BMME 9

QATAR HERODohaland CEO Issa Al Mohannadi on transforming the heart of the capital

VISITORS WELCOME Abu Dhabi Tourism Authority’s Mubarak Hamad Al Muhairi trumpets the city’s ambitious tourism projects

FIRST-CLASS DELIVERY

The secret behind Aramex’s meteoric rise across the

Gulf and beyond

Takingfl ight

How Middle East airlines are fi ghting back from the downturn

ARAB POWERThe most infl uential and successful Arabs under the spotlight

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FROM THE EDITOR 7

Tony Wheeler, the intrepid globetrottingfounder of the Lonely Planet travel guides, re-cently wrote that in order for a country to haveits own identity on the world stage it needs twothings: its own brand of beer and a national air

carrier. The latter of Wheeler’s requirements is somethingthat the GCC states have, on the whole, delivered withaplomb. In the space of a few years the so-called ‘big three’of Emirates Airline, Etithad Airways and Qatar Airwayshave burst on to the aviation scene and shaken up the mar-ket, muscling in on the legacy carriers’ lucrative routes intoEurope and Asia.

The Middle East’s favourable geographic position isbeing leveraged to their advantage as these carriers striveto be the first choice for travellers. Emirates Airline, theArab world’s largest airline, seems to be cornering the mar-ket on Airbus 380 ‘super-jumbos’ with its latest US$11.5billion order for 32 of the 800-seat aircraft. The Chairmanand CEO, HH Sheikh Ahmed bin Saeed Al Maktoum, al-ready has another 58 being manufactured with theEmirates livery at Airbus headquarters. It’s a far cry fromwhen the airline took to the skies with just two aircraft 20years ago.

But the leading triumvirate haven’t got it all their ownway. The low-cost airline sector, although representing justfive percent of the aviation industry in the region, is cap-turing new business as travellers tighten their purse stringsin these times of economic uncertainty. It’s a market ripefor expansion, hence the emergence of Air Arabia, JazeeraAirways and flydubai in the last few years. Then there isOman Air, the Sultanate’s flag carrier, which is snappingup new aircraft and opening up new routes. In our exclu-

sive interview with the airline’s CEO, Peter Hill, (page 56)he discusses where his expanding company is heading.“We don’t have huge ambitions to be the biggest, but wedo have an ambition to be become recognised as a world-class business and economy class airline,” Hill states.

Like Oman Air’s Gulf rivals, the GCC governmentsare using their flag carriers as a marketing tool to enticeboth tourists and business visitors. Dubai has been charg-ing ahead with attracting foreigners (holidaymakers andexpats) for the past 15 years or so. Its lack of the black stuffcompared to its oil-rich neighbour Abu Dhabi meant ithad to look for alternative sources of income.

As Hill explains, Oman too is looking to diversify itseconomy away from oil and gas and promote the Sultanate asan upmarket tourist destination. Its stunning coastline, desertand mountains are an unspoilt beauty that is already provinga magnate for foreigners looking for an alternative destina-tion. Like Emirates, Oman Air will be crucial in putting itscountry on the tourist and business map in a part of the worldwith states jostling for foreign attention. For these rapidly ex-panding airlines, things are really taking off. n

Julian Rogers, Editor

Up, up and away

Why the Middle Eastern airlines and the burgeoning aviation sector in the region areleading the way in these times of economic doubt.

“Tradition isalways the focusand a priority whenwe consideranything in thedevelopment”Al Mohannadi,CEO Dohalandpage 51

“You have to be onyour toes at anygiven time becausethat’s how youwork in the serviceindustry. Wesurvive to serve ourcustomers andattend to theirneeds so you can’tswitch off” HussainHachem, CEOAramex (MEA)Page 42

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Qatar Hero Aft er Qatar discovered oil and gas back in the 1930s, its capital, Doha, morphed from a small fi shing vil-lage into a sprawling city. Dohaland CEO Issa Al Mohannadi believes, how-ever, that now is the time for the city to go back to its architectural roots

Flying highTh e world’s major economies may be struggling through se-verely turbulent times but the Middle East’s aviation industry is one sector that appears to be soaring. However, is this growth sustainable or are the airlines heading for a bumpy landing? Business Management investigates

Good things come in small packages Global logistics services and transportation company Aramex started life in 1982 as a small, regional player but soon became the Middle East’s biggest courier fi rm. Hussein Hachem, CEO of Aramex Middle East and Africa (MEA), explains why this “dy-namic” and “creative” business is really going places

CONTENTS 1389

Power playBusiness Management takes a look at 10 of the most powerful and infl uential Arabs in the world

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CONTENTS10

Zero tolerance and passive network infrastructuresDraka’s Peter Ludin explains why failure is not an option for up-coming generations of high-speed broadband networks

Predicting the future of enterprise ITJoe Baguley forecasts some key considerations that will need to be addressed if cloud computing is to deliver on the hype

CEO perspectivesTh e results of the Annual Global CEO Survey 2010 shows that business lead-ers in the Middle East are emerging from the economic crisis with optimism

Cheap thrillsTh e rise and rise of low-cost fl ying

The changing face of project fi nanceAlthough times are un-doubtedly leaner than at any point in the last three years, those in-volved in project fi nance in the Middle East are still bullish about the health of the sector

A princely positionReigning supreme in the world of construc-tion Wal King, CEO of Leighton Holdings, re-veals why evolving with the times has proved a key strategy to getting – and staying – at the top

The challenging road aheadWe hear from Saudi Aromco’s Khalid Falih

Beyond keeping the lights onTo discover why technol-ogy is the “main fabric” of Abu Dhabi Commercial Bank and the key role of innovation, we speak to Head of IT Operations, Steve Dulvin

Rising star Oman Air has its sights fi rmly set on new routes and fl eet expansion but the top priority right now, stresses CEO Peter Hill, is to clear the airline’s debts and turn a profi t

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6086

94

100

78

76 Abdulaziz Al-Salloum, Duroob Technology 83 Costin Raiu, Kapersky Lab 84 Salah Abu Shaar, STME106 Khaled EL-Faramawy, AL-Nokhba for

Business Transformation (NBT)

104 Gaby Matar, Maximo114 Ibrahim Al Daour, Technostream127 Ousama Kabbani, Abdulla Fouad

Holding Co.

Ask Th e Expert

Executive Interview

144Jay Bauer

127Ousama Kabbani

74Peter Ludin

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CONTENTS12

16 Th e brief 18 International news 23 In my view138 City guide

124

138

79

Regulars

140 Gadgets141 Books142 Lazy days144 Final word

Birdies, bogies and bytes Th e European Golf Tour would be fi rmly plugged in the proverbial bunker if it wasn’t for the mountain of technol-ogy behind the scenes, says CIO Mark Lichtenhein

The long arm of the lawMajor General Khamis Mattar Al Mazinah, Deputy General Commander of Dubai Police, reveals how the force is working to improve safety and security in the emirate

Gateway to the GulfBahrain’s well-diversifi ed economy and attractive geographic location enhance its appeal as an attractive trade hub in the Gulf region, putting it in a strong position to prosper.

Redefi ning refi ningAs oil refi neries encounter one of the toughest periods in their history, Bap-co’s deputy CEO, Dr Eion Turnbull, re-veals what the company is doing to stay one step ahead of the competition

Training upNigel Banister explains how an MBA could help executives get that all impor-tant edge in an increasingly competitive recruitment market

Visitors welcomeMubarak Hamad Al Muhairi, Direc-tor General of the Abu Dhabi Tourism Authority (ADTA), on how his emirate plans to become a global tourism hub

Magnifi cent metropolisRobert Kunkler, Regional Vice-Presi-dent of Operations tells us what makes the Madinat Jumeirah stand out

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“What stands out from this event was the quality of the

speakers chosen to moderate the round tables. I like working

with genuine facilitators who can open people up and keep the

discussion moving.”Paul Bergamo, VP and CIO, Liberty Mutual

A Proven FormatThis inspired and professional format

has been used by over 100 executives as a rewarding platform for discussion and learning.

The CIO Summit is an opportunity to debate, benchmark and learn from other industry leaders.

A Controlled, Professional and Focused Environment

The CIO Summit is a three-day critical information gathering of the most infl uential and important CIOs from the Middle East region.

CIO Summit MENA 2010

Find Out More Contact CIO

+44 117 921 4000

Chairman/Publisher Spencer GreenDirector of Projects Adam BurnsEditorial Director Harlan DavisWorldwide Sales Director Oliver Smart

Editor Julian RogersManaging Editor Ben ThompsonAssociate Editor Stacey SheppardContributors Ian Clover, Ross Densley, Lucy Douglas, Sarah Herman, Jodie Humphries, Diana Milne, Nicholas Pryke, Rebecca Goozee, Marie Shields, Timon Singh, Huw Thomas

Creative Director Andrew HobsonDesign Directors Zöe Brazil, Sarah WilmottAssociate Design Directors Tiffany Farrant,Michael Hall, Crystal Mather, Cliff Newman, Catherine Wilson

Online Director James WestOnline Editor Jana Grune

Project Director Ray DaviesProject Manager Danielle DochertySales Executives Jason Griffiths, Stephen Ball, Mike Thomas, Becky Blakeway

Finance Director Jamie CantillonProduction Director Lauren HealProduction Coordinators Renata Okrajni, Aimee Whitehead

Director of Business Development Richard OwenOperations Director Jason GreenOperations Manager Ben Kelly

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The African dreamcomes alive. Could

it be Qatar in12 years?

After months of anticipation, the FIFA 2010World Cup Finals have finally kicked off inSouth Africa – the first time football’sgreatest prize has been staged on African

soil. For four weeks the eyes of the world will be onAfrica’s richest nation as the feast of football dominatesTV coverage, the media and conversations over the officewater cooler. To award South Africa a sporting event ofthis magnitude was somewhat of a gamble but football’s

“SouthAfricans haveproved to becolourful,hospitableand noisyhosts”

UPFRONT16

UPFRONT BMME9:25 June 18/6/10 15:28 Page 16

News in Picturesgoverning body, FIFA, felt this continent’s time hadcome. South Africa narrowly missed out to Germanyto stage the 2006 tournament.

The build-up to the World Cup was dogged byfears that the stadia wouldn’t be completed on timebut the organisers proved the doubters wrong bybuilding and upgrading the grounds with months tospare. Getting the 10 stadia in nine cities completedcost the country US$2.2 billion. But even this isdwarfed by the US$52 billion total infrastructure in-vestment programme initiated by the government toupgrade roads, rail and airports. From a financialviewpoint, South Africa’s economy is forecast togrow by 2.3 percent this year with an estimated350,000 fans from 32 nations flooding the countryand adding some US$2.7 billion to the economy. Thetournament has also created 129,000 jobs.

South Africans have proved to be colourful, hos-pitable and noisy hosts thanks to the cacophonousdin from the army of fans passionately blasting theirvuvuzela horns before, during and after the matches.Some matches have been played in stadia with largeempty patches of seats in the stands, which has beenattributed to the extortionately high price of air fares,the cost of travelling between games in a country witha creaking infrastructure and the lingering securityproblems. On top of this, FIFA has been accused ofpricing the tickets too high for the locals.

However, FIFA’s decision to award the tourna-ment to this continent will give Qatar extra impetus.The Gulf state is hoping the World Cup can be heldin the Emirate after launching an ambitious bid tohost the tournament in 2022. This would be the firsttime it has been played in the Arab world. Althoughjust an 11,000 square-kilometre peninsula stickinginto the Persian Gulf and housing a population ofjust 1.3 million, the bid committee, who are in SouthAfrica for the finals, are confident the Emirate has thecredentials to land the coveted prize. Qatar certainlyhas the funds to construct state-of-the-art stadia,transport links and hotels for the players, FIFA offi-cials and travelling fans. One of the biggest stumblingblocks to Qatar being selected is the heat. The WorldCup is played in the summer, a time of the year whentemperatures in Qatar regularly top 40°C. This sti-fling heat could reduce play on the pitch to a sweatycrawl, but the bid committee has plans for air-condi-tioned indoor stadia as well as outdoor grounds withinnovative cooling systems. Qatar failed in its bid tohost the 2016 Olympic Games so will be looking tolearn from where it went wrong. A decision on the2022 World Cup’s host country will be announced inDecember so watch this space.

UPFRONT 17

Sultan Bin Nasser al-Suwaidi, the governorof the United Arab Emirates Central Bank,speaks at the First Annual World IslamicBanking Conference, in Singapore in June

Smoke billowsfrom the scene of

one of fiveexplosions thatrocked the Iraqi

capital Baghdadkilling at least two

people, accordingto an interior

ministry official

Kuwaiti MPs Ahmad al-Sadoun (R), Msallam al-Barrak (C) and Khaled al-Tahous leave a session of

Kuwait’s parliament after four members ofKuwaiti opposition group the Popular Action Bloc

walked out of the parliamentary session whenMPs voted to grill the prime minister over alleged

inaction on pollution behind closed doors


Europe

Europe’s luxury goods retailers are experi-encing a wave of rising profits on the back ofthe economic crisis in the region. The reasonfor this unexpected success has been putdown to the fall in value of the single curren-cy, which has lost a fifth of its value against thedollar since last November. This fall hasboosted profits for those companies that ex-port their goods to the US and East Asia.

Likewise, luxury goods companies thatsource their products from the eurozonecountries have seen their costs fall sharply andtheir revenues rise.

USA

International news

The massive oil spill leaking from a well in theGulf of Mexico is having a damaging effect onoil giant BP’s share price, which has fallen to itslowest level in 14 years.

Recent weeks have seen BP’s failed at-tempts to contain the leak in an operationknow as “top kill” which aimed to plug theleaking well. Figures for the clean-up have nowbeen put at a staggering US$990 million, ac-cording to BP.

As a result of what President Obama hascalled “the worst oil spillage in US history” andan “environmental 9/11” the shares sell-off wasBP’s biggest one-day shares fall for 18 years, andwiped UK£12 billion off its stock market value.

UK

The BBC recently found that almost UK£30million has been left unused on 16.5 millionsmart travel cards during the year from April2009 to April 2010. The Oyster pay-as-you-gocards, which are used for travel on London’strains, buses and tubes have no expiry date andeach of the unused cards is thought to containcredit totaling an average of UK£1.80.

In 2009, 31,000 Oyster cards were issuedand topped up but never used, even though theyheld UK£246,000 worth of travel on them, ac-cording to information obtained in a Freedomof Information (FOI) request.

In 2009, 31,000Oyster cards wereissued andtopped up butnever used, eventhough they held

UK£246,000

“Following the deathof a 19-year-oldemployee who fell tohis death at thefactory and eightother suicides at thesite this year,Foxconn hasreportedly askedemployees to signletters promising notto kill themselves”

UPFRONT18


Taiwan

Taiwanese manufacturer Foxconn, theworld’s largest maker of computer compo-nents, has witnessed an unfortunate numberof suicides at its Shenzhen factory in China,which has raised questions about the workingconditions for millions of factory workers.

Following the death of a 19-year-old em-ployee who fell to his death at the factory andeight other suicides at the site this year,Foxconn has reportedly asked employees tosign letters promising not to kill themselvesand agreeing to be sent to psychiatric institu-tions if they appear to be in an abnormal men-tal or physical state.

China

Two-way capital flows between the China andthe Middle East are likely to increase rapidly inthe coming years as investment catches upwith recent fast growth in trade, according tothe Chief Executive of Invest AD, the AbuDhabi-based financial services firm.

In the last five years, two-way trade be-tween China and the Middle East had tripledto reach US$107 billion in 2009. Chinese com-panies are among the most active in the infra-structure sector of the Middle East, winningUS$2.1 billion worth of construction deals inthe UAE alone, in 2008.

Nigeria

Troubled Nigerian airlines are to receivea US$3.3 billion bail-out from Nigeria’sCentral Bank. Many of the airlines, whichhave been hit by higher fuel prices, arenow heavily indebted.

The bank’s spokesman, MohammedAbdullahi, said that airlines can now ac-cess this fund and those that are alreadyindebted to banks can refinance theirloans and amortise them over a period of10 to 15 years.

It is hoped that this funding will helpto avert a financial crisis in the aviationindustry.

In the last fiveyears, two-waytrade betweenChina and the

Middle East hadtripled to reach

US$107 billion

“The massive oil spillleaking from a well in

the Gulf of Mexico ishaving a damaging

effect on oil giant BP’sshare price, which has

fallen to its lowestlevel in 14 years”

UPFRONT 19


Landmark sale

Famous London department store Harrods haschanged hands in a deal reportedly worth UK£1.5billion. The store was sold by Egyptian tycoonMohamed Al Fayed who bought a 30 percent

stake in House of Fraser (which included Harrods) from theFraser brothers in 1984 and then in 1985 he and his broth-ers paid UK£615 million for the remaining 70 percent.

Fayed’s acquisition of Harrods did however lead toone of the most bitter feuds in British business history asbusiness magnate Roland ‘Tiny’ Rowland, from whomFayed bought his original 30 percent stake at a price ofUK£2.50 per share, accused him of using a power of at-torney that he held for the Sultan of Brunei, the world’srichest man at the time, to fund the purchase. Rowlandtook the matter to the Department of Trade and Industry,where an inquiry ensued.

The DTI report was delivered in July 1988 but was notpublished. However, it was reported in UK newspaper TheObserver that the findings confirmed Rowland’s suspicions.“We are satisfied that the image they [the Fayeds] createdbetween November 1984 and March 1985 of their wealthyEgyptian ancestors was completely bogus,” the report al-legedly stated.

However, Fayed retained ownership of the store andsince 1985 he has invested almost UK£400 million on refur-bishing the retail wonderland, including a UK£30 millioncomputerised distribution centre to speed up shipments andthe UK£20 million Egyptian Escalator, which was designedalongside experts from the British Museum for authenticity.

The sale of Harrods was announced on May 8, 2010when it emerged that Qatar Holding, the Qatari royal fam-ily’s investment company, became the fifth owner of thestore since its creation in 1840 for a reported UK£1.5 billion.

Fayed’s sale of Harrods followed months of speculationdue to rumours of investors from the Middle East makingunsolicited approaches. It was reported in the UK newspa-per The Times that Fayed had commented in April: “Peopleapproach us from Kuwait, Saudi Arabia, Qatar. Fair enough,but I put two fingers up to them all. It is not for sale. This isnot Marks & Spencer or Sainsbury’s. It is a special place thatgives people pleasure. There is only one Mecca.”

However, according to a statement from Fayed follow-ing the sale, the decision was prompted by the desire to re-tire and spend more time with his family. The store’s newowner, Qatar Holding, is estimated to control about €57billion in assets and has interests in many leading compa-nies in Europe and Unites States.

Qatar is the largest shareholder in Songbird EstatesPlc, which controls more than half the buildings in the

“People approachus from Kuwait,

Saudi Arabia,Qatar. Fair enough,but I put two fingers

up to them all. It isnot for sale. This

is not Marks &Spencer or

Sainsbury’s. It isa special place

that gives peoplepleasure”

“After 25 years as Chairman ofHarrods, I have decided to retireand to spend more time with mychildren and grand-children.

“I have made Harrods into aunique luxury brand that it recog-nised all over the world, and inreaching my decision to retire, Iwanted to be sure that the legacyand traditions I built up in Harrodswould be continued.

“The team I have built will beencouraged by new owners to de-velop the foundations I have laidand support the long-term suc-cessful growth of Harrods.”

Mohamed Al Fayed on the sale of Harrods

UPFRONT20

Charles HenryHarrod foundsa wholesalegrocery inStepney, EastLondon

1834

Harrodsmoves to

the Knightsbridgearea of London, nearHyde Park

1849TheBritish

department storeholding company,House of Fraser,buys Harrods

1959

Harrods timeline...

On 6 Decem-ber, fire guts

the shop buildings,giving the family theopportunity to rebuildon a grander scale

1883Harrods shares arefloated on theLondon StockExchange underthe name Harrod’sStores Limited


Canary Wharf estate in London and J Sainsbury Plc, theUK’s third-biggest supermarket owner. It’s also the sec-ond-largest shareholder in London Stock ExchangeGroup Plc and has a stake in Volkswagen AG, theGerman automaker. It had previously invested inBarclays Plc, the UK’s third-largest bank by assets, but

recently sold its shares.Speaking to Sky News about the acquisition, Ken

Costa, the Chairman of Lazard International, the in-vestment bank advising the deal, said: “After 25years as chairman of Harrods, Mohamed Al Fayedhas decided to retire and to spend more time with

his children and grandchildren. He has builtHarrods into a unique luxury brand with worldwide

recognition. “In reaching the decision to retire, he wished to en-

sure that the legacy and traditions that he has built up inHarrods would be continued, and that the team that hehas built up would be encouraged to develop the foun-dations that he has laid.

“Qatar Holding will become only the fifth owner ofHarrods since its creation in 1840. Qatar Holding wasspecifically chosen by the Trust as they had both the vi-sion and financial capacity to support the long-term suc-cessful growth of Harrods. Of paramount importance toMohamed Al Fayed was to ensure that the Harrods staffwould find in QH an owner who would be supportive oftheir efforts to maintain the traditions of Harrods.”

Ahmad Mohammed Al Sayed, CEO and MD ofQatar Holdings said: “It is a privilege for us to acquireHarrods, a unique company that combines an iconic lux-ury brand and one of the most prestigious retail proper-ties in the world with best-in-class financial metrics. Thisacquisition further expands our global portfolio ofworld-leading companies.”

Al Fayed will remain as honorary Chairmanof Harrods.

“It is a privilegefor us to acquireHarrods, a uniquecompany thatcombines an iconicluxury brand andone of the mostprestigious retailproperties in theworld with best-in-class financialmetrics”

UPFRONT 21

Qatar Holding become thenew owners of Harrods,

after Al Fayed announces he has soldthe store. It was reported thatthey paid UK£1.5 billion for theKnightsbridge store, in a deal signed

in the early hours of 8 May, 2010

Harrods was established in 1849

The Harrods motto is OmniaOmnibus Ubique - All Things forAll People, Everywhere

The store has over 90,000 squaremetres of selling space and 330departments

The store currently employs 4000staff

15 million people shop there eachyear

Up to 30,000 customers passthrough the store per day

100 tonnes of chocolate is sold bythe Harrod’s confectionarydepartment every year

The store is open 363 days a year

The Facts...

The Harrods‘102’ storeopensopposite themain store on BromptonRoad

2006

The relationship between House of Fraser and Harrodsis severed. Harrods remains under the ownership of the

Fayed family, and House of Fraser is floated on the stock exchange1994

The Fayedbrothers

buy the remaining70 percent of thestore for UK£615million

1985 2010


Lebanese growth

The Lebanese economy is expected to grow byseven to eight percent in 2010, according to RiadSalameh, the Central Bank governor. He madethe announcement at the 18th Arab Economic

Forum, which was attended by 25 countries.Lebanon’s 60 banks have assets worth three times the

GDP and this, together with their conservative policies, has al-lowed them to largely avoid the global economic crisis. Thebanks’ resilience has helped to boost confidence and has there-fore had a positive effect on growth.

However, Lebanon’s national debt tops US$50 billion(some 153 percent of GDP), accumulated since the end of the1975-1990 civil war. The International Monetary Fund hasurged Lebanon to take steps to reduce its debt-to-GDP ratio,raise revenues by reviewing current electricity tariffs, and redi-rect expenditures.

Fixing the financesShortcomings in the UAE’s financial system will be ad-dressed through a series of new measures to tackle reg-ulatory and legal deficiencies that were exposed duringthe financial crisis.

Dubai International Financial Centre GovernorAhmed Humaid Al Tayer announced the measures atthe recent Middle East, North Africa and South Asiaforum. He stressed that although robust economicfundaments have enabled countries in the MENAregion to be resilient to the impact of the crisis, therisks and challenges uncovered by the economicdownturn need to be addressed.

The matter is increasingly important given theregions increased role in the global economy asglobal economic power shifts towards the east.

Facts & FiguresIt took 22 millionman-hours ofwork to build the Burj KhalifaSource: arabianbusiness.com

UPFRONT22

A study released by US-based fund manager Invesco has shown that Middle East investorsare looking to invest more in emerging markets than in North America, Europe or Japan,lured by the higher returns that these regions can offer. Approximately 82 percent of the200 participants surveyed for the report showed a preference for exposure to emergingmarkets in the next three to five years, compared with 30 percent for North America and 14percent for Europe.

The study also showed Gulf investors have a short-term investment horizonwith about 38 percent of retail respondents having a time horizon of less than a year,while only 12 percent of institutional investors have an investment horizon beyondfive years.

Global asset managers frequently look to the Gulf region as an importantsource of financing from the region’s sovereign wealth funds. Invesco Middle Easthead Nick Tolchard estimates the region’s asset management industry to be US$2trillion. The Invesco study included a variety of Gulf investors, ranging from sovereignwealth funds to retail bank advisers and pension funds. One of the mainobservations in the report is that most Gulf investors have become more risk aversein the last six months to a year, with sovereign wealth funds in the region lookingmore at alternative investment strategies than in the past.

Market opportunities

Kuwait has posted a fiscal surplus of US$28.3 billion after oil revenue more thandoubled the budget forecast, according to the Finance Ministry. In the finan-cial year to March, state income was 122 percent above its budget at US$61.8billion, whilst spending came in under budget at US$33.6 billion, compared to

the annual forecast US$41.7 billion.The annual revenue from oil was predicted to be US$23.8 billion, but the actual

figure came in at US$58 billion, according to data from the Ministry. The predictionwas based on an oil price of US$35 per barrel, but oil is currently trading at US$70per barrel. The forecast budget deficit US$16.7 billion therefore did not materialiseand instead 10 percent of the revenue earned will now be put into a reserve fund forfuture generations.

For the current fiscal year, Kuwait, the fifth-biggest oil producer in OPEC, is plan-ning to increase its spending by 34 percent and is projecting a budget deficit of US$22.2billion, based on an oil price of US$43 a barrel.

Kuwait budget surplus


UPFRONT 23

In my viewDR RUMAIH M. AL-RUMAIH, Deputy CEO of the Saudi Arabian Railway Company(SAR), explains why rail is so important for the Kingdom of Saudi Arabia.

“The challenges aremany, but our

resolve anddetermination is

greater. The NSR ispart of the largest

railway projectunder constructionin the world today.The total length of

the railway is anestimated 2400kilometres, and

includes sidings,yards, maintenanceshops, stations and

administrativefacilities”

Once the Saudi Railway Company (SAR)North-South Railway (NSR) project iscompleted and in operation, the map ofthe entire region will be significantly

smaller, with the rail network opening up remote areasand eventually extending across borders. This will in-evitably mean an increasingly viable transport optionin the entire Middle East, with rail linking theKingdom together with its neighbours, and linking theregion to major rail networks beyond.

The advantage of rail is that it is safe, secure andaffordable alternative to both air and road travel, andwill connect the mining centres in the north to the pro-cessing and export ports in the South.

Despite already boasting an existing rail net-work, the development of an expanded rail transportsystem in the Kingdom is crucial to improving thenation’s economic viability, whilst positively im-pacting its neighbours in the region.

The first priority for SAR is the design and con-struction of the Mineral Line of The North-SouthRailway (NSR). This connects the phosphate andbauxite-rich mining-cities of Al Jalalmid and AzZabiiah in the North; with the agricultural district ofAl Basayta at the Al Zabirah Junction in the East. Thesewill then be linked to the processing and export facili-ties of Ras Az Zawr, currently under construction in-side the Arabian Gulf port and industrial city of AlJubail, in the South. Another important function of the

railway is its linking of a number of cities, neighbour-ing areas and villages, which will lead to their develop-ment socially, economically, industrially, agriculturallyand commercially. In the future this will help also toestablish advanced industries in the north of theKingdom of Saudi Arabia.

Improving remote areas currently distant frommore market-driven cities in the Kingdom, such asRiyadh, will be another advantage of the project. Inturn, this will create opportunities for the Kingdom’syouth with the country’s economy as it develops.

From a regional perspective, SAR aims to eventu-ally provide a safe transport alternative for expatriatesand tourists between the Kingdom and other GulfCooperation Council nations, and beyond to countriessuch as to Jordan, Syria, Lebanon, and Turkey.

The challenges are many, but our resolve and de-termination is greater. The NSR is part of the largestrailway project under construction in the world today.The total length of the railway is an estimated 2400kilometres, and includes sidings, yards, maintenanceshops, stations and administrative facilities.

SAR has commissioned the best consultantsworldwide to ensure that our decisions are based on thebest and most reliable engineering and technical solu-tions. In addition to this, SAR ensures that young Saudiengineers are recruited and actively engaged with theconsultants on the ground, training abroad, at the var-ious project sites, or in our head office, all year round.


UPFRONT24

The Kingdom of Saudi Arabia’s power need hasbeen highlighted by the company’s electric com-pany, Saudi Electricity Co, seeing a loss ofUS$209 million in its first quarter due to it hav-

ing to purchase power from external providers to effectivelymeet the kingdom’s energy demands. In a statement, thecompany said its loss was “due to the increase in purchasedenergy from independent producers in order to meet in-creased energy demands, as well as the increased costs result-ing from new projects”.

It is no surprise that the company wants to makesome sort of expansion, but such a project is expected tocost upwards of US$1.87 billion and the company is try-ing desperately to make sure it can meet Suadi Arabia’spower demand, which is growing at a rate of eight percentper year. It was recently estimated that if Saudi Arabia is tomeet its rising domestic demand, then it needs to raise in-vestments in its power and water supplies industries by athird to at least US$266.7 billion through to 2025.

However, while the Kingdom has plans to spendmore than US$400 billion over five years to upgrade in-frastructure such as airports, roads and power plants, itsenergy plans aren’t as highly financed with only US$186.6billion earmarked for such projects – US$79.9 billion onpower generation, US$53.3 billion on water desalinationand US$53.3 billion on sewerage.

According to a recent report from Banque SaudFransi, this amount is “a step in the right direction – but atleast a third more in funding would be required to bolstercapacity in a way that comfortably cushions demand”.

Additional energy plansIn order to meet the Kingdom’s future energy de-

mands, Saudi Arabia has said it has set up a scientific cen-tre for civilian nuclear and renewable energy. Despite thecountry being the world’s second highest producer of oil,

Saudi Arabia’s US$209m power shortagedomestic power demand has forced Saudi Arabia to lookat other sources of energy to support the economy as wellas the rest of the world’s.

The country’s investment in power generation is ex-pected to see capacity increase from 46,000MW now to67,000MW by 2020. Currently, the UAE is the first GulfArab country to take the nuclear route, in a bid to meet ris-ing electricity demand for a fast-growing population.

Despite saying they intend to increase the use ofcrude oil for power generation to 2.5 million barrels of oilequivalent on a daily average by 2020 from 1.5 millionBOE in 2009, Saudi Arabia’s plans to invest in alternative,sustainable, reliable sources to produce electricity and de-salinate water is a clear intent to reduce their reliance oftheir oil reserves.

Saudi Arabia has invested US$12.5 billion in thesustainability-oriented King AbdullahUniversity of Science and Technology in Thuwal,which opened in September, in a bid to becomethe world’s largest exporter of clean energy andthe most important centre for solar energy re-search within 30-50 years. Despite cynical sug-gestions that it is yet another way for Arab oilproducers to expand their grip on global energy

The potential of solar energy resourcesis excellent in all MENA countries, withan annual global solar radiationbetween 4-8kWh/m

Countries such as Oman, Egypt andMorocco have good wind energyresources, with a wind velocity rangebetween 8 11m/sec

Egypt, Lebanon, Iraq, Syria, Tunisia,Morocco and Algeria have good hydroresources, although potential faroutstrips current output

“Saudi Arabia’s plansto invest in alter-

native, sustainable,reliable sources toproduce electricity

and desalinate wateris a clear intent to

reduce their reliance of their oil reserves”

supplies, others believethe case for renewableenergy in the MENA re-gion comes down topure economics. Whyburn finite hydrocarbonresources for yourself ifyou can save them andsell them?


UPFRONT 25


UPFRONT26

Qatar’s Al Jazeera Network will be making its content available free of charge on socialnetworking sites such as Facebook and Twitter. The move, which is reportedly part of acampaign for internet freedom, was announced by Wadah Khanfar, Director General ofthe network, at a conference in Doha. Khanfar says that by making their content avail-able free of charge across a range of digital platforms, more people will be able to accessit, which creates an environment where people are better informed and can make bet-ter decisions.

Content will be available on Facebook, YouTube and Twitter, and Al Jazeera isset to launch an application on the iPad and is expanding its presence in mobilecommunications on the iPhone, Blackberry, Android and Symbian platforms.

Al Jazeera gets social

The Middle East is currently undergoing a new media explosion, accordingto a panel of local and international digital media experts who met at theShelter in Dubai to discuss the future of the region’s media landscape andthe fate of traditional media. The debate, led by American author, online

publisher and journalist Mark Briggs, explored the need for journalists to keep up withthe times in order to remain relevant.

The discussions concluded that journalists need to embrace new technology if theyare to excel in the digital age. Briggs commented that the rise of new media does not sig-nal the death of journalism and that there will still be a place for print newspapers, whichwill continue alongside a thriving online element.

Technology is, according to Briggs, making journalism more collaborative, moreimmediate and more interactive, which, he says, is better serving readers. He added thatonline media allows journalists to reach far more people than they could have ever hopedto reach through print.

The debate coincided with the launch of the SAE Institute’s Diploma in DigitalJournalism – the first course of its kind in the region. “Digital journalism is the way ofthe future,” says Pia Heikkila, co-creator of the new diploma. “The media revolutionshows no signs of slowing down, so journalists must evolve, embracing new forums andways of working to reach their audiences.”

Digital media explosion

Facts & Figures

Qatar's economy isprojected to grow 16percent in 2010, withthe state expecting a

budget surplus ofUS$2.7 billion

Source: arabianbusiness.com

50% of the MENA region’s users prefer touse Facebook in English

Facts & Figures

0.0% 20.0% 40.0% 60.0% 80.0% 100.0%

Arabic English French

Eygpt

Morocco

Tunisia

Algeria

Libya

Palestine

Jordan

Lebanon

Iraq

Yemen

Saudi Arabia

UAE

Kuwait

Qatar

Bahrain

Oman


Source: Spot On Public Relations

Five million Facebook users in GCC

7%

UPFRONT 27

Facebook has become a force to be reckoned with in the Middle East and NorthAfrica and the platform can now claim 15 million users as of May 2010, accord-ing to a new report by Spot On Public Relations. Facebook experienced a strongperiod of growth in 2008/2009 from English and French speaking users across

the MENA region, but the decision to add an Arabic interface in March 2009 opened up ac-cess to a whole new demographic of internet users and as a result Facebook gained a fur-ther 3.5 million Arabic users over the past year.

