cars losing downforce when chasing a car directly in front of them. “It’s the single largest rule change in modern times. Developing a new race car from the ground up where you’re not pulling over anything really from the previous year is a unique situation. It’s an exciting challenge for the design team and the engineers. I think the challenge is that they don’t really have a baseline to work from like you historically would,” notes Brown. Apart from F1, McLaren Racing already participates in IndyCar as well as esports. Starting 2022, it will also take part in the FIA-sanctioned electric off-road racing series Extreme E. And there might be more announcements to come this year. Brown says, “We’ve been reviewing the World Endurance Championship series which we like and we’ve also been reviewing Formula E. Those continue to be under review and I think we’ll make some decisions on those in the next few months.” But for McLaren, as is the case with every other auto major, Formula 1 remains at the very pinnacle. “Our world revolves around Formula 1. I think Formula 1 is on fire at the moment. I see that continuing and only getting stronger as the competition gets closer,” says Brown. Making sure that its competition stays a car length behind it, while McLaren itself closes the gap on those immediately in front of it, is a well-crafted strategy that Brown has likely already meticulously mapped out. gulfbusiness.com

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Lifestyle / Horology

Shifting shapes Carlos A. Rosillo, CEO and co-founder of independent watchmaker Bell & Ross, has merged French design with Swiss watchmaking techniques to create a brand with universal appeal BY VARUN GODINHO

he Quartz Crisis in the Seventies and Eighties dealt a bruising blow to the European watchmaking industry at large, and specifically the Swiss. At the turn of the Nineties though, it began to claw its way back into the limelight, alongside a burgeoning watchmaking renaissance among its neighbours in Germany and France. In 1994, seeking to ride that wave, Parisians Carlos A. Rosillo and Bruno Belamich, decided to embark on a quest to set up a watchmaking brand of their own with an initial investment of $20,000. They combined their names to establish Bell & Ross, with Belamich serving as the creative force behind the brand, while Rosillo drove its business. Starting from scratch to get a watch brand off the ground can be a daunting 64

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task, which is why they turned to the legendary German watchmaker Helmut Sinn to help make the first Bell & Ross pieces. Helmut already had decades of experience manufacturing high-spec tool watches such as the Sinn 140 that went into space and the Sinn U1 which was made from submarine steel. The first few Bell & Ross pieces, made in Frankfurt’s Sinn Spezialuhren manufacture, even had “Bell & Ross by Sinn” on the dial. To introduce their brand to the world, Rosillo took the watches to Baselworld in 1994. “We were surprised by the immediate reaction of the people who were really specialists in watches as well as the media and top-level retailers,” Rosillo told Gulf Business in an exclusive interview during a visit to Dubai recently. “We were small in scale, but had a good collection. The top retailers, including those who were

carrying the likes of Patek Philippe, came to us. I’m a collector. I know what it is for a retailer to carry Patek.” Early on, Bell & Ross decided to position their pieces as professional tool watches – not just wristwatches with pretty faces and colourful dials. In 1996, for example, its Bomb Disposal Type watch was ordered for use by bomb squad members of France’s elite GIGN special operations wing. The 1997 Bell & Ross Hydro Challenger meanwhile was tested under conditions that replicated the pressure experienced at more than 11,000 metres below sea level. gulfbusiness.com

THE SINGLE MOST IMPORTANT MOMENT THAT FOREVER ALTERED BELL & ROSS’ TRAJECTORY WAS IN 2005, WHEN IT DEBUTED THE BR 01

“The centre of our logo has an ampersand. That ampersand is a union of competence and union of expertise of designers, engineers, watchmakers and professional users,” explains Rosillo of the watchmaker’s positioning. By 1998, witnessing Bell & Ross’ rising star, Chanel decided to buy a minority stake in the watchmaker. Four years later, Bell & Ross was able to break away from Sinn and instead rely on Chanel’s manufacturing facilities in Switzerland. The single most important moment that forever altered Bell & Ross’ trajectory was in 2005 when it debuted the BR 01, whose characteristic design of a round dial in a square case with four exposed screws remains an iconic and emblematic design of the watchmaker. It took inspiration from the design of dashboard instruments on vintage military aircraft, and aimed to create wristbound versions of them. The BR 03 meanwhile featured a smaller 42mm case to suit smaller wrists. More recently, in 2019, the brand unveiled the BR 05, versions of which were available with integrated steel bracelets. It was intended to be a more urban alternative to the rugged BR 01 and BR 03. Rosillo has an automotive analogy to explain it. “The BR O5 is the evolution of the BR 03, but for the city. Let’s say we have to compare it to a car. Land Rover, when they went from the Defender to the Evoque, they

