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ISSUE 1 | OCTOBER 2011

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HE Sheikha Lubna Al Qassimi, UAE Minister of Foreign Trade, talks about diversifying the UAE economy, decreasing custom duties and

enabling an open trade policy.

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3OCTOBER 2011

EDITOR’S LETTER

Meghna Pant, Editor, Trade and Export Middle East

Talk to us:

E-mail: [email protected] Twitter: @TradeNExportME

Facebook: www.facebook.com/tradeandexportme LinkedIn group: tradeandexportme

Welcome to the inaugural issue of Trade and Export Middle East!

As the first magazine covering trade in the region, Trade and Export Middle East is unique in many ways. We know that the Middle East is one of the world’s most prominent trading hubs with trading links to more than 1.5 billion people and with most of its goods and services exported, imported or re-exported. Yet, there is no single-source knowledge provider in the region to help traders navigate the dramatic changes in trading or to guide them to better opportunities. This is

where Trade and Export Middle East steps in. By analysing existing markets, highlighting new opportunities and discussing the shared challenges of traders in a demanding and complex trading environment, the magazine aims to address trader needs and give them a competitive advantage in today’s global marketplace. In this way, the magazine also hopes to carry forward the regional governments’ vision in shaping a diversified economy.

Trade and Export Middle East covers all aspects of trade, with expert interviews, features, case-studies and data analysis to give readers an edge in their trade business. Inside this issue you will find a range of pertinent trade topics that will help your business adopt a successful entry strategy into Europe, demystify marine insurance coverage, protect your intellectual property rights, and lead your employees to thrive in a multi-cultural environment. As a special treat, we have interviewed the most powerful Arab woman, according to Forbes magazine, and someone who is the voice and soul of this region’s trading community, the UAE Minister of Foreign Trade, Her Excellency Sheikha Lubna Al Qassimi.

And this is just the beginning!

For all this, first and foremost, we must thank our partner, Dubai Exports, an agency of the Dubai Department of Economic Development (DED), Government of Dubai, which is helping firms expand into foreign markets; HE Saed Al Awadi, CEO, Dubai Exports, for supporting the first publication of its kind in the Middle East; and Dr. Ashraf Mahate, Head of Export Market Intelligence, Dubai Exports, who has played a key role in developing and guiding the magazine. And a special thanks to you, our reader, as this magazine would be nothing without you.

As with any first issue, we are putting Trade and Export Middle East out with a lot of anticipation, hoping it becomes everything you want from a leading trade publication. We are building a social media presence and organising events to create a resourceful trading community platform that helps you generate leads, find suitable partners and, more importantly, be heard. So, do be a part of this!

We look forward to your comments and feedback, and strive to make Trade and Export Middle East your go-to guide for all things exported and imported.

We hope you enjoy the read.

Welcome Aboard!Publisher

Dominic De Sousa

COONadeem Hood

Managing DirectorRichard Judd

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EDITORIAL

Dave [email protected] +97 1 4 440 9106

Group Editor, CPI BusinessKetaki Banga


EditorMeghna Pant


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Aparna Shivpuri [email protected] +971 4 440 9133

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46re

sour

ces

upda

tes GLOBAL WATCH: International news and

trends with domestic trading relevance.

POLICY: A snapshot of updated standards and regulations from government and industry bodies.

snAPsHOTs: A quick look at news and trends that will impact traders in this region.

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LOGIsTICs: Ravi Jawani, Legal Consultant at Fichte & Co, provides advice on how to protect your export business from a piracy attack.

LEGAL: Geethalakshmi R., CEO and Managing Partner, Associated Business Attorneys, discusses the asset value of your intellectual property.

GLOBAL MARKETInG: How do trading firms market to their target countries? Dr. Ashraf Mahate, Head of Export Market Intelligence, Dubai Exports, and Vice Chair of the Economic Policy Committee, Dubai Economic Department, offers tips.

FInAnCE: Murali Subramanian, Executive Vice President and the Head of Transaction Banking, ADCB; and Lloyd Caughey, Vice President and Head of Trade Finance, ADCB, outline the emerging bank facilities being put in place to help small firms get a foothold on the export ladder.

InTERnATIOnAL HR: Fahad Abdullah Al Ameri, Head, Human Resources and Public Relations, Al-Qahtani Pipe Coating Industries shows you how to maximise and capitalise on workplace diversity.

HOW TO: Dubai Exports, an agency of the Dubai Department of Economic Development, Government of Dubai, outlines the various stages of the export process.

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COUnTRY FOCUs: Has the UAE replaced Saudi Arabia as the largest GCC market for US exports? Which countries feature as the top destinations for Dubai exports and re-exports? Find out about all this and more here.

InDUsTRY InsIGHTs: Even industry gurus need regular access to information. Here’s a comprehensive look at the latest developments across various industries.

sERVICEs: Hamdan Mohamed, the Founder, President and Chairman of the Board of the Arab Business Club, talks to Trade and Export Middle East about the driving force behind his vision to forge better business relationships.

COMMODITY WATCH: Your guide to all things commodity.

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54 EVEnTs CALEnDAR: A snapshot of exhibitions and conferences around the world, which can help you spend less time planning and more time attending.

trad

e ta

lk HOW TO EnTER THE EUROPEAn MARKET: Want to develop a successful entry strategy to export to a complex market like Europe? Then look no further, for Sowmya Narayan, Supply Chain Manager at Gulf Extrusions Co. LLC has answers.

TRADE GURU: The most powerful Arab woman, according to Forbes magazine, and the current UAE Minister of Foreign Trade, Her Excellency Sheikha Lubna Al Qassimi lets us in on what the future holds for the region’s trading environment.

TRADE sECRETs: Trade and Export ME with Tickbox Surveys Middle East conducts a survey to gauge the quarterly performance of traders across the region. Don’t forget to be a part of this!

37OCTOBER 2011

UAE’s Export FutureInterview with the UAE Minister of Foreign Trade: Her Excellency Sheikha Lubna Al Qassimi

TRADE TALK

MINISTER OF FOREIGN TRADE

Vital Voices Global Trailblazer Award 2008, for her exceptional leadership in the Middle East and her profound influence on future generations of Arab Muslim female decision makers. The Times UK newspaper included Sheikha Lubna in its “Gulf Power 25 list of 2007” and The Wall Street Journal recognised Sheikha Lubna as one of its “50 international women to watch”. In 2009, Nicolas Sarkozy conferred on her the

Chevalier de la Légion d’Honneur, the highest possible distinction, for her extraordinary achievements as a public servant of the UAE and for her invaluable role in enhancing her country’s foreign relations. In 2007, she became the first Arab woman to receive the Italian ‘Stella Re’ prize, awarded annually to just one woman throughout the world who strives to make a difference to contemporary society and culture

through her innovative work, dedication and ideas.

Sheikha Lubna graduated from the California State University, Chico with a Bachelor’s Degree in Computer Science, and has an Executive MBA from the American University of Sharjah. She received an honorary doctorate of science from California State University, Chico, for her contributions to the field of science and technology. n

ABOUT HER ExcELLEncy SHEiKHA LUBnA AL QASSimiBefore she became one of the most prominent female politicians in the Middle East, HE Sheikha Lubna Al Qassimi was one of UAE’s most pioneering women professionals. Her successful corporate career included stints as a Dubai branch manager for the General Information Authority, the organisation responsible

for automating the federal government of the UAE, a senior manager of the information systems department at the Dubai Ports Authority (DPA) and the chief executive officer of Tejari, the first Middle Eastern electronic business-to-business marketplace.

Sheikha Lubna is the first woman to hold a ministerial post in the United Arab Emirates.

In her current role, which she has held since 2008, she has steered the UAE along a course of economic modernisation and diversification, while underscoring the role of the private sector. Prior to this, Sheikha Lubna was the UAE Minister of Economy, a post she held during one of the country’s most economically prosperous periods in history.

Her numerous achievements in both the public and private sectors led to her

being voted as the most powerful Arab woman by Forbes magazine, with her name also featuring among the 2009 Forbes List of the 100 Most Powerful Women in the World.

She is also a member of the ruling family of Sharjah and the niece to His Highness Dr. Sheikh Sultan bin Mohamed Al-Qasimi, the ruler of the emirate of Sharjah.

Sheikha Lubna has received many awards for her work, including the

36 OCTOBER 2011

H er Excellency Sheikha Lubna Al Qassimi, the UAE Minister of Foreign Trade, holds the distinction of being voted the most powerful

Arab woman by Forbes magazine, as well as being the first woman to hold a ministerial post in the United Arab Emirates (UAE).

In an interview with Trade and Export Middle East, she speaks about the role of the Ministry of Foreign Trade in diversifying the UAE economy, decreasing custom duties, and enabling an open trade policy.

Can you please tell us about the Ministry of Foreign Trade and its medium-term strategy to increase non-oil exports from the UAE?The Ministry of Foreign Trade recognises the importance of promoting the country’s trade and economic prowess. It thus organises and hosts many international and regional fairs and trade conferences not only in the UAE but across the globe. These events encourage and strengthen local production, while also increasing the country’s export potential to world markets, due to the significant deals and transactions they generate.

In order to further promote national exports, the Ministry also organises lectures and workshops that raise awareness on exporting, by addressing issues such as export requirements, export conditions, as well as the fundamentals of international trade within the framework of the World Trade Organisation.

What are the types of services that the Ministry of Foreign Trade offers UAE firms to become successful in foreign markets? How can exporters from the UAE utilise these services?The Ministry of Foreign Trade continuously prepares in-depth analytical studies and research materials that aid all exporters – especially those in the private

sector – with the necessary information to identify promising markets, export opportunities and good investments, locally and abroad. It also signs trade agreements that open up international markets for UAE exporters.

What are the types of services that the Ministry of Foreign Trade offers foreign firms looking to enter the UAE?The Ministry of Foreign Trade constantly highlights and promotes the country’s key economic sectors. We periodically publish booklets that provide a clearer view of the UAE’s economic sectors and activities, while also giving detailed explanations on how to establish a new business here. These booklets also list the country’s official institutions that are involved in the trading startup process.

The Ministry currently has four trade offices. Are there any plans to open more? The Ministry of Foreign Trade has embarked on a mission to restructure and expand operations of all trade offices representing the UAE in major economies. This task began with the trade offices in Washington DC, Delhi, China, and Geneva, all of which rank among the UAE’s most important economic partners.

The mandate of the UAE trade offices in these countries is to maintain and further enhance the positive nature of bilateral trade and commerce.

The Ministry also has a number of trade attachés stationed at UAE embassies operating in some of the country’s major trading partners. There are plans to establish even more trade offices in the future.

The objectives of these offices are to assess viable opportunities and then follow through with negotiations that can lead to trade and commercial agreements with

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Dubai’s global trade touched AED 289 billion (about USD 78 billion) in the first five months of this year, despite regional unrest affecting certain markets. The figure rose by 27% compared to AED 228 billion in the corresponding period last year. Statistics issued by Dubai Customs show growth in all sectors of direct trade between Dubai and the rest of the world,

including exports, imports and re-exports. Free zone trade was up by 25% to more than AED 160 billion compared to AED 128 billion in the corresponding period last year.

Ahmed Butti Ahmed, Director General of Dubai Customs, said that the growth witnessed in Dubai reinstates the strength of UAE’s economy. He added: “Dubai’s direct trade with the

world during the first five months of this year has scored record rates, especially as compared to the same period in the last five years. This is primarily due to Dubai’s economic diversity and its status as a key business hub.

According to a study by Dubai Chamber of Commerce and Industry, Dubai exports and re-exports to certain key markets in the Middle East and North Africa (MENA) region slowed, but this did not significantly impact the emirate’s overall export and re-export figures.

Total exports and re-exports to Egypt, Libya, Yemen, Syria and Tunisia reached AED 14.6 billion in 2009, slowing by 4.4% to AED 13.9 billion the following year due to the global financial crisis.

From 2007, trade with Egypt expanded, slowing down only in 2009, again due to the global crisis. During this time, growth of Dubai exports and re-exports was swift, increasing from AED 622 million in 2007 to almost AED 1 billion in 2010.

Libya expanded rapidly and was not negatively affected by the global crisis. Dubai exports

and re-exports to Libya increased from AED 253 million in 2007 to AED 506 million in 2010.

On the other hand, exports and re-exports to Syria declined, from AED 194 million in 2007 to AED 129 million in 2010. Yemen was a stable destination, with the value of goods flowing to the country hovering around the AED 500 million mark.

Tunisia, while a relatively much smaller market for Dubai’s exports and re-exports, was stable during this time, dipping slightly in 2009. The value of goods flowing from Dubai to the country recovered in 2010 to a value of AED 24 million, the study found.

Political unrest in the MENA region generally started in urban centres, directly affecting commercial and industrial activities. This has led to the slowing down in demand for machinery and mechanical appliances.

On the other hand the economic development programmes in countries under new regimes are expected to spur growth in trade to fill the need for raw materials, machinery and vehicles, the study concluded. n

Dubai Exports, an agency of the Dubai Department of Economic Development (DED), Government of Dubai, is expecting more UAE companies to increase trade with Brazil, particularly in the sectors of finance, construction and retail.

Average annual (non-oil) export growth, over the last four years to Brazil, despite the economic crisis, was 166%, with the total

(non-oil) exports in 2010 reaching nearly AED 365 million (USD 100 million). Among the top products being exported by the UAE to Brazil are machinery and parts; plastics & plastics articles; aluminium and its articles; iron & steel & products thereof; building materials, and perfumes, among others.

Mr. Sidnet Costa, UAE General Manager for APEX

Brazil, quoted figures provided by the Ministry of Development, Industry and Foreign Trade of Brazil: “The volume of UAE’s exports to Brazil increased 62% from 2009 to 2010, with an increase of 182% in the value of exports. These numbers prove the effectiveness of the initiatives of Dubai Exports to consolidate new markets for UAE products.” n

Dubai Exports sees more companies exporting to Brazil in the coming years

UPDATES

GLOBAL WATCH

The worldwide business process outsourcing (BPO) market is forecast to grow 6.3% in 2011 and 5% in 2012, according to Gartner Inc. The outlook for BPO is mixed in developed economies, and this has resulted in a tempering of growth expectations.

“While growth remains strong in developing economies, the United States, the world’s largest BPO market, presents a mixed picture for the global market,” said Cathy Tornbohm, Research Vice President at Gartner. “Emerging markets are faring far better and, generally, multinational companies continue to look to BPO as a means to reduce costs and buoy their business operations during the protracted return to a growth environment. We also see an increase in transaction volume, especially in payroll, recruiting, accounts payable, and customer data analytics and knowledge process outsourcing (KPO) activities.” n

Gartner says worldwide BPO growth continues despite mixed fortunes in developed countries

Dubai’s global trade reaches $78 billion

DESTINATION 2009 2010Change

(%)2010 2011

Change (%)

Egypt 4,500 5,465 21.4 1,734 1,532 -11.7

Libya 5,268 3,456 -34.4 1,248 519 -58.4

Syria 2,021 2,013 -0.4 651 688 5.7

Tunisia 395 483 22.5 149 150 0.6

Yemen 2,396 2,525 5.4 1.035 595 -42.5

TOTAL 14,581 13,941 -4.4 4,818 3,483 -27.7

Jan - Apr value

Source: Dubai Customs

Dubai’s exports/re-exports to selected destinations2009 and 2010 and Jan - Apr 2010 and 2011

Total annual value

8 OCTOBER 2011

The UAE Ministry of Economy and the Ministry of Environment in the UAE have joined hands with the Arab Federation for Food Industries and the AR Group to roll out an ambitious initiative to support food security in the Arab world and address famine in the African Horn.

His Excellency Sultan bin Saeed Al Mansoori, UAE Minister of Economy, said that the food industry in the UAE has witnessed steady growth over the past years, due to the Government’s focus on promoting industries

and driving economic diversification. “The growth in industrial infrastructure has contributed to the inception of some 150 food industries, with the food sector accounting for nearly 46% of the total volume of non-oil investments in the country.”

He said that the Ministry has launched major initiatives to support the food industry in the UAE, such as issuing Certificates of Origin online. This service offers flexible procedures for investors

thus enhancing the investment environment of the UAE. With this service, the merchant or the producer can apply online and request for a certificate of origin, as well as update or change the contents of the request for the certificate any time.

The Ministry has also launched the Certificate of Origin form (A) Generalized System of Preferences, which gives privileges to UAE exports, especially for national products, by reducing customs fees from 38 member states. n

UPDATES

POLICY

His Excellency Sultan bin Saeed Al Mansoori, UAE Minister of Economy, said that in the first half of 2011, the UAE promoted its policy of international co-operation and built strategic ties with a number of nations. This was in line with the UAE Vision 2021 to further underline the UAE’s status as a competitive knowledge-based economy.

The Ministry has launched several steps to promote the use of technology and modern techniques to strengthen its service standards. Among other initiatives was its support to www.madeintheuae.com, a comprehensive website that helps manufacturers promote their factories, products and services. It enables UAE manufacturers to reach and connect with a global audience of buyers.

The Ministry also launched the Electronic System for Goods Monitoring which connects the Ports and Customs, the Ministry of Economy, and the centres of major retailers, enabling the Ministry to counter any attempts at potential monopoly practices by negotiating with suppliers or distribution outlets.

Another service was the issuance of Arabic Certificates of Origin online. This service offers flexible procedures for investors, further enhancing the investment environment of the UAE. With this service, the merchant or the producer can apply online and request for a certificate of origin, as well as update or change the contents of the request for the certificate any time. n

UAE Ministry of Economy builds strategic international ties during first half of 2011

HE Sultan Bin Saeed Al Mansoori, UAE Minister of Economy, stated that excellence has been one of the components of UAE’s strategy in facing the economic challenges. It was the country’s sharp policies, diversification and openness which helped it prosper in the wake of the opportunities arising out the global financial crisis.

Speaking at the opening of the International Conference Mohammed Bin Rashid Al Maktoum Business Award 2011, Al Mansoori stressed that the focus is now on diversifying the economy, strengthening the industrial sector, promoting business and bilateral trade, as well as implementing new laws to attract investment and boost business competitiveness.