The Facebook communities in Egypt and Saudi Arabia have seen the strongest growthin Arabic users during that period with each adding 1.1 million users.

Susbscriptions to Facebook in the MENA region now outweigh the total regionalArabic, English and French newspaper circulation, which is just under 14 million.

Facebook’s startling stats• There are now 15 million Facebook users in

the Middle East & North Africa (this figureexcludes Iran, Israel, Pakistan and Turkey)

• 50% of MENA Facebook users haveselected their primary language for usingFacebook as English, with 25% preferringFrench and just 23% Arabic

• Only 37% of Facebook users in MENA arefemale (compared with 56% in the USAand 52% in the UK). Only Bahrain andLebanon Facebook communities approachgender equality with female usersaccounting for about 44% of total users

• MENA’s top five Facebook countrymarkets, Egypt, Morocco, Tunisia, SaudiArabia and the United Arab Emirates,account for 70% of all users in the region

• The GCC has five million Facebookusers, with Saudi Arabia and the UAErepresenting 45% and 31% of that totalrespectively

• North Africa has 7.7 million Facebookusers, with Egypt accounting for 3.4 millionusers (or 44% of all North Africa users).Egypt has the largest Facebook communityin MENA

• Francophone countries Algeria,Morocco and Tunisia together accountfor 3.7 million French speakingFacebook users, equivalent to nearly 25%of all MENA users

• Algeria, Egypt, Jordan, Lebanon, Morocco,Palestine, Tunisia and Yemen all haveFacebook communities with more than50% of users below the age of 25

• The UAE has the oldest Facebook communityin the MENA region with 41% of users beingover 30 years old, 28% being 25-29 years oldand 31% being under 25 years old

The Facts...

Qatar

10%

Kuwait

31%

UAE45%

Saudi Arabia

3%

Omen

4%

Bahrain

Facts & Figures


UPFRONT28

Stronger job creation

While most companies around theworld have been suffering in the past18 months during the financial reces-sion, several top Arab companies

have seen strong growth, which is expected to equate tojob creation over the next few months.

According to a report by AllWorld Network, aBoston-based global economic development firm, de-spite the global recession “most of the companies grewin 2009, and 95 percent of the companies expect signifi-cant growth in the next six months, with several predict-ing sales growth of 25-50 percent”.

As such the firm has released ‘Arabia 50|500 LeadingIndicators’ data on the performance of major companiesin the Middle East and North Africa. All these firms haveseen employment double since 2006 and are all expect-ed to hire large numbers of new staff over the next sixmonths.

The Middle East has one of the youngest popula-tions in the world, with 60 percent of the populationunder 30 years of age. While countries like the UK aredeeming their 20-25 population as ‘The lost generation’due to the lack of jobs, the new openings in the MiddleEastern market have the potential to absorb this younglabour force.

Quoting the AllWorld report, “it is estimated that theMiddle East will need to generate 100 million new jobs by2020 just to maintain current living standards. While pri-vate sector employment growth has been sluggish in mostMiddle Eastern and North African countries, AllWorld'sresearch shows that there is a new entrepreneurial dy-namism taking hold in these countries.

“We have bench-marked the sophistication, inten-sity and mindset of the Arabia 500 entrepreneurs, andunsurprisingly, we found the same entrepreneurial DNAin them as we have found in our work with their US andEuropean counterparts,” said Anne Habiby, co-founderof AllWorld Network Habiby. “What they lack, andwhat the regions of the Middle East, Africa, Asia andLatin America lack, is visibility to sustain rapid growth.”

On top of that, nearly 75 percent of the region'sentrepreneurs are expected to launch another com-pany, while more than half of them will bring in out-side investors. A third want to acquire a company intheir industry. “The largest constraint to their furthergrowth is finding qualified managers and employees.Tied for second place is shortage/cost of long-term fi-nance and government regulation and red tape,” saidAllWorld’s research.

New Labour Ministry rules in Kuwait will allow females in certain sectors, like banking,hospitality, medicine, law and journalism to work nightshifts until midnight, accordingto the Kuwait Times. The new rules, which also cover an outside work ban for both menand women between 12 noon and 4pm from June 1 until the end of August because ofthe extreme summer heat, were announced by Labour Minister Dr. Mohammad Al-Afasi,

However, women will be banned from working in physically demandingroles, including handling petrochemicals and in manufacturing roles wherechemicals are used, the report said.

New labour laws

The World Health Organization is predicting a workplace revolution as more em-ployees choose to postpone their retirement in the coming years. John Beard,Director the WHO’s ageing and life course believes workplaces should preparefor a rapid ageing population boom that could see tech-savvy 100-year-olds as

part of the workforce.Beard believes that employees be should be allowed to continue working past the tradi-

tional retirement age if they are willing and fit. He says that whilst ageing is often portrayedas a burden on society, we vastly underestimate the skills and experiences that older peoplecan bring to the workplace.

Envisioning an older generation that is plugged into the latest technology and choosingto stay at work, Beard cites surveys from the US in which only 20 percent of retired workerssay they were happy to give up their jobs. The majority wanted to stay employed in some ca-pacity although through more flexible working hours.

According to Beard, some American companies are now offering employees the optionof working 1000 hours in a year over retirement, which could put an end to past divisionswithin someone’s life from strict periods of education, employment and then retirement.

Employing the elderly


The tourism industry in Saudi Arabia is expected to make a revenue of SR66 billionthis year, 4.76 percent up on the revenue earned in 2009, according to Salal Al-Bakhit, Deputy Chairman of Saudi Commission for Tourism and Antiquities(SCTA). In a statement carried by the Saudi Press Agency, Al-Bakhit said he was

optimistic about the future of the country’s tourism industry. “By the year 2015 its revenuewould reach SR118 billion and by 2020 it would jump further to SR232 billion,” he said.

Making a presentation on ‘Creating a tourism investment climate in the Kingdom,’ Al-Bakhit said the revenue of transport sector would increase by eight percent in 2010 to reach SR30billion and that restaurants and coffee shops are expected to earn a revenue of SR36 billion in2010, a rise of nine percent compared to last year. The number of jobs in the tourism sector alsorose, registering an annual growth rate of 7.4 percent.

Al-Bakhit also revealed SCTA’s plan to establish a company for tourism development invarious parts of the country in association with private and public sectors. Al-Bakhit said he ishopeful that tourism will strengthen the Kingdom’s economy, diversify its revenue, create morejobs for its citizens and provide investment opportunities for small and medium enterprises.

Tourism takes off

UPFRONT 29

According to a recent report entitled Global ProfessionalsOn The Move, working in the Gulf is becoming an increas-ingly attractive option for a growingnumber of professionals. The report,which was produced by ESPCEurope Business School in con-junction with specialist recruit-ment group Hydrogen, surveyed3155 mid to senior-level professionalsfrom over 70 countries. The findings ofthe survey revealed a readiness by the majorityof respondents to work abroad. Among the mostpopular locations for relocation were the US,the UK and Australia, but the United ArabEmirates consistently ranked in the top 10 asa destination of choice for those who work in law,engineering, human resources, finance and tech-nology related jobs.

The Middle East, with over 56 percent ofthe world’s oil reserves, is a particular hot bedof demand for engineers as the Arab nationsare set to spend over US$120 billion on newpower projects before 2012. “With this massdemand for energy and infrastructure and theopportunities it creates, it is no surprise theregion is such an attractive location forengineers,” says Andy Clapham, a manager atDarwin Park, which is part of Hydrogen Group.

Relocation, relocation

World’s top 10 airlines

32

54

1

87

109

6

Asiana Airlines

Singapore Airlines

Qatar Airways

Cathay Pacific

Air New Zealand

Etihad Airways

Qantas Airways

Emirates

Thai Airways

Malaysia Airlines

Top 10Source: www.worldairlineawards.com


UPFRONT30

65% have a Twitter account

54% have a Facebook fan page

50% have a YouTube channel

33% have a corporate blog

FORTUNE GLOBAL 100 COMPANIES

How are the top 100 companies in the world

embracing and utilising social media?

29 companies

United States

3 companies

Latin America

20 companies

Asia Pacific

48 companies

Europe

40% in Asia Pacific

67% in Latin America

71% in Europe

72% in the United States

TWITTER ACCOUNTS

Percentage of companies with Twitter

accounts by region


40% in Asia Pacific

52% in Europe


FACEBOOK FAN PAGES

Percentage of companies with Facebook

fan pages by region

Social media in business

With more people utilising social media tech-nology such as Twitter and Facebook,companies are coming to realise it is an-other resource to reach their clients. As

such, many firms can now be found on a variety of socialmedia networks. Here we take a look at the Fortune Global100 Companies.


UPFRONT 31

[ Source: The Global Social Media Check-up - Insights from the Burson-Marsteller Evidence-Based Communications Group ]

[ Graphic by T Farrant | Twitter @fallenblossom ]

FREQUENCY OF ACTIVITY

82% 68% 59% 36%

Percentage of Fortune 100 companies

using their Twitter account per week

on average per week on average per month on average per week on average per month


using their YouTube account per month


using their Facebook page per week


using their corporate blog per month

27 tweets 10 videos 3.6 posts 7 posts

25% in Europe

50% in Asia Pacific



CORPORATE BLOGS

Percentage of companies with corporate

blogs by region

52% in Europe

YOUTUBE ACCOUNTS

Percentage of companies with YouTube

accounts by region

79%of companies globally use at

least one of the four platforms

20%of companies globally use

all four platforms


35% in Asia Pacific



32

54

1

87

109

6

Abu Dhabi Investment Authority

Australian Government Future Fund

China Investment Corporation

Government of Singapore Investment Corporation

Kuwait Investment Authority

Libyan Investment Authority

Government Pension Fund Global

Qatar Investment Authority

Russian Reserve Fund and National Wealth Fund

Temasek Holdings

The 10 largest Sovereign Wealth Fundsworldwide

Top 10

Source: IRRC Institute SWF Report October 2009

In the biggest evolution of the internet since its inception 40 years ago, net reg-ulator Icann has switched on a system that allows full web addresses that con-tain no Latin characters. The move, which has prompted more than 20countries to request approval from Icaan for international domains, is the first

step to allow web addresses in many scripts including Chinese, Thai and Tamil. The first three countries to have so-called “country codes” written in Arabic scripts

are Egypt, Saudi Arabia and the United Arab Emirates. “All three are Arabic script do-mains, and will enable domain names written fully right-to-left,” said Kim Davies ofIcann in a blog post. Previously, websites could use some non-Latin letters, but thecountry codes such as .eg for Egypt had to be written in Latin script. The UAE gov-ernment announced last year its plan to launch .emarat – the Arabic equivalent of the.ae domain name for the country and now the UAE’s Presidential Affairs Ministry haslaunched the world’s first Arabic address website: Khalifa.emarat.

The Egyptian Ministry of Communications also now has a website with a fullArabic. Egypt’s Communication and Information Technology Minister Tarek Kamaltold the Associated Press that three Egyptian companies were the first to receive reg-istrar licences for the ‘.masr’ domain, written in Arabic. Masr means Egypt in Arabic.

Arabic addresses allowed

UPFRONT32

Facts & FiguresYouth vs. overall unemployment rates (latest available)

Country Youth (15-24) unemployment Overall unemployment

45.6%

20.7%

37.8%

25.8%

45.3%

38.9%

23.3%

21.3%

27.3%

44.3%

15.7%

19.6%

17%

25.%

10%

5%

41%

8%

30%

11%

3%

12%

7%

16%

10%

7%

1%

5%

Algeria

Bahrain

Djibouti

Egypt

Iraq

Jordan

Kuwait

Lebanon

Libya

Mauritania

Morocco

Oman

Qatar

Saudi Arabia


Companies in this issue are indexed to the first page of the article in which each is mentioned.

Abdulla Fouad Holding Co. 47, 103, 127Abu Dhabi Commercial Bank 78Abu Dhabi Tourism Authority 130Adfec 36AGR Petroleum 72Air Arabia 36, 42, 52AL-Nokhba for BusinessTransformation (NBT) 106, 107Alshaya Group 36Anantara 130APC 13Aramex 42Atkins 116Bahrain Chamber of Commerceand Industry 116Bahrain Economic DevelopmentBoard 116Bahrain Mumtalakat HoldingGroup 116Bapco 124Boeing 56, 60

Central Bank of Bahrain 116Cisco 34Deloitte 116DHL 42Dohaland 48Draka Telecom Solutions 65,74, 75Dubai Customs 42Dubai World 36Duroob Technology 8, 76Durrat Khaleej Al BahrainCompany 116easyJet 60Emaar Properties 36Emirates Airline 42, 52Emirates Group 60Euromonitor 52Facebook 42Fairmont 130Fedex 42Ferrari 130flydubai 52, 60Gavrosche 6General Federation of Workers

Trade Union 116GolfWeb 108Good 4Goodrich Corporation 60Gulf Air 56Gulf Finance House 36HP 108IATA 52International Monetary Fund 116Iraqi Airways 52iStrategy 77Jazeera Airways 52JetBlue 60Kangaroo TV 108Kanoo Group 36Kaspersky Lab 11, 83, OBCKingdom Holding 36Land Rover IFCLeighton Holdings 98Manchester Business School128, 129Masdar 124Mashreq Bank 36

Maximo 81, 104, 105McLaren Automotive 116Meet the boss 93Mubadala 120NBT 106, 107NVS 63Oman Air 56PGA European Tour 108PricewaterhouseCoopers 68Qatar Airways 36, 52Quest Software 15, 66, 67Research in Motion 2Ryanair 60Saudi Aramco 100Sri Lankan Airlines 56STI Systems 97, 144, IBCSTME 41, 84, 85Tamkeen 116Tatweer 120Technostream 114, 115Twitter 42Volvo 130

Company Index Q3 2010

Improving insuranceThe insurance industry in the MENA region has made significant progress in the lastthree years, according to a new study by Booz and Company. Policy makers and reg-ulatory authorities have succeeded in promoting growth, competitiveness and de-velopment of the industry, which looks set to build on this success.

The regions insurance market saw 26 percent compounded annual growthbetween 2005 and 2008, which was bettered only by 27 percent growth inCentral and Eastern Europe. The UAE market, in 2008, was the largest in termsof Gross Premium Income and was worth over US$5 billion, followed by SaudiArabia with US$3.1 billion and Morocco with US$2.5 billion. Bahrain, Algeria,and the UAE showed the strongest GPI growth rates between 2007 and 2008,at 46 percent, 45 percent and 41 percent, respectively.

However, the report by Booz and Company also states that there is roomfor improvement. “The MENA region’s share of the world market accountedfor just 0.42% last year. Furthermore, insurance penetration – GPI as apercentage of gross domestic product – remains low in the MENA region,”said Peter Vayanos, a partner at Booz & Company. This ratio grew to 1.08percent in 2008 from 1.05 percent in 2005, but paled in comparison to everyother major region of the world.

Facts & Figures

UPFRONT 33

In the Middle East, there are an estimated 57,425,046

internet users, and between 2000 and 2009 the region

witnessed an impressiveinternet usage growth rate

of 1648.2%Source: www.internetworldstats.com


CISCO AD.indd 2CISCO AD.indd 2 15/6/10 15:56:1615/6/10 15:56:16

CISCO AD.indd 3CISCO AD.indd 3 15/6/10 15:56:1915/6/10 15:56:19

1Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud

Chairman, Kingdom Holding, Saudi Arabia

As the man behind one of the world’s most successful international holding

companies, Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud has been named

twice by Forbes magazine as one of the smartest and most creative investors in

the world. He has also received numerous honours and accolades from many

organisations, societies, monarchs and heads of state, including 14 honorary

doctorates from universities in the US, Britain, Korea, Egypt, Malaysia, Ghana,

Palestine, the Philippines, Tunisia and Uganda, to name but a few.

Prince Alwaleed formed his company in 1980 and his first contract was a

US$8 million project to build a bachelor’s club at a Riyadh military academy

representing a Korean contractor. The business grew rapidly, and before long

the Prince was involved in a variety of profitable joint ventures. Investments in

the banking sector in particular have seen him catapulted onto the interna-

tional financial stage. He is the largest individual shareholder in Citigroup and

his 3.5 percent stake now constitutes the biggest portion of his wealth, which is

estimated at US$19.4 billion and ranks the Prince at number 19 on Forbes’ list

of the world’s billionaires.

10

2

Abdul Aziz Al GhurairCEO, Mashreq Bank, UAEAs CEO of the publicly traded Mashreq Bank, AbdulAziz Al Ghurair has an estimated worth of overUS$8 billion and his influence on the bankingworld is substantial. Mashreq is the largest privatebank in the UAE with a growing retail presence inEgypt, Qatar, Kuwait and Bahrain. It was the firstbank to introduce ATM machines and credit cardsto the UAE and was also the first bank in the re-gion to introduce customer loans and digital point-of-sale readers.

In 2009 Al Ghurair was honoured by TheBanker Middle East with the ‘LifetimeAchievement Award’ in recognition of his signifi-cant contribution towards the development andprogress of the banking industry in the MiddleEast. Aside from his responsibilities at Mashreq, AlGhurair is also Vice President of the DubaiInternational Financial Centre and also sits on theboard of the Emirates Foundation and the DubaiEconomic Council.

POWERplay

SPECIAL INSIGHT

TOP10 POWER ARABS_june10 18/06/2010 15:30 Page 36

www.busmanagementme.com 37

The Middle East is brimming with top talent and the influence of Arabs

on the global business scene in increasing with every year that passes. In

this issue of Business Management we take a look at some of the most

powerful, influential and successful Arabs. All of those named here have

demonstrated particular business prowess, which has enabled them to

propel their particular business ventures onto the international business

stage. Some of those featured have been so successful that they now

feature in Forbes’ world billionaires list.


3Akbar Al BakerCEO, Qatar Airways, QatarAkbar Al Baker has played an instrumental role in shaping the development of Qatar Airways

into one of the fastest growing and most highly acclaimed airlines in the world. Before Al

Baker became CEO in 1997, Qatar Airways only operated four aircraft in a regional capacity,

but the company now flies 83 aircraft to 89 destinations across an international route net-

work. The airline will operate a fleet of 110 aircraft by 2013. During 2007, Qatar Airways or-

dered 80 Airbus 350s, together with 60 Boeing 787s and 32 Boeing 777s. It has ordered five of

the twin-deck Airbus 380 ‘super jumbos’ for delivery from 2012.

Al Baker has been a successful businessman in Doha for over 25 years and is also CEO of

several divisions of Qatar’s national airline – these being Qatar Airways Holidays, Qatar

Aviation Services, Qatar Duty Free Company, Doha International Airport, Qatar Distribution

Company and Qatar Aircraft Catering Company. He is also leading the development of the

New Doha International Airport, which opens in phases from 2011.

5

Sultan Ahmed Al JaberCEO, Adfec, UAE

Dr Sultan Ahmed AlJaber is the ChiefExecutive Officer ofthe Abu Dhabi FutureEnergy Company(ADFEC), which ismandated by the gov-ernment to undertakeand drive the MasdarInitiative. Masdar isAbu Dhabi’s vision forthe world’s first car-free, carbon neutral,sustainable, zero-

waste city, which is due for completion in 2014. The multi-billiondollar project explores the future of energy and environmentalsustainability in response to the need for a global focus on the de-velopment of advanced energies and sustainability-related tech-nologies.

Al Jaber also holds the position of Senior Projects Managerat Mubadala Development Company, where he has held broadresponsibilities that have included direct project origination andexecution in the energy and utilities sectors, as well as relation-ship management with key multinational companies and gov-ernment institutions.

Al Jaber is also a board member of the Abu DhabiShipbuilding Company and a member of the Advisory Board ofthe College of Business and Economy at the UAE University. Healso serves on the board of the American University of Dubai(AUD) and was recently appointed as a Board Member of theYoung Arab Leaders organisation.

4Sultan Ahmed Bin SulayemChairman, Dubai World, UAESultan Ahmed Bin Sulayem is the Chairman of Dubai World andits subsidiary companies and has been a driving force behind theGroup’s rapid expansion to become the fourth largest marineterminal operator in the world. The Jebel Ali Free Zone (Jafza) isnow an unrivalled business park with global operations.

Bin Sulayem was also behind the establishment of Nakheel,one of the biggest master developers in the world and the cre-ators of icons such as The Palm and The World. In addition hefounded the investment house Istithmar, the Dubai MultiCommodities Centre (DMCC), and the international real estatedeveloper Limitless.

Bin Sulayem has won several regional and internationalawards and honours. In October 2008, the UK-based MiddlesexUniversity conferred on him an honorary doctorate for his dedi-cation to excellence and commitment to the economic develop-ment of the UAE and the Arab World. He was also chosen as‘Global Leader for tomorrow’ by the World Economic Forum.



6

Mohammed AlabbarChairman, Emaar Properties,UAEMohammed Alabbar is undoubtedly one of the re-gion’s most well-known business personalities. Hehas played an integral part in the development ofDubai’s real estate sector in his role as Chairman ofthe Middle East and Africa’s real estate power-house and the Arab world's largest developer.Emaar has had a tough time recently due to the se-vere drop in Dubai property prices, but 2010 hasseen Emaar deliver two of the biggest projects onthe global stage. January marked the opening of itslong-awaited flagship building, the Burj Khalifa,which at 828 metres high, is the world’s tallestman-made structure ever built. And four monthslater came the first ever Armani Hotel, built withinthe tower. It didn't take long before Emaar reportedits full year profits had increased 98 percent year-on-year while revenue increased 94 percent.

With six business segments and more than 60active companies, Emaar has a collective presencein several markets spanning the Middle East,North Africa, Pan-Asia, Europe and North America.The company has established operations in theUnited Arab Emirates, Saudi Arabia, Syria, Jordan,Lebanon, Egypt, Morocco, India, Pakistan, Turkey,China, USA, Canada and the UK.

7Adel AliCEO, Air Arabia, UAEAir Arabia CEO Adel Ali is credited for setting up the Middle East

and North Africa’s first low-cost carrier (LCC) and as such was

awarded world’s Low Cost Airline ‘CEO of the year’ in 2008. Since

the company commenced operations in October 2003, Ali has

brought a wealth of strategic aviation, tourism and marketing expe-

rience to the company, which was voted the world’s best low cost

carrier in 2009.Ali drove Air Arabia’s growth to become the largest low-cost

carrier in the Middle East as well as the first publicly owned airline

in the Arab World within just five years.

Previously, he served as Vice President (Commercial and

Customer Service) for Gulf Air and spent over 20 years with British

Airways. He has been recognised within the industry as a Middle

East airline expert and has received awards for his contribution to

air transport and tourism in the Middle East and Africa.

POWERplay


40 www.busmanagementme.com

8

Mohammed AlshayaChairman, Alshaya Group, Kuwait

Alshaya has becomea byword for tradingand commerce in theArabian Gulf andMohammed Alshayais the undisputedking of Gulf retail. Amajor player across avariety of sectors –real estate, construc-tion, hotels, retail, in-formationtechnology and ad-vertising – Alshaya

initially operated in Kuwait and the Kingdom of Saudi Arabiaand more recently throughout the Middle East, Turkey,Cyprus, Russia, Poland, Egypt, Czech Republic and Slovakia.

Mohammed Alshaya was appointed CEO of the RetailDivision in 1990, and Executive Chairman in 2007 and hasdriven the rapid and continuing expansion of the company.The retail arm of Alshaya currently owns and operates over1800 stores across 15 countries, representing over 40 interna-tional brands, such as MAC, H&M and Mothercare, amongothers.

Mohammed Alshaya is also a member of the SupremeCouncil of Planning and Development of the State of Kuwait,a member of The Board of Trustees of the Arab ThoughtFoundation and a board member of Mentor Arabia andMentor International.

10Esam JanahiChairman, Gulf Finance House, BahrainOne of the main founding members of Gulf Finance House (GFH), Esam Janahi

successfully led the organisation as CEO until 2007, when he was elected

Chairman. With 21 years of financial experience, Janahi sets the long-term

strategic direction and advises on operational matters for the short and medi-

um term. Consequently, GFH is one of the most successful Islamic investment banks

in the Middle East and saw a 61 percent increase in profits to US$340 million

during 2007.Since 1999, Janahi has led flagship initiatives including the launch of Energy

Cities in Qatar, Libya and Kazakhstan, a series of Financial Harbours in Bahrain

and Tunisia, and the largest GFH concept to date, the US$10 billion Mumbai

Economic Development Zone. Elsewhere, GFH has announced First Energy Bank,

the world’s first Islamic investment bank offering tailored energy-based finance.

9

Mishal Kanoo Deputy Chairman, Kanoo Group,BahrainMishal Kanoo is Duputy Chairman of the Kanoo Group, oneof the largest independent, family-owned, group of companiesin the Gulf region. With diversified interests in shipping, trav-el, machinery, logistics, oil and gas, power, chemicals, jointventures, retail and commercial activities, the Group has real-ly forged a name for itself.

Kanoo is a frequent speaker at conferences in the Gulf andhis wide-ranging knowledge of regional business affairs andglobal capital markets give him a unique and often controver-sial insight into business life in the Gulf region.

He made his writing debut as a columnist in Money Worksmagazine and continues to voice his views by writing to localand regional newspapers and magazines.


STME AD.indd 1 15/6/10 14:46:01

Good thingscome in smallpackages


Global logistics services and transportation companyAramex started life in 1982 as a small regional player butrose up to become the Middle East’s biggest courier firm.Hussein Hachem, CEO of Aramex Middle East and Africa(MEA), tells Julian Rogers why this “dynamic” and“creative” business is really going places.

Instantly recognisable with its scarlet red livery embossed with boldwhite lettering, Dubai-listed Aramex is going from strength tostrength. Its trucks, vans, motorcycles and boats can be found day andnight ferrying goods, packages and documents all over the Middle Eastand beyond. Headquartered in Amaan, Jordan, Amarex is a top-fiveplayer in the world behind in the likes of international household namesFedex and DHL. However, the company’s earnings are soaring – no

mean feat amid a global economic downturn and the cut-and-thrust marketAmarex competes in. Net profits for 2009 hit US$50 million, which was a 25 per-cent up over 2008. The trend continued this year with a 10 percent jump in first-quarter profit to US$12.93 million compared to the same period in 2009.

“You have to be on your toes at any given time because that’s how you workin the service industry,” remarks Hussein Hachem, CEO of the MEA region. “Wesurvive to serve our customers and attend to their needs so you can’t switch off.”Hachem says the company’s low asset model that it adopts keeps heavy costs offthe books and allows for price and cost flexibility. For instance, unlike rival logis-tics firms, Aramex doesn’t have the expense of aircraft on its balance sheet, choos-ing instead to use the services of local airlines. “Our light asset model and the rangeof services we offer are quite unique. It’s a flat management here with no bureau-cracy whatsoever, which makes for a corporate culture that allows people to think

Hussein Hachem

THE BIG INTERVIEW

Aramex(HusseinHachem) ed TOP FLASH_june10 18/06/2010 15:29 Page 42


creatively, have the space to challenge themselves, challenge themarket and challenge the customer – it’s a very dynamic envi-ronment. And our customers are happy to see a young dynam-ic company that keeps coming up with new ideas.”

Aramex, which has low debt levels and market capitali-sation of more than US$650 million, registered on the NAS-DAQ in 1997, the first company in the Middle East to takesuch a step. It returned to private ownership in 2002. Today,the business’ reach stretches to more than 35 markets glob-ally while the number of employees has doubled to morethan 8000 in the past five years. The company has a networkof 310 offices in 200 major cities although a hunger exists for

further expansion with a push into Africa, Southeast Asia, theCIS region and China on the cards. Indeed, China is a marketboasting enormous potential for Aramex; the firm already op-erates in the world’s most populous country through itsShanghai office but is looking to expand in to the capital,Beijing, and Shenjing through a joint venture, CEO FadiGhandour told reporters earlier this year. He also said that theselean times were ripe for expansion because Aramex can capi-talise on the fact that its rivals are taking an opposite viewpoint.“Our core markets continue to show a high level of growth,”says Hachem. “However, we see a lot of opportunities in Africaand a lot of opportunities in the CIS countries.”

US$32.6 million

Cost of Aramex’s new state-of-the-art

warehousing facility in Dubai


His company could have a foothold in 10 new marketsin Africa and CIS within two years, analysts predict. “CentralAsia is another key area for us because there are lots of oil andgas in landlocked countries,” Hachem reveals. “They have acouple of gateways and ports and we believe that if we gothere with the right tools we can reshape the logistics indus-try in Central Asia.” Aramax already has a presence in NorthAfrica but is looking to operate out of Nairobi, Kenya, beforeestablishing a base in South Africa and using this as a spring-board to tap into the West Africa market. This is a companythat isn’t afraid to take awkward territories, be it operating inLebanon in the 1980s and 90s with its crippled road networkdue to the civil war, or being the first company in its field toenter Iraq after the US-led invasion in 2003. Aramax doesn’tshirk challenges, Hachem states.

Human capital Cost cutting contributed to last year’s record profits but

Aramex chiefs are proud of the fact that not a single memberof the workforce has been laid off during the economic slow-

down. Ghandour “guaranteed” every person’s job, apartfrom those who didn’t perform. “A measure we took in 2009was quite simple: we did not hire, we did not increase oursalaries and we didn’t lay off any of our employees,” Hachemexplains. “Our employees are our human capital and ourmain asset so we saw no need to lay any off.”

This reluctance to slash the headcount is a philosophythat has served Aramex well down the years. “In the 28 yearswe have been operating, we never reduced our manpowerdue to any recession or due to any glitch in the economy. Thesuccess of Aramex has always been as a result of combinedefforts of our employees across the globe – these people havemade Aramex what it is now.” With a strong work ethic anda sense of working towards a collective goal, the business hasgone from strength to strength.

“Our unique and flexible business model has helped usto weather the storm, big time,” states Hachem. “We are notbound by certain elements like our competitors but we haveadopted a couple of measures across the organisation to helpus manage and control our costs.” Any downturn throws upopportunities for companies to negotiate better deals withtheir suppliers. For Aramex, it was with its air freight con-tracts. “Airlines had the capacity issue during the recessionand free space was available so we were able to receive betterrates from airlines and thus improve our gross profit marginacross the organisation.”

And in this period of belt-tightening, with customerslooking to snip excess expenditure, Aramex has taken the de-cision to launch a new ‘Value Express’ service for express ship-ments in the MENA and South Asia region, allowingcustomers the option to transport less urgent parcels at eco-nomical rates. The service is aimed primarily at SMEs. In theGCC alone, SMEs represent over 75 percent of the aggregatenumber of operating companies, Hachem states. “We are ableto give our customers a quality product where we can moveshipments from point A to point B in three working days at avery economical rate,” he reveals. Value Express takes advan-tage of a soaring low-cost air travel sector across the Gulf.“We’re probably one of the few people that really looked atbudget airlines, although their main line of business is passen-gers because they don’t offer freight services,” says Hachem.“Air Arabia and a couple of other airlines have hit the marketand this opened a window of opportunity for us to capitalise ontheir belly space. And it’s a win-win situation for all parties: theairline is happy they’re getting extra business and the customeris happy because he or she is getting a good deal.”

Keeping the customer happy and satisfied with theAramex service is a cornerstone of the business model. Lastyear, the company launched social networking pages onwebsites Facebook and Twitter in an effort to furtherstrengthen and cement the brand in their customers’ psyche.Charismatic boss Ghandour has 2282 followers on his per-sonal Twitter page alone. “We use the internet and social


“Ouremployees

are our human capitaland our main

asset so we sawno need to lay

any off” Hussein Hachem

CEO Fadi Ghandour establishedthe business 28 years ago


net orders, gifts, magazine subscriptions, bank statementsat Shop&Ship fulfilment centres in the UK and US –Aramex then forwards the goods to the customer atfavourable rates, alerting them by phone or SMS that thedelivery has arrived, which is usually four to six days afterdispatch.

Green is clean Shipping parcels all over the world comes at a cost, es-

pecially if you are at the mercy of volatile oil prices; greatwhen the price of crude sunk to US$35 a barrel in 2009, notso great when oil hit a record high of US$147 in the summerof 2008. On top of the fuel costs associated with doing busi-ness in this industry comes the pressure to reduce your car-bon footprint – something that Aramex has beenchampioning for some time now. With this industry tradi-tionally reliant upon oil to power its vehicles, Aramex hasbeen introducing hybrid vehicles and electric-powered mo-torcycles to its fleet. Hybrid bikes have been rolled out for itscouriers in Lebanon. In some countries petrol has beenswitched to liquid gas, which is a cleaner fuel. The mountainof packaging the company uses is all biodegradable, recycledwater is used where possible and solar panels are installedoutside buildings to harness the sun’s omnipresent rays inthe Gulf. The company produced a programme to reduce en-ergy consumption in offices and warehouses and expandedpaper and cardboard recycling activities to new countries. InAqaba, Jordan, 10,000 new trees were planted to offset the


media sites like Facebook and Twitter because they allow us tocommunicate with our people and customers at any given time,24/7,” Hachem explains. “It’s a seamless relationship that willallow customers to become more integrated with us.”

In broad terms, the internet has been a game-changer forcouriers, particularly with the boon in online shopping. “Theinternet is a major facilitator of trade,” says Hachem when dis-cussing the profound effect e-commerce has had on thisbusiness. “We are very much involved in e-commerce be-cause the internet has obviously been a blessing, which iswhere we come in as a logistics and transportation solutionprovider.” And with customers keeping a tight reign ontheir spending, the online world can offer significant sav-ings over bricks-and-mortar shopping – again a boon forAramex. A popular online service is Aramex’s Shop&Ship,whereby customers can enjoy the benefits of shopping on-line at US and UK websites as if they actually live there.They receive correspondence and packages such as inter-

Geographical revenuebreakdown in 2009

Middle East 72.9%

Europe 17.4%

Asia and IndianSubcontinent 6.4%

North America 3.3%

Heads up: Aramex’s 28th annual leaders conferencein Dubai in May


business’ carbon footprint. Each tree is expected to com-pensate 0.8 tonnes of CO2 or 1500 km of executive travelin its 40-year lifetime. “All these initiatives are designed toreduce our emissions to the environment,” says Hachemsays proudly.

