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No 128
March 2011
EDITORIAL Editor-in-Chief HH Sayyid Tarik Bin Shabib Group Editor Mayank Singh Assistant Editor Visvas Paul D Karra Sub Editor Muhammed Nafie DESIGN Senior Art Director Sandesh S. Rangnekar Art Director Minaal G. Pednekar Senior Designer M. Balagopalan Senior Photographer Rajesh Burman Photographers Sathyadas C. Narayanan Motasim Abdulla Al Balushi Cover concept Chanjeet Singh Production Manager Govindaraj Ramesh MARKETING Business Head Jacob George Senior Advertising Manager Avi Titus Advertising Manager Arif Abdul Bari CORPORATE Chief Executive Sandeep Sehgal Executive Vice President Alpana Roy Vice President Ravi Raman Senior Business Support Executive Radha Kumar Business Support Executive Zuwaina Said Al-Rashdi
REALTY CHECK
R
eal estate is real while everything else is unreal’ is an adage that one often hears in Oman. The swagger and hubris of the sector took a beating in the aftermath of the subprime crisis as loan defaults, project delays, eroding capital values, declining rentals, liquidity issues and lack of customers reared their head. To be fair, Oman fared much better than its peers in the region and things have stabilised to a large extent – speculators have given way to real buyers and sellers, there is a better demand and supply match in the residential space and banks have started lending to developers and customers. On the flip side, things remain challenging in the office space market. According to a CB Richard Ellis report, “Despite improving conditions economically, the office market continues to face major challenges as significant oversupply impacts the market for both existing as well as new office buildings. Tenant migration trends are set to be maintained during 2011, as occupiers look to move from aging buildings to new dedicated office developments with higher quality specifications and adequate facilities. In the short term, excess supply will supersede demand resulting in improved terms for tenants in the form of rent free periods and more relaxed payment terms.” Integrated Tourism Complexes are similarly being forced to rethink their strategies as European buyers have decreased due to economic compulsions. Despite such shortcomings,no one can deny the primacy and importance of real estate for Oman’s economy. The government’s thrust on infrastructure spending and economic growth are expected to spur the sector in the years ahead. OER’s cover story takes stock of various cross currents impacting realty in the Sultanate. The sudden and untimely demise of HE Dr Rajiha bint Abdulamir bin Ali, Minister of Tourism came as a huge shock to all of us. As a tribute to HE Dr Rajiha, OER spoke to her husband Murtadha Hassan Ali and her son Faisal Murtadha Al Lawati. The article makes for poignant reading.
Distribution United Media Services LLC OER Presentations
Mayank Singh Published by United Press & Publishing LLC PO Box 3305, Ruwi, Postal Code - 112 Muscat, Sultanate of Oman Tel: (968) 24700896, Fax: (968) 24707939 Email: publish@umsoman.com Website: www.umsoman.com All rights reserved. No part of this publication may be reproduced without the written permission of the publisher. The publisher does not accept responsibility for any loss occasioned to any person or organisation acting or refraining as a result of material in this publication. OER accepts no responsibility for advertising content. Copyright © 2011 United Press & Publishing LLC Printed by Oman Printers Correspondence should be sent to: Oman Economic Review United Media Services PO Box 3305, Ruwi 112, Sultanate of Oman Fax: (968)24707939 Email: editor@oeronline.com Website: www.oeronline.com
2
March 2011
OER -magazine
To read, click on link at: www.oeronline.com
PUBLICATION
‘PROGRESS 2010-2011’ GOES ONLINE A
comprehensive digital version of ‘Progress 2010-2011’, United Media Services’ annual publication, can now be viewed online at www. progressoman.com. The digital version will provide readers with easy online access to all the pages of the bilingual publication, making it accessible via all acknowledged internet browsers without additional software installation. The online edition will also take the readers to the index pages of each advertiser in the publication. Being the first annual publication in the country to go online, ‘Progress’ will provide a wonderful opportunity for the advertisers to keep their messages online, frequently visited by business travellers and local residents. Besides, a separate link is given to view the greeting messages and video clippings of various industry heads on the
MEASURED STEP Visvas Paul D Karra’s insightful article (Cover story, Feb) sheds more light on how the Budget 2011 and the 8th Five-year Plan reflect government’s ability to conceive, implement and maintain a cohesive development plan for the people of the country. Both the budget and the new fiveyear plan are formulated with a longterm development strategy, infusing a new life into the core sectors of the economy such as education and health. A significant increase of spending on education and health programmes -RO1,262mn-shows the government’s commitment to ensure meeting the inevitable needs of its citizens. The total allocation of RO927mn for education, in addition to a special grant of RO20mn from His Majesty the Sultan for distribution of laptops and computers, is likely to support the goal of 50K jobs creation per annum. The budgetary allocation for human resource development will also serve to 4
March 2011
Capital Markets, Education and Healthcare, Insurance, Agriculture and Poultry, Retailing, Aviation, Information Technology, Real estate, Telecom, Manufacturing and Logistics, Power, Infrastructure, Tourism and Trade. Each of these sectors is covered in dedicated chapters highlighting the strides taken by the Sultanate in these areas.
occasion of the 40th anniversary of the Sultanate’s Blessed Renaissance. Readers can also download the PDF version of each article in the latest issue of ‘Progress’ which stands out for its exhaustive coverage of various sectors such as Oil and Gas, Banking and Finance,
create 200,000 to 275,000 new work opportunities for the national workforce during the period. Besides, top priority accorded to the development of tourism, industry, agriculture and fisheries will not only provide long-term sustainable benefits to the society at large but also help the government generate more revenue to its coffer. K Satchidanadan, CBD, Ruwi
RENEWABLE ALTERNATIVE While explaining the new plans of the government to improve the power and water capacities in the country in order to meet the increasing demands, the Public Authority for Electricity and Water (PAEW) Chairman Mohammed Al Mahruqi also mentioned some policy instruments to support renewable energy sources across the country (OER, Feb). Urbanisation and population growth will continue to intensify population density, and therefore water demand.
Published on the occasion of the 40th anniversary of the Renaissance, the 16th edition of ‘Progress’ highlights the major milestones in Oman’s socio-economic development during the last 40 years. ‘Progress 2010-2011’ also takes a walk down memory lane identifying 40 landmark events that have been fundamental in Oman’s transition to a modern, dynamic and progressive nation.
These trends suggest that we need to develop energy intensive water supplies. Renewable energy sources should be utilised for new and existing water projects whenever practicable to reduce greenhouse gas emissions, protect utilities and their customers from spikes in fossil fuel costs, and decrease the water demand associated with conventional sources of electric power. Considered in the context of climate change, the water and wastewater sector will need to significantly curtail its energy use and greenhouse gas emissions. While water and wastewater provisions already account for a significant share of total energy demand, we cannot gloss over the fact that water-related energy use is poised to grow at an accelerated pace in Oman like elsewhere in the world. George Titus, Al Khuwair
Write to us with your comments/feedback at: editor@oeronline.com
INSIDE
22
26
Steady and Sustaining
32
PERSONALITY
Pursuit of excellence
A combination of talent and single minded dedication has enabled Tariq Al Barwani to become a role model for Oman’s youngsters
CORPORATE PROFILE
In rhythm with time
Hasan Juma Bakcer has significantly contributed to the inclusive growth and infrastructure development of the country in the last 35 years 6
Committed till the last breath Tourism Minister HE Dr Rajiha bint Abdulamir bin Ali’s death is an irreplaceable loss to the nation
FACE2FACE
54
We are a destination developer Adil Taqi, CEO, Muriya Tourism Development Company
OIL & GAS
Despite challenges, Petroleum Development Oman is confident about sustaining and gradually increasing production in the years to come
58
OBITUARY
March 2011
ECONOMY
60
Poised to scale new heights Qatar has the potential to lay out the red carpet for the estimated 400,000 fans that are expected to visit the country for the 2022 FIFA World Cup
36
TELECOM
64
Successful innovation Micromax is looking at repeating its success story in the Sultanate, thanks to its customer-focussed products
COVER STORY
Lessons learnt and kept
6
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INSIDE
78
CLOSE UP
AUTO TALK
Jeep Grand Cherokee
66 70
Editorial
2
Auto News
82
Economy Watch
10
Environment
84
Business Briefs
12
Browsing Corner
86
In the News
20
Billboard
88
Periscope
28
Market Watch
90
Real Estate
56
Gizmos
91
Golf Update
74
Muscat Festival
92
CARTOON CORNER
By Kannan Murali
Big moves‌ more avenues
8
March 2011
76 87
GCC’s drive for clinching trade deals The GCC countries are bound to expand business opportunities in the region
INFRASTRUCTURE
Thinking beyond Freezone Sohar is expected to give a fillip to the development of Sohar region in tandem with Port Sohar and Sohar Industrial Area
RETAIL
Shopping Carnival The shopping malls and high streets of Istanbul will wear a festive look, as the Turkish capital is all set to host the first shopping festival
LEGAL
Omani Arbitration Law Omani court case may go through three tiers of justice whereas an arbitral award is final, with no right of appeal
Al Khamis Plaza, Qurum Commercial Area, Muscat Tel: +968 24 560945 • E-mail: mmu@mouawad.com • Website: www.mouawad.com
ECONOMYWATCH
NUMBERS Oman salaries to rise by seven per cent in 2011 HIGHLIGHTS ¡ ¡ ¡ ¡
Qatar tops regional pay rises HR professionals get the highest raise Moderate jobs growth forecast for 2011 Egypt turmoil could impact talent availability in the Gulf
cent. The UAE and Bahrain saw the smallest increases at 5.2 per cent and 4.9 per cent respectively. Although much lower than the double-digit increases of 2008, the pay rises were all higher than the rates of inflation, resulting in improving living standards for many. However, an estimated 55 per cent of professionals did not receive any pay increase at all.
Private sector salaries in the UAE are forecast to increase at an average rate of 6.3 percent this year, according to a research released by GulfTalent.com, the leading online recruitment firm in the Middle East. Among countries, Qatar and Saudi Arabia had the highest pay rises in 2010 at 6.8 per cent and 6.7 per cent respectively. Oman was in third place with 6.4 per cent, followed by Kuwait at 5.7 per
Across the region, with consumer spending picking up, the retail sector saw the highest pay rise at 6.4 per cent, while education had the smallest increase at 3.8 per cent. Based on GulfTalent.com’s study, the employment market in the Gulf is expected to continue growing at a moderate pace, aided by global economic recovery, rising oil prices and continued government spending on infrastructure projects.
GCC Average Pay Rises by Country 2010-2011
GCC Inflation 2010-2011
Country
2010
2011 Forecast
Country
2010
2011 Forecast
Qatar
6.8%
Saudi Arabia
6.7%
7.2%
Saudi Arabia
5.4%
6.3%
7.0%
Oman
4.0%
4.5%
Oman
6.4%
7.0%
Kuwait
3.9%
4.8%
Kuwait
5.7%
5.9%
Bahrain
2.5%
3.0%
UAE
5.2%
6.3%
UAE
1.6%
2.1%
Bahrain
4.9%
5.1%
Qatar
-1.9%
Overall GCC
6.1%
6.6%
GCC Average salary increase (2005-2011)
2.1% Source: Economist Intelligence Unit
Salary increase by country
Source: GulfTalent.com Surveys
10
March 2011
PDO’s EcOman Centre dedicated to nation THE WAVE SHOWCASED AT MUSCAT FESTIVAL The Wave, Muscat, the Sultanate’s first integrated tourism complex, has established a fully-fledged promotional stand at Qurum National Park as silver sponsor of the 2011 Muscat Festival. The stand was located at the Silver Jubilee square amidst the atmosphere that celebrates Oman’s rich and traditional arts, culture and heritage making The Wave, Muscat the only real estate project in Oman to have a stand at the park.
101ST BRANCH OF AL ANSARI EXCHANGE Al Ansari Exchange has announced the opening of its 101st branch located in Ajman Markets Cooperative in the Al Nuaimi area. HH Sheikh Majid Bin Saeed Al Nuaimi, chairman of the Emiri Court; Rashed Al Ansari, general manager, Al Ansari Exchange; and officials from the local Ajman government and representatives from Al Ansari and the private sector were present during the opening ceremony.
BANKMUSCAT ENLIVENS MUSCAT FESTIVAL BankMuscat made its presence felt at Muscat Festival. Supporting as main sponsor, the bank has spared no efforts in enlivening the Sultanate’s annual cultural and tourism extravaganza. Coinciding with the festival, BankMuscat has launched special offers on an array of innovative products. The incredible offers include chance to win laptops, iPhone, iPads and BlackBerry mobile phones for those applying for BankMuscat MasterCard credit card while those applying for Zeinah women’s credit card got an exclusive guaranteed gift. 12
March 2011
Petroleum Development Oman (PDO) has recently opened an EcOman Centre, a facility dedicated to educating and inspiring the public to adopt an eco-friendly lifestyle, at Mina Al Fahal. The EcOman Centre aims at introducing people to the different forms of energy like heat, light, mechanical, electrical and chemical energy and educating them
on how to gradually shift from non-renewable fossil fuels to renewable sources like solar energy, wind, geothermal, hydropower and biomass. The centre will help visitors to understand energy consumption habits at home and work locations and to understand the efficient alternatives to save energy by changing lifestyle. The
centre is designed to create awareness among the public about the possibilities of harnessing sustainable energy resources for brighter future. Sayyid Said bin Ibrahim Al Busaidi, dy governor of Muscat, presided over the opening ceremony.The centre consists of three themes: the ‘Power Tower’, ‘Better World’, and connecting these two, the ‘Energy Journey’.
Asia Express set for expansion in Oman Asia Express Exchange is all set to fuel further growth in the financial sector of remittance and payment solution providing market in the Sultanate. The prominent Gulf-based businessman Yousuf Ali MA, who operates the Lulu hypermarket chain, has taken a stake in the Asia Express and plans to invest and expand further in Oman. Currently, Asia Express has seven branches in Oman and with the new management in place, it plans to expand the network to serve larger market. “Oman is the least affected country
in the economic slowdown period and we will continue to expand by opening new branches of Asia Express Exchange here,” says Yousuf
Ali. “We see ourselves as a unique service provider with greater emphasis on quality,” says Adeeb Ahamed, CEO of the new management team.
POWER, WATER SUMMIT Global Exhibitions & Conferences (GEC) and the US-based International Quality and Productivity Centre (IQPC) will hold the first-ever Oman Power and Water Summit from May 22 to 25. The summit will focus on a wide variety of major topics ranging from the design, construction and management of power and desalination plants, to the installation of efficient power and water networks throughout the sultanate.
AL OMANIYA POSTS 10.1 PER CENT GROWTH Al Omaniya Financial Services declared its audited results for the year 2010 showing a net profit of RO4.13mn for the year ended on 31 December 2010, with an increase of more than 10.1 per cent compared to the previous year. The total revenues of the company stand at RO13.37mn.
OIB HIGHEST IN OPERATIONAL EFFICIENCY With an operating margin of 47.53 in 2009, Oman International Bank (OIB) outperformed the average of its peers by two times. OIB has been ahead of the other key banks by consistently delivering an operational margin of well over 40 per cent in the last four years.
18 PER CENT INCREASE IN BMW SALES Al Jenaibi International Automobiles has announced that its 2010 sales of BMW and MINI vehicles achieved an 18 per cent increase compared to 2009 figures. The BMW group importer in Oman is ranked among the top five growth markets for BMW group Middle East, signaling the strength of the Omani market 14
March 2011
Renaissance announces record preliminary results Renaissance Services has announced the preliminary results for the year ended on December 31, 2010. The results are subject to audit by the external auditors and approval of the company’s audit committee, board of directors and shareholders. Renaissance is expected to post revenues of RO253mn, up from RO248mn in 2009. Net profit is predicted at RO32.3mn up from RO28.5mn in the preceding year. The net profit of 2010 includes a capital gain of RO0.65mn from the disposal of assets compared with a capital
Renaissance owns and operates an offshore support vessel fleet of 100 vessels, one of the top ten fleets in the world
gain of RO5.97mn in 2009. Stephen Thomas, CEO of Renaissance, says in an announcement, “We would like to pay tribute to our customers, suppliers and everyone of the 11,457 people who work in this group of
ours. They have managed to deliver growth in a year that has felt the toughest impact of the global recession in some key industries and markets in which we operate. This underlines the resilience of the Renaissance business model.”
BankMuscat approves $800mn EMTN BankMuscat shareholders approved an $800mn Euro Medium Term Note (EMTN) programme at the Extraordinary General Meeting (EGM) presided over by Sheikh AbdulMalik Bin Abdullah Al Khalili, chairman of the bank. The EGM approval for the $800mn EMTN programme will allow the bank to launch
a series of bond issues over a 10-year period with varying maturities, currencies and terms through public subscription or private placement. The type of bonds that can be issued include fixed rate, floating rate, zero coupon and indexlinked notes, which will be listed on Luxembourg Stock
Exchange. Sheikh AbdulMalik bin Abdullah Al Khalili says, “We are extremely glad that the shareholders have given approval for the $800mn EMTN programme. We anticipate strong response to the Euro bond issue, the proceeds of which will be utilised to meet the dollar-denominated project financing requirements.
Nawras to move to new premises Nawras has signed a contract with Tilal Development Co for new premises to house the growing Nawras family from next year. Nawras CEO, Ross Cormack and chief financial officer, Jorgen Latte, signed the agreement with Abdulrahman Burham, board member of Tilal Development Co. Against a backdrop of the majestic Western Al Hajar Mountains and with an air
of festivity, Nawras Board Member, Saleh Nasser AlRiyami joined members of the senior management team and around 50 colleagues representing the different departments of this company. The Nawras family members donned their branded hard-hats to participate in the exciting occasion of the company choosing to relocate to offices above the Muscat Grand Mall in Al Khuwair.