He further stressed that the UAE economy is expected to grow by 3 to 3.5% this year, while inflation will remain around 1 to 1.5%. The government’s focus on promoting investment and entrepreneurship is creating a competitive business environment especially for the small and medium enterprises (SMEs) who account for 94% of the companies operating in the country, he said.

The Ministry of Economy is now focusing its efforts to steer the economic strategy of the country with economic diversification, industrialisation, promotion of entrepreneurship, dynamic bilateral engagement, and legal and regulatory reforms to drive investment and business competitiveness that are the thrust areas of the Ministry’s new strategy.

The Minister of Economy said that a sharp focus on economic diversification is enabling the country to build capabilities locally and create further opportunities for cross-border trade. “Our bilateral trade profile is also expanding considerably, with many vibrant economies across Asia, Africa, Latin America and the Middle East forging partnerships with the UAE.”

“One of our key focal points is the industries sector which we believe can add further momentum to economic diversification. The sector already contributes 16 % to our GDP and we have a set goal of increasing this to 25% through industrial incubators which will further promote entrepreneurship and investment in this particular sector,” he added. n

UAE Minister of Economy says UAE bilateral trade seeing expansion; economy to grow 3 to 3.5% this year

UAE Ministry of Economy and Ministry of Environment unveil ambitious initiative to address food security in the Arab world

Website: www.madeintheuae.com

10 OCTOBER 2011

BrazArtis, a Rio de Janeiro based company, jointly with Saborama, a leading Brazilian manufacturer of refreshment beverages, will launch a new line of fruit-flavor drinks in the Middle East, including Acai, Citrus, Guarana, Grape, Catuaba, Gooseberry, Tutti frutti savour concentrates, and the award winning Brasil Fruit energy drink.

With nearly four decades of experience in the beverage sector, Saborama has

attained a prominent status in the Brazilian and international market, and offers a wide array of juices, emulsifying flavoured concentrate and syrups, traditional soft drinks and a new line of energy drinks.

Ana Borray, VP of International Sales at Saborama, said: “Our expansion into the Middle East coincides with our international expansion. Saborama is a traditional

company and we have undertaken a natural growth path, which focuses on the development of specific products that cater to consumer lifestyles and tastes.”

She added: “The Gulf region is one of the leading partners of Brazil, especially in the juice sector. In our efforts to gain competitive advantage in the Middle East, we have nominated BrazArtis to offer us commercial representation in the market. Jointly with BrazArtis, we see a great potential for expansion through collaboration with retailers and distributors in the region.”

The Middle East is a focal market for Brazilian food and beverage products. In the first quarter of 2011, sales to the Middle East amounted to nearly USD 2.5 billion, an increase of 29.6% over the same period in 2010. In May 2011 Brazil’s exports to the Middle East totalled USD 1.02 billion, an increase of 34% from the same month in 2010. n

Landmark Group, the retail and hospitality conglomerate, has launched Candelite, a first-of-its-kind confectionery and savoury concept in the Middle East.

Poised to expand its presence in the region with an investment of over USD 100 million, Candelite aims to open nearly 50 small and large format outlets in the UAE, Kuwait, Oman, Qatar, Bahrain and Saudi Arabia by 2012.

Since the launch of Candelite’s first store in February 2011, the USD 3.8 billion Landmark Group has rolled out four large format stores covering a total retail space of over 12,000 square feet. The confectionery concept store has a presence in its large format at the Ibn Battuta Mall and Mirdif City Centre in Dubai, as well as

Mushrif Mall in Abu Dhabi and Ajman City Centre. These are complemented by three shop-in-shop layouts at Sharjah Airport, Iconic at Deira City Centre and Fun City at Bawadi Mall. Additionally, Candelite operates two large kiosks at Oasis Centre, Dubai, and Centrepoint Breakwaters, Marina Mall, Abu Dhabi.

Vipen Sethi, CEO, Landmark Group, said, “Our decision to develop and invest in the confectionery and savoury concept comes from the need to fill a gap in the market and bring premium global brands that offer exceptional value for money. The Landmark Group is leveraging its solid retail strength to organise and realise the business potential of this dynamic sector in the region.”

Candelite is divided into eight distinct sections, offering over 2,000 products of 65 popular brands from over 18 countries. The sections include Kiddy Delites, Funky Treats, No-Guilt Options, Classic Delites, Gourmet Room, Snackin’ Around, Gifts Galore and Chill Out Zone.

Explaining the rationale behind the brand’s product range, Jani Viswanath, Business Head, Candelite, said, “Extensive research of the confectionery and snack industry has gone into the making of Candelite. We aim to cater to the eclectic choices of the multicultural palate that defines the Middle East region. We have selectively identified brands and products that are healthy, nutritious and offer unmatched taste.” n

Landmark Group introduces Candelite to the Middle East

UPDATES

SNAPSHOTS

Al Rawabi Dairy Company, one of the leading producers of dairy products and fresh juices in the GCC, has announced an investment of USD 200 million as part of its ongoing expansion plans.

The dairy company, which currently serves Dubai, Abu Dhabi, Sharjah, Al Ain, the Northern Emirates, Qatar and Oman, plans to extend its regional footprint to Bahrain and Kuwait, where it will replicate the business model it successfully runs in the UAE. Al Rawabi Dairy is also looking to invest a further USD 100 million this year to augment its milk production and processing capacity.

“We are constantly investing in new technology to maintain the best quality products; this year, we plan to expand our existing facilities with the addition of a world class milking parlor, yard and cooling system. We are also looking to increase the number of our cows to a total of 10,000 from the current count of 7000 by 2012,” said Dr. Ahmed Eltigani Abdul Rahim, General Manager, Al Rawabi Dairy Company.

Over the last two decades, Al Rawabi has grown remarkably to become one of the leading producers of milk products in the region - retaining more than a third of its domestic market. Al Rawabi was listed among the strongest 40 brands in the Arab world by Forbes magazine. The company has achieved all of the top quality benchmarks including the ISO 22000 HACCP Food Safety Management System. n

Al Rawabi Dairy plans USD 200 million expansion

BrazArtis introduces ‘super-fruit’ refreshment drinks in the Middle East

11OCTOBER 2011

UPDATES

SNAPSHOTS

Global Marine terminal operator DP World Limited (DP World) has expanded to Suriname, on the northeast coast of South America, by acquiring a controlling interest in Integra Port Services (IPS) – a company holding a container and break-bulk terminal in Nieuwe Haven Port, Paramaribo – and in Suriname Port Services (SPS) – a company that owns a private break-bulk facility upstream from Paramaribo.

Mohammed Sharaf, CEO, DP World, said: “We are pleased to add Suriname to our global portfolio as part of our strategic expansion plans into the fast growing market of South

America. We look forward to working with our new partners at IPS and SPS to further grow operations and serve our customers in the region.”

Nieuwe Haven Port terminal handles origin and destination cargo’s for Suriname. The terminal currently has a container throughput capacity in excess of 100,000 TEU per year, with the potential to double its capacity in order to meet the demands of a growing local economy, as improved road links into French Guiana and off-shore oil exploration are set to increase trade volumes in the future.

Matthew Leech, Senior Vice President and Managing Director of Americas, DP World,

said, “These terminals are well placed to handle all cargo into Suriname, and more importantly, they have the potential to expand in line with future demand as trade continues to grow, underpinned by Suriname’s diversified natural resources, such as oil, gold, bauxite, agriculture and forestry. Operating the ports in Suriname will provide our customers quality services in and around the southern Caribbean region.”

In April 2010, IPS was awarded a 15-year concession, with an option for a further 15-year extension, to manage and operate its terminal within Nieuwe Haven. IPS is the largest terminal operator at the port. Suriname Port Services is a freehold break-bulk facility about 20 miles upstream from Paramaribo, specializing in the handling of mining and logging equipment, off-shore supply and cement.

Capt. Remi Vyzelman, Founder and CEO of IPS and SPS, said: “We are delighted to welcome DP World to Suriname and look forward to working with them as our partners. DP World shares Integra’s deep appreciation of the key role that port facilities play in facilitating international trade and economic development. We have a common business philosophy about the operation of public port infrastructure which will help ensure the ongoing success of these terminals and allow them to continue to act as catalysts for economic development for the benefit of the port and country.”

DP World will have a management services agreement for both terminals.

The transaction is expected to close in the third quarter of 2011. The price was not disclosed. n

DP World expands to South America

The Middle East and North Africa region is currently the world’s fastest growing markets for rail projects. With an increase for efficient and effective means of transport, the increase in metros, trams and monorail projects will lead to the rail market almost doubling in size over the next decade. While the region is undergoing more than USD 250 billion of planned investment in the railways sector, the GCC is leading the way with an expected rail project spend of around USD 245 billion, according to the MEED Railways Report 2011.

Huawei Enterprise, a global leader in providing Information and Communications Technology (ICT), currently specialises in GSM-R (Global System for Mobile Communications) technology, an innovation that facilitates the modernisation of railway communications today. From GSM-R,

transmissions, unified communications (fixed telephony, Voice over IP and mobile communications), and security solutions like video surveillance, Huawei Enterprise offers railway communication solutions that are critical to the construction and operation of modern railway infrastructure.

“Investments in the MENA railway network are having a tremendous effect on trade and commerce as it plays an essential role in driving economic growth. Advanced railway infrastructure is instrumental in developing public transport as it forms the

backbone of every modern city,” said Rabii Ouadi, Head of Business Development, Transportation Solutions at Huawei Enterprise, Middle East and North Africa.

Huawei has a proven history in providing high-end, next generation GSM-R solutions. By the end of 2010, Huawei had deployed more than 8000 kilometres of GSM-R networks worldwide. Projects include railway networks in Southeast China for the Guangdong – Shenzhen – Hong Kong railway line and rolling out the GSM-R service in Australia, among others. n

Huawei Enterprise cashes in on GCC’s USD 245 billion rail project spend

12 OCTOBER 2011

The Royal Caviar Company (TRCC), the world’s largest and most technologically advanced producer of high quality sustainably produced caviar, has witnessed the hatching of its first sturgeon fish here in Abu Dhabi. Almost 120,000 sturgeon eggs were flown in from Germany last month, and since their arrival, TRCC has seen more than 80% of these eggs successfully hatch – representing the company’s first batch of locally-grown sturgeon.

The young sturgeon will be reared not only for the production of caviar and sturgeon meat products, but will also form a part of the company’s first broodstock for breeding. TRCC’s Abu

Dhabi-based factory utilises world-leading pisciculture technology from its partner United Food Technologies AG to deliver the best quality end product in significant volumes each month. Thus, the factory’s state-of-the-art and controlled facilities provide an ideal environment for breeding, as recent success has shown. Moving forward, TRCC aims to have sturgeon eggs hatch on a yearly basis to allow the factory to become entirely self-sustaining.

Robert Harper, Group Commercial Director of Bin Salem Holding, owners of TRCC, commented: “The Royal Caviar Company is well placed to address the

world’s growing demand for high quality caviar and this first substantial hatching is an exciting milestone for the factory as we look towards long term self-sustainability here in Abu Dhabi. Over 120,000 eggs achieved a hatch rate of 80%, which is highly encouraging and we look forward to this batch of sturgeon producing our Year Five harvest.”

TRCC is the largest caviar factory of its kind in the world,

allowing economical use of the world’s best technology and enabling monthly production of high quality caviar and fillets. When fully operational, the 50,000m2 factory has the capacity to produce up to 35 tonnes of caviar each year – satisfying almost 10% percent of the global supply and demand gap. The first commercial batch of caviar and fillets is planned for the second half of 2012. n

UPDATES

SNAPSHOTS

Dubai Investments Park (DIP), the largest integrated business and residential community in the Middle East, has announced that Hotpack Packaging Industries, a leading producer and wholesaler of quality disposable food packaging materials in the UAE, will set up a 30,000-square meter manufacturing facility at DIP.

The new unit, with a project cost of approximately AED 100 million, will be equipped with state-of-the-art technologies for efficient production, storage and logistics operations under one roof to provide quality food packaging solutions. The company also aims to execute backward integration in the paper and plastic product lines.

Omar Al Mesmar, General Manager, Dubai Investments Park, said: “Hotpack Packaging Industries is another renowned company which will soon commence operations in DIP. We are delighted with the company’s decision to set up a new manufacturing facility at DIP as part of its business objective to provide high quality packaging solutions to customers. We are confident they will benefit from the advantages that DIP offers to achieve their business objectives in the near future.”

Abdul Jebbar P.B, Managing Director, Hotpack Packaging Industries, said: “The new unit is expected to go on-stream in June 2012. The company’s decision to expand production capacity comes as part of its endeavour to meet the

growing demands of its customer base. Through this strategic move, we aim to cater to our customers with high quality packaging solutions. We chose DIP due its location and the facilities it provides. DIP’s proximity to the seaport and the upcoming Jebel Ali International Airport, coupled with easy access to major highways will enable us to capitalise on the opportunities emerging from our valuable customer base.”

Founded in 1995, Hotpack Packaging Industries currently has manufacturing facilities in Umm Al Quwain and Sharjah. The DIP unit is being set up to supplement current production lines in the UAE besides expanding the advanced production line to meet international standards. n

The Royal Caviar Company hatches first batch of sturgeon eggs in Abu Dhabi

Hotpack Packaging to set-up AED 100 million manufacturing unit at Dubai Investments Park

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While the appalling situation of having a cargo vessel attacked and captured by pirates is every trader’s nightmare, it is a reality that they cannot ignore. Ravi Jawani, a legal consultant at Fichte & Co, provides a helpful guide on how to protect your cargo from such a contingency.

Marine insurance policy:

How to tackle piracy

RESOURCES

LOGISTICS

15OCTOBER 2011

In light of continuing piracy incidents – pirate attacks on the world’s seas have

totalled 266 in the first six months of 2011, up from 196 incidents in the same period last year – insurers have once again been put on standby position in order to protect themselves against any possible claims brought by the assured under their marine insurance policies. Whilst obtaining a marine insurance policy – whether for a vessel or for cargo – remains the only reasonable precautionary measure to secure your interests against a peril, it is still doubtful whether the same would suffice in case of an incident involving piracy. How far the insured is protected against a piracy incident is not determined only by the insurance policy, but subject to the law governing marine insurance policies and how that law classifies piracy as an insured peril.

piRaCy: maRinE OR waR RiSk?Historically, under English law, the position of piracy as an insured peril was tentative. For a period of time piracy was considered a war risk and hence excluded from the list of insured perils under the standard marine insurance policy. It required a separate war risk cover. However, the position appears to have changed recently with piracy now regarded as a marine risk and hence covered under the Institute Clauses 1983. tERRORiSm and hijaCkingEven though piracy is an insured peril, the onus to prove the act of piracy for successful recovery remains with the insured, in particular to establish that the act occurred was piracy and not terrorism, which means that the persons committing the act did so exclusively for their own material benefit, rather than pursuing a political, ideological or religious scope.

Further, recovery by the assured becomes more intricate when the vessel is simply hijacked. The distinction between hijacking and piracy is roughly based on whether violence is used against the person (piracy) or whether force is used only to gain possession over the

property (hijacking). This difference is important, as in a recent case involving the hijacking of a vessel by pirates, the insured claimed an actual total loss under his marine insurance policy but the court dismissed the claim on the basis that even though the pirates had seized the vessel, the insured had still not been ‘irretrievably deprived’ of the vessel and was expecting the recovery of the vessel due to ongoing negotiations with the pirates for the ransom.

mitigatE yOUR lOSSESAnother important principle to be kept in consideration while claiming insurance is the duty under which the ship-owner mitigates his losses. He must in fact demonstrate that he has performed his best endeavors to avoid harsher and further consequences of his losses. In this sense a payment of ransom by the insured to recover the vessel might be considered an attempt to mitigate the loss, and when the insured successfully mitigates his loss by paying a ransom, the same could be simply recovered under the sue and labor expenses clauses contained in the insurance policy.

piRaCy UndER UaE lawUnder UAE law, the perils of piracy is a more complex matter, as there is ambiguity in the relevant provisions governing the recovery of losses. UAE law demands that a “special agreement” is entered into for the inclusion of acts

of piracy under an insurance policy in accordance with article (381) of the UAE maritime commercial law, Federal law No. (26) Of 1981. Only where such a special agreement is in place the liability of the insurer can be triggered by an act of piracy.

The controversial question remains whether such a special agreement should be interpreted as a special cover, equivalent to war risk insurance, in which case the intention of the UAE draftsman would be interpreted so as to include the piracy incident within the war risk insurance cover. However, it should be noted that Article (382) of the UAE Maritime Commercial Law lists down all war risks exclusively and refrains from expressly including acts of piracy. The only possible remedy is therefore be to classify a piracy incident as a “hostile operation occurred by authorities, whether recognized or not”, an option which, most probably, would not take the assured very far in an ordinary piracy case.

Similar to English law, UAE law also states that the insured must demonstrate that he has done his best to mitigate his losses. Therefore, according to article (378) of the UAE Commercial Maritime Law, any ransom payments would be recoverable as incurred expenses to avoid an insured peril or limit the extent of damages.

It is evident from the above that although the shipping market has welcomed the inclusion of the act of piracy within the catalogue of insured perils, both common law and civil law jurisdictions have been reluctant to allow an easy recovery of such claims. On the other hand, piracy should be an insurable peril, or the consequences would be catastrophic on world trade. n

“The controversial question remains whether a special agreement in the UAE should be interpreted as a special cover that includes the piracy incident within war risk insurance.”

aBOUtRavi Jawani is an international maritime lawyer who works as a legal consultant with Fichte & Co. He handles the highly specialised practice areas of maritime and international trade law, as well as contentious and non-contentious cases. Prior to joining Fichte & Co, he was heading the insurance department of one of the leading off-shore construction companies in Abu Dhabi and has worked with leading international litigation law firms in Mumbai.He is a post graduate from Narottam Morarjee Institute of Shipping, Mumbai, and holds an LLM in Maritime Law

from the University of Southampton, UK. Since 2005 he has been a member of the Institute of Chartered Brokers, London, and the English Law Society, as well as a member of the Bar Council of Maharashtra & Goa since 2002. You can reach him at [email protected].

