Wednesday, December 03, 2008

Oman's Quiet Success

The quiet industrial revolution which has been transforming Oman’s manufacturing sector over the past decade entered the limelight at PEIE’s annual Smart Manufacturing Conference, 29 – 30 November at the Muscat Inter-Continental Hotel.

Held under the patronage of HE Maqbool bin Ali Sultan, Minister of Commerce and Industry the conference - supported by Nawras, Ericsson, Intilaaqah, Reem Batteries, Infocomm, Oman Cables and Al Mudhish – covered topics including recruitment and training, ICT, sales, marketing, logistics and the environment and their importance to helping Oman’s manufacturing sector sharpen its global competitive edge.

Hilal Al Ahsani, Chief Executive Officer of PEIE, said: “Employing over 30,000 people nationwide, Oman’s manufacturing sector is one of the most productive in the Gulf region. This conference was an opportunity to celebrate that success, salute the manufacturing excellence in Oman, and discuss the challenges and opportunities that lay ahead. It’s vital that we build on our strong position, and by working alongside public and private sector partners we can drive up the sector’s attractiveness, productivity and competitiveness. Indeed, it’s important that manufacturing continues to attract the right talent.”

Increasing dialogue between manufacturing and education is of particular interest to Abeer Al Jasim, General Manager of professional training provider Knowledge Horizon. “Any time spent on getting people with the right skills into industry is time well spent,” argues Al Jasim. “The crux of the matter is that manufacturing needs to form stronger links with education. This means getting manufacturers into schools and colleges so they can give students a better understanding of what the industry is about and the careers options available. Manufacturers also need to let universities know that there’s a real demand for science, maths, technology and engineering graduates. These courses are expensive to run and universities will only offer them in response to an identified market need.”

The global credit crunch was the topic of the conference keynote address. “Given the current economic climate, manufacturing isn’t a declining industry,” remarked S. Gopalan, CEO, Reem Batteries. “It’s merely transforming. But as it transforms, we need to move peoples' perception of manufacturing away from the misleading twentieth century stereotype of what it was. There are fantastic opportunities in Oman’s manufacturing sector as it transforms into a lean, innovative, technology-driven, creative and diverse twenty-first century industry. What's more, and in response to one of the conference panels, it’s apparent that local industry is ready to fully-embrace the change towards a low-carbon economy.”

It was obvious from the Finance panel moderated by Malak Al Shaibani, General Manager, The Youth Fund that many Omani manufacturers are now niche players and have adapted to years of intense global competition. “Local manufacturers export to over 40 countries worldwide,” remarked Ibtisam Al Faruji, PEIE’s Marketing Director and organizer of the Smart Manufacturing Conference. “Most manufacturers rely on a diverse range of markets, limiting their vulnerability to markets where there’s a consumer downturn. Even with Libor (the London interbank offered rate) at 6%, manufacturers will feel the impact of the credit crunch less than other sectors,” smiled Al Faruji.

The PEIE Marketing director went on to suggest that the credit crunch had so far had a limited impact on Oman’s manufacturing: “Manufacturers fund a lot of their investment from their own earnings and don't need to go outside to borrow - but I think if the credit crunch starts to impact other parts of the global economy and slows some of the major markets we sell into, it will have an impact. But certainly at the moment we're looking at something that may slow manufacturing, rather than stop it in his tracks,” she said.

According to Cambridge University economist, Michael Kuczynski, and keynote speaker at the Smart Manufacturing Conference, there is evidence of a return of manufacturing activity to Western Europe and the US from low-cost locations like China. “High transport costs, coupled with quality and reliability problems have led to demands from some customers for production to be located closer to home. It’s too soon to say if this is a trend but it is certainly an interesting development.”

Kuczynski goes on to say: “manufacturing is one of Oman’s best-placed sectors to drive forward the sultanate’s economy and sustainability agendas.” Adding, “PEIE is in a unique position to help advance this agenda.”

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