AHK Oman hosts German business delegation
The German Industry and Commerce Office (AHK Oman) hosted two separate events for the business delegation from RhinelandPalatinate, Germany recently at the Grand Hyatt Hotel Muscat. The events organised by the ministry of economics, transport, agriculture and viniculture of Rhineland-Palatinate included a workshop on “Landscaping and Agriculture� by Dr Roland Kubiak from the German Institute for AgroEcology and a business-to-business
meeting between high profile German companies and Omani companies in order to develop and explore potential partnership. The inauguration of the workshop and the businessto-business meetings was held by HE Angelika Storz-Chakarji, the German ambassador in Oman and the representative of the Rhineland-Palatinate ministry of economics, transport, agriculture and viniculture, Claudia Brillmann.
Ports of Oman unveiled RAMNIKLAL BAGS OMANISATION AWARD Ministry of Manpower has honoured Ramniklal B Kothary & Co with the Omanisation Award 2010 at its annual event held recently at Al Bustan Palace Hotel under the patronage of HE Lieutenant General Malik bin Suleiman Al Maamary, inspector general of police and customs. The award was presented for achieving and maintaining high rate of Omanisation in 2010.
SAMSUNG APPS AT 2 MN Samsung Electronics Co announced that Samsung Apps, the world’s first application store for the television, has reached its two millionth TV application download globally. The milestone is the latest in Samsung’s Smart TV category leadership, which was on full display at the consumer electronics show in Las Vegas earlier this month.
MUSCAT CAPITAL’S OPF IN KSA Muscat Capital, a subsidiary of BankMuscat, has launched a new fund targeted at Saudi investors interested in investing in companies listed on the Muscat Securities Market (MSM). The Oman Premier Fund (OPF) will function as an open-ended feeder fund investing into the popular BankMuscat Muscat Fund, which in turn invests in MSM-listed companies.
JET’S 100TH DAILY FLIGHT Jet Airways announced the addition of two more daily flights between Dammam and Mumbai and Mumbai and Dubai. With this addition, Jet Airways has achieved a landmark milestone of becoming the first private Indian airline to operate 100 daily flights to international destinations.
16
March 2011
The Ministry of Transport & Communications has released the Ports Of Oman. The bilingual publication, the first of its kind in Oman, encapsulates the remarkable development of the ports sector in the Sultanate. The 296-page publication has been produced by United Press & Publishing (part of UMS) for the ministry.
While unveiling the publication, the Undersecretary for Ports & Maritime Affairs in the Ministry of Transport and Communications, HE Said Bin Hamdoon Bin Saif Al Harthy says, “Through an extensive coverage of all the ports, the Ports Of Oman book reflects on the Government’s sustained efforts in the last 40 years to develop the
port sector and relentless commitment towards investing in the long-term growth.” Sandeep Sehgal, Chief Executive of UMS says, “Rich in information with concise write-ups, relevant data and breathtaking photographs, the publication is a visual delight and a handy reference source for a wide cross-section of the readers.”
Health ministry, UNICEF honour Omantel Omantel has been honoured by the Ministry of Health and the United Nations Children Fund (UNICEF) for its ongoing commitment to help improve the lives of thousands of children all over the Sultanate. The felicitation came at
an event jointly hosted by the Ministry of Health and UNICEF to launch a new national campaign aimed at combating malnutrition in children in Oman. Omantel’s vice president for finance, Talal Al Maamri, received the
recognition from the Minister of Health HE Dr Ahmed Al Saeedi. In 2010, Omantel signed a new agreement to sponsor and support the UNICEF in the Sultanate and help promote and raise awareness of children’s rights.
GCC roaming charges reduced The Telecommunications Regulatory Authority (TRA) recently attended the third meeting of the regulators’ working group on regulating international roaming prices, which was held at the secretariat general of the Gulf Cooperation Council (GCC). The meeting reviewed the
implementation status of the recent ministerial decision regarding capping the prices of international roaming outgoing calls made by GCC mobile users while roaming within the six GCC countries. The ministerial decision, which was passed during the last GCC telecom ministerial
committee, has set price caps on the retail prices charged to GCC consumers making voice calls while roaming within the six GCC countries. The caps are RO0.138/min for calls within the visited county and RO0.344 /min for calls to any GCC country.
Joseph Tha h mp mpan a Commerci ciiall Manager of Al Adrak
Michael Ramsis Regional Manager , Information Technology Muriya Tourism Development
Richard Lopes General Manager, Business Services IMTAC
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Omantel launches Omantel Business SWISS-BELHOTEL’S THIRD MILESTONE IN OMAN Swiss-Belhotel International signed a memorandum of understanding with Al Farazdq Trading and Construction Company for the management of an international 2-star hotel, Swiss-Belexpress Muscat, in Oman. SwissBelexpress Muscat will be the third property for Swiss-Belhotel International in Oman.
AHLIBANK’S INFORMATION SECURITY TRAINING Ahlibank held an Information Security Awareness training programme for its employees at its training centre in Al Khuwair. The training programme, organised as a part of the bank’s data security enhancement programme, seeks to ensure that people understand their information security responsibilities, organisational policies and properly use and protect the information resources entrusted to them.
TRA SERVICES GO ONLINE The Telecommunications Regulatory Authority (TRA) launched a system for electronic transactions of telecom equipment approval. The technical affairs unit of the authority conducted a series of workshops and training courses to train the companies dealing in telecom equipment to get them acquainted with the new electronic system at the TRA website.
A’SAFFA’S REAL HALAL CHICKEN A’Saffa Foods announced that its customers in Oman and across the GCC can buy any of their chickens and food products with confidence knowing that it has been raised and slaughtered by hand using real Halal techniques in accordance with Islamic Shariaa. 18
March 2011
Omantel has recently launched Omantel Business, a new enhanced brand positioning for the company’s corporate business unit. The announcement of the name and identity was made by
the recently appointed vice president of the Corporate Business Unit, Todd Dick, a senior executive with over 20 years experience in the international and regional telecommunications
business. Omantel has created the new identity for its corporate business unit to provide a focused and cohesive structure to its business operations in the future.
Ernst & Young to train government executives Ernst & Young has launched an executive management development programme to train 30 Omani executives in government organisations as part of the 40th National Day celebrations. Titled ‘Executive Management Development Programme’ (EMDP), the one-year-long coaching will
leverage the global leader in assurance, tax, transaction and advisory services, Ernst & Young’s global knowledge, insight and experience to train senior government executives. The programme was formally inaugurated by HE Maqbool bin Ali Sultan, minister of commerce and industry at the
Intercontinental Hotel recently. “I hope this programme will enable senior government executives to make a greater impact as future leaders not only in Oman but across the region,” says Abdulaziz Al Sowailim, chairman of Ernst & Young Mena.
FRiENDi introduces easy prepaid Internet FRiENDi mobile has introduced Easy Prepaid Internet, a high quality and easy-to-use internet, using the latest 3.5G technology which ensures high speed and great network coverage.
Easy Prepaid Internet will enable people in Oman connect their laptops to the internet from anywhere at an incredible price of RO9.9 per month. The FRiENDi mobile internet starter kit available at
50 outlets in Oman includes a USB modem for the laptop and one month’s free internet which offers at a special introductory price of only RO29 during the launch promotion.
INTHENEWS
O
man Construction Summit 2011 that concluded in Muscat recently highlighted the rapid progress being made by the Sultanate in infrastructure development and investment opportunities in the construction sector. Organised jointly by Global Exhibitions and Conferences (GEC) and the US-based International Quality and Productivity Centre (IQPC) under the patronage of the ministry of housing, the summit provided exclusive details of the progress in some of the key projects like Duqm port, dry-dock, and Oman national railway project. Over 40 high profile speakers which included top officials from the government and the private sector made presentations at the summit, which was the first ever event in Oman dedicated to the construction sector. The panel discussions were marked by candid reviews of development strategies. The event was formally inaugurated by HH Sayyid Harib bin Thuwaini al Said, assistant secretary-general of the council of ministers for conferences, in the presence of ministry officials, members of the diplomatic community, the senior management of construction companies and other distinguished guests.
Focus on Duqm Dr Maurice Girgis, project advisor, who made a presentation on the focus day, said Duqm Port phase one would be ready by 2012. Director general of ports at the ministry of transport and communications, Qassim Ahmed al Shizawai, revealed that RO1.6bn has already been invested on Duqm’s infrastructure development. Infrastructure development is progressing on a war footing and investors can avail of the advantages offered by Duqm special economic zone to gain competitive edge. M J Park, CEO, Oman Drydock Company, says the soft launch of the dry-dock will be held in April. Explaining the facilities at the dock, he points out that Duqm drydock was the second biggest in the region and has the advantage of being brand new, compared to Dubai dry-dock. On the progress of Oman’s railway project, Engineer Salim Al Afani, director 20
March 2011
Opportunities galore The first ever event in Oman dedicated to the construction sector, Oman Construction Summit 2011 underscored the strong interest in the Sultanate as the government embarks on massive infrastructure development throughout the country general for physical planning, supreme committee for town planning said that pre-qualification process for project management and design and supervision consultants has been completed and consultants will be selected by June this year. “Railways will start operations in Oman in 2017,” he adds. Arjan Weerstand, acting general manager, port development and implementation, Port of Salalah revealed the expansion of general cargo terminal is going on and expansion of container terminal will be taken up in the fourth phase which will be completed in 2019. The summit also featured presentations on Oman’s tourism infrastructure, key residential projects, the ministry of housing’s strategic vision, the expansion of Salalah Port, and Oman’s national solid waste management strategy. Speakers also discussed the country’s water
infrastructure projects, the competitiveness and attractiveness of Oman’s construction market, the key challenges facing the Sultanate’s construction industry, the future plans of Petroleum Development Oman (PDO), and how to manage risks in construction projects. Case studies were also presented on the Asian beach games project, the Muscat wastewater project, and The Wave, Muscat. In addition, there were panel discussions on the construction market forecast for the next five to ten years as well as on the challenges and best practices in developing Oman’s energy and utilities infrastructure.
OER/ OER Dossier and AIWA were media partners
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OIL&GAS Petroleum Development Oman is facing complexities like never before, with ageing oilfields, complex projects, burgeoning demand for gas and spiralling prices of commodities. Despite challenges, it seems certain that the company will sustain and gradually increase production in the years to come. Sunil Fernandes reports on the reasons for such optimism
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aking challenges head-on has never been a problem at Petroleum Development Oman (PDO). When faced with criticism for declining production a few years ago, the company not only reversed declining production, but managed to sustain and increase production. The year 2010, like 2009, was a year of steady performance in terms of production at PDO. The company reported, for the fifth successive year, a combined production of oil, gas, liquid petroleum gases and condensates at more than one million barrels of oil equivalent per day. But if we consider the production of oil individually, there was a marginal increase in production. The average oil production in 2010 stood at 553,000 barrels per day, slightly above the 2009 level of 552,000 barrels per day. Pertinently, if the Harweel project had to go on stream as anticipated by mid-2010, the company would perhaps have shown a reasonable jump in production.
The big leap The last few years have seen a steady oil and gas production trend at PDO. Going 22
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Raoul Restucci, Managing Director, PDO
STEADY AND SUSTAINING forward, the company is faced with ageing oilfields which poses a challenge in replenishing its oil production. However, Enhanced Oil Recovery (EOR) projects that are slated to go on stream will add almost a third to production in
the coming years, making it the next big leg in the production story. EOR projects at Harweel, Marmul, Qarn Alam and Amal will between them add staggering levels to oil produced, when all of the projects go on stream at full production.
OIL&GAS However, EOR projects come at a cost, and at a cost that is significantly higher when compared to conventional means of oil production. “We would be satisfied even if oil would be around $30. The EOR projects at Harweel, Marmul, Qarn Alam and Amal, would not have any problems with lower oil prices. Having said that, if we consider today’s oil prices, these projects are extremely attractive,” says Raoul Restucci, managing director of PDO. Interestingly, PDO would be the first company to simultaneously use all the three EOR techniques of polymer flooding, miscible gas and steam injection, when some of its projects are commissioned. The first of the EOR projects at Marmul has already kicked-off with the plant inaugurated in October 2010. The lowest in terms of oil production contribution, the Marmul polymer project will add 10,000 barrels a day of incremental production to PDO over the coming years. Marmul is a long-term project in which increased production can take many months to take effect. However, early operations have been promising with increased production. Haweel is yet another complex EOR project, but this time using miscible gas to draw-out oil. Technological challenges have led to some delays, but commissioning activities at this project are now underway, and first oil is expected in the second quarter 2011. Once Harweel reaches full production, it will contribute with an additional 40,000 barrels per day of high quality crude oil to PDO’s expanding portfolio. The Qarn Alam steam-injection project has also experienced some delays, but the project team is working hard to recover lost time. First production and first steam stages are expected in August and October 2011, respectively, after which it will also contribute another 40,000 barrels per day. PDO’s newest EOR project at Amal is progressing on schedule. This is a twin field development at Amal East and Amal West where steam will be used in different ways to increase production.
Amal is expected to take several years to reach its full effect with peak production at the two Amal fields not expected until 2018 when output is projected to reach 23,000 barrels per day.
Discoveries remain crucial Discoveries remain crucial to ensure that depleting reserves are replenished and a reserve-replacement ratio in excess of one is achieved. “At the moment we delivered in excess of one and we continue to work on that,” says Restucci. And the reasons for maintaining a healthy ratio is PDO’s heavy investment in its exploration programme which has resulted in significant successes. In 2010, the company made a discovery of four new oil fields, one of them with material volume of oil in place. The company also found a potentially large gas field. Combined potential in-place volumes of oil and gas could be in excess of 800 million barrels of oil equivalent. One of the material oil discoveries in 2010 was at Amal Southeast, close to the existing Amal and Amal East oil fields which are currently part of an important Enhanced Oil Recovery (EOR) development project. In addition to this, PDO has made three other oil discoveries at Sayyah in the north of PDO’s concession, Al Ghubar East and Aqeeq in the central region of the Sultanate. “Now there is lot of work, like appraisal, testing and determining the full commerciality of these projects. But we are very excited about these projects,” says Restucci.
PDO would be the first company to simultaneously use all the three EOR techniques of polymer flooding, miscible gas and steam injection, when some of its projects are commissioned
An intensive gas programme The Sultanate is witnessing a rising demand for natural gas to drive industrial growth and the demandsupply scenario continues to remain tight. “We continue with an intensive gas exploration programme, including development and seismic. But in addition to that we have gone significantly into tight and unconventional gas,” says Restucci. The search for new gas is focused on deep tight gas exploration throughout Oman. In northern Oman, up to 30 tight gas wells will be drilled and tested over the next four years and extensive 3D seismic data will be acquired. In southern and central Oman, PDO plans to drill new wells to test new gas play concepts, it will acquire additional 3D seismic data, and carry out in-depth geological studies. Already in 2010, three new gas fields at Burhaan West, Mabrouk and Harmal were brought onstream on schedule, giving an important boost to PDO’s ability to sustain gas production over the coming years. And new natural gas discoveries continue. In 2009 it was Khulud South and in 2010 Khulud West. Clearly, the gas story at PDO remains huge, and the company is intensifying efforts to ensure that production is increased and then sustained.
Reasons for optimism There is little doubt that PDO is facing challenges from ageing fields, cost increases, growing demand for gas and increased complexity of its projects. But each of these challenges seemed to be well mitigated by new discoveries, EOR projects slated to go on stream, sustaining natural gas supplies and improving operating efficiencies. “Clearly, the response will be by sustaining production on the exploration front, building development activity, commissioning EOR expertise, strengthening efforts in managing costs, driving efforts in energy consumption for EOR projects, strengthening of project engineering service. It’s about operational excellence, technology and our people,” says Restucci.
OBITUARY
COMMITTED TILL THE LAST BREATH so confused about the trip that she sought my advice, though we were not married at that time. I asked her to go as it would open up new vistas in her professional life. During the conference she met a number of prominent personalities who later became ministers and senior officials in their respective countries. But she was the only Arab woman representative in that conference which was held in 1973, a fact which testifies to the importance the Sultanate accorded to women empowerment. This conference was a milestone in her life because she came back a different person with great confidence and enthusiasm.
Here we produce a first person account on the life of the late HE Dr Rajiha bint Abdulamir bin Ali, Minister of Tourism, as told by her husband Murtadha Hassan Ali, Chairman, Genetco and Faisal Murtadha Al Lawati, executive director, Genetco, her son.
