30 June 2015
MUSCAT: Ithraa has been helping Omani non-oil exporters explore and penetrate mature and emerging markets worldwide, grow jobs at home, strengthen our economy, and ensure long-term, sustainable economic growth since 1997. We are the only part of government that has charged specifically with helping non-oil exporters.
Growing business is an important topic for the CEOs of companies of all types across Oman right now -- and if you talk about where growth is going to come from in the next decade for Omani companies, it's going to be in tackling overseas opportunities. In fact, trading internationally is a natural step for many Omani businesses looking to grow.
Exports can extend a company's market, boost turnover and reduce reliance on a domestic customer base. But making the move from being a national to an international operation does come with its challenges. They range from overcoming exchange rate fluctuations, dealing with cultural, legal and language issues, meeting labelling requirements, coping with extended payment terms to maintaining a healthy cash flow.
Ithraa works to help Omani businesses break into exporting and take advantage of its opportunities without being held back by any barriers that may stand in their way. It provides market intelligence; connect businesses with our trade and investment representatives overseas; offer financial signposting and advice; organise local and international trade events; and educate firms about markets opened by our free trade agreements.New export markets
There are, though, practical steps Omani businesses can take themselves to develop new export markets and succeed overseas.They include taking advantage of the opportunities for face-to-face contact at trade shows and B2B sessions - we have taken local companies to exhibitions and B2B meetings in China, Iran and Ethiopia in the first quarter of 2015; paying attention to product design and packaging - does it meet the standards of the market you want to get into; creating multilingual versions of marketing collaterals; leveraging technology, particularly social media - it's a very cost-effective way of reaching out to new markets; finding and using overseas partners; learning about and paying attention to the subtleties of linguistic and social conventions; getting to grips freight and logistics requirements; and making sure your workforce is globally fluent - understands what you want to do and what's needed to achieve your goals.
In addition to our in-house activities, services and resources, we have recently partnered with the Oman Chamber of Commerce and the Public Establishment for Industrial Estates, on OPEX, a series of large-scale, international trade shows designed specifically to renew and revitalise the promotion of Oman-made goods overseas. Given the feedback we have received from participating firms, Ithraa believes these trade efforts are paying dividends and helping change the way Omani non-oil exporters do business. As a result, now more than at any time ever before, Omani firms are selling more goods internationally.
There are so many success stories about non-oil exports. For example, our stone adds decorative flair to Dubai Metro and Heathrow Airport, our batteries power London's iconic red double decker buses and our cables can be found in Burj Khalifa, the world's tallest building. It is powerful stories like this that has helped us achieve an all-time non-oil exports record of $9.88 billion in 2013.Role of SMEs
Ithraa thinks they should applaud Oman's small- and medium-sized enterprises (SMEs) for the critical role they have played in driving this export growth.It is a fact that they are often the most dynamic part of any business community because they grow and add jobs at a faster rate than more mature businesses.
Lifting the participation rate of SMEs in exporting is a priority for Ithraa. With this in mind, we are devoting more time to increasing the number of SME non-oil exporters and making it easier for them to access export advice and assistance. Through all our activities, we encourage Omani SMEs to take advantage of the services, initiatives and resources we offer. If we make it easier for businesses to reach international markets, we can help them expand, create jobs and grow our economy as a whole.
It's worth mentioning that the Export Credit Guarantee Agency of Oman (ECGA) helped 200 policyholders expand their non-oil export sales in 2013, issuing $1.74 billion in cumulative credit limits, a record amount in export credit insurance, representing 17.6 per cent of Oman's non-oil exports (excluding re-exports) in 2013.Chinese growth
Talking about Oman's non-oil exports is crucial and we consider the broader international perspective. We have slowing Chinese economic growth; falling oil prices; an under-performing Eurozone; Japan in recession; and currency volatility in Latin America. These are major markets for us and mean challenging trading times for Oman's non-oil exporters. Indeed, for the past two years, global trade growth in general has been sluggish.
In 2012-13, it expanded by less than 3.5 per cent, which is well below the pre-crisis average annual rate of 7 per cent, and this has certainly held back global economic growth. As far as markets are concerned, we have found that the smaller countries that don't get the big media attention can often be fertile ground for exporters willing to enter markets that large multinationals ignore. For example, Vietnam's economy is enjoying an exciting economic recovery.
In 2010-11, it struggled with inflation and external account difficulties, with foreign exchange reserves at low levels. Since then, there's been a remarkable turnaround, with inflation estimated to be 4.1 per cent in 2014, easing to 3.5 per cent this year.
Meanwhile, GDP growth is forecast to strengthen to 6 per cent in 2015.
We have also seen sizeable foreign direct investment coming into Vietnam. Money that's being invested for the long-term, coming from companies like Samsung. Demand is increasing for consumer goods, including plastics, food, raw materials and metals. We believe there are opportunities here for Omani firms.Trade links with Asia
While we have established trade links with the big Asian powerhouses of China and India, what some businesses perhaps don't realise is that some of the best opportunities can be found in the smaller cities outside the traditional trading partners tier-one list of Beijing, Shanghai, Mumbai and Delhi. In this regard, we organise B2B sessions and trade shows that are designed specifically to help Omani firms make decisions about where to take their business in these markets.
India has been on our radar for some time and we have held several B2B trade meetings there and will do so again in 2015. The country's 50 million strong market of English-speaking, middle-class consumers is predicted to multiply tenfold over the next 15 years, offering Omani companies opportunities in the country's education, food, healthcare, power, renewable energy and retail sectors. The attraction of India for Omani businesses is also underscored by the two countries' shared history and deep investment links.
We recognise that it is not always easy for Omani SMEs to enter a big market like India but the opportunities are there for those prepared to seize them. What businesses need to understand is that India is a series of interconnected regional markets where the legislative and investment climate may change from one state to another.
In this regard, we can help firms compare local laws, government incentives, the available infrastructure and workforce.Oman Export Week
A new and exciting initiative that we are introducing in 2015 is the Oman Export Week, scheduled to take place in November. Government organisations, businesses and other stakeholders will come together for five days to promote and facilitate international trade. We will be celebrating 'Oman Export Week' by offering a full agenda of seminars geared towards helping local businesses succeed in the global marketplace and highlight the link between international trade and Oman's economic well-being. We will have business networking events and an awards dinner that will recognise the exemplary achievements of non-oil exporters and those supporting the sector.
We are passionate about encouraging more businesses to get a foothold in international markets. Growing our economy requires looking beyond our borders. Promoting and communicating the importance of non-oil exports is key to Oman's long-term economic future.
And whether you're the CEO of a large company exporting worldwide or a start-up thinking about taking the plunge, it pays to have a sense of where the export opportunities and pitfalls lie. And we can help. The strength of non-oil exports and the resulting impact on Oman's communities is undeniable. So, if you're looking at getting started or growing your international operations, Ithraa is a great place to start. We hope to meet you soon.
This article is a monthly series focusing on the success of Oman's non-oil exports. It is contributed by the Pubic Autthority for Investment Promotion and Export Development (Ithraa)
© Times of Oman 2015