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went from country house to the city. With the 05, we have gone into the city with an integrated bracelet, and softened the case too. We now have two icons – the classic 03 which is very robust, like the Defender, and the 05, which is more sophisticated.” While the 05 collection previously featured time-and-date as well as chrono models, last year it introduced its first dual-time zone version in the BR 05 GMT. From a small-scale two-man show back in the early Nineties, the brand has grown to one with a truly international footprint. “We are present in 80 countries. In most of them we have subsidiaries or people who are working for Bell & Ross. We have around 600 point of sales around the world, with 15 of them being Bell & Ross boutiques,” says Rosillo. When we met at the end of November last year in Dubai, Rosillo was visiting the city to attend the Ahmed Seddiqi & Sonsorganised Dubai Watch Week. “When we started in the Middle East initially, it was not a strong market for us. I think one key development was the partnership we then entered into with Seddiqi around three years ago. Working with Seddiqi has been an important move

Lifestyle / Horology

because they have very good brands, they are knowledgeable and customers know the [profile] of the watches [they retail],” notes Rosillo. At the Dubai Watch Week, the brand unveiled a collaboration with Seddiqi, the BR03-92 UAE 50th Anniversary edition which is limited to 50 pieces and was made to commemorate the country’s golden jubilee. Last year, Bell & Ross was also chosen by the Armée de l’Air et de l’Espace (French Air and Space Force) to become the official watchmaking partner of the Patrouille de France (French Acrobatic Patrol), with a quartz version of the BR 03-94 Patrouille de France issued to team members while an automatic winding mechanical version of it limited to 500 pieces was made for the public. Coincidentally, the Patrouille de France team entertained spectators by performing over the skies at the opening weekend of Expo 2020 Dubai in October. In 2018, Chanel acquired a 20 per cent stake in Swiss watch movement and component manufacturer Kenissi for CHF20m. Apart from a stake in Bell & Ross, Chanel also has stakes in independent watchmakers F.P. Journe and Romain Gauthier. By virtue of Chanel’s deal with Kenissi, and the latter’s expansion of its manufacturing facilities in Le Locle, those independent watchmakers will also have access to new movement and parts manufacturing capabilities. “We don’t own our own manufacture. But with our partnership with Chanel and Kenissi, we have access to their technology. In 2022, we will use this manufacture to develop a new Bell & Ross movement,” reveals Rosillo. While the average starting point of a Bell & Ross is approximately $4,000, with especially great deals to be had among its classic round cased vintage collection, the brand has also shown that it can successfully command a spot at the much higher end of the market. In November, for the Only Watch auction, it offered up a one-off BR 01 Cyber Skull Sapphire piece which had an estimate of CHF90,000, but ended up being auctioned for well over double that amount at CHF220,000. In December, the brand launched a limited version of 10 pieces based on that piece, each built with a proprietary B&R movement, and priced at $117,000 – nearly five times the overall investment with which Rosillo and Belamich had set up their independent watch brand nearly three decades ago. January 2022

Lifestyle / Auto

An electric moment Nissan’s $18bn electrification plan, if done right, could define the trajectory of the Japanese carmaker for decades to come. Ashwani Gupta, chief operating officer at the automaker, is leaving nothing to chance BY VARUN GODINHO

he Nissan Leaf, the first massproduced EV launched over a decade ago, was ahead of its time. It challenged the notion that electric cars were impractical, while also in many ways forced the hands of other automakers to play catch-up. With the electric car market now having finally reached maturity, Nissan needs to make sure that it has a plan in place to stay ahead. In November, the Japanese carmaker unveiled its Ambition 2030 strategy to accelerate its electrification agenda. Accordingly, it plans to spend $18bn over the next five years. It will introduce 23 new electrified models, including 15 new EVs by 2030 and aims to achieve an electrification mix of more than 50 per cent globally across its Nissan and Infiniti brands. To do so, it aims to increase its global battery production capacity to 52 GWh by 2026, and 130 GWh by 2030.