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hey say that those whom the gods love die young. In the case of HE Dr Rajiha bint Abdulamir bin Ali, Minister of Tourism, she was beloved to the people of Oman as well. Dr Rajiha, who took the helm of the nascent ministry of tourism in 2004, was fully aware that her portfolio was very critical for the development of the national economy. The road was tough and the journey long, but Dr Rajiha had boundless energy to steer the ministry with the Omani mast flying high. The results of Dr Rajiha’s tireless efforts are there for everyone to see. Oman’s name is now firmly stamped on the world tourism map and the contribution of the tourism sector to the GDP of Oman has exceeded the set targets. Dr Rajiha’s death is an irreplaceable and profound loss to the nation. Her dedication and commitment to her work was so remarkable that she continued to discharge her ministerial duties even from her hospital room till she breathed her last, says her son Faisal. Murtadha Hassan Ali: After her graduation from Baghdad, Rajiha came back to Oman in 1972 and started her career as an inspector at the Ministry of Education. At that time, she was the youngest inspector at the ministry. Most of her colleagues found it very odd to work with some one who was at least twenty years younger than them. This forced HE Sheikh Walid Bin Zaher Al Hinai, the then Minister of Education, 26
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HE Dr Rajiha bint Abdulamir bin Ali Minister of Tourism
April 12, 1953February 2, 2011
to change her position from the post of inspector to a mathematics teacher. But still she had to teach students who were older than her, which she found difficult. At that time, a United Nations delegation visited the Sultanate and decided to set up a statistics centre in the country. Of around 50 people who were considered for the post of the director of the centre, she was selected. After a short while, Rajiha was chosen to represent the Sultanate at an important international conference. She was
It was during this time that the Development Council was established in Muscat which was later replaced with the Ministry of Commerce and Industry and the Ministry of Agriculture, Oil and Minerals. Rajiha was appointed as the director in charge of statistics at the Ministry of Commerce. Later, when the Development Council was reconstituted she was a part of it. It was in that period that we got married. Then she visited the US and came back to become the director general of statistics at the ministry. In 1987, she became the senior undersecretary for planning affairs at the Ministry of Commerce. But before she was appointed as the undersecretary, she had been offered the post of Executive Vice President of the Central Bank of Oman (CBO) with an attractive salary. But she categorically declined that offer saying that it was not her cup of tea. After that she got another attractive offer. She was invited to head the Organisation for Economic Cooperation and Development which was looking for a woman from a
HE Dr Rajiha at the inauguration of Oman Convention and Exhibition Centre in January alongwith HE Ahmed bin Abdulnabi Macki, Minister of National Economy; HE Maqbool bin Ali Sultan (left), Minister of Commerce and Industry; and Wael Lawati (extreme right), CEO, Omran GCC country for this post. But Rajiha refused this offer too as she was not interested in leaving the country. In 1999, she went to Cairo University to do her PhD; but later she changed her mind and enrolled in Exeter University in 2000 from where she completed her PhD in ‘Development of Oman’ in 2004 Later, in the 1990s she was appointed as the Undersecretary for Statistics and Information Affairs and went on to become the Minister of Tourism in 2004. When the announcement was made, she was attending a meeting in Beirut. My son was in Britain; our two daughters were in the Netherlands and US and I was alone in Oman. She rang me up from Beirut asking me to tune in radio to hear an important news regarding her. When the announcement regarding her appointment as the minister was made, I informed her and our children abroad. We were in seventh heaven. Even before becoming the Minister of Tourism, she used to share with me her dreams for Oman’s tourism development. She would tell me that the arrival of just 1,000 visitors will generate 10 job opportunities in the country. Rajiha who had a great vision for national development had contributed greatly to drafting the Vision 2020. After becoming Minister, she worked hard to achieve this goal. Now the contribution of tourism
sector to the national GDP has grown up to 3 per cent, while the target to be achieved by 2020 was only 2 per cent. From the day I proposed to her, I understood that she was very intelligent and capable of doing a lot of things for the country. I would encourage her and work with her. She was very self-confident and hardworking not only as a successful professional and committed civil servant but as a caring mother and wife. Faisal Murtadha Al Lawati: She was diagnosed with cancer one year ago. But it was in the initial stages and she underwent treatment and was cured completely. Later, when we went to Britain, she was urged to undergo further tests. Though her health was sounding fine according to those tests, the doctor advised her some more advanced tests. To our dismay, we discovered that the disease had already spread everywhere. But it did not upset her at all and she remained calm on hearing the news. When she came back to Oman, I asked her about the results of the tests. She said it had spread to various parts of the body. But I could not believe what I was hearing because my mother was so calm that I could not see any trace of anguish on her face. I still remember what she told her doctor when she went to Germany for advanced treatment.
She categorically said that she would not accept any treatment that would not allow her to do her work. However, owing to the pressure from the family, my mother conceded to get herself admitted and treated in a German hospital. The treatment continued in Royal Hospital in Oman under the supervision of the German hospital. Some 28 days before she breathed her last, my mother became very tired and breathed with great difficulty. Later, she underwent artificial respiration and radiation. She had Pleurisy also and one of her lungs was completely infected while the other one was affected almost 90 per cent. The disease had completely taken over her body. But even though my mother was admitted in the hospital, every morning she would call me up and tell me to bring her work to the hospital. Even till the last moment before she died, she was working. She was more than a mother to us, she was our friend and mentor and always wanted us to be successful in our life. When my sister, who was studying in the US as a doctor, wanted to come and take care of her, she totally rejected the idea saying, “You will not succeed in life by sitting beside me; my happiness is to see you scale new heights in your academic life”. As told to Visvas Paul D Karra and Myssaa Al Hinai
BY MATEIN KHALID
PERISCOPE
Egypt, risk and Arab equities The uprising in Tahrir Square has triggered stock market crashes in Arab bourses from Casablanca to Muscat
The author is a renowned investment banker based in Dubai
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n the last three years, there have been some dramatic, if not traumatic, real time lessons in risk for investors in Arab equities. Egypt’s political crisis triggered stock market falls in Saudi Arabia, UAE, Jordan and Qatar. After all, many listed GCC companies have obvious exposure to the Egyptian economy. DP World owns the Red Sea port of Sobkha, Air Arabia has an Alexandria hub and flies to Cairo and Luxor, NBAD has 8 per cent of its assets in its Egyptian branch network, Al Raghi owns stakes in Shariacompliant Egypt banks. This reflects the rise in intraArab FDI and capital flows in the past decade, a process that has also dramatically increased correlation risk among different Arab stock exchanges. This process has only been accelerated by the rise of a new breed of pan Arab mutual fund and hedge fund manager, a financial ecosystem that ensures that gunfire in Tahrir Square trigger stock market crashes in Riyadh, Dubai, Amman and Doha.
Collective risks The region’s stock exchanges 28
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Protestors in Tahrir square in Egypt are also inter-connected by powerful linkages due to cross shareholdings, strategic ownership stakes, cross listings, GDR programmes and, above all, margin accounts. Saudi private investors, for instance, were forced to sell Saudi equities in Riyadh to meet margin calls when Egypt’s stock market plunged from EGX – 30’s 7,200 January high to 5,600 before it was closed. Every investor in any GCC stock exchange is exposed to the global and
Arab world risks which also includes geopolitical risks. Sovereign credit risk is also the fallout of the Egyptian crisis. Egypt’s five-year sovereign credit default swaps more than doubled to 400 basis points after street protests broke out against the Mubarak government in late January. This meant that the capital markets considered investing in Egypt sovereign riskier than investing in Iraq! Credit default swaps (CDS) are the crisis flash points
PERISCOPE
THE CAPITAL MARKETS CONSIDERED INVESTING IN EGYPT SOVEREIGN RISKIER THAN INVESTING IN IRAQ! of the 21st century Arab finance. This widening of Egyptian sovereign spreads will have traumatic real world consequences even as the CDS market, notoriously illiquid and volatile, triggers financial contagion across all Arab, even emerging market issuers. Egypt has been twice downgraded by Moody’s. The fall in the Egyptian pound will mean a spike in imported inflation, particularly since Egypt is the world’s largest wheat importer at a time when Russian drought led to ban on grain shipments. While bread has been subsidised in Egypt since the Pharonic times, food riots could well erupt if crude oil and grain prices continue to spiral higher across the emerging markets. The rise in Egypt’s CDS means higher borrowing costs for a state with 8 per cent budget deficit and $45bn in maturing local currency debt that cannot be rolled over to foreign investors. A depositor run on Egyptian banks when they reopen could lead to another spiral higher in Egypt’s borrowing costs, country risk premium and CDS. This will mean refinancing risk will suddenly become a crucible 30
March 2011
IMPACT ¡ NBAD has 8 per cent of its assets in its Egyptian branch network ¡ Egypt’s stock market plunged from EGX – 30’s 7200 January high to 5600 ¡ Egypt’s budget deficit stands at 8 per cent and maturing local currency debt at $45bn ¡ Loan-deposit ratios in several GCC banks were well above 100 per cent
of contagion for all the Arab borrowers. This, in turn, will pressure Arab bourses from Casablanca to Muscat and, ipso facto, lead to a rise in equities risk premia across the region. This is the nature of New Age international finance. It escalates local crises into regional shocks at the speed of life. Nakheel’s shock standstill request to its creditors in December 2009 triggered a regional surge in risk premia. Banking counterparty risk has shot higher in the region in the aftermath of Dubai’s sovereign debt restructurings, several Kuwait sukuk defaults, the collapse of two Bahraini offshore banks owned by Saudi Arabia’s Saad/Gosaibi Groups embroiled in a debt scandal and, above all, the failure of Wall Street
investment bank Lehman Brothers. This is relevant to Arab stock exchanges for two reasons. One, loan growth in several GCC banking systems in nowhere near matched by organic deposit growth. This is the reason loan-deposit ratios in several GCC banks were well above 100 per cent, making them highly leveraged and dependent on raising wholesale funds in the offshore medium term note Euromarkets. These wholesale markets are now virtually closed for Arab banks who hail from heavily indebted states or governments gripped by fiscal and political crises. Two, Arab stock exchanges are dominated by banks, insurers and property companies. Any impact on bank risk has immediate, negative impact
on Arab stock exchanges. This huge weighting of banks in regional exchanges is the reason why GCC markets, burdened by the Nakheel/ DP World, Saad/Gosaibi and the Kuwaiti sukuk defaults, grossly underperformed BRIC’s and Asian emerging markets in 2009 and 2010. Investors in Arab equities should remember that Egypt’s Commercial Bank and International and National Bank of Egypt alone are more than one third of the free float in the Cairo Alexandria stock exchanges. Any increase in Egyptian bank risk will therefore echo across the Arab world. An increase in borrowing costs in the offshore funding market is inevitable for Arab bank borrowers, even those from countries with no systemic debt, fiscal or political crises. Egypt also reinforces the role of liquidity risk in Arab stock exchanges. Foreign funds own one third of the largest, most liquid Egyptian telecom, banking, property, steel and construction shares. In times of political crises, Western funds heed the credo of Victorian surgeons. When in doubt, cut it out. They sell what they can, not what they must.
PERSONALITY
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PURSUIT OF EXCELLENCE A combination of talent and single minded dedication has enabled Tariq Al Barwani to become a role model for Oman’s youngsters. Mayank Singh reports
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n IT wizard, business executive, radio jockey, knowledge disseminator, a columnist and a teacher – if you thought that we are alluding to a group of people, just hold on to your horses. The person in question is Tariq Hilal Al Barwani, head of corporate affairs, Nawras and the president and founder of www. KnowledgeOman.com. And Tariq does all of these and probably more.
Early awakening Few would have guessed that a childhood passion for computer games and cartoon characters would grow into a life time penchant for information technology. Says Tariq, “It all started with my parents buying me Atari, a video console game. I would constantly think as to how I could be a person in the game or create characters that are in the game.” This also encouraged him to look at a character or problem from different angles and to see as to how a problem could be solved – a trait that he has nurtured over the last 31 years. At the age of five his parents bought him a home computer system released by Sinclair Research Limited in the UK known as ZX Spectrum 128. “My father told me, ‘you can use this to play games or to create programmes and that’s where it all started.” Hilal Al Barwani, his father, whom Tariq refers to, often, as a mentor and friend, spotted his talents at an early age and nurtured them. A private teacher was hired to take him through the paces with computers. In 1989 at the age of 10 he was given a personal computer (PC) to work upon.
Says Hilal, “I noticed Tariq’s talents at an early age because when I introduced him to a computer device he was not merely interested in playing games as most kids of his age would be but wanted to create games.” The reaction of people around him gave Tariq an important insight into the future. “I saw that people around me
AWARDS WON ■ Global Brand Leadership award at the World Brand Congress in 2010 for KnowledgeOman.com ■ Most Valuable Professional Award from the largest software company in the world -- Microsoft for four years consecutively 20072010 for technical leadership. He is the first and only Omani to receive the award. Tariq had the opportunity to travel and meet Bill Gates, Chairman and Founder of Microsoft, in Washington, US during the MVP Global Summit ■ Best Personality Award in 2009, presented by Telecommunication Regulation Authority during the largest IT and Telecom Exhibition Comex 2009 ■ Best IT Professional Award in 2008, presented by the Information Technology Authority, a government IT body in Oman
were not familiar with computers and IT but whenever I made a small programme they would say ‘Wow’ and that gave me an idea that these simple tools may become necessities for people in the years to come.” He started out by creating small programmes and anti-virus cleaners and since then, there was no looking back. In the late 1990s he created a software for Omantel that helped the company’s Internet subscribers to change from GTO to Omantel seamlessly. “For them it was magic but for me it was science and how I could use technology for the benefit of businesses and people.” Realising the need for a more structured approach towards his interest he did his diploma in information systems in Oman. He went onto pursue a bachelors with an honours in computer science from Canada’s Nova Scotia University and a Masters in IT from Australia. He is currently doing his doctorate in management of organisations from University of Phoenix in the US.
Good grounding When he was just 18 years he was invited by United Media Services (UMS) to join the company’s Internet cell (now known as UMS Interactive). Says Tariq, “I received an e-mail from UMS inviting me to join the company. The mail stated that they had looked at my website and the company must have realised that they could utilise some of its characteristics for their business.” Then a high school student, he recalls going for the interview accompanied by his father and his bag. He accepted the offer and worked at UMS as a web programmer. “In two years, we created numerous websites for a number March 2011 33
PERSONALITY of companies. I had the expertise but I built the work experience at UMS. We created the first general website called Omanaxis.com and I was an integral part of the process,” he avers. His talent is corroborated by Sandeep Sehgal, chief executive, UMS, “Tariq exhibited extraordinary skills for someone of his age and we knew that he was destined for bigger things in life. His perseverance, energy, dedication and knowledge was exemplary and something that others could learn from.” While working at UMS it occurred to him that he should create something for Oman. This led him to create an IT portal called Tariq.net which gave information related to information technology. And all his programmes could be downloaded for free from the portal. The website got an overwhelming response from users and sponsors alike. Companies like BankMuscat, Commercial Bank of Oman, The Bahwan Group and Khimji Ramdas supported the site. As traffic on the site grew Tariq left UMS to concentrate on Tarik.net. Soon he got a number of offers to buy the site and finally sold it to the OHI Group. The company rechristened the portal as OHITarik.net. He joined OHI as the youngest manager and probably was the youngest IT manager in the country at that time with a four figure salary. At OHI he built a team and created a number of websites. After two years at his father’s behest he left his job to pursue a masters degree. “When I left OHI everyone thought that I was crazy,” recalls Tariq. Nawras the second mobile operator in the Sultanate was gearing up to launch its operations and on his return from Australia, Tariq joined it as an online manager in January 2005 looking after their Internet presence. Tariq has been instrumental in changing the structure of the Nawras website. Says Tariq, “The Nawras website has been winning almost all the regional and local awards since the company commenced operations.” Ross Cormack, CEO, Nawras adds, “It is great to see how Tariq raises the profile of communications and IT in the country and by encouraging and energising the involvement of young people he inspires others as well as raising the profile of Nawras.” 34
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A FEW FAVOURITES Books: 1) Thinking socratically by Schwarze Lape 2) Profits with principles by IRA Jackson 3) Manager’s Toolkit by Harvard Business 4) The Power of Positive Thinking by Norman Pale Movies: 1) Lean on Me a 1989 movie (Morgan Freeman is the lead actor) 2) Gandhi a 1982 movie (Ben Kingsley is the lead actor) Actors: 1) John Travolta 2) Denzel Washington 3) Morgan Freeman Destination: Thailand
After four years as the online manager Tariq was promoted as the head of corporate affairs. In his new role he looks after media relations, PR, sponsorships and events. In a nutshell – “it is all about safeguarding the image of the company externally.” Says Eric Kerboriou, marketing director, Nawras, “Tariq has a very nice personality, he is pleasant at work and is always willing to support when his natural interpersonal skills are needed. He is a very positive person and when he commits to delivering, he does it to the best of his abilities. At the beginning of his new assignment managing the team and handling the diversity of the role was a challenge for him but he handled it very well.”
Social conscience In 2007, he crisscrossed the country over two weeks as a part of an Information Technology Awareness journey. On his way from Muscat to Salalah he visited a number of schools and colleges educating people on the benefits of technology. The experience inspired him to create something that could promote IT awareness in the country. This led to a new portal KnowledgeOman.com (KO).
“The idea is to transform Oman into a knowledge-based society and this is based on the vision of His Majesty Sultan Qaboos bin Said.” KO is a community driven project with 66 volunteers who are driven by the same passion and zeal. KO has over 8,000 members and is a growing community. Says Rym Aoudia, media affairs, KO, “Tariq is a man who walks the talk, his skills and understanding of individuals has enabled him to lead a team of people from diverse backgrounds, age groups and nationalities to work as volunteers for the community.” The portal has an online and offline version. While the online version dessiminates knowledge, KO volunteers work closely with charitable organisations like Dar al Atta’a in various CSR initiatives. The portal has been winning various accolades. It recently won the Global Brand Leadership award at the World Brand Congress 2010, for the community brand leadership. Says Khalfan Al Mahrazy, vice president, KO, “Tariq is a thinker and doer. He always thinks and talks about tomorrow and the future while he ensures everything is at its best today. He knows what it takes to make a difference.” Having been a newspaper columnist for a decade, he thought of using another media – radio, to promote IT awareness in the country. “I thought about creating a programme that would not just be about entertainment but would spread knowledge.” This led to the programme Tarik Talk on Oman Radio FM. The programme focuses on different aspects of technology, personal development and careers. The programme started as Cyber Talk two years back and was later rechristened. Ask him about how he manages to keep himself abreast of the developments in IT field and he avers, “I keep aside a few hours for learning and upgrading my skills. I have a strong base and so it is just a matter of updating myself. I believe that life is like a treadmill and if one stops while the treadmill is moving it will throw you away.” His hobbies include reading and spending time with his four-year-old son Hilal and two-year-old daughter Dania. His advice to youngsters – “Build up your interest, work hard and listen to your parents.”
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COVERSTORY
LESSONS LEARNT AND KEPT
The real estate sector in the GCC region got severely impacted by the global subprime crisis forcing developers, banks and property agents to go back to the drawing board. Ironically, this may prove to be the most enduring legacy of the meltdown. A report by Mayank Singh
Alargan Towell Investment Company’s Al Khairan resort, a top-end property in Bandar Al Khyran, got caught at the wrong end of the global financial crisis. As market sentiment turned adverse and liquidity concerns plagued the real estate market, the project got delayed and the developer had a real problem on its hands. Undaunted by the predicament, Alargan Towell embarked upon something called ‘Value Engineering’ – a process which helps to reduce project costs without compromising on the quality of the product. The result was a 12 per cent reduction in the overall cost of the project!
