Author: OBG Admin

Mohammed El Etreby-Chairman-Banque Misr

Tapping into the market: A strong start for the growing facilities management industry

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The rapid pace of development for large-scale real estate projects in Kuwait has led to increased demand for companies that can manage these facilities. In particular, owners of high-end properties are seeking support to maintain the premium brand image of their properties. While this sector is still in the nascent stages in Kuwait, a growing number of local and regional players are tapping into the market’s potential. Many Kuwaiti real estate development companies have already launched their own facilities management affiliates, and international firms are setting their sights on the state. BIG NAMES: One major player in the segment is the United Facilities Management Company,

Pham Hong Hai-CEO-HSBC Vietnam

Heavy-duty: The government is increasingly focusing investment in heavy oil

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Kuwait’s oil reserves include a total of approximately 13bn barrels of heavy crude oil, located primarily in the country’s northern fields of Raudhatain, Sabriya, Abdali, and Ratqa, as well as the Partitioned Neutral Zone (PNZ). Developing production in the northern Jurassic fields will help the government to meet the key objective of Project Kuwait to increase oil production capacity to 4m barrels per day (bpd) by 2020. According to the US Energy Information Agency, developing heavy oil production from the Ratqa field is a major focus for Kuwait Petroleum Corporation (KPC), which plans to add capacity for another 60,000 bpd from the field by 2017

Daouda Coulibaly-Managing Director-Société Ivoirienne de Banque

New horizons: Local players are looking to expand their global operations

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Management of the external operations of the state oil company, Kuwait Petroleum Corporation (KPC), is delegated to various subsidiaries, which are particularly focused on expanding the state’s assets abroad. Kuwait Petroleum International has a major stake in refining and marketing operations internationally. The company, which operates under the Q8 brand name, entered the European market with the acquisition of Gulf Oil’s retail operations in six countries in 1983 and expanded further four years later by adding BP’s operations in Denmark to its portfolio. The company’s holdings have grown at a tremendous pace since then. Q8 now operates approximately 4000 retail stations across six countries and

David Gledhill-CEO-Port of Salalah

Rising cost: Growing demand has prompted a drive to boost generating capacity and explore alternatives

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With one of the highest rates of energy consumption per capita in the world, meeting electricity demand is a pressing concern for Kuwait. According to the World Bank’s World Development Indicators, the country was the fourth-largest consumer of electricity per capita in 2011. A growing economy and an increasingly wealthy population is pushing up demand for power supplies. BEARING THE COST: While the country’s harsh weather conditions are one key factor behind this level of demand, highly subsidised energy tariffs are likely to be the

Éric N’guessan-Managing Partner-EY Côte d’Ivoire

New luxury: A thriving high-end market underpins the success of many brands

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In spite of its relatively small population, Kuwait has all the makings of a thriving luxury retail market. With GDP per capita among the highest in the world, spending power is consequently very high. This increased ability to purchase goods, combined with a young population that views shopping as a popular leisure activity in its own right, suggests there is major potential for the luxury retail segment. OF GREAT OPPORTUNITY: The 2014 Knight Frank Luxury Retail Opportunities Index places the Middle East second only to Africa in terms of growth opportunities, accounting for 30% of predicted growth. Indeed, A.T. Kearney’s Global Retail Development Index (GRDI)

George Richani-CEO-Al Ahli Bank of Kuwait

The right dose: Demand for pharmaceuticals is set to rise as the population ages

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Kuwait is set to witness significant demographic changes over the coming decades, with far-reaching consequences for the local pharmaceuticals industry. High birth rates and continued immigration mean that the population is increasing in absolute terms and is set to reach 4m by 2020 and 6.3m by 2050, according to estimates by the UN’s Economic and Social Commission for West Asia. The population is slowly ageing: birth rates have fallen steadily, from 5.1 children born per woman in 1982 to 2.6 in 2012, according to World Bank indicators. At the same time, life expectancy continues to rise. Although figures from Kuwait alone are not available, the

Sheikh Ahmad Duaij Jaber Al Sabah-Chairman-Commercial Bank of Kuwait

Supersizing hypermarkets: While traditional retailers remain popular, larger-format chains are expected to expand going forward

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Although the hypermarket format is nothing new for Kuwaiti retail, penetration remains relatively low by regional standards. According to A.T. Kearney’s latest retail report, the Kuwaiti groceries market is fragmented, with the top five retail groups accounting for just 10% of the market. Traditional retailers – cooperatives, local corner shops and markets – dominate the grocery business. However, this looks likely to change in the coming years with the growth of super- and hypermarket chains. Indeed, a recent report from Alpen Capital forecast that sales

Daniel Asare-Kyei-CEO-Esoko; Curtis Vanderpuije-CEO-ExpressPay; and Daniel Marfo-General Manager-Zipline Ghana

Substantial investment: A series of mega-projects are set to boost hospital capacity

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Kuwait’s overall development strategy is contained in a government plan known as Kuwait Vision 2035. Health care forms a big part of Vision 2035, with the government placing belief in the relationship between a healthy economy and a healthy workforce. Furthermore, while birth rates in Kuwait remain high compared to many Western countries (2.6 children born per woman in 2013, according to World Bank figures), a combination of falling birth rates and longer life expectancy means that the country’s demographic profile is set to age: in the GCC as a whole, the proportion of over 65s is set to rise from around 2% in 2015

Éric N’guessan-Managing Partner-EY Côte d’Ivoire

In high demand: Private schools are an increasingly popular option

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A key challenge for the education sector in Kuwait is rising cost pressures, with the issue being discussed in public arenas and the media. It is not just a matter of concern to the parents of the students involved, but to Kuwaiti businesses and the government as well. In part this is because the cost of education for children of non-Kuwaiti parents is not covered by the state. As such, if expatriate workers wish to have their children schooled in Kuwait, they – or their employers – must meet the costs out of their own pocket. Thus, rising school fees have a knock-on effect across

Nhon Luc Ly-CEO-AIA Myanmar; Son Nguyen-Country President-Chubb Life Insurance Myanmar; Daw Zarchi Tin-CEO

Applied learning: Successful past approaches enshrined in the new project law

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On August 17, 2014 the highly anticipated new law governing public-private partnership (PPP) projects was issued as Law No. 116 of 2014 (“New PPP Law”). The New PPP Law replaced the previous PPP law, Law No. 7 of 2008 (“Old PPP Law”), and was well received as a major reform that will benefit Kuwait’s PPPs. NEW PPP LAW: While the Old PPP Law was generally satisfactory in terms of regulating PPP projects, the New PPP Law helps to modernise the economy by addressing various issues related to PPP concepts that were introduced to the corporate, project and project finance world in the past decade. To