January 2022

Nissan says that by introducing 20 new EV and e-power equipped vehicles in the next five years, it aims to increase its electrification sales mix across most major markets by 2026. For example, by 2026, it expects electric options to account for more than 75 per cent of its sales in Europe, over 55 per cent in Japan and above 40 per cent in China, and for around 40 per cent in the US by 2030. During a visit to Dubai last month, Ashwani Gupta, chief operating officer at Nissan Motor Company, said during a roundtable that the reason that Europe would lead the electrification charge was due to several factors, including the upcoming Euro 7 regulations. “At the time of Euro 7, from a customer viewpoint, if he compares the pricing of total cost of ownership of ICE cars versus total cost of ownership of battery cars – and we are able to make [battery cars] affordable

– there will be a natural transition [from ICE to electric]. That 75 per cent [estimate for Europe] is very conservative. I believe that at the time of Euro 7, the whole market will shift towards electrification in Europe,” says Gupta. Its electrification push is accompanied by an aggressive plan to reduce the cost of ownership of EVs. To that end, Nissan will continue to develop its existing lithium-ion battery technology, while also introducing cobalt-free technology to reduce the battery cost by 65 per cent by 2028. Its trump card though will be the introduction of its proprietary all-solid-state batteries (ASSB) by 2028, which will reduce charging time to a third. Importantly, ASSB is expected to lower the cost of battery packs to $75 per kWh by 2028 and aims to bring it further down to $65 per kWh to help achieve cost parity between EV and gasoline vehicles. gulfbusiness.com

Ashwani Gupta, COO , Nissan Motor Company

“As far as Nissan is concerned, we want to support the transition to charging infrastructure, but that’s not our core business. Our core business is products and services” “If you see the United States where gasoline prices are competitive, the total cost of ownership of battery cars is [currently] high,” says Gupta while explaining why the company expects its electric sales to be less in some markets. “The same thing is happening in the Middle East where you have to reduce the total cost of ownership of battery cars.”

The Ambition 2030 plan also outlines Nissan’s commitment to invest up to JPY20bn by 2026 towards charging infrastructure, though Gupta stresses that the nature and scope of that infrastructure support will vary between its markets. “When we did a customer investigation in Europe, 75 per cent of them said they charge their cars at home. When we consider Japan,

Lifestyle / Auto

only 40 per cent said they charge at home because they mainly live in apartments. And that’s where we need to work with governments to have an infrastructure. In the Middle East, we have to understand whether we need to put that infrastructure at home, or establish [an external network of] charging infrastructure,” notes Gupta. He points out that eventually it may be external third-party players who also support the ecosystem. “Imagine if Europe opts for 100 per cent electrification, what then will be the future of gasoline stations? Naturally they will transform themselves. As far as Nissan is concerned, we want to support the transition to charging infrastructure, but that’s not our core business. Our core business is products and services.” The Japanese automaker has its sights set on being carbon neutral across the lifecycle of its products by 2050. To pave a path to get there, in July, it unveiled a GBP1bn Nissan EV36Zero centre in Sunderland that would serve as a manufacturing hub for its EVs with an emphasis on striving for carbon neutrality at the manufacturing end. It has confirmed that it will take that EV36Zero concept to Japan, China and the US with measures to localise sourcing and manufacturing expected to further drive down EV costs. Alongside, Nissan will also set up battery refurbishing facilities beyond Japan in Europe this year, and in the US by 2025. As for the specific EV models that will debut, much of it is still under wraps. The 100 per cent electric crossover Nissan Ariya which was showcased recently at Expo 2020