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nnovation, value for money and revisiting fundamentals have been the guiding principles of the real estate market in the last two years. The market which was dominated by speculators in 2008 has given way to real buyers. Says Ali Hassan Moosa, general manager, Alargan Towell, “One of the indices to measure the real estate market is the number of transactions that have passed through the ministry of housing, and it clearly shows a significant shift.” According to the Ministry of Housing figures, confidence is returning to the real estate sector with transactional activity increasing significantly during the first half of 2010,
compared to the same period in 2009. The total value of real estate transactions during the first half of 2010 was more than RO992mn compared to RO617mn during the same period in 2009 – an increase of 60.8 per cent. The number of real estate transactions involving nonOmani GCC citizens during this period amounted to 2,299 – an increase of 40.7 per cent compared to the corresponding period in 2009. Despite this increase, the number of transactions in 2009-10 is far less as against in 2007-08. The monetary value of these transactions too has been far lower reflecting the presence of real buyers and sellers in the market.
The ITC space Says Christopher J Steel, managing partner, Savills Oman, “During good times the natural tendency is to build expensive houses and the bubble was based on high-end properties.” Integrated Tourism Complexes (ITCs) in Oman which were expecting to attract buyers from Europe and the GCC region were in for a rude surprise as global sentiment turned negative. Blue City, also known as Al Madina A’Zarqa, was launched as Oman’s largest and most ambitious property project in 2006 but was bogged down by an ownership dispute, design changes and slow sales. According to a Moody’s report in November 2009, Blue City had a total sale of $74.6mn compared to a target of $860mn. The 20-year project was expected to become a city with a population of 200,000 in Barka on the West of Muscat. The first phase was funded by a bond but the developer failed to meet its financial obligations in 2010. Essdar Capital, an investment company from Abu Dhabi has since taken a controlling stake in the project. Work on the Salam Yiti development got stalled as Sama Dubai got impacted by the debt problems of its parent company Dubai Holding. Dubai Holding is a part of Dubai World which struck an agreement with creditors in October 2010 to restructure a $24.9bn debt. According to IMF estimates, Dubai’s total debt is
Ali Hassan Moosa, General Manager, Alargan Towell
Movement of rents in prime areas of Muscat Type
2004
2005
2006
2007
2008
2009
2010
1 Bedroom
160
180
200
250
400
350
350
2 Bedroom
225
250
300
400
550
450
450
3 Bedroom
275
350
450
600
800
700
700
3 Bedroom villa
400
500
650
1,000
1,500
1,200
1,200
Source: Al Habib & Co LLC
37 March Mar Ma M aarrcchh 20 2201 2011 011 37 01
COVERSTORY
Mohamed Nawaz al Balushi, Head of Mortgage Sales, Retail Banking Division and Hassan Amir Shaban, Chief Marketing Officer, NBO (L-R)
estimated at $109bn after a credit-fuelled boom unravelled during the global financial crisis. Omran, the ministry of tourism’s investment and development arm, has taken over the project and work on Salam Yiti is expected to resume in the early part of 2011. According to Clutton’s January 2011 Oman Property market report, prices in the ITC re-sales market have declined sharply from the highs of early 2008 but have now stabilised to a degree though the bottom of the market has not been reached. The report foresees a continued but gradual softening of secondary market values over the coming months. Factorising the new market dynamics, The Wave stopped sale of new properties in 2009 and helped existing customers either to get bank credit wherever needed 38
March 2011
Population Omani
Expatriate
Total
1,951,100 72.4%
742,994 27.6%
2,694,094 100%
Total Housing Units
Total Households
546,215
400,783 Source: Census 2011
or to sell if necessary. The new properties launched in 2010 were priced 20 per cent less compared to the earlier phases. Says Mohamed Ayjaz, general manager, Hamptons International, Oman, “Prices in ITCs fell in the aftermath of the global crisis as people were keen to get their money back. Developers have checked this trend by pricing new stock at a competitive rate compared to the secondary market.” The seventh property release of 160 apartments and townhouses at The
Wave in March 2010 reportedly achieved a 95 per cent sales rate within one month of release while the eighth release of properties in early November 2010 included villas for the first time in over two years. The Cluttons report adds that although offered at reduced prices to suit the current market conditions, the recent launch at The Wave was not sold out which indicates that, although confidence and activity are returning, the market is still very much in the recovery phase. The last quarter of 2010 has seen increased activity in the
COVERSTORY
Christopher J Steel, Managing Partner, Savills Oman
Says Jose Lora, CEO and managing director, Juthoor Real Estate, “ITCs have two components – commercial and residential. Though they may start off with a residential component they have to be driven by the hospitality/commercial segment. A number of developers are talking about hotels but little progress has been made on them.” Almost all ITCs have drawn up plans for developing hotels and other leisure options. Muscat Hills where the construction of Phase 1 of the residential units is now nearing completion plans to develop a five star hotel, a country club and further residential units. Saraya Bandar Jissah located in a secluded bay to the East of Muscat is developing 2.2 million square metres of land. This will include residential units, two five star hotels and leisure facilities. 40
March 2011
The development is a partnership between Saraya and Omran and it is likely to be launched during the early part of 2011. Muriya is preparing to open the Sifawy Hotel during the first quarter of 2011 at their development at Jebel Sifah. The boutique hotel is located in the heart of the marina town and will have 55 guestrooms. The opening of the Sifawy Hotel is expected to increase interest in Jebel Sifah and should have a positive impact on the residential component of
Population growth 30 25 Annual growth (%)
secondary sales market but it is still relatively quiet. The level of enquires is, however, slowly increasing and analysts expect the market to gain momentum during the first quarter of 2011.
Jose Lora, CEO and Managing Director, Juthoor Real Estate
20 15 10
the project. The Salam Yiti project will consist of around 2000 residential units, four hotels, a marina and a golf course.
Tourism-driven growth Another trend giving impetus to ITCs is the government’s tourism thrust. The Vision 2020 plan aims to promote tourism as a priority sector of Oman’s economy. In 2009, tourism contributed 6.7 per cent of GDP. By 2019, this is estimated to reach 9.9 per cent of GDP. Things seem to be moving in the right direction. Though the tourism sector showed a year-on-year (y-o-y) decline of 8.3 per cent in 2009, the World Travel and Tourism Council (WTTC) expects Oman’s tourist sector to have the highest growth in the Middle East and the thirdhighest growth in the world in 2010. Real GDP growth for the tourism sector is expected to be 6.1 per cent in 2010 and to average 5.6 per cent per annum over the coming 10 years.
5 0
2007 Omani
2008
2009
Expatriate Source: Ministry of National Economy
The growth of tourism is expected to fuel a demand for hotels, retail, entertainment complexes and these augur well for the real estate sector. According to the
COVERSTORY
According to Ministry of National Economy figures, Muscat capital area has a total of 93 hotels as well as a number of hotel apartments and guest houses providing a total of 6,103 rooms and 8,849 beds. In the higher quality sector, there are eight five-star hotels with 1,844 rooms, ten four-star hotels with 1,368 rooms and ten three-star hotels with 580 rooms. A vast majority of five and four star hotels came on board before 2005. New development within this sector has been somewhat limited over recent years other than the opening of the three five star hotels at Shangri-La’s Barr Al Jissah
Rental rates 16 Omani Rials per sqm per month
Ministry of Tourism figures, the number of hotels and hotel rooms in the Sultanate has increased steadily over recent years, with a particularly strong annual growth of 11.7 per cent for both hotel numbers and rooms between 2008 and 2009 following relatively limited development in 2007 and 2008.
14 12 10 8 6 4 2 0 CBD
Q1 - 2010 Shatti Al Qurum
Q1 - 2010 Al Khuwair
Q4 - 2010 Ghubrah North Source: Cluttons
Resort in 2006, the four-star Park Inn at Al Khuwair in 2010 and the recent opening of the 85-room Platinum Hotel, which is also in Al Khuwair. While the growth in the number of hotels and rooms has been steady, hotel
occupancy has been hit by the global recession. Accordingly, occupancy slumped by around 10 per cent in 2009, with the five-star sector suffering the largest losses. Recent figures released by the Ministry of National Economy indicate that occupancy rates for five and four star hotels have been around 50 per cent in 2009 and the first half of 2010. And though guest numbers have increased by three per cent in 2010, revenues have decreased by seven per cent in comparison with 2009. Says Ayjaz, “Oman should promote itself as a tourism destination rather than relying on product specific selling. Secondly, we need to focus on global customers as Oman is well known in the GCC region.� The research company, Proleads, reports that there are currently 39 hotel developments in the pipeline in Oman. There are several significant hotels either under construction or in the planning stages which would more than double the number of five-star hotels in the Muscat capital area. The business travel sector is being catered for by the development of two four-star hotels in Al Khuwair (City Seasons and Shaza Hotel) and the proposed Muscat Convention Centre which would include four three to fivestar hotels and serviced apartments. The long term outlook for tourism and hotels in Oman is bright but with the projected supply of hotel rooms across the four to five-star sector, careful consideration will need to be given to the locations and target markets of future hotel developments.
Mohamed Ayjaz, General Manager, Hamptons International, Oman 42
March 2011
A Royal Decree (76/10) issued in September has relaxed both foreign shareholding restrictions and limitations on the usage of land. Public and closed joint stock companies with a minimum of 30 per cent Omani shareholding are now able to own land and, perhaps more significantly, engage in real estate development as a business objective, a permission that was previously restricted to 100 per cent-Omani and later 100 per cent GCC owned companies. The relaxation of restrictions should provide
COVERSTORY
Glenn Meek, General Manager, Better Homes
Limited office space availability across the market led to rapidly escalating rental values in Muscat up until early 2008 and also triggered a boom in office space construction that is now starting to feed into the market. It is estimated that approximately 500,000 square metres of new office space will come into the market across the capital area by the end of 2013. The majority of this new development is spread across the western section of Muscat; but an area that is showing particularly rapid development as a commercial area is the previously vacant land between Ghala industrial area and Sultan Qaboos Highway. Says Hassan Mohammed Juma, managing director, Mohamed Juma Sultan Co (which owns Era Oman), “Oman’s office market remains volatile as asking rents have declined and vacancy rates are close to historic highs.” A combination of the recent financial crisis and an increasing supply of new 44
March 2011
Current hotel stock 320
12
280 240
9
200 160
6
120 80
3
Number of rooms (000)
Office market takes a hit
office space has resulted in the decrease of rental values over the last two years. Office space rentals which touched RO13-14 per square metre in 2008 have now fallen to around RO8 per square metre. Says Lora, “Commercial rents in Oman were higher than class A buildings in the US except that office buildings in the US gave tenants ample parking space, building amenities and high
Number of hotels
further impetus to the real estate sector.
M. Sudhakar Reddy, General Manager, Al Habib and Company
40 0
2006
2007 Hotels
2008
2009
0
Rooms Source: Ministry of National Economy
speed elevators while buildings in the local market leave a lot to be desired.” Analysts consider that, as excess supply continues to build in the Muscat office market, rental values will reduce while vacancy levels rise. Demand for office space remains steady but the majority of enquiries are for spaces of less than 1,000 square metres with small, good quality offices of less than 200 square metres seeing strong demand, while demand for large spaces is almost exclusively generated by government bodies. A particular issue that is not successfully addressed in a majority of commercial developments is the provision of suitable car parking with many developments relying almost entirely on off-site parking on undeveloped land. Says Philip Paul, head of country, Cluttons Oman, “Developers tend to overbuild their plots leaving little open space, while what works is probably a smaller building with adequate parking space.” Commercial rents are expected to head southwards with higher vacancy levels as supply starts to significantly
COVERSTORY
outstrip demand. Poorer quality buildings with inadequate facilities will be particularly affectes.
Residential property looks up
Sohar’s real estate market was in for a rude shock as rental and capital values plummeted sharply in the wake of oversupply. A two-bedroom house which was rented for RO400 in 2008 is now struggling to find takers at RO150. Says Juma, “The market value of land located in and around Sohar, Saham, Barka and in some areas on the outskirts of Muscat have declined by approximately 40 to 70 per cent from prices which prevailed during the middle of 2008 depending on specific characteristics such as zoning, location, size etc.”
Philip Paul, Head of Country, Cluttons Oman
Resale values of ITC villas 600 450 Omani Rials (000)
Unlike office space, rents in the residential property market have stabilised as demand and supply are balanced. Rents rose steeply from 2006-08 as demand for residential dwellings outstripped supply. According to the ministry of human resources, as many as 17,000 jobs were created in the market every month in 2008 and the supply of houses could not keep pace with demand and rents saw a steep escalation. The number of jobs being created in 2010 averaged around 6,000 per month, and, with more houses and apartments coming into the market rents have softened. Says M Sudhakar Reddy, general manager, Al Habib and Company, “Rents are down compared to 2008 but they are still double of what they were five years ago as the economy has settled at a higher per capita GDP.” The fact that 90 per cent of the real estate market is residential has a huge bearing on the prevailing sentiment of the market.
300 150 0
Q1 - 2008
The Wave
Q1 - 2010
Muscat Hills
Q4 - 2010 Barr Al Jissah Source: Cluttons
Tightening of purse strings Banks were often blamed for creating an artificial liquidity crisis in the real estate sector. As the subprime crisis escalated, banks became wary of lending to realty. Says Mohamed Nawaz al Balushi, head of mortgage sales, Retail Banking Division, National Bank of Oman (NBO), “In the early days of the crisis, disbursal of our Al Manzel home loans was slow as we learnt from the mistake of others and were cautious.” Overall, there was a renewed focus on quality as banks started looking at metrics like debt burden ratio closely. Hassan Amir Shaban, chief marketing officer, NBO points out,
In keeping with the times www.progressoman.com
COVERSTORY
their housing needs and most banks are keen to increase its disbursal. A softening of interest rates from 7.75 per cent to 6.75 per cent (on a variable loan) has also helped in making home loans more attractive in the last one year, giving the beleaguered sector much needed respite.
Silver lining Looking back, the slowdown has served as a rude wake up call for the sector. “In all unsophisticated markets, there is a lack of willingness to pay for intellectual capital (due diligence and research) and Oman is no different,” says Reddy. As the Dubai model of building gets discredited, there is a growing appreciation of concepts such as segmentation, differentiation and providing value. Says Lora, “Customers are demanding better prices, quality and on-time delivery and developers who do not listen to these demands are going to be at a disadvantage.”
Hassan Mohammed Juma, Managing Director, Mohamed Juma Sultan Co
Home loans disbursement has picked up in the last year or so. “People have started building houses not just in the capital area but also in the interiors leading to a greater off-take of home loans,” adds Mohamed. Home loans are seen as a way of helping the local community meet
Resale values at The Wave 300 280 240 Omani Rials (000)
“Oman’s real estate is geared towards Omanis unlike some other countries which were dependent on expatriates, prices are realistic in the local market and the government’s vision is to help every Omani to have a house. All these help in making the real estate sector in Oman more stable.”
200 160 120 80 40 0
Q2-2008 Q2-2009 Q2-2010 Q4-2010
2 bedroom town house
3 bedroom town house Source: Cluttons
As the ITC and top-end market got hit, a number of developers started developing affordable housing. Zain Properties Development launched Dar al Zain in 2009 with plans to develop 184 town houses and villas over four phases; Elite Properties launched Abraj Zumund in Al Khoudh with 34 two bedroom houses; Towell Alargan is building Al Hail Homes in Al Khoudh over two phases. The project has 126 units with a commercial component. Affordable housing is a loosely defined term with prices ranging from RO30,000 to close to RO100,000. A number of developers misread the market both from a pricing and demand point of view resulting in stalled projects or few
Creating a world of opportunities www.progressoman.com
COVERSTORY
buyers. Says Steel, “When the demand for high-end properties dried up, developers started building cheap houses for nationals without doing due diligence about the aspirational value of Omanis which has resulted in delayed projects.” Omanis have traditionally preferred buying land and building houses to staying in multi-use apartments. But with over one third of Oman’s population still in schools and the number of young professionals growing, this may change. Says Moosa, “There is demand for affordable houses from middle-income households but this should be quality housing rather than low-end housing.” For example Al Alargan’s Al Hail homes offers buyers a choice of five different designs to choose from, housing loans from NBO, BankMuscat and Ahlibank, staggered payment options and landscaping. The result: over 25 per cent of the first phase of 46 houses have been sold. Says Glenn Meek, general manager, Better Homes, “It’s all about offering the right product to the right people.” Iskan Oman Investment Company recently launched its Zahrat Al Khareef project in Salalah. The project envisages to build 586 units over three phases. Adil Al Bader, chairman of Iskan Oman Investment Company says, “We are confident that Zahrat Al Khareef – Dhofar project is a smart opportunity for those who want to invest and for people seeking a home in Salalah. The reason is that Salalah’s market needs luxurious apartments due to an increase in its population especially during the Khareef season. Apart from being a tourist destination, it is also seeing a
Adil Al Bader, Chairman of Iskan Oman Investment Company
lot of project development both by the government and the private sector.” Though ITCs may have gone through a rough phase, they have upgraded benchmarks in the local market. “A prospective tenant coming out of The Wave started demanding better quality forcing landlords to upgrade their properties,” says Meek. Looking ahead, market analysts are confident about the prospects of the real estate sector in
Oman. Says Steel, “2011 will be a year of consolidation and recovery. While there may not be a huge upswing for the next five to six years, we have definitely turned the curve.” Though the sector may have been through tough times, the silver lining is that the downturn has forced developers to go back to the fundamentals. Overall, it may be a good time for the realty sector to do some value engineering.
