Introducing Oman's new business hub
Madinat Al Irfan will become Oman’s bespoke central business hub – that is the plan of Omran, the country’s leading development company.
And what is Omran doing to make this plan a reality?
It is making significant investment opportunities available, with the release of ten major land plots at the urban development. The aim is to encourage new and existing businesses, especially in the fields of oil and gas, banking, aviation, and logistics, to see the potential of this location as a viable hub for their regional operations.
Speaking about the new investment opportunities, Omran’s CEO James Wilson said: “We envision Madinat al Irfan to set a benchmark for contemporary city planning and provide an exciting addition to Muscat’s new lifestyle offering modern Arabic homes that are designed to meet the needs of modern family living but with the qualities of Oman’s cultural and architectural values.
“We are benchmarking against world renowned companies such as google Inc and others successful case studies that have set new standards in innovative business environments and working cultures. Through Omran, Oman’s government has made a significant investment on laying a platform for Madinat Al Irfan to be world-class smart city a model in how public authorities and the private sector can work together to deliver such an ambitious and forward thinking project.”
On completion, Madinat Al Irfan, will be a city within a city. It is being developed on a site extending to over 7.4 million square metres, and will have business parks, hospitals, schools, mixed housing and strategic link and transport to Muscat International Airport.
Wilson added: “The government has now entrusted Omran to deliver Oman’s vision in setting new standards of urban development and developing the new urban city of the capital. the plan is now set and ready. It is the now the role of the private sector to build on this vision and grasp the unique investment offerings of this city.
“Some of the biggest companies in Oman, such as Omran and Omantel, have already announced that they will relocate their headquaters to Madinat Al Irfan. discussions with a number of leading Omani companies such as Oman Air are also being progressed with great interest.”
Salah Al Gahzali, Chief Investment Officer added : “Oman has lots to offer for local and global investors and Madinat Al Irfan is our jewel in the crown. The development is being designed to integrate the needs of modern business and lifestyles.
“With the integration and mobility of the right mix of an urban city, the prescient will also be home to international private hospitals, school, hotels and not to mention a state of the art exhibition and convention center for meetings and networking opportunities all within the immediate reach of hundreds of employees who can chose to spend their day to day working activities that will have access to quality working lifestyle. This is why Madint al Irfan is set to be Oman’s and the region’s new business hub for leading organisations.”
Read the September 2016 issue of Business Review Middle East magazine
Billionaire Kumar Birla Champions Regional Supply Chains
As the head of the Aditya Birla Group, a US$46bn firm that operates in 36 countries, Kumar Mangalam Birla is no stranger to splashy strategic moves. Yet his recent announcement that he no longer wants to acquire globally distributed supply chains stood out. While many companies have struggled to cope with shipping backlogs, his firm has chosen to pivot and focus on regional networks. Said Birla: ‘We wouldn’t look at a company or a business where you source in one corner of the world and sell in another’.
He cited protectionism, the pandemic, and the limited movement of products and people around the world as ABG’s primary causes of lost profits. And they aren’t alone. Over the past year, 900 of the U.S. and Europe’s biggest IT, defence, and financial services firms have lost an average of US$184mn apiece.
An Era of Global Disruption
Over the past few decades, low shipping rates and rapid delivery times have lulled multinational firms into a false sense of security. In the early 2000s, companies chose to take on significant global supply chain risks in exchange for increased profits. First, it made sense to manufacture higher-value goods, such as electronics, in low-cost regions throughout Southeast Asia, India, and Africa. Second, first-tier suppliers started to outsource the manufacturing of specific components to second-, third-, and even fourth-tiers—leaving supply chains with extremely limited visibility.
So when COVID-19 disruptions struck certain regions, companies were caught unprepared. Usually, these events come few and far between. But over the past ten years, we’ve seen a number of ‘black swan’ events that have thrown the supply chain industry into chaos. Here’s a quick history of the most significant events in recent years, thanks to the MIT Sloan Management Review:
- 2010. China creates export quotas for rare earth elements.
- 2011. The Tōhoku Earthquake hits East Japan; flooding sweeps throughout Thailand.
- 2016-present. Trade wars between the U.S. and China hurt suppliers.
- 2020-present. COVID-19 pandemic shuts down international shipping ports.
Now, Kumar Birla is one of many who want to re-evaluate how we run our supply chains. Though his company has acquired 40+ companies in the last quarter decade, Birla intends to build up local hubs rather than expand operations.
Why Pursue Regionalisation?
Combine Chinese economic dominance, global supply chain vulnerabilities, and major government policy shifts around the world, and you have a storm brewing on the horizon for big multinational firms. As Brookings noted, ‘the biggest risk for trading opportunities in the developing world is growing protectionism in more advanced economies, often dressed up as national security protection’.
Altogether, from the U.S. to the European Union, governments are trying to protect their domestic supply chains, secure adequate stockpiles of materials, and build world-class local networks. Consider Biden’s recent executive order, which seeks to bring semiconductor manufacturing back to home soil, or Japan’s bid to open more memory chip fabrication factories near Tokyo. The Aditya Birla Group intends to react in kind. Said Birla: ‘We’re looking at regionalism as a very big theme’.
Will Others Follow Suit?
In the post-pandemic economy, global businesses must decide whether to expand or contract. On one hand, the Alibaba Group’s Cainiao Smart Logistics Network recently launched a direct flight between Hong Kong, China, and Lagos, Nigeria. On the other, the Japanese government is desperate to make its chip manufacturing domestic. Indeed, as two supply chain strategies diverge in a post-pandemic world, the one businesses take may make all the difference.
Yet Birla is confident that regionalisation is the right call. According to his words at the Qatar Economic Forum, even necessary cross-border transactions should be smaller in scope. And as the Bloomberg Billionaires Index now lists his net wealth at US$10.4bn, up 52% from 2020, he may have the cash to test his theories out. ‘Regional hubs, regional presence, regional employment, catering to regional demand’, he stated. ‘We’re a global company rooted in local economics’.