Sustainability is a top priority for this company, which is atrailblazer in terms of being the first company in the Arabworld to release its own Sustainability Report, in which it hasset an ambitious goal of becoming the first carbon neutral com-pany in its field. Amarex also contributes more than one per-cent of its profits to sustainability programmes around theworld. “From day one, Aramex has been at the forefront of sup-porting community efforts,” says Hachem. “We always makesure the whole Aramex community is geared and working to-wards enhancing the community we operate in.”

Following the sustainability trend, Aramex is in theprocess of delivering an environmentally friendly warehous-ing and distribution facility at Dubai Logistics City, which isslated for completion in the first quarter of 2011. TheUS$32.6 million facility, conveniently located adjacent toJebel Ali Port and Free Zone, will be fitted with energy con-servation systems, including an energy-saving water coolingsystem, the channelling of waste water for irrigation purpos-es and the installation of sophisticated lighting sensors. Thedevelopment will boast a footprint of 43,000 square metreswith a capacity of more than 40,000 pallet positions.

Other plans on the company’s itinerary include theopening of a new logistics centre in Cairo, Egypt, as well asjoining Dubai Customs and Emirates Airline in implement-ing the e-freight system, making Dubai the first city in theMiddle East to adopt paperless cargo operations. The new e-freight system provides paper-free operations to enhancetrade movement by allowing airlines, freight forwarders andcustoms administrations to exchange electronic informationand e-documents. In 2009, Dubai Customs cleared over 2.5million declarations transported by air.

One vision In May, Aramex held its 28th annual leaders conference

in Dubai – a three-day event that brought together 280 mem-bers of the worldwide management team. Many of the globalmanagers are Jordanians who started their careers at the firm’sheadquarters in Amaan. The purpose of the meeting was to dis-cuss growth strategies for 2010 and lessons learned from theeconomic slump. Other topics included further expansion op-portunities and enhancing customer service through technol-ogy. Hachen, who was in attendance, says these gatherings areabout formulating new ideas to keep the business ahead of thecompetition in the region. “You have to be innovative and cre-ative to be in this business. What kept us competitive over theyears is our creative approach because we are always looking atour supply chain and how we give innovative solutions to ourcustomers.”

Hachem himself has worked in a variety of roles anddifferent countries during his 20-year journey to his cur-rent position at Aramex. “The fact that you rotate arounddifferent countries economies means you learn a lot,” heexplains. With this industry being very much a 24/7 oper-ation, Hachem freely admits that his BlackBerry is nevermore than an arm’s length away. However, when asked todescribe his management style he coyly skirts around thequestion. “My management style is similar to the othermanagement styles here because it’s one culture that gov-erns us all,” he says diplomatically. “It’s a culture of cre-ativity, innovation, transparency, playing fair, givingopportunities and trial and error. It’s a beautiful environ-ment that I’m lucky to be working in and I’m sure my col-leagues across Aramex enjoy this atmosphere as well.” n


35Number of

markets Aramex

operates in


ABDULLAH AD.indd 1 15/6/10 14:40:59


Qatar

CONSTRUCTION

Dohaland(AlMohannadi) ed_june10 18/06/2010 15:30 Page 48

Asubsidiary of Qatar Foundation for Education,Science and Community Development,Dohaland was established in 2007, alignedwith the Qatar National Vision 2030, to createurban living concepts that build on tradition-

al Arabian architecture and design. Earlier this year, the foun-dation stone for Dohaland’s first development, the Musheirebproject, was laid at a ceremony attended by HH the Emir SheikhHamad bin Khalifa Al-Thani. Musheireb, which in Arabicmeans a place where one can draw water from, is a 35-hectaresite that will transform the architectural centre of the Qatari cap-ital and set new standards for inner city development in the Gulf.Dohaland CEO Issa Al Mohannadi, who was named PropertyDevelopment CEO of the Year by the Middle East ExcellenceAwards Institute, says Doha’s glass-encased buildings don’t al-ways fit with the capital’s rich history. He wants to seeMusheireb take the city back to its architectural roots and cre-ate thriving communities.

How does Musheireb reflect the aspirations of the QatarFoundation and of the Qatar National Vision 2030?Issa Al Mohannadi. Real estate projects in general can easi-ly align with the 2030 Vision if they are well planned and thestrategy is developed well. The 2030 Vision has been built infour pillars: social sustainability, economic sustainability,human resource development sustainability and environ-mental sustainability. If you take any real estate project youstill can achieve these four pillars if the project is well definedor designed well.

The Musheireb project is a mixed-use development andone of very few developments in the region that focus onthis style. This mixed-use concept – whether you have res-idential, commercial buildings, retail, hotels, schools ormedical facilities – is all developed in the same area. Thisreduces the amount that people need to travel to a schoolor medical facility or maybe even go to work because allof these aspects have already been designed and cateredfor. So if you live in Musheireb, and you happen to haveyour business headquarters there, you have all the ameni-ties you need to live in a community. That by itself con-tributes to the concept of social sustainability. We want tobring life back to the heart of the city, which we believe wecan achieve through the master plan.


After Qatar discovered oil and gasback in the 1930s, its capital, Doha,morphed from a small fishingvillage into a sprawling city.Dohaland CEO Issa Al Mohannadi

believes, however, that now is thetime for the city to go back to itsarchitectural roots.


strength of the country and the position and image ofQatar. The regeneration of this city started with us eval-uating how we can improve the whole area, because someof the buildings are in really bad condition, not even suit-able for people to live in. We will regenerate this part ofthe city and bring it to life and if this trend continues thenthe whole downtown could be redeveloped, which wouldcontribute to transforming Doha into a modern capitalthat also embraces traditional architecture.


How will the development transform Qatar’s capitalcity?AM. If you look at the location of the project itself, thisMusheireb area is one of the oldest parts of the city.Unfortunately, during the last 10 to 15 years, this part hassuffered from different social issues. The buildings them-selves have lost their quality and have not been main-tained very well, so the whole area has come close tobecoming a rundown area. But this does not reflect the

13,700 Number of

underground car parkspaces beneath the

entire Musheirebproject


The first phase of the project is due for completion in 2012,while the entire development is slated for completion in2016. Are you confident that you will meet these targets?AM. It’s so far so good; Phase I for 2012 is still on target andthe whole completion of 2016 is still so far on target. Bear inmind that this regeneration project has a different nature toany green project. What I mean by a green project is thatwhen you build a project outside a city in a remote area youcan go there, start planning and start the construction.Musheireb is a place with people already living there, so wehave to go through the government process of land acquisi-tion and giving people the right notice period until they findanother place to relocate to. All of this, of course, takes time.However, so far we are confident that this target is achievable.

How will Musheireb help to expand the Qatari economyand build on the successes of its oil, hospitality andknowledge-based industries?AM. We had lost our identity when it comes to our architec-tural language and we became lazy as a society. From the1960s onwards, there were hardly any developments for thisarchitectural language. So the Musheireb project came witha number of missions, one of which is to bridge this gap anddevelop a new architectural language rooted in the past andembrace the traditions in our architectural language. We en-couraged the architects and everybody involved in the pro-ject to think outside the box and start to apply knowledge inhow we can come up with this architectural language. Wespent more than two years on research and innovation.

We also have the knowledge enrichment centre (KEC) lo-cated in the most dense area of Doha where we exchange ideasand thoughts with the public on concepts to do with Musheirebor any other project Dohaland is doing. By exchanging thisknowledge and these ideas we teach others how to do thingsdifferently. We encourage people to look at development of realestate not in the traditional way of how they look at it right now.We want people to realise that whatever is going to be built isgoing to communicate a certain language to the public and isgoing to have a reflected identity on the country itself.

We want to stop importing ready-made architectural so-lutions and we want to stop constructing ‘glassy’ buildings thatdo not fit in this kind of environment. In Qatar we may havemodern structures with good-looking facades but many ofthem are not designed for our environment and do not belongto our history or our architectural language. We want to stoppeople from being lazy and importing whatever is available forthe design of a building. We want them to think again and finda new theme for their development or a new architectural lan-guage and work with us in thinking along these lines. I’m notaware that or there are many real estate developers that thinkthis way. So we feel Dohaland is being unique in how we ap-proach the development of real estate. We don’t build thebuilding for the sake of just building a building. We want to

make sure that this building is built right, built for a purposeand reflects a good identity.

How does the design of the project incorporate tradi-tional Arabian heritage and how important was this con-sideration when designing the project from the start?AM. This was the key element. The reason why Dohaland wait-ed for two years to launch the company itself was because wewere searching, researching, learning and developing this ar-chitectural language that’s rooted in the tradition and the coun-try. We learned more about how our ancestors used to buildtheir buildings and how they used to make a master plan for acity without any software or architects. For example, an old partof Doha built 30 years ago is very close to being a green build-ing because it is made of natural and local material that isreusable. Every single stone used at that time was reused. Wehave to look at the concept of making sure the buildings are notfacing the sun and are opened up for the wind direction andthat we are creating courtyard spaces with the homes them-selves. These are all things that our ancestors applied too. So tra-dition is always the focus and a priority when we consideranything in the development.

What efforts are being made to ensure this project is en-vironmentally sustainable?AM. We are designing the buildings to reflect or to enrich theenvironmental sustainability for the country. Phase I of theproject has been developed to make sure we are following theguidelines and requirements of LEED (Leadership in Energyand Environmental Design) certification. All the buildingswe are designing are going to be green buildings for theMusheireb project. The master plan itself has been designedto cater for the environmental aspects related to this part ofthe world. So this by itself could contribute easily to the en-vironmental sustainability.

What achievements have particularly made you proudduring your tenure as Dohaland CEO?AM. I’m lucky and honoured to lead such a team and such acompany. We have come a long way from when the con-cept of the project was just an idea on paper. We recentlyawarded the Phase I construction contract, so this makesme proud because it wouldn’t have happened without agreat team here enabling an idea to move from the mind toreality. The greatest achievement will be when Musheirebis delivered to the people because we are building historythat will be part of the whole nation’s history. EveryDohaland employee will be proud to have contributed tothat. I believe this project will contribute to the whole worldon how real estate developers need to think and how peo-ple can learn from projects. I am pleased that the employ-ees of Dohaland are working as one team to achieve thisobjective. n


“We don’tbuild thebuilding forthe sake of justbuilding abuilding. Wejust want tomake surethat thisbuilding isbuilt right,built for apurpose andreflects a goodidentity”



Flyinghigh

AVIATION MID EAST ED P52-55.indd 52AVIATION MID EAST ED P52-55.indd 52 18/06/2010 16:2918/06/2010 16:29


Last year was one of the most diffi cult 12 months for the global airline industry with airlines collectively racking up losses in excess of US$11 billion. Passenger travel contracted by 3.5 percent while cargo move-ment fell sharply by 10.1 percent. But aft er the doom and gloom of 2009, the outlook is looking brighter in the aviation industry, especially in the Middle East where many of the carriers have been reporting double-

digit growth. Th e Gulf ’s favourable geographic position, combined with the strong regional economies and consumer purchasing power are key ingredients in the aviation sector’s positive forecasts for 2010 and beyond. “Despite a slump in sales across Europe and North America, the Middle East aviation sector seemed to perform better than other sectors worldwide,” says Nadejda Popova, a travel and tourism analyst at Euromonitor International. “Th e industry [in the Middle East] was faced with slowing growth rather than a widespread contraction. Competition between commercial carriers remained upbeat in the region mainly due to a strong overcapacity in the market.”

According to the International Air Transport Association (IATA), airlines in the region are predicted to post a profi t of US$100 million in 2010 – their fi rst since 2005. Th is positive forecast is a dramatic U-turn from the IATA’s earlier projected US$400 million loss for the year following the US$600 million losses in 2009. Th e association puts the reversal in fortunes down to GDP growth of 4.3 percent in the Gulf outstrip-ping global averages as well as the airlines grabbing market share through their hubs for Europe to Asia-Pacifi c.

Regional powerhousesTh e rapid ascent of government-backed heavyweights like Etihad Airways, Emirates

Airline and Qatar Airways has shaken up the global aviation scene in recent years. All three fl y to more than 240 destinations and have around 600 aircraft on order. New routes are being added to their expanding networks with all three launching new fl ights to regions with strong growth potential such Asia and South America. “Th ey are all entering new markets like China and we have seen Qatar Airways going into South America so they are taking advantage of their geography in order to do this,” explains John Strickland, Director of aviation consultancy JLC Consulting. “So provided they have the schedule, the price and the service quality, they can tap into these traffi c fl ows.”

Th e strong cash reserves of the major players in the Gulf have helped them to ride out the storm of the past two years – rocketing fuel prices closely followed by the credit crunch and subsequent nosedive in passenger numbers. “Th e recession has also caused a seismic shift in the airline industry with a loss of demand and revenues previously un-imaginable,” says Popova when assessing the eff ects globally. “Airlines have been forced to rethink policy and airline alliances have become increasingly important as a means of maintaining existing customers,” says Popova.

The world’s major economies may be being buffeted in these turbulent times but the Middle East’s aviation industry is one sector that appears to be soaring, along with its profi ts. However, is this growth sustainable or are the airlines veering towards a bumpy landing? Business Management investigates.



Emirates Airline is the Arab world’s largest airline and part of Th e Emirates Group, which includes air travel services supplier Dnata. Th e group recently posted a record annual profi t of US$1.1 billion – an increase of a staggering 248 percent. “Th is is a stunning rise,” remarks Strickland. “Th is massive increase in profi ts refl ects their growth strategy.” Emirates Airlines, which has an order book worth over US$48 billion, saw revenue rise by 17 percent in 2009 and maintained its share of premium traffi c – a stark contrast to the fact that 30 carriers across the world that went to the wall. Capitalising on its suc-cess, the Dubai-based carrier is also boosting its fl eet of Airbus 380 ‘super-jumbos’ by 32 (worth US$11.5 billion). Another 58 A380s are already on order. And a recruit-ment drive will see 700 pilots hired to cover the new routes, the company announced.

To cater for the enormous infl ux of tourists and busi-ness travellers to the region, multi-billion dollar airports are being built and existing ones upgraded. Th e UAE alone, which recorded 46 million passengers passing thought its six airports last year (a four percent rise), is set for further air travel expansion

Th e impressive Al Makhtoum International Air-port in Jebel Ali, Dubai, is due for completion in 2017. Th ese airports are forecast to handle 240 million pas-sengers a year. Likewise, Kuwait, Saudi Arabia, Oman, Qatar and Bahrain are expanding and renovating air-port facilities that will result in increasing arrivals by at least 300 percent.

Th e new Doha International Airport is set to open in 2012 and will have the capacity to accommodate 25 million passengers and there are also plans to build a metro system for Doha. “Th e MENA region has invested heavily, spending more than US$50 billion on infra-structure and US$178 billion on aircraft developments,” says Popova. Th e development of Abu Dhabi, Dubai and Doaha airports as major hubs for customers passing through on their way from Europe to Asia Pacifi c and vice versa is why the big three have so many planes on order. Th eir global reach brings travellers directly to the Middle East, which can benefi t local carriers’ business.

Popova, says regional travel has played its part in the boom in business. “In an eff ort to encourage growth of international tourist arrivals, many commercial airlines increased their eff orts to attract more regional travellers from countries such as Saudi Arabia and Kuwait, in ad-dition to lobbying with hotels and other travel accom-modation outlets to keep prices down and introduce attractive price off ers and discounts to dispel negative perceptions about the region’s elevated costs and prices.”

On a budget While the big three – Emirates, Etihad and Qatar Airways – have ruled the skies in

recent years, the emergence of budget carriers has shaken up the market. Th e likes of Air Arabia, Jazeera Airways and fl ydubai have been the rising stars as cost-conscious travel-lers look for no-thrills means of getting around the MENA region, particularly in these times of economic uncertainty. “Travellers are feeling the pinch and trading down so that’s why we have seen big traffi c developments in this area and profi tability from com-panies like Air Arabia and early growth from players like fl ydubai,” Strickland explains. “Th e big pool of ethnic workers from countries like India, Pakistan and the Philippines want to go home as oft en as they can and they can’t aff ord more than a low fare.”

On top of this, carriers like government-owned fl ydubai are entering riskier territo-ries in the hopes these markets are air travel’s sleeping giants, says Strickland. “fl ydubai that is taking opportunities that maybe others wouldn’t necessarily see, such as getting into Iraq or Afghanistan – countries that, hopefully, are going to see good stability for the future. By getting in at the bottom rung straightaway, they are taking advantage.” Air Arabia too has recently announced fl ights to Iraq’s city of Najaf, 100 miles south of the capital, Baghdad. But despite budget airlines fl ourishing in the Middle East, they still represent just fi ve percent of air traffi c, compared with 35 percent in Europe. It’s

New Doha International AirportEstimated value: US$11 billionSchedule: Due for completion in 2015

Al Maktoum International AirportEstimated value: US$8 billionSchedule: Phase one opens in June 2010

Abu Dhabi International AirportEstimated value: US$6.8 billionSchedule: Opening of the centrepiece Midfi eld Terminal is expected in 2015

King Abdulaziz International Airport – Phase 1Estimated value: US$1.5 billionSchedule: Completion is expected in 2012

Expansion of Muscat International AirportEstimated value: US$1.2 billionSchedule: Completion expected in 2012

Concourse 3 at Dubai International AirportEstimated value: US$1.17 billionSchedule: Completion expected in 2012

1

4

5

6

2

3

Emirates Airline’s bulging order book

90

A380s

70 A350s

18 Boeing

777-300s

7 air freighters

on order

Six of the biggest airport projects in the GCC.



And the not so good: state-owned Iraqi Airways dissolved amid row with Kuwait.

Like a phoenix rising from the ashes, Iraq’s national carrier, Iraqi Airways, was back in the skies over the Middle East and beyond after being grounded

following crippling sanctions and the US-led invasion of the Arab state. Flights between Baghdad and London had even been resumed after 20 years. However, the government has taken the unusual decision to declare the company bankrupt over war reparations with Kuwait stretching back to Saddam Hussein’s reign. Kuwait Airways claims Iraq’s national carrier owes about US$1.2 billion for 10 planes and millions of spare parts taken during Iraq’s invasion into its oil rich neighbour in 1990. Ali al-Mosawi, an Iraqi government spokesman, told The Times: “The decision was made by the council of ministers to dissolve Iraqi Airways because of debts the company cannot pay. They don’t have the money.” A Kuwaiti offi cial was quoted as saying his nation’s fl ag carrier won’t give up in its pursuit for compensation. Lawyers claim that the Iraqi government is now liable for the debts. When Iraqi Airways’ CEO Kafah Hussan arrived in London recently he had his passport seized and the plane he arrived on was impounded.

a segment of the market ripe for expansion. Th ere is an appetite for growth and demand there but the low-cost airlines need to ensure high standards of effi ciency. “fl ydubai is only a year old but it is growing – we’re not talking about it being profi table yet but it’s still following a key expansion plan,” suggests Strickland.

While the future for legacy and low-cost carriers across the Gulf is looking good for 2010 and beyond, there are challenges that need addressing. Th e major hubs like Dubai, Abu Dhabi and Doha may be creating 21st century transportation between cities and the airports but the infrastructure everywhere needs improvement. “Dubai’s had its problem with gridlocked roads. It’s now got the Metro system but we probably need to see more developments of that kind,” says Strickland. For the airlines themselves, trade sources highlight a shortage of commercial pilots in the region, which threatens any further expansion plans, Popova reveals.

“Th e number of pilots required in the UAE and other Middle East countries is expected to increase by 75 per-cent by 2020, which needs to be addressed by the local industry and governments.” She adds: “Also, quality and effi ciency levels must be improved in order for the region to compete on an international level. Deregulation poli-cies must be implemented, which can further boost route frequency and widening of destination off erings.” Th en there are the environmental issues and carbon off setting that needs to be addressed by the industry in the region, according to Popova.

Th e threat of rising fuel prices will have a profound eff ect on any airline’s bottom line. Th en, of course, comes the expected crises like the swine fl u (H1N1) outbreak restricting travel or the volcanic ash cloud paralysing air space and grounding pas-sengers for days, as over 100,000 fl ights were cancelled. Indeed, the ash cloud is one of the main reasons for the IATA forecasting the European airlines to lose US$2.8 billion this year. For the Middle East’s burgeoning aviation sector, though, things are really taking off .

“Despite a slump in sales across Europe and North America, the Middle East aviation sector seemed to perform better than other sectors worldwide”- Nadejda Popova



COVER STORY


Oman Air_PeterHill.indd 56 18/06/2010 15:46


Oman Air, which is 99 percent government-owned, is looking to reposition itself from a regional carrier to a truly international airline and established brand on the avia-

tion scene. Th ere was a 28 percent increase in capacity in 2009 with the addition of 10 aircraft , including six 737s, while more planes are on order, including six Boeing 787 Dreamliners. And in 2009, passenger numbers hit 2.4 million – a 19 percent jump over the previous year. As well as this, eight new destinations are earmarked for 2010, including Kuala Lumpur, Kathmandu, Lahore and Milan. Th e soft ly spoken and aff able Englishman Peter Hill has been at the controls of Oman Air since the summer of 2008, aft er being the head of Sri Lankan Air-lines. “We don’t have huge ambitions to be the biggest, but we do have an ambition to become recognised as a world-class business and economy class airline.”

But despite this seemingly rosy outlook, the com-pany posted a 2008 loss of US$109 million and this year is also expected to see signifi cant losses for the airline. Hill doesn’t forecast the business being in the black until 2014. “I’ve said that 2014 is the turnaround for Oman Air, with the next three to four years being decreasing losses rather than profi ts,” he concedes. “I would be the fi rst to jump up with glee if we could bring that profi tability forward, but it’s a tough old world out there as we try to cut costs, make sure the product is up there with the best and get closer to profi t.” Th e target now is turning a profi t and repaying government its funding. “It’s going to take us some time to recoup the amount of money we’ve put into the business so far, and this is certainly a year where we expect to make a considerable loss in our business. So whilst the government is keen on investing and develop-ing the airline, it wants to see that investment paid back and that’s our strategy.”

He acknowledges that 2010 and 2011 are going to be tough years for Oman Air, which fi rst took to the skies in 1993, as adverse economic conditions continue to linger. “In the next couple of years it’s going to be very diffi cult for us to make money because last winter we started fi ve new long haul destinations. We’re bringing two or three more on during the course of this year and they’ll take a little while to mature.” Th e business won’t be over-stretching itself, either. “Yes, in the last 12 months we’ve taken on a lot of aircraft – we took on 10 last year but this year it’s only two, next year it’ll be a couple more, so we’re not expanding beyond our capabilities. So you won’t see huge numbers of aircraft joining the fl eet and we hope this will mean a gradual and profi table expansion of the network.” To fuel this controlled growth, the carrier has also raised its capital by 67 percent to from US$779.2 mil-lion to US$1.3 billion.

Oman Air, the Sultanate’s fl agship national carrier, has its sights fi rmly set on new routes and fl eet expansion as it aims to muscle in on rival Gulf airlines’ share of the skies. But the top priority right now, stresses CEO Peter Hill, is to clear the airline’s debts and turn a profi t.

Oman Air_PeterHill.indd 57Oman Air_PeterHill.indd 57 18/06/2010 14:5718/06/2010 14:57


Bumpy rideWith the global economy in a tailspin, the competition among the airlines is fi ercer

than ever. Up until the end of 2008, Oman Air, which took over the coveted national carrier status from Gulf Air, grew by 30 percent year on year. And although Oman itself has been fairly insulated from the fi nancial maelstrom, this airline has been quick to adopt fl exible pricing and creative promotions in order to fi ll seats, because once the cabin doors close the empty seats have cost you money, Hill explains.

Th e fl ipside to the downturn is that Oman Air is able to negotiate favourable contracts with suppliers, caterers and baggage handlers. “We’ve been able to leverage a lot of benefi ts from this current situation,” says Hill. “Once the economic recovery materialises – and I am one of those people who believes it will – we are set pretty fair with deals we have locked in for the next three to fi ve years with suppliers.” Despite the turbulent period, Oman Air is predicting a 30 percent rise in passenger numbers this year over 2009. “It’s ambitious for us but I believe we’ll do it.” Its cargo side of the business is another growth area. Today it represents four percent of the airline’s earnings but Hill forecasts it rising to 10 to 12 percent in the next fi ve years, especially with the wide-body fl eet coming into service. “Until we started taking delivery of the A330s we were predominantly a narrow-bodied operator with 737s; great workhorses but when you fi ll them up with 150 passengers they don’t carry too much cargo. So with the expansion of our wide-body fl eet, we were able to start really carrying cargo.”

As well as off ering passengers video on demand and six channels of live television, Oman Air recently became the fi rst airline in the world to off er the ability to make mobile

phone calls mid-fl ight, as well as Wi-Fi connectivity and broadband internet. Th is has been a staggered roll, out but by August the whole A330 fl eet will be kitted out with this connectivity. Th ese services are only func-tional above 10,000 feet, due to the fact that electronic devices need to be switched off during takeoff and land-ing. Th is groundbreaking move will be music to the ears of those needing to fi re off an email or make an impor-tant call, but the salient issue of fellow passengers being disturbed by loud phone calls will concern some cus-tomers. “When you’re travelling on an overnight fl ight you don’t want to be bothered by somebody having a rather robust conversation at three in the morning,” Hill explains. “We’ll speak to people who are making a nuisance and, if necessary, even cut it out, because we can do that.” He says it comes down to education. “We believe that we can educate our customers progressively to use the mobile phone in a responsible way. We’re going to encourage people to use the silent or the vibrat-ing mode rather than the bells and whistles when a call or message comes in.”

Despite these concerns, the initial feedback from customers has been more than positive. “Time will tell, but so far the reaction has been amazing. Everybody wanted to know how we could do it but it’s all about investment and timing.” He adds: “It’s now very diffi cult to resist the urge to use your mobile phone up there. It’s the novelty factor initially, but it will also be pretty af-fordable when you’re sending messages and things like that to stay in touch.” Oman Air’s chiefs see these de-velopments as a competitive advantage in the battle for business. “My board and the management team believe that the more things you can make available that you would normally expect in everyday life up in the air, the

“It’s going to take us some time to recoup the amount of money we’ve put into the business so far.”

Peter Hill



more competitive your product is going to be. I’ve spent quite a number of years in this area, and we’ve gone from nothing to fantastic in-fl ight entertainment. More and more connectivity is the way to go.” Th e airline says it wants to be at the forefront of technology and comfort but without forgetting the traditional values. Th is is echoed by Hill: “We are investing in the product in a big way because we want to make sure that our cus-tomers not only have probably one of the most comfortable rides in the sky, but are also very well entertained.”

Desert delightsOman as a nation is weening

itself off its dependency on oil revenues and turning its attention to the burgeoning tourism sector, marketing the Sultanate as an upmar-ket travel hotspot. Entitled the Economic Vision 2030, the country has a roadmap to diversify the economy over the next 20 years. As part of this investment and tourism drive, Oman Air will be instrumental in at-tracting increasing numbers of tourists and corporate visitors on direct fl ights in and out of Muscat. Oman is a

country that boasts a stunning coastline, desert landscapes and the highest mountain range in the Arabian peninsula. “For seven or eight months of the year, the tempera-ture is perfect, with clear blue skies and tremendous scenery,” says Hill. “Increasingly, more and more people are going away to get away from city life and when you come

to Oman you can experience all of that, as well as top rate hotels being developed. Th ey won’t be inexpensive but you’re going to pay for the

uniqueness of Oman.”Oman isn’t looking to fl ood the country with tourists though,

warns Hill. “Th e country doesn’t want to attract millions and millions of visitors every year because that would spoil the ecology and the ecosystem in the country. So the government is clever in that they’re developing areas that are designed to bring all the infrastructure together – the roads, the power, the

water – and blend that into regions of the country that will not spoil the natural habitats. We’re creating new tourist sites that

are going to be developed into resorts, golf courses and marinas all over the country. And this is not for the next couple of years –

this is for fi ve, 20, 30 years down the line.” Muscat International Airport is also undergoing a US$1.2 billion expansion plan that will eventually boost

the airport’s capacity from four million to 12 million passengers a year. “For Oman Air, a steady expansion of the network and a consistent improvement of the product will get us up in the minds of people who will see Oman as an exciting but very interesting and rather exclusive destination. I would like to see Oman Air as the airline that brings them into and out of the country, and their fi rst experience of Oman should be on Oman Air as the brand ambassador of the country. Oman Air’s goal is to act as a catalyst for development in Oman,” Hill reveals.


Any frequent traveller knows that alltoo well, you don’t get anywherenear what you pay for with air trav-el. The popularity of low-cost carri-ers like easyJet and Ryanair inEurope and JetBlue in the UnitedStates is therefore easy to under-

stand – many consumers will happily trade already-de-creasing amenities and services for lower ticket prices onshort, simple flights.

So it was to great fanfare that flydubai – a low-cost air-line designed to cater to a region brimming with expats –was founded in March 2008. Begun at a cost of Dh250 mil-lion, it is completely owned by the government of Dubaiand operates out of Dubai International Airport betweenvarious cities in the Middle East and Africa. Though notpart of the Emirates Group, flydubai was founded byEmirates Chairman Ahmed bin Saeed Al Maktoum, and isled by Ghaith Al Ghaith, a former Emirates executive.

According to him, it had long been the vision of SheikhMohammed bin Rashid Al Maktoum, the ruler of Dubai, tohave a low-cost carrier headquartered in Dubai. He recog-

nised the need for Dubai to have its own low-cost airline toserve the largely expat population in the region and to en-sure more people would be able to travel to more destina-tions more often. The capacity constraints at DubaiInternational Airport made the establishment of anotherairline in Dubai impossible before now. However, with therecent opening of Terminal 3 and the expansion ofTerminal 2, these constraints were no longer a barrier toDubai having its own low-cost airline and flydubai tookflight in spring 2008.

Two years into the running of the fledgling company,and Al Ghaith is pleased with the success of the airline thusfar. “We only started commercial operations with flights toBeirut on June 1 last year,” he explains. “Since then we havebegun flights to a further 20 locations, bringing our totalnow to 16 operational destinations. We recently announcedColombo in Sri Lanka and Lucknow in India as our nextroutes with flights starting in June.”

To help meet rising demand for services, the airline re-cently took delivery of seven 737-800NG aircraft on sched-ule from Boeing, including the first BoeingNext-Generation 737 aircraft equipped with Goodrich


CheapThrillsThe rise and rise of low-cost flying, according to flydubai CEO Ghaith Al Ghaith.

COVER STORY

Dh250 millionCost to get the

flydubai businessairborne

FLY DUBAI_june10 18/06/2010 15:44 Page 60


Corporation Duracarb carbon brakes. In July andNovember last year, it signed aircraft financing, mainte-nance and logistics deals worth around US$520 million.And it also moved into a new headquarters building on theNorth side of Dubai International Airport, near toTerminal 2.

“We are more than pleased with the success of flydubaito date,” says Al Ghaith. “Flydubai brings a fresh approachto travel and has its own unique business model. It was notmodelled on any other airline, although we have tried totake the best of other airlines from around the world andadapt them to the market in this region. The flydubai modelaims to make travel a little less complex, a little less stress-ful and a little less expensive for travellers. We’ve kept thesebasic principles in mind when conceptualising our businessmodel. And, going by the enormous number of passengersthat continue to travel with flydubai, I think we’ve success-fully achieved what we set out to do.”

The original order for 50 Boeing 737s at theFarnborough airshow was valued at approximately US$4billion and marks the biggest single order by a Gulf-basedlow-cost carrier for the aircraft. The reason for making sucha large order at once was twofold: “First, to assure the bestprice possible for the fleet and second, because only once

THE DESTINATIONS OF FLYDUBAI

Aleppo AlexandriaAmmanAssiut

BahrainBaku

BeirutDamascus

DjiboutiDoha

Kabul Kathmandu

Khartoum KuwaitLucknow Luxor Muscat

Flights planned: Colombo, Karachi, Latakia, Istanbul


we have our fleet in place can we move forward and makedecisions on the route network, staff appointments, and soon.” says Al Ghaith.

He explains that the Boeing 737-800 Next Generationaircraft was chosen above any other model because they areacknowledged as being the safest, most reliable and mostfuel-efficient aircraft flying today. “The aircraft has theequivalent of more than 30,000 years in the air and has car-ried 12 billion passengers across 75 billion miles. Those arefantastic credentials by any standards. Its reliability, safetyand fuel efficiency make the aircraft ideal for flydubai,which can pass on the savings to its customers,” says AlGhaith remarking that the five safest aircraft models cur-rently under production – with more than 10 million flightsa year – are all Boeing, with the 737 having one of the bestrecords and the most flights.

“One of the most striking features of our aircraft is thewinglets, in which we invested US$50 million,” continuesAl Ghaith. “These winglets add an extra 1.4 metres to thewingspan, and are aerodynamically designed to save up tofour percent of the total fuel burn. A winglet-equipped air-craft can typically use three percent less climb thrust ontake off, and cruising fuel flow is six percent less. This willsave flydubai between 75,000 and 125,000 gallons per air-craft per year, which not only saves on energy expense andextends engine life, but also ensures lower fuel consump-tion,” he says.

“This reduction in fuel has a positive impact on the en-vironment as it ensures nitrogen oxide emissions are re-duced by as much as five percent and carbon dioxideemissions by around four percent. Another great benefit ofthe winglets is the reduction in noise from the aircraft.Because les thrust is needed on take off, there is an average6.5 percent drop in decibels, making it a much more flightpath-friendly option for local residents.”

These considerations are of course gaining in impor-tance, not only as environmental concerns work their wayup the international agenda, but also as flydubai expands itsroute network. The low-cost carrier currently serves andwill continue to launch a mix of destinations that are com-mercially popular as well as those that are currently under-served by direct flights from Dubai. “Our aim is to expandthe region’s low-cost air travel sector by making travel moreaffordable and accessible for everyone,” explains Al Ghaith.“I think all the destinations we currently fly to and will flyto in the future have great potential, especially since Dubaiis a country dominated by a strong expatriate population.With flydubai, travellers now have the option to travel moreoften – be it for business, leisure or to visit friends and fam-ily back home.”

