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Oman 2014 | DUQM | INTERVIEW

TBY talks to Nabil A. Al-Ghassani, CEO of Takamul Investment Company, on investment strategies to encourage jobs, exports, and downstream industries, and Duqm as a rising star.

Nabil A. Al-Ghassani
BIOGRAPHY
Nabil Abdulla Al Ghassani has been the CEO of Takamul Investment Company since it was established. Takamul is a subsidiary of Oman Oil Company (OOC), a commercial venture of the government of Oman. The company was established in July 2008 with an objective to develop, promote, and invest in greenfield projects, as well as in existing companies to support their operations and develop a value-added chain of metal, mineral, and petrochemical industries. Prior to taking up the role, he was the Head of Commercial Department of OOC, where he played a key role in promoting, evaluating, and developing projects within Oman and across the globe. He has also represented OOC on the boards of some of its international subsidiaries. Before joining OOC in 2001, he held a number of positions in the government, including the Director of Privatization at the Ministry of Electricity & Water. He holds a Master’s in Electrical Engineering from Florida Institute of Technology, US.

What is your personal background and how did the company come to Oman?

We started Takamul as an initiative within Oman Oil Company (OOC) in 2006, and shortly afterward we began mapping out our business plan and targets, examining the raw materials available, exploring the market for downstream opportunities, and assessing the technology. We started our work with four people, and now we have close to 50. Takamul Investment Company was first incorporated in July 2008 with OMR10 million of paid out capital, and the figure has reached OMR100 million despite the financial crisis. We are a good example of the economic stability in Oman. We are entirely invested in the market—profitable and doing well. The company is competing, creating opportunities and new employment, and attracting investment and loans from local banks.

How has your focus evolved?

We began by seizing opportunities downstream from the aluminum mill and Oman Polypropylene, which is now part of ORPIC. Then, we considered opportunities at the refineries in Sohar and Muscat. We identified a number of projects that could be potential investments for us; our criteria were that they should be feasible, sustainable, and job creating. We want this activity to be integrated within the existing industries in an economically, financially, and environmentally sustainable way. We are working to create employment and a synergy with SMEs. Our focus was on raw material availability and we created industries for export. We then started targeting the local market for import replacement, and, thus, entered the service industry. Until then, many services were imported from outside, and knowledge and know-how were not retained in Oman. One industry that is commissioned regionally is the manufacture of galvanized steel wire. That is one project where the raw material is not available today, but the market is. We feel that 60% of that project could be supplied locally or regionally by Oman, the UAE, and Qatar.

How important has Duqm been for your development?

Considering how Sohar has developed to the point of saturation, we need to begin thinking about another area. Beyond Sohar, we are exploring new areas for future growth. There is huge potential for growth in Sohar, but on the long-term horizon, we need to establish a new area for growth and Duqm is the right place to do it. Taking into consideration our interest to leverage further on the strategic location of Oman on the open sea, we feel Duqm could also provide a more competitive advantage for large industries to allow for better-positioned import and export activities. Being a greenfield area, Duqm will allow us to expand much further away from existing residential zones.

“ We feel that 60% of that project could be supplied locally or regionally by Oman, the UAE, and Qatar. "

What characterizes the sea intake system you are constructing in Duqm?

Our experience in Sohar guided us to take control of the sea intake system from an early stage, where initially the government had taken responsibility for the development of the project. We are in discussions with the refinery, the government, and the authority to plan better for the seawater intake. Originally, we lacked a central focal point in Sohar for the provision of utilities—we scrambled to find investors arriving in Sohar who could offer telecoms, electricity, and water. There was no one-stop shop for utilities. In Duqm, we are working to plan and develop the corridors and the utilities in order to attract industrial companies and make life simpler. Specifically, we have targeted the steel, aluminum, petrochemicals, and refining clusters. The fisheries segment is another sector that has yet to be developed, so there are six clusters planned in Duqm. We would like to lead the discussion on the development of utilities for these industrial sectors. The provision of utilities is a long-term plan that requires large, advanced capital investment.

What time frame do you have in mind for investment?

When Takamul was initially created, we were not aiming to compete with local industries or investors. We were created to leverage and add value to the sector. We try to utilize the maximum amount of Omani workforce resources for operating and managing our plants. In the final stage of our investment, we divest part or all of our interest directly or indirectly to all of these industries. In collaboration with our shareholders, we are implementing a number of projects that have passed the development and construction phases and are entering the operational phase. The company is seeking to work with financial advisers to start divesting. That would most likely be carried out through private placement (pension funds) or an IPO. These will be part of the studies we are completing in the near future.

How do you attract investment to Oman?

To be honest, Oman does not require much advertisement when it comes to potential investment opportunities. Many people come and talk to us directly, and we partner with them on projects in Oman. We have received a huge amount of feedback for opportunities through local banks and government and consulting agencies, whether the work is financial or legal. These opportunities are usually created by international investors who have a business plan to invest in the region and are aiming to find the best place and partner. Another way we participate is by creating an idea and the investment opportunity. We identify an opportunity, develop it, then target the players in that industry globally. We focus mostly on technology or know-how, not specific countries. We are looking to attract long-term investments that are technically and economically feasible.

What is your outlook for the downstream industry in Oman and its role in developing the economy?

I see the government as a whole putting more effort into supporting the downstream segment. Downstream is more focused on SMEs, and the government is putting huge effort into developing these areas. The challenges we are facing will hopefully be resolved. The competitive advantage is that we are more technology-oriented, closer to customers, and more labor-intensive. Somehow, we need to come up with a structure to ensure that whatever SMEs and downstream industries we create here, we can combine them competitively in Oman.

What is your vision for the next five years?

Over the next five years, we will continue adjusting our targets. We base our strategy and vision on the past, and that means that we sometimes make mistakes. I know we are going to develop a number of projects in Duqm, but some of the projects we have carried out in the past six years were not even on our road map. As a target, I'd like the company to be twice as large as it is today in five years. If we were able to grow our capital by OMR100 million in five years during the economic crisis, our rate of progress should be easily tripled during the current economic boom.