16 OCTOBER 2011

Worth your weight in gold

RESOURCES

LEGAL

LEt’S StaRt by aSking a fEw qUEStiOnS:

Do you sell ideas? lIs your trade profile service oriented? lIs your business, product or service lexclusive?Have you distinguished your business lwith a unique logo, style, design or simply a mark? Have you ever analysed how valuable lan intellectual property is?Have you ever considered evaluating lyour business module, process, idea or mark in terms of an asset value?

thE REaL aSSEtBusiness evolution is the consequence of a simple process where a product, service, module or process will sell. Income generated from such a sale justifies the production, thereby crafting a value for what is created and thus spawning the birth of a business. Every businessperson

initiates several measures to protect their business. Have you ever wondered what you need to protect the idea or intellect behind your profit?

This brings us to the crucial question – is intellectual property the actual asset?

In today’s competitive business world, there is just one single answer – yes. For every trader intellectual property is the most vulnerable, yet cashing asset, that goes either under estimated or never estimated. All companies insure their hard assets against loss and their company against liability, but most outdoor related businesses will not have insurance against loss of their intellectual property.

So what’s needed is to identify the intellectual property that a company owns that is valuable to its business in terms of setting it apart from competitors and whether the company has taken the appropriate steps to retain its value

and safeguard it against loss. Businesses should treat intangible assets like physical assets, make wise decisions in acquiring the assets, take steps to protect the assets, monitor the assets to ensure that they are not taken, and act against those who attempt to steal the assets. Yet, many businesses neglect their intangible assets until it is too late. Therefore, an intellectual property audit is a contemporary, yet critical, form of appraisal to evaluate and assess a company’s net worth in terms of intangible asset value.

Though the word “audit” brings fear to many hearts and puts people on the defensive, an intellectual property (IP) audit is one of the best tools available for trade companies to offensively develop, protect and maximise the return on their intangible assets. This article will outline the some of the more obvious steps involved in this kind of audit.

In a fiercely competitive trading environment, any trader selling services or ideas will have to protect his business from current and potential competitors. In this regard have you ever wondered what the asset value of your intellectual property is, asks Geethalakshmi R., CEO and Managing Partner, Associated Business Attorneys.

17OCTOBER 2011

abOUtAdvocate Geethalakshmi R. is the CEO and Managing Partner for Associated Business Attorneys FZC, UAE; ABA Management Consultants, Dubai, UAE; ABA Investments LLC, Dubai, UAE; and Associated Business Attorneys, Bangalore, India. With more than 15 years of experience in the legal field, and by holding a position which is not common for an expatriate woman in the profession, Geetha is held in great esteem and high regard in her profession. She can be reached at [email protected].

whEn tO iP aUdit?To determine whether an IP audit should be undertaken, a business should consider the following types of questions:

Do we know what intangible assets the lcompany owns, licenses or controls?Have we taken steps to protect our IP lassets?What is the status of the company’s lknown intellectual property?Do we know how much we are lspending on IP assets?Do we know how much our IP assets lcontribute to our bottom line?Is a product line going to infringe a lcompetitor’s patent, trademark or copyright?Is a product line protected? If not, lwhat are the options?Do we know what IP assets are lcontrolled or owned by our competitors?Do we know how our competitors will lreact to our products?Can our IP assets be used to obtain lfinancing or be licensed to third parties?Have we budgeted for potential IP llitigation?Do we need to copyright everything? lWhat’s really worth protecting?Do company policies properly secure ltrade secrets, confidential information and other intellectual property?Have we developed uniform lprocedures for handling intellectual property issues, including standardised agreements for use within the company and with third parties?Are we adequately protecting our lassets and preventing unauthorised third parties from infringing our intellectual property rights?Are we losing valuable royalties or lmarket share to an infringer?Have we identified methods to lincrease branding of the company’s name and to cross-promote brands?

Have we ensured that we are in lcompliance with all our licenses?

iP aUdit PROCESS:Trader IP portfolio analysis:1. Identify and assess2. Technology and law3. Market and value4. License and asset net worth5. Commercialisation and disposition

Trader business analysis:1. Set up2. Legal compliance3. Actual IP rights

tRadEmaRkS, COPy RightS, dESignS, tRadE SECREtS and mOdULESThe audit process will categorise IP assets according to type, determine what protection, if any, exists and establish the scope of this protection to ensure that adequate protection is achieved. Contracts are reviewed to determine whether such contracts adequately address the company’s intellectual property rights.

Inbound and outbound licensing agreements, employment agreements, employee manuals, work made for hire agreements, copyright assignment agreements, agreements with competitors, and any other agreements that may relate directly to ownership of IP assets are reviewed.

A list of names, logos and trademarks are compiled to determine whether the marks have been registered and protected for the products where the marks are used. Also identified are quasi-trademark uses, such as domain names, trade names and fictitious business names.

Promotional materials are reviewed to determine whether copyright registration has been obtained or necessary. Samplings of print and online publications are reviewed to identify potential risks. Consideration must be given to whether Websites comply with laws, regulations and sound business practices relating to privacy and data collection, terms of use, message boards, linking, banner advertising and use of domain names and met tags.

In addition, products, publications or Websites may contain protectable trade dress elements. Other information, such as databases, software, expansion plans and marketing strategies may qualify for protection as trade secrets. Further, the business’ policies regarding confidential information are reviewed to ensure that trade secret protection is encouraged and enforced.

Inventions and technologies are reviewed to determine whether patent protection is appropriate. Existing patents are assessed for validity and risk of infringement.

After completing the analysis, an audit report is prepared evaluating whether the

“For employees with broad access to trade secrets and customer relations, the employer should have in place agreements whereby employees covenant not to compete with the employer after they terminate their employment.”

18 OCTOBER 2011

business has sufficiently protected and enforced its IP rights and recommending a prioritised plan of action for correcting deficiencies and reducing risk, and recommendations on implementation and training for key personnel.

iP aUditS and thE EmPLOyEEAn IP audit helps a company educate employees on intellectual property rights, design uniform policies and procedures for protecting a company’s trade secrets and confidential information, set up a programme for the company to register and docket patents, trademarks and copyrights, and alert the company to any errors in pre-existing registrations to avoid a claim of invalidity, misuse or fraud.

Further the audit can help ensure the validity of conveyances of intellectual property rights and eliminate any gaps in the chain of title or any potential dispute over ownership rights, determine whether

the scope of the rights being acquired or sold are subject to the rights of third parties, and ensure that the adoption and use of a new product, creative work, technology or trademark will not violate the rights of any third party.

agREEmEntS PROtECting intELLECtUaL PROPERtyA key part of the intellectual property audit will be to identify and assess the adequacy of agreements, which should be in place to protect intellectual property. These agreements are of two types: internal agreements with employees and third party agreements.

Every company with intellectual property to protect should have employment agreements with employees having access to such property, and not just with key management. The employee agreements should include provisions whereby the employee recognises the ownership of the employer in the trademarks and copyrights of the company, and agrees to protect its trade secrets from disclosure, both during and following the term of employment, and regardless of the circumstances under which employment terminates. The employee agreement should further acknowledge that the employer is the owner of the copyright of all work performed on the job (and in certain circumstances off the job).

For employees with broad access to trade secrets and customer relations, and perhaps for others, the employer should have in place agreements whereby

employees covenant not to compete with the employer after they terminate their employment. These types of agreements must be carefully drafted because they are often challenged as unfairly restricting the liberty of a former employee to pursue employment of his or her liking and the courts will give careful scrutiny to any restriction on this interest.

Although different states have formulated different policies on when the covenants not to compete will be enforced, most require them to be limited in time (certainly five years or less, with two years generally being safe), limited in geographic coverage to no more than the scope of the customer base and competitors, and limited in the scope of the restriction to protect only what the business is entitled to protect.

One method of limitation that has been approved in some states is to prevent an ex-employee from soliciting any existing customer of the business and any prior customer of the business within a defined period of time with which the employee had contact. These covenants can be important and thus it is important that they be carefully crafted to meet the needs and circumstances of a particular business without overreaching.

Contracts with third parties should be audited as well. If the business uses independent contractors for the delivery of its services, work for hire agreements should be put in place along with provisions from employment agreements, such as nondisclosure and covenants not to compete.

A business allowing independent contractors to have access to a company’s copyrights and the right to affiliate or represent itself as being associated with the business should be dealt with in licenses, specifying the terms and conditions under which the independent contractor is allowed to use the copyrighted material and trademark association with the business. n

RESOURCES

LEGAL

“Business policies containing confidential information, databases, software, expansion plans and marketing strategies may qualify for protection as trade secrets.”

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Our international network of experts can design a package of products and services that aim to meet your specific needs and to help increase your profitability. Not only do we supply an extensive range of lubricants, we also aim to help you to■ choose the right products■ store and apply your lubricants correctly■ achieve continuous improvement through vehicle and

performance monitoring.

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44-47_project_update.indd 47 10/18/11 5:48 PM

20 OCTOBER 2011

RESOURCES

GLOBAL MARKETING

Start-up trading companies need to ensure that their target market is fully informed of their merits. This is even more important when exporting to foreign markets where the product or service is competing with domestic as well as established international suppliers, says Dr. Ashraf Mahate, Head of Export Market Intelligence at Dubai Exports, and Vice Chair of the Economic Policy Committee, Dubai Economic Department.

Blow your own trumpet

“Without spending vast sums of money on advertising and marketing, traders need to ensure that in a crowded market place consumers are able to identify their product or service with relative ease.”

21OCTOBER 2011

I t is quite common that start-up trade firms are established by former

employees of large trade companies who have identified either a cheaper method of producing a good or service, or one that is more efficient or effective. One would assume that customers would fall over themselves to purchase the superior products and services offered by start-up trade firms rather than those of larger traders. So why is this usually not the case?

COmmUniCatEThe simple answer to this question is that current customers are not reminded of the value add they receive from the purchase while potential customers are not informed of the merits of the product or service. Therefore, the start-up trade company needs to ensure that their target market is fully informed, more so when exporting to foreign markets where they compete with domestic as well as other international suppliers. Without spending vast sums of money on advertising and marketing activities, the company needs to ensure that in such a crowded market place consumers are able to identify their product or service with relative ease. In fact, in most cases, the company can initiate this type of communication by using cheap but innovative communication techniques.

Before developing these communication techniques a start-up trade company needs to evaluate its product or service against those of its competitors to ensure

that there is a real distinction or value that that can be promoted.

DO yOUR hOmEwORk When entering a foreign market the firm may need to visit the country either through an official trade mission or a private visit. Trade missions tend to be organised by export promotion agencies, such as Dubai Exports based in Dubai. Private visits can be arranged independently or through the numerous export consultants. The main aim of these visits is to understand the products or services offered by competitors, the marketing and distribution channels, communication methods, pricing strategies, and so on.

BE DiffEREnt When communicating with customers it is dangerous, if not suicidal, to use a “false boast” since this cannot be kept hidden from customers or competitors for long. Once the truth is out, the company will lose credibility in the market, which it may never regain. It is far better for a company to identify or even develop areas of differentiation than to adopt false or non-existent ones. One area where a start-up company can create differentiation is the payment terms it offers customers, especially since large companies may not be able to offer flexible payment terms due to higher fixed costs.

A good example is a small wood supply company in the USA which enjoyed little

competition, if any, until a large national chain opened a branch less than 20 miles away. The small wood supply company could not compete on price against the large national chain due to its purchasing power. More importantly, the small wood supply company could not compete on product differentiation because at the end of the day a plank of oak (or any other wood) from one supplier is the same as that from another. So the small company began providing flexible payment terms to small contractors who often lacked working capital, thus maintaining its prices and retaining the bulk of its business. However, this strategy was successful only because the company used word of mouth to inform contractors of these flexible payment terms. In foreign markets a company can secure its accounts receivable through export credit insurance, while in the UAE this provision is available through the Export Credit Insurance Company of the Emirates.

highlight DEal ClinChERS Typically start-up traders are eager to build a customer base due to which they offer guarantee terms that are far more generous than larger companies who can ride on their brand image. Various consumer surveys and studies show that customers view guarantees positively as they remove the risk of making a purchase. Therefore, guarantee terms usually tend to be a deal clincher. However, the same studies show that most firms fail to state or emphasise the guarantees that their

aBOUtDr. Ashraf Mahate is the Head of Export Market Intelligence at Dubai Exports, which is an agency of the Dubai Economic Department. Dr. Mahate is also the Vice Chair of the Economic Policy Committee with the Dubai Economic Department. He has written a number of journal articles and book chapters, as well as edited books in the areas of economics, finance and banking. He has also presented papers at major international conferences. Dr. Mahate has provided extensive consultancy services to various organisations in the

areas of banking, economics and finance. He has been a director of a number of companies including a venture capital company and a private equity fund.Dr. Mahate received his doctorate from Cass City University Business School in London (UK) which was ranked by the Financial Times newspaper as the 12th best university in the world for finance. He read Economics at University College London, followed by a Masters in International Economics and Banking at the University of Wales in Cardiff. Dr. Mahate is a professional educator and received his training at the Institute of Education (University of London). He is a member of the Chartered Institute of Managers (UK) and a Member of the Institute of Commercial Management (UK). He is also a member of the Association of Certified Anti-Money Laundering Specialists (ACAMS).

22 OCTOBER 2011

products or services come with, under the false assumption that customers may already be aware of this value add.

Even if customers are aware of such a value add, it is important to remind them, more so at the time of sale when customers are evaluating different products and services. There are countless examples of retailers who have become successful on the single aspect of their “money back guarantee”. The most cited example is Marks & Spencer, the UK retailer which started as a small market stall and grew largely due to this simple concept. Moreover, it was the company’s ability to communicate this guarantee to its customers that allowed it to expand and gain new customers.

Do keep in mind that in foreign markets traders need to comply with the country’s rules and regulations regarding guarantees as well as promotional activities.

knOw yOUR CUStOmERCreating a difference in the mind of the buyer is all about knowing what they desire. In other words, it is of little use to communicate a message that the customer has little regard for. A start-up trade company needs to establish what is important to the person making the buying decision. In this regard, focus group sessions are an important way to understand why consumers buy a particular product. These sessions also

allow a company to determine what induces customers to buy its competitors products as well as arrive at a list of purchase drivers which help develop its communication message and method.

DaRE tO COmpaREMore often than not, communication messages which can be backed up with measurable factors tend to be highly effective. An example of this is an orange juice producer who stated that their product had twice the natural content compared to the nearest competitor.

Such measurements allow the buyer to make easy and direct comparisons between different products. Also, the fact that the consumer has readily available information at the time of purchase implies that they are able to make informed decisions in favour of the smaller company. In some countries companies may need to follow certain guidelines or regulations when making claims regarding their product or service.

EXCEl in SERviCE anD DElivERyIn some cases it is difficult, if not impossible, to differentiate the exporters product from those of its competitors. In such circumstances competitive advantage and differentiation can be obtained in the delivery process.

Smaller companies tend to have far better local knowledge of their customer base than their larger competitors, and are also able to excel on delivery time as well as service. However, very few small companies proclaim their ability in this area, even though studies show that customers highly value good service and have low tolerance for late delivery. There is evidence to suggest that companies who boast their delivery times and service levels tend to have higher sales than those that do not.

However, the danger with boasting delivery times and service levels is that it gives the customer a yardstick by which to measure company performance. In

other words, if a company states that they will deliver a pizza in 10 minutes and does so, the consumer considers it normal and expected. However, if the company delivers the pizza in 15 minutes instead of the promised 10 minutes, then the customer will have a far greater negative experience and impression compared to a company that did not make such a promise but took the same time to deliver the pizza. Therefore, it is important for a company to keep a promise or compensate the customer. Although delivery is an important differentiating factor, traders need to be aware that logistics and customs procedures may differ significantly from their own country. Hence, before making any claims the trading company needs to understand “on the ground” delivery time which takes into account local factors and hurdles.

makE SURE tO tEll thEm aBOUt thE fREE tRainingSmaller trade companies tend to have owners who are able to offer low cost or even free training to their customers, which larger firms with their higher costs cannot always match. Training allows smaller companies to showcase their product or service to existing and potential customer, hence reinforcing the value add aspects. At the same time, training allows smaller companies to obtain insights into how their customers intend to use their offerings.

From a customer perspective, free training reduces the cost of purchase and ensures that the purchase will lead to immediate returns. More often than not, sellers do not fully value the importance of training and hence do not use it in their sales communication.

The bottom line is that if trade companies are able to showcase their product or service features effectively, not only will they retain and perhaps increase their customer base, but also develop their brand image. The brand of a product or service does not depend solely on advertising, but on its features as well as value add. In the long run companies that communicate effectively with their customers tend to have loyalty and goodwill. This is especially important for start-up trade companies who do not have the large advertising and marketing budgets of their bigger competitors. n

“It is better for an exporter to identify or even develop areas of differentiation than to adopt false or non-existent ones. One area where a small export company can create differentiation is in the payment terms it offers.”

RESOURCES

GLOBAL MARKETING

The region’s largest heavy equipment exhibition

The Construction Machinery Show will be the largest heavy construction machinery event in the region. There will be a wide variety of products on show

ranging from heavy equipment to machinery and generators including service providers. There are plans of a live auction and demonstration area for visitors to get a real idea of the capabilities of the equipment. This event is dedicated

to the construction machinery sector and will provide an invaluable platform for customers in the Arab world bringing manufacturers, distributors and buyers

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24 OCTOBER 2011

RESOURCES

FINANCE

Financing small and medium export businesses is never clear cut, but banks are beginning to turn their focus to the growth of the sector, especially in this region. Murali Subramanian, Executive Vice President and the Head of Transaction Banking, ADCB and Lloyd Caughey, Vice President and Head of Trade Finance, ADCB, outline the emerging bank facilities being put in place to help these firms get a foothold on the export ladder.