In terms of geographical reach, flydubai will servethose countries that are within a five-hour flight radius ofDubai. This takes in a population of 2.5 billion people and


Other low-cost airlines

easyJet, UK

Air Asia, Malaysia

Air Arabia, UAE

Ryanair, Ireland

Jazeera Airways, Kuwait


NVS AD.indd 1 15/6/10 14:45:16

gives flydubai access to one third of the world’s population.“It is important to us to expand our network quickly to giveour passengers the widest possible range of destinations tofly to. But some of our routes are proving to be so popularthat we need to add extra capacity to existing routes to keepup with the demand.”

And even though it has only been 12 months since theairline started commercial operations, it is expanding rapid-ly. “We are proud of our achievements and have been ontrack with our plans; to be honest, I am overwhelmed by thegreat response we have received,” says Al Ghaith. “Like anybusiness, our rapid expansion has meant we’ve had a verysteep learning curve. However, we’ve met these challengeswell and are in a strong position this year. Also, as flydubaicontinues to expand, another one of our challenges will be tocontinue to attract and recruit the right number and calibreof staff to ensure we can continue to offer our customers theexcellent levels of service that we have started with.”

Providing a good customer experience is one of the mainpriorities for flydubai and it’s what sets it apart from its com-petitors. “At flydubai, we like to keep things simple to keepcosts low and that’s how we keep fares low,” says Al Ghaith.“We’re constantly looking at ways to make things easier andto save costs. We want to be clear about the way we operate sothere is never any doubt about the cost of a fare. Our fares arefair, as they include all taxes and charges and a generous handbaggage allowance of 10kgs. On flydubai you only pay for theservices you want and we believe you should only pay for thebaggage you have. If you require checked-in luggage, you canhave it, but you pay for it separately.”

Al Ghaith is also quick to stress that low-cost does notequate to low quality. “We are also committed to ensuring agood on-time performance and a high quality on-board ser-vice. flydubai may be low cost but that doesn’t mean we willcut corners in terms of our on board experience. Our cabincrew is trained to provide the best customer service possibleand they are of a variety of nationalities to ensure a wide rangeof spoken languages and cultural diversity,” he explains.

There is plenty to look forward to in the future, too. “Wehave only just completed a year of operations and have al-ready achieved more than we set out to do. I am excitedabout everything we do. I’m looking forward to flydubaievolving as a company and helping to expand the region’slow-cost travel sector even further.” n


flydubai in numbers

“We’re constantly looking atways to make things easierand to save costs”

flydubai was established by the governmentof Dubai in

It was Dubai’s 1st low-cost airline

In the coming months the company expects toreceive a further 5 aircraft and will fly to over

The first commercial flight tookplace on

flydubai has a network of 21 destinations,17 of which are currently operational

The company operates

In the first 12 months of operations, the airline notched up

flydubai employs more than

March 2008

June 01, 2009 to Beirut

8 Boeing 737-800Next Generation aircrafts

1 millionpassenger bookings and 750,000 passengers

500 stafffrom almost 70 countries, including more than 100pilots and more than 200 cabin crew

25 destinationsby the end of the year


Draka1 Ad 1.indd 1 15/6/10 14:43:00

Cloud computing is the hottest buzzword in ITright now. But is this the fabled magic bullet thatpromises to solve CIO headaches once and forall, or merely the latest in a long line of over-

hyped, marketing-driven technologies? As we know, cloudcomputing essentially describes an approach whereby IT re-sources are provided as a service via the internet. Instead ofpurchasing physical servers, databases, middleware and ap-plications separately, as was traditionally the case, organisa-tions will simply be able to order these services over theinternet in ‘virtual’ form, as demand requires. In theory,cloud computing will deliver all the technical benefits butnone of the financial costs and technical headaches associat-ed with wholly-owned IT assets. Consumption of comput-ing power will be billed using a simple ‘utility’ model – aper-unit approach similar to that used by power companies.

Whatever the wider economic environment, the recentstampede toward cloud computing has been startling. As bigplayers like Google, Microsoft and Sun jostle to positionthemselves as Cloud Service Providers (CSPs), so relative ar-rivistes like Amazon.com are also being increasingly seen astechnology providers rather than mere retailers. In this bravenew world, the rationale goes, why shouldn’t buying com-puting power online be as straightforward as purchasingbooks or DVDs with a click of one’s mouse?

Marc Benioff of Salesforce.com, an early pioneer of theSoftware as a Service (SaaS) mentality, would certainly agree.Speaking at his company’s London ‘Cloudforce’ conferencein April 2009 – even the show’s name reflects this newmantra – Benioff argued that: “The old model of enterprisesoftware is not working; paying 22.5 percent for maintenanceevery year does not work. Enterprise software can run in thecloud, which makes it much lower cost for everyone.” Withsuch noise around this technology right now, it would appearthat the future for cloud computing is assured. Indeed, IDCpredicts that the market for cloud computing will reachUS$42 billion by 2012. Before we all get carried away withsuch astronomic forecasts, however, it’s worth consideringsome potential pitfalls.

Foremost amongst these is the question of cost – or, toput it more accurately, value. Cloud computing certainlypromises the potential for some significant efficiencies, but,when many organisations don’t even have an accurate pic-

ture of their IT costs today, how will companies knowwhether the cloud can save them money? IT companies needto invest far more effort in helping customers understandtheir existing technology spend before they even start think-ing about moving them into the cloud. Indeed, in the currenteconomic climate, companies should be subjecting their ITbudgets to more forensic examination, whether they are con-sidering a cloud strategy or not. With so much media hypearound cloud computing, there is a danger that CIOs will beunder pressure to reshape their IT strategy around a tech-nology that may not be the most cost-effective option fortheir particular organisation.

Allied to these cost concerns are ongoing questions abouttechnical robustness. Microsoft attracted criticism recently foran outage of its fledgling Azure cloud platform. As I bloggedat the time, though, I think that much of this flak was unwar-ranted. Azure is only at the ‘pre-beta’ stage and this sector ofthe market is equally new. Indeed, I would argue that thesekinds of glitches are positively healthy, as they highlight theneed for greater industry collaboration and more cohesivestandards within the cloud environment. It is difficult to envi-sion cloud computing losing its current momentum, but thenagain it wouldn’t be the first time that the technology indus-try’s next great white hope turned out to be only so much mar-keting rhetoric. To avoid a repeat scenario, the IT industrymust work together to address nascent issues like cost and se-curity, ensuring that this cloud at least has a silver lining. n

Predicting the future of enterprise IT


Joe Baguley forecasts some key considerations that will need to be addressed if cloudcomputing is to deliver on the hype.

INDUSTRYINSIGHT

Joe Baguley is the EuropeanChief Technology Officer forQuest Software. With morethan 16 years of experience inIT, Baguley has extensive fieldexperience deploying andmanaging large-scaleinfrastructures. He regularlywrites and presents on the keychallenges facing companiesglobally in an increasinglycomplex and integrated world.

QUEST_june10 18/06/2010 15:39 Page 66

QUEST AD.indd 1 15/6/10 14:45:30

perspectivesThe results of the Annual Global CEO Survey 2010 shows that businessleaders in the Middle East are emerging from the economic crisis withoptimism.


CEOSURVEY

Published annually, PricewaterhouseCoopers’ Global CEO survey isan extensive report that provides an important benchmark on theeconomic climate, both globally and regionally. This year’s survey –PricewaterhouseCoopers, 13th – interrogated 1198 global CEOsfrom 52 countries on their views of the factors that are impactingbusiness in the post-recession environment. Issues explored include:how business leaders have responded to the challenges brought about

by the recession, the concerns they are facing today and, reflecting on often difficultlessons learned, their strategies for positioning their companies for the long term.

This year, for the first time, PwCs survey included 68 business leaders from theMiddle East and Africa. The Middle East Summary highlights the views of CEOs basedin the region and compares them to those of their counterparts in other parts of the world.

Here, Business Management provides a brief overview of the survey results.

PwC_CEO Survey Ed_june10 18/06/2010 15:36 Page 68

“

Maldives

Qatar

Hong Kong

UAE

Singapore

Ireland

Saudi Arabia

Oman

New Zealand

Kiribati

Kuwait

Mauritius

Bahrain

Denmark

Luxembourg

EASE OF PAYING TAXES

Cautious optimismCEOs across the globe are still addressing cost-cutting whilethey prepare for the recovery and many had to make deepercuts than they had expected with 88 percent admitting thatthey had initiated cost reductions. CEOs in the Middle East,however, appear to be emerging from the crisis with optimismand are more likely to state that they will increase headcountby five to eight percent in the next 12 months.

Middle East-based CEOs are also less anxious about threatsto business growth prospects such as over-regulation, low-costcompetition, currency volatility and energy costs. What doesconcern them, however, are business threats such as inflation,lack of available key skills in their market and terrorism.

”Whilst the timing of the recovery will vary

by geography and industry, it is encouraging tosee that CEOs in the Middle East have been

quick to adapt to many of the challenges they have faced and are now in a strong position

to take advantage of a global upturn

FIGURE 1 Middle East CEOs were the least critical ofgovernment ability to provide skilled workforces

North America 10%Western Europe 21%

Asia Pacific 29%Latin America 8%

CEE 11%Middle East 39%

Africa 23%

CEOs in the Middle East are more likelyto say that their governments havebeen effective in helping create a skilledworkforce. However, the discrepancybetween supply and demand – in termsof quality and quantity of labouravailable – is amongst the mostpressing challenges to Arab business.

Of those surveyed, 71 percent ofMiddle East CEOs intend to increase theirfocus and investment on how theymanage people through change. They arealso more likely to say that they willchange their strategies for managingtalent in the wake of the economic crisis.

Human capital challenge

0 10 20 30 40 50 60

123456789101112131415

Fouad Alaeddin, PricewaterhouseCoopers Middle East Managing Partner, Markets


“

Over-regulation tends to be less of aconcern for Middle East CEOs whosee government intervention in amore positive light than theircounterparts elsewhere. They are

also more likely to agree that their governmentsare taking adequate steps to improve theircountry’s infrastructure and to increase access tolower-cost healthcare. Confidence in theirgovernment’s ability to secure access to naturalresources such as raw materials, water and energyis also higher amongst Middle East-based CEOs.

They are also more likely to favour regulationfor stability in the financial sector and for socialsustainability and believe that enhancedenforcement would be more beneficial thansystemic change. However, if there is a chance thatregulation could harm job creation, businessleaders in the Middle East are less likely to be infavour of it. They are also clearly opposed to newregulations in innovation, foreign investment andaccess to capital.

More regulation is sought by 39 percent ofMiddle East CEOs in order to protect theinterests of consumers and the public. Manybelieve that consumers are becoming moresophisticated when it comes to brandawareness, product origin and environmentaland corporate responsibility footprints and thatmore consumers want to play an active role inproduct and service development.

70 www.busmanagementme.com ”Dennis M. Nally, Chairman

PricewaterhouseCoopers International Limited

The effects of the downturn were far-reaching. Many business leaders contend they shouldhave anticipated the impact and prepared sooner – allowing them more time to consider

various strategic options. As we see in the survey, CEOs continue to work to strengthen theirorganisations while seeking opportunities emerging from structural shifts in their

industries, economies and regulatory environments. They recognise that the decisions theymake today, dealing with issues like cash management and cost pressures, will have a

lasting impact on their companies’ competitive position. The ability to understand andrespond to the structural shifts underway, and to improve risk management capabilities,

will be fundamental considerations as CEOs plan their course for growth

Figure 2 Middle East CEOs are more likely to view governmentintervention as positive

The government is taking adequate steps to improve the country’sinfrastructure




Africa 43%0 10 20 30 40 50 60 70 80 90 100

The government is working to improve healthcare access at lower cost

0 10 20 30 40 50 60 70 80 90 100




Africa 35%

The government helps companies secure access to natural resources

0 10 20 30 40 50 60 70 80 90 100




Africa 28%

0 10 20 30 40 50 60 70 80 90 100




Africa 18%

The government has reduced the regulatory burden on corporations

Regulation


Confidence in recoveryThe survey revealed that for the most part,Middle East CEOs are relatively optimisticregarding the future. However, thenegative impact of the economicdownturn has forced businesses across theregion to refocus their strategy and place agreater emphasis on regulatory issues,understanding market risks andimplementing long-term investmentstrategies.

In general, most believe that theregion is well positioned to emergewith a stronger, more transparent,better-regulated and more sustainablebusiness environment.


Organic growthMost CEOs surveyed, including thosefrom the Middle East, see the biggestopportunity for growth over the next 12months in existing markets.Unsurprisingly, markets in the Middle Eastare growing more quickly and many wereable to avoid the full impact of theeconomic downturn.

In comparison with the globalaverage (15 percent), Middle East-basedCEOs are more likely to fund this growththrough private equity or venture capital(29 percent). Likewise, whilst 83 percent ofCEOs globally plan to fund growththrough internally generated cash flow,only 64 percent of Middle East CEOs planto do the same.

TaxThe Middle East benefitsfrom competitive taxationsystems that promoteinvestment, business activityand economic growth. TheGCC countries are doingparticularly well and in arecent PwC report entitledPaying Taxes 2010, whichmeasures the comparativeease of paying taxes in 183countries, the GCC rankedparticularly highly.

“”

It s clear that the fears of a global economic meltdown have started torecede and CEOs in the Middle East are more upbeat about the future.

The region’s economies are recovering at a faster pace than in other parts of the world and companies with the best prospects

are those who managed through the recession while keeping an eye on the recovery ahead

Warwick Hunt, PricewaterhouseCoopers Middle East Managing Partner

Climate change

Of all those surveyed, Middle East CEOs were leastlikely to have a climate change strategy in place ayear ago, although this is no surprise given the factthat the region boasts 60 percent of the world’s oilreserves and Qatar alone has over 14 percent of theworld’s gas supplies. The survey also revealed thatMiddle East CEOs are least likely to be working on aclimate change strategy in the coming 12 months.Despite this, they recognise the advantage thatclimate change initiatives can offer – in particular fortheir reputation – and consequently they are thelargest group (75 percent) of CEOs surveyed to agreeor strongly agree that regulatory cooperation willhelp successfully mitigate systemic risks such asclimate change and they are looking to thegovernment to take the lead.

Figure 3 Middle East CEOs view regulatory cooperation as positive

0 10 20 30 40 50 60 70 80 90 100

%

North America

Western Europe

Asia Pacific

Latin America

CEE

Middle East

Africa

56

63

72

63

59

75

63


AGR AD.indd 2AGR AD.indd 2 15/6/10 15:55:4115/6/10 15:55:41

AGR AD.indd 3AGR AD.indd 3 15/6/10 15:55:4315/6/10 15:55:43

Next generation internet is now intertwined withour quality of life. Economic stability, criticalbusiness information, super definition HD and3D multimedia and an ingrained social media

culture are all part of our advanced societies. As the pressure ontelecoms infrastructure increases, a quest for perfection is coun-terbalanced with a growing emphasis on reducing costs. Are thetwo compatible? Experience shows that innovative infrastruc-ture solutions combined with turnkey approaches that reducetotal cost of ownership doesn’t mean compromise for passivenetwork structures.

Pyramid effect Draka builds passive networks using advanced fibre optics.

The business is illustrated as a pyramid-type layer model, onethat applies to any telecom service. The passive network is thebase of the pyramid, a critical part of the FTTH ecosystem. This‘three-layer model’ separates fibre cables from the services thatwill pass through them. At the peak, the upper service layer in-cludes services offered by content and market providers – radio,television, internet, mobile and fixed telephone. The middle ‘ac-tive layer’ has active equipment with small latency (time delay)and large bandwidth capability. It includes high-tech equipmentplaced in the district exchange, sophisticated decoding boxeswith the end user, as well as active management electronics.

The foundation of this pyramid, the bottom, passive layer,is our business. With over 20 years’ expertise in cable and net-work building projects, we have a proven methodology com-prising fiber optic cables with network project design, planning,implementation and maintenance. This strategy aligns with the

current concerns of network operators. The successful runningof a market-driven telecom network with a positive businesscase relies on the intelligent deployment and operation of a net-work. That’s why a systematic attitude to TCO is a requisite atthe passive network layer level. As passive layer infrastructureexpands to meet super broadband expansion, success means aconstant focus on cost reduction and performance improve-ment. By managing Capex and Opex, we reduce the total costof operations through the passive value chain.

Green field Energy City QatarThe same engineering principles apply to a small 6000 net-

work in the suburb of Rotterdam in the Netherlands as for alarge-scale green field project such as the Energy City Qatar(ECQ) in the Middle East. A US$2.6 billion project, Draka is de-signing, engineering and implementing this advanced fibreoptic network. ECQ is being built from the ground up, with fullyintegrated communications. Three separate networks supportthe energy hub in Qatar; IT and datacoms, a security CCTV net-work for external and internal building protection and an addi-tional CCTV network for security and street surveillance.

Here, a TCO approach runs throughout, down to the basicrudiments of running fibre cables through ducts. Draka’sJetNetXS blows cables through micro-ducts with jets of air froma central point up to a kilometre away. It means 90 percent fewermanholes as well as fewer ducts. A team of three people can de-ploy cables up to eight kilometres a day, compared with tradi-tional cable laying techniques that take twice the manpower fora quarter of the distance. At another level of value chain detail inQatar, Draka’s in-house manufactured bend-insensitive fibre,BendBrightXS, contributes to optical network rollout, reducingenergy consumption, material use and civil works.

At the end of the 1960s, the planners of the internet had thevision of designing a communications network that wouldnever fail, even in the event of a major catastrophe. Fast forwardsome 40 years to our three-layer pyramid and we see that nextgeneration networks are interdependent throughout each of thelayers, but depend upon a long-term reliance over the lifecycleof the passive network. Our approach is proving that by con-centrating on innovative techniques that reduce TCO, a zerotolerance engineering attitude to passive network quality be-comes a part of a construction culture. In Draka we call this‘Value Innovation’. n


INDUSTRYINSIGHT

Peter Ludin, Vice PresidentSales EMEA for Draka TelecomSolutions, is an experiencedexecutive in the European ITand telecoms industry. A SwissNational, he has a successfultrack record working withsenior management in thetelecommunications industryacross Europe and the MiddleEast in a career which hasspanned over 25 years.

“Innovativeinfrastructuresolutionscombined withturnkeyapproaches forreducing totalcost ofownership aregoing hand inhand to exceedexpectationsfor passivenetworkstructures”

Zero tolerance and passive network infrastructuresDraka’s Peter Ludin explains why failure is not an option for upcoming generations ofhigh-speed broadband networks.

Energy City Qatar

DRAKA ed_june10 18/06/2010 15:31 Page 74

Draka2 Ad 2.indd 1 15/6/10 14:43:12

In the past, a business continuity infrastructure hasbeen looked at as an insurance policy that should bethere in case of a disaster. Nowadays, more and morecompanies are trying to make business continuity in-

frastructure dynamic – using it everyday of the week to moveinformation technology systems anytime, anywhere and forwhatever purpose.

Organisations in Middle East find data volumes contin-uing to grow, service level and compliance requirements in-creasing and costs rising. Awareness is rising as DisasterRecovery and Business Continuity solutions can dramatical-ly improve operations, making data easier to share and man-age with less disruption.

Over the last several years, organisations have learnedthat this comprehensive solution not only simplifies complexenvironments, but also improves utilisation and boosts pro-ductivity – all resulting in lower total cost of ownership.

Companies in the Middle East are now mature enoughto understand that users require solutions that are easy to useand feature advanced capabilities that enable them to remaincompetitive in the marketplace while meeting IT infrastruc-ture demands, reliability and performance.

As always, system reliability is critical for any organi-sation and the importance of continuous information ac-cess has never been greater. IT architectures that fail todeliver high availability will impede business operations.Disaster recovery and business continuity solution capabil-ities make it easier to meet required service levels while im-proving efficiency and it provides the ability to placeinformation in storage tiers that can significantly reducecosts.

Easy-to-use tools that work across the information in-frastructure help to utilise best practices for backup and re-covery management and operations. Also another key inmeeting service levels is intelligence in the environment, in-cluding the ability to prioritise workloads at different timesduring the day to meet application requirements.

In a long-term vision, organisations should have theability to move data among various drive types and RAIDlevels, streamlining their environment whilst improve effi-

ciency and flexibility. Disasters can be costly in terms ofdowntime and manpower, so if a company has business con-tinuity solutions that can alleviate the unexpected costs thenthe investment would pay for itself.

There has never been a good time to put off implement-ing a business continuity or disaster recovery plan. However,in these difficult times it could be even more important toimplement a solution and ensure that your business can con-tinue in the face of a disaster. Dynamic infrastructure ties inall of the benefits of business continuity, without restorationtimes, without downtime and companies should protectthemselves in the event of the following:

• Exponential data growth, compliance requirements andservice level agreements

• System or power outages, natural disaster, internal sabo-tage, government conflict or cyber attack

The following aspects should be addressed before theevaluation of disaster recovery or business continuity solu-tions:

• Business agility, superior application uptime, simplicity ofmanagement, and breakthrough value for your enterprise

• Achieving performance objectives for all application tiersat the lowest TCO

• Providing the highest levels of system availability and dataprotection

• Enhancing backup and recovery processes while reducingassociated costs

• Proactive service and support to quickly resolve potentialissues, minimise both planned and unplanned outages

• Avoid penalties due to loss of information• Advanced business continuity via array-based replication

technologies to protect and move critical information

The overall goal should be to minimise business dis-ruptions and maintain a high level of confidence in theability of your company to resume working in a timelymanner. n

Securing live business information


Like other businesses in the world today, Middle East companies need tomanage exploding information growth while keeping costs down and meetingstringent service levels, says Abdulaziz Al-Salloum.

ASK THEEXPERT

Abdulaziz Al-Salloum owns andoversees Duroob Technology'sbusiness units and has 20 yearsof experience facilitatinginternational business anddeveloping strategies topromote new technology andsolutions in Middle Eastmarkets. Prior to establishingDuroob Technology, he was theManaging Director of, and ledthe entire operations of, CAMiddle East, headquartered inSaudi Arabia and with officesthroughout the Gulf region.

DUROOB ATE_june10 18/06/2010 15:32 Page 76

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FINANCIALIT

Beyond keeping the lights onWithout back-office and customer-facing technologies the banking sector

would grind to a sudden halt. To discover why technology is the “main fabric” ofAbu Dhabi Commercial Bank (ADCB) and the key role of innovation, we speak to

Head of IT Operations, Steve Dulvin.

novation and keeping the lights on go hand in hand. Although our mainfocus would be on running the bank, innovation still plays a very importantrole in our day-to-day operations. The only difference is that today it’s notabout it being nice to have but about improving our services with self-fund-ed IT projects. Believe me, the opportunities are plenty but a few years agoIT professionals did not have to think from that perspective, which meanstoday it has opened our minds to a new dimension. Innovation is not justsomething that should be seen from a senior management perspective – it’sa mindset that we need to spread across the organisation. Everybody in an

organisation can contribute to innovation. It means the IT departmentneeds to think bigger and better than they think they can, it’s about break-ing barriers to our vision and it’s about doing things we thought were neverpossible. A recent study from Gartner shows that IT time allocation can bedivided with 62 percent on running the business or ‘keeping the lights on’,21 percent for growing the business and 17 percent on transformational ini-tiatives (see graphic).

Many CIOs have been forced to do more with less because of the glob-al economic downturn. Being 64.8 percent owned by the Abu Dhabigovernment, are you insulated from the economic woes? Are IT bud-gets unaffected?SD. ‘More with less’ has been my favourite quote. I do not believe a day pass-es by where I have not mentioned doing more with less. For sure, the eco-nomic crisis has affected almost every organisation in the world, but is itreally economic crisis or is it something that we should have done a long

H eadquartered in Abu Dhabi, ADCB is a diversified bankwith 45 branches in the UAE supported by 172 ATMs.This diversified institution is active in banking servicesspanning corporate, retail and commercial banking aswell as in the areas of treasury derivatives, infrastructurefinance, private banking and wealth management. The

vast IT side of the business falls under the remit of Steve Dulvin who has oc-cupied the top IT job at ADCB since April, 2009 after a three-year stint asHead of IT Security and Quality Control at the bank. He describes ADCBas one of the most aggressive banks in the Middle East, which means a racefor the IT department to support the business in its goal of gaining a com-petitive advantage.

After having been Head of IT Security you were then promoted to Headof IT Operations. What were your priorities and challenges when youfirst took on the role?Steve Dulvin. Data centre modernisation with cost reduction was my firstpriority; this involved customising data centre strategies according to busi-ness plans, regulatory requirements and rapidly changing technologies inline with business objectives. These projects had to enable ADCB to containcosts while maintaining a competitive edge. Key projects that enabled busi-ness growth were projects like consolidation, outsourcing and virtualisationby efficient and optimal utilisation of existing infrastructure and human re-sources. ADCB is known for being customer centric so this added morechallenges for us, and the transformation had to be done with no disruptionto customer service and we had to meet a 99.9 percent availability of service.

IT Heads talk about the 80:20 rule – 80 percent of the job being about‘keeping the lights on’ and 20 percent about innovation. How is yourjob divided and can you tell us about how innovation comes into yourrole and what you are currently working on?SD. This is one of the best eras for IT heads and managers because it’s aboutmaking sure we keep the lights on by maintaining our service levels but alsolooking at reducing operational costs and I do not believe you can achievethat by reducing your focus on innovation. So to answer your question, in-

“Innovation is not just something thatshould be seen from a seniormanagement perspective – it’s a mindsetthat we need to spread across theorganisation”

STEVE DULVIN 3_june10 18/06/2010 15:40 Page 78



time ago? Coming back to your question, yes we are partly owned by thegovernment of Abu Dhabi and ADCB is one of the few organisations thathas never stopped and we continue to give the best to our customers withproduct offerings and benefits. There are always two ways of reacting to this:one is to stand still, during which customers will feel the pinch but for us it’sabout continuing and maintaining our services to customers and making ita pleasure to bank with ADCB. However, it also does not mean we have anopen budget, because all our projects today, including infrastructure en-hancements, go through the management executive committee in whichour CEO is present. I do not believe there is anything we do with no clearROI which could be financially driven or to improve customer service.When the business invests in IT it is not looking for the features and func-tions of a product . What it expects is business outcomes that can be trans-lated into more efficiency, lower costs and revenue growth.

How does technology come into the bank’s retail operations? For in-stance, do you offer mobile banking? If not, are you considering rollingthis out?SD. IT is the main fabric to the business. We consider ourselves a valuecentre to the business, although a few years ago the concept of having sep-arate strategies for the business and IT existed. Today, we are very much

one and the IT strategy can only be part of the business strategy – they cannever be separate. Technology plays a big role in ADCB’s retail operationsfor both Islamic Banking and conventional banking. We are one of themost aggressive banks in the UAE and for us in Information Technologyit’s a race to support the business and continue to deliver new productlines and additional benefits to customers. Yes, we currently do offer SMS-based mobile banking to customers and we are assessing the situation toexpand the mobile banking experience for customers, and are looking forsolutions that will integrate internet banking into mobile banking withminimum changes to the software, thus providing consistent and seam-less user experience.

Security still comes under your remit, and last year you implementedGuardium’s real-time database security and monitoring solution.What were the reasons for rolling this out and how has it made a dif-ference to security? SD. Almost every study shows that the biggest risk to any organisation is in-ternal. In fact, as we speak we are in the process of implementing bank-widesingle sign-on (SSO) with biometric devices to reduce the risk of identitytheft. Guardium is only one of those initiatives we took to ensure our cus-tomer data is secure and is accessed by authorised personnel, only when re-

“The ITdepartmentneeds to thinkbigger andbetter than theythink they can,it’s aboutbreakingbarriers to ourvision and it’sabout doingthings wethought werenever possible”


www.maximo.ae

Maximo ad.indd 1 15/6/10 14:44:37


quired. It also adds value to our change management process during whichall activities of administrators are monitored by an independent team to en-sure what is said has been done. Apart from Guardium, we also use record-ing tools for GUI (Graphical User Interface) based changes andprovisioning tools to automate changes to our critical systems which is re-viewed by the quality control department and tested on the UAT (UserAcceptance Testing) environment before they are deployed.

We also have a partnership with Cyveillance who monitor ADCB cardnumbers online and for phishing sites to minimise risks to our customersby taking down fraudulent sites. The partnership has helped us become oneof the first banks in the Middle East to take a more proactive approach toleverage its online presence in social media networking sites such as Twitter,Facebook and MySpace. This service will provide us with valuable brand in-telligence, including raw customer feedback, increased security and visibil-ity; it will help us utilise this intelligence in future marketing campaigns andnew product development to better serve our customers. We also have apartnership with Symantec who monitor our internal and external network24/7, which include, ensuring our servers are compliant to ISO standards.

In fact, we were one of the first in the world to work with Symantec on out-sourcing our internal managed end point service, which helps us give an in-dependent view on our external and internal infrastructure. Security andcompliance is key to ADCB, which I am sure you would understand seeingas we are a bank.

What strategies do you have in place to deal with disaster recovery andcontinuity planning? SD. Disaster recovery and continuity is a continuous process. It’s about keep-ing planning current and ensuring rehearsals are done, not just from an ITperspective but also with the business users. It’s also an investment you makefor something you may possibly use or never use, which is expensive for bothhardware and software licenses, which again needs to be measured against theprobability and frequency based on the kind of disaster. At ADCB we decid-ed to use the disaster recovery environment as much as we can for user ac-ceptance testing and pre-production tests before any new enhancements aremade. By doing this, it comes back to doing more with less by not having twoseparate environments for UAT and disaster recovery. We also have a few

dedicated environments for disaster recovery for our critical applications.While I am on this subject, we are currently in the process of moving our datacentre to a Tier 4 site managed by Injazat partnered with EDS, which also isone of the first facilities to acquire a Tier 4 certification in the region. Themove started in November last year and is scheduled to finish in August. Thereason we are taking almost nine months for the move is to avoid disruptionto customer service and avoidable expenditure on new hardware. As of now,we have already completed 70 percent of the move with little or no interrup-tion to our customers.

What is driving the need for adequate disaster recovery plans in theMiddle East and are there any unique differences between the regionand, say, Europe in how you manage this aspect of business?SD. A disaster recovery plan is very much related to probability and the fre-quency of any disaster. Keeping that in mind, yes, there will be a big differ-ence between the Middle East and Europe, which also does not mean weshould stay blind to any unforeseen possibilities so we must take precau-tionary measures because there are predictable and unpredictable disasters

that we should be ready for. I would also say theglobal crisis is a form of financial disaster – a dis-aster that was definitely a surprise to many orsomething that was considered a high risk butwith least probability.

Will the next area of focus for you be a newcore banking solution? SD. Yes, the main focus for the next 12 months willbe looking at a new core banking solution that willfit into our environment, considering it’s beenmore than five years since we implemented FLEX-CUBE. In the last few years we have acquired bestof breed applications for each business area to suittheir needs, such as treasury, trade finance andCRM. We will be looking for a system that couldretrofit into our environment with interfaces to

multiple applications but that does not necessarily have to be a traditionalcore banking system with the ability to serve multiple business areas.

Another thing we will be working on is to build a service-oriented ar-chitecture (SOA) where business areas can have flexibility to choose fromservices with a lower total cost of ownership and will give us the option ofre-using existing assets and services with a much lower cost and a fasterturnaround time. Some of the technology benefits of having an SOA ar-chitecture are faster application development, improved system interoper-ability, scalability, enhanced information quality and a capability ofsharing, which turns into business benefits that can provide better respon-siveness to customers, adherence to market and regulatory requirementsand improved operational effectiveness, and cost avoidance/reduction.SOA has been there for years and is not a new technology. It’s about de-coupling business process from technology to enable organisations tochange spontaneously in the most cost effective manner and today thiswould definitely be an added value to the organisation. We have severalother initiatives that we are looking at but the two mentioned above woulddefinitely be on top of the list. n

How a typical CIO’s role is divided between ‘keeping the lights on’, expandingthe business and rolling out new technologies.

Run Grow Transform

Source: Gartner IT Key Metrics Data 2010

0 20 40 60 80 100 %

62% 21% 17%



The beginning of the year was marked by a num-ber of notable incidents. First of all, the targetedattack against Google and 30 other large UScompanies marked what I believe will be a no-

table trend – cybercriminals focusing on high precision tar-geted attacks, with great potential for financial gain.Secondly, we see P2P applications spiking as a source of mal-ware and infections for users, so I believe that will continuethroughout the year. Finally, this year will be marked by se-rious efforts from companies such as Adobe trying to closethe huge gaps in their products, such as Adobe Reader.

A good security strategy and implementation policy isa key survival factor in today’s cyberworld. The emphasis ison ‘good’ here because there can be different levels when im-plementing a security strategy, balancing usability withstrength of protection. A few key points include correct ac-cess permission in the local network (make sure that rightsto change files are granted on a per-need basis) and thatthere are logs for Internet access. A good solution has beenfound to be the proxying of all outgoing connections,through a proxy with authentication. This seems to take careof many Trojan-Spy that are designed to steal passwordsand other confidential data.

There are certain important steps that can limit theamount of attacks and threats coming from using social net-working sites. In general, people should not post private de-tails such as home addresses or other information that can beused in password recovery forms. Also, we should avoid pub-lishing too much private information and make sure that welimit the amount of people that can see it. A good practice is‘friends of friends’, a better one is ‘only friends’. Make surethat the information seen by random users is very limited, forinstance, just name and city. Lastly, be careful who you be-friend on social networks. A good practice is to only acceptfriend requests from people you’ve met in person. A betterone is to only accept friend requests from people you’ve metin person at least twice.

Cloud computing can really make a difference when itcomes to stopping new attacks, so it is important that secu-rity suites do take advantage of this technology. However,they are not the final solution to all problems. It is importantfor managers to understand that cloud computing and in-the-cloud security are just parts of the security chain and

must be complemented by the measures detailed in the pre-vious point. In general, we see attacks against all kinds of en-terprises – big, medium and small. As long as they haveimportant information that can be turned into money, theyare targets.