CHARGE THEIR CARS AT HOME

75% EUROPE

40%

JAPAN because they mainly live in apartments

gulfbusiness.com

January 2022

Lifestyle / Auto

“Our market share is growing and we have enough sales potential. In the GCC, we are targeting a 20 per cent market share by 2022. Needless to say, the majority of that market share is driven by the Patrol” Dubai will be rolled out in several markets over the coming months. It is built on the bespoke CMF-EV platform developed by Nissan along with its alliance partner Renault. The Ambition 2030 strategy revealed four concept cars: the crossover Chill-Out that is expected to also use the same CMF-EV platform, a single cab pickup Surf-Out model, a camper van/ SUV styled Hang-Out model, and MaxOut which is imagined along the lines of a convertible sportscar. For the moment, there’s no dearth in demand for its ICE engines. “We used to have 7.2 million capacity worldwide. In this pandemic, we downsized it to six million. This year we will be selling 3.8 million cars. We have enough capacity to produce more. Our market share is 68

January 2022

growing and we have enough sales potential. In the GCC, we are targeting a 20 per cent market share by 2022. Needless to say, the majority of that market share is driven by the Patrol,” says Gupta, who was in Dubai to launch the GCC-exclusive 2022 Patrol 70th Anniversary edition and also the 2022 edition of the Pathfinder at the Expo 2020 Dubai site. Gupta says that eventually, the success of its EV push comes down to the consumers and the choices they make, although Nissan won’t ram through the transition. “If we say that from tomorrow Nissan will not make the Patrol because it emits gas, do you think customers will accept that? I don’t think so. In Europe, why is the transition [to electric cars already] happening? Because the customers are ready.

Europe is taking the lead because of the maturity of the market, maturity of the customers and maturity of the competitors which gives the customer the option to make the transition.” He cites the example of the Expo as what it would take for the uptake of EVs to be even more successful. “What Dubai Expo is trying to achieve is connecting the dots. One person cannot run the disruption. You need a platform where everybody is contributing. We as a company will contribute with the latest technology and with cost competitiveness. But then we need other partners [also] to drive that transformation,” says Gupta. With $18bn on the table, those partners – be they customers, governments or external parties – cannot second-guess Nissan’s intent. gulfbusiness.com

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Lifestyle / Sports

A victory swing Paul Casey returns this month to Dubai to defend his Dallah trophy at the Slync.io Dubai Desert Classic which has now been elevated to a Rolex Series event. The English golfer is going for the jugular BY VARUN GODINHO

ongevity is clearly on the agenda for English golfer Paul Casey. A flash in the pan, high-octane sprint with a few memorable victories, followed by an equally rapid descent and walk into the sunset is typical of more than a few sportsmen. Casey is not among them. He turned professional in 2000. Twentytwo years later, he still has fight and is 70

January 2022

challenging players half his age. Proving a point, he rocked up to the 2021 edition of the Dubai Desert Classic a year ago and sealed his 15th victory on the European Tour. That win – amid a pandemic that exacted a telling toll on professional athletes around the world – was a particularly memorable one. “I really struggled with the temporary pause that we had on the PGA Tour because of Covid-19. I wasn’t playing

well at the time. I just had to re-focus and get 2020 behind me. Our performances on course are what is always talked about, but I had a rubbish time off the course as well, as I couldn’t operate the way I normally could,” Casey told Gulf Business recently. “I arrived [in Dubai] on a Tuesday night because I had played golf in the United States the week before. I woke up on Wednesday morning before playing the Pro-Am quickly in a total daze due to the jet lag. I ended up going on to win the event, but I was physically exhausted. It shows that energy can sometimes come from another source. At that point, we were heavily locked down with Covid-19, and not allowed to leave our hotel rooms. At the course, we had about 500-800 spectators. When we got to these pockets of spectators on the golf course, it was brilliant because we literally hadn’t played in front of anyone. To me, it was just one of the coolest events on the tour.” gulfbusiness.com