Small and medium enterprises (SMEs) are a key driver for the dynamic UAE

economy, which is predicted grow at over 3% this year and beyond. In the growth years, through the global economic crisis and now, UAE SME businesses have sustained an almost consistent growth trajectory. They now constitute around 80% of the non-oil GDP of the UAE (around 30% of the entire GDP), 88% of the employment, and account for at least 90% of all of the UAE’s non-oil exports. The SME sector is the engine for the dynamic re-exports business in the UAE.

The UAE has been ranked by the World Bank and IFC Doing Business survey as the top three countries in the MENA region to set-up and operate a business

in terms of procedures, cost and time taken, and has shown the greatest growth worldwide in start-ups in 2010. With world class logistic hubs at JAFZA and other free zones, there is large facilitation in ensuring the continued performance of the SME sector.

In other economies, where SMEs have driven the overall national economy, access to banking and finance, in addition to efficient logistics as well as a supportive regulatory and operating environment, has been a critical determinant of success for start-up and newly set up SMEs. On this front, SMEs in the UAE face greater challenges. To quote the WB/IFC survey, access to finance continues to be a leading

constraint for SMEs doing business in the UAE.

SMEs often struggle to gain access to basic financing facilities; a report released by the Union of Arab Banks and the World Bank in October 2010 revealed that SMEs in the Middle East receive just 8% of regional bank lending. For GCC-based SMEs the figure was even lower, sitting at 2% of all bank lending.

Although there are several government programmes for start-up funding, such as SME Dubai (formerly named Mohammed bin Rashid Establishment for SME Development), Khalifa Fund, and the ADCED and DED programmes, access is not available to every SME setting up and operating.

Trading beyond your horizon

25OCTOBER 2011

Some of the most important issues relevant to SME financing are:

FinanCing and thE inCREaSing ROlE OF tRadE and SUpply Chain Of the 52 banks licensed and operating in the UAE, there are ten major players servicing mainstream SME clients, with several others in niche segments. It is only recently that banks have started joining some of the government programmes to provide analysis and administration facilities granting SME borrowers banking facilities.

Banks have traditionally used a relationship lending model with SMEs that is based on their knowledge of the promoters and/or the business of the SME. While a number of banks have indicated intentions of lending more to the SME segment and enhancing portfolio limits, actual approval and setting of limits is based on an analysis of financial statements and other key risk indicators which limit the eligible SMEs to a much smaller number.

Very few banks have offered scorecard or criteria based lending to SMEs, which has proven to be much more flexible and tolerant of the emerging nature of a majority of SMEs. It is not atypical to see the first two approaches result in rejection rates of 70% of credits examined, and for decisions to take considerably longer than the lead time tolerable to SMEs.

While SMEs withstood the recent economic cycle well and actually increased their share of the economy, many banks have tended to cut back across all their industry segments and portfolios and have not distinguished the SME sector for increased focus. ADCB, which has long

had an SME focus, has adopted a tailored model for credit assessment of SMEs using a scorecard-based approach, and has actually increased its focus on lending to the segment.

There is a significant cross-border trade element in the UAE SME supply chain. Within this context, the main SME-focussed banks offer these structures for financing and servicing trade flows increasingly to SME clients:

Equipment financing (in healthcare, lconstruction, and other industries)Trust receipt financing under limport local collections (LCs) on an unsecured basis, with a loose linkage to exportsFinancing against export LC either as lpre-shipment or post-shipment loansBack-to-bank financing l

FUnding and tRanSaCtiOn COStThe other major component is the competitiveness of bank pricing of loans and foreign exchange for payments

in foreign currencies. Apart from international banks that have funding bases in money centres and source deposits in foreign currencies, most local banks in the UAE source foreign currency funding as wholesale funding and not as client deposits, with a higher cost that gets passed onto their clients, either as higher FX margins for payments, or reflected in the margin over benchmark in loans.

Margins tend to be higher for SME clients compared to those for larger corporates, as most banks try to expand to a multi-product relationship with the more complex larger corporate, whereas SMEs do not offer buying opportunities for other value-added banking services.

In the event that a bank does not finance a transaction, it could provide an avalisation service (payment undertaking given by a bank in respect of a bill of exchange) based on which another bank may finance the instrument. This of course comes at an additional margin for avalisation.

aBOUtMurali Subramanian is an Executive Vice President and the Head of Transaction Banking at ADCB. Transaction Banking is a group in the Wholesale Banking Group, offering industry leading cash management and trade solutions and premier client service to over 15,000 multinationals, public sector entities, domestic corporations, government entities, SMEs and financial institutions throughout the UAE. Murali has been in this role since August 2009, when he joined ADCB. Prior to this, he was MD and Head of

Global Transaction Services at Citibank for the MENA region based in Dubai, and has held various senior management roles in GTS in the North African, CIS, and Western European business. Murali has a 22-year banking career of which 20 have been with Citi, and two with ABN Amro Bank in Amsterdam and Kazakhstan.Murali holds an MBA from the Indian Institute of Management and a B.Tech in Mechanical Engineering from the Indian Institute of Technology.

aBOUtLloyd Caughey is a Vice President and Head of Trade Finance at ADCB. Trade Finance is part of the Transaction Banking Group, offering industry leading trade finance solutions to large corporates, emerging local corporates, SMEs and retail clients throughout the UAE. Lloyd has been in this role since January 2008. Prior to this he was Director and Head of Trade Finance for Barclays Emerging Markets. He has 20 years of banking experience of which more than 12 years have been in trade finance product and management. His

early career was focused in South Africa where he worked for the major local banks. Thereafter, he has spent time managing teams and transacting in many African and Middle East countries. Lloyd holds a Licenciate Diploma in Banking from the Institute of Bankers in South Africa and Bachelor of Commerce Degree from the University of South Africa.

BANK VIEWl Portfolio approachl Risk and compliance focusl Industry outlookl Transactional innovationl Relationship return

CLIENT VIEWl Reliable partnerl Understand businessl Consistent approachl Advisory outlookl Support in growth

26 OCTOBER 2011

COvERagE OF SUpply ChainIt is typical for banks with a global network presence to provide export LC confirmation arrangements and LC/guarantee issuance capabilities across most if not all of a client’s supply chain. However, local banks typically restrict themselves to a region of choice, either where they are present, or in the GCC and MENA/South Asia region. SME exporters tend to find fewer banks offering them such facilities as these are more focussed on servicing their larger clients.

Banks also tend to cherry pick the countries and risks they wish to confirm, and avoid the rest. As a result, an SME exporter faces a higher cost funding

challenge for countries that banks consider “difficult”, as these cannot be covered by supply chain based structures and hence lower cost.

Increasingly though, several defeasance techniques are being commonly used by banks, and multilateral agencies such as the IFC, ADB, ICIEC and ECAs are playing an increasingly important role in bank risk defeasance. In case of the latter, a few have also been key providers of reinsurance services to enable export credit agency defeasance to banks.

dOCUmEntatiOn pREpaRatiOn, pRESEntatiOn and pROCESSing This is typically used by SME export clients that either do not wish to have specialist staff focussed on this activity, or are facing a volume growth without any room to face delays in getting paid arising from incomplete or discrepant documents submitted by them. Banks prepare documents on behalf of the SME client and work with counterparties to collect third party documents, to produce document sets compliant at the point of creation. Thereafter, this is negotiated.

thE BEnEFitS an ExpORtER gEtS FROm thiS aRRangEmEnt aRE:

Discrepancies are minimised and lturnaround time is reducedEffort saved as the manual preparation lof documents is minimisedBanks coordinate with third parties on lbehalf of the SMEReports and document images are ltypically providedPredictability in getting paid against ldocuments submission, and hence eventually lower cost of transaction or fundingHope for the future l

What we can conclude is that steps are being taken to rectify current restraints for SMEs. The export and trading potential of this sector as well as their limitations and specific needs is something that banks have considered with care. The introduction of consequent initiatives are evidence that financing for SMEs from banks should unfold across a wider spectrum of sectors after careful planning. n

RESOURCES

FINANCE

ADCB SERVICESADCB provides complete services to SME exporters for all bank issuers and countries that they export to, with the exception of sanctioned or otherwise regulatory prohibited environments. In addition to the above, the recently announced strategic alliance with Bank of America Merrill Lynch (BofAML) allows ADCB to offer its SME export clients access to the entire global network and services of BofAML. IN ADDITIoN ADCB PRoVIDES THE FoLLoWING TRADE SoLUTIoNS To SME CLIENTS: Fully electronic single-sign on channel for:

Import LC and guarantee issuance lViewing and printing of export lLCs, and documentsReal time updated view of the lprogress of issued creditsPayments, collections, account lservices and liquidity management on all their accountsFX transactions l

Structuring and approval for trade facilities pertaining to:

Pre-shipment financing against lexportsImport LCs and guarantees lTRs under import LCs l

ADCB PRoVIDES SME EXPoRTER CLIENTS WITH TRADE FINANCE SoLUTIoNS THAT CoULD INCLUDE THE FoLLoWING BUILDING BLoCKS:

Documentation preparation, lpresentation and processingBack-to-back LC structuring, with lor without financingSupply chain financing – invoice land export credit

Bank can then send documents directly to the Issuing Bank/have them sent to Exporter

BANKSUPPLIER

LC ISSUING BANKCoUNTERPARTIES(shipping Agent, Testing

Lab, Surveyor, Chamber of Commerce, etc)

Exporter ships goods

Banker engages with counterparties to prepare 3rd party docs

1

2

3

4

“The export and trading potential of the SME sector is something the banks have considered with care and consequent initiatives introduced are evidence that, after careful planning, financing for SMEs from banks should unfold across a wider spectrum of sectors.”

thE papER tRail

Banker engages with Exporter to prepare 1st party docs

Efficient execution and pricing on all trade facilities

BEST SME BANK IN MENAWINNER OF THE BANKER MIDDLE EAST INDUSTRY AWARDS, 2010.


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DRIVING YOURBUSINESS AMBITION FORWARD.

28 OCTOBER 2011

The world’s increasing globalisation requires more interaction among

people from diverse cultures, beliefs and backgrounds than ever before. People no longer live and work in an insular marketplace; they are now part of a worldwide economy with competition from nearly every continent.

The challenge of creating a multicultural and diverse organisation is becoming an increasingly prominent concern for the chief executive officers (CEOs) of companies around the world. Diversity management initiatives are long-term and strategic in focus; they strive not only to recruit but to actively develop, promote and capitalise on the different skills and perspectives of minority employees, as well as involve fundamental organisational change.

Cox (2001) suggests that “multicultural organisations” are the most flexible firms; actively integrating minorities into the company structure and building

an appreciation among employees for individual differences. These types of firms tend to consider diversity in an inclusive manner that encourages unity. Still, diversity in numbers alone (surface diversity) will not likely contribute to workplace harmony. Diversity must be accepted and integrated into the trading firm’s social and business fabric.

Research by Brock and Sanchez (1996) supports the hypothesis that a diverse environment can increase worker satisfaction only so long as real or perceived discrimination does not exist. By making diversity a priority and increasing the acceptance of differences within the organisation, firms can increase the commitment of minority employees, which can contribute positively to minority retention and personnel development. This is the heart and essence of this investigation.

With a wide spread of industries – primarily in oil refinery and production

– Gulf countries have been a hub of employment for many people. It cannot be denied that domestic labours of these countries are not sufficient for the diverse manpower needs of available employment. Therefore, expatriates have slowly diffused to the Middle East in search for better opportunities.

In a survey carried out from 1995 to 2007, it was noted that Gulf countries required the most number of workers from around the world. For example, 80% of the labour forces in Saudi Arabia are foreign nationals. Manpower requirements range from technical to mechanical, and include labourers from different countries. Many companies spend huge amounts of money to provide entry and working visas to entice these workers. In fact, this phenomenon has allowed many third world countries to provide citizens with enhanced opportunities and generated higher revenue inflows.

RESOURCES

INTERNATIONAL HR

Due to the very nature of its business, a trading organisation employs and deals with people from across the world. Trading organisations need diversity to become more creative and open to change. Maximising and capitalising on this workplace diversity is an important issue for management, especially in this region, says Fahad Abdullah Al Ameri, Head, Human Resources & Public Relations, Al-Qahtani Pipe Coating Industries.

We are family

29OCTOBER 2011

In order to attend to clients’ requirements in the most efficient way, companies have diversified their business nature and orientation, venturing into white and blue collar jobs, and employing a diverse talent pool with different skills, expertise and specialisation. In order to hold, retain and motivate such diverse employees it is necessary for a multi-faceted and strong management structure to evolve within any organisation.

ThE ChallEngEDiversity management is faced with dilemmas on four different aspects: leadership traits, peer relationships, employee behaviour and selection practices.

Leadership traits: l Leadership traits of middle managers are a key factor for the success of any company, as these inevitably direct activities. A leader who does not possess the key elements of good leadership may pass down poor directives, which can result in employee mismanagement. Prudent decision-making is one trait that should emanate from a leader, as poor decision-making can endanger the organisation.Peer relationships: l In a larger context, employee behaviour is a result of how management handles the company. Good or acceptable behaviour among employees emanates from solid leadership, leading to employee allegiance. To solidify relationships between management and employees, a “pro-people” approach works better than a “system-orientated” approach. Employee behaviour: l In a diversified culture, various nationalities work together, and this can lead to misunderstandings and ignorant preconceptions from time-to-time. Differences in religion, language, beliefs and practices are always present and only a strong leader can forge these differences and synchronise employees under one common goal. Selection practices: l It is important to realize that selection practices must be given attention to alleviate any potential problems in the future. The human resource department at any trade organization should set higher standards of criteria and qualifications in order to hire employees who are flexible, adaptable and can fit in with a diverse set of people.

ThE SOlUTiOn It is inherent for any trade business to strive to improve the existing work environment, especially if it hinders company objectives. To help build a healthy work environment and a trusted organisational structure, management has a wide array of option.

If the organisation has less diversity in its workforce, a programme can be initiated to align upper management with diversity goals and encourage board attendance at any diversity events. This could be realised by bringing diversity to board leadership (chair, other officers and committee heads) and by engaging managers, supervisors and employees in diversity training or conferences. Management must be reminded that the workplace is rapidly changing and they must keep abreast of these changes.

In the same way, it is advisable for an organisation to create a committee that will map out an action plan for high performing or high potential minorities. These could include: discussion of the employee’s career interests, additional skills required for further progress, how to obtain these skills, who can mentor them, and what internal or external contacts they need to build relationships. An export company can also create a team of senior managers, across all

lines of business and staff functions, to address obstacles and barriers affecting diversity management.

In as much as communication helps to bridge any gaps between the management and staff, an open communication should also be established between employees, middle managers and higher management to thresh out problems related to relationship, behaviour, leadership, motivation, advancements, and social and emotional dilemmas. This can be facilitated by the human resource office through a well-established, balanced and unprejudiced programme, addressing the needs of people regardless of their culture, background and ethnicity.

Cultural diversity training programs must also be performed for all employees, managers and supervisors. This training will help them become aware of the different cultures and beliefs in a diverse workforce. Similarly, a seminar or workshop on team building should be frequently conducted to build unity and cohesiveness among employees. n

aBOUTFahad Abdullah Al Ameri is currently heading the Human Resources and Public Relations department at Al-Qahtani Pipe Coating Industries. He is also in charge of Public Relations and Media for Abdel Hadi Abdullah Al-Qahatni & Sons Group of Companies, where he develops, coordinates and directs public relations activities. Prior to this, Fahad worked as a teacher with the Ministry of Education and the Ministry of Post and Telecom in KSA. He has also held various

managerial positions for operations involving pre-openings of various hotels in the region, including the FAMA Holding Group (Sunset Beach Resort) and Al-Khobar Holiday Inn.Fahad has a Bachelor Degree in Education Programme from the University of Bahrain and an MBA from AMA International University (Bahrain), which specialises in Human Resource Management. Fahad can be contacted at [email protected].

“Diversity in numbers alone is less likely to contribute to workplace harmony. Diversity must be accepted and integrated into the trading firm’s social and business fabric.”

30 OCTOBER 2011

The massive restructuring of political boundaries, the opening

of new consumer markets, historic trade agreements, abolition of quotas, and the World Trade Organisation (WTO) have created numerous benefits for manufacturers and businesses willing to take the step forward into foreign markets.

WHY EXPORT?Increase in sales and profits: l If a firm is performing well domestically, expansion into foreign markets is likely to improve its profits. Gain global market share: l By

exporting, a firm can learn from its competitors, including their strategies and what they have done to gain a share in foreign markets. Reduce the level of dependence lon existing domestic markets: By expanding into foreign markets, a firm will increase its marketing base and reduce its dependence on local customers. Offset market fluctuations: l By tapping global markets, firms are no longer held captive by economic changes, varying consumer demand and seasonal fluctuations within the domestic economy. Use excess production capacity: l

Exporting can increase the utilisation of production capacity and length of production runs, thereby reducing average unit costs and achieving economies of scale. Enhance competitiveness: lExporting enhances a firm’s and country’s competitive outlook. While the firm will benefit from exposure to new technologies, methods and processes; the country will benefit from an improved balance of trade. Find excellent no-cost or low-cost lexperts in export: For many firms, the decision not to export is based on the fear of the unknown.

Get ready to exportThere are unprecedented opportunities for businesses to export in a global marketplace. Dubai Exports, an agency of the Dubai Department of Economic Development, outlines the various stages of the process.

RESOURCES

HOW TO

31OCTOBER 2011

THE EXPORTing PROCESSExporters stand a much greater chance of success if, as a first step, they start thinking about their objectives in terms of:

What products to export lWhere to export lHow to export l

Lack of a definite set of goals or objectives will be a waste of resource, leading to dissipation of efforts in the wrong direction. A potential exporter’s objectives need to be realistic – neither too ambitious nor too modest – and take into account the existing market situation, the exporter’s position in the market as well as competition. To attain an objective in time, an exporter should intensify efforts and redirect resources, while refraining from the need to constantly modify the same.