In the case of a successful attack, losses can include dam-aged image, loss of intellectual property, data loss and directfinancial loss.The attack process itself can then include black-mailing or other threats. Facebook and Twitter are activelyused by cybercriminals as infection vectors. Kido, one of themost widespread malwares of all times, did not take advan-tage of Facebook or Twitter to spread. Yet, there are cases ofmalware that are using social engineering in the process,which are very serious and hard to remove.

Promising technologies have appeared over the yearswhich could turn the tides in this never-ending battle be-tween security companies and cybercriminals. In-the-cloud security is here and it is an important developmentin the battle, as it greatly enhances reaction speed – deliv-ering faster protection while obtaining true feedback onthe effects of new detection algorithms. Furthermore, vir-tualisation and sandboxing are shaping the industry, al-lowing for better isolation of malicious software – limitingdamage. Whitelisting is another, as it makes sure that onlyprogrammes from known sources have access to the sys-tem. I think the changes in the threat landscape will close-ly mimic these developments, while at the same time,taking advantage of the weakest link in the security chain:the human mind. n

Mitigating the risks

With security threats coming from all directions nowadays, Costin Raiu offers his advice onhow organisations can protect themselves.

ASK THEEXPERT

Costin Raiu has over nine years’experience in antivirusresearch and technologydevelopment. He is a memberof the Virus Bulletin TechnicalAdvisory Board and CARO. Raiualso provides his services as anincident reporter to TheWildlist OrganizationInternational and haspublished extensively on datasecurity and computer viruses.He joined Kaspersky Lab in2000.

“Cloudcomputing canreally make adifference whenit comes tostopping newattacks, so it isimportant thatsecurity suitesdo takeadvantage ofthis technology”

KASPERKSY_june10 18/06/2010 15:35 Page 83

Many companies throughout the world havebeen forced to drive down their IT budgetsas part of their cost-cutting measures whichwere required following the financial con-

straints brought upon by the global economic downturn. Butwhile the rationale of controlling costs to keep the companyafloat is very understandable, are lower operational expens-es worth exposing critical corporate IT functions to riskssuch as security leaks, lesser data protections and reducedavailability? Sectors such as education and government con-tinue to adopt advanced IT solutions to maximise their pro-ductivity, so why should enterprises do the reverse andhesitate on important technology investments?

Over the past decades, IT has become embedded with-in corporate operations and businesses, and IT business al-liance governs most of the technology investments. ITinvestments have become essential to gaining a competitivebusiness edge through optimised efficiencies and increasedfocus on core activities. This is why all IT-enabled enter-prises are in agreement that budget cuts should not be dealtto the extent that an organisation would be deprived of es-sential IT functions such as availability, data protection andsecurity.

Experts and market research predict a 30 to 60 percentannual growth for the enterprise data segment in the comingyears, echoing general expectations that the downturn willnot slow down corporate demand for IT solutions. IT has be-come the lifeblood across all Middle East industries, from fi-nancial services and oil and gas to telecommunications andlogistics. The slew of latest innovations in information man-agement and virtualisation promises to elevate the role of ITin organisational efficiency even higher, which is why systemintegrators such as STME are constantly assessing new tech-nologies and how they can be deployed to provide value-added services to enterprises.

STME brings to the Middle East markets modern andnew technologies that can serve the Middle East enterprisesto meet the needs to enhance their IT systems availability andprovide more protections to their data storage and archiving;adopting the right technology and solutions with the right in-vestments will greatly improve the IT infrastructure withoutthe need for too high and costly investments. It is mostly a

matter of determining the right mix of solutions and part-nering with a reliable provider. Moreover, the chosen toolsshould be able to deliver in terms of minimising expenses, in-creasing operational efficiency and manpower productivity,proactively identifying problems and providing solutions,enhancing management, facilitating high-level data securityand protection and supporting easy access and seamless in-tegration, among others.

Founded in 1982, STME has been at the forefront ofmatching IT frameworks with the Middle Eastern brand ofbusiness. As an established regional data storage and IT so-lutions and services provider, the company has formed part-

nerships with global technology providers such as Symantec,Hitachi Data Systems and NetApp, Cisco and others to de-liver solutions geared to meet specific client needs. Throughits strong presence throughout the Gulf region, Egypt, Levantand Pakistan, the company has been designing and integrat-ing innovative solutions to its portfolio of over 400 enterprisecustomers. IT support providers such as STME will contin-ue to emphasise the value of technology investments thatcomplement rather than compromise the viability of MiddleEastern businesses. A fundamental rule in technology is thatwhatever can be done, will be done; organisations simplycannot afford to pass up the numerous benefits of IT plat-forms and functionalities in favour of squeezing out morefrom corporate finances. n

Wise investments


Salah Abu Shaar says the right IT investments are key to sustained successof Middle Eastern enterprises.

ASK THEEXPERT

Salah Abu Shaar is the CEO of STME. Shaar joined STME recently aspart of the late acquisition process. He has 33 years of experience indirecting and managing IT and technology divisions within wellrepudiated financial and telecom firms. He also has very goodexperience in developing, managing and leading restructuring andchange initiatives and projects.

“IT investments have becomeessential to gaining a competitivebusiness edge through optimisedefficiencies and increased focus oncore activities”

STME_june10 18/06/2010 15:40 Page 84

STME AD.indd 1 15/6/10 14:46:01


changing faceThe

project financeof

SPECIAL FEATURE

Project Finance new_7dec10 18/06/2010 15:33 Page 86

The image was blunt, offensive even: His Highness Sheikh Mohammed binRashid al-Maktoum depicted sinking in a sea of debt. As a piece of jour-nalism, the illustration in the November 29 edition of the UK’s SundayTimes newspaper was crass and right on the edge of acceptability (over it, asfar as the Dubai authorities were concerned: they reacted by removing thepaper from shelves). But as an indicator of the strength of feeling regardingDubai World’s call for a temporary moratorium on its debt obligations, it

was right on the money: as far as the international finance community was concerned, the emi-rate’s credibility as an investment destination was dead in the water.

I was in Dubai last year when news of the looming debt problems first surfaced; the reactionwas mixed. “It might slow the pace of recovery for a while but I don’t think it’s going to be one ofthese cataclysmic moments that suddenly means equities fall off a cliff,” said Stephen Pope, ChiefGlobal Equity Strategist at Cantor Fitzgerald. His attitude mirrored that of many of the bankers,analysts and construction industry experts I spoke to at November’s Big 5 event, with the majori-ty keen to play down the potential impact on global and regional markets. Others, however, wereless sanguine. “The panic button’s been hit again,” suggested Francis Lun, General Manager ofFulbright Securities, while Faisal Ghori at consulting firm ME Ventures warned that therewould be “repercussions throughout the GCC”.

The real impact has been somewhere in between. While fears of another global economicmeltdown – the dreaded double dip recession – largely failed to materialise, the debt crisis didhave implications for the infrastructure community, not least in terms of the availability of fi-nancing for projects both large and small. Back in November, anyone proclaiming the wisdomof using massive debt to finance large infrastructure projects would have been politely shownthe door and intercepted by the men in white coats on the way out. The strong growth in theavailability of credit for project financing since 2002 came to a screeching halt in the secondhalf of 2008, and since then international banks have shown little willingness to take on pro-ject-related loan exposure outside their home markets. For many, the crisis in Dubai markedthe end of an era.

A new phase“International banks do the bulk of the project finance in this region,” explains Eckart

Woertz, Executive Director of the Dubai-based Gulf Research Council. “In Saudi Arabia it’smaybe 50 percent, but in the smaller Gulf countries, probably 70-80 percent of the project fi-nance comes from international banking. Of course, their liquidity position is now strained andwith the Dubai crisis they have been even more reluctant to lend money.” ShankarKrishnamoorthy, Chief Executive of GdF Suez Energy’s Middle East and North African oper-ation, agrees, suggesting that the world of project finance has changed significantly in com-parison to three years ago. “The certainty of transactions has vanished,” he says. “Liquidity isnot what it used to be, and the pricing has gone through the roof.”

But despite the problems experienced in Dubai and increasing public unease regarding thedangers of large-scale borrowing, using debt to fund large capital expenditure projects still hasa bright future in the region – and it could be argued that it is now needed more than ever be-fore. The Middle East project finance market is also in much better shape than recent headlineswould have us believe. Indeed, the bullish view is that any well-structured project can find fi-

Although times are undoubtedly leaner thanat any point in the last three years, thoseinvolved in project finance in the Middle Eastare still bullish about the health of the sector.

By Ben Thompson



88 www.menainfra.com88 www.busmanagementme.com

nancing; banks are conserving capital and rebalancing theirbooks, but it is a myth that they have stepped out of projectfinance altogether. In fact, the rollercoaster Middle East pro-ject finance market could be about to enter a new phase ofgrowth.

Since 1995, project finance deals around the world havebeen completed to the tune of more than US$1.5 trillion, butglobal activity dropped by 40 percent over the last 18months as the funding costs of banks increased, makinglong-term finance scarce and expensive. Even so, theMiddle East still represents a big market for project fi-nance deals. “In 2009, regional project finance activity wasprobably 50 percent of what it was in 2008 – but you haveto bear in mind that it was coming down from an incred-ible peak,” explains Jonathan Robinson, Head of MiddleEast Project Finance at HSBC. “Globally the project fi-nance market had a quarter of a trillion dollars of projectfinance activity in 2008. So even with the drop-off in ac-tivity you’re still talking about a very big business, and theMiddle East still occupies a very important role in theglobal project finance market. It’s just changed. It’schanged because the economics have changed. It’schanged because the number of international banks whoare still in this business has decreased, and those who areleft are lending less money than they used to or are beingmore selective. And it’s changed because the regionalbanks are to all intents now primarily focused on localcurrency funding, their US dollar capacity is very limited,and the secondary market has all but dried up.”

After closing GCC deals worth no more than US$20 bil-lion in 2009, project financiers are predicting the value ofcompleted transactions in the region could rise by up to 50percent this year and to $40 billion in 2011. While this wouldstill be less than in 2007 – when the Middle East was theworld’s biggest project finance market – the oil price reboundover the last 12 months has restored confidence among pro-ject sponsors and delivered fresh urgency to the GCC infra-structure programme.

“All of the Gulf countries have been in privileged posi-tions over the last 18 months in that they have basically beenable to keep on spending during the recession,” says Woertz.“They had savings that they could mobilise for counter-cycli-

Project timeline

Market demands perceived

Definition of project objectives

and scope

Conceptualplanning and

feasibility studies

Conceptual plans and

specifications

Design andengineering

Construction plans and

specifications

Transport and

manufacturing

Supply chainissues


www.menainfra.com 89www.busmanagementme.com 89

Akkawi, Head of Ernst & Young’s Infrastructure and PPPAdvisory Practice in the Middle East. “They want good pro-jects and risks that are well-balanced, with little demand risk,and where the off-take risk is borne by the public sector in somecapacity or another.” In fact, he sees this as the biggest hurdle interms of tempting the private sector back into the infrastructuremarket. “There’s hardly any appetite by the private sector to getinvolved in financing for infrastructure – whether it’s equity ordebt – where the private sector bears the brunt of the demandrisk,” he explains. “In other words, unless the government isputting mechanisms in place to guarantee a certain level of pay-ments, investors are not really interested.”

Another issue is the lack of standardisation in dealingwith the international community. “Every country has differentways of dealing with risk. And that’s making some financial in-stitutions very selective in terms of who they deal with andwhere they invest,” says Akkawi. Indeed, location is important,as the strength of the market varies from country to country.“Places like Saudi Arabia and Abu Dhabi are quite strong at themoment,” he adds, “but Dubai is a different story. Until they sortout the restructuring that’s going on, it’s unlikely there’s goingto be a flood of project finance money available very soon – al-though having said that, the government has just embarked onseveral opportunities for the private sector to participate in, suchas IWPP and others that are ongoing. Even so, I would say thatthe opportunities for project finance are far more promising inoil-based economies than in service economies at this stage.”

The third challenge he sees is around enhancing the roleof local institutions. “Local banks are funding,” says Akkawi.“It’s just that they’re still not very aggressive in taking on long-term structured financing deals. We’re seeing some babysteps, but it’s still the international banks that are coming inand taking the longer view.” He believes that the governmentsof the GCC have to work harder on assisting the locally basedbanks in order to help them get into long-term financing.“We have seen this be successful in other jurisdictions such asEgypt, where the government has been pushing local banksto get into 10,12, 13-year financing deals. It’s about stimulat-ing local economies and institutions.”

Bankers clearly have a role to play in this, but the start-ing-point is in GCC government infrastructure plans – andin this regard, more regional co-ordination is required to reg-

Procurement and construction

Completion ofconstruction

Startup foroccupancy

including testing

Acceptanceof facility

Operationand

maintenance

Fulfilment ofuseful life

Disposal of facility

cal fiscal stimulus, so with the exception of Dubai, everybodyhas been able to keep projects going.”

Such government intervention has proved reassuring,and led to a number of high-profile deals. Last June, Bahrain’sUS$2.1 billion Addur power and water project closed its fi-nancing, while July saw one of the year’s largest deals – theUS$4.1 billion Dolphin Energy financing. The equity marketsare improving, too. Earlier this year, the Carlyle Group – theUS buy-out behemoth that launched a US$500m regionalfund in 2007 – acquired a 30 percent stake in GeneralLighting Company in Saudi Arabia, its first stake in a Gulfcompany after two investments in Turkey. And local housesalso plan to start investing again, with Saudi Arabia’s AmwalAlKhaleej closing in on four potential investments in Egyptand Saudi Arabia.

Big projects, bigger challengesDriving this growing appetite for project finance is the

power and water sector, with a number of big deals currentlyin the pipeline. Despite tightening credit conditions, fivegroups have bid for Saudi Electricity Company’s 2000MWPP11 independent power project, even though the tenors ofthe supporting finance were 20-22 years long. To help make thedeal more attractive, SEC offered to take a 50 percent equitystake in the project, its second IPP; the first, for a power stationin Rabigh, was closed last July with SEC taking a 20 percentstake. Indeed, the GCC project pipeline suggests there will be atleast two big independent power and water projects (IWPPs)every year for the indefinite future; next up are four more powerIPPs – required to help meet SEC’s power capacity needs to2019 – at a rate of one every 18 months to 2016.

But while this presents a huge opportunity for suppliers ofequipment and services, it’s going to present a considerablechallenge to the Gulf project finance industry because of the factthat so many other major schemes will be seeking long-term fi-nance deals over the next decade. It raises a key point regardingthe project finance market: that it has become, even more sothan it was in the past, a matter of survival of the fittest in whichonly the most attractive projects – those with the best risk-ver-sus-returns ratios – will be able to attract funding.

“We’ve been following the market closely, and the inter-national banks are being very choosey,” says Abraham

“All of theGulf countries

have been inprivileged

positions overthe last 18months in

that theyhave basically

been able tokeep on

spending”

Eckart Woertz


ulate project borrowing. For instance, the appetite among in-ternational banks for GCC project debt has been hit by anumber of fluctuations in government policy, not least thedecision to cancel the Saudi Landbridge private finance planand suspend the Saudi National Water Company’s privatisa-tion programme. Other discouraging factors include an un-certain regulatory environment in some sectors and perennialconcerns about loan security, particularly when it comes toprojects sponsored by government-related entities. Such anx-ieties must be addressed; after all, if Gulf governments them-selves appear to lack the necessary commitment to make suchschemes work, what incentive is there for global banks to tryto win project finance mandates?

Diversifying the mixBut building up the financial strength of local institutions

is only one solution to the region’s funding challenges. Andwhile project financing is slowly recovering from the fall-away seen in early 2009, developers will increasingly need tolook at a mix of funding options for their schemes. The recentdifficulties in securing favourable project finance loan termshave prompted many developers to look at capital market so-

lutions – either to complement loan funding or refinance ex-pensive loans with more attractive bonds – as having fundingalternatives means developers will be under less pressure toput in their own money as equity in projects.

Islamic financing is also proving attractive as developerslook to diversify their funding mix. According to a recent re-port published by the Dubai International Finance Centre, in-frastructure projects are ideal for Islamic financing, in partbecause of Islamic finance’s preference for equity-based andasset-backed projects. Furthermore, many infrastructureschemes benefit the wider community, which fits well with themoral underpinnings of Islamic finance. An example of this isthe US$100 million International Finance Corporation HilalSukuk listed on NASDAQ Dubai and the Bahrain StockExchange, the proceeds of which are funding infrastructure andhealth projects in Yemen and Egypt.

“The sources of funds available for infrastructure financ-ing can be increased with the expansion of the Islamic finan-cial industry into other non-bank entities (such as investmentbanks and Takaful companies) and funds (such as mutual,hedge and pensions),” argues Habib Ahmed, Professor andSharjah Chair in Islamic Law & Finance with the Institute of

“Unless thegovernment isputtingmechanismsin place toguarantee acertain level ofpayments,investors arenot reallyinterested”

Abraham Akkawi

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

A lost decade for project finance?According to World Bank and PPIAF figures, the years followingthe Asian financial crisis represented a lost opportunity for theproject finance community, as investment commitments toinfrastructure projects with private participation in developingcountries fell dramatically and took 10 years to once again hit pre-crisis levels. However, the decade also witnessed unprecedenteddevelopment in the MENA region, and saw the construction ofsome of the world’s most iconic projects.

2000 Burj Al Arab, Dubai

2002 Kingdom Tower, Riyadh


Middle Eastern & Islamic Studies at Durham University, andauthor of the DIFC report. “Investment in Islamic instru-ments that fund infrastructure projects can be facilitated if avariety of securities with different risk/return/maturity profilesexist.”

It certainly represents a huge untapped market: accord-ing to an analysis by Ernst & Young, to date only 22 percentof the US$40 billion in Shari’ah-compatible financing withinthe GCC has gone into infrastructure projects. By their na-ture, such projects tend to involve large investments, and asmost Islamic financial institutions have a relatively small cap-ital base they will only be able to finance components of a pro-ject rather than the whole deal. Shari’ah-compliant financingis likely to constitute only a part (or tranche) of the total fund-ing, with the majority of the financing being supplied by con-ventional financial institutions.

As such, Robinson believes its potential as an alternativeto traditional methods of project financing will be limited. “Atthe end of the day, whether it’s Islamic or conventional, youhave to understand how to do project financing well,” he as-serts. “You have to understand the industry. You have to un-derstand the risks. Conventional banks have been doing this

for a lot longer than the Islamic banks, and as a result theIslamic banks don’t have that body of expertise built up to un-derstand the risks. And if you don’t understand the risks,you’re not going to be successful. So I don’t see them becom-ing a dominant factor, although I think it’s realistic to saythey’ll be an increasing element.”

Akkawi agrees that Islamic financing’s share of themarket is increasing, but echoes Robinson’s scepticismregarding its widespread adoption. “I think Islamic fi-nance as an instrument will play a role in partially fi-nancing some of the infrastructure, but it’s unlikely toovertake traditional financing because of some of thechallenges and limitations associated with Islamic fi-nance, not least around ownership,” he says. “Many in-frastructure projects don’t lend themselves easily to anarrangement whereby ownership rests with the providerof the financing, as mandated in Islamic finance. There iscertainly a desire by the Islamic finance market to get intothe infrastructure sector, but I don’t see them becominga prominent player. I see them continuing as a bit player,and growing, but they will not dominate the infrastruc-ture play.”

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

2006 Palm Jumeirah, Dubai

2007 Sheikh Zayed Mosque, Abu Dhabi

2008 World Trade Centre, Bahrain

2010 Burj Khalifa,Dubai



Building the futureThere is no doubt that the Gulf is now a lenders’ market,

and it is the borrowers that have to do the bulk of the spade-work in terms of attracting the requisite funding. Certainly,banks could do more to build project expertise in the regionand develop secondary infrastructure debt markets. But get-ting the right returns is now finance’s top priority. Investingin infrastructure debt is a low-return activity and completingdeals is hard work, takes time and delivers less than trading inshort-term financial instruments. Around 80-90 percent ofloans that banks provide are short-term (between one andthree years) leaving project finance – which traditionally re-lies on loans with maturities longer than 10 years – to sufferfrom the liquidity crunch.

Nevertheless, analysts maintain that the situation issteadily improving, thanks largely to the rise in alternativesources of finance. “During the crisis governments had to step inand provide either some higher-level of guarantee or liquidity oradditional funding to get projects going,” says Akkawi. “Now,from the projects we’re involved in, we’re seeing significant ap-petite by the private sector to get involved and help provide fi-nance. We’re not yet back to where we were three years ago,when a good project with good off-take was being financed ataround 125 basis points above LIBOR, but the pressure is easing.We’re certainly not at the 300 basis points above that we saw dur-ing the crisis – we’re probably in the middle at this stage. Around200 basis points above is typically the type of margin that banksare currently looking for.”

How quickly the market can rebound, however, is moredifficult to gauge. “It’s going to depend on the next two or

three big projects coming to market and how the market re-acts to them,” continues Akkawi. “There are several projectsin Abu Dhabi and Saudi that are coming to market in the next18 months, and they’re going to probably shape the future –at least in the mid-term – for such financing. So I’m bullishand cautious at the same time.”

Woertz, too, is reluctant to call how the market will pan outover the next few months, given its dependence on internation-al banks. “Depending on what your opinion is of the worldeconomy, you are either optimistic or pessimistic,” he offers.“Should we face a double dip recession there would be renewedproblems; but should there be an ongoing recovery, that wouldbe very helpful for the project finance market.”

To survive, sponsors need to go to the right what liquiditypools: tap the Islamic finance market, look at local currency fi-nancing, and look at the export credit agencies – quasi-govern-ment entities that help domestic companies win deals throughloans and guarantees – that now account for almost half of allproject finance raised in the Middle East. Such agencies havestepped up their activity in the region and ameliorated thedownturn in bank lending.

Indeed, Robinson believes there is still massive scope for abuoyant market. “I do not see a return to 2007/2008 levels of ac-tivity in the foreseeable future, certainly not in the forthcomingfive years,” he says. “But I think if we get back to a level of activ-ity that is 60-70 percent of that, then it will have been a tremen-dous achievement. I could easily see the Middle East once againbecoming the largest project finance market in the world in thenext few years. Even if it’s not at the level of 2007/2008, it’s stilla significant market.” n

Stability returns to CityscapeA sense of stability is returning to the regional real estate investment market thanks togovernment-led infrastructure programmes – but it will take time to become fullyestablished, according to senior executives speaking at Abu Dhabi’s Cityscape exhibitionin April. Gurjit Singh, Chief Operating Officer of Sorouh Real Estate, said governmentinvestment in infrastructure – including rail and transport links, logistics, oil and gas andenergy projects – will have a beneficial effect on the property market in Abu Dhabi.“These investments are going to bring more employment creation which will bring moredemand for real estate both for residential and commercial projects,” he said.

John Bullough, CEO of Aldar Properties, agreed, adding that while the last few yearshave been challenging it was now time for the sector to focus on potential growthopportunities. “We have all felt the pain,” he said. “The last 18 months have beencathartic for the market. We now need to give investors solid future prospects and thatis a long-term play. This isn't a quick win. Property is a long-term investment.”

US$40bnPredicted value

of GCC completedtransactions

by 2011

“I could easily see theMiddle East

once againbecoming the

largest projectfinance marketin the world in

the next fewyears”

Jonathan Robinson


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Having spent 23 years at the helm of one of the world’s major project development and contracting organisations, Wal King, Chief Executive of Leighton Holdings, has seen a

fair amount of ups and downs – not least the global reces-sion that hit last year. At the time, King admitted that “a few of our tail feathers were singed”, but the company seems to have made a fast and full recovery aft er recently announcing an 82 percent rise in profi ts from AUS$220 million in 2009 to AUS$400 million – and the company continues to go from strength to strength by winning contracts and acquiring new work, including AUS$1.8 billion since March 2010 alone.

Looking at Leighton’s operations, what would you say are the biggest infrastructure challenges in the market at large?Wal King. Big infrastructure projects are getting larger but they are also becoming more complicated in terms of design, the risk profi le and community engagement, whereas 20 years ago, infrastructure projects were no-where near as complicated. In terms of environmental approvals, community approvals, sustainability, the complexity of the projects is increasing, and it becomes an almost square off function.

And what would you say are the challenges in the Middle East, specifi cally?WK. We work in 20 countries around the world and each of those countries has their own particular challenges in terms of culture and work practices, they all have their own unique cultural diff erences and issues. In the Middle East specifi cally the cultural diff erences are somewhat more amplifi ed by the fact that most of the workers are actually imported workers; and then of course you’ve got the religious aspects, which are much more magnifi ed in the Middle East than other parts of the world.

So how do you ensure that the Middle East’s cultural heritage is maintained, despite the advent of new developments?WK. Well, we deliberately have a partnership with some very senior and trustworthy Arab gentlemen and we look to build our organisation around the culture. At the end of the day, it’s based on mutual respect and the ability to work in that environment.

Urban planning is an increasingly important subject in infrastructure development. Do you have to work closely with urban planning departments to get the appropriate planning permissions and so on?WK. Absolutely, and you know the planning processes are becoming much more complicated in terms of new

Reigning supreme in the world of construction, Wal King, CEO of Leighton Holdings, reveals why evolving with the times has proved a key strategy to getting – and staying – at the top.

direction with the communities, sustainability, pollution – it’s a much more complicated process down the line than it was.

In the Middle East we do have a partnership where we own 45 percent of the com-pany Al Habtoor Leighton, and the process that we go through requires engagement at all levels with the local authorities and with the Arab community, our partners. Our strategy is very much one of consultation and working together with the people.

Big interview.indd 94Big interview.indd 94 18/06/2010 15:2018/06/2010 15:20


embraces profi tability – if there is no profi tability, there is no sustainability.

We need to embrace the environment and recognise the needs of the community wherever we work – if we work in Indonesia or Mongolia, we need to have this cooperative arrangement recognising the needs of those communities

An increasing number of companies around the world are championing the impor-tance of sustainability, so how is Leighton building a greener focus into its design and development processes?WK. I would always broaden the concept of sustainability. It doesn’t only mean focus-ing on green issues; in its broadest context, it means being able to have a business that goes forward and embraces all of the issues of sustainability and includes and



and that includes energy conservation, recycling, energy effi ciency, etc, the list is very long. But a lot of people talk about sustainability as issues that relate only to the environment and the minimisation of power usage for example, but it’s a much broader subject than that. Sustainability, broadly speaking, is the concept that you have a license to operate that will only continue to be good if you satisfy the environmental issues, community issues, mutual respect issues and include the needs of the client as well as profi tability.

And what are your views on using sustainable materials and resources?WK. Wherever possible we use sustainable materials and resources but in some cases, of course, it’s dictated by our client. If it’s our own development then we develop to the high-est standards in Australia. We were the fi rst to build the highest rated building, the Green Square South Tower, which was a fi ve-star Green Star rating for offi ce design from the Green Building Council of Australia. However, quite oft en these things are dictated not by us but by our clients. If we’re in a location in, let’s say Central Indonesia, sometimes these materials are not available. So in Sydney and Melbourne and Brisbane, of course, yes we do use the most eff ective, sustainable and renewable materials and we recycle. We’re a big recycler and in our earth-moving business we strive to have more energy effi cient uses of our equipment and the like. It’s a complete all-embracing ecologic strategy, but the strategy has to be pretty much in tune with the local situation.

To what extent are building and environmental standards important in your opinion?WK. Well, they’re continuing to evolve in terms of energy usage, material usage and it’s a matter of keeping in contact with the demands of the community on the one hand, but also in terms of our license to operate, keeping in contact with in our own ethical standards, which are that we do the best possible job in the environment within which we work. Our core values very much dictate that we do the right thing.

Looking at the global economic crisis last year, what impact did that have on you in terms of your projects? Did you have to make any cutbacks, for example?WK. Th e biggest area that was aff ected was our property business where work came pretty much to a standstill. However, if you went back to the start of the global fi nancial crisis, there were dire consequences predicted that the world was coming to an end; of course, that hasn’t happened and the recovery, particularly in Australia, has been much quicker and more powerful than people predicted.

Yes, we had to adjust our business strategies, but we’re always adjusting our business strategies. In our particular case, we’re on a continuing journey and that requires us to be in tune with the environment. When you encounter a rough period like the global fi nancial crisis, you adjust your business strategy so that the things that you’re doing are compatible with the economic circumstances that you encounter and again we’re adjusting now. We have a continually evolving strategy and that work is never done and never will be done. It’s a matter of continuing to navigate your way through the ever-changing environment and it’s only in the context of looking backwards that you can see the rapid changes that are happening in the community and the world at large.

You say that you’re constantly evolving. Is that something that’s quite hard to do as such a large organisation? How do you manage that?WK. We’re a very decentralised organisation and our business planning process is what I call “all about the rules of racing”. Th e rules of racing set out the fi nancial parameters and so on and so forth. And then we delegate to our respective managers, so they have the rules of how they operate and then they have the freedom to operate within that. So it’s the fi nancial and planning discipline but with freedom to operate. In simple terms, its like playing a game of football: everyone knows the rules but once you’re on the fi eld, you have to use your

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02

03

01



When the global fi nancial crisis occurred, a huge economic earthquake happened, much like a real earthquake, and the economic plates of the world shift ed and they’re not going back to where they were. So if the last century was the century for America, this century is going to be the century for Asia. Not that America will be smaller or poorer, it will just be less important in the world scale as is the case with Europe.

You’re obviously very optimistic about the coming decade. Where will you pre-dominantly be focusing your work over this time?WK. Well, we are focusing our work on Asia, the Middle East and India and all of those places where we think growth is important and will happen. Leighton has a magnifi -cent footprint in the world and we have the resources, management and capability to continue to grow. When I joined Leighton in 1968 it was on AUS$17 million a year with about 200 people and now it’s a 40,000 people organisation on AUS$19 billion, and we have an aspiration that within fi ve years, we will have a revenue of AUS$30 billion with AUS$50 billion worth of work in hand.

Finally, what do you believe to be the biggest challenges facing the industry as it goes forward?WK. Well the biggest challenge is the continuing need for human capital and capable people and we at Leighton are continuing to recruit and train. At the end of the day, we only have two things in our business: we have capital and we have people, and assuming that you can get the capital either by equity or through borrowing, success comes down to people. So the greatest challenge for us is to be able to attract, retain and train our people to be eff ective in an organisation, be well rewarded and produce great results for the shareholders.

own initiatives and accountability. So we delegate a lot of accountability and responsibility to our senior people but it’s all done within a disciplined framework.

And did you feel any impact on operations in the Middle East after or during the fi nancial crisis – there was of course a great deal made of Dubai being bailed out by Abu Dhabi – did any of this have an impact on your operations in the region at all?WK. Th e Middle East was more magnifi ed in terms of the eff ect of the fi nancial downturn and a lot’s written about the Middle East, but Dubai is just part of the Middle East and is not representative of the region as a whole. Obviously there’s been diffi culty in the region, and continuing diffi culties in Dubai, but overall the region is very sound.

I’m a great believer that we’re in a long-term growth cycle that will go on for another 20 years. It’s like the stock market; when you look backwards in the stock market, like the crash of ‘87, these are mere blips on the horizon when taken over the fullness of time. But we are in a long-term growth cycle and in the next 20 years, there’ll be another billion and a half people that will enter the middle class and that middle class will drive greater growth in the world.

Where it all began

Wal King: “I fi nished my fi rst degree at the University of NSW in 1966, and I then worked with the Electricity Commission in New South Wales, which is a power generating authority where I did a Master’s degree. When I fi nished that master’s degree, I looked around to join an Australian company and eventually joined Leighton. Back in 1968 Leighton had an annual revenue in the dollars of that day of AUS$17 million a year and of course, this year it’s AUS$19 billion.

“When I was looking to join an Australian company, a lot of my friends went off to work for overseas companies but you know, I’m strongly patriotic and I looked for a small company to join that had a spirit of adventure, the ability to grow and in hindsight my choice was fi rst class.”


This is why your CRM system must be designed and optimized to manage a customer retention process which will allow you to:

• Capture information about current & emerging needs and the customer’s buying structure.• Create a yearly plan for servicing each customer based on the information collected. • Manage implementation of that plan including yearly, quarterly and monthly goals. • Enhance the customer service experience by always giving them more than they expect.

That is how CRM done right helps prevent the loss of an incalculably valuable business asset, your customer.

CAN YOU AFFORD TO LOSE A CUSTOMER?

For More Information Contact:Jay Bauer, President/Senior Process Consultant, STI Systems. Phone: +1 949 361 4070 Email: [email protected].

You may only lose the customer once, but you pay for that loss over and over again. You lose the immediate revenue. You lose the opportunity for ongoing revenues. And you lose all the time and money it takes to acquire a new customer (if there is even one available).

If your CRM system isnʼt doing that for you–WE NEED TO TALK.

STI Customer service AD.indd 1 15/6/10 14:45:49

Our businesses range from exploration and productionof oil and gas, oil refining, chemicals and shipping to salesand marketing and support in industrial, personnel, medical,finance, law and planning disciplines. We maintain world-class expertise in all these areas. We believe that talent will in-creasingly become a differentiating factor among more andless successful companies in the future. Consequently, re-cruiting, developing and retaining talent is one of our keycorporate strategies. We regard learning as a lifelong processand operate programmes to enable this pursuit for our em-ployees. We maintain one of the world’s largest corporatetraining programmes, having in-house training of operators,craftsmen and administrative staff. We currently sponsormore than 2000 students for undergraduate and graduate de-grees and specialised programmes at more than 200 local andleading international universities.

Talent thrives only in an environment that rewards ex-cellence, effort and achievement. Throughout its history,

Saudi Aramco is the world’s largest producerand exporter of oil and is among the leadingplayers in the global oil industry. For 20 yearsit has been ranked by Petroleum IntelligenceWeekly as the number one oil company and isrun as a modern international corporation,

competing successfully with the best in the business; and it isthis qualitative aspect of our standing in the global oil indus-try that is the focus of our efforts and the source of our pride.Equally important to the company is our critical obligationto support the Kingdom and its people. We consider talent,technology and teaming to be the three most important suc-cess factors for Saudi Aramco and for any global energy en-terprise, for that matter. Saudi Aramco comprises more than57,000 men and women, 87 percent of whom are SaudiArabs, with 13 percent expatriates employed in highly skilledprofessional disciplines; almost the entire management of thecompany consists of Saudis.