Lifestyle / Sports

The reigning Slync.io Dubai Desert Classic champion is back this month to defend his title at the Emirates Golf Club. Significantly, this year’s tournament which will be held from January 27-30, has been upgraded to the European Tour’s Rolex Series with the prize fund more than doubled from the existing $3.25m to $8m. “There is a massive difference between normal events and Rolex Series events. I feel like it has finally been elevated to the position that I think a lot of us felt it was at. For an event that is so new, it has gained a lot of prestige amongst the players. It also shows the importance of golf in this region. The fact that Rolex chose Abu Dhabi and Dubai just shows the level of significance Rolex has with golf and the UAE,” says Casey. Previous winners of the Desert Classic include Tiger Woods, Henrik Stenson and Ernie Els. This year, Casey faces up to stiff competition from the likes of world number two Collin Morikawa, former world number one ranked Rory McIlroy as well as fellow Major winner Sergio Garcia. The addition of the Desert Classic to the Rolex Series event means players may have to select which of the string of tournaments they choose to play during a packed calendar year. “The reality is we don’t play every Rolex Series event. It is a tricky balance between trying to win Majors and Rolex Series events, but maybe it will be the first time I play all five,” notes Casey, who is a Rolex Testimonee since 2009. Casey says that the first Rolex he bought was early on in his pro career in 2001 when he won the Scottish PGA and rewarded himself by buying a ‘Pepsi’ dialled GMT which he still has. When we meet on the sidelines of the 2021 edition of the DP

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“I used to live and die by the results in my 20s and 30s. I feel like I’ve been trying to strike a balance between reflecting on my career, for example [participating in] the Olympics which was a goal I achieved” World Tour Championship in November, he’s only too happy to slip his Oyster Perpetual 41 from the Ryder Cup off his wrist to give us a closer look at it. It has the number 130 inscribed on the back. “The significance of this watch is that it was presented to every Ryder Cup player on the European Tour. Rolex presents a timepiece to every player and captain of both the United States and Europe. There have only ever been 164 players to represent Europe at the Ryder Cup, and I was the 130th player [to do so], so this number was engraved by Rolex on the back of my watch. “The reason we are reminded of this is because it shows how only a small number of people have actually represented Europe. Thousands of people have climbed Everest, about 550 people have been into space and yet there are only 164 people that have played in the Ryder Cup for Europe.” Of his Ryder cup collection, Casey says he was also given a steel and gold blue face Submariner from

Bernhard Langer in 2004, and in 2006 he received a yellow gold and steel Daytona with a champagne gold face. It was also in that 2006 edition in Ireland when Casey became the first player ever in Ryder Cup history to win a foursome match with a stunning hole-in-one. At 44, Casey is still hunting victories, though the raw temperament characteristic of younger players seeking to prove themselves has been smoothened out with the maturity that comes with being pro for over two decades. “I used to live and die by the results in my 20s and 30s. I feel like I’ve been trying to strike a balance between reflecting on my career, for example [participating in] the Olympics which was a goal I achieved,” he says. “A lot of athletes say don’t look back until you’re finished. But I’m definitely able to look back and think that was a really good victory.” And when Casey thinks back – considering his current form and the competition he is up against – the 2022 edition of the Slync.io Dubai Desert Classic could well be that victory which Casey reckons ranks among his career’s finest moments. January 2022

JAN

The SME Story A dedicated hub for the regional startup and SME ecosystem

INTERVIEW

Conquering the last mile A monthly car rental company and a premium nonalcoholic drinks company are on our radar this month What is the USP of invygo?

Invygo was developed with a mission to unlock vehicle access in the MENAPT region, which surprisingly has one of the lowest global vehicle penetration rates (140 cars/1,000 people). In comparison, Brazil and Russia have a vehicle penetration rate of 260 and 300 respectively. From experience, the primary reason for this is the lack of financial inclusion. With only 18 per cent of adults in MENAPT having a bank loan and 57 per cent having a bank account, lenders find it risky to fund depreciating assets when individuals don’t have a credit record. Cars also have high service costs and are often written off easily, adding to financing risk. This is where car subscription is truly transformative, by giving people access to cars with no commitments and zero risk. Users only need a smartphone to book a car from invygo’s 40,000 cars across 50 brands, and have doorstep delivery within 24 hours, with the option to swap every month. 72

January 2022

Invygo has been through a few accelerators including Misk 500, Google for Startups and in5 Dubai. What has been your biggest takeaway from them?