Once the export goals and objectives have been formulated the exporter needs to understand the export process namely: export feasibility study, planning foreign market entry and implementation. The stages are outlined below:

Stage #1: EXPORT fEaSibiliTY STUdY

Analyse domestic performance. lAssess the firm’s capacity. lConsider the demographic, social, lpolitical and economic factors of target markets.Confer with international trade lexperts, like those in the fields of marketing, finance, legal and logistics.Select the target markets. l

Stage #2: Planning fOREign maRkET EnTRY

Conduct and evaluate market research lof the industry sector.Decide how the product will be marketed. lComply with target country licensing, lstandards and certification requirements. Apply for the necessary patent, ltrademark, and copyright protection. Identify taxes, tariffs, duties, quotas, lor other non-tariff trade barriers. Establish the pricing strategy. lSeek financing. l

Stage #3: imPlEmEnTaTiOn

Determine methods of distribution. lImplement marketing plan. lChoose sales representatives or lsales methods.

Negotiate the sales contract. lProduce the finished product. lObtain the insurance cover. lComplete the required paperwork. lPackage and label the product. lShip the product. l

THE EXPORT TRaPS Below are some avoidable traps that can become problematic for exporters when writing the international plan.

Seek no-cost or low-cost advice: lFirms that are new to exporting or are expanding into an unfamiliar foreign market often do not obtain qualified export counselling before developing their international business plan. Public and private sector professionals and organisations are available throughout the region to help firms clearly define their export goals and objectives.Obtain management commitment: lBefore researching and writing the plan, the person responsible for developing the foreign market strategy must make sure that top management is firmly committed to the project. That person will then be better equipped to negotiate with foreign and financial partners to overcome the initial difficulties and financial requirements of exporting. All parts of the firm, from management to finance, marketing, production and training, must understand and appreciate the firm’s export expansion plans. Detailed CVs of all senior staff should be included in the international business plan.

Conduct market research: l Many international business plans are weak in terms of market research. Market research should confirm the exporter’s instinct that a product will be acceptable and sell in a particular market. Confirmation is sought through research carried out on small focus groups by sending product samples, or by generally understanding the unique preferences of potential foreign customers. Determine the export price: l Pricing a product is the most important factor affecting financial projections in the international business plan. Many first-time or infrequent exporters do not consider the various foreign costs that can contribute to the per unit price.

Among the special elements to consider when exporting are: the percentage mark-up, sales commissions, freight forwarder processing and documentation fees, financing costs, letter of credit processing fee, export packing charges, labelling and marking, inland freight charges, unloading at the terminal, insurance, translation of product materials, credit terms, payment schedules, payment currencies, insurance, commission rates, warehousing costs, after-sales servicing responsibilities, and costs of replacing damaged goods.

Each of these costs should be taken into account in the financial projections and budget.

For further details in this area, please refer to the Dubai Export Development Corporation (EDC) publication, ‘Pricing for Export’, which also includes a pricing matrix.

abOUTFormerly known as the Dubai Export Development Corporation (EDC), Dubai Exports is an agency of the Dubai Department of

Economic Development (DED), Government of Dubai. It has been established to provide exporters with the services required to enter or expand to foreign markets, including trade information, branding advice, financial, legal and foreign trade representation, as well as access to potential buyers. Dubai Exports also undertakes an advocacy role for exporters in their relations with government and other relevant agencies through the formation of long-term and mutually beneficial partnerships. For more information visit: www.dedc.gov.ae.

“Conduct an inquiry to determine the firm’s competitiveness within the industry. In analysing competition, it is helpful to know the market shares and trends of the industry.”

32 OCTOBER 2011

RESOURCES

HOW TO

HigHligHT THE fiRm’S CaPabiliTiESPrice is not the only factor contributing to a buyer’s decision to purchase a product or service. Other important factors include management capability, production capacity, quality control system, technical cooperation with foreign firms, system for handling orders, export experience, financial standing, and links with banks. These points should also be included in the international business plan.

PROdUCing an EXPORT PlanDeveloping an international business plan requires careful planning and a commitment of time. As with any new business operation, the decision to export must be envisioned with a long-term business investment attitude rather than a short-term profit objective. Before making a commitment to enter into international business agreements, the development of an international business plan is an important and key step for determining a product’s readiness for export.

A well-prepared plan will assist the business in assessing the potential of a product in international markets,

facilitate the application for financing and determine the cost to export a product. The core elements of a business plan include the following:

Executive summary: l State what makes the company successful and then list the competitive advantages over domestic and foreign competition.Present situation: l Identify which company products have export potential.Objectives: l Define long-term goals and how exporting will help to attain those goals.Management: l Conduct a company analysis in order to ensure that the decision to export is supported by all levels of management and to decide who will execute what functions.Description: l Answer the question: Why is the product/service unique in an international market?Market analysis: l Determine potential opportunities in the target market.Target customers: l Find out the demographic and socio-economic profile of the target customer.Existing competition: l Conduct an inquiry to determine the firm’s competitiveness within the industry. In analysing competition, it is helpful to know the market shares and trends of the industry. Focus group research: l Do a focus research on a small group of potential customers in order to gain feedback and constructive criticism.Calculated risk: l Estimate the industry and the firm’s performance over a period of three to five years so that the firm may calculate risks accurately.

Marketing strategy: l Determine how to attract customers and sustain their interest.Pricing/profitability: l Develop an international pricing strategy.Selling tactics: l Carry out direct mailing, cold calling and advertising tactics.Methods of distribution: l Determine where and how to deliver overseas.Advertising: l Consider foreign labeling and packaging requirements, literature translations and customer relations.Public relations: l Develop a regular and consistent product/service programme. Issue an internal newsletter as well as press releases. Be proactive by writing for technical magazines and so on.Business relationship: l Articulate a plan for developing international business relationships, including cultural training. Determining the type of relations your export business can have, such as an agent or distributor, representative, supplier or direct exporter. Manufacturing plan: l Indicate initial volume, expansion requirements, source materials and location of manufacturer.Financial history: l List out a five-year profit and loss statement.Financial projections: l Remain realistic and conservative.12-month budget: l Anticipate exporting costs for the financial year.Cash-flow projection: l Calculate cash receipts vs. cash disbursements.Balance sheet: l Illustrate liquidity and cash position.Break-even analysis: l Calculate number of units to sell for break-even.Source/use of funds: l Decide from where the funds will be obtained to start or expand export operations.Use of proceeds: l Decide where profits and loans will be dedicated.

COnClUSiOnThe lists above are not to be taken as the entire process but provide some of the steps that will help companies prepare for their journey to exporting.

Finally, it is best to keep your export strategy concise and simple. Before starting on your export path do ensure that you have articulated why your company should export and how you will achieve your goals. n

“A potential exporter’s objectives need to be realistic – neither too ambitious nor too modest – and take into account the existing market situation, the exporter’s position in the market as well as competition. To attain an objective in time, an exporter should intensify efforts and redirect resources, while refraining from the need to constantly modify the same.”

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34 OCTOBER 2011

If you want to use a successful entry strategy to export to a complex market like Europe, then look no further. Sowmya Narayan, Supply Chain Manager at Gulf Extrusions Co. LLC shares her trade secrets.

TRADE TALK

HOW TO

S uccessful entry into any market needs a well-defined and thoroughly thought out strategy. Exporters who wish to approach the

European market are often baffled with the complex set of regulations regarding trade barriers, price-undercutting, product standards, dumping margins and duties, especially as they have to navigate the individual rules of each of the 15 member states within the European Union (EU). Recently exporters have also been intimidated by the declining profit margins in Europe due to the global financial turmoil.

But with a huge import market and high demand from EU member states, Europe is a market that few can afford to ignore. There has also been a removal of trade barriers within the EU that has not only facilitated trade between the EU states but also helped increase the volume of goods being imported into the EU.

So, if you are looking to export your products and/or services to the European market then you must bear the following aspects in mind:

MARKET REsEARchThe first step for any exporter looking to enter the European market is to conduct a detailed market research or feasibility study of the target market. This will allow the exporter to get in-depth knowledge about the size of the market, competition, legal framework, taxation and custom regulations, which would, to an extent, help in forecasting various needs as well as assist in evaluating the initial capital required in terms of infrastructure, manpower and marketing needs.

A good approach to conduct this type of extensive market research would be to hire a consultant who can study the market/target member state and submit a report with the findings. A typical study report needs to define the costs and benefits associated with the intending proposition. It should be a tool for decision-making based on the cost benefit analysis and exit strategies. Some EU member states offer investment incentives to stimulate growth and the consultant conducting the feasibility study should preferably highlight these aspects in the study report. Based on this feasibility study a formal and complete business plan can then be put in place.

Know youR TAxEsA crucial aspect that an exporter should have knowledge of is the tax liabilities and duty rates applicable in the different member states across the EU. Albeit it is the European Union, the actual applied rates differ between member states and between certain types of products.

Taxation depends on a lot of factors, starting from whether you have a registered office, a distribution center, or a warehouse that is either fully owned and managed or outsourced. All of these will indicate whether the exporter has a taxable presence and the tax implications thereafter.

Another crucial feature is the value-added tax (VAT) and duty aspects in the various member states. What is VAT? VAT is a general tax that applies, in principle, to all commercial activities involving the production and distribution of goods, as well as the provision of services. VAT on Goods: The VAT due on a transaction is payable once the goods are acquired by the taxable customer in the member state where the goods arrive. The customer accounts for any VAT due in his normal VAT return at the rate applicable in the member state of the destination.VAT on Services: Depending on the nature of the service, VAT may need to be paid in a member state other than that where the supplier is registered.

If your company is not registered in the EU but engages in transactions in any member state under

Exporting to Europe

“Taxation depends on a lot of factors, starting from whether you have a registered office, a distribution center or a warehouse which is either fully owned and managed or outsourced.”

35OCTOBER 2011

the name of your main company, then you may be subject to the local VAT. Such transactions include purchase, distribution, services, storage and imports carried out in a member state. If this is applicable to your company, then you have to be registered for VAT in the concerned state with a local VAT number.

There are numerous companies that offer services for fiscal representation. They take care of all VAT and tax matters, provide insight into tax exemptions, and handle all communication with the tax authorities. It is highly recommended that exporters use one of these companies to ensure that they comply with the local regulations in the EU.

PERfoRM youR DuTiEsUnder its Generalized System of Preferences (GSP), the EU has granted exporters from developing countries to pay lower duties on some or all their products. This provides an incentive to traders to import products from developing countries, thus helping them compete in international markets. To be eligible for these preferential duty tariffs under the EU's GSP scheme, products have to originate in a GSP beneficiary country. The EU member country also has to benefit from GSP arrangements which include these products. This scheme currently covers roughly 7000 products. Preferential rules of origin for the GSP determine whether or not goods produced in the beneficiary countries are eligible. The importer has to provide a certificate of origin, Form A, to the customs authorities in the EU in order to prove the origin of the imported products in the beneficiary country.

DRivE youR wAy To LogisTicsLogistics is an often overlooked and highly underestimated aspect of exports. If not dealt with in great detail it has the potential to impact an export company’s bottom line. One has to work carefully in order to manage the costs and incorporate the risks arising from outbound shipments to EU states. Although logistics is much more than just transporting goods from one point to another, the transportation component is an important part of the logistics process.

Excessive transport costs, whether by sea, land or air, often create a barrier for entry to a foreign market. The costs and risks differ as per the mode of shipment. International Commercial Terms (Incoterms) are widely used for international transactions, to clearly communicate the costs and risks associated with the transport and delivery of goods. Incoterms rules are

accepted by governments, legal authorities and practitioners worldwide as an interpretation of the most commonly used terms in international trade. So depending on whether it is FOB or CIF (or any other Incoterm), the transfer of risk and associated costs will differ. Several other factors like container optimization (for containerized cargo), fuel surcharges, type of containers (equipment), destination and type of cargo are among those that influence the costs.

If the organization is dealing with the distribution of goods, care has to be taken about the handling of these goods, as damages during this process can be steep. Most often the third-party logistics (3PL) or fourth-party logistics (4PL) partners do not take responsibility for any liabilities, and the contracts or service-level agreements (SLAs) also do not cover such damages.

Working with an efficient 3PL or 4PL partner, who has presence and experience in the member state of interest, would help in a smooth operation and reduce associated risks.

The UAE, and in particular Dubai, encourages local exporters to widen the scope of their business outside the UAE. Companies should leverage on organizations like Dubai Exports which aim to create a growth-oriented export environment by providing partners value-added services such as country specific data, market insights and one-on-one meetings with industry experts. n

ABouTSowmya Narayan is a Supply Chain Manager at Gulf Extrusions, a leading aluminum extruder in the region. With 12 years of experience as a consultant in strategic procurement and supply chain, she currently heads the supply chain department at her company, managing international supply chain projects, contracts management, sourcing, as well as warehouse management. Sowmya

has also played a key role in setting up third-party logistics for Gulf Extrusions in Europe. She is a science graduate and a certified supply chain professional from the Chartered Institute of Supply Chain, UK. She can be reached at [email protected].

UAE’s Export FutureInterview with the UAE Minister of Foreign Trade: Her Excellency Sheikha Lubna Al Qassimi

TRADE TALK


ABOUT HER ExcELLEncy SHEiKHA LUBnA AL QASSimiBefore she became one of the most prominent female politicians in the Middle East, HE Sheikha Lubna Al Qassimi was one of UAE’s most pioneering women professionals. Her successful corporate career included stints as a Dubai branch manager for the General Information Authority, the organisation responsible

for automating the federal government of the UAE, a senior manager of the information systems department at the Dubai Ports Authority (DPA) and the chief executive officer of Tejari, the first Middle Eastern electronic business-to-business marketplace.

Sheikha Lubna is the first woman to hold a ministerial post in the United Arab Emirates.

In her current role, which she has held since 2008, she has steered the UAE along a course of economic modernisation and diversification, while underscoring the role of the private sector. Prior to this, Sheikha Lubna was the UAE Minister of Economy, a post she held during one of the country’s most economically prosperous periods in history.

Her numerous achievements in both the public and private sectors led to her

being voted as the most powerful Arab woman by Forbes magazine, with her name also featuring among the 2009 Forbes List of the 100 Most Powerful Women in the World.

She is also a member of the ruling family of Sharjah and the niece to His Highness Dr. Sheikh Sultan bin Mohamed Al-Qasimi, the ruler of the emirate of Sharjah.

Sheikha Lubna has received many awards for her work, including the

36 OCTOBER 2011

H er Excellency Sheikha Lubna Al Qassimi, the UAE Minister of Foreign Trade, holds the distinction of being voted the most powerful

Arab woman by Forbes magazine, as well as being the first woman to hold a ministerial post in the United Arab Emirates (UAE).

In an interview with Trade and Export Middle East, she speaks about the role of the Ministry of Foreign Trade in diversifying the UAE economy, decreasing custom duties, and enabling an open trade policy.

Can you please tell us about the Ministry of Foreign Trade and its medium-term strategy to increase non-oil exports from the UAE?The Ministry of Foreign Trade recognises the importance of promoting the country’s trade and economic prowess. It thus organises and hosts many international and regional fairs and trade conferences not only in the UAE but across the globe. These events encourage and strengthen local production, while also increasing the country’s export potential to world markets, due to the significant deals and transactions they generate.

In order to further promote national exports, the Ministry also organises lectures and workshops that raise awareness on exporting, by addressing issues such as export requirements, export conditions, as well as the fundamentals of international trade within the framework of the World Trade Organisation.

What are the types of services that the Ministry of Foreign Trade offers UAE firms to become successful in foreign markets? How can exporters from the UAE utilise these services?The Ministry of Foreign Trade continuously prepares in-depth analytical studies and research materials that aid all exporters – especially those in the private

sector – with the necessary information to identify promising markets, export opportunities and good investments, locally and abroad. It also signs trade agreements that open up international markets for UAE exporters.

What are the types of services that the Ministry of Foreign Trade offers foreign firms looking to enter the UAE?The Ministry of Foreign Trade constantly highlights and promotes the country’s key economic sectors. We periodically publish booklets that provide a clearer view of the UAE’s economic sectors and activities, while also giving detailed explanations on how to establish a new business here. These booklets also list the country’s official institutions that are involved in the trading startup process.

The Ministry currently has four trade offices. Are there any plans to open more? The Ministry of Foreign Trade has embarked on a mission to restructure and expand operations of all trade offices representing the UAE in major economies. This task began with the trade offices in Washington DC, Delhi, China, and Geneva, all of which rank among the UAE’s most important economic partners.

The mandate of the UAE trade offices in these countries is to maintain and further enhance the positive nature of bilateral trade and commerce.

The Ministry also has a number of trade attachés stationed at UAE embassies operating in some of the country’s major trading partners. There are plans to establish even more trade offices in the future.

The objectives of these offices are to assess viable opportunities and then follow through with negotiations that can lead to trade and commercial agreements with

37

Vital Voices Global Trailblazer Award 2008, for her exceptional leadership in the Middle East and her profound influence on future generations of Arab Muslim female decision makers. The Times UK newspaper included Sheikha Lubna in its “Gulf Power 25 list of 2007” and The Wall Street Journal recognised Sheikha Lubna as one of its “50 international women to watch”. In 2009, Nicolas Sarkozy conferred on her the

Chevalier de la Légion d’Honneur, the highest possible distinction, for her extraordinary achievements as a public servant of the UAE and for her invaluable role in enhancing her country’s foreign relations. In 2007, she became the first Arab woman to receive the Italian ‘Stella Re’ prize, awarded annually to just one woman throughout the world who strives to make a difference to contemporary society and culture

through her innovative work, dedication and ideas.

Sheikha Lubna graduated from the California State University, Chico with a Bachelor’s Degree in Computer Science, and has an Executive MBA from the American University of Sharjah. She received an honorary doctorate of science from California State University, Chico, for her contributions to the field of science and technology. n

OCTOBER 2011

38 OCTOBER 2011

the host country; fulfill the economic and commercial objectives set forth by the UAE Ministry of Foreign Trade; and promote the UAE as a preferred business and investment destination in the Middle East. Trade offices also facilitate the exploration of mutual import, export and investment opportunities between the UAE and the host country.

With regard to their tasks and responsibilities, trade offices conduct research and analysis, based on which they prepare the corresponding reports on market capabilities, demand, as well as drivers for both the host country and the UAE. They also generate awareness on regulatory changes imposed on business operations, establishments, imports and exports, as well as individual or company investments, while informing relevant authorities of their potential impact.