Oman’s Progress now goes online www.progressoman.com
FACE2FACE
WE ARE A DESTINATION DEVELOPER Adil Taqi, CEO, Muriya Tourism Development company speaks to Mayank Singh about the company’s differentiation, project timelines and future plans in his first media interview
The real estate sector has been going through a slowdown regionally. What made you take up this job amidst such circumstances? Muriya Tourism Development is one of the companies that will position Oman on the global map. Since Oman’s population is only 1.8-1.9mn, there are structural limitations to growth and this impacts traditional sectors like banking and telecom. When you look at tourism, there are no such limitations – your limitations in terms of tourism tend to be around infrastructure, hotel rooms, airport size and capacity and so forth, but these are not structural issues. This is what attracted me to Muriya. Even before I went out of Oman in 2006 we had been hearing this rhetoric about Oman’s Tourism potential but I do not know as to how genuinely people believed in it – I certainly felt that it was more of a lip service. Since then a lot has happened. 54
March 2011
EXCLUSIVE
When you go to a country like Seychelles, which is an 8 x 17 mile island you find that tourism is everything that they do, everything else is peripheral and you see how the entire value chain is structured towards tourism. The beach strip at the Banyan Tree Resort in Seychelles is very ordinary compared to the beaches of Salalah, yet they charge you $2,000 a night for a villa. So tourism has immense potential in Oman. I have come here with a lot of energy, hope and optimism. What a lot of people do not realise about Muriya is the difference between us and what else is on offer. People consider us to be a real estate company just like some other developers. I beg to differ with this – we take barren land and generate value around it, by creating an integrated city. What people do not realise is that a property developer comes in where there is infrastructure, proven demand and he puts a few buildings and either sells them or rents them. A property developer will not take a place where there is no infrastructure and create livelihood around it, but a company like Muriya takes land where there is no habitation and by definition this has to be out of town and in the middle of nowhere. We look at the natural beauty of the place and leverage it to create something out of it. This is therefore a very long term project. When your investment horizon is so long you tend to be conservative and plan for downturns and upswings. So we take land out of nowhere and create a tourism destination. We have no end game, when we develop the project guess who is going to be the biggest property owner – it will be Muriya. As we will continue to own a significant percentage of most of the hotels, we will continue to hold large scale real estate inventory that we will continue to develop. Our interest is that the value of the destination is valued and kept. The message is that we are not experimenting with customer money. We are not here because sales is good or the market is hot – this is our business, this is what we do and we know nothing else. Since the crisis no foreign investor has put so much money in the GCC as
Muriya has åthrough its shareholders into Oman. What are the board’s expectations and is there a future roadmap? In this business there are three or four major pillars – there is sales and marketing, construction, financing operations which are using your equity more intelligently and having as much sensible debt as possible and then there is the community operation of creating livelihood and customer experience. On the construction front we are cursed as we are out of town. If we were in Ghubra, you could put up a crane and the world would know about it, but If you are in Sifah, not only are your transportation and insurance costs higher but no one sees you either. A lot of work has happened in Sifah and Salalah. My plans are to develop every one of those pillars. One area that we could have done better is communication – letting people know as to what we are doing and getting them to see what we are doing. Though this may sound like rhetoric, I see every challenge as an opportunity. We have a challenge in sales and marketing so we need to position ourselves properly and sell the concept well. We need to expand the sales channel, the network and improve our distribution. When it comes to financing we are not unique. We need to expand
MURIYA TOURISM DEVELOPMENT ■ Ownership: Joint venture between Egypt’s Orascom Hotels & Development and Omran ■ Projects: Jebel Sifah, Salalah Beach, Muscat-based “City Walk” and an exclusive ecolodge development at As Sodah Island ■ Hotels: Four Seasons, Missoni Hotel, Banyan Tree resort and Sifawy boutique marina hotel
our financing options as we have been solely equity dependent till now, though we also have some customer payments. A number of banks are interested in financing our hotel developments and we are speaking to them. There is a strong impression that things have slowed down in all the ITCs including Muriya. How would you react to this? I agree that we have a perception hurdle, in the last two years or so the world was falling apart and real estate was the biggest victim along with financial institutions. Real estate in the region was created and defined in the way we know it by Dubai. And as Dubai went through the floor, real estate in the region went through a lot of problems. When there is a huge tide coming and you stick your head out and say we are different, there are going to be very few people who are going to believe you. Even if we had said that it’s business as usual in this scenario people would not have believed us, so the wise thing was to lie low and to continue doing your work. Now when people look around they can see all the good work that has been done. Are there any timelines on when the hotels, marina and apartments at Jebel Sifah and Salalah Beach will be operational or handed over? We will open the marina, the first hotel and handover the first apartments in Jebel Sifah by the summer of 2011. The landscaping around the apartments has been done; at the Marina our target is to have 100 boats before the end of the year and I am sure that we will get this as the competition is very expensive. When we deliver these people will have a reason to come. Today, if you want to go out of Muscat town for a relaxing dinner your options are limited. We will have 10 hotels between the three projects, four of these will open in the next two years, two in this calendar year and two next year. The idea is to create traffic; we are talking to prominent retail names in the region to come and take space there and once that happens the marina will open and apartment keys will be handed and it will be a mini destination. March 2011 55
BY SUDHAKAR REDDY
REAL ESTATE
Oil, realty prices move in tandem There is a very close correlation between oil and real estate prices
The author is General Manager, Al Habib & Co.
W
ith real Estate prices in Oman correcting from the astronomical levels that they had reached in mid 2008, It will be educative to look at the factors that took the prices to historical highs and examine the reasons. Although they have corrected, they have now settled at much higher levels than they were seven to eight years ago. There are a few interesting questions that may shed more light on the lessons that the real estate industry needs to learn at this juncture: Was it speculation driven by liquidity, was their increased demand affecting fundamentals, was there a supply constraint and how much of a factor was inflation? It is important to learn in order to avoid the severely damaging real estate bubbles that have crippled economies around
the world. Oman is a natural resource-based economy and economic growth and real estate prices move in tandem with oil prices. The chart given below shows how the price of a typical commercial/ residential plot in the prime area of Al Khuwair has moved with oil prices over the years. There is a very close correlation between oil prices and real estate prices. This is because high oil prices allow higher government outlays which, in turn, drives economic growth and increases the demand. High oil prices will make market participants optimistic about the future prompting them to bid up prices. One of the prime factors behind real estate price increase is economic growth. To a certain extent economic growth depends on oil prices. The nominal per capita income has doubled from RO3,000 in
Source-Al Habib for real estate prices and Ministry of National Economy on oil prices
56
March 2011
2000 to about RO6,000 in 2010. There is about 35 per cent inflation built in to the nominal per capita incomes. Higher incomes lead to greater demand which pushes up the prices. The relative share of building and construction activity to the GDP has gone up from about 2 per cent in 2000 to about 6 per cent in 2009. The country spends more percentage of its GDP on construction than it uses to pushing up demand. Thus real estate prices have gone up faster than the growth in nominal GDP. The more jobs the economy creates the more will be the real estate demand. The number of employees in the private sector has gone up from about 500,000 in 2005 to about 1,100,000 today thus creating demand for more properties. So we cannot gloss over these fundamental factors that have driven up real estate prices and rents. However, there was an element of speculation in mid-2008 when irrational exuberance took over the markets. In that short period, prices were divorced from fundamentals. Central banks try to prevent asset bubbles; but that becomes very difficult to do when euphoria takes over market participants.
CORPORATEPROFILE
IN RHYTHM WITH TIME A prominent player in various development projects in the interior and far-flung
wilayats of the Sultanate, Hasan Juma Bakcer has significantly contributed to the inclusive growth and infrastructure development of the country in the last 35 years, says Krishnakumar Taori, Group Managing Director, in an interview with Muhammed Nafie. Please give a brief on Hasan Juma Backer and its operation in Oman? Hasan Juma Backer (HJB) started its operation in 1975. Over the last 35 years, the company has emerged as one of the leading civil electro-mechanical construction and project management companies in the country. We are working on various infrastructure projects and the major areas of our operations include buildings, roads, substations, pumping stations, instrumentation, fire fighting, sewage networks, industrial infrastructure projects, schools, colleges, hospitals and leisure and sports projects. HJB has provided civil, electro mechanical and construction services to a wide spectrum of clients including the Diwan of Royal Court, Royal Oman Police, Royal Guard of Oman, Public Establishment for Industrial Estates, Ministry of Defence and other ministries and important establishments in public and private sectors. Can you give an overview of various projects that the company is executing presently? We have been recently awarded a 190villa project of over RO16mn by Muscat municipality in Yeti. This is one of the prestigious projects that we are currently executing. In addition, we are working on the extension of the ministry of foreign affairs building and doing various construction works for the Royal Guard of Oman and a number of water supply projects in Al Rustaq, Al Awabi and Al Musanah areas. Besides, our Qatar operation is very active at the moment. 58
March 2011
In Qatar we are working for Kahramaa as well as Qatar Petroleum. We have recently got some important projects from Qatar Petroleum. Last year, we completed the infrastructure developments of the third, fourth, fifth and sixth phases of Sohar Industrial Estate which involve road works, electromechanical services, irrigation, firefighting, water supply and landscaping. In short, we have completed the entire facilities required for the companies such as aluminum smelting plant and various other industries to start operation. In 2010, we also did the civil works for helicopter facilities for the ministry of defence and water transmission project from Nizwa to Bahla, rehabilitation of Muttrah Internal roads (Muscat Restoration) and Mudaybi Internal roads in A’sharqiya Region. What was the contribution of HJB to the economic growth and development of Oman in the last three and half decades? Over the last 35 years, HJB has grown from a small company of 50 employees in 1975 to the strength of 3,500 employees in 2010. We have significant employment opportunities for Omanis and have contributed to the development of Oman. As a pioneer in infrastructure development in the country, HJB has executed various power, water, health, leisure and sports projects across the country. Our major civil electromechanical construction projects include land mark buildings of RGO, OmanGas, Oman LNG, State General Reserve Fund, College of Banking and Financial Services etc., hospitals such as Wadi Heibi, 100bed extension to Jalan Bani Bu Ali hospital, university colleges and schools in Rustaq and Ibra, several buildings in Sultan Qaboos University and the ministry of education’s schools. HJB has executed various development projects and infrastructure facilities in the interior areas of the country. We have set up several water pumping stations and pipelines across the country. Our presence is ubiquitous in almost all interior and far-flung Wilayats of the country such as Musanna, Awabi, Rustaq, Wadi Bani Khalid, Nakhl, Buraimi and Khasab. To carry out our projects, we partnered
mainly with local contractors and subcontractors from the respective areas so that we can generate a lot of employment opportunities for the nationals. A green card holder for Omanisation for many years, HJB continues to hold training programmes for its national work force. To cap it all, we have a strong base of the equipment and resources which ensure the quality, excellence and effectiveness of our projects. With Vision 2020, the government is focusing on diversifying the economy. What is your contribution to this? We have our own plans for diversification. We have already ventured into hospitality sector and are looking to execute various tourism related projects. We have also built schools, colleges and hospitals. Apart from the hospitals in Wadi Heibi and Jalan Bani Bu Ali , we have set up renal dialysis centres in Sohar and various interior areas such as Ibra, Ibri, Nizwa, Khasab, Buraimi and dialysis centre in Nizwa, Bahlah and other areas. Besides, we have set up nursing training schools in all the six regions for the ministry of health. What are the major challenges facing the construction industry in the country? There are different challenges in
ONGOING PROJECTS ■ 190-villa project of over RO16mn by Muscat municipality in Yeti ■ Extension of the Ministry of Foreign affairs building ■ Construction works for Royal Guard of Oman ■ Water supply projects in Al Rustaq, Al Awabi and Al Musanah areas ■ Projects in Qatar for Kahramaa and Qatar Petroleum Growth of company 1975 2010
50 employees 3,500 employees
different areas. Manpower shortage and commodity prices are the two likely big challenges in 2011. The rise of borrowing cost from banks is another challenge that the construction industry is going to face. Increasing interest rate is a big challenge all over the world. The market is competitive because of new players, especially foreign companies. Registration procedures are very easy for foreign companies in Oman compared to other GCC countries. Omani companies will not get that easy access and similar treatment outside in other GCC countries. What about your foreign operations? HJB has gone international by taking up major water projects in Qatar with Qatar General Electricity and Water Cooperation after successfully completing a techno-commercial evaluation on its own strength against international companies. The company seeks to expand its presence in Doha. And with Qatar winning FIFA World Cup bid for 2022 and since the government is looking to do a lot of infrastructure projects in the country, we expect to play a bigger role. A word about your civil and electromechanic divisions? The civil division of HJB, which is also the traditional strength of the company, has expanded manifold over the past 30 years with several major works to its credit. The division is currently fully equipped to execute large-scale turnkey projects. The electro mechanical division of the company played an important role in executing projects in very far-flung areas and contributes its might to the universal electrification and drinking water distribution. We do all integrated works. We have electrical mechanical instrumentation and scada instrumentation technology which help us build mega pumping stations with 400-500 KW automatic motors. The government is investing heavily in ports and free zones. What opportunities do you see there? We will be definitely involved in all these expansion projects. We have tremendous experience in this area. We have been a seasoned player and have a big role to play in the development of infrastructure facilities for free zones across the country. March 2011 59
OLIVER CORNOCK
ECONOMY
Poised to scale new heights Qatar has the potential to lay out the red carpet for the estimated 400,000 fans that are expected to visit the country for the 2022 FIFA World Cup
The author is Regional Editor, Oxford Business Group
60
March 2011
T
he days of Qatar being an “undiscovered� market are over. While the country has been punching far above its weight on the international economic and diplomatic scene for years,
its ascendancy to householdname status throughout the world has undoubtedly come from its successful bid to host the 2022 FIFA World Cup. This may seem incongruous for a nation with few natural
patches of grass or one where daytime temperatures at the time of the tournament are known to touch 50 degrees centigrade. However, the vision of the Qatari leadership has managed to convince the FIFA leadership that these
ECONOMY
QATAR BECAME THE WORLD’S LARGEST PRODUCER -NOT JUST EXPORTER, AS IT WAS FORMERLY- OF LIQUEFIED NATURAL GAS IN 2010
challenges in no way impede its ability to be a stellar host. This isn’t news to everyone: long before the muchanticipated announcement in December, Qatar had been racking up a list of top international events. Bold and ambitious, these events have turned out to be extremely successful business ventures. People outside the region/ industry are unlikely to have noted that Qatar became the world’s largest producer (not just exporter, as it was formerly) of liquefied natural gas (LNG) in 2010. Some may have noticed the country’s media presence – both as the base of news network Al Jazeera and, through the Qatar Foundation, the sponsor of the BBC’s “Doha Debates,” described on their website as “a unique venture in the Arab world, providing a battleground for conflicting opinions and arguments about the major political topics of the region.” Here is a list of three of the top headline-grabbers of 2010 and a more in-depth look at how they have brought worldwide attention to this Gulf state. 62
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¡ State-owned Qatar Holding bought the iconic London store, in a high-profile move into the London market
widely watched sporting event to date, airing on ESPN worldwide and giving many football lovers their first glimpse of the country.
¡ Qatar could successful accommodate of 40,000 people during Brazil-Argentina Football Match
Stake in Santander
FACTOIDS
¡ Qatar Holding has acquired a 5 per cent stake in banking giant Santander’s Brazil operations Acquisition of Harrods In May 2010, state-owned investment vehicle Qatar Holding bought the iconic London store, adding another key brand to its already glittering roster. Few in the luxury retail business needed another reminder that Qataris like to shop – but those unacquainted with the Qatari market reacted with a mix of befuddlement and curiosity. It takes a delicate blend of exclusivity, innovation and buzz to become a destination on the international luxury shopping circuit. With such a high-profile move into the market in London, Qatar has certainly managed to attract the attention of this high-margin set, and may consequently see more people coming to explore retail options in Doha. The city certainly looks set to
capitalise on this interest, with gross leasable area (GLA) of retail space set to double to 400,000 sq metres over the coming years.
Brazil-Argentina match Held just before the 2022 bid results were announced, this game is widely credited with clinching the host position for Qatar. The timing could have hardly been better: the legendary South American rivals had been tied in a dead heat of 33 wins each over their last 89 encounters. The successful accommodation of 40,000 fans was touted as proof that the peninsula had the potential to support the estimated 400,000 fans that are expected to descend in 2022. This was far from the first high-profile match played in Qatar – November 2009’s England-Brazil stands out – but it was the most
Already well-known for its high-profile investments in Europe, the Middle East, and Asia, Qatar Holding made a splash when it announced in October 2010 that it would acquire a five per cent stake in banking giant Santander’s Brazil operations, making it the second-largest stakeholder in the Latin American bank. The move lent credence to the country’s ambitions to be a truly global financial player, and set it up well to access further Latin American markets. It was also among Qatar’s most value-conscious investments to date, with the bonds Qatar Holding bought to convert into shares exchanging at QAR23.75 a share, at the time below market value. In addition, Santander’s chairman reported that the bank expects higher profit from Brazil than Spain this year in October. To those who had doubts, this key acquisition proved that Qatar isn’t treating its investments lightly.
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TELECOM
B
usinesses succeed or fail based on whether they have been listening to their customers. This is more so in the case of mobile telephony market. A case in point is Micromax Informatics Limited, the Indian mobile handset manufacturing company, which witnessed a meteoric rise thanks to its customer-centric products giving established international mobile phone brands a run for their money.
Just to give an indication of the popularity of the brand, Micromax sold 7.05 million mobile handsets in fiscal 2010. The handset sale has grown by 132.43 per cent from 1.11 million units in the quarter ended in June 2009 to 2.58 million units in the quarter ended on March 31, 2010. Micromax also sells mobile data cards for computers to service providers in India. “Product innovation has been a key factor in driving Micromax growth as our strategy is to provide unique value propositions to our customers in terms of innovation in quality and pricing. This automatically attracts customers to us,” says Vikas Kumar, VP, Middle East and Africa, Micromax.
