THE RIGHT MINDSET

Oman 2016 | ECONOMY | INTERVIEW

TBY talks to Pankaj K. Khimji, Director of Khimji Ramdas, on investments in IT, working with SMEs, and development in the industry.

Pankaj K. Khimji
BIOGRAPHY
Pankaj K. Khimji graduated from Hammersmith & West London College in Building Construction Engineering. He is Working Group Member of Oman’s Logistic Strategy 2040; Chairman of Oman India Joint Business Council; Vice Chairman of Oman Singapore Joint Business Council; Member, Oman’s Contingent to ILO; a Founder Member of SANAD, Oman’s Committee for Promoting SMEs; Founding Director, Muscat University (under formation); and was a Director on the Board of the National Bank of Oman from 1998 to 2003. He is also a keen cricketer, being the Director of the Oman Cricket Club and Executive Board Member of the Asian Cricket Council.

Regarding your investments in ICT, how does the KR Group specifically focus on innovation?

In terms of innovation, ICT is the enabler. We have invested $5 million in software and hardware solutions. We dedicate 20 people to supporting the system of knowledge sharing. It has made us that much more efficient, and brought about the difference we were seeking. It has already given us a competitive edge. We are in the business of supply chain logistics, infrastructure, and consumer distribution. About four years ago we started the huge process of completely upscaling and upgrading our ICT network, so we contracted with SAP. It was a huge task, involving millions of dollars worth of software, but it is not just about buying it and plugging it in as it does not work like that; it needs a whole process and change of mindset, which is the most difficult part. So we went through that and we had our hiccups like every other company has but we came out of it unscathed and a much better, more efficient firm. With that in hand, we went further down and built a huge integrated mechanized warehousing system. From small units in many small warehouses, we went into one large integrated mechanized warehouse, where we installed a warehouse management system (WMS), which was then backward integrated into the ICT system, and this now makes us an efficient player for supply chain logistics. More efficiency means more control, and more control means more profits.

Logistics is one of your most important services. Regarding the whole group, what different focuses have you had over the past year?

We built a fully mechanized, integrated warehouse for our consumer group, one of the most advanced in the Middle East, and we opened this in 2014. This greatly improved our efficiency, integrating eight locations into one. Many of our other divisions wanted to be a part of this as a result, and it necessitated a doubling of capacity in just one year. We provide on-site accommodation for 350 staff. The warehouse serves an area of some 200km, putting some two-thirds of Oman's population within our reach. This gives us greater communication efficiency, and supply chain and distribution efficiency. We are open to JVs and ready to engage with other stakeholders to pursue other areas of expansion in logistics and supply chain. We are committed to becoming a responsible service provider by adopting as many SMEs to propose an all-inclusive development strategy, especially in areas like Duqm and other free zones.

How does KR cater to the SMEs that are looking to expand their operations?

What we have done is try to encourage truck owners to work with us, guaranteeing them a certain amount of business. In other words, we are outsourcing catering, supplies, cleaning services, maintenance, and pest control. We are encouraging drivers to invest in their vehicles, so we can outsource deliveries also. You must realize that an SME does not come about by itself. An SME is nothing but an ancillary to an existing industry. You cannot promote an SME by itself; you need to promote an industrial sector, or a cluster, at which point the SMEs will come in. You cannot promote micro industry without a major industry off which these small micro industries feed. For example, if Sohar is a cluster for petrochemicals, aluminum, and steel, we need to identify which ancillary industries flourish behind a steel industry, an aluminum cluster, and a petrochemical cluster. We need to now look at countries like Brazil, India, and Indonesia, where there are petrochemical clusters, steel clusters, and aluminum clusters, and what the ancillary industries there are and then come back and implement them here to see what will flourish or not flourish. A business will not flourish unless it can feed on something. For an ancillary you need an anchor, a cluster, or a sector that already exists.

What are your views on the situation regarding human development in the industry?

We have nearly 42% Omanization at the company. We are investing in people by developing the middle management, in particular via special training courses in India. They return motivated and with high morale. These programs encourage them to be very focused and they return to Oman keen to illustrate their newfound skills.