Gaining Market Share

How has Vanguard expanded its manufacturing capacity?

Vanguard Engineering and Oilfield Services has expanded its manufacturing facilities by adding new equipment and machinery, which has completed the product cycle for us. This brought us new customers who look to do in-country value (ICV) for client companies here, but do not want to make such a large investment because it is not feasible for them. These multinational companies are interested in building their products in Oman with us because we can provide full service for their products from A to Z, ensuring that they do not have to split their manufacturing between various locations. Vanguard can provide them with a price-competitive turnkey solution; however, we still have to balance manufacturing with importing products. It is about maximizing the use and efficiency of our machinery to get a more competitive product out there because there is a great deal of competition in the global market.

How does Vanguard differentiate its products and manufacturing processes to make the company more attractive in markets internationally?

There are various segments, and it is difficult to talk in general terms. The strategy varies depending on the product type. When it comes to highly complex and technical products, there is less competition. When it comes to run-of-the-mill products and solutions, there is strong competition. In these cases, we just do parts manufacturing for bigger suppliers and act as their sub-vendors. This is easier for us than having to build a brand and going out to market it.

How does the government promote local manufacturers like Vanguard?

In many instances, it has sought to promote local manufacturing with offers and tenders being specific to locals; however, the government wants to achieve a balance and does not want companies to think that just because they manufacture locally they will win the business. Companies have to compete technically and commercially in whatever field they are. The government will give local companies preference depending on their ICV percentage, though it also looks at international companies’ ICV efforts. Large international companies all have local offices and also meet a certain ICV percentage, and the government rewards them for those efforts. We are currently not able to have 100% local manufacturing, though we are gradually increasing that figure and gaining more market share, growing internationally, and getting more volume. Vanguard is still in the early phase of identifying and setting up the resources for doing all that technically and commercially.

For which skill sets is it difficult to find qualified Omani staff?

In the upstream segment and field-related activities we employ all Omanis. There is no challenge there because the skills are available. However, for technical jobs on the manufacturing and sales sides, that skillset is missing. There are thin margins in manufacturing, and the pay is significantly lower. It also takes four or five years for an engineering graduate to build up the specific skills. It is tricky and cannot be fixed overnight. The government and the industry know the challenges and seek to find different solutions. However, it is a long-term game, and we all have to work together. We have had discussions with certain colleges and have given suggestions to the Ministry of Manpower. One idea is to have a mandatory internship program for all students so they know what the industry graduates, and the minimum wage means they are not striving to obtain job skills to help them survive and compete in the workforce.

What are your operational objectives for the coming 12 months?

We want to consolidate our resources, which will give us better utilization of resources and cut down on communication time and bureaucracy. This is an aggressive move that will strengthen our team, bring it together, and identify more opportunities. Currently, different companies in the group deal in different markets, and we can replicate this experience and grow together. We have an aggressive plan to grow by 10 times.