SUCCESSFUL INNOVATION Micromax, which is launching its mobile phones in
Oman soon, is looking at repeating its success story in the Sultanate, thanks to its customer-focussed products. Vikas Kumar, VP Middle East & Africa speaks to Visvas Paul D Karra about the company’s philosophy 64
March 2011
Micromax handsets will be aimed at consumers across all segments with special focus on the age group of less than 30 years because it offers a wide variety of phones that range from gaming specific phones all the way to social media that are in line with its brand essence “Nothing like anything”. “We are also eyeing the expatriate population from the sub-continent as they already have an experience with our products in India,” says Kumar who was on a short visit to Oman in February. Micromax has announced its plan to launch its phones in Oman by entering into a distribution agreement with Molecules Group of Companies. The launch date was not announced at the time of OER going to print as Molecules is still awaiting the final approvals from Telecom Regulatory Authority of Oman.
Entire value chain However, what is of interest for the Omani consumer is the fact that Micromax has
the entire value chain of handsets, with phone features ranging from 30-day long battery life (standby mode), dual SIM, QWERTY phones, multimedia and utility phones, points out Kumar, who has plenty of experience in the mobile phone market. Kumar was with Samsung in Africa before joining Micromax in the Middle East.
to establish itself as an innovative Indian mobile handset company.
Following its success in India, Micromax started selling in Nepal, Sri Lanka, Bangladesh and the UAE. Besides Oman, it has also forayed into Kuwait and Qatar as well through its wholly owned subsidiary, Micromax Informatics FZE with local partners.
Micromax has many ‘firsts’ to its credit thanks to its versatile product portfolio. It was the first to introduce: Handsets with 30 days battery backup, handsets with dual SIM/ dual standby, handsets switching networks (GSM - CDMA) using gravity sensors, aspirational Qwerty keypad handsets, operator branded 3G Handsets, OMH CDMA Handsets, etc.
Kumar says that Micromax is privileged to have consumer confidence, which has enabled the company to establish itself in India, in a short period. According to him, the Omani market is very exciting and he believes that consumers would appreciate the dual SIM handsets, which would allow them to carry two mobile numbers in one phone. Talking about market segments, Kumar believes that Micromax will be able to replicate its growth in the region through its target segment with varied range of products. He says that they will be able to set up a new segment with each of its products in the new markets.
Visible brand The aim of Micromax is to become an established brand in all the market territories where it operates by positioning itself in such a way so as to enhance its brand visibility. Therefore, the marketing strategy of Micromax is to focus on the unique functionalities of the phone products, which further strengthens its reputation for innovation. Talking about competition, Kumar says his company differentiates itself through innovation and design, the use of advanced technologies and an indepth understanding of rapidly changing consumer preferences. This has enabled Micromax to develop several new product categories that address unique customer needs and further, its product development capabilities have helped it
Since its entry into the Indian mobile handset market in March 2008, Micromax has introduced more than 40 distinct mobile handset models and as of August 31, 2010, the company sold more than 30 distinct mobile handset models.
Out-of-the-box solutions No wonder then that, today, Micromax has become a brand, which people relate and look up to for realising their individual device preferences and other out-of-the-box solutions. Micromax has introduced 37 phones in just over a year and a half, designing them in India and manufacturing with partners in China. The company has kept its phones at an affordable price and tailored to local tastes. Most Micromax handsets care less about Wi-Fi, 3G, or GPS capabilities, for example. That keeps costs down. One phone doubles as a Nintendo Wii-like controller, allowing users to play games on a television game console. Another, marketed heavily with Bollywood-themed
Micromax – Indian Market – Handsets sold 1.11 mn
June 2009
2.58 mn
March 2010
Growth 132.43% MICRO FACTS ■ 2010: 7.05mn handsets sold ■ 37: Handsets introduced in one and a half years
TV commercials, has costume jewellery embedded in it and swivels open to reveal a full keyboard. Micromax is selling about one million handsets each month, or about 4 percent of the $6.3bn Indian market; Indian phone makers as a group have grabbed 14 percent of the market, according to research by Indian trade magazine Voice&Data. Micromax, which is also planning an IPO, was approached by Boston-based TA Associates, a $16bn private equity fund that invested $45mn in the company in January for an undisclosed stake. The company plans to raise a little over INR4.26bn from the capital market with a public issue of 20 million shares. This values the company, which entered the mobile handset business only three years ago, at close to $1bn. The Gurgaon-based mobile handset company plans to set up a research and development centre in China by the yearend at an investment of INR500mn.
Rural success One of the major aspects that contributed towards the substantial growth of Micromax is its 80 per cent sales in the rural areas. In fact, it was in one such rural settings that the idea for a Micromax mobile handset was born which until then was delivering technology of fixed wireless-powering desired products to companies. The year was 2007, when executives of Micromax noticed a curious sight in one particular village, in eastern India. People lined up next to a man who had a car battery strapped to the back of his bicycle. They were charging their mobile handset batteries by paying a few rupees as their homes didn’t have electricity. Realising this great need, less than a year later, Micromax sold its first cell phone, the X1i, with an oversized battery, a small screen, and tweaked electronics that made the phone run for as long as five days, and on standby for as many as 30 days. And the rest as they was history. And that came about purely by listening to customers’ feedback.
DR JASIM HUSAIN ALI
CLOSE UP
GCC’s drive for clinching trade deals The GCC countries are bound to expand business opportunities in the region by clinching trade deal with countries and nation groups across the world
The author is an eminent economist and Member of Parliament, Bahrain (jasim.husain@gmail.com)
T
he Gulf Cooperation Council (GCC) countries are in a mood to conclude trade deals with various countries and economic entities across the globe. Undoubtedly, this drive fits well with the tenor of globalisation where nations depend on each other for their economic well-being. The latest move was the signing of a framework agreement on economic, commercial, investment and technical cooperation with Malaysia. The high profile deal was signed in Abu Dhabi earlier in 2011, reflecting UAE’s presidency of the GCC until the next summit in Saudi Arabia.
Mutual benefits The deal seeks to further strengthen the bilateral trade between GCC states and Malaysia by making it easier for investors to do business in the countries on each side. Available statistics put the deal at more than $30bn. Understandably, Malaysia enjoys a $1.5bn surplus on the back of exporting their relatively pricey items which includes durable goods 66
March 2011
such as equipments and machineries. Conversely, GCC exports primarily comprise of crude oil, petroleum products and petrochemical goods, whose prices are vulnerable to market prices. Undoubtedly, Malaysia is bound to benefit enormously from emerging business opportunities in the region on the back of gradual return of confidence in the aftermath of the global financial crisis. The steady oil prices in the international markets testify to this. Needless to say, the petroleum sector serves as the main source of budgetary revenues and hence the expenditures in all GCC countries.
the attraction of Malaysia as a tourist destination for GCC citizens. Numerous GCCbased carriers operate daily flights to Kuala Lumpur.
Looking eastward It is hoped that the latest accord would pave the way for clinching a free trade agreement (FTA) with Malaysia in a span of two years. By one account, negotiations between representatives of the two sides are scheduled to start in March.
To be sure, Malaysian firms are key investors in Doha’s new airport. What’s more, Malaysia stands the chance of winning projects related to World Cup 2022 in Qatar thanks in part to trade accords with GCC countries at large.
It makes sense for Malaysia to have an FTA with a group of six nations of sizable economies. According to a World Bank rating in 2010, the gross domestic product (GDP) of Saudi Arabia is ranked number 20 worldwide. By contrast, GDP of Malaysia ranks number 29 globally, smaller than that of Saudi Arabia alone. Together, the GDP size of the GCC countries combined is twice that of Malaysia.
For its part, Malaysia aims at attracting GCC direct investments for property development throughout the country. In addition, the deal stands to further strengthen
The GCC’s drive for signing free trade agreements (FTA) and other framework accords dates back to 2008 when it signed the first ever FTA with Malaysia’s neighbour
CLOSE UP
THE BIGGEST CHALLENGE FOR THE GCC COUNTRIES IS TO REACH FTA WITH 27-NATION EUROPEAN UNION, THE LARGEST ECONOMIC BLOC WORLDWIDE Singapore. It ushered in a new period of trade deals with the members of the Association of South East Asian Nations (ASEAN). Concluding a deal with ASEAN as a bloc is a daunting task because of the uneven economic situations in the 10-member grouping. Asean includes countries facing different economic realities including Singapore and Malaysia on the one hand and Cambodia Laos on the other.
CHRONOLOGY OF DEALS ¡ The first ever FTA of the GCC was signed with Singapore in late 2008 ¡ FTA with the European Free Trade Association (EFTA) in 2009 ¡ GCC and New Zealand came close to reaching a comprehensive FTA in 2009 ¡ A memorandum of understanding with 19-member COMESA in the first half of 2010 ¡ Framework agreement with Malaysia signed in Abu Dhabi earlier in 2011
EFTA and New Zealand In 2009, GCC countries together signed another FTA with the European Free Trade Association (EFTA), which comprises of Switzerland, Norway, Iceland and Liechtenstein. Amongst others, the deal suggests that several European countries such as Switzerland and Norway seem pleased with the laws and procedures in place in the GCC. Yet, the biggest challenge for GCC countries relates to reaching FTA with 27-nation European Union, the largest economic bloc worldwide. Undoubtedly, this is not an easy job partly because of EU’s numerous demands especially in matters related to human rights and 68
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environmental protection in the GCC countries. On the other hand, the GCC states insist on removal of customs charges on aluminum and petrochemicals products. Currently, the EU imposes notable customs duties on imports of aluminum and petrochemical products from the GCC nations in return for supplying industrial undertakings with underpriced gas. Also in 2009, GCC states and New Zealand came close to reaching a comprehensive FTA. Not surprisingly, New Zealand with its unique geographical location, showed particular
interest in concluding the deal. It was in 2006 that the two sides agreed to start work towards reaching a deal. Negotiations kicked off in 2007 only to be completed in late 2009 following merely six rounds of talks. Besides, GCC carries deserve credit for operating flights to New Zealand, thereby paving the way for strengthening business links between the two sides. The GCC states also signed a memorandum of understanding in the first half of 2010 on commercial and economic cooperation with 19-member Common Market for Eastern and Southern Africa (COMESA) focusing
on economic cooperation.
The way forward There are indications that the GCC states are determined to sign trade deals with other countries, with talks underway with Japan, South Korea, Pakistan, Australia and China. The Chinese seem to be interested in restricting any such deal in the first place to goods, thereby excluding services. Undoubtedly, China is known for enjoying competitive advantage in exporting goods but not services. But a deal with the world’s second largest economy has a special significance for GCC countries whilst pursuing economic agreements with other nations. GCC states are doing the right thing by clinching trade accords with entities and countries located in diverse parts of the world. Regional countries would most likely not be at loss by making trade deals by virtue of being relatively open economies. In fact, numerous entities and countries enjoy trade surpluses with GCC countries outside the petroleum industry.
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INFRASTRUCTURE
THINKING BEYOND Freezone Sohar is expected to give a fillip to the development of Sohar region in tandem with Port Sohar and Sohar Industrial Area thanks to a strategic plan for cluster development. Visvas Paul D Karra takes stock of the recent developments in this special economic zone
W
hen the government decided to develop Sohar as the industrial hub of Oman and reclaim the region’s past status as the key port in the Arabian Sea, little did they realise that it would literally be a date with history. A joint excavation carried out by the ministry of heritage and Sohar Free Zone management team, in the area designated for the special economic zone, unearthed tombs dating back to 1,000BC. The team found human skulls and bones, horse bones, teeth, pieces of glass pots, gold and silver beads, agate stone, shells, earrings, bronze and iron rings in 57 tombs that date back to 1,000BC and the beginning of 2,000BC during the era of Wadi Al Shouq of the Iron Era (2,000/300BC). This was the period when business was booming in Sohar, the gateway for trading 70
March 2011
important commodities including metals like copper and iron and food items such as dates and honey. It seems to be a remarkable coincidence that this important archaeological discovery was made in the area earmarked for the Sohar Free Zone development, a 45 sq km-land mandated by the government to propel Sohar’s reputation as the modern trading hub of the region in combination with Port Sohar and Sohar Industrial Area.
Royal Decree The development of the Sohar Free Zone, now branded as Freezone Sohar, got a strong impetus following the promulgation of the Royal Decree 123/2010 issued in September 2010. The long-term strategy crafted for this region was to have industrial development which can generate economic spinoffs for
the local population in particular and the country in general. The Royal Decree provides numerous benefits to international, regional and local investors at Freezone Sohar in addition to the unique strategic, geographical and regulatory advantages, which are available in this special economic zone. Investor interest in the 4,500-hectare scheme has been strong from the outset thanks to the proven industrial performance, according to officials of Sohar Free Zone, spearheaded by Sohar Industrial Development Company, a joint venture between the Government of Oman, the Port of Rotterdam and SKIL Infrastructure in India. It may be noted that during the 7th Five Year Plan (2006-2010), sizeable
$14bn which have poured in to industrial port of Sohar, for various industries including aluminium, propylene, fertiliser, aromatics, steel etc., the idea now is to attract a number of small and medium enterprises and industries into Freezone Sohar. These industries will become the downstream units for the big-ticket industries in the Sohar Port. This will in turn generate more employment for the local population, says HE Maqbool. The Freezone Sohar, together with the Sohar Industrial Area and Port Sohar, forms a massive industrial zone where the private sector has a big role. The multi-nodal transport infrastructure like the roads (Muscat Expressway, Coastal Highway and the existing highway) linking Sohar with Muscat, as well as the proposed railway and airport will make Sohar a major port for goods coming in to and going out of Oman.
HE Maqbool bin Ali Sultan, Minister of Commerce and Industry (centre) with Jamal T Aziz, CEO of Sohar Free Zone (right); and Neelima Vyas, COO of Sohar Free Zone investments were poured in to major sectors of the manufacturing industries, such as petrochemicals, heavy industries, (steel, iron, aluminium, fertilisers) as well as small and medium industries which form a strong base for the manufacturing industries in the Sultanate. The industry sector witnessed remarkable growth in terms of added value, GDP, exports, increase in the number of industrial projects and Omanisation. During the 7th plan, the growth rate of the manufacturing industry amounted to 18.4 per cent compared to 23.2 per cent of refined oil products. Basic chemical materials achieved 20.2 per cent growth rate. These rates constitute the highest growth in different sectors.
Batinah gains importance HE Maqbool bin Ali Sultan, Minister of Commerce and Industry, says that
OPPORTUNITIES ➲ 4,500-hectare free zone is dedicated to various clusters ➲ First phase will cover a total leasable area of 350 hectares ➲ 200 hectares for clusters related to logistics, warehousing ➲ 100 hectares for light manufacturing ➲ 150 hectares for industries
Sohar is an important location because the Batinah region has the highest concentration of the Omani population. Apart from investments worth around
What is important, as far as the population of Batinah is concerned, is the education and training potential, says HE Maqbool. “We have the International Maritime College in addition to the Sohar University, as well as other technical and vocational colleges. This will take care of the human resources by employing the people in the free zone. Once the industries come up, it will not only help the existing companies but other ancillary services like hotels and transport companies will be generated.
Steel cluster As a special economic zone located adjacent to the highly successful Port Sohar, Freezone Sohar has paved the way for a number of dedicated clusters at the 4,500-hectare free zone. The first phase, covering a total leasable area of around 350 hectares, will have clusters related to logistics and warehousing (200 hectares); light manufacturing (100 hectares); and industry (150 hectares). Some seven companies have already obtained leases to set up operations as part of the phase 1 development of the scheme. A downstream steel cluster, for the steel projects in operation and under development at Port Sohar, is being pursued by Freezone Sohar in collaboration with the state-owned March 2011 71
INFRASTRUCTURE
Freezone Sohar Masterplan (first phase)
Graphic not to scale Source: www.portofsohar.com
energy investment Oil Company.
vehicle,
Oman
The proposed steel cluster represents a unique value proposition to investors, given especially Freezone Sohar’s proximity to a slew of iron and steel ventures like the newly launched steel mill of Jindal-Shadeed, and the soon-tobe-operational $1.5bn iron ore pelletising scheme of Vale Oman, says Jamal T Aziz, CEO of Sohar Free Zone and deputy CEO of the Port of Sohar. Jindal-Shadeed’s fully integrated steel complex at Port Sohar, due to commence operations soon, is a Direct Reduction Iron (DRI) plant with a capacity to produce 1.5 million tonnes of hot briquetted iron (HBI) per annum. Brazilian mining conglomerate’s local subsidiary Vale Oman is also close to completing work on its giant $1.35bn pelletising plant capable of producing 9 million metric tonnes of DRI pellets annually. Both ventures, according to Jamal, have 72
March 2011
the potential to create synergies that make downstream steel-related investment an attractive proposition for local, regional and international investors.
Future developments Freezone Sohar is a dynamic development and its most unique value proposition is the logistics advantage that investors can leverage to access markets in the Gulf, Indian sub-continent and the wider Middle East region. Excellent connectivity afforded by a world-class seaport and road network – and rail and air access in the future – further underscores the free zone’s investment appeal. Neelima Vyas, COO of Sohar Free Zone, says that companies from Gulf Cooperation Council (GCC), Indian subcontinent and Europe have already signed up for setting up industries within the free zone in the first phase. The projects involve capital investments in excess of $60mn, Vyas adds while saying that the first company within the free zone is
expected to start operation by the third or fourth quarter of next year. One of these is Zubair Furnishing, a global contract furnishing company wholly owned by The Zubair Corporation, which has signed a Letter of Intent (LoI) with Sohar Free Zone as a precursor to negotiate the terms of a land lease agreement for a four hectare plot within Freezone Sohar. Also on the anvil is a dedicated cluster earmarked exclusively for educational and medical services for which an area of 50-60 hectares will be allocated. A major Grain and Dry Bulk Foods Terminal being planned at the Port of Sohar would stimulate investments in food related industries at the free zone. The terminal, whose scope and capacity is still the subject of evaluation, is likely to be built on a reclaimed plot designated as part of the Future Container Terminal in Port Sohar and has been conceived in line with the government’s food security strategy.