Moreover, trade offices collect and archive information on all commercial, financial and economic activities between the host country and the UAE. These are made accessible to the Ministry of Foreign Trade, as well as businesses and individuals who are interested in doing business with the host country and/or the UAE, or may be keen to organise exhibitions and conferences to promote commercial opportunities across multiple sectors that add value to both countries.

Finally, trade offices organise commercial visits within and among the UAE and the host country. They coordinate and prepare the schedule and agenda with relevant authorities in order to maximise productivity.

Emirates such as Dubai have an export promotion body, but not a single federal organisation. Does the Ministry of Foreign Trade have plans to establish a federal export promotion body to help UAE firms enter the overseas markets?Part of the Ministry’s mission is to open new trade and investment horizons for national goods and services, as well as to enhance the UAE’s involvement in foreign markets. To fulfill this, the Ministry coordinates with the individual export promotion

bodies (EPBs) of different emirates to help them identify important products and markets, organise trade fairs and visits to foreign countries, and host international business and economic events

This way, the Ministry provides a sort of ‘federal umbrella of coordination’ for individual export promotion bodies of the emirates to work under. We welcome suggestions from the EPBs to further the federal aspects of this umbrella in a manner that enhances their effectiveness without duplicating their tasks or services, or replacing them.

We believe that the GCC has over 20 Free Trade Agreements (FTAs) in various stages of discussion or negotiation. Can you please tell us which of these FTAs is due to be signed next and what benefits they offer exporters?The GCC is actively engaged in potential free trade agreements with nine trading partners: Australia, New Zealand, Japan, Korea, China, India, Pakistan, Singapore, and Turkey; and three economic groups, including the EFTA states (Switzerland, Norway, Iceland and Lichtenstein), the European Union, and MERCOSUR (Brazil, Argentina, Paraguay and Uruguay). Some agreements have been signed with the EFTA states and Singapore, and negotiations have wrapped up with New Zealand.

These agreements are expected to further promote GCC trade and investments with partners, strengthen economic and political relations, broaden markets for GCC products and exporters, remove tariff and non-tariff barriers faced by GCC goods entering partner countries, and open up markets for the GCC to extend or establish business in partner countries. Such agreements will also compensate for the limited market capacity of GCC countries, which in turn will encourage and attract more foreign direct investments to the region.

A number of countries have an import and export bank to assist exporters. Do you feel that such an institution needs to be established within the UAE and, if so, have there been any plans to date?The UAE currently has no export development bank. However, some local governments have initiated export credit programs with local banks to enable companies to trade.

What do you think needs to be done to deal with the current non-trade imbalance with many countries?The Ministry of Foreign Trade is working even harder to strengthen mechanisms for bilateral cooperation and trade. It aims to participate in economic committees as such meetings can lead to agreements that ease trade by decreasing or removing custom duties on a number of goods and commodities. Moreover, the Ministry plays a pivotal role by establishing and maintaining trade offices across the world that help boost national exports and reduce trade balance deficits. n

“The Ministry provides a sort of ‘federal umbrella of coordination’ for individual export promotion bodies of the emirates to work under. We welcome suggestions from these export promotion bodies to further the federal aspects of this umbrella in a manner that enhances their effectiveness without duplicating their tasks or services, or replacing them.”

TRADE TALK


39OCTOBER 2011

Trade and exporT MiddlE EasT aims to keep the regional trading community up to speed with the latest information.

over the following months we will delve into industry trends, pinpoint key data and analyse the most pertinent issues to ensure that our readers are armed with real insights from

within the industry.

and we need your help for this!

We will conduct regular reader surveys and then share key trends and analysis back with you. This is your chance to be heard and

to share your experiences to help the industry.

of course, your responses will be held in the strictest confidence.

Have your say! Visit www.tradeandexportme.com to take the survey.

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40 OCTOBER 2011

Source: US Census Bureau

Major exports of USA to the GCC and share of each member country (2010)

FOCUS

COUNTRY

The UAE has replaced Saudi Arabia as the largest GCC market for US exports last year, the latest study by Dubai Chamber of Commerce and Industry has revealed.

US exports to the UAE reached a total of USD 11.64 billion in 2010, compared to USD 11.59 billion to Saudi Arabia, the study found. Meanwhile, US exports were valued at USD 3.2 billion to Qatar, USD 2.8 billion to Kuwait, USD 1.2 billion to Bahrain and USD 1.1 billion to Oman.

The study, quoting the US Census Bureau, further revealed that US trade with GCC countries increased by 21% during 2010, as US demand for oil rose with the economic recovery. Previously,

US trade with the GCC grew by 40% in 2008, before falling by 42% a year after.

Resurgence of imports of crude mineral fuel contributed significantly to the increase in US trade with the GCC in 2010, with these products accounting for 92% of US imports from the region.

Exports to the GCC accounted for 2.5% of US exports in 2010. Although more varied than imports in terms of content, machinery and transport equipment accounted for about two-thirds of the total value of exports to the GCC, with a total value of USD 20.8 billion, equivalent to 4% of US exports of the products to the world. This trend was expected as the region bounced back from

the decline in expenditures on household and industrial durables in 2009.

According to the study, exports of food and live animals to the GCC amounted to USD 1.7 billion, representing 2% of total US exports of products. The largest market in the GCC was the UAE, with 47% of the total value of goods exported to the region, followed by Saudi Arabia, with 39%, and Kuwait with 8%. Exports to other member countries were about 2% each.

US exports of miscellaneous manufactured articles to the GCC amounted to USD 3.1 billion, representing more than 2% of US world exports of these products. Included in the group are manufactured

personal and household goods, as well as scientific, laboratory and hospital instruments. A major part of the total exports (43%) was to the UAE, with 31% going to Saudi Arabia, 9% to both Qatar and Kuwait, 3% to Bahrain, and 2% to Oman.

The US presence in the Gulf is expected to continue to be substantial, exporting into the region not only goods, but also services. With a highly developed production technology and a high level of industrial specialisation, the US is expected to continue to dominate world trade for highly specialised products and services. In the GCC, US technology in the oil industry is expected to remain in high demand in the coming years. n

United States BilaTERal TRadE

UAE emerges as largest export market for US products in the GCC in 2010

PRODUCTVALUE

(USD MN)SHARE

(TO WORLD)BAHRAIN KUWAIT OMAN QATAR

SAUDI ARABIA

UAE

Food and live animals 1,724 2.1 2.5 7.6 2.1 2.6 38.6 46.6

Chemicals and related products 2,332 1.2 1.7 7.6 7.0 5.0 41.8 36.8

Manufactured goods classified chiefly by material 1,840 1.5 1.5 9.9 3.5 6.7 31.2 47.2

Machinery and transport equipment 20,754 4.0 4.4 9.1 3.4 12.1 37.6 33.5

Road vehicles (including air-cushion vehicles) 6,972 7.3 2.2 12.1 3.6 3.8 52.9 25.5

Transport equipment, n.e.s 5,014 6.0 8.8 1.6 0.4 34.1 18.7 36.5

General industrial machinery and equipment, n.e.s., and machine parts, n.e.s.

2,325 4.1 3.1 7.0 5.1 8.8 44.0 32.0

Power generating machinery and equipment 1,826 5.1 7.2 32.1 3.2 5.4 34.6 17.5

Miscellaneous manufactured articles 3,088 2.3 2.6 9.1 1.8 9.1 30.5 46.8

Other commodities and transactions not classified

1,144 1.9 12.6 7.0 5.7 5.1 27.0 42.6

TOTAL 31,522 2.5 4.0 8.8 3.5 10.0 36.8 36.9

GCC SHARE (%) TO GCC

42 OCTOBER 2011

FOCUS

COUNTRY

Dubai Exports, an agency of the Department of Economic Development (DED), Government of Dubai, hosted its largest delegation at Africa’s Big Seven (AB7) exhibition held in Johannesburg, South Africa, with small and large UAE-based companies in the food & beverage and packaging industries. The delegation was also joined by government organisations such as Jebel Ali Free Zone (JAFZA) who sought trade opportunities for their member companies across the South African continent.

An annual event, Africa’s Big Seven amalgamates the seven components of food production, including the various processes and technologies employed in transportation, packaging, marketing and lastly, retail. Dubai Exports, together with the UAE’s Ministry of Foreign Trade, provided exporters with support services to bolster the success of their new partnerships made at the exhibition.

Prior to the event, all the participating companies and organisations participated

in an extensive briefing session with experts from the continent. In addition, the delegation received market insights from Euromonitor.

There are strong and historical trading ties between South Africa and the UAE. In 2010 the total value of Dubai Direct Exports to the country was estimated at AED 219 million. The key export sectors include plastics and polyesters, facial tissues and sanitary paper towels, glass products, gold, chocolate and cocoa preparations, perfumes and cosmetics, and lubricants and base oils.

Engineer Saed Al Awadi, Chief Executive Officer of Dubai Exports, stressed on the numerous opportunities between the UAE and South Africa, as well as the wide range of support services and financial aid through the Export Assistance Program

that encourage local exporters to widen the scope of their businesses outside the UAE.

“South Africa is a hub of trade activity, with much untapped potential that is not limited to the food manufacturing industries. As a prominent emerging market for Dubai products, Dubai Exports is keen on cultivating stronger ties with the South African region to the effect of mutual gains,” he added.

Among the companies participated at AB7 were Ministry of Foreign Trade; Dubai Exports; Jebel Ali Free Zone (JAFZA); RAK Free Zone Authority; Pure Ice Creams LLC; Diamond Meat Processing; Falcon Pack; DoFreeze; Palletco LLC; Integrated Plastic Packaging; Al Foah Dates, General Holding Company; Dubai Refreshments and National Food Products LLC. n

China BilaTERal TRadE

South Africa BilaTERal TRadE

Bahrain EDB head lauds growing Chinese regional trade ties

dubai exports to South africa in 2010 valued at aEd 219 million

On the occasion of the China-Arab International Trade and Economic Operation Forum, the Chief Executive of the Bahrain Economic Development Board (EDB), Shaikh Mohammed bin Essa Al-Khalifa, pointed out the opportunities to strengthen and diversify trading links with China.

Highlighting figures published by McKinsey forecasting that trade flows between China and the Middle East are set to climb to between USD 350 million and USD 500 million by 2020, Shaikh Mohammed stated that the trading relationship between the region and China, which is heavily reliant on the Gulf Cooperation Council (GCC), will move away from a broadly consumer-based and transactional relationship. Recognised as the most diversified economy in the Gulf and

the most liberal one in the region, Shaikh Mohammed pointed to Bahrain’s central role as a gateway for China to the Gulf’s trillion dollar market, which is set to double by 2020.

Looking at how the relationship could develop, Shaikh Mohammed said: “I believe this relationship will shift further to one where investments predominate, whether it is through pure finance or in human capital and services. These activities require a greater commitment, but bring substantial mutual benefits over the long term.”

Despite the unrest that has occurred across the region, Shaikh Mohammed asserted that long-term prospects were strong, not least because of the young age profile and improving levels of education in the Middle East, as well as the commitments

made by governments across the region for significant investments in economic and social infrastructure.

In conclusion, Shaikh Mohammed said: “Accounting for its position as a bridge point between East and West, I can only see the relationship between the Arab World and China growing. And this will occur above and beyond the importance of oil to trade and economic co-operation.” n

DID YOU KNOWIn a finding by INSEAD, the leading international business school, and Booz & Company, a global management consultancy, 95% of business leaders believe that Europe should take a unified position on trade issues, and 9 in 10 feel this policy should foster free trade. However, responses differ by country according to their economic situation: Bulgarian, Norwegian, Danish respondents demonstrated 100% support for free trade, while this rate fell to 70% in France and other more protectionist countries such as Hungary and Portugal.

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44 OCTOBER 2011

Chef Pascal Tepper, who holds the ‘Meilleur Ouvrier de France,’ a lifetime achievement award acknowledging him as one of France’s finest bakers,

launched his flagship dine-in bakery in Dubai Media City, the first outside his native France, and is looking to further expand in the Middle East.

“The UAE is an important global destination and it feels good to begin our expansion drive in a vibrant city like Dubai,” said Chef Pascal.

With an initial investment of AED 3 million, Chef Pascal says he was able to start making a profit after 2 months of launching his cafe. Clearly, as he admits, the UAE is proving to be “one of the world’s fastest

growing F&B markets.” A cafe in the UAE can potentially generate daily revenue of anywhere between AED 6000 to AED 50,000, though cafe’s in premium locations like Dubai Mall could make AED 30,000 – AED 40,000, he adds.

He is currently looking for reputed franchise partners in Saudi Arabia, Qatar, Singapore, Thailand and Korea. n

FOCUS

COUNTRY

Asia dUBai EXPORT MONiTOR PERFORMaNCE HiGHliGHTS

France FOOd & BEVERaGE

South and West asia are top destinations for dubai products by value Dubai Exports, an agency of the Department of Economic Development (DED), Government of Dubai, revealed that in 2010, the Emirate has been exporting diverse products, such as gold and precious metals, sugar, plastics and food, in various target export markets, particularly South and West Asia.

According to Dubai Export Monitor Performance Highlights, a yearly publication produced by Dubai Exports, exports sustained the continuous growth trend in 2010, while imports to Dubai and the free zones, as well as re-exports, have reversed the decline witnessed in 2009. Another important trend was the continuous growth of direct and free zone exports during the past years, followed the positive growth trend of manufacturing GDP, indicating that exporting was a main factor in fostering manufacturing growth during the recession.

The Emirate’s top 10 products accounted for 77% of the total value of direct exports, an indication of a relative concentration of diverse product portfolio. From the total direct exports of AED 68 billion, the top 10 products were valued at AED 53 billion, while other products were AED 15 billion.

Gold, the top exported product by value, accounted for AED 38 billion or 56% of direct exports value while the other nine products were worth AED 14 billion. Meanwhile, the direct re-export pattern

was significantly different as some products such as motor vehicles, spare parts and electrical apparatus were not in the direct exports list. Among the leading re-exported products were diamonds, worth AED 56 billion or 39% of the total re-exports value of AED 144 billion.

Trade pattern for free zone exports, valued at AED 143 billion, was also different from both direct export and re-export, being characterised by low product concentration; however electrical apparatus, petroleum products, and data processing machines have relatively higher shares.

Based on the report, top destinations of Dubai’s exports and re-exports in 2010 were in South and West Asia, worth AED 157 billion; followed by ‘Other Arab Countries’ at AED 48.4 billion; Arab Gulf Cooperation Council (AGCC) at AED 47.6 billion; and West Europe at AED 37.5 billion.

Direct exports to South and West Asia were the most diversified with products including gold, sugar, petroleum and aluminium; while exports to AGCC were mainly food items. Top products to ‘Other Arab Countries’ were petroleum, plastics and gold, while products exported to Western Europe were precious metals, plastics and ceramics.

Meanwhile, Dubai export markets by value were highly concentrated in India and Switzerland, comprising 40% and 20% respectively. n

French master baker expands to the UAE in his first international outlet outside France

UAE to support development of Afghanistan’s civil aviation infrastructureHis Excellency Sultan Al Mansoori, UAE Minister of Economy, said that the UAE is open to sharing best practices in supporting the development of Afghanistan’s civil aviation infrastructure. He announced this during his meeting with His Excellency Dr. Daoud Ali Najafi, Minister of Transport and Civil Aviation, Afghanistan. They discussed ways to strengthen bilateral ties between the UAE and Afghanistan, with a special focus on transport and civil aviation. The two sides discussed ways to enhance cooperation in the field of civil aviation and the transfer of UAE’s expertise in this area to Afghanistan, which is currently focused on strengthening its aviation facilities. The UAE will look at hosting trainees from Afghanistan at its civil aviation training centres. His Excellency Sultan Al Mansoori said that the UAE has proven experience in developing airport free zones, which could serve as a model for Afghanistan in boosting its economy. Dr. Ali Najafi expressed his gratitude to the support from the UAE and hoped to benefit from UAE’s experience in building modern airports. He said that the volume of trade between the UAE and Afghanistan is over AED 2 billion annually, making the UAE one of the most important economic partners for Afghanistan. Currently both parties are seeking to increase the number of flights from the UAE to Afghanistan to three flights daily through FlyDubai. n

Afghanistan BilaTERal TiES

Watch this space and log on towww.smeadvisor.com/awards2011 for updates

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46 OCTOBER 2011

A recent Dubai Chamber of Commerce and Industry study based on a Dubai Multi-Commodities Centre (DMCC) report indicates that gold trading in Dubai increased by 18% in 2010, as compared to 2009, to USD 41.3 billion.

According to the study, 2011 showed similar positive trends with gold contracts experiencing healthy volumes at the Dubai Gold and Commodities Exchange (DGCX), increasing 39% year-on-year in May, 49% in April and 51% in March.

The UAE’s most important export markets for unwrought and semi-manufactured gold were Malaysia, Turkey and

Nepal, while Switzerland, UK and Singapore were the main export markets for gold jewellery. Malaysia, Turkey and Bahrain were among the fastest growing export markets with compound annual growth rates (CAGR) from 2006-2010 of 89%, 63% and 20% respectively. The UAE’s fastest growing import markets include Pakistan, Bahrain and Brazil.

The World Gold Council (WGC) estimates that jewellery and investment demand from India and China represented about 40% of total global demand in 2010. Demand from India is expected to grow exponentially.

Other countries in Asia, Africa and Latin America might also experience an increase in demand for gold as their economies grow, giving their residents more disposable incomes to purchase luxury items. For sourcing, UAE importers can look for suppliers of minerals, including gold, from Central Asia, Mongolia and Africa.

The study concludes by stating that price volatility risk can be contained through long-term hedging. A more sustainable way is to create

a business model where businesses can accommodate large price swings, perhaps by entering into long-term fixed price contracts with both suppliers and buyers.

