Oct. 7, 2020


Said bin Homoud Al Mawali

Oman

Said bin Homoud Al Mawali

Minister of transport & former CEO, Oman Shipping and Oman Drydock Company

Oman Shipping Company is identifying opportunities for local enterprises in the container business, mobile repair, and land logistics.

BIO

Said Al Mawaali was the CEO of Oman Shipping Company and the CEO of Oman Drydock Company before being appointed Minister of Transport. Prior to his role at ODC, he has been providing leadership and governance for the executive management of OTTCO since 2014. Al Mawaali occupied significant positions at Petroleum Development Oman, Occidental Oman, Sohar Aluminum, and Oman Oil Company and held board and sub-committee roles at Oman Rail, Majan Ferrochrome, Oman Gas Company, Vale Oman, Oman India Fertilizer Company, and Oman Shipping. Al Mawaali holds a bachelor's degree in mechanical engineering from the Imperial College London.


How have COVID-19 and the low oil prices impacted your business and the Omani shipping industry?
On the one hand, COVID-19 has had a negative impact both on the container segment of our business, disrupting supply chains all around the world, and the dry bulk segment, forcing shipping companies to adjust. Nonetheless, after the first three weeks, trade links stabilized, and we were able to mitigate our losses. Since the beginning of 2020, OSC has transported more than 22,000 containers, linking Indian and Omani ports with Gulf ports. The VLCC sector has been overheated due to the low oil prices, although oil trading will drop if oil prices remain low. The market will thus slow down as soon as countries realize their stock has grows excessively, with refineries already lamenting a lack of demand for their products. Transportation prices will subsequently fall. In light of this scenario, the government remains focused on its goal of reducing dependence on petroleum products, hoping for other sectors to take over, such as mining, manufacturing, agriculture, and fisheries. This strategy will allow us to increase our market share of dry bulk in Oman.

What does the integration of Oman Shipping Company under the ASYAD that mean for the company's business operations and the broader Omani logistics industry?
Oman Drydock Company and Oman Shipping Company will remain two legally separate companies with two different P&Ls. The integration was done firstly to reduce the overheads of both companies, both in terms of human capital and physical resources. Secondly, the integration was carried out to unlock 27 combined business development opportunities that the two companies can work together on, both in the short and long term. For example, Asset management becomes easier using integration. Moreover, ASYAD will be the common shareholder overseeing the financial condition of both companies. Around the world, such integration is fairly common. Partnerships are a key element of this strategy, especially with players that seek to grow in long-term relationships. We have identified opportunities for the container business to engage with local enterprises. At some point, we want to engage in mobile repair. We want to move closer to the supply chain to get closer to the source of industrial production. We want to work with traders and logistics across the value chain of a certain sector.

As the global shipping industry continues with a wave of consolidation, how can Omani SMEs play a role in a “big fish" industry and maintain their international competitiveness?
The integration of the Oman Shipping Company and Oman Drydock will unlock a wide array of opportunities for smaller players in different areas. Indeed, partnerships are a key element of our growth strategy, as we seek both to outsource non-core activities and engage in new avenues that could bring us financial and operational benefits. Any player who seeks to grow with us is welcome to be part of our strategy. In this sense, we have identified opportunities for local enterprises in the container business, mobile repair, and land logistics. We also want to move closer to the top of the supply chain at the source of the industrial production of a certain sector, in order to cooperate with companies involved along the value chain. Moreover, innovation is a key aspect that players in the shipping industry are looking at, and that does not necessarily stem from large companies. While in the medium term, the current trend of integration will continue, especially to mitigate the impact of the current crisis, in the longer-term partnerships will be created to unlock innovation and technological synergies. On a global level, partnerships will be impacted by the advent of regionalism, supported by the increasing populism affecting Western countries. Trade protectionism will determine how ports react, and shipping companies will have to adjust as more and more countries restrict free trade.

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