The challengingroad ahead


Saudi Aramco may be the largest oil and gas company in the world but it faces a whole heapof obstacles in the coming years, explains President and CEO Khalid Al-Falih.

LEADERSHIP

“We believethat talent willincreasinglybecome adifferentiatingfactor amongmore and lesssuccessfulcompanies inthe future”

Saudi Aramco ED_june10 18/06/2010 15:37 Page 100

Saudi Aramco has maintained a corporate culture that en-courages individuals and teams to excel; where advancementis based on merit, skill and work ethic; and where employeeshave the opportunity to go as far as their expertise and drivewill take them. That kind of working environment con-tinues to be vital for our business success.

We also believe that technology is a great enabler ofmore efficient, more reliable, safer, lower cost and moreprofitable operations. Therefore, we utilise the world’sbest technologies in our operations. In fact, we are amongthe industry’s leaders in deploying new, cutting-edge tech-nologies in our operations. To remain among the leadersin technology, we have two advanced research and devel-opment laboratories: one for sub-surface called theEXPEC ARC and the other for surface facilities, the R&DCenter. Many of our technologies are also developed col-laboratively in partnership with service companies, tech-nology developers and academic institutions. Thispartnering model sets the stage for a brief discussion ofour teaming strategy.

Teaming refers to our collaboration with partners, sup-pliers, customers, and other stakeholders. Whatever the ex-tent of a company’s capabilities, no company can or shouldgo it alone these days, simply because the business is just toocomplex and too multifaceted for any single organisation toexcel at everything. We have pursued joint-venture partner-ships with leading global petroleum companies and nowwith top-flight chemical enterprises. We also look at ourdealings with suppliers, vendors, contractors and serviceproviders as mutually beneficial partnerships. When it comesto teamwork, we look to partner with leading institutionswhich also take a strategic, long-term view of building ca-pacity and capabilities, and whose strengths and expertise fitwell with our own, thus creating synergies. Regardless ofcompanies’ past record of achievements and possession oftalent and resources, bad governance can ruin company rep-utations and indeed put them into peril, as the examples ofEnron and many others tell us. Such risks can be avoidedonly by strictly adhering to good governance, and practice ofthe highest business ethics. We not only attach great impor-tance to governance and business ethics ourselves but de-mand the same of our employees as well as our businesspartners.

Oil and the economyDespite a lot of discussion in the media about the rapid-

ly rising role of energy alternatives, we believe that alterna-tives are starting from a very small base and realisticallyspeaking, their contributions will grow only gradually due totechnology, economics, infrastructure and consumer accep-tance issues. Oil will continue to play a key role on theworld’s energy scene for the foreseeable future. We subscribeto the consensus view that oil demand will rise from about 86

million barrels per day currently to between 105 and 110 mil-lion barrels per day by the year 2030. Even if the share of oiland fossil fuels falls in the energy mix over the coming yearsdue to alternatives gradually gaining ground, the demand foroil and fossil fuels is expected to rise in absolute terms. To re-spond to the anticipated growth in oil demand, and taking alongterm view of the business, we have recently completedan upstream expansion programme that brought our oil pro-duction capacity to 12 million barrels per day, with a sparecapacity of roughly four million barrels per day. This sparecapacity alone equals the exports of two typical large pro-ducers of oil, and helps assure oil market stability during un-foreseen circumstances.

Oil is a volatile business. You saw this vividly during thepast two years as the oil prices shot toward US$150 per bar-rel; then fell below US$35 as the world economy was hit bythe financial and economic crises; and has since then recov-ered to exceed US$80 per barrel. Oil exports remain thelargest source of export revenue for the Kingdom.Depending on oil prices and our export volumes, oil still ac-counts for 80 to 90 percent of total revenue. This major de-pendence on a single commodity, oil, is not desirable. This iswhy it is imperative on all of us to work hard on diversifica-tion and indeed transformation of our economy.

However, economies take time to transform. Oil willcontinue to play a major role in the Kingdom’s economy forthe medium term, which I would consider to be the next sev-eral decades, while industrialisation steadily increases andeconomic diversification grows.

While energy is a key enabler of the Kingdom’s eco-nomic development and a major competitive advantage, weneed to make sure that we use our precious oil and gas re-sources efficiently, wisely and minimising waste. The totaldomestic energy demand is expected to rise from about 3.4million barrels per day of oil equivalent in 2009 to approxi-mately 8.3 million barrels per day of oil equivalent in 2028,or a growth of almost 250 percent.

We estimate that through improved efficiency, whilemaintaining the same economic growth, the increase in en-ergy demand can be cut in half. This is a highly desirable goalbecause increasing domestic consumption of oil reduces theexport availability. If no efficiency improvements areachieved, and the business is as usual, the oil availability forexports is likely to decline to less than seven million barrelsper day by 2028, a fall of three million barrels per day whilethe global demand for our oil will continue to rise.

Saudi Aramco and the Kingdom’seconomy

The challenge to accelerate creation of high quality jobsin the Kingdom is tremendous. Six of every 10 Saudi citizensare under 25 years old. To absorb the influx of young peopleentering the labour market, Saudi Arabia will need to create



nearly four million jobs over the next 10 years. The Kingdom’seconomy historically has grown between three and five percent,while to generate the number of well-paying jobs required forour youth, the economy needs to grow in excess of eight per-cent. This is a tall order. Saudi Arabia’s per capita GDP wasUS$20,300 in 2009, about half of the US per capita GDP ofUS$46,400. We’ll need to increase our per capita GDP to closethe gap with developed nations, or at least make sure that thegap does not open up further. Saudi Aramco is well aware ofthis challenge, and is making a variety of efforts to contributeto the economy growing more strongly. The company’s activ-ities have a major impact on the Kingdom’s economy, well be-yond providing a large share of export revenues.

In our country, the transition to a knowledge-basedeconomy cannot happen instantly; it will take time – cer-tainly decades and perhaps generations – to take hold, all themore reason to start now. It will be an added challenge thatother nations are ahead of us and moving faster towards theknowledge-economy, but with commitment and dedicationwe can overcome these hurdles. Clearly, high quality educa-tion is essential to lay the foundation for future growth in se-lect knowledge-based areas that can be targeted forinvestment. With four out of every 10 Saudi citizens 14 yearsold or younger, improvements must begin in primary school

where a large proportion of our population needs to receivea high quality basic education before it is too late. And theimprovements must continue at every stage through highereducation. A measure of the challenge before us is that SaudiArabia has fewer than 500 engineers per 100,000 citizens.Jordan and Kuwait have about twice as many engineers percapita; the United Kingdom has about 10 times as many percapita. A comparison of 8th-grade maths and science scoresshows that Saudi Arabia lags badly behind the average of thetop 20 countries in math and science rankings.

I am convinced that this is a moment the Kingdom canseize to leverage our current strength in petroleum to helpour youth become world class participants in the globalworkforce, to diversify our economy, to improve energy effi-ciency and productivity, to accelerate and sustain economicgrowth, and to establish Saudi Arabia as the global leader inselected knowledge-based industries. These are not easygoals, but with hard work they can be attained. Just as today’sSaudi Arabia has achieved prosperity and cultural develop-ment few could have imagined two or three generations ago,so too can we prepare the way for an even brighter and moreexciting future for our nation. n

This article is based on speech given by Khalid Al-Falih at the MIT Clubof Saudi Arabia Dinner.


Khalid Al-Falih speaksduring his keynoteaddress


ABDULLAH AD.indd 1 15/6/10 14:40:59

inventory size costs. Large corporations may havehundred of millions dollars of investment lockedaway in the Inventory. A 20 percent saving on thisrealises tens of million dollars of free operatingcapital, which easily repays the investment.

How do client achieve these savings? GM. Savings can be achieved by implementing intime inventory replenishment (this is an auto-matic benefit of Maximo). Also by shortening thesupply chain cycle – many of our major cus-tomers have been able to trim 20 weeks off theirsupply chain by simply implementing the auto-mated workflow. This dramatically speeds up thereplenishment cycle as approvals are automatedand also because people know the clock is tickingand they are being measured. The result is 20weeks less stock and a massive reduction in in-ventory. Another way is by improving the pur-chasing process, meaning that items on orders arebetter specified, history is available and the buy-ers can negotiate better pricing.

Are there functional add-ons? GM. Maximo has always been a leading productin the EAM sector with its base functionality. IBMhas now started to provide focused enhancementsfor specific industry sectors. These enhancementsare based on the core product but add industryspecific functionality. These include, six industrysolutions for oil and gas, utilities, transportation,nuclear, government, pharmaceuticals and spe-cific add-ons such as Linear Assets Management(for roads, rail, pipelines and oil wells). It also in-cludes Calibration for regulated industries, ser-vice provider functionality, IT asset and servicemanagement, and Asset Configuration Managerfor aircraft and technical systems. n


Can you tell us about the recent IBM TivoliBusiness Partner award won by eSolutionsand its significance?Gaby Matar. Out of hundreds of eligible partners,eSolutions has been honoured by IBM with theSmarter Planet Award in February 2010 at theAnnual Pulse in Las Vegas. This award was givento eSolutions for its dedicated work with clients tomanage instrumented, interconnected and intel-ligent infrastructures with better visibility controland automation across IT assets, people, infor-mation and processes. The IBM Tivoli BusinessPartner Awards recognises business partners thathave demonstrated deep technology and industryexpertise with IBM Tivoli software and are deliv-ering exceptional industry solutions that solvecritical business issues. eSolutions has represent-ed IBM Maximo in the Middle East since 1996and has trained over 22,000 Middle East Maximousers in the past 14 years. We are honoured towin this award and to be recognised for our com-mitment to provide solutions and services thatenable businesses to gain a competitive edge, evenduring these challenging times.

How have you been affected by the global eco-nomic downturn?GM. Despite the economic turmoil, eSolutionsmanaged to maintain the same level of revenue in2009, while projecting a growth of nine percent in2010. This is mainly due to gaining a bigger mar-ket share and to offering our existing client basenewly introduced functional add-ons of Maximosoftware for specific industry sectors such as oiland gas, utilities and transportation.

Where is IBM Maximo being used? GM. Maximo started in the GCC as the big compa-ny tool and rapidly won the lion’s share of the oiland gas and utilities markets in the UAE, Kuwait,Oman and more. Now the focus is moving towardsthe service companies and we are seeing a big up-surge in facilities management and transportation

markets. In today’s marketplace there is a shift to-wards the service provider model. Companies nowoutsource the maintenance and operation of theirstrategic assets. For the service providers, the key towinning business is to be better and more efficientthan their competitors. This leads to these compa-nies selecting products like Maximo to give them-selves a competitive advantage.

What sort of ROI can be expected?GM. Our experience is that Maximo provides arapid ROI, usually with 12 – 18 months of rollout. Some of these ROIs happen naturally, for ex-ample by inventory cost reductions and sometake longer to achieve, such as improvement ofworkforce efficiency. Our experience is that usu-ally the first major ROI is in the reduction of the

Managing your assets

Gaby Matar lifts the lid on how his business is using experience gained in the Middle Eastenergy industry as a springboard into the service sector.

EXECUTIVEINTERVIEW

“Savings can be achievedby implementing in timeinventory replenishment”

Gaby Matar is the Group Managing Partner of eSolutionsFZ LLC. With 23 years of experience, Matar drivesworldwide partner relationships as well as establishingties with key partners in the MENA region. He has beensuccessful in working closely with many enterpriseaccounts especially in the energy, telcoms, governmentand banking sectors.

MAXIMO_june10 18/06/2010 16:08 Page 104

www.maximo.ae

Maximo ad.indd 1 15/6/10 14:44:37

The new era of internet, e-commerce, the high ad-vancement of telecommunications, networkingand globalisation forces business executives to beunder continuous pressures to increase rev-

enues, reduce operating costs, gather and analyse data morefrequently, rapidly explore new market initiatives and in-crease the business opportunities thus resulting in moreprofits and market share.

To be able to operate within new global challenges, es-pecially under major financial crises or global recessions,companies are in great need of a real time system that canstreamline the transaction processing, provide operations-level reporting and ensure the consistency and reliability ofdata across the enterprise, which simply implies that the or-ganisations must implement an Enterprise ResourcePlanning system, which provides a robust foundation for thebusiness by providing common data repository, and stan-dardise the business processes across the different depart-ments. Knowing that possessing a reliable system isbecoming a business necessity which leads to the fact that im-plementing an ERP is a must to survive, and bearing in mindthat the ERP implementation is not an easy task, the stake-holders are trapped and seek the answer to the key question:how to implement an ERP successfully? The key success fac-tors are:

Scope Definition: Organisations should precisely determinetheir requirements in details for the entire organisation, andthen finalise the scope by having a helicopter view of the en-tire requirements from different departments and determinethe flow of information between various business functionsto identify the integration points.Vendor Selection: According to the size of organisation, itsvision and allocated budget, the suitable software vendorsshould be invited to demonstrate their capabilities for fulfill-ing the crystal clear requirements.Implementation partner selection: The fact that the invest-ment in an ERP system once started will never stop meansthat the organisation must seek a business partner ratherthan an implementation vendor. Organisations will requirea long-term relationship partner who is capable of providingall services related to the ERP. Organisations will need a part-ner who is capable of identifying the pain areas and precise-

ly suggesting, designing and implementing a value addingpractical and best value for money solution satisfying the re-quirements. Further more, the partner should be capable ofmaking the necessary integration efforts with existing appli-cations and build industry specific features and functionali-ty that are not accommodated within the ERP and streamlinethe processes towards a total business solution.

As the training is considered as one of the critical suc-cess factors, the partner must provide the required trainingto the different user within the organisation to ensure asmooth transition from the old legacy systems and the newlyintroduced ERP. Prior to going live, the partner must assessthe site readiness and provide change management activitiesto ensure the implementation success and avoid any show-

stoppers. Obviously, the initial going live stage is extremelycritical and accordingly the partner should provide the postimplementation support and maintenance activities toquickly resolve any issues and ensure customer satisfaction.Finally, the partner should ensure that the business users arefully utilising the implemented features and suggest futurefootprint to adding more value for business.

Top management guidanceWith top management commitment towards the suc-

cessful implementation of the ERP, all the employees’ effortswill be focused to the company target. Lack of this major suc-cess factor will result in wasting time and a great deal ofmoney. Strong project management functionality is neces-sary to ensure successful implementation of an ERP project.At all times, project constraints, including scope, time, cost,quality and customer satisfaction should be taken care of andstrong change control procedure should be in place to ensurethe smooth implementation of the projects on time and onbudget. n

Leading the ERP implementation journey


For most organisations, especially joint stock companies, the question is not whether touse an ERP, but rather how to implement and maintain it, says Khaled El-Faramawy.

ASK THEEXPERT

Khaled EL-Faramawy isBusiness Solutions SalesConsulting Manager for AL-Nokhba for BusinessTransformation (NBT). He is asenior business professionalwith diversified credentials inbusiness development, accountmanagement, solutiondevelopment, sales, marketing,key alliance relationships,project management andcustomer satisfaction. He hasmore than 15 years’ experienceworking with variousindustries, challenging marketsand different cultures.

“With top management commitment towards thesuccessful implementation of the ERP, all the employees’efforts will be focused to the company target”

NBT_june10 18/06/2010 15:37 Page 106

Innovative Business Solutions…

A partner to trust

Capable To Deliver…

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FINAL NBT AD.indd 1 15/6/10 14:45:01

A lthough golf is sometimes described byits detractors and those who have suf-fered the ignominy of a bogey-riddledround of 18 holes as the best way tospoil a good walk, it is now a multibil-lion-dollar industry. Its top stars travelthe world, have money-spinning spon-

sorship deals and battle it out for purses worth millions ofdollars. Even despite his recent annus horribilis and subse-quent loss of lucrative sponsorship deals, Tiger Woods is stillsport’s first billionaire. And although it’s always been por-trayed as an elitist sport, increasing numbers are getting intothe game, particularly in the developing world, as profes-sional golf tours expand into new territories.

With golf garnering so much attention nowadays, youcould argue that Mark Lichtenhein has landed one of theplum IT jobs in Europe. Last year, the tour stopped off at 36countries and staged 100 tournaments as far afield as Dubaiand Kazakhstan. The IT and broadcasting infrastructure thathas to be set up at each tournament – often a greenfield sitein the middle of nowhere – is mammoth, including over 80kilometres of television cabling. When the golf finishes, it’sall taken down and the Tour jets off to the next location tobegin the whole process over again. “You couldn’t do this jobif you didn’t enjoy golf because it’s not a nine-to-five job andcan be fairly all-consuming as I’m sure my wife will testify,”says Lichtenhein. He never leaves home without his clubs,though. “My handicap is nine, which just about puts me onthe board of respectability in this organisation,” he revealsmodestly. “I’m not a great golfer, but I enjoy it.”

Lichtenhein, a software engineer by education, joinedthe Tour in 1999 after having been a founding force behindSilicon Valley start-up GolfWeb in the mid-nineties, the firstever website dedicated to golf. In the past 10 years he has

been instrumental in the evolution of europeantour.com androlling out new technologies for on-site IT infrastructure. Aswith most sports, the Tour’s information systems and tech-nology have to be ready on time for the first player to tee off;delaying the start of a golf tournament because of IT snags isnot an option. “The events don’t stop when the network goesdown, so it’s not a question of when you’re ready but howready are you when the event starts,” he explains.

Unlike the US PGA Tour that has to deal with onecountry, one language and one culture, the challenge of theEuropean Tour can leave Lichtenhein feeling like he’s land-ed in the rough. “Last year, we were in 36 different coun-tries which means it is very challenging dealing with 36suppliers for telecoms, broadband or whatever we need on

Birdies,

bogies

and


The European Golf Tour, whichstops off at Abu Dhabi, Dubai andDoha on its travels, would befirmly plugged in the proverbialbunker if it wasn’t for themountain of technology behindthe scenes. We tee off with Mark

Lichtenhein, CIO and Director ofBroadcasting and New Media, tohear more about the complexitiesof this globe trotting organisation.

SPORTSTECHNOLOGY

Above: Paul Casey of Englandhits his second shot on the 13thhole during the second roundof the Omega Dubai DesertClassic

EUROTOUR GOLF_june10 18/06/2010 15:34 Page 108

site. This is why we try to control our own destiny and bringas complete a solution to site as possible – we can’t rely ona local telco trying to work out why the DSL [digital sub-scriber line] doesn’t work or why they can’t give us sym-metric connectivity.” The Tour is self-sufficient with itsown VoIP (reducing the need for temporary lines, andTour staff have the same number the world over), Wi-Fiand super-fast satellite broadband just in case there is aglitch with the local telco’s internet supply.

Most of the golf courses the Tour turns up at don’t havea permanent infrastructure but Lichtenhein seems to relishthe challenge of unearthing solutions to ensure each tourna-ment runs smoothly. The varying locations and cultures alladd to a unique mix. “It means we have to have a lot of in-

novation and different ways of thinking depending on wherewe are. It’s compounded by the fact that we’re not only in adifferent country, but we’re in a green field often in the mid-dle of nowhere, which doesn’t even necessarily have goodmobile signals or mobile access.” He continues: “Some cours-es, however, are well served, particularly those that have in-frastructure like hotels on site, but we go to some fairlyremote courses that are very beautiful but not necessarilyknown to the local telcos.”

Indeed, that’s the nature of where golf courses are situat-ed, sometimes at a windswept outpost miles from any town.The course itself can be spread over 30-square kilometres,which adds to the expense of installing temporary networks.“The countries that we think might be more challenging tend


€116,892,269Total prize moneyon the European

Tour in 2008


to surprise us by being rather good,” Lichtenhein explains.“We go to South Korea and it’s fantastic because they proba-bly have the best broadband on the planet. We went to Indiaand hats off to our Indian partners because we had great con-nectivity. However, it’s closer to home where we seem to havemore difficulties: Scotland is not very densely populated andit has some remote courses so we’ve certainly struggled overthe years out there but generally things are improving asbroadband availability improves with every country upgrad-ing its networks. Compared to 10 years ago, it’s night and daybut the demands on the network are 20 times higher thanthey were.”

Data manager As in most sports, information is king for the spectators

gathered at the course and television viewers watching athome. Wi-Fi networks now relay scores to the leader boardand other data back to the IT hub, which is regurgitated tothe public and media. The Tour was one of the first sports topioneer the use of wireless technology for its scoring andtoday Wi-Fi is ingrained in everything that goes on behindthe scenes. “Wireless technology in all its manifestations isreally key for us,” says Lichtenhein, “especially because we areworking over a wide area. We put down 80 kilometres ofcable a week for television, so we don’t even have to com-pound that by putting out huge data networks as well bycable.” He adds: “We are so mobile and here today, gone to-morrow, that you don’t want to put in permanent infra-structure for one week of the year, even when you’re comingback to the same course another time. We look for technolo-gies that help our efficiency and reduce the overhead of set-ting things up and the costs associated with it.”

Out on the course, an army of volunteers carry hand-held devices to collect stats as the tournament unfolds,while GPS is used for calculating ball positioning, distanceto the hole, ball speed and more. The scoring and stats aredelivered to a worldwide audience, whether they’re embed-ded in television pictures, stand alone data on a website,syndicated to third parties or provided to the press. “Datais very much our product,” Lichtenhein states. Indeed, thethirst for information is hard to quench; golf followers wantas many stats as Lichtenhein can provide. “There is an in-satiable demand or appetite for information because ouraudience wants to know every last detail of everything that’shappening on the golf course. There’s an awful lot of dataout there so it’s just a question of capturing it all.” This iswhere Lichtenhein thrives. “My role is very much to lookafter all those digital assets and to ensure that they’re pro-duced in the most timely and cost efficient manner and dis-tributed to all their respective destinations as quickly aspossible because we’re living in a real-time world where thevalue of the data decreases dramatically with every secondthat passes afterwards.”

Following what’s happening on course can be a difficultproposition for spectators, whereas on television you havethe commentary, close up action of all the shots and a pletho-ra of stats and graphics. To redress the balance, the Tour isworking closely with Canada-based Kangaroo TV to streamlive footage of the action and data feeds to a handheld devicethat users carry with them around the course. The Tour pre-dicts that in the near future this same footage will be avail-able to spectators on their smartphones. “Unlike a stadiumsport where you’ve got action replays and you know exactlywhat’s going on, it’s much more difficult on a golf coursewith 18 holes,” Lichtenhein acknowledges. “And on televi-sion you know instantly who is leading; as a spectator walk-ing around the golf course you don’t. So this is the kind ofthing we are working on to improve customer experience.”

But any technologies Lichtenhein rolls out usually comewith a hefty price tag, especially given the open environmentof tournaments and the globetrotting nature of the Tour. “It’sa huge cost because all of this is temporary infrastructure,”he explains. “It’s not like erecting a giant screen at Lord’sCricket Ground and then leaving it there for the year – you’repicking it up and taking it somewhere else, so it’s got to be

durable, transportable and cost effective.”As well as being CIO, Lichtenhein is charged with the

broadcasting side of the operation, being Co-ManagingDirector of European Tour Productions – a joint venturewith IMG Media – which produces almost all of the Tour’stelecasts on behalf of the broadcasters worldwide. A special-ist live golf team has now produced more than 400 EuropeanTour events while each week 20 hours programming is de-livered to over 30 customers worldwide. Around 220 peopleare on site every week for the broadcasts.

“We produce all the pictures that you see on televisionstations around the world, be it Sky in the UK, SkyDeutschland or the Golf Channel in the US, so we bring a lot


200,000golf fans will

attend the 2010Ryder Cup

“We’re livingin a real timeworld wherethe value of thedata decreasesdramaticallywith everysecond thatpassesafterwards”

Miguel Angel Jimenez of Spainis presented with the winner’scheque for the 2010 OmegaDubai Desert Classic


of infrastructure with us and are dependent upon technolo-gy. The Tour broadcasts the action in high definition to view-ers at home and IPTV HD footage locally to hospitality andthe clubhouse. The Tour uses the services of a companycalled Creative Technology to deliver the pictures to plasmascreens around the course.

Eyes on the prizeThe ‘big one’ for Lichtenhein is the 2010 Ryder Cup at

The Celtic Manor Resort in South Wales in October.Europe’s top players versus the best the United States canmuster in a match that takes place biennially. It’s one ofsports most prestigious events and is expected to draw200,000 golf fans and 1000 journalists to the nearby city ofNewport and a global television audience of tens of millions.Lichtenhein has been making preparations for the competi-tion for the past four years. “It’s the biggest golf event on theplanet – much bigger than any of the Majors.” Lichtenheinstresses that four years is a short time in terms of planning anevent like the Ryder Cup but that technology can evolve dra-matically in this time. Indeed, making tech decisions back in2006 was a tricky proposition. “For instance, we are puttingin 100MB symmetric connectivity but it’s situated in a valley.There are a couple of PSTNs [Public Switched TelephoneNetworks] if we can find them so we are having to put in alot of fibre from the local exchange. We are looking at somefairly sizable costs to run all this for a week but it’s an eventthat’s going to be under the world’s gaze.”

Preparations were ramped up in October of last year asthe IT and broadcast teams nailed down what they needed.By this April, a team was assigned to concentrate solely onthe Ryder Cup and system testing began. The Tour will alsobe relying on outsourcing partners to make it all happen. HP,for example, will provide a unified wired and wireless net-work infrastructure to ensure fast, secure internet access toevery corner of the complex, including the tented village,hospitality pavilions, business centre, media centre and theteam rooms of both Europe and the United States.

Lichtenhein says any solutions he implements have tobe tried and tested; the Ryder Cup is too important to bewrestling with unproven technology just before it starts. “Weare very innovative but we would never use something thathadn’t been fully tested, particularly for the Ryder Cup. So ifsomebody came along and said they had this great solutionfor the Ryder Cup I would think that’s fine but let’s have itout on a European Tour event a year ahead so that we can seeit in action, we can use it and by the time we get to the RyderCup we haven’t got any surprises.” This cautiousness is im-portant but Lichtenhein is quick to reiterate that the Tour isinnovative. “We are constantly innovating. One of the greatassets we have is our high public profile which has meant weare fortunate enough to capture the imagination of a lot oftechnology companies who come to us with solutions that

they think would work for golf. Some of them do and someof them don’t, so I think we’re well placed in terms of under-standing what’s going on and events like the Ryder Cup onlyhelp to reinforce that.”

The overall goal for all this technology is to improve theuser experience, he says. “We are always asking ourselveshow we can improve things, deliver a better experience forour television viewers, website visitors and spectators but ithas to be cost effective and build the business going forward.”Looking into his crystal ball, Lichtenhein doesn’t foresee aground-breaking technology development but rather waysof better using the technologies currently available. “I don’tthink we’re going to have a paradigm change in the way thatthe internet changed things 10 or 15 years ago when it wentmainstream. However, I do think we’re in much more of aconsolidation phase about how best to use these technolo-gies, and things like, VoIP are very important to us.” As heconverses you notice that Lichtenhein seems to be alwaysnaturally smiling; he really does seem to relish this role.Working in a sport that you love is a dream combination thatmost of us never get to experience. n


Top: Alvaro Quiros of Spainplays his tee shot at the par 4,9th hole during the final roundof The Abu Dhabi GolfChampionship

Bottom: Paul Lawrie ofScotland on the 18th tee duringthe first round of TheCommercialbank QatarMasters


Challenges“The rapid development of science and technology in

the world has a positive and negative impact on communi-ties,” he continues. “Unfortunately, there are those who haveendorsed the huge developments of science and knowledgeto develop criminal methods. On the bright side, this helpsus develop more sophisticated means of detection and pre-vent criminal activity. We not only stay up-to-date with theserecent criminal techniques and methods, but we must alsodeal with them before they occur, eliminating criminal ac-tivity through proactive processes and pre-emptive strikes.”

Al Mazinah goes on to point out that security officersand policeman are responsible for maintaining the protec-tion of society. “Dubai Police General Headquartersworks hard and offers tremendous support, both finan-cially and technically, to develop the capabilities and ca-pacities of our criminal experts. We raise the performancelevel, professionally and technically, for those who workin all fields of criminal science, traffic and administration,providing them with the basic skills to cope with ongoingchallenges, particularly the patterns and type of crimesthat have become common in light of the rapid develop-ment of modern techniques.”

Established in 1956 in Port Naif, the DubaiPolice force has been serving the emirate forover half a century and in that time Dubai haschanged immensely. “Dubai Police was found-ed as the first police system in Dubai because

we needed a foundation of security,” explains Major GeneralKhamis Mattar Al Mazinah, Deputy General Commander ofDubai Police. “The law maintained stability, safeguarded therights, regulated transactions and spread security among thepeople of Dubai.”

In 1968, the late Sheikh Rashid bin Saeed Al Maktoumissued the decree under which His Highness SheikhMohamed bin Rashid Al Maktoum, Vice President, PrimeMinster of the UAE and Ruler of Dubai, was appointed Chiefof Police and General Security in Dubai. Since this time H.H.Sheikh Mohammed has set a mandate to concentrate onbuilding and developing a modern and contemporary foun-dation in support of quality of life, economy, education,health, transport and sport.

“Over the past 53 years, tremendous achievements havebeen made by Dubai Police General Headquarters in its mis-sion to maintain and support the security, stability and de-velopment of our homeland,” explains Al Mazinah.

The long arm of the law in Dubai


Major General Khamis Mattar Al Mazinah, DeputyGeneral Commander of Dubai Police, reveals how the forceis working to improve safety and security in the emirate.

SECURITYFOCUS

The long arm of the law_june10 18/06/2010 15:37 Page 112

Highlighting that security authorities around the worldare dealing with the same challenges, Al Mazinah says thatthe Dubai Police work in accordance with the vision that se-curity overcomes crime and they look to combat and reduceopportunities for criminals. As such, much time and efforthas been given over to develop and upgrade the human re-sources team and provide them with the training to providethe best security and police practices internationally throughan annual forum. Al Mazinah goes on to explain that DubaiPolice have also established a department annexed to theGeneral Administration of Criminal Investigation in Dubai

and have sent a number of officers to attend educational andtraining programmes in research and investigation.

“We have managed to gain the confidence of all inter-national security agencies who are keen to exchange experi-ences and information with Dubai Police,” says Al Mazinah.“Some countries have even asked us to provide officers toshare their expertise in the detection of the obscurities andmysteries surrounding the solving of global crimes, such asthe robbery case in Wafi Shopping Centre, the murder ofLebanese singer Suzan Tamim and the murder of SulimYamadayev.”

He added that the Dubai Police General Headquarterswill establish the Modern Laboratory for Criminal Evidenceand Criminology at Dubai Police HQ, the first of its kind inthe world. It is due to include the Administration of PhysicalRemains and Effects, Administration of Criminal and SocialEvidence, Administration of Forensic Specialist, Administrationof Forensic Technology and Administration of ForensicEngineering. “Many tests will be carried out in the new labora-tory, including hair and fibre tests, analysis of fingerprint and im-ages, chromosome tests and test for weapons of massdestruction, as well as DNA tests,” explains Al Mazinah.

Improving the cityThe Dubai Police force have a lot on their plate: from

strengthening security for construction projects to imple-menting new rules and regulations for safe living conditionsfor labourers and the huge traffic problems in the city.“Dubai Police and other bodies and authorities such asDubai Municipality, the Roads and Transport Authority,the Civil Defence Department and the Ministry of Labourall work together. We work in accordance with the visionand message of the United Arab Emirates Government,”explains Al Mazinah. “The police force is always lookingto activate partnerships with different community organ-isations and various community members to provide a de-cent and dignified life for both UAE citizens andexpatriate residents.” n


Safety for Dubai MetroThere is no doubt that the Dubai Police will play animportant part in the safety of the Dubai Metro. Anew police unit has been established to provide se-curity along the line and almost 200 officers will pa-trol the 74 kilometres of track and 47 stations. AlMazinah explains how he foresees the role shapingup: “I can’t sing the praises enough of the signing ofthe memorandum between the Dubai Police and theRoads and Transport Authority for the security ser-vices of the Dubai Metro. In particular, the memo-randum is in place to ensure the security of the metrostations under the responsibility of the Dubai Police.We have appointed specialist staff to carry out anddischarge all the tasks of the Dubai Metro safety andsecurity by attending training and courses on securefacilities methods.”

“The police force is alwayslooking to activatepartnerships with differentcommunity organisationsand various communitymembers”

The long arm of the law_june10 18/06/2010 15:37 Page 113

IAD. A solution was for a major petroleum com-pany in the region. The problem in this field isthat the plastic seal that is used for sealing thetruck’s inlets and outlets was easily removed, partof the oil was stolen, and then a new seal wasplaced, leaving no evidence of abuse. This has costlots of money by loosing oil and by getting intodisputes with the oil dealers. To overcome theproblem, we’ve locked all inlets and outlets byhardened steel padlocks using a mechanical key,which is inserted into a steel box that is installedon the dashboard. The mechanical key can’t beremoved unless an authorised electromechanicalkey is inserted into the same box and rotated,when the mechanical key is removed to open thetruck’s oil outlets. The other key is stuck in thesame box until the mechanical key is returnedagain. All electromechanical key reports can beextracted from the cylinders at the company’sHQ, which can be audited and used as evidenceincase any dispute occurs. Most importantly, oilis being transferred safely. n


What is driving the need for top-notch securi-ty locking solutions today, and how does thesituation differ in the Middle East? Are thereunique challenges?Ibrahim Al Daour. Security solutions are usually acombination of procedures, software and devices.Without having a high security locking solution tophysically block or control the access of personnel,the security chain will have a major weak link. Inother words, procedures and software are thebrain; locks are the muscles that act upon thebrain’s set-up. When it comes to the Middle East,two major challenges occur: the environment,which is more humid, sandy, and warmer thanwhere most of those advanced technologies origi-nally come from, like Europe. The other main chal-lenge is that the market has dramatically grownover the past few years in this region; people werevery busy completing the job rather than executingthe job to perfection, due to the huge number ofjobs to be completed within a very short timeframe. This has caused the competition to be, inmost of the construction projects, rather price-dri-ven and hence overlooking other important factorssuch as quality and durability.