Being a part of the region’s biggest accelerators fast-tracked our growth. Access to mentors, industry leaders and local market experts refined our approach for expansion and customer acquisition. In5 Dubai was where we started, giving us the early-stage validation we needed to launch. Misk 500 gave us unique insights into Saudi Arabia and connected us to important stakeholders. Google for Startups was a game changer for our product, helping us evolve our technical capabilities and build a future-fit product. Give us a business overview of invygo’s operations.

Invygo grew 9x from April 2020 to the end of 2021. Since launch, we’ve raised $4.4m from global and regional investors. We have 25 employees, with engineering being our largest

Eslam Hussein CEO and co-founder, invygo

department. Up to 25 per cent of our engineers are women, something we are incredibly proud of. Also, women account for 46 per cent of our customer base, and this number is growing. You recently relocated to Saudi Arabia. What potential does that market hold for invygo?

World Bank data shows that only 14 per cent of adults in Saudi accessed loans from commercial banks. Low auto financing and low credit reliability rates act as a barrier to car access. With 60 per cent of a car’s value lost in the first five years, ownership remains risky. With invygo, we provide cars that require zero commitments. Our all-inclusive pricing makes subscription a better option compared to leasing or ownership. With one of the youngest populations in the region, we are ensuring that these digital natives [in Saudi] can now access a car directly from their smartphones. gulfbusiness.com

The SME Story

40,000 What are your expansion plans?

Our expansion plans have focused on three areas – new customers, new partners and hiring the best engineering talent. A large part of our customer growth is organic. This has also helped attract new dealers and leasing companies who are able to move inventory faster than before. Lastly, we know the importance of having robust engineering capabilities

INVYGO’S CARS ACROSS 50 BRANDS

and that is a priority investment area. We are exploring new markets in the MENAPT region. These countries have a low motorisation rate due to high costs of ownership and invygo intends to change that. What is the steepest learning curve you’ve experienced when it comes to being an entrepreneur?

is outsourced to third-party companies. Our biggest market is the UAE where we have direct-toconsumer reach via our e-store as well as a presence in retail and the hospitality sector. We tend to do our own distribution and work directly with our B2B clients. However, if we cannot achieve the required results, we partner with a bigger FMCG distributor to ensure we reach our KPIs. We also have a large number of export clients for Kuwait, Saudi Arabia and the Maldives.

How did the idea for Drink Dry come about?

I moved to Dubai in 2019 from the UK. The zero-alcohol drinks category was already present there, so I knew that the choice exists. But it simply was not available in the Middle East. I am a non-drinker, so it was a personal conquest of mine to introduce and build the premium alcohol-free drinks category for adults in this region. We were the first movers in this space and so the concept was brand new and it made most sense to do it by reaching the end consumer directly and setting up an online store was the most obvious way forward. What is current scale of your business?

We are currently a team of four people who also work with a number of freelancers. We import our products from the UK, Spain, France, Germany and Belgium. Our warehouse and fulfilment operations, as well as last mile delivery service, gulfbusiness.com

What is the potential market size for the non-alcoholic beverage market in the region?

It is hard to give specific numbers but the recent stats announced by Lyre’s suggest that there is a potential of 100,000 cases a year of alcohol-free spirits alone totaling $20m. I think there is a lot of education to be done to achieve these numbers, but the signs to reach there definitely look promising. The fastest growing sub-categories for us are definitely non-alcoholic beers and spirits. We launched our non-alcoholic spirit brand Sea Arch in December in the UAE. What are some of the most pressing challenges that you’ve come up against when growing Drink Dry?

The first is breaking down the taboos and people’s perceptions about the quality and taste of the products we have under Drink Dry’s umbrella. Historically, nonalcoholic beers and wines were not great and so people are sceptical. However, a lot has changed in the last five years in

As a founder, you soon realise that entrepreneurship isn’t an easy journey. You have a responsibility to your customers, employees, investors and other stakeholders. Founders don’t have a job description and must be more handson than everyone else, wear multiple hats, and be able to pivot fast. Entrepreneurs must also attract and retain exceptional talent.