GOLFUPDATE
A MEMORABLE DAY
OER CEO Golf 2011 made history yet again with corporate Oman’s leading business men going head to head in friendly competitions in an event that has clubbed golf and networking under the same banner
T
he seventh edition of OER CEO Golf, the day-long leisure sports and networking event, was held on Feb 3, 2011 at the prestigious Muscat Hills Golf and Country Club under the auspices of HE Ali bin Masoud al Sunaidi, Minister of Sports Affairs. Over 350 of the country’s most respected CEOs and A-list guests went head to head in friendly competitions, backed by some of the nation’s most popular and competent brands. Nawras Business Solutions was the presenter of OER CEO Golf 2011 while INFINITI was the associate presenter. Rolex was the official timekeeper while Times of Oman and Al Shabiba were the publicity partners. The day-long leisure sports and networking event got off to a chipper start with HH Sayyid Tarik bin Shabib, editor-in-chief, doing the inaugural tee-off, setting the pace for the game ahead. OER CEO Golf has always been hailed as a very ‘high-profile’ affair by the corporate elite and this year’s event bore testimony to that claim. CEOs also benefited from a plethora of business opportunities as they stopped to scope out the greens and score winning shot. The event opened up new worlds of opportunity for the country’s leading brands as well, showcasing them to the cream of the corporate crop for maximum mileage and reach. Corporate Oman’s leading business men got their game face on at the greens in an event that has always clubbed golf and networking under the same banner. A thrilling battle of dexterity ensued leaving some triumphantly victorious and others no worse for the wear, but at the end of it winners all. Michael Lenarduzzi, CEO, The Wave was crowned as The Champion of champions of OER CEO Golf 2011. Martin 74
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Champion, Director of Operations, Eight Services Company was the 1st runner up and Sachin Bawa, CFO, Shanfari Group of Companies was the 2nd runner up. Ajay Ganti, CEO, SARCO won a Rolex Watch as the “Most promising golferto-be 2011.” Over 60 prizes were won by various golfers, aspiring golfers and guests at the evening function. Everyone – both the pros and the beginners – jumped in on the action. While the pros got to swing their clout in a super fast session of Golf Power Play, the greenhorns were instructed to ‘stick’ together for a fun game of SNAG. Then participants stood back to watch a pro in action – Trick Shot specialist, Jeremy Dale who had more than a few pointers for the new, Ivy League of golfers. Dale finished as the runner up in the 2005 World Golf Trick-Shot Championships and is usually referred to as the Trick-shot king. And later, as the day receded over the horizon, CEOs put their putters to rest while they got ready to glam it up for a glittering soiree under the stars. Prizes galore, show-stopping performances – all-girl string quartet Asteria – really
threw the festivities into momentum with electrifying performances – it definitely was a day to remember. Media sponsors included Hi, and Al Youm Al Sab’e. The Category partners are Signature (Luxury) and AXA (Insurance), Reach (Activation), Oman Printers & Stationers (Printing), OUA (Beverage), Infoline (Call Centre) and Aggreko (Energy). Prize partners are Samsung, Micromax Mobiles, Damas; Millennium; Shangrila Bar al Jissah, Travel City, Graphic International Centre. Zahrat al Rose extended Décor support for the event.
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24-26 March 2011 Yas Marina, Abu Dhabi, UAE
Superyachts and Supercars to Light up Yas Marina The third edition of the Abu Dhabi Yacht Show is the regionâ&#x20AC;&#x2122;s only dedicated event for the superyacht industry, where key decision makers meet to do business against a backdrop of the worldâ&#x20AC;&#x2122;s most stunning ocean vessels. This year visitors can look forward to world-class attractions including: Â&#x2039; ( Z\WLYI Ã&#x2026;V[PSSH VM V]LY Z\WLY HUK TLNH`HJO[Z ^P[O WYPJL [HNZ PU L_JLZZ VM TPSSPVU Â&#x2039; ;OL º)H[[SL VM [OL )YHUKZ» ^LLRLUK WHY[ VM [OL -0( .; >VYSK *OHTWPVUZOPW Â&#x2039; ,_JLW[PVUHS ZVJPHS HUK UL[^VYRPUN VWWVY[\UP[PLZ Â&#x2039; ,_JS\ZP]L 4PKKSL ,HZ[ :\WLY`HJO[ )YPLÃ&#x201E;UN ;O\YZKH` [O 4HYJO Â&#x2039; .SHTVYV\Z JVJR[HPS YLJLW[PVUZ ZVJPHS M\UJ[PVUZ HUK ZWLJPHS L]LU[Z MVY `V\Y LUQV`TLU[ HUK YLSH_H[PVU
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RETAIL
SHOPPING CARNIVAL The shopping malls and high streets of Istanbul will wear a festive look with a dazzling display of its culture, as the Turkish capital is all set to host the first shopping festival from March 18 to April 26, Rekha Baala reports from Istanbul
T
housands of hard-core shoppers are all set to descend on Istanbul, Turkey as the first Istanbul Shopping Fest gets underway on March 18. The shopping festival will be a 40-day long marathon opportunity for shopping till you drop. The major highlight of the festival is a 30 per cent discount sale for the season’s latest products which cover a mind-boggling array of international brands. Destinations like Taksim, Nisantasi, Sisli, Bakırköy, Fatih, Bahariye and Bagdat Avenues, and 94 modern shopping malls throughout the city will wear a festive look throughout the period. The festival will also cover traditional shopping spots like the Grand Bazaar and the Spice Bazaar. Besides, visitors will also benefit from the opportunity of tax-free shopping. The Istanbul Shopping Fest is not only about shopping. Istanbul will be abuzz with various activities – concerts, parties, competitions, fashion shows, parades, carnivals, music shows, street entertainment, dancing and even calligraphy workshops. During the period, shopping malls will be open until 11 pm and once in a week two shopping malls and stores will be open until 2 am. Every day, a visitor stands to win a car through a lucky draw. Hundreds of surprise gifts are also up for grabs. Turkish Airlines, the national carrier and one of the major sponsors of the festival will be running special promotions especially for the festival. Istanbul has boutiques, bazaars, markets and malls featuring top brands. The city is also well-known for its handmade 76
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carpets, clothing, antiques, spices and sweets. The Istanbul Shopping Festival will only add to the diverse shopping experience. The Istanbul Shopping Festival will be on until April 26. The shopping fest project has been organised by the Turkish Ministry of Culture and Tourism and the Governorship of Istanbul; with the support of Istanbul Metropolitan Municipality, Turkish Exporters Assembly, Istanbul Development Agency and Istanbul Chamber of Commerce; with the coordination of AYD (Shopping Centers Investors Association), AMPD (Association
of Shopping Centres and Retailers) and BMD (United Brands Association); with the cooperation of THY (Turkish Airlines); and with the contributions of TÜRSAB (Association of Turkish Travel Agencies), TUROB (Association of Touristic Hotel Owners and Investors), TMD (Association of Registered Trademarks), TURYİD (Association of Touristic Restaurant Investors and Operators), TAV (Tepe Akfen Airports) and ISG (Istanbul Sabiha Gökçen Airport). For further details on promotions, you can contact the Muscat office of Turkish Airlines at: 247 65 071, 247 650 72
AUTOTALK
Bridging the divide THE 2011 JEEP GRAND CHEROKEE HAS UPGRADED ITS REFINEMENT QUOTIENT WITHOUT LOSING ITS VAUNTED OFF-ROAD CAPABILITY. MAYANK SINGH REPORTS
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he Jeep Grand Cherokee 2011 bridges the gap between luxury SUV and rugged fourwheeler. It offers even better off-road capabilities, a more refined interior and a more comfortable on-road ride. The Grand Cherokee is a completely new vehicle â&#x20AC;&#x201C; it has a new suspension, refined sheet metal, new interior materials, a new engine option and two new off-road systems. The redesigned Grand Cherokee is a bonafide off-road SUV with an sleek interior that rivals some of the best in its class. Plus, with a new spacious rear seat and optional streaming television, it becomes 78
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a viable family vehicle. The 2011 Jeep Grand Cherokee is redesigned, with freshened styling, a new V6 engine, and new features. This midsize SUV seats five. The 2011 model is about five inches longer in wheelbase and two inches longer overall than the 2010 Grand Cherokee.
Unmatched power Standard on all models of the 2011 Jeep Grand Cherokee is a new 3.6-liter V6 engine that makes 290 horsepower and 260 pound-feet of torque. Optional on Laredo, Limited and Overland models is an engine carried over from the 2010 model: a 5.7-liter V8 engine that makes
360 horsepower and 390 pound-feet of torque. Both engines come with fivespeed automatic transmissions. For 2011, the Jeep Grand Cherokee gets a new suspension that gives it much more comfortable on-road handling. The Cherokee handles bumps in the pavement well for an off-road vehicle. For an even more comfortable ride, however, there is the new Quadra-Lift air suspension system. It comes standard on Overland models and optional on other 4WD models. The system can be operated automatically or manually and features five different height settings for different situations.
Off-road capabilities The 2011 Jeep Grand Cherokee can conquer nearly anything off the beaten path. It is available with a choice of three four-wheel drive systems. Quadra-Trac I is a full-time system with a single-speed transfer case; it doesnâ&#x20AC;&#x2122;t require any input from the driver. Quadra-Trac II provides a two-speed transfer case, and QuadraDrive II features a full-time transfer case with a rear Electronic Limited-Slip Differential. The system detects tire slip and distributes engine torque to tires with the most traction. The Grand Cherokee provides up to 8.6 inches of ground clearance with the standard
suspension and up to 10.7 inches with the optional air suspension. New for this year, the Quadra-Lift air suspension system is standard on Overland models and optional on Laredo X and Limited models with 4WD. The Quadra-Lift air suspension system can be operated automatically or manually and features five different height settings. Normal Ride Height provides 8.1 inches of clearance; Off-road 1 lifts the SUV an extra 1.3 inches to help clear obstacles; Off-road 2 provides an extra 2.6 inches; Park Mode lowers the vehicle 1.5 inches to make it easier to enter and exit; and
Aero Mode lowers the vehicle half an inch to make the Grand Cherokee more aerodynamic and provide maximum fuel economy. The air suspension system makes the Grand Cherokee comfortable both on and off the pavement. The Selec-Terrain system, which is standard on models with Quadra-Trac II and Quadra-Drive II offers modes for five types of driving conditions: Sand/Mud, Sport, Auto, Snow and Rock. If you are looking for an off roader which can double up as a comfortable city drive, then your search ends with the Jeep Grand Cherokee. March 2011 79
The New Aston Martin V8 Vantage S
The Aston Martin Vantage range comes of age with the new V8 Vantage S characterised by a host of new driver-focussed features all designed to push the honed dynamics of the standard Vantage to a new benchmark level. Aston Martin’s own 4.7 litre V8 engine has been engineered to deliver peak power of 430 bhp (436 PS / 321 kW) at 7300 rpm and torque of 490 Nm (361 lb.ft) at 5000
rpm and is coupled with a new ground-up developed Sportshift II transmission, specifically designed for the Vantage S with seven short ratio gears to deliver the most engaging and intense driver involvement. “The Vantage S epitomises every attribute of the V8 Vantage and pushes the driver experience beyond what we have offered before,” says Dr Ulrich Bez, CEO of Aston Martin.
A rewarding experience Infiniti designs for life, rather than mechanics, following its own course to offer those who share the Infiniti vision an emotionally rewarding driving experience - and one that is always true to itself. Throughout the Infiniti FX, stunning style balances with versatility to compose a seamless whole. Bold design and visionary engineering mesh, creating a masterwork defined by stylish lines and shimmering materials. From
14” front rotors and 4-piston opposed calipers and the aerodynamic wave hood to custom-designed 21” Enkel alloy wheels, the FX is a canvas of impressive artistry. Yet there is meaning behind every carefully crafted curve and shaped, polished metal. It is design that employs inspiration and indulgence in equal measures with the understanding that style should evoke, as well as engage.
Nissan’s free check-up camp
New LR2 and LR4 The new 2011 fully refreshed Land Rover LR2 and the Land Rover LR4 have arrived in showrooms across the Sultanate courtesy to Mohsin Haider Darwish.
“The LR2 arrives in the Middle East with a bolder look, and as one of our most successful cars in 2010. I am sure it will continue to strengthen our market in the region. The LR4 won countless awards in 2010 and the refinements to the vehicle will continue to position Land Rover as an industry leader in the Middle East,” explains Robin 82
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Colgan, managing director, Land Rover MENAP.“We are proud to present the 2011 Model Year LR2 and LR4 to Oman and we look forward to welcoming customers to take a look at the award winning vehicles,” adds David Aziz, director automotive, MHD.
Suhail Bahwan Automobiles (SBA) held a free vehicle check-up camp for small and medium enterprises as part of its Value Up programme. The free check-up camp for Nissan vehicles held at SBA’s Azaiba service centre attracted a large number of SME customers. By joining Value Up, customers will also have the advantage of getting nominated for industry specific workshops covering topics like finance, IT etc. These workshops and
information sessions provide an opportunity to interact with experts in the SME arena for coaching, guidance and support. Value Up members will also receive special offers on new vehicle purchase, with flexibility in finance or leasing and customised down payment plans and customised instalments to suit the requirements of individual businesses. All the customers can also avail the night service option at select locations, thus minimising fleet downtime and maximising business returns.
More Hondas at Budget Rent A Car OMASCO, the sole distributors for Honda Cars in the Sultanate, recently delivered a fleet of Honda Accords, Civics, Odysseys and Citys to one of the leading car and van rental companies in Oman, Budget Rent A Car. This is in addition to the 50 Honda cars added to Budget Rent A Car’s fleet recently. Shabbir Boxwala, general manager, Budget Rent A Car, says that his decision to go in for more Honda cars in his fleet, is due to “the solid brand, lower cost of ownership, excellent fuel economy,
superb safety features and the very strong eco-friendly cars manufactured by Honda.” Honda’s Omni-directional vehicle-to-vehicle crash test facility at Tochigi in Japan is the world’s first indoor all-weather facility of its type. In addition to standard barrier tests, the facility tests in situations that simulate actual traffic accidents between vehicles. With Honda’s patented ACE Body technology used in its cars, makes Honda a very safe product on the road.
Ford funds 3 Omani initiatives
Pajero event in Wahiba Sands
The Ford Motor Company Conservation and Environmental Grants awarded funding to three conservation projects from Oman, bringing them closer towards completion. The Environment Society of Oman (ESO) received $7,000 from Ford for its project focusing on community education in Masirah Island, the world’s largest Loggerhead Turtle rookery. Biosphere Expeditions was awarded $10,000 for its project to protect the reefs of the Musandam peninsula. Through education, capacitybuilding, mapping and study of the Musandam reefs, Biosphere Expeditions aims to protect the reefs which will benefit and preserve not
Mitsubishi Oman hosted a special two-day customer event at the Sama Al Wasal desert camp in Wahiba Sands, where 30 lucky Pajero owners and their families had the opportunity to test the offroad capabilities of their 4x4 in the safe hands of a team of desert driving experts. The group of customers spent Thursday and Friday at the camp, courtesy to Zubair Automotive, where they got to drive their own vehicles over the dunes experiencing the SUV’s full range of advanced technologies and off-road features with expert guidance. Mark Tomlinson, general manager for Mitsubishi
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only the local reef wildlife, but also the communities of Oman in terms of increased tourism and resulting commerce. Another project spearheaded by Biosphere Expeditions is the protection of the Arabian leopards in Dhofar region, which received a $12,000 grant from Ford. The Ford Conservation and Environmental Grants is a grass-root level programme that has offered $1.1mn in grants to over 130 Middle Eastern environmental projects.
Oman says, “The event was a tremendous success and was our way of thanking our customers for choosing to buy a Mitsubishi Pajero.” The following day guests were invited to take advantage of Yamaha’s range of All Terrain Vehicles which included quad bikes, and Rhino off road buggies. March 2011 83
ENVIRONMENT
FOR FERTILE ROOFS
SQU’s ‘roof-mounted irrigation by capillary siphoning’ is an effective combination of green roofing and capillary siphoning technologies
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Alternative irrigation system
oof-mounted irrigation by capillary siphoning’ is a unique and innovative project by Sultan Qaboos University (SQU) to study the feasibility and technical applicability of green roofs with a novel capillary siphoning irrigation system in Oman. It is also aimed at assessing the durability of the siphons as water conduits in harsh Omani conditions and studying the temperature regimes of the roof near siphoned pots and the soil inside the pots. As part of the project, different types of crops were cultivated in pots filled with three types of soil (coarse sand, recharge dam silt and soil from the SQU agricultural experimental station plot). The pots were placed in an open area of the roof of the university buildings. Water was diverted to the pots from containers through siphons made of used T-shirts, which are rolled and filled with soil. Siphoning flow rate, moisture content in the pots, hydrological parameters and the development of the plants were measured and monitored. The project also assessed the feasibility of
The project was also an attempt to explore and develop a novel irrigation system. Siphoned pots serve as good buffers for regular regional rainfalls. Irrigation by siphoning in regional conditions with precautions on secondary salinisation is recommended based on four different green roof modules tested. Daily-average temperature of the roof is shown to be reduced by 6-8 degrees (in June) with mid-day temperature peaks reduced by more than 20 degrees.
further greening the roofs of Omani houses and their passive thermal insulation. Pot modules at the extreme temperature and dryness of Omani climate showed to be efficient thermal insulators of the roof and suitable biomedium for plants. In addition, regular measurements of temperature, moisture content and electrical conductivity of soil, flow rates of siphoning were carried out to prove the agronomical and engineering feasibility of green roof modules.