Can you describe how best to integrate be-tween mechanical and electrical security locksin the physical security systems field? IAD. It is difficult to define a best way; however,all levels of access control have to be consideredin this integration. From the main server in thesecurity room to the cylinder, everything is to betraceable and, wherever applicable, electro-mechanically integrated. Locks can be over-rid-den by keys in several cases, but if the cylinderused is electromechanical, even this overridingprocedure is traced. The idea of using advancedelectromechanical cylinders is to combine thecomplicated hard-to-break mechanical combi-nations of cylinders’ components and theuniqueness of electronic key codes provided bythe built-in micro-electronics; ultimately, opti-

mising the strength of mechanics and the flexi-bility of electronics.

How do you see the area of physical securitylocking evolving – are there new develop-ments on the horizon that you are excitedabout?IAD. A key word in all security related solutionsis ‘integration’. It is becoming more and moreimportant to have security solutions communi-cating with each other using a common networkplatform. Physical security locks and locking so-lutions are no exception. To achieve such inte-gration, we need to have traceable informationthat can be transferred over a common network.This has been developed by few leading manu-facturers in the world to the cylinder level and ithas been successfully applied. The improvementnow is to make those cylinders more wirelessly‘networkable’ and traceable, and hence, makethe deployment, integration with other systems,and maintenance much more convenient andpowerful.

Do you have a recent example of howTechnostream has improved an organisation’sphysical security?

Under lock and key

Technostream’s Ibrahim Al Daour speaks to Business Management about security trendsin the Middle East and how his company plays a critical role.

EXECUTIVEINTERVIEW

Technostream’s Director Ibrahim Al Daour graduated fromthe American University of Sharjah in 2004, holding adegree in Computer Engineering. In 2004, he became theacting Director of Technostream, providing engineeringsolutions and services in the fields of surveillance, securityand access control, dental laboratories and industrialeducation equipment and training.

“A key word inall securityrelated solutionsis ‘integration’”

TECHNOSTREAM_june10 18/06/2010 15:41 Page 114

TECHNOSTREAM AD.indd 1 15/6/10 14:46:12

COUNTRY FOCUS

Bahrain is an understated nation by Gulf standards. Th e region’s smallest country, once a hub for pearl hunting and agriculture, lacks the fossil fuel wealth and headline grabbing mega-projects that have propelled its regional neighbours – the UAE and Saudi Arabia – into the world spotlight and oft en slips under the radar of the international media. Yet this tiny archi-pelago nation is home to a leading fi nancial services sector, a lucrative manufacturing industry and the most diversifi ed economy in the Middle East. While the global reces-sion crippled some of its more extravagant neighbours, Bahrain emerged relatively unscathed and looks set to assert itself as a major player on the world stage in the coming years.

Kamal Ahmed, COO of Bahrain’s Economic Development Board, is keen to explain why this is case. “In Bahrain,” he says, “we have taken prudent domestic measures to preserve and grow the prosperity that the Kingdom has been nurturing for many years.” Indeed, Bahrain has achieved a moderate level of growth in the last year. Th e country’s GDP grew by 2.9 percent in 2009, respectable given the fi nancial circumstances, and according to the IMF, Bahrain is expected to enjoy a further boost of 3.5 percent in 2010 and continued growth over the next fi ve years. Th is ability to withstand such a diffi cult climate comes as a result of a measured approach to eco-nomic development, and with the recovery now under way, Bahrain looks to be in a comfortable position to enjoy long-term success across a number of sectors.

“Bahrain has always tended to its growth carefully,” Mr Ahmed says, “focusing on long-term, sustainable growth. We have also taken a cautious approach to public spending, focusing on the priorities. Th is approach has served Bahrain well; it has meant that the country has avoided excessive reliance on borrowing, on derivatives and on real estate.”

As a nation, Bahrain is well within its rights to feel somewhat smug about its conservative advances in economic growth. Like the fabled tortoise, Bahrain’s slow and steady approach is proving more successful than the impressive but unsustainable boom the UAE enjoyed during the last decade. As US$400 billion worth of construc-tion projects have been shelved or cancelled in the UAE, an increasing number of landmark developments are now underway in Bahrain.

Currently taking up the most column space is the US$1 billion Durrat Al Bahrain island city project, located on Bahrain’s south coast. Th e 21 square kilometre develop-ment, projected to be something of an icon on the Bahrain landscape, will consist of 15 interconnected islands and provide a combination of residential accommodation, hotels and tourist attractions.

In addition to the luxury accommodation it will provide, the Durrat Al Bahrain project stands to provide a boost to Bahrain’s already comfortable tourism industry. Th e sector currently represents 12 percent of the country’s income, and that fi gure is expected to rise to 25 percent over the next 10 years.

Bahrain is currently one of the most popular tourist destinations in the region, receiving around four million visitors a year, a signifi cant proportion of whom are business travellers. Mr Ahmed explains that the country’s advanced infrastructure systems, competitive prices and, perhaps most signifi cantly, the location, make Bahrain a popular choice for the Meetings, Incentives, Conferences and Exhibitions (MICE) sector.

Th e Bahrain Grand Prix, which debuted in 2004, was an early indicator that the country aims to develop its reputation as a leading tourist destination, appealing to tourists from across the world rather than just those from the Gulf region, who cur-rently make up around 90 percent of Bahrain’s visitors. Improving on this already lucrative sector is important, Mr Ahmed explains, to the strategy for growth across all sectors. “As well as having an immediate economic impact, creating jobs and grow-ing GDP, bringing people into the country will also provide benefi ts longer term in

With its well-diversifi ed economy, Bahrain is in a strong position to prosper in the coming years. Business Management looks at why the GCC’s smallest nation has managed to weather the global downturn and how it plans to develop.

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Bahrain Focus.indd 116Bahrain Focus.indd 116 18/6/10 15:38:1718/6/10 15:38:17




Th e nature of Islamic fi nance allowed it to largely avoid any erosion from the recession; in fact, the sector has averaged a 15-20 percent annual growth for the last fi ve years. Th ese fi gures persuaded consulting giant Deloitte to choose Bahrain rather than Dubai, as the site for its Islamic Finance Knowledge centre. Th e announcement made earlier this year was yet more evidence that the country is now usurping the position of its neighbour as the fi rst choice for business in the region.

Deloitte are not the only global fi rm that have ex-panded into Bahrain since the recovery. Major British sports car manufacturer, McLaren Automotive, an-nounced in April that the Bahrain International Circuit would be the site for its regional headquarters. While this news did not come as much of a surprise – Bahrain Mumtalakat Holding Group owns a 50 percent stake of the fi rm – the international prestige of McLaren has helped boost the nation’s profi le, sending businesses around the world a reminder that Bahrain is a prime destination for regional operations. “Our eff orts to make our economy more business friendly,” explains Mr Ahmed, remaining modest, “by putting in the right legal and regulatory measures to make sure that there is an environment that’s conducive to doing business, has attracted growing interest from all over the world.”

Next generationIt’s not all sunny, however. Bahrain has a long-

standing problem with unemployment rates; the success

attracting business into Bahrain, both to service the growing tourism sector and in helping people to get to know the country and thus explore the opportunities to establish a base here.”

Prime spotEncouraging interest from foreign investors is a key

factor for Bahrain’s economy. Th e country has long been seen as a popular base for multinational corporations looking to establish a regional headquarters. Bahrain is well placed as a gateway to the US$1 trillion Gulf market and is looking to capitalise on its proximity to other booming economies in the GCC, most notably Saudi Arabia and Qatar. Th e King Fahd Causeway has been providing a strong link across to Saudi Arabia since the 1980s, and on the other side of the country plans are well underway to build the causeway linking Bahrain with Qatar, set to be the longest of its kind in the world. Fresh developments such as the US$360 million Khalifa bin Salman Port, opened in April 2009, and the forthcoming Bahrain Logisitics Zone is setting Bahrain up as one of the most cost-eff ective transhipment hubs in the region.

Geography is by no means the only factor that makes an attractive base for foreign investment. Mr Ahmed links the country’s appeal as a trade base back to its sus-tainable and diversifi ed economy. “Our plan has always been about building sustainable growth through a sound and fl exible economic and fi scal policy, a highly skilled and educated local workforce, diversifi ed economy and well-run, transparent regulation, which has been proven over time. In today’s world, recovering from recession, these same measures provide the optimum business en-vironment for international companies.”

Indeed, Bahrain’s fi nancial services sector has suc-cessfully established the country as a prime business hub in the Gulf and will continue to make it a popular choice for the future. Th e fi nance industry accounts for around 26 percent of the country’s GDP, signifi cantly more than the usual primary economic contributor in the region, oil and gas. Th e infl uence of this industry on the national economy makes Bahrain’s weathering against the reces-sion all the more impressive.

Mr Ahmed puts it down to a belief in the impor-tance of strong but transparent and rigorously regulated fi nancial system. “Th e Central Bank of Bahrain (CBB) is the only single regulator in the Middle East and is widely considered the most progressive in the region,” he ex-plains. “Th e CBB consults with banking professionals in devising its regulations and applies them uniformly, with no exceptions.”

Another major infl uence in this sector is the Islamic fi nance industry, a niche market that Bahrain dominates thanks to a substantial quantity of specialist institutions.

Durrat Al BahrainOwned by the Durrat Khaleej Al Bahrain Company, the Durrat Al Bahrain is the biggest project of its kind in the country, and is intended to provide luxury accommodation, generate business opportunities and boost tourism. The mega-project, designed by global architecture fi rm Atkins, is slated for completion in 2015 and will consist of:

15 interconnected, artifi cial islands2000 beachfront villas3600 apartments and offi cesLuxury hotelsRetail space400 berth marina



Constructing the future Looking to establish a strong living environment for its national workforce and to attract the greatest amount of interest from outside the country, Bahrain is planning to develop its national infrastructure, from transport systems to healthcare.

April 2010 saw the announcement of the King Abdullah bin Abdulaziz Medical City, a US$22.7 million healthcare centre in Bahrain that will be affi liated to the Arab Gulf University.

The end of 2011 is the planned start date for the US$7.9 billion public transport network that aims to be fully completed by 2030. The network will include a light rail link, a monorail system, trams and bus rapid transport systems and will cover a total of 184.2 kilometres.

The Bahrain Qatar Causeway is due to begin construction this year. The causeway is the longest of its kind in the world is set to cost around US$2.7billion.

In order to tackle a national housing shortage, 5000 homes are being built every year until the 45,000 families waiting for housing have a home. Using a new Chinese technique, the smart homes are built in two months rather than 18. The waiting period for houses is currently more than 17 years, but by the end of 2011 the list will hopefully have been cleared up to 2003.

in attracting expatriate workers has had a detrimental eff ect on the country’s national workforce, with dispro-portionate numbers of Bahrainis out of work. Th is is one of the issues that Bahrain’s economic development plan, Vision 2030, plans to tackle; Mr Ahmed explains that the plans, which were published last year, aim to drive focus on the private sector and raise national living standards by creating greater opportunities for the country’s people.

Th e evidence can already be seen. A US$3.5 bil-lion steel manufacturing complex is currently under development in the Salman Industrial City, which will generate around 1800 jobs and looks set to be one of Bahrain’s largest employers by 2013. “We are de-termined to invest in the future,” says Mr Ahmed. “A growing number of Bahrainis are entering the labour market and we are committed to attracting and training a workforce that will be able to fi ll the positions that we will create through a continued focus on diversifying our economy.”

As well as creating new jobs, there is an emphasis in the country on nurturing independent business. June saw the launch of a US$26.5 million support fund for small and medium-sized businesses that are at least 51 percent Bahraini owned. Th e initiative is a joint venture from Tamkeen (formerly the Labour Fund), Bahrain Chamber of Commerce and Industry and the General Federation of Workers Trade Union, and aims to sup-port around 1000 SMEs. Nazar Sedeq Al Baharna, the Chairman of Tamkeen, told the Oxford Business Group in an exclusive interview: “Culturally, we need to change the way people look at SMEs because the ma-jority only see the value in large corporations, but the reality is SMEs form 97-98 percent of total businesses in Bahrain”.

In fact, this recent project is just one of many initia-tives Tamkeen has been involved in. To date, the organi-sation has invested some US$185 million into projects targeting more than 5700 SMEs and 19,000 Bahrainis to provide a boost for local businesses and ensure the national workforce are the fi rst choice for opportuni-ties in the country. “Around 100,000 young people are forecast to join the national workforce over the next 10 years,” says Mr Ahmed, “which will provide a great op-portunity for overseas businesses looking to tap into the talent and potential of our country.”

Certainly, Bahrain still has a way to go. Th e popula-tion is projected to double by 2030 thanks to a growth in the expatriate workforce, so the country must ensure it has the infrastructure capacity to sustain this boom. But all evidence suggests that Bahrain is doing everything to maximise its potential for signifi cant economic develop-ment and establish itself as major global economy.

Kamal Ahmed, COO of Bahrain’s Economic Development Board


As the most powerful fi gure in Bahrain’s oil and gas sector, the Minister for Oil and Gas Affairs he

dr abdul-hussain ali mirza holds the key to one of the world’s most profi table refi ning industries. In this exclusive interview, he tells Diana Milne about his hopes for the future.

LAND OF

COUNTRY FOCUS


Dr Abdul-Hussain Ali Mirza.indd 120Dr Abdul-Hussain Ali Mirza.indd 120 18/6/10 15:29:2818/6/10 15:29:28

When Dr Abdul-Hussain Ali Mirza started out as a fresh-faced Bapco trainee aft er leaving school, he never dreamt of one day becoming the most powerful fi gure in the coun-try’s oil and gas industry. Today he is charged with over-seeing the whole of Bahrain’s energy remit, at a time when the country is undertaking a dramatic overhaul of its oil

and gas industry. Formerly a relative backwater in the GCC oil and gas sector, Bah-rain is currently experiencing a fl urry of activity by major international oil companies (IOC) following the allocation of four off shore exploration and production blocks last year. Meanwhile, eff orts are underway to tap into the country’s natural gas reserves and to develop technology that will breathe new life into the ageing Bahrain fi eld.

Describing his spectacular climb to the top, the man in charge of these projects says: “I worked at Bapco for 40 years, starting off as a trainee before ending up as Chief Execu-tive. During that period the company was kind enough to sponsor my higher education in London. Th en I had to go through various positions, climbing up the ladder of the organisation. So I have been General Manager of Administration, General Manager of Services and of Finance and Legal Aff airs, Deputy Chief Executive and Chief Executive. I was appointed in 2002 by his Majesty the King as a Minister of State and in 2004 I was made Minister of Cabinet aff airs.”

Leading changeAli Mirza became Minister of Oil and Gas Aff airs in 2005. Th en, following the issuing

of political, social and economic reforms by the King of Bahrain, the National Oil and Gas Authority was formed, with Ali Mirza as Chairman. Since his appointment, he has been instrumental in encouraging investment by IOCs in Bahrain’s oil sector – an achievement he describes as his proudest to date: “Th e main thing I have brought about is a paradigm shift in the oil and gas sector. Th ere are lots of activities going on now in the sector. We have off ered all our off shore blocks for exploration to the international oil companies and they



will develop the onshore oil fi eld with the latest technology such that the production of crude oil is doubled, from the current 30-35 thousand barrels per day within fi ve years and then trebled two years aft er that. In addition, Tatweer will implement a drill-ing programme to increase the non-asso-ciated gas production so that the planned increases in power and water requirement are met. Now one might ask how impor-tant this is to Bahrain, my answer is that the contribution to the national economy will be enormous,” says Ali Mirza.

Another activity upon which high hopes are being pinned in terms of its po-tential contribution to the Bahraini econ-omy is the exploration of Bahrain’s deep gas reserves. Currently the government is evaluating bids by IOCs to carry out the work. To date drilling has reached 16,000 feet in Bahrain but the plan is to increase this to 20,000 feet. Ali Mirza hopes that if greater reserves are accessed in Bahrain it will, like neighbouring Qatar, be able to tap into growing world demand for LNG: “Our consultants say we have a good quan-

tity (of deep gas), this is their estimate. We don’t want to project any fi gures because the bidders have bid, and we want to look at their projections and their evaluations fi rst. Gas is the most valuable commodity now everywhere. It’s required for generating energy for the industry, for generating power and electricity, for use as a fuel in the petrochemical industry, so it is a commodity in demand, and we in Bahrain have launched 12 initiatives to secure gas because we don’t have as much gas as Qatar has currently.”

Th e eff ective use of new technology, including enhanced oil recovery techniques, is vital to the success of Bahrain’s many projects, and Ali Mirza says the country prides itself on its investment in the latest techniques: “Of course Bahrain has always been proactive in the use of new technology and we are currently using it both in the exploration for crude oil and in the refi ning sector. So for example, we have spent more than US$1 billion over the last 10 years to modernise a refi nery by using new technology. We have carried out major projects, for example, to produce unleaded gasoline and low sulphur diesel projects, and we are currently commissioning a new refi nery gas exploration project. All these projects require new technology.”

Investing in the futureAs well as investing heavily in exploration technology, Bahrain has also paid millions

of dollars into projects to increase the sustainability of its operations. Last year, the NOGA signed an agreement with Abu Dhabi - based Masdar to develop ways to cut carbon emis-sions in the oil and gas sector. Describing some of the environmental projects the govern-ment has been involved in to date, he says: “We are very proud of what has been achieved, and the support that we have received for environmental projects from the very top of the government. For example, over 10 years ago Bapco developed an environmental invest-ment programme to improve the quality of petroleum products and reduce environmental emissions. Unfortunately these projects cannot be achieved overnight. In the early part of the decade Bapco eliminated the manufacture of leaded gasoline and the whole country

are working on it now. Cooperation with international oil and gas companies based in other countries is seen by the political leadership of Bahrain, and the National Oil and Gas Authority (NOGA), to be vital to the future of the industry in Bahrain. International oil companies are the enablers for us to develop our natural resources such that the citizens of Bahrain can collectively benefi t in terms of standards of living, employment and wellbeing.”

In addition to the major upstream projects un-derway at Bahrain’s four off shore blocks by IOC’s, the country is also awaiting the completion of a major overhaul of the main pipeline, which transports crude oil from Saudi Arabia to Bahrain’s refi neries. Th is will enable Bahrain to achieve one of its key objectives – a plan to pour billions of dollars into the production of high quality gasoline and aviation fuels. “With respect to the new pipeline, the FEED study is ready to start while we await approvals for the onshore route of the pipeline. Th is project is part of our vision to create a refi nery that is a world leader and extremely competi-tive,” says Ali Mirza.

Maximising resourcesAs well as creating new facilities, Bahrain is investing

heavily in maximising its existing resources, in particu-lar the Bahrain fi eld – the oldest in the Arabian Gulf at 79 years. Oil was fi rst discovered there in 1952, signalling Bahrain’s entry into the global oil and gas market. Th e NOGA has signed an agreement with two international

oil companies, Occidental and Mubadala, which, together with the newly formed Bahraini oil company Tatweer, will aim to triple current production at the Bahrain fi eld from 33,000 bar-rels per day to 1,200,000 in the next seven years. “Th ey will be using the latest enhanced oil recovery technologies such as steam injections, water fl ood-ing and gas injections. Tatweer

“Bahrain has always been proactive in the use of new

technology and we are currently using it both in the exploration for crude

oil and in the refi ning sector”


went unleaded. More recently the refi nery invested US$150 million to remove impurities from the Khuff gas and the project has reduced the SO2 emissions to a level below the standard for refi neries in California. Th is is a clear example of how the refi nery sets world-class standards. We also invested US$700 million in the refi nery to manufacture ultra low sulphur diesel, and the refi nery now makes the cleanest diesel in the world. Further refi nery projects have addressed solid waste from the refi nery and improvement of the excess water.”

But these cutting-edge projects require major investment by the Bahraini government at a time when margins in the industry are tighter than ever. Ali Mirza admits the Bahraini oil and gas industry has been adversely aff ected by the economic downturn, but says, given the lengthy planning periods involved in constructing new refi nery facilities, he is hopeful that long-term projects will not be aff ected: “Th e global recession has impacted the world-wide demand for petroleum product and the corollary of this is a reduction in refi nery margins. Hence, the recession has defi nitely reduced our earnings. On the other hand, investments in this industry take a long time to develop from the initial idea to a plant in operation. Th is can oft en take between fi ve and seven years. Our strategic investment plans are designed to position us for the long term and so we have not reduced this investment. Short-term investment has been modifi ed but not to a great extent.”

As well as the fi nancial capital needed to realise its ambitious plans, Bahrain requires skilled human capital, which, like in every other country’s oil industry, could be in short supply as the current generation of oil and gas workers approaches retirement age. Ali Mirza describes the steps being taken to combat the problem: “If I may take you back to the 1960s, Bahrain faced the problem of developing a skilled workforce in the oil and gas industry and a cadre of young men and women were identifi ed for further education. Th at programme was coordinated by Bapco in conjunction with the American company Caltex and the result was that the major Bahraini companies are now predominately managed and operated by Bahrainis. It is not uncommon for our manufacturing companies to have a level of Bahrainisation of between 80 and 90 percent. Th e additional benefi t was that many national leaders, myself included, originated from that programme.

“However, what are we doing for the future? Today is a diff erent world and young people have diff erent aspirations. However, we aim to recreate the successful develop-

ment programmes of the past to ensure that the neces-sary academic and vocational education and training is made available to every young person in Bahrain.”

He goes on to reveal that the government is in the process of discussing plans for an oil and gas institution in the country to educate trainees and that it is focussing on the continued training of those already employed within the industry: “We want to create an institute for education in the oil and gas industry, and we have been discussing an arrangement with a prestigious, globally recognised university that specialises in courses suited to the oil and gas industry. Furthermore, we ensure that the training and development budgets of companies within the NOGA portfolio are generously supported, such that employees of all ages are getting the necessary development as this is vital to the future. It is a great challenge for NOGA to demonstrate to the school leav-ers and the university graduates that a career in the oil industry will be rewarding fi nancially and in terms of job satisfaction.”

Ali Mirza’s own career success story should be moti-vation enough for aspiring young Bahraini oil workers to join the industry, despite the challenges it currently faces in today’s economic climate. He believes that Bahrain’s own part in the global oil story is only just beginning and that there is plenty of life left in the industry yet: “If anyone tells you that the oil industry is a dying industry, just take another look at the demand for hydrocarbons, the dependence of society today on the products from oil, and the reserves for the future. Oil will be a part of the energy solution for a very long time.”



REFINING124 www.busmanagementme.com

Eian Turnbull.indd 124Eian Turnbull.indd 124 18/6/10 15:39:4218/6/10 15:39:42

As oil refi neries face one of the toughest periods in their history, Bapco’s deputy CEO Dr Eion

Turnbull reveals what the company is doing to stay one step ahead of the competition.

Although Bapco may appear oft en in the news headlines for its workers’ strike action, the company is keener than most to publicise its employee welfare schemes. Press releases are regularly issued describing the latest health and safety programmes or staff training days. And according to Deputy CEO Dr Eion Turnbull, it is the empowerment of its people that diff erentiates

Bapco from the rest of the region’s National Oil Companies. “Fundamentally I believe these days, that if you look at diff erent refi neries, the technology and the hardware that sits behind them is broadly the same. In fact, the real diff erence between the pace setters and the laggers is the way people get engaged in the business and contribute to its success. I fi rmly believe the diff erence between the best and the rest is the people. At the heart of the organisation are the people, their loyalty and the people thinking that the managers care about them in a holistic sense and make them feel special.” He goes on to say that this is very oft en not the case at GCC-based oil companies. “Some companies talk about issues like safety but you get a sense of them being driven by the wrong reasons. For example a manager might drive safety very hard because it’s going to aff ect his or her bonus, not because they really care about people or their well-being.”

People powerElaborating on how Bapco’s approach is diff erent, Dr Turnbull says it provides support

and training for employees’ career development, supports the families of injured work-ers and runs health and safety schemes such as a recent ergonomics awareness campaign. Despite this focus on employee welfare however, Bapco workers frequently strike over pay and working conditions, with the most recent industrial action taken in February when hundreds of staff protested against the company’s refi nery facilities, led by the Trade Union of Bapco Employees, which issued 52 diff erent demands including automatic retirement for workers aged over 60. Similar strikes were held the previous February by around 700 workers demanding increased bonus payments. While these strikes indicate worker dis-satisfaction, they are also perhaps indicative of the company’s willingness to provide work-ers with a voice by supporting the existence of a trade union. Indeed Dr Turnbull denies that Bapco’s record with regards to staff treatment is tainted and claims the only challenge it now faces in this regard is to ensure it keeps its standards up. “I think Bapco has an enviable history, in terms of safety, care and concern. Th e challenge for us now is how to maintain and sustain that because quite oft en when you are very good, there is a tendency to maybe take your foot off the accelerator and think you’ve done it.”

Safety fi rstOne of the ways in which Bapco aims to perpetuate its “enviable history” is through

its strong focus on health and safety issues. Dr Turnbull points out: “If you have one big incident on the refi nery, you can go from looking very good to looking very poor very quickly.” As well as operating ongoing health and safety training schemes for its staff and funding some through higher education programmes, Dr Turnbull says the company is looking at ways in which to use technology to increase the safety of its workers. One such initiative, he says, is the installation of remote sensing devices to detect the early signs of dangerous gas emissions. “Th ere might be areas where there might, for example, be a release of volatile organics. Th e sensors can detect a combination of chronic and acute gases,” Dr Turnbull explains.




About BapcoBapco is wholly owned by the Government of Bahrain and is engaged in exploration and prospecting for oil, drilling, production, refi ning, distribution of petroleum products and natural gas, sales and exports of crude oil and refi ned products. The company owns a 250,000 barrel-a-day refi nery, storage facilities for more than 14 million barrels, a marketing terminal, and a marine terminal for its petroleum products. Bapco’s prime customers for crude oil and refi ned products are based in the Middle East, India, the Far East, South East Asia and Africa, and 95 percent of its refi ned products are exported.

Technology is also being used to help the company reach its environmental targets, particularly reducing emissions of sulphur gases from its refi neries. In order to achieve this, it is investing US$400 million in research and development to fi nd a solution. Describing the project Dr Turnbull says: “Previously our gases were not treated as thoroughly as we’d like to so not all of them ended up in our fuel gas. Th ere were three major pieces of work. Th e fi rst major piece was to identify the diff erent gas strains and to separate them, put them through diff erent scrub-bing units to extract the H2s and put them through sul-phur recovery units. Th ese are the modern recovery units where you actually have the three-stage conversion process with a unit at the end that really gets down to the very low levels of sulphur compounds released.”

Another environmental scheme the company is run-ning is a new state-of-the-art wastewater treatment plant that uses membrane technology combined with biological technology to clean up the fuels before they become re-leased in wastewater. “Th is takes away wastewater and treats it through chemical processes and then through biological processes. It was quite a challenging project because our wastewater streams have some characteris-tics that are unusual in terms of high temperatures and high levels of salinity. Also, some of our specifi cations on clean water were much tougher than in other parts of the world. So getting the combination of tough conditions and tough criteria was diffi cult. What we ended up with was a membrane-based biological system.” He goes on to say that environmental schemes of this sort are all the more important given the increased future global demand for energy: “Sudden demand for energy to meet ever increas-

ing needs really plays out on two sides. One side is how you restrict demand and how to be more energy effi cient so you don’t consume energy in the production process itself. Th e other side is how you make more of the product itself.”

Competitive timesBut while Dr Turnbull is working to fi nd ways of sus-

tainably meeting world demand, he also says one of the biggest challenges the company faces in the shorter term is the growing competition from new refi neries that are slated to open, particularly in emerging markets such as India – combined with the impact on short term demand from the economic downturn and growing eco-awareness. “Th ere are a lot of facilities coming online and some big ones like the refi neries over in India. And because of awareness of the environment I think that in the western world we’re going to see demand either shrink or stay very fl at as they make moves to contain their energy consump-tion. What we’re seeing around the world is that some refi nery projects have stopped altogether and others have been slowed down. We’re seeing shutdowns and shut-ins of refi neries on a scale that I don’t think we’ve seen in maybe 30 years. It’s having a profound impact on the industry at the moment.”

With this in mind, Dr Turnbull says he is work-ing on ways to cut down on the company’s operational costs, “We are looking at how we can control our costs in a meaningful way during this period.”

Th e company is also forging ahead with plans to expand its refi nery capacity despite the gloomy eco-nomic prospects. Last year, it announced plans for a US$2 billion expansion of its Sidra refi nery, which would take capacity to between 350,000 and 400,000 bpd, from around 267,000 bpd. Th e success of the project depends on the building of a new pipeline from Saudi Arabia through which it will receive new crude oil supplies, which are expected to be pumped through from 2011. Th e company is also in partnership with the Finnish company, Neste Oil, to establish a base oil plant. It will aim to take some of the lower grade oil streams from the hydrocracker and upgrade them to high qual-ity base oils that can then be used for high performance engines. “It’s a major undertaking and that’s just the sheer logistics of getting all the equipment here on time and getting the right sequence of events around the construction and the commission of testing. You have got to be very careful with hydrocracker units.”

Like every oil company in the GCC, Bapco is work-ing to achieve a delicate balance between planning ahead for increased global demand and adapting to current economic conditions, which have stifl ed it. Its ambitious expansion plans suggest, however, that its eye is set fi rmly on a brighter future. Eion Turnbull



OK: We have executed many security projects ofhigh caliber in Saudi Arabia and in Bahrain but themost demanding one was the integrated securitysystem of a modern university on the west coast,where intelligent long-range CCTV cameras weredeployed to detect intruders and pinpoint theirexact location along the 15 km perimeter usingsatellite geo-positioning techniques.

We see the market flooded with CCTV cam-eras of all sorts. How can you choose the rightcamera for your application?OK: Most of the cameras you currently see on themarket are of the analogue type. They are cheap.However, with the giant leaps in today’s informa-tion technology, analogue cameras are becomingsomething of the past. They are being rapidly re-placed by IP digital types, allowing communica-tion over LAN networks with unprecedentedimage clarity and features. Cameras with highprocessing power now yield high definition im-ages with video content analysis. This means thatit is now possible to analyse the size, speed, direc-tion, quantity and behaviour of the image andalert the operator only when the image behaviourmeets certain criteria as set by the software.

What is your preferred security technology atthe moment? OK: There is a definite tendency for our designersto rely more and more on image behaviour analy-sis as a means of intrusion detection and site con-trol. And since this technology is in a state ofconstant change, our strategy at Abdulla Fouad isto always provide our clients with the most up-to-date technology without compromising their al-ready existing systems. n

Can you give us a quick rundown on how theMiddle East security market was in the pastand where it has evolved to today?Ousama Kabbani: I remember the first time I ap-proached a client in Jeddah in the late 1960s, hebluntly asked me: “Why would I be needing a se-curity system when Allah (swt) protect me fromabove?” He may have had a point then. Lookingaround me, I saw a Rajhi money exchange shopowner close down for prayer by simply coveringhis goods (cash in essence) with a blanket, thengoing off to the mosque. It is said that “need is themother of invention”. Maybe you wouldn’t hearof a theft then, or at least a theft without severepunishment. But as crime rates rise steadily intheft and/or terrorism, so does the need for secu-rity counter measures.

When did industrial security start becomingparamount in this area?OK: After 9/11 of course, though it had alreadybeen making remarkable strides in some coun-tries such as Saudi Arabia, thanks to local legisla-tion from the Ministry of Interior through their

High Commission of Industrial Security (HCIS)that sets standards and ensures that all executedsecurity projects meet those standards.

When did this legislation come into force?OK: Since the early 1990s, every industrial and/orcritical site in Saudi Arabia must have an inte-grated security system in place. This is whatmakes Saudi Arabia a very attractive market forsecurity companies. They are growing in numberevery day. But of course, advanced security solu-tions remain in the hands of only a few profes-sional integrators with the necessary technicalknow-how and financial strength.

What was the most demanding project thatAFHC (ISSD) has been involved in?

Keeping a watchful eye

Ousama Kabbani explains how the security market has evolved in the Middle East regionand how surveillance technology is improving.

EXECUTIVEINTERVIEW

Ousama Kabbani is an experienced veteran of thesecurity world, having been involved in the industry for40 years. He is an electronic engineer and has for manyyears been working extensively throughout the MiddleEast. He currently holds the position of General Managerof the Industrial Security & Safety Division (ISSD) ofAbdulla Fouad Holding Co. in Saudi Arabia.

“Analogue cameras are becomingsomething of the past. They arebeing rapidly replaced by IP digitaltypes, allowing communication overLAN networks with unprecedentedimage clarity and features”

ABDULLAH EXEC_june10 18/06/2010 15:29 Page 127

With the world economy in recession and job cuts in manysectors, some might think that doing an MBA might not beof much relevance in the immediate future. The MBA in-dustry is no stranger to recession and turbulence. Previous

economic downturns and difficult economic times have in fact traditionallyheralded a surge in applications, as people identify a natural opportunity totake a career break or to improve their skills. The burst of the dotcom bubble,for instance, brought many executives to business school campuses.

It is unclear what the future holds, but one thing can be certain, there willalways be a need in the economy for skilled and experienced managers ableto work in an international environment.

Many graduating MBAs are now ob-viously anxious about recruitment.Nonetheless, companies are still hiring, de-spite the difficult conditions, and an MBAwill always be of benefit, in particular forthose who have just enrolled or are consid-ering entry into a business school this yearwith graduation in 2011 or 2012 when theeconomic climate will be very different andrecruitment will be active again.

The current crisis is not going to re-verse the trend for globalisation. We live in a global age and it is imperativethat executives are able to operate in an international context evolving in andleading multicultural teams, suppliers, contractors and clients. In a globaleconomy, corporations have a seemingly insatiable need for good managers.This is a trend that will only gather pace in the years to come.

So I expect that the MBA will retain its status as the 'hot ticket' in post-graduate management education and European business schools will prevail,as they are already catering to diverse cultures and have a more global outlookthan US business schools. Indeed, our students are usually multilingual andare very often seeking to work in another region of the world. They are gen-erally open to the idea of job flexibility, which is essential in today's volatileeconomic climate.

Given the economic turbulence, many will opt for a general MBA thatprovides the basic tools for students to enter a wide range of sectors. Some stu-dents may opt for specialised programmes, enabling them to refocus or redi-rect their careers towards a specific industry.

Employers are becoming increasingly discerning and looking moreclosely at the additional value MBA graduates can bring to a role. So it is vitalthat executives planning an MBA select a programme that takes them in thedesired direction.