UAE exporters can look at expanding gold and jewellery exports to existing markets as well as new markets. Such measures could help investors take advantage of the current and future opportunities in the global gold market, while preparing them for the risks that may lie ahead. n

Dubai gold trade rises 18% in 2010

According to the Dubai Manufacturing Sector Snapshot report published by Dubai Exports, an agency of the Department of Economic Development (DED), Government of Dubai, the UAE’s manufacturing sector was among the largest non-oil contributor to Dubai’s GDP since 2009, driven by increased government support and funding.

The manufacturing sector ranked as the fourth highest contributor to GDP at 13.2% or AED 38.72 billion, after wholesale trade, retail & repair; transport/storage/communication; and real estate at 30% (AED 89 billion), 14% (AED 41.54 billion), and 14% (AED 40.29 billion) respectively.

The sector also employs 8% of Dubai’s total workforce, proportional to its total contribution to GDP – an indication that the sector functions at relatively reasonable levels of productivity.

In addition, based on constant levels of pricing, the manufacturing sector has experienced an average growth of 8% per annum between 2007 and 2010, despite a sharp decline in the curve between 2008 and 2009. In 2010, the manufacturing GDP growth posted 11% as compared to 6.2% in 2009.

Currently, Dubai’s annual industrial production is estimated at approximately AED 200 billion, with total exports of AED 68 billion accounting for 34% of the

total production. Exports of gold products constitute 60% of the total export value. The growth in the value of direct exports in correlation with the growth in manufacturing GDP indicates that exports sustained industrial growth during the financial crisis.

In 2010, Dubai’s external trade activity exhibited recovery with increase in direct and free zone exports. Direct exports in 2010 posted AED 68 billion, a 24% increase from AED 52 billion in 2009, while free zone exports were valued at AED 143 billion as compared to AED 112 billion in 2009, a hike of 28%.

“Dubai is the ideal location as it provides a world class trading platform for a wide array of commodities. The manufacturing report shows a growing export market with significant opportunities for Dubai manufacturers. The Dubai government realises the importance of diversifying the sources of income and increasing the participation of the industrial and export sectors in increasing the country’s GDP,” said Engineer Saed Al Awadi, Chief Executive Officer, Dubai Exports. n

FOCUS

INDUSTRY INSIghTS

Commodities gOlD

Manufacturing

Manufacturing sector contributes 13% to Dubai’s gDP with exports contributing 34% to total production

47OCTOBER 2011

Saudi Arabia has emerged as one of the most lucrative destinations for industrial machineries with total imports valued at around USD 15 billion annually. Aggressive investment initiatives in the industrial sector has likewise created exciting business opportunities for industrial machineries as industrial investments have reached USD 37.70 billion in 2010, up from USD 24.57 billion in 2009.

Makinat Saudi Arabia 2011 – The International

Trade Exhibition for Industrial Machinery, Machine Tools, Equipment & Technology for Saudi Arabia – has been organised to complement the robust business climate within the industrial sector and provide a definitive business-to-business platform for trade buyers and leading suppliers to interact and discuss mutually beneficial business opportunities. Makinat Saudi Arabia 2011 will be held at the Riyadh International Convention & Exhibition Center

and will run from November 28 to December 1, 2011.

Kamil Al Jawhari, Project Manager of Makinat Saudi Arabia at Riyadh Exhibition Company, said: “The industrial sector has achieved a remarkable growth pace in recent years, creating an unprecedented surge in demand for a wide array of industrial machineries, tools, spare parts and technologies. We expect Saudi Arabia to continue to move forward with its industrial diversification strategy, which is a key component in the Kingdom’s mission to further strengthen the national economy.”

Makinat Saudi Arabia 2011 will add momentum to

the sustained growth of the industrial sector by creating a definitive venue to discuss business opportunities and to showcase the latest technological advances, state-of-the-art machineries and best practices in the industrial sector.

Makinat Saudi Arabia will be presenting the latest developments in machinery, machine tools, equipment, accessories and spare parts from regional and international manufacturers and suppliers. The event also provides opportunities to network with the Kingdom’s leading industrial players and to sign new dealership and business agreements. n

Saudi Arabia imports USD 15 billion worth of industrial machineries annually

FOCUS

INDUSTRY INSIghTS

A recent Dubai Chamber of Commerce and Industry study indicates that Dubai has experienced a strong growth in pharmaceutical trade. Since 2003, imports of pharmaceutical products have risen from AED 800 million to AED 3 billion in 2010, while exports have risen from AED 100 million to AED 400 million over the same period

The study goes on to highlight several attractive features that lure manufacturers and traders to the region. The UAE pharmaceutical market is one of the most developed markets in the Middle East, with a strong healthcare infrastructure and the highest per-capita medical expenditure in the Middle East. The UAE pharmaceutical sector also has a relatively strong patented drug market, with a high demand for the latest medicines.

Industry experts say that there is potential for further growth in the pharmaceutical products sector, in light of changing lifestyle dynamics in the region, which is based on an increasingly Westernised disease profile with non-communicable diseases such as obesity.

The study further states that an array of solutions has emerged in recent years aimed solely at this segment. Diseases associated with a relatively sedentary lifestyle, such as heart disease and diabetes, will likely remain the mainstay of growth for patented drug manufacturers. New areas for pharmaceutical product growth could also include tapping the rising demand for medical tourism connected to these changes in lifestyle.

Increasing incomes and awareness have led to an increase in personal care. The rise

in medical device sales that monitor health (such as blood sugar and heart rate monitors) in connection to pharmaceutical products is another area of potential growth. This, combined with the opening of pharmacies in grocery retail outlets, will stimulate the over-the-counter (OTC) market which may help manufacturer’s better leverage the opportunity for growth and export. n

Pharmaceutical

Imports of pharmaceutical products rise AED 3 billion in 2010 from AED 800 million in 2003

Industrial Machinery

48 OCTOBER 2011

A leading New Zealand company is flourishing in a sector that is little heard of, but vital to growing businesses across the region. Machinery health information systems, which are used to detect early mechanical fatigue and breakdown, are in growing demand and have enabled Commtest to significantly grow its specialist business in the GCC.

Since it established an office in Dubai four years ago, Commtest is well on its way to becoming the world’s leading designer of machinery health information systems, and it has seen huge demand for the specialist vibrations analysis technology it offers. The technology is used to detect the early precursors to machine failure, allowing equipment to be repaired or replaced before an expensive failure occurs.

Thanks to support from New Zealand Trade and Enterprise’s Beachheads Programme, which assists New Zealand companies in the region and helps boost bi-lateral trade opportunities, the company is now going from strength to strength. With key industrial markets in oil refinery,

petroleum and manufacturing, Commtest has seen particular interest from companies based in the Kingdom of Saudi Arabia, Egypt, UAE, and the rest of the GCC.

Commtest has offices in its home country of New Zealand as well as the USA and China, and is replicating its operational success in the Middle East region. Emad Bitar, Area Director of MENA and South Asia, says, “Once again, oil and gas, electricity, water, and the manufacturing sectors are going from strength-to-strength, leading to a high demand for our technologies from clients in these key sectors. We are, of course, delighted with the response our products have had in Saudi Arabia and Egypt and we are looking for new distributors and partners in other key GCC countries.”

Anne Chappaz, New Zealand Trade and Enterprise’s Regional Director for Europe, Middle East and Africa, says: “New Zealand is renowned for its food and beverage sector but our world-class innovation and technology is also fast being recognised, particularly by companies in growing markets such as the Middle East.

“Commtest invests heavily in research and development so their campaign is one step ahead of the market and able to adapt to the demands from its customers. By opening a fourth international headquarters in Dubai, it reinforces Commtest’s commitment to the region and the scope of business that is opening up in the Middle East. We are seeing more New Zealand companies taking the same step to be firmly present in this expanding market.” n

Machinery health information systems FOOD AND BEVERAgE

The Kingdom of Saudi Arabia’s food sector is currently expanding at an annual rate of 18.5%, while food and agricultural imports account for 15% of overall imports, at USD 17.3 billion. To further ensure food security, the Kingdom is investing some USD 12.3 billion in domestic agriculture projects as well as to acquire land abroad. These projects include the King Abdullah’s Initiative for Agricultural Investment Abroad and the USD 800 million Saudi Company for Agricultural Investment and Animal Production. “This year marks the 30th anniversary of Saudi Agriculture, a show that has grown exponentially over the years and has provided the perfect platform for food industry players to capitalise on the lucrative Saudi Arabian market that has been backed by strong government support,” said Mohammad Al Hussaini, Deputy General Manager, Riyadh Exhibitions Company.

Saudi Agriculture 2011 serves as an ideal business-to-business platform for major agricultural producers, manufacturers, dealers, agents and distributors along with key policy makers and high-ranking officials from the Saudi Agriculture Ministry. Other key areas of focus of the trade event include fisheries and fish farming, greenhouses, handling and transport systems, irrigation and landscaping equipment, machinery and spare parts, organic farming, packaging systems and products, pesticides, pumps and pipe systems, seeds and soil nutrition products, spraying machinery, water treatment, water management systems, and warehousing. n

Food

Following success in Saudi Arabia and Egypt, UAE becomes major focus for New Zealand-based company

At USD 17.3 billion Saudi Arabia’s food and agricultural imports account for 15% of overall imports

FOCUS

INDUSTRY INSIghTS

50 OCTOBER 2011

Speaking with Hamdan about his first steps into business, he recalls his early

years living in Fujairah where he purchased boxes of groceries and stored them at home. To save time with trips to the store his mother would buy the supplies she needed and when word spread to neighbours and friends a tidy profit would soon be made.

Fast forward to 1991 and Hamdan was opening various stores in Fujairah, but it was with the establishment of a computer shop that he took the first major steps

into launching an entrepreneurial career. After completing a four-year course in computers in the US, Hamdan returned to the UAE and immediately set up a Website where he could trade goods online.

“Back then online shopping was unheard of. People went to the mall to purchase whatever they needed. My online grocery store built an e-commerce platform where groceries could be ordered online and delivered straight to doorsteps,” says Hamdan.

The cornerstone for any successful trading company is the client. As a member of the trading community, it is imperative for you to have a platform which can help you generate leads, build networks and match you with international buyers and sellers. This is where being part of one of the most respected and professional business clubs in the region can help. Hamdan Mohamed, Founder, President and Chairman of the Board of the Arab Business Club, talks to Trade and Export Middle East about the driving force behind his vision to forge better business relationships and establish alliances within the Arab world and international community.

Breaking through barriers

FOCUS

SERVICES

“From the outset I wanted to break down the barriers between cultures and bring like-minded people of various cultures together to do business, thus forging business relationships between global enterprises and the Arab business community.”

Push ahead a little more in time and Hamdan accumulated a holding company, Teqaniya, which means technology in Arabic, and which encapsulates several profitable Websites, including a recruitment portal service for UAE nationals (www.wadifah.com) and the first accommodation sharing service Website in the Middle East (www.flatmateplus.com). These efforts were recognised and awarded when he received Online Retailer of the Year in 2007 by the Middle East Retail Association.

“By 2007 I was making headway with my businesses, but not one to rest on my laurels I thought it was time that I put something back into the community. I wanted to provide entrepreneurs an opportunity to realise their potentials and fulfil their dreams. For this vision, the Arab Business Club was born in 2008,” he says.

“From the outset I wanted to break down the barriers between cultures and bring like-minded people of various cultures together to do business, thus forging business relationships between global enterprises and the Arab business community.”

So did the arrival of the economic slowdown cripple the Arab Business Club before it even got on its feet?

“The sudden and abrupt onset of the recession actually proved a blessing for us because at a time when a lot of businesses were struggling to maintain investment, our scheme of networking events proved invaluable. Many attendees were in search of services and what transpired was a sort of meet and greet where people could come along and link up with someone who could provide an invaluable service for them,” says Hamdan.

He notes that at this time there was no unified platform for Arab businesses that

51OCTOBER 2011

brought everyone together to talk shop. What existed were events for local business councils and networking evenings held for the expatriate community.

Therefore, at this point where “time is money” never rang so true, it became apparent that it was vital to bring together top management, without having to go through middle management, and agree on principles to an extent where all that was left was essentially the paperwork.

“The speed at which business was concluded became much faster and alliances were swiftly established. Our networking events undoubtedly helped these top decision makers to find business in a faster and cheaper way. These people were saving money on advertising and instead paying only minimal fee for event fees and membership,” notes Hamdan.

Reading through the list of different membership options, it’s clear why Arab Business Club has attracted the attention of not only business enterprises, but government officials and elite international corporations. Elite membership is reserved only for the senior official of a business, with specialised and tailored round tables and delegations catered for on-request.

“We have found that by accommodating smaller and more intimate meetings between CEOs as well as high ranking government officials, business issues can be discussed and resolved more expediently,” says Hamdan.

“One of the major success stories this year was when we brought together the inventor of an oil spill rescue system with multinational investors, who agreed to manufacture the system right here in the UAE.”

Premium members are given access to a wide range of facilities, like marketing

their products and services to all members, and through trade delegations and conferences; receiving market advice and professional feedback from all business industries through their database; availability of the Arab Business Club’s PR service as well as meeting rooms and office lounges in Dubai; benefits and discounts from the club’s partners, including airlines, hotels, car rentals and special event invitations. Membership is open to men and women, regardless of nationality, race, creed or religion.

At the core of the Arab Business Club is the idea of friendships and partnerships; networking serves as the main tool for this very objective, but, there are various other tools which act as a reinforcement to this.

“We have our online Website where people can register and get to know members worldwide. This effectively acts like a social networking tool. We also have what we call business match making, a fully automated application where the needs of one business are placed with the products and services of another,” notes Hamadan.

A big believer in social media, you will find the Arab Business Club active across Facebook, LinkedIn and Twitter, with a YouTube channel also in operation. Hamdan says that he uses social media since it is cost effective, has no expiration date, and helps to monitor the needs of businesses and their management more easily.

With plans to launch a series of Arabic and English televised round table discussions (including audience Q&A participation), and by taking events to Munich, Dusseldorf, San Francisco and Moscow, it’s obvious that Hamdan has made innovation a cornerstone of the club.

“Where possible, we not only organise our own events but also partner up for man y international conferences. This is proving to be one of the many successful ways we broaden the scope of the club for our members,” he says.

“We have more expansion plans for 2011. We participated in the Khazan Summit as a Strategic Partner, had the Second Islamic Summit in Astana, Kazakhstan, and have arranged events in Stockholm, New York and London.”

The list of speakers that the Arab Business Club has had are equally impressive, including high ranking management from multinational companies and international banks, as well as the UAE Minister for Economy, His Excellency Sultan Bin Saeed Al Mansoori.

“As much as introducing our members through networking is important, we also see the long-term benefits in educating them through conferences; business practices and developments move at such a fast pace that constant updates and education is vital for the success of all members, regardless of their industry and geographical whereabouts,” insists Hamdan.

With so much activity, are there any other major developments in the pipeline to help propel the club further into the business sphere?

“In the coming months we will be launching the Young Arab Business Club, which will target university graduates under the age of 30 working in business organisations. The club will be headed by someone under 30; members will choose their own board, have the opportunity to interact with senior club members, and conduct separate events. My role will be simply one of guidance in helping the next generation progress into the business arena,” he says, smiling from ear to ear. n

“We have our online Website where people can register and get to know members worldwide. This effectively acts like a social networking tool. We also have what we call business match making, a fully automated application where the needs of one business are placed with the products and services of another.”

