FALLOUT AND MOVING ON
The drop in oil prices and its subsequent disruption has provided challenges and opportunities for players, especially those with aggressive growth plans.
How would you evaluate 2015 for your business?
Prerit Goel Last year ended on a positive note, considering we witnessed the fallout in oil prices in early 2015. Lower oil prices create some sustainability issues in the region, which has a slowdown effect on the economy in a broader sense. Also, we see the interest rates rising gradually. This does not help because on one side the economy is slowing down but on the other end increased interest rates are counterproductive to helping business grow. Furthermore, over the last two years we have seen some unfortunate regional conflicts creating instability, like in Yemen, for example. The removal of sanctions on Iran in early 2016 is a welcome step and over the longer run should help some local businesses grow, of course pending clearances from the Central Bank in the UAE. Of late, we have seen a lot of SMEs that were highly leveraged and exiting business due to drop in prices and local credit issues. This created some space for us to grow our market share. The UAE's economy is not completely oil revenue driven, even if a significant portion of it does rely on oil. The country has reserves to help keep it afloat. In my opinion, the UAE is the best place to be in the GCC at this time.
S. Mukherjee Most of our chemicals are petrochemicals and petroleum products are derivatives of crude oil. When that price falls, all petrochemical products' prices fall. Since revenues have reduced even with same volume of business, we have been affected. Many proactive measures have been taken to circumvent the loss in revenue. So we have gone through a very tough phase. The most important thing we did was to not retrench anybody. The reason is that ours is a very unique set-up, and we are a very safety-conscious company. Our employees on the shop floor are very well trained and are also qualified in first aid and safety, because we deal with hazardous chemicals. That means if you let them go, you have to reinvest in training and expertise when the situation improves, which is very costly. We have invested in our manpower; they are our assets and we never let them go to reduce costs. Another factor affecting operations earlier was the sanctions on Iran but, now that the Iranian market will open up, and business relations normalize, it will be a big opportunity for us and other companies. We expect that to give us a big boost to business in the coming years as it is a huge untapped market of 80 million people.
What investments have you made in the infrastructure that supports your respective businesses?
PG We recently inaugurated our brand new state-of-the-art USD60m terminal in Hamriyah, UAE adding an additional 203,888cbm to the group's overall storage capacity across 37 tanks ranging from 1,700 up to 11,200cbm. We have also recently announced our USD50m expansion plans of our existing terminal in Fujairah. Our facility currently has a storage capacity of 412,000cbm with 17 tanks ranging from 13,000cbm up to 40,000cbm, handling Class III petroleum products such as fuel oil and gas oil to name a few with 348,000cbm dedicated to fuel oil across 10 tanks. Earmarked for completion in March 2018, the group will increase its storage capabilities by 243,280cbm, bringing total capacity at its Fujairah terminal to 655,280, across tanks with a capacity ranging from 9,000cbm and 37,699cbm. The additional capacity to be added will enable the group to store Class I products. Upon completion of the expansion of our terminal in Fujairah, and complimented by our existing storage facilities in Hamriyah, UAE and Pipavav, India, the group will boast a total capacity of over 1,100,000cbm. Our terminals in these strategic locations, offer a natural alternative to the open sea front Strait of Hormuz.
SM We export to 22 countries, mostly in the GCC, but also throughout South Asia, the MENA region, and Africa. We are setting up a new terminal at an investment of USD126 million, and it will be up and running early in 2017. It will be a mini-refinery, or technically a distillation facility. We will be producing a few different products from one product. That facility will be our biggest revenue earner once it is completed and operating. So we will not just trade, distribute, fill drums, and blend, we will also be distilling and producing new products, for both the domestic and international market.
FALLOUT AND MOVING ON
TABLE OF CONTENTS
HH Sheikh Dr. Sultan bin Muhammad Al Qasimi, Member of the Federal Supreme Council and Ruler, Sharjah
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Sheikh Fahim Bin Sultan Al Qasimi, Executive Chairman, Department of Government Relations
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HE Sultan Abdullah Bin Hadda Al Suwaidi, Chairman , Sharjah Economic Development Department
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HE Sheikh Sultan bin Ahmed Al Qasimi, Chairman, Sharjah Media Corporation
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HE Waleed Al Sayegh, Director General , Sharjah's Finance Departmen
TBY talks to HE Waleed Al Sayegh, Director General of Sharjah's Finance Department & CEO of Sharjah Asset Management, on fiscal policy direction and initiatives being introduced to increase efficiency and transparency from the top down.read article
Dr. Rashid Al Leem, Chairman , Sharjah Energy and Water Authority (SEWA)
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Mohammed N. Al Hazzaa, Director General , Emirates Company for Industrial Cities (ECIC),
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Focus: Mixed-use Developments
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Focus: Fighting Cardiac Disease
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HE Khalid Jasim Al Midfa, Chairman , Sharjah Commerce and Tourism Development Authority (SCTDA)
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Manal Ataya, Director General , Sharjah Museums Department (SMD)
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Hanan Al Mahmoud, Director, Al Jawaher Reception & Convention Centre (JRCC)
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