Some will decide on a one year/18 month full-time programme and oth-ers on a longer, part-time, blended learning MBA, which allows them to con-tinue to work whilst studying.

Part-time/blended learning students tend to have a wider age range thanparticipants in full-time programmes, and choose this option to overcome lo-gistical challenges, avoid the need to take two years off work and benefit fromapplying their new knowledge immediately.

The integration of technology is helping to facilitate this option andmuch of the work is still done collaboratively by students via the web, withseveral face-to-face workshops every year. And the part-time programmes aregenerally about 50 percent cheaper than the full-time equivalent, whilst theMBA degree awarded is exactly the same as for the full-time programme.

A part-time MBA is not an easy option, as it demands the combining ofwork, study and often family commitments, but our experience shows thatmost students complete their studies successfully whilst often having beenpromoted at work or moved to a better job in another organisation.

The most effective MBA programmes have a diverse international mixand attract professionals with strong work experience, establishing an exten-sive global network of contacts that will be invaluable in future careers.

MBAs are not a career panacea but in the current competitive market-place, an MBA from a well-respected business school sets an executive apartby giving him/her the business agility to succeed. n


Training up

Nigel Banister explains how globalisation and the economic downturn have made therecruitment market more competitive than ever and how an MBA could help executives getthat all important edge.

INDUSTRYINSIGHT

For more information visit: www.mbs.ac.uk/dubai

Nigel Banister is Chief Global Officer of Manchester Business School (MBS), the UK’s largestcampus-based business and management school. It provides a comprehensive range ofundergraduate and postgraduate programmes as well as customised executiveprogrammes for organisations from both the private and public sectors. ManchesterBusiness School Middle East Region International Executive Centre was established inDubai in 2006 and currently supports more than 700 MBA students from across the region.

We live in aglobal age andit is imperativethat executivesare able tooperate in aninternationalcontext”

MANCHESTER SCHOOL_june10 18/06/2010 15:36 Page 128

MANCHESTER AD.indd 1 15/6/10 14:44:25

Saadiyat Beach Golf Club with a championshipready course designed by Gary Player. Nine holesof the Yas Links course on Yas Island haveopened and the nine-hole, all grass course at thePalm Sports Resort in Al Ain has expanded to 18holes. We have also, in the past year, seen theopening of the iconic Yas Hotel – the only one inthe world straddling a Formula 1 race track; thebeachfront Fairmont Bab Al Bahr and TradersHotel and the Qasr Al Sarab Desert Resort byAnantara in the midst of the towering dunes ofthe stunning Liwa Desert.

Our leisure proposition will take anothergiant leap forward this October with the plannedopening on October 28 of Ferrari World AbuDhabi – the world’s largest indoor theme park


Can you sum up the main goals of the ADTA’sDestination 2013 strategy and the impact thiswill have on Abu Dhabi in the long term?Mubarak Hamad Al Muhairi. Abu DhabiTourism Authority operates a five-year rollingstrategy. Our current strategy, which extendsuntil the end of 2012, had numerous objectives. Itcalled for a substantial increase in the number ofhotel rooms by the end of the period. We are cur-rently on course to achieve that with some 17,500rooms at present with 21,600 rooms anticipatedby the end of this year; 22,600 rooms by the endof next year and 24,000 rooms by the end of 2012.The strategy also called for a significant increasein visitor attractions to expand the destination’sleisure segment appeal.

How far have you come in terms of achievingyour goal of creating world-class leisure facil-ities in Abu Dhabi?MHM. Since the strategy’s launch in April 2008,much has been achieved with the opening of therenovated Al Jahili Fort in Al Ain , the arrival ofthe Big Bus Company operating city tours in AbuDhabi city, the launch of the Yellow Boats speed-boat tours of our coastline, bicycle hire for visitorsto our Corniche and the opening of the expansiveCorniche Public Beach. There has also been thelaunch of SeaCruisers diving, fishing and coastalsightseeing trips as well as more recently, the in-troduction, by Falcon Aviation, of helicoptertours of Abu Dhabi city and its environs.

In addition, we have seen the opening of the

TOURISM

Visitors w With an estimated 2.7 million hotelguests expected there by 2012 andwork underway on some of theworld’s most ambitious leisure andhospitality projects, Abu Dhabi is oncourse to become one of the world’smost exciting tourism destinations.Business Management meets the AbuDhabi Tourism Authority’s (ADTA)Director General, Mubarak Hamad

Al Muhairi, to find out how it plansto realise these ambitions throughits Destination 2013 strategy.

ABUDHABI TOURISM_june10 18/06/2010 15:25 Page 130

boasting the Formula Rossa, the world’s fastestrollercoaster.

What advances has the ADTA made in terms ofcreating a skilled workforce to service and de-velop the emirate’s leisure and tourism sector?MHM. The authority has made major advance-ments in the field of professional developmenttraining with more than 1000 employees of thelocal tourism industry now having gone throughworkshops and seminars staged by ADTA. Ourongoing training programme, which extends to theentire industry, not only the ADTA workforce, hasalso seen us introduce the highly successful YouthTourism Summer Camp, which gives youngEmiratis hands-on experience in all aspects of the


industry. Indeed this has been so successful that itis being expanded this year.

We have also expanded our Ambassadorsprogramme to other Government entities in re-sponse to demand. This programme trains cus-tomer-facing UAE nationals to be ambassadors ofthe destination. Other strategy high points havebeen the successful introduction of our ground-breaking classification scheme, which was pio-neered in close collaboration with our hospitalityindustry and the launch of our ‘Partners inProgress’ stakeholder campaign, which has drawnus closer to the industry worldwide. In short, theimpact of these initiatives has been a much im-proved offering in terms of facilities, accommo-dation and service levels as well as enhanced

destination credibility at both trade and con-sumer levels.

Has the achievement of these goals been af-fected at all by the economic downturnthrough impacts on investment in infrastruc-ture projects?MHM. Not currently. In Abu Dhabi we have beenfortunate that work on all previously announcedprojects has continued and is continuing. Theremay have been some delays within the privatesector on projects it planned to announce but ithas been minimal.

From which parts of the world does ADTA aimto attract tourists and are there any national-

elcome


MHM. In the case of the classification upgrade, wesimply want to recognise certain properties wherestandards and facilities are well above the tradi-tional five-star categorisation. This is one way ofbetter positioning the properties to the trade andconsumers. In the case of the Green Hotels pro-gramme – this is totally in line with our intentionto build a world-class, sustainable tourism desti-nation and with our core value of protecting ourenvironment. It is also aligned to the Abu DhabiGovernment’s 2030 plan, which has sustainabili-ty running through all streams of society.

What aspect of ADTA’s work are you mostproud of as Director General and which as-pect of the authority’s plans are you mostlooking forward to coming to fruition?MHM. I am proud of the many internationalcommendations now being received by ourstakeholders and the destination as a whole –such as the recent recommendations by two ofthe world’s top travel guides Frommer’s andLonely Planet of Abu Dhabi as a top 10 destina-tion to visit this year. From the authority’s pointof view I am proud of the achievements of the en-tire staff which last year helped ADTA be namedas ‘The World’s Leading Tourism Body’ in the2009 World Travel Awards – they have come along way in just over five year’s of ADTA’s exis-tence. I am looking forward to maintaining themomentum and reaching our target of 2.3 mil-lion hotel guests by the end of 2012 and to someof the new initiatives taken by our events teamincluding the January 2012 hosting of the fourthleg of the Volvo Ocean Yacht Race when we hopeto activate the entire community. Of course weall look forward immensely to the opening in2013 of the Louvre Abu Dhabi and GuggenheimAbu Dhabi. These are certainly exciting times.

Which aspect of the ADTA’s targets do youthink will prove the most challenging toachieve?MHM. We love challenges at ADTA – they donot divert us. I think we have a challenge inachieving greater Emiratisation within the over-all tourism segment and it is an issue we are de-voting dedicated resources to. It is largely amatter of education and letting young Emiratisknow the very diverse opportunities available tothem in this exciting industry where they cangreatly assist the future development of theirhomeland. n


ities it is working on that have not traditional-ly been frequent visitors to the region?MHM. Our key source and emerging marketsare the neighbouring GCC states, the UK,Germany, France, Italy, Australia and China –we operate offices in the last six. We are activelypursuing the opening of another office – possi-bly in Russia later this year – and are looking toexpand our influence in China. We are alsoworking closely with our key stakeholder EtihadAirways on activating the Japanese market afterthe launch of its recent flights from Nagoya andTokyo to Abu Dhabi International. The MiddleEastern countries remain our mainstays but weare actively pursuing the high potential Asianmarkets.

Efforts are currently being made to train AbuDhabi’s travel agents to ensure they are betterprepared to meet the challenges of the emi-rate’s changing environment. Can you de-

scribe what the aim is of this training and inwhat way travel agents need to improve theirwork?MHM. As described above our professional in-dustry development department is working on anumber of initiatives to improve service across avariety of aspects – from better use of the inter-net for online selling, to having a deeper under-standing of the Asian market and its specificneeds. We offer stakeholders training sometimesat no cost, or at a nominal cost, because we be-lieve that excellence of service will be a key desti-nation differentiator.

ADTA has recently announced plans to ex-pand its hotel classification system to includehotels above a five star classification and alsoto publish guidelines on building green ho-tels. Why has ADTA chosen to focus on thesetwo areas in particular? Does it see these asparticular areas of expansion?

Director General Mubarak Hamad Al Muhairi


TRAVEL & GADGETS & BOOKS & LEISURE & MONEY & TRAVEL & GADGETS & BOOKS & LEISURE & MONEY 133

Downtime

Magnifi cent metropolis

Intelligent livingp136

LuxuryTravelp134

CityGuidep138

Gadgets &Booksp140

Lazy Daysp142

Robert Kunkler on running one of Dubai’s most iconic hotels.

BACK SECTION.indd 133BACK SECTION.indd 133 18/6/10 15:44:4618/6/10 15:44:46

DOWNTIME. LUXURY TRAVEL134

What is your role at the Madinat Jumeirah? Robert Kunkler. Madinat Jumeirah includes three prop-erties: the Mina A’ Salam, the Al Qasr and the Dar Al Masyaf, each with its own dedicated team and general managers.

I oversee the three properties, but our dedicated team of 3500 colleagues from 80 countries makes sure that every guest has an exhilarating and memorable experience.

Can you describe the resort and its offerings? RK. Madinat Jumeirah translates into the ‘City of Jumeirah’, so named because of the variety of the resort, and is authentically Arabian-style featuring unique UAE architecture and design.

The destination encompasses three components; two grand boutique hotels (Mina A’Salam, Al Qasr); and clusters of 29 traditional Arabic summer houses (Dar Al Masyaf) nestling amongst the gardens and waterways, all built around the souk, the traditional centre of Arabic life at the heart of the resort.

The resort also provides the most comprehensive conference, incentives and banqueting facilities, a multitude of dining options, a collection of seven royal villas and a world-class spa.

The resort is practically a small city in terms of its size. What would you say are your biggest priorities as management?RK. Maintaining our award-winning team of colleagues dedicated to personalised service. The priority is and always will be to look after our guests and exceed their expectations. Jumeirah’s promise to ‘Stay Different’ delivers imaginative and exhila-rating experiences in a culturally connected environment offering a thoughtful and generous service.

Are most of your guests regional or international? RK. Most of our guests come from Germany and the UK. Depending on the season, we welcome many visitors from the Middle East, Asia and Russia, while very impor-tant upcoming markets are the US, Brazil and China.

As the world of luxury hotels in Dubai continues to expand, some still stand out among the rest – and of those, the Madinat Jumeirah attracts a fair amount of attention as one of the largest properties in the region. Business Management spoke with Regional Vice-President of Operations in Dubai, Robert Kunkler, about his work at the property.


DOWNTIME. LUXURY TRAVEL 135

What do you think Middle Eastern custom-ers look for particularly in a hotel?RK. I believe that all our customers, no matter where they come from, are looking for warm and generous service – true Arabian hospital-ity. Simple things such as remembering their preferences, attention to detail and luxury in everything the senses can take in.

What do you think sets your hotel apart from other luxury hotels in Dubai? What are some of the unique aspects of staying there? RK. Jumeirah is committed to being the world’s most luxurious brand. Our core brand strat-egy is ‘Stay Different’ and we defi ne luxury by providing thoughtful and generous service through exhilarating and imaginative experi-ences in a culturally connected environment.

At Jumeirah, we defi ne luxury as emo-tional, memorable, and above all personal, and this is what we believe today’s sophisticated luxury traveller relates to and responds to. We want to be innovative, imaginative and leave our customers with a smile in their minds.

We are always looking at the trends within the hospitality industry as they are an impor-tant indicator as to what the guests need. Our guests are primary for us and to be able to exceed their expectations we need to listen to them and provide them with the best level of personalised service.

What is it about Dubai that makes it such a popular tourist destination?RK. Dubai has become one of the most popular and sought-after tourism destina-tions in the world with its exceptional facilities, high levels of service and hos-pitality and a very exciting calendar of high profi le sporting and entertainment events, such as the Dubai World Cup and Dubai Desert Classics. It has become a year-round destination that offers something for everyone. We’ve been a part of that with events like Art Dubai, and hosting the Dubai International Film Festival for the past four years.


DOWNTIME. INTELLIGENT LIVING136

Despite the downturn in Dubai, the UAE looks set to become a leader in smart home technology.

Picture the scene. You’re halfway to work and realise you’ve left the lights on/the door unlocked/the windows wide open/the air conditioning on full-blast. What are your options? In times past, you’d either have to perform

a sharp U-turn in order to remedy the situation or continue with your journey and spend the rest of the day worrying about whether your home would still be there when you got back. But the advent of smart home technology could be about to provide a third, more intelligent option: mobile remote control.

Of course, smart home technology is nothing new. People now expect that if they are spending millions of dirhams for a place to live, it should come with the latest in gadgets and comforts, ranging from smart systems that allow owners to control the ambient conditions of their home from the touch of a keypad, to the best in home cinema and entertain-ment systems. But what is revolutionising the sector is the ability to perform such tasks remotely, via a mobile application or interface.

For example, leading multi-room entertainment and control provider Opus Technologies has just supplied the fi rst resident on Nakheel’s Palm Island Jumeirah development, Andy Dukes, with a major upgrade to his multi-room entertainment system. As well as incorporating new touchscreens, the latest Opus system benefi ts from armchair control using an iPhone or iPod touch.

“Andy was the fi rst resident to move into Palm Jumeirah Island and opted to have a multi-room audio entertainment system installed throughout his home,” explains Steve Simpson, Opus’ Regional Manager for the GCC region. “It’s fantastic that he’s also become the fi rst to upgrade his property with our state-of-the-art touchscreens in order to enable iPhone or iPod touch control for a wonderful user experience.”

Th e rise of the smart home

Smart appliancesWhile most home automation technology is focused on lighting, security and entertainment, smart appliances may be on their way as well. Ideas include:

Trash cans that monitor what you throw away and generate online orders for replacements

Refrigerators that create dinner recipes based on the ingredients stored inside

Washers and dryers that send text message alerts when their cycle has ended


DOWNTIME. INTELLIGENT LIVING 137

Setting up a smart homeThe idea of a smart home might make you think of George Jetson and his futuris-tic abode, or maybe Bill Gates, who spent more than US$100 million building his smart home. But while once a draw for the tech-savvy or the wealthy, smart homes and home automation are becoming more common. About US$14 billion was spent on home networking in 2005, and analysts predict that fi gure will climb to more than US$85 billion by 2011. Here are some examples of smart home products and their functions.

The potential applications are signifi cant. Opus cabling has been installed into the fabric of every one of Nakheel’s 1386 prestigious Signature Villas, Garden Villas and Canal Cove Townhouses on the Palm Island Jumeirah development, and similar solutions are becoming increasingly commonplace in new-build property developments across the Gulf. The cabling or pre-wire of such large-scale developments fa-cilitates residents the option of having a multi-room control system installed at any time, without the disruption and costs normally associated with run-ning cables and other infrastructure retrospectively. Typically, the only visible evidence of this system are the fl ush-mounted in-ceiling speakers, the on-wall touchscreens and stylish remote control.

Opus iPhone/iPod touch control offers users full system control from the palm of their hand, in any Opus equipped room, and replicates the intuitive interface of the touchscreen. “I’m completely thrilled with my Opus system, but when I was informed about an upgrade package offering control by touchscreens and my iPod touch, I simply couldn’t resist,” explains Dukes. “The new touchscreens are so intuitive and an absolute pleasure to use – I particularly enjoy using my iPod touch to control the audio in my villa. The ability to select the room I’m in and then effortlessly control the system is a brilliant feature.”

Apart from the ease and time-saving benefi ts this gives the home owner, it also means they can be far more precise about how much lighting or air con-ditioning is used throughout the day, saving energy as well. Saleem Al Marzouqi, CEO of UT Technology, believes such interfaces will revolutionise the way people in the region think about energy effi ciency. “Smart homes are not only about providing tech-nology, they also contribute to conserving the envi-ronment and reducing pollution,” he says. “Smart home applications rationalise 30 percent of energy consumption, providing around 50 percent of space needed for technology infrastructure and provides people with more control over their appliances. This helps in rationalising energy consumption by control-ling usage of electricity, water and gas.”

Technology companies are betting that consum-ers and businesses are still willing to pay for smart home technology, even during a global recession. But while the global market for smart home technology is potentially huge, the real opportunities for smart-home technology in the Middle East comes not from the consumer market but from the business to busi-ness market. In the region, the biggest potential cus-tomers are hotels and utility companies.

CAMERAS will track your home’s exterior, even if it’s pitch-black outside

A VIDEO DOOR PHONE pro-vides more than a doorbell – you get a picture of who’s at the door

MOTION SENSORS will send an alert when there’s motion around your house, and they can even tell the difference between pets and burglars

DOOR HANDLES can open with scanned fi ngerprints or a four-digit code, eliminating the need to fumble for house keys

AUDIO SYSTEMS distribute the music from your stereo to any room with connected speakers

CHANNEL MODULATORS take any video signal – from a security camera to your favourite television station – and make it viewable on every television in the house

REMOTE CONTROLS, keypads and tabletop control-lers are the means of activating the smart home applications. Devices also come with built-in web servers that allow you to access information online – enabling smartphone control

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DOWNTIME. CITY GUIDE138

Hong Kong

As one of Asia’s most breathtaking destinations, Hong Kong is a hotspot for both business and pleasure. We check out what is on off er.

About Hong Kong has a population of seven million people, but at only 1108 square kilometres, it is actually one of the most densely populated areas in the world. Renowned for its expansive skyline and natural setting, Hong Kong is also one of the world’s leading fi nancial capitals, and is a major business and cultural hub, having maintained a highly developed capitalist economy for decades.

Getting Around Over 90 percent of daily travels in Hong Kong are made on public transport, making it the highest used network in the world. A tramway system covers the northern parts of Hong Kong Island, while across the Victoria Harbour, the Star Ferry service provides pan-oramic views of Hong Kong for its 53,000 daily passengers. Elsewhere, the Peak Tram provides vertical rail transport between Central and Victoria Peak, and in the Central and Western districts there is an extensive system of escalators and moving pavements, providing access to Hong Kong’s steep and hilly terrains.

From the airportHong Kong International Airport is the leading air passenger gateway and logistics hub in Asia, serving more than 47 million passengers each year. The airport is one of the most accessible in operation today, designed for maximum convenience. Moving walkways and an automated people mover allow quick and easy movement throughout the build-ing. The North Lantau Highway on Lantau Island connects the airport to inner Hong Kong; it can also be reached via the Airport Express, a dedicated rail link, and bus, taxi and ferry services.

Time: +8hrs GMT | Currency: Hong Kong Dollar | Population: seven million | Average Temp: 23°C

ffer

°C


DOWNTIME. CITY GUIDE 139

Eat Tien YuFor Hong Kong’s best dim sum meal with a view, head to this multi-level contemporary restaurant on the Peak.Dim sum HK$43-54 (US$5-7)

Yan Toh HeenOne of Hong Kong’s top Cantonese eateries, this elegant restaurant offers a daily changing menu, listing two-dozen varieties of dim sum.Dim sum HK$43-64 (US$5-8)

Fast factsThe saying ‘Only mad dogs and Englishmen go out in the midday sun’ originated in Hong Kong: Noel Coward wrote the words refer-ring to the Noon Day Gun in Causeway Bay, which has been fi red every day at midday since colonial times.

With over 8000, Hong Kong has the most skyscrapers in the world. Classifi ed as build-ings with more than 14 fl oors, that’s almost double that of New York.

Hong Kong’s offi cial name is the tongue-twisting Hong Kong Special Administrative Region, or Hong Kong SAR.

See The Man Mo Temple is one of the most impor-tant in Hong Kong. It was built in 1848 and is named after Man, the god of literature, and Mo, the god of martial arts. Elsewhere, Wong Tai Sin Temple is the most well known Taoist temple in the whole of Hong Kong, while a trip to Lantau Island brings visitors to the largest monastery. The 100-foot tall Buddha sits atop the 260-step summit. Similar stunning views can be had by taking a trip in a cable-pulled train up Victoria Peak – named after British monarch Queen Victoria. Hong Kong’s most famous hotel is The Peninsula so after all that traipsing around make sure you drop by for afternoon tea – sandwiches, scones and pastries – accompanied by a string quartet.

SleepFour Seasons Hotel Hong KongOverlooking Victoria Harbour and the fi nancial district, this elegant property redefi nes luxury and excellence with exceptional accommodation that is ideal for business travellers.399 rooms availableDeluxe harbour rooms from HK$7780 (US$1000)

Kowloon Shangri-La HotelThis property is conveniently situated in the Tsim Sha Tsui shopping district with easy access to the Hong Kong skyline, fi nancial district and busy Victoria Harbour areas.Over 700 rooms availableDouble rooms from HK$3372 (US$433)


DOWNTIME. GADGETS140

Technology for today’s executiveApple iPadAfter months of waiting, Apple has fi nally unveiled its latest piece of shiny new tech outside of the US – the unimaginatively named iPad. Apple believes its new tablet-style device will occupy a gap in the market between an iPhone and a MacBook. For the critics (of which there are many), therein lies the problem; it’s too big to fi t in your pocket and too impractical to replace a laptop. There’s no denying the iPad’s seductive curves and glorious 9.7-inch screen will have Apple fans’ palms perspiring, but its ability to garner mass-market appeal looks unlikely. For starters, it cannot run Flash and it won’t even allow you to multi-task. It also has no USB port, no SD slot, no camera and no GPS. In essence its an iPhone on steroids.

Nokia Netbook 3G:With a new netbook seemingly rolling out onto our selves every month, you could be excused for not paying attention to Nokia’s latest addition. However, if you’re in the market for a new netbook then sit up and listen to this. Having taken the netbook concept one step further, Nokia has added memory card and SIM card slots, alongside a 10.1-inch glass-fronted screen – that is fully capable of leashing out HD fi lms – and an in-built webcam and microphone. While you’re unlikely to be playing the latest PC games on its Windows 7 operating system, you can be assured that the US$750 you’ll spend will be worth every cent.

Sony Ericsson Xperia X10 The past year or so, Sony Ericsson has found itself losing ground to its rivals, particularly in the smartphone market. To redress the balance, the Japanese-Swedish manufacturer has released the all singing all dancing Xperia X10 running on Android. The unavoidable selling point is the massive VGA high-resolution screen – it dominates the front of the device. The generous four-inch screen size means the X10 is slightly on the porky side at 13mm thick and 135g in weight but this phone is packing a lot of kit, includ-ing an 8.1 MP camera, GPS, 348MB of RAM and 1GB onboard storage. It also has a 3.5mm headphone jack. Can the X1 dislodge Apple’s crown? It’s unlikely but Sony-Ericsson have made a fi ne stab with this handset.

Flip Mino HD 8GBIt’s amazing to think how much camcorders have shrunk in size from the days when you needed to put on a back brace before hauling a breeze block-like piece of kit up on your shoulder. The pocket size Flip Mino is about the

same size as a chunky mobile phone and records in HD, capable of capturing 120 minutes on 8GB of built-in memory. A convenient USB arm fl ips out from the side of the unit for transferring video to a PC or Mac, doing away with the need to scrabble around for a USB cable. The easy-to-use FlipShare software allows you to edit, email or upload video to YouTube or MySpace. This is a point and shoot camcorder that even the biggest of technophobes would not have any trouble getting to grips with.

task. It also has no USB port, no SD slot, no camera and no GPS. In essence its an iPhone on steroids.

Flip Mino HD 8GB


DOWNTIME. BOOK REVIEWS 141

The Game-ChangerHow Every Leader Can Drive Everyday Innovation, by A.G Lafl ey and Ram Charan

Co-author A.G Lafl ey is Chairman and CEO of Proctor & Gamble, a company that has tripled its profi ts in the past seven years. In this 336-page book he and Ram Charan guide you through how the likes of P&G, Nokia and Lego have become today’s game changers. This book claims to help you redefi ne your leadership style, whether you are running a company or in your fi rst management job. The book is packed with thoughtful insight and advice on how and why certain strategies employed by multinationals have succeeded or failed.

BM says: The sections devoted to P&G’s organic revenue growth offer a fantastic insight into how the company has outstripped its rivals. The book also demonstrates how an innovation curve should be an achievable goal, not just wishful thinking.

Get a Dog: Don’t Work Like OneJim Banting

This 230-page book offers a sense of perspective and practical guidance from the people who know best: senior executives and leaders. It’s about making people more successful and happy, by getting them to think differently. Packed with real-life experiences, case studies, anecdotes and stories, Banting provides 101 pieces of advice and tips to redesign your time in order to get a life. Themes such as money management, health and reorganising your everyday work activities are all discussed.

BM says: An abundance of practical suggestions are supplemented by an easy-to-read and witty writing style.

The Secrets of CEOs150 Global Chief Executives Lift the Lid on Business, Life and Leadership, by Steve Tappin and Andrew Cave

In this fascinating, authoritative book, 150 of the world’s top chief

executives share their advice for getting to the top, and, once there, how to be successful leaders and still have a happy life. The book reveals frank discus-sions with some of the West’s most infl uential CEOs and incorporates radical and thought-provoking comments from the heads of companies in India, China and Russia and well as the US corporate giants.

BM says: The Secrets of CEOs contains a wealth of strategies that individuals and organisations alike can use to encourage a new standard of leadership. It could well be an essential guidebook for those want-ing to know what its really like to be a CEO – and the health warning that should come with the job.

How to Beat Bedlam in the Boardroom and Boredom in the BedroomBy Jane Gunn

Gunn, described as a mediator, confl ict management

consultant and speaker, promotes her inaugural book as a ‘life-changing guide to happiness at work and at home’. Packed full of interesting case studies, this book looks at how confl ict in one area can have a profound effect on another. “Almost every instance of confl ict at work is the catalyst for confl ict at home,”

Why Women Don’t AskThe High Cost of Avoiding Negotiation – and Positive Strategies for Change, by Linda Babcock and Sara Laschever.

According to this new book, by neglecting to negotiate the starting salary of her fi rst job, a woman may sacrifi ce over US$400,000 in earnings by the end of her career. From career promotions to help with child care, studies show that time and time again women don’t ask. Babcock and Laschever draw on research in psychology, sociology, economics and organisational behaviour to explore why women seldom ask for what they need, want and deserve at work and at home.

BM says: This book will strike a chord with modern women and will encourage them to pluck up the courage to ask for more.

writes Gunn. “Any time you’re under stress at home, it puts you under stress at work. And vice versa.”

BM says: This book has received rave reviews from both critics and leadership gurus. A must-read for those looking for a good work/life balance. 5

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DOWNTIME. LAZY DAYS142

Audi lift s the roof with its latest version of the R8.

When the R8 hit the market it was received with adulation due to its stunning performance and gorgeous looks. This latest version features a retractable roof, which seems to enhance the German marque’s looks even further. This car caught the eye of Hollywood who featured it in the box offi ce hit Iron Man 2. The 5.2 FSI quattro can propel the driver from 0-100km/h in just 4.2 seconds on its way to a maximum speed of 313km/h. This R8 features a fascinat-ing package of technologies, including the Audi Space Frame (ASF) made of aluminum and carbon fi bre composite, quattro perma-nent all-wheel drive, LED headlights and the innovative Bluetooth seatbelt microphone. Answering a phone call has never been so easy. The good news, depending how deep your pockets are, is that for a car this good it will only set you back around US$150,000.


From the people you hire to the products you sell, if you’re in business, we’ve got it covered...

Your World. COVERED

Find out more: www.busmanagementme.com

Business ManagementWhat business processes work? What are the proven, successful strategies for taking advantage of domestic and international markets? Business Management is about real, daily management challenges. It is a targeted blend of leadership and learning for key decision makers in government and private enterprise.

Next Generation PharmaceuticalApproximately 50% of new drug development fails in the late stages of phase 3 – while the cost of getting a drug to market continues to rise. NGP is written by pharmaceutical experts from the discovery, technology, business, outsourcing, and manufacturing sectors. It is committed to providing information for every step of the pharmaceutical development path.Available for: US, EU

Find out more: www.ngpharma.com

Next Generation Power & EnergyA poll of 4000 utility executives posed the simple question: what keeps you up at night? The answers were costs, new technologies, ageing infrastructure, congested transmission and distribution, viable renewables and inadequate generation capacity. Available for: US

Find out more: www.nextgenpe.com

Oil & GasCollaboration between Government and multinationals to ensure the energy supply is developing on two fronts. O&G is the defi nitive publication for stakeholders and service companies to read about the regional projects, technologies and strategies affecting their group.Available for: MENA, US, Russia

Find out more: www.ngoilgasmena.com

InfrastructureInfrastructure provides insight on how developers can achieve critical objectives by integrating leading-edge solutions across their operations – helping them to make informed decisions about technology and operations solutions for all of their areas of responsibility.Available for: MENA,US, EU

Find out more: www.menainfra.com

ALSO AVAILABLE FOR: US & EUROPE

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CATALOGUE PAGE.indd 143 18/6/10 14:23:09

FINAL WORD144

Adeep economic downturn, like the one we arecoming through now, is like a vicious stormthreatening everything in its path. The naturalresponses to such an event are instinctive: first

protect what is most precious, then rebuild as quickly aspossible – but better and stronger than before. A crisismakes it crystal clear that customers are our most trea-sured business assets. Losing a customer will cost you notonly the current business but also all the time and moneyyou invested to get the customer, along with all the futurerevenue that this customer would have produced for yourcompany. In a crisis you need to do everything you canwith the systems available to protect your customers.

Then you need to take a hard look at your businessprocesses to make sure they allowed you to do everythingyou possibly could have to avoid losing customers. Werethey robust and flexible enough to detect and respond tocustomer needs quickly and comprehensively during theeconomic crisis? Or did you lose some customers becausethey felt your business was not in sync with them whenthey most needed a vendor who understood their needs?

Rebuilding business processesWe can take these valuable, albeit painfully acquired,

answers as starting points for re-engineering our busi-ness processes to bolster customer retention while pro-viding us with a more powerful engine for maintainingcurrent customers and acquiring new business in the fu-ture. Here are some more questions indicating areas youmay need to address: Do I have an adequate process forcollecting information on business prospects? Do I havean ongoing plan for collecting and updating informationconcerning the needs and objectives of existing cus-tomers? Can my plans for updating this information beimplemented from within my CRM system? Do all of thecustomer-facing individuals on service teams have accessto the same information? Or are there islands of applica-tions within our customer maintenance systems that iso-late divisions, departments and individuals from oneanother, thus inhibiting timely and integrated respons-es to customer needs? Most importantly, do my businessprocess systems present a holistic view of the customerto everyone working to serve his needs?

Revisiting deployment optionsOnce these and other issues have been thoroughly

considered you will be able to refine or totally re-engineeryour processes to be more timely and effective, both in re-sponding to customer emergencies but also moving for-ward to the new business opportunities. Before youimplement your re-engineered business processes, how-ever, you need to look at how you are deploying your sys-tems and ensure you are making optimal use of thetechnologies currently available. Most CRM systems today

are based on a client/server methodology deployed behinda firewall. Web-based deployments retain the firewall butallow for greater data security. New cloud technologies(SaaS) are outside the firewall, allowing access from any-where. They minimise hardware and software costs andshave months off the design and deployment schedule.These advantages may be important if you need to get upand running with a reinvigorated system quickly.

So the downturn may have revealed some flaws inyour business processes, particularly the ones that im-pact customer retention. You need to address those asfast as you can. Customer retention is essential. Whileproactively maintaining your existing customers youneed to look at all the other things that can be done toimprove your business processes. While you’re at it, re-visit your deployment options. Some changes here couldsignificantly reduce business process costs while makingyou more competitive for the upturn in the economy thatis on the horizon. n

Sound advice

STI Systems’ Jay Bauer on today’s vital business processlessons courtesy of the economic downturn.

Jay Bauer has 25 years ofexperience in sales andmarketing management withsuch companies as CSC, BoeingComputer Services andMotorola. Bauer has been theSenior Process Consultant onmore than 300 projects. He hasundergraduate degrees inengineering and liberal artsand a MFA and MBA from UCLAand NYU.

“A crisis makesit crystal clearthat customersare our mosttreasuredbusiness assets”

FINAL WORD STI_june10 18/06/2010 15:35 Page 144

This is why your CRM system must be designed and optimized to manage a customer retention process which will allow you to:

• Capture information about current & emerging needs and the customer’s buying structure.• Create a yearly plan for servicing each customer based on the information collected. • Manage implementation of that plan including yearly, quarterly and monthly goals. • Enhance the customer service experience by always giving them more than they expect.

That is how CRM done right helps prevent the loss of an incalculably valuable business asset, your customer.

CAN YOU AFFORD TO LOSE A CUSTOMER?

For More Information Contact:Jay Bauer, President/Senior Process Consultant, STI Systems. Phone: +1 949 361 4070 Email: [email protected].

You may only lose the customer once, but you pay for that loss over and over again. You lose the immediate revenue. You lose the opportunity for ongoing revenues. And you lose all the time and money it takes to acquire a new customer (if there is even one available).

If your CRM system isnʼt doing that for you–WE NEED TO TALK.

STI Customer service AD.indd 1 15/6/10 14:45:49

KASPERSKY AD.indd 1 15/6/10 14:43:52

BMME 9

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