MB HOLDING COMPANY LLC
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Besides, improving building thermal regimes and flood attenuation, it can utilise idle roof space for cultivating basic vegetables in urban households, recycling used family cloth and plastics and engaging family members in farming activities. Several plants (ivy, sunflower, succulents and others) are shown to grow well on the roof when the maximum concrete/gravel temperature of the roof reaches more than 70 degree. The project has proved the effectiveness of the green roofs plus capillary siphoning technology in the Sultaante and other Gulf countries.
The 6th Annual Gulf Exhibition for Building and Construction
VISIT
Bahrain’s leading Building & Construction Expo 26th - 28th April 2011
Bahrain International Exhibition and Convention Centre
10am to 7pm daily
FOR TRADE AND BUSINESS VISITORS ONLY. CHILDREN UNDER 16 YEARS OLD WILL NOT BE ADMITTED
T: +973 1729 9123 F: +973 1729 9155
www.gulfbidexhibition.com Organised by:
Supporting Organisations:
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sk anyone who has ever stepped into an office about his experience and he is sure to come up with a litany of woes – unreasonable superiors, back biting colleagues, favouritism and prejudices. For some people, work is a breeze as they glide effortlessly through all the office politics and squabbles. They say and do the right things, get raises, promotions and results. What do they know that everyone else doesn’t? The rules of work. Those rules are surprisingly easy to learn – and once you know them, they’re equally easy to live by. Now, Richard Templar has brought them all together in one place: the quick, irreverent The Rules of Work: A Definitive Guide to Personal Success. Templar doesn’t just show you how to look more effective but he shows you how to be more effective in today’s workplace environments. Discover how to get ahead without compromising your principles; how to project the air of confidence and energy that wins respect; how to carve out a powerful niche for yourself; how to handle conflict without alienating the warriors; how to read your corporate culture; when to speak and when to remain silent; when to stay late and when to leave early; and how to capitalise on the key moments that can supercharge your career.
The publication featured in Browsing Corner is provided by WHSmith Bookstore
CITIUS, ALTIUS, FORTIUS THE RULES OF WORK GUIDES READERS ON CLIMBING THE CORPORATE LADDER FASTER AND IS RECOMMENDED READING FOR ANYONE ASPIRING FOR SUCCESS AT HIS OR HER WORKPLACE
of your workplace to your advantage, then you should read this book. Templar’s 100 rules cover the gamut from what to wear and how to act to get noticed and to developing a career game plan. If you have never worked in an office environment, this book will help prepare you for what you will likely experience. If you have spent any time in an office environment, you will find many familiar situations to which you can relate. The book is divided into ten parts (Walk Your Talk, Know That You’re Being Judged at All Times, Have a Plan, If You Can’t Say Anything Nice – Shut Up, Look After Yourself, Blend In, Act One Step Ahead, Cultivate Diplomacy, Know the System – and Milk It, Handle the Opposition), each with ten rules, that cover many important and sensitive aspects of virtually any work environment. Each rule is presented in two pages in a very conversational writing style that is generally easy to read.
THE RULES OF WORK: A DEFINITIVE GUIDE TO PERSONAL SUCCESS By Richard Templar
Tips galore If you are looking for some good insights and perspectives
from an experienced business manager about how to use the unwritten and unspoken rules
The Rules of Work is a no nonsense book that covers the basics of a successful career. The book focuses on getting promoted or moving into a better position, but the rules are such that anyone can follow them and become better at his/ her job. Overall, the book is informative and well written. It can be read in one sitting and is the perfect companion for a road trip.
Cut out this coupon from OER and present it at the WHSmith’s bookstore in Jawarat Al Shatti to claim a 10% discount on the book featured in the March 2011 issue, or 5% discount on all other books.
*This coupon cannot be combined with any other in-store promotions. Offer valid until May 31, 2011.
JAMES HARBRIDGE
LEGAL
Omani Arbitration Law Omani court case may go through three tiers of justice whereas an arbitral award is final, with no right of appeal
The author is a Partner at Curtis, Mallet-Prevost, Oman
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here is often a lack of understanding about how Oman’s Arbitration Law (Royal Decree 47/97 as amended) works. The truth is that this law provides a viable alternative to having a dispute heard by the Omani courts. The fundamental difference between the Omani court system as opposed to the Omani arbitration system is that an Omani court case may go through three tiers of justice (primary, appeal and supreme), whereas an arbitral award is final, with no right of appeal, and it is extremely unlikely that the Omani courts would nullify an arbitral award. This means that almost certainly an arbitral award will lead to the end of the dispute, without any ability to appeal or overturn the arbitral award. The best time to agree on arbitration is in the contract at the start of the relationship with your counter-party. For instance, if party A desired to have any dispute heard by an arbitral panel, using Omani Arbitration Law as the procedure for such arbitration, it is best for the contract to state: “Any dispute will be finally settled via arbitration in accordance with Omani Arbitration
Law (Royal Decree 47/97 as amended).” However, the above clause can be further fine-tuned to state how many arbitrators will be on the arbitral panel. Article 15 of Oman’s Arbitration Law states that if the parties have not agreed on the number of arbitrators, the number of them will be three. Accordingly, if the parties wanted a sole arbitrator to hear any dispute, they should say so in the contract. It is worth bearing in mind that with a panel of three arbitrators, a majority 2-1 decision is sufficient, unless the parties had agreed otherwise in writing before the commencement of the arbitration.
Timely resolution Article 17 states that the court would decide the identity of the sole arbitrator, if the parties cannot agree on whom it should be. If the panel is to consist of three arbitrators, one party states his nominee as arbitrator, and the other party must then state his nominated arbitrator within the following 30 days. The two arbitrators thus chosen should select a third arbitrator within 30 days after the nomination of the second arbitrator. However, either party can apply to court if these 30 day
deadlines are breached. An important part of the Omani Arbitration Law is what it states about the time procedural framework for an arbitration case. It is often forgotten that Article 27 says that – unless the parties have agreed otherwise - the arbitration clock starts ticking on the day the defendant receives a letter from the claimant stating that a dispute exists and that, as per the contract, it must be resolved via the agreed arbitration procedures. Article 45 requires that the arbitral award must be forthcoming within 18 months after the clock started to tick, unless the arbitral panel and the parties agree otherwise. Another salient aspect of Omani arbitration is that the arbitral panel can appoint one or more experts to present a report. The Law states that the parties will be given the opportunity to present their views on the expert reports. In addition, each party has the right to examine the report of the expert. The parties are also granted the right to bring their own experts to an arbitral hearing, to present their views on the contents of the reports prepared by the expert appointed by the arbitral panel. March 2011 87
HSBC-Biosphere volunteers visit school
HSBC Oman, in collaboration with Biosphere Expeditions, visited the Sultan’s School in Muscat to further enhance students’ understanding of the ways to contribute to sustaining the unique marine eco-systems in the country. The visit was organised as part of the bank’s ongoing drive to raise awareness on the importance of environmental conservation in the Sultanate. The students listened diligently to the experiences
of HSBC Oman’s Mohamed Al Dhahab and Hilal Al Baloushi, the qualified diving duo, who together with other international divers joined Biosphere Expeditions on a data gathering underwater voyage in Musandam last October. The team was also joined by Dr Matthias Hammer, founder and executive director of Biosphere Expeditions, a non-profit-making organisation that offers hands-on wildlife conservation.
Al Khalili partners with Thorn Lighting Al Khalili United Enterprises has announced a partnership agreement with Thorn Lighting for OTC lighting fixtures essential in Oman. Thorn Lighting, part of the Zumtobel Group, is a highly recognised, global brand for professional lighting fixtures.MoU of the authorised main distributor for trade products in Oman was
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signed between Qais Salim Al Khalili, chairman, Al Khalili Group and Kevin Lander, general manager, MENA region, Zumtobel group. “This partnership with Thorn Lighting will cater to the growing needs of exclusive lighting products for our clientele in Oman,” says Qais Salim al Khalili.
OIFC donates to NACA Oman Investment & Finance Co (OIFC) has donated for the second time to the National Association for Cancer Awareness (NACA), the first patient advocacy group in Oman. The NACA seeks to create awareness of cancer, its causes, symptoms and the need for early detection and constant screening to prevent it. “OIFC believes that it has an important responsibility to all the communities it serves and has worked hard to ensure that CSR is built into every aspect of its strategy and activities,” says Hamyar Al Ismaili, general manager for human
resources and administration, OIFC. “We are extremely proud to announce our contribution to the National Association for Cancer Awareness and we remain committed to support its activities that improve the lives of people everywhere,” he adds.
renna to launch best data package Following the launch of 3G and MMS data service in December 2010, renna mobile is working on the launch of a data package that promises to offer the best prices in Oman. Customers will enjoy internet access through their phones or laptops with high speed internet service (3G). “Our team is continuously working on improving customer offers and
packages that reflect customer lifestyle and business needs,” says Joakim Klingefjiord, who has recently rejoined as CEO of renna mobile. “Our data prices will be developed to provide great value for staying connected whenever you want and we are looking to launch the best data package in Oman with unlimited usage over one month for not more than RO9.500,” he adds.
The world on a platter Pizza Hut is taking its patrons on a tasty, flavoursome trip around the world with its all-new ‘Taste the World’ menu. Stopovers include the world famous flavour of the Chicken Tikka Pizza from India; to the quadruple-delight of Four Cheese Pizza from Italy; the delicious Creamy Chicken Mushroom Pizza from France; to the spicy, tangy Chicken Chipotle Pizza from Mexico; and the mouth-watering Mega Beef Pepperoni
from the USA for those who like it larger than life. Customers are spoilt for choice with a range of innovative veggie toppings too, and the option of traditional pan crust or yummy stuffed crust. The culinary world trip is priced at an extra-reasonable RO3.950 for a medium pizza and RO5.200 for a large pizza.
Omanoil debuts annual CEO award
Oman Oil Marketing Company has launched the CEO award of excellence, a first-of-itskind programme that has been introduced to drive omanoil’s staff to achieve excellence in all areas of operations while maximising efficiency and productivity.
Spearheaded by the Company’s CEO, Eng. Omar bin Ahmed Qatan, the awards aim to further ingrain a corporate culture built on a solid foundation of outstanding customer service. “This initiative is part of our ongoing endeavor to always maintain our competitive edge, as it encourages the effective implementation of key practices that improve service deliveries between various departments, by enhancing quality, speed of service and overall corporate performance,” says Qatan.
Synerggie Eventz holds leadership workshop Synerggie Eventz (SE) conducted the first workshop in its organisational and leadership meet series with Dave Ulrich, at InterContinental Hotel. The informative and descriptive workshop designed to align top management strategies and human resource practices was presented by Dave Ulrich, Professor of Business, Michigan University. The workshop highlighted the concepts and tools of development of an organisation, leadership skills, HR transformation,
culture change and the commitment of employees in the success of an organisation. It also explored the latest trends encountered in the competitiveness of organisations in the region, the sources and advantages of competitiveness, talent formula and how to build a more effective organisation. The session also gave an insight into how to improve the leadership abilities in an organisation and the expectations from HR.
Welcare DTC, VLCC to raise health awareness
Welcare DTC will partner with VLCC to raise public health awareness in the country. By working together, both the centres will enlighten the public about various issues concerning healthcare. Medical consultation will be provided by Welcare’s specialised doctors for VLCC customers. Likewise, the VLCC dieticians and nutritionists will support Welcare DTC’s patients
to attain better health by offering excellent services. Welcare DTC is one-of-its-kind multidisciplinary medical centre in Oman equipped with state-of-the art technology and designed to deliver modern health care services which has successfully developed a whole new aspect of healthcare in the community. VLCC is a beauty centre which offers tips and advice on healthy living to both men and women. It has commendably catered to the requirements of its diverse range of customers in the country concerning obesity, dietary, skin and hair.
i2Offshore launches corporate pension product nature and is structured and backed by a highly respected London-based pension specialist company. Senior executives from i2Offshore outlined the impact the new product will have alongside financial experts from the City of London at a special investment seminar hosted by the company that featured senior executives from Brooklands Trustees, LCF Rothschild, AMT Futures and Castlestone. Muscat-based i2Offshore has launched a unique new pension and savings product that will bring significant benefits to employers and individual employees – both Omani nationals and expatriates. The new product is the first in Oman to be genuinely 100 per cent capital protected for the full amount of the investment, is totally flexible in
Barry Woodgate of i2Offshore says, “A key differentiator in our product is having trustee partners in the form of Brooklands Trustees who operate out of offices in the City of London and Dubai and a financial nominee in the shape of Brown Shipley Private Client Bank, a FTSE 100 company in London.” March 2011 89
FLOWER OF ETERNITY Why don’t you surprise your mom with a ‘wow’ jewellery gift and celebrate her in the way she deserves on this year’s Mother’s day which falls on March 21. Every piece of the ‘Flower of Eternity’, a stylish line of jewellery exuding contemporary glamour from Mouawad, is an ideal gift to thank her and tell her how much you care for her. Crafted from 18k yellow, rose and white gold, and set with diamonds and coloured gemstones, the ‘Flower of Eternity’ collection ranges from simple pendants to ornate four-piece sets. The result is a selection of iconic pieces perfect for every mood from daytime chic to the most dazzling evening sophistication. Each variety of flowers had a hidden meaning, adopted by lovers as a secret language to send subtle messages via every bloom. With the ‘Flower of Eternity’ collection Mouawad brings a contemporary take on this cherished tradition. Studied carefully, the flower emblem reveals its composition of heart shapes.
SMALL AND SOPHISTICATED The House of Amouage presented the perfect gift for men and women with the launch of its new small leather goods collection, introducing crocodile prints and patent leather with vibrant nappa leather contrasts. The spectrum of rich colour combinations range from elegant black with gold and tan with orange to bold purple with baby pink and black with fuchsia. The collection comprises a contemporary and distinctive variety of small leather goods from wallets, credit card holders, business card and key cases to women’s cosmetic bags, luggage tags, men’s wash bags and passport cases. The apogee of the collection are a one-of-a-kind domino and backgammon set in a sophisticated leather case stamped with the House’s exclusive and signature jacquard. All products are hand-made of the highest quality using the very top grade of calfskin by artisans whose skills have been passed down throughout many generations.
AESTHETIC MATURITY With the launch of the La Monégasque collection of elegantly contoured timepieces driven by exceptional mechanical movements, each bearing the prestigious Poinçon de Genève and including a new chronograph caliber, Roger Dubuis embarks on another chapter in its history. It enters a new era of greater aesthetic and mechanical maturity with the development of innovative movements that exactly meet the requirements of the most demanding connoisseurs. In the new collection, which has an assertive design, marry the latest technology with the precise demands of the Poinçon de. Tighter collections, products that target collectors and connoisseurs, entirely new global communications and worldwide selective distribution all contribute to the exceptional vitality of this daring brand. It is a brand that is intentionally extravagant, elegant and worthy of the best in fine watch making. 90
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FIRST 3D MONITOR IN THE WORLD The recently launched Acer GN245HQ, the first 3D monitor in the world to support the HDMI 3D solution from NVIDIA, is designed especially for gaming enthusiasts, movie lovers and tech freaks. The Acer GN245HQ has Full HD 3D imagery via HDMI 3D or DVI-DL (dual link) connectivity with NVIDIA 3D vision which ultimately enhances the overall user experience with enhanced 3D multimedia output. It has NVIDIA 3D glasses with active shutter 3D technology which is combined with the monitor’s built-in IR emitter. With all these technologies in one product, it gives user to view 3D TV broadcasting with set-top box or by connecting Blu-ray Disc player, 3D camera or 3D games using a HDMI 3D game console. The Acer GN245HQ is a part of Acer’s range of EcoDisplays which are known for its power saving and environment friendly features.
LARGEST FULL LED 3D TV LG Electronics and OTE Group announced the Middle East launch of the 72-inch LZ9700, world’s largest FULL LED 3D TV. The LZ9700 will let viewers see life-sized action on a beautiful crisp picture. With Full HD resolution on an LED display, the LZ9700 delivers pictures as large and colourful as paintings at an art gallery. The extra spacious screen size also makes the picture more immersive than ever, offering viewers a 3D experience every bit as good as the screen in the local multiplex. The LZ9700 combines the ultimate in LG’s 3D picture quality with the latest developments in connectivity and smart technology. This state-of-the-art TV is also fitted with LG’s latest smart technologies, making it possible to access information about travel, health and anything else by using the contents cube feature.
A MULTI-MEDIA HUB Samsung has launched the next generation Samsung Galaxy Tab, which has a bigger screen and more processing power than the original, along with a new ultra slim Samsung Galaxy S II. The Galaxy Tab 10.1 is designed as a multi-media hub for keen gamers, e-book readers and social media fans, and has a 10.1-inch screen, dual surround-sound speakers, and both front- and rear-facing cameras. The tablet is running Nvidia Tegra 2 dual core processors and is based on the latest Google Android Honeycomb platform. The tablet measures in at 1.1cm think, weighs 595g and has a textured plastic back, designed to make it easier to hold. The new Tab has an 8MP camera on the back and a 2MP one on the front, HSPA+ 21 cellular networking with no voice calling, Wi-Fi and either 16 or 32GB of storage. The phone is designed around hubs for social networking, reading, games and music. The Galaxy SII has a two-megapixel camera on the front and an eight-megapixel camera on the back.
MUSCAT FESTIVAL
A MONTH OF MERRIMENT Muscat Festival 2011, organised by the Muscat Municipality gave the people one month of fun and frolic. Various events spread across numerous venues ensured that it was an audiovisual feast for both children and adults. Some of the notable events and programmes included the Tour of Oman, Muscat Fashion Week, Extreme Sailing Series, The International
Village, The Oman Heritage and Culture Village, International Festival for Arts, Heritage and Creativity, Naseem Park Fun, Oman Food Festival, International Food Festival Gala Dinner, live concerts and National Geographic Exhibition of Omani ships. OER presents a photofeature depicting the various hues of the event.
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