FOCUS

commodity watch

DATE OPEN CLOSE HIGH LOW

29-Sep-11 104.03 104.03 104.03 0

28-Sep-11 105.92 105.92 105.92 0

27-Sep-11 105.47 105.47 105.47 0

24-Sep-11 103.97 103.97 103.97 0

23-Sep-11 106.15 106.15 106.15 0

20-Sep-11 109.07 109.07 109.07 0

16-Sep-11 112.22 112.22 112.22 0

15-Sep-11 109.63 109.63 109.63 0

10-Sep-11 112.77 112.77 112.77 0

09-Sep-11 114.77 114.77 114.77 0

08-Sep-11 115.55 115.55 115.55 0

03-Sep-11 112.33 112.33 112.33 0

31-Aug-11 114.17 114.17 114.17 0

29-Aug-11 111.1 111.1 111.1 0

26-Aug-11 111.36 111.36 111.36 0

25-Aug-11 110.22 110.22 110.22 0

23-Aug-11 108.78 108.78 108.78 0

22-Aug-11 105.54 105.54 105.54 0

19-Aug-11 108.62 108.62 108.62 0

18-Aug-11 110.46 110.46 110.46 0

17-Aug-11 109.74 109.74 109.74 0

16-Aug-11 109.12 109.12 109.12 0

15-Aug-11 108.22 108.22 108.22 0

13-Aug-11 108.03 108.03 108.03 0

12-Aug-11 107.03 107.03 107.03 0

11-Aug-11 107.1 107.1 107.1 0

10-Aug-11 104.84 104.84 104.84 0

09-Aug-11 102.22 102.22 102.22 0

08-Aug-11 106.46 106.46 106.46 0

05-Aug-11 109.37 109.37 109.37 0

03-Aug-11 116.77 116.77 116.77 0

01-Aug-11 118.26 118.26 118.26 0

29-Jul-11 116.74 116.74 116.74 0

28-Jul-11 117.68 117.68 117.68 0

25-Jul-11 117.72 117.72 117.72 0

23-Jul-11 118.67 118.67 118.67 0

22-Jul-11 117.85 117.85 117.85 0

21-Jul-11 118.41 118.41 118.41 0

20-Jul-11 117.72 117.72 117.72 0

19-Jul-11 116.25 116.25 116.25 0

16-Jul-11 117.26 117.26 117.26 0

15-Jul-11 116.15 116.15 116.15 0

13-Jul-11 117.75 117.75 117.75 0

12-Jul-11 117.75 117.75 117.75 0

11-Jul-11 117.24 117.24 117.24 0

08-Jul-11 118.33 118.33 118.33 0

07-Jul-11 114.29 114.29 114.29 0

06-Jul-11 114.28 114.28 114.28 0

05-Jul-11 111.23 111.23 111.23 0

04-Jul-11 112.05 112.05 112.05 0

01-Jul-11 111.77 111.77 111.77 0

30-Jun-11 112.34 112.34 112.34 0

29-Jun-11 108.51 108.51 108.51 0

DATE OPEN CLOSE HIGH LOW

29-Sep-11 3.8 3.8 3.8 0

28-Sep-11 3.86 3.86 3.86 0

27-Sep-11 3.81 3.81 3.81 0

23-Sep-11 3.7 3.7 3.7 0

22-Sep-11 3.73 3.73 3.73 0

19-Sep-11 3.79 3.79 3.79 0

16-Sep-11 3.81 3.81 3.81 0

15-Sep-11 4.04 4.04 4.04 0

13-Sep-11 3.88 3.88 3.88 0

09-Sep-11 3.92 3.92 3.92 0

08-Sep-11 3.93 3.93 3.93 0

07-Sep-11 3.93 3.93 3.93 0

05-Sep-11 3.9 3.9 3.9 0

02-Sep-11 3.88 3.88 3.88 0

31-Aug-11 3.92 3.92 3.92 0

29-Aug-11 3.89 3.89 3.89 0

26-Aug-11 3.93 3.93 3.93 0

25-Aug-11 3.91 3.91 3.91 0

23-Aug-11 3.88 3.88 3.88 0

22-Aug-11 3.88 3.88 3.88 0

19-Aug-11 3.94 3.94 3.94 0

18-Aug-11 3.91 3.91 3.91 0

17-Aug-11 3.92 3.92 3.92 0

16-Aug-11 4 4 4 0

15-Aug-11 4.01 4.01 4.01 0

12-Aug-11 4.06 4.06 4.06 0

11-Aug-11 3.99 3.99 3.99 0

10-Aug-11 4.01 4.01 4.01 0

09-Aug-11 3.9 3.9 3.9 0

08-Aug-11 3.88 3.88 3.88 0

05-Aug-11 3.94 3.94 3.94 0

03-Aug-11 4.15 4.15 4.15 0

02-Aug-11 4.19 4.19 4.19 0

01-Aug-11 4.17 4.17 4.17 0

29-Jul-11 4.14 4.14 4.14 0

27-Jul-11 4.34 4.34 4.34 0

25-Jul-11 4.41 4.41 4.41 0

22-Jul-11 4.4 4.4 4.4 0

21-Jul-11 4.53 4.53 4.53 0

20-Jul-11 4.56 4.56 4.56 0

19-Jul-11 4.56 4.56 4.56 0

18-Jul-11 4.56 4.56 4.56 0

15-Jul-11 4.55 4.55 4.55 0

13-Jul-11 4.38 4.38 4.38 0

12-Jul-11 4.29 4.29 4.29 0

11-Jul-11 4.3 4.3 4.3 0

08-Jul-11 4.2 4.2 4.2 0

07-Jul-11 4.24 4.24 4.24 0

06-Jul-11 4.34 4.34 4.34 0

05-Jul-11 4.31 4.31 4.31 0

04-Jul-11 4.31 4.31 4.31 0

01-Jul-11 4.31 4.31 4.31 0

30-Jun-11 4.3 4.3 4.3 0

29-Jun-11 4.35 4.35 4.35 0

28-Jun-11 4.27 4.27 4.27 0

NATURAL GAS

* Prices are adjusted historically for corporate actions ** Market capital is stored on a daily basis starting January 2011

BRENT

Data provided by Zawya52 octoBER 2011

FOCUS

commodity watch

GOLDDATE OPEN CLOSE HIGH LOW

29-Sep-11 1626 1626 1626 1626

28-Sep-11 1644.7 1644.7 1644.7 1644.7

27-Sep-11 1656.6 1656.6 1656.6 1656.6

23-Sep-11 1639.8 1639.8 1639.8 1639.8

21-Sep-11 1807 1807 1807 1807

20-Sep-11 1781.1 1781.1 1781.1 1781.1

18-Sep-11 1856.1 1856.1 1856.1 1856.1

16-Sep-11 1814.7 1814.7 1814.7 1814.7

15-Sep-11 1815 1815 1815 1815

14-Sep-11 1833.4 1833.4 1833.4 1833.4

12-Sep-11 1815.5 1815.5 1815.5 1815.5

11-Sep-11 1861.6 1861.6 1861.6 1861.6

09-Sep-11 1859.5 1859.5 1859.5 1859.5

08-Sep-11 1847.7 1847.7 1847.7 1847.7

06-Sep-11 1875.1 1875.1 1875.1 1875.1

05-Sep-11 1880.1 1880.1 1880.1 1880.1

02-Sep-11 1879.2 1879.2 1879.2 1879.2

01-Sep-11 1822.9 1822.9 1822.9 1822.9

31-Aug-11 1836.6 1836.6 1836.6 1836.6

30-Aug-11 1796 1796 1796 1796

29-Aug-11 1814.6 1814.6 1814.6 1814.6

26-Aug-11 1797.3 1797.3 1797.3 1797.3

25-Aug-11 1743.2 1743.2 1743.2 1743.2

24-Aug-11 1851 1851 1851 1851

23-Aug-11 1900.6 1900.6 1900.6 1900.6

22-Aug-11 1888.8 1888.8 1888.8 1888.8

19-Aug-11 1852.2 1852.2 1852.2 1852.2

18-Aug-11 1796.2 1796.2 1796.2 1796.2

17-Aug-11 1791.6 1791.6 1791.6 1791.6

16-Aug-11 1775.6 1775.6 1775.6 1775.6

15-Aug-11 1740 1740 1740 1740

12-Aug-11 1742.6 1742.6 1742.6 1742.6

11-Aug-11 1784.5 1784.5 1784.5 1784.5

10-Aug-11 1756.8 1756.8 1756.8 1756.8

09-Aug-11 1751 1751 1751 1751

08-Aug-11 1714.9 1714.9 1714.9 1714.9

05-Aug-11 1651.8 1651.8 1651.8 1651.8

04-Aug-11 1665.3 1665.3 1665.3 1665.3

02-Aug-11 1645.9 1645.9 1645.9 1645.9

01-Aug-11 1623 1623 1623 1623

29-Jul-11 1631.2 1631.2 1631.2 1631.2

28-Jul-11 1616.5 1616.5 1616.5 1616.5

27-Jul-11 1622.9 1622.9 1622.9 1622.9

26-Jul-11 1615.2 1615.2 1615.2 1615.2

25-Jul-11 1614.7 1614.7 1614.7 1614.7

22-Jul-11 1601.5 1601.5 1601.5 1601.5

21-Jul-11 1604 1604 1604 1604

20-Jul-11 1589.8 1589.8 1589.8 1589.8

19-Jul-11 1606.3 1606.3 1606.3 1606.3

18-Jul-11 1598 1598 1598 1598

15-Jul-11 1590.1 1590.1 1590.1 1590.1

14-Jul-11 1583.8 1583.8 1583.8 1583.8

13-Jul-11 1582.8 1582.8 1582.8 1582.8

12-Jul-11 1563.3 1563.3 1563.3 1563.3

08-Jul-11 1541.6 1541.6 1541.6 1541.6

07-Jul-11 1534 1534 1534 1534

06-Jul-11 1517.3 1517.3 1517.3 1517.3

05-Jul-11 1494.5 1494.5 1494.5 1494.5

04-Jul-11 1494.8 1494.8 1494.8 1494.8

01-Jul-11 1482.6 1482.6 1482.6 1482.6

30-Jun-11 1509.6 1509.6 1509.6 1509.6

29-Jun-11 1505.9 1505.9 1505.9 1505.9

SILVERDATE OPEN CLOSE HIGH LOW

29-Sep-11 30.785 30.785 30.785 30.785

28-Sep-11 30.85 30.85 30.85 30.85

27-Sep-11 31.58 31.58 31.58 31.58

23-Sep-11 33.645 33.645 33.645 33.645

22-Sep-11 40.5 40.5 40.5 40.5

21-Sep-11 40.145 40.145 40.145 40.145

20-Sep-11 39.118 39.118 39.118 39.118

19-Sep-11 40.65 40.65 40.65 40.65

16-Sep-11 40.831 40.831 40.831 40.831

15-Sep-11 40.545 40.545 40.545 40.545

13-Sep-11 41.231 41.231 41.231 41.231

12-Sep-11 41.11 41.11 41.11 41.11

09-Sep-11 41.624 41.624 41.624 41.624

08-Sep-11 41.855 41.855 41.855 41.855

07-Sep-11 41.475 41.475 41.475 41.475

06-Sep-11 43.15 43.15 43.15 43.15

05-Sep-11 43.15 43.15 43.15 43.15

02-Sep-11 43.29 43.29 43.29 43.29

01-Sep-11 41.45 41.45 41.45 41.45

31-Aug-11 41.47 41.47 41.47 41.47

30-Aug-11 40.63 40.63 40.63 40.63

29-Aug-11 41.075 41.075 41.075 41.075

26-Aug-11 40.952 40.952 40.952 40.952

25-Aug-11 39.615 39.615 39.615 39.615

24-Aug-11 41.96 41.96 41.96 41.96

23-Aug-11 43.575 43.575 43.575 43.575

22-Aug-11 43.86 43.86 43.86 43.86

19-Aug-11 42.432 42.432 42.432 42.432

18-Aug-11 40.315 40.315 40.315 40.315

17-Aug-11 40.075 40.075 40.075 40.075

16-Aug-11 39.74 39.74 39.74 39.74

15-Aug-11 38.97 38.97 38.97 38.97

12-Aug-11 39.114 39.114 39.114 39.114

11-Aug-11 38.915 38.915 38.915 38.915

10-Aug-11 38.13 38.13 38.13 38.13

09-Aug-11 38.84 38.84 38.84 38.84

08-Aug-11 39.955 39.955 39.955 39.955

05-Aug-11 38.211 38.211 38.211 38.211

04-Aug-11 41.685 41.685 41.685 41.685

03-Aug-11 40.121 40.121 40.121 40.121

02-Aug-11 39.76 39.76 39.76 39.76

01-Aug-11 39.585 39.585 39.585 39.585

29-Jul-11 40.106 40.106 40.106 40.106

28-Jul-11 39.821 39.821 39.821 39.821

26-Jul-11 40.689 40.689 40.689 40.689

25-Jul-11 40.565 40.565 40.565 40.565

22-Jul-11 40.122 40.122 40.122 40.122

21-Jul-11 40.28 40.28 40.28 40.28

20-Jul-11 39.2 39.2 39.2 39.2

19-Jul-11 40.57 40.57 40.57 40.57

18-Jul-11 39.915 39.915 39.915 39.915

15-Jul-11 39.071 39.071 39.071 39.071

14-Jul-11 38.15 38.15 38.15 38.15

13-Jul-11 37.585 37.585 37.585 37.585

12-Jul-11 35.629 35.629 35.629 35.629

08-Jul-11 36.543 36.543 36.543 36.543

07-Jul-11 36.235 36.235 36.235 36.235

06-Jul-11 35.87 35.87 35.87 35.87

05-Jul-11 33.97 33.97 33.97 33.97

04-Jul-11 34.07 34.07 34.07 34.07

01-Jul-11 33.705 33.705 33.705 33.705

30-Jun-11 34.87 34.87 34.87 34.87

29-Jun-11 34.15 34.15 34.15 34.15

Data provided by Zawya 53octoBER 2011

54 OCTOBER 2011

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Save the date!We know that you are a busy trader with a demanding events diary. Therefore, we are providing you with a snapshot of exhibitions and conferences around the world, which could help you spend less time planning and more time attending.

EXHIBITION DATE LOCATION

SEpTEmBEr 2011

Domotex Middle East 12 - 14 September Dubai

Light Middle East 12 - 14 September Dubai

Furniture Manufacturing & Supply China 14 - 17 September China

Arab Oil & Gas Show (AOGS) 18 - 20 September Dubai

Private Label Middle East Dubai 2011 18 - 20 September Dubai

Arab Oil & Gas Exhibition 18 - 20 September Dubai

Gifts & Premium Exhibition 18 - 20 September Dubai

Paper Arabia 18 - 20 September Dubai

Smart Build 20 - 21 September Dubai

Retail City Conference 25 - 27 September Dubai

Materials Handling 25 - 27 September Dubai

Global Airport Expansion Summit 26 - 27 September Abu Dhabi

Dubai Airport Expo 26 - 28 September Dubai

The Internet Show Middle East 27 - 28 September Abu Dhabi

2011 World Robot Olympiad UAE 28 - 29 September Abu Dhabi

18th World Route Development Forum 2011 30 Sept - 3 October Abu Dhabi

OCTOBEr 2011

Business, Franchise & Investment EXPO 1 - 2 October Canada

Middle East Workboats 2011 3 - 5 October Abu Dhabi

Saudi Arabian Infrastructure Congress 2011 8 - 10 October Saudi Arabia

GITEX 9 - 13 October Dubai

Middle East Coffee & Tea Convention 12 - 14 October Dubai

Power + Water Middle East 2011 16 - 18 October Abu Dhabi

Middle East Chemical Week 16 - 19 October Abu Dhabi

International Jewellery & Watch Show Abu Dhabi 17 - 21 October Abu Dhabi

Abu Dhabi International Wood and Wood Machinery Show

18 - 20 October Abu Dhabi

2nd Annual Global Petrochemicals Technology Conference

18 - 20 October Doha

Financial Services Trade Mission 19 - 21 October Indonesia

INDEX 22 - 25 October Dubai

Abu Dhabi Medical Congress 2011 23 - 25 October Abu Dhabi

15th Annual MEGAS Summit 24 - 26 October Turkey

BETT Middle East 2011 25 - 26 October Abu Dhabi

Building Future Education MENA 2011 25 - 26 October Abu Dhabi

NOvEmBEr 2011

2011 UFI Congress 1 November Abu Dhabi

AutoRomania 1 November Romania

Oil & Gas Ukraine 1 - 3 November Ukraine

Abu Dhabi International Petroleum Exhibition 5 - 8 November Abu Dhabi

World Hospital Congress 8 - 10 November Dubai

Dubai International Jewellery Week Exhibition 10 - 13 November Dubai

Dubai International Motor Show 10 - 14 November Dubai

Dubai Air Show 13 - 17 November Dubai

International Tourism Exhibition (ITE) 14 - 16 November Abu Dhabi

Roadex/Railex 2011 18 - 20 November Abu Dhabi

2011 World Robot Olympiad UAE 18 - 20 November Abu Dhabi

The Middle East HR Summit And Expo 2011 20 - 24 November Dubai

HR Best Practices in Oil, Gas & Petrochemicals 21 - 22 November Kuwait

Gulf a la Carte 2011 21 - 23 November Abu Dhabi

SIAL Middle East 2011 21 - 23 November Abu Dhabi

FM Expo + Big 5 Show 21 - 24 November Dubai

Middle East Manufacturing Exhibition 2011 28 - 30 November Abu Dhabi

SIM - Signage, Imaging & Media Show 2011 28 - 30 November Abu Dhabi

Airport Exchange 2011 29 - 30 November Abu Dhabi

Global Water and Beverage Technology Congress 29 Nov - 1 December Dubai

DECEmBEr 2011

World SME Expo 1 - 3 December Hong Kong

China Import & Export Commodities Exhibition 1 - 4 December Malaysia

World Green Tourism 2011 5 - 7 December Abu Dhabi

Middle East Natural & Organic Products Exp 5 - 7 December Dubai

National Exhibition for Small & Medium Enterprises 5 - 8 December Abu Dhabi

International Real Estate & Investment Show 7 - 10 December Abu Dhabi

Airport Suppliers Conference 11 - 12 December Dubai

Abu Dhabi International Motor Show 19 - 23 December Abu Dhabi

JANUArY 2012

Silicon Valley International Auto Show 5 - 8 January USA

Arab Health 23 - 26 January Dubai

FEBrUArY 2012

World Ophthalmology Congress 2012 16 - 20 February Abu Dhabi

International Defence (IDEX) 20 - 24 February Abu Dhabi

Facility Management 22 - 24 February Germany

Middle East Exclusive 2012 27 - 29 February Dubai

mArCH 2012

LogiPharma Europe 1 March USA

CeBIT 2012 (IT) 6 - 10 March Germany

International Security National and Resilience 19 - 21 March Abu Dhabi

AprIL 2012

Motexha 1 - 3 April Dubai

Arabian Travel Market 30 April - 3 May Dubai

mAY 2012

Multimodal 1 - 3 May England

Arab Market 2012 1 - 12 May Abu Dhabi

Cards and Payments Middle East 2012 15 - 16 May Abu Dhabi

The Hotel Show 2012 15 - 17 May Dubai

Made IN Korea (MIK) UAE 2012 21 - 23 May Abu Dhabi

JUNE 2012

The Franchise and Business Opportunities Expo 2 - 3 June USA

World Gas Conference & Exhibition 4 - 8 June Malaysia

COMPUTEX Taipei 5 - 9 June Taiwan

AIBTM 2012 19 - 21 June USA

JULY 2012

CIS Travel Market 27 - 28 July Russia

Ramadan & Eid 2012 29 July - 19 August Abu Dhabi

AUGUST 2012

ACBW 2012 2 - 4 August Australia

EXHIBITION DATE LOCATION

SAS and all other SAS Institute Inc. product or service names are registered trademarks or trademarks of SAS Institute Inc. in the USA and other countries. ® indicates USA registration. Other brand and product names are trademarks of their respective companies. © 2011 SAS Institute Inc. All rights reserved. S65512US.0411

Price to fit demand.ANALYTICS

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SAS® Revenue Optimization solutions make it easy for companies to manage pricing across the entire product life cycle in near-real time – providing more localized offerings to customers. Decide with confidence.

SAS and all other SAS Institute Inc. product or service names are registered trademarks or trademarks of SAS Institute Inc. in the USA and other countries. ® indicates USA registration. Other brand and product names are trademarks of their respective companies. © 2011 SAS Institute Inc. All rights reserved. S65512US.0411

Price to fit demand.ANALYTICS

sas.com/pricingfor a free white

paper

SAS® Revenue Optimization solutions make it easy for companies to manage pricing across the entire product life cycle in near-real time – providing more localized offerings to customers. Decide with confidence.

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