Erika Doyle Founder, Drink Dry

terms of technology and the taste profile of non-alcoholic drinks. The easiest way for us to overcome this challenge is by getting people to try our products. Hence we partner with a lot of other businesses – from barber shops to highend luxury clothing brands – where we showcase the drinks to the end consumer. The second challenge we have is the compliance process for importing the products. We work with local authorities to make sure we address any issues beforehand to ensure the smooth launch of new products in the market. What are your expansion plans?

Kuwait and Saudi Arabia are our number one priority markets and we hope to be up and running with our online store in Kuwait in Q1 of 2022, with Saudi to follow later on in 2022. January 2022

The SME Story COMMENT

Why being a ‘good’ business matters Business leaders must work with colleagues and customers and ensure that the path ahead is the right one, writes business advisor Kate Hardcastle

eing ‘good’ – what does that really mean for a business? It’s such a generic term. In the past ‘good’ would have meant an organisation’s financial health, customer retention or maybe even its website traffic statistics. But now that four-letter word adds up to so much more: it’s about our corporate environmental standing, how much support we offer for the mental health and wellbeing of colleagues, and what impact we make as a stakeholder in our community. The pressure is on for organisations around the world to stand up and be counted. Green washing just will not cut it anymore. Nor will the notion of a ‘spokesperson being unavailable for comment’. Leaders of today must make a difference for the future and accept that it is not always about the immediate wins. This is a longer term but critical mission. With the consumer having more information at their fingertips than ever before, they are not afraid to use it. They can and will find your email address in seconds if they wish to talk directly to you about any perceived challenges. Internationally, many companies have experienced service issues due to the pandemic, and the customer is still feeling the pain and their tolerance is much lower than it used to be in this instantaneous world. Unlike in the past, when you would have a stern letter of complaint to the CEO from the determined few, many people now use the public platform of social media to vent their frustrations, and in doing so, often find kindred spirits who have experienced similar issues. Hence it is a challenging phase for business leaders. As a client recently told me: “We have just used all the fuel in the tank to serve throughout the pandemic, and at the same time we have to take on climate 74

January 2022

crisis and so many other issues with the same budget as before. How?” And it’s a fair reflection as Covid-19 has churned up a seabed of issues that need to be tackled – greater diversity and inclusion being a significant focus and rightly so. However, this generation of leaders will be the baton-carriers for the next – and we must realise that it may not be about us reaching the final glorious lap. It is up to us to be the change we want to see and to take our whole organisation with us. We must work with our colleagues and customers, include them, and ensure that the path ahead is the right one for the greater good.

BETTER CONNECTION Being a better organisation and making profit ethically should be a basic value for any business. Yet some companies feel great concern about making any grand statements on progress and developments – as it is feared that this will never be enough for the customer.

Unfortunately, a real disconnect can occur between customers and CEOs. I have interacted and engaged with thousands of consumers around the globe in research and development programmes, and one of the reminders I take is that a consumer is very unlikely to understand or have any grasp on how your organisation works, and what is involved in getting that product or service to them. And without that, it’s near impossible for a consumer to have a detailed understanding of what is achievable in the steps towards being better. Companies often talk from the inside out, which means that statements on measures of improvement can be too detailed, filled with jargon and sit in wordy statements on corporate sections on the website. It is time to find a common language to have an ongoing conversation with our customers as we further our journey to be ‘good’ and then great. Easy and understandable measures should be regularly published and be easily accessible. Brand values and promises are as relevant on the receipts we send and behind the counters we serve at. The wallet for the hotel key could enlighten the guest on what improvements are being made as well as inviting them to be part of the conversation. ESG is not about limiting the conversation to a page on a website. The path to greatness is never an easy one, but it will be enhanced with the first step of accepting that this is a time for collaboration, honesty and working from the outside in. On new paths it is more than acceptable to ask for guidance, take time to reflect on where we have been and reaching our destination. gulfbusiness.com

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