Arabian Industries And Group Companies Essay

Question:

Discuss about the Arabian Industries and Group Companies.

Answer:

Introduction:

This report deals with Arabian Industries, an Oman based multinational company, which started its journey in 1991[1]. The goal of the project is to discuss the company including its various subsidiary companies. The objective of the report is to discuss the functional areas of Arabian Industries, describe in detail the activities carried out by its various group companies and cover the important financial, human resource and marketing affairs of the company as a whole.

In this report, secondary data has been used. Most of the information and knowledge has been gathered from the official website of the company.

The structure of the report covers four main areas. The first part discusses the activities carried on by four functional areas, i.e. engineering, manufacturing, construction and maintenance, of the company. In the next part, the company’s recruitment policy has been discussed. The company follows various methods of internal and external recruitment. The third part deals with the expansion strategy of the company and the sources from where the company arranges the required finance. The last part of the report covers the marketing activities carried out by the company for the promotion of the brand, the products and the services offered by it.

Activities of the four functional areas:

Arabian Industries (AI) is an EPC company, which is engaged in contracting, manufacturing and maintenance work for Oil and Gas sector, chemicals and fertilizer industries, refinery industries, petro chemical industries and power industries[2]. Since its inception in the year 1991, the industry has developed a unique expertise in designing, procurement, and engineering, construction, painting fabrication, testing and maintenance of projects across various industries. The main functional areas of Arabian Industries are:

Arabian Industries has a separate group company for providing engineering services for the oil and gas industry[3]. Arabian Industries Energy Solutions is a specialist in this sector. Arabian Industries Energy Solutions is engaged in activities of removing sands from stream and using cyclone based separation devices for treatment of produced water[4]. For this AIES uses a wide range of modern and advanced technologies for such separation services, AI Energy Solutions is the cheapest solution provider. It provides worldwide solutions for integrated processes across oil and gas industry. Arabian Industries Energy Solutions is engaged in treatment of oil and gas processing. Some of the products and services of Arabian Industries Energy Solutions for the oil & gas industry are:

  • Four functions of oil treatment, separation, and dehydration and oil desalters are the main upstream areas.
  • Treatment of gas covers dehydration of glycol, control of dew point of hydrocarbon and gas sweetening.
  • Produced water treatment includes de oiling of hydro cyclone, filtration of membrane, stripping of H2S, management of sand, de sanding of hydro clone, washing, collection and transportation of sand.
  • Feed study, survey of sites, installation of sites, trial of fields, commissioning of equipment and various control systems[5].

Manufacturing Activities:

Arabian Industries has a separate wholly owned subsidiary, Arabian Industries Manufacturing (AIM) that focuses on engineering and manufacturing of different process equipments. It manufactures engineering equipments designed as per the needs of specific consumer[6]. These equipments are used in core industrial productions. It nurtures the value of quality products, health, safety and security of its employees, and protection of environment for the overall well being, thus providing an ideal business value to its stakeholders. The products and services offered by Arabian Industries Manufacturing are:

  • Separation packages for 2nd and 3rd phase, treatment system for produced water, conditioning system for fuel gas, dehydration packages for gas and crude, stations for pressure reduction, skids for chemical injection, low and high pressure manifolds, condensate stabilizer, gas sweetening and other process modules and pre-engineered skid packages.
  • Separation packages for testing, dehydrators, re- boilers for amine and glycol, de-gassers, de- aerators and de- hydrators, filters, drain vessels, drums and sand catchers and other pressure and process vessels.
  • Cladding products, reactors, equipments for heat transfer, auto pipe spools, storage tanks, reactors, pig launchers and receivers, equipments and other technological structures.

In addition, Arabian Industries Manufacturing provides repair and rehabilitation services like welding of overlay pipes and line pipes, butt welding, welding of fittings, valves and their components, painting and coating of glass flake etc., flange management, coating with thermal spray, bolt tensioning and asset integrity management[7].

Construction Activities:

Arabian Industries is a holding company of Arabian Industries Projects. Arabian Industries Projects deals with the most technically challenging projects across the EPC contract. It provides innovative and cost effective one stop solution to both, the onshore and off shore clients[8]. It provides assurance of delivery in project management, transportation, warehousing, construction, installation and commissioning of facilities. Arabian Industries Projects follows principles of sustainable development to maintain international standard in providing wide range of expert skills. Some of the business areas of Arabian Industries Projects are:

Off plot piping and on plot piping for oil and gas projects, refinery projects, power projects, civil works, tanks, treatment of gas, petrochemical projects, water injection[9], water treatment, and steam facilities, electrical projects, revamp projects, shutdowns and turnaround projects, modification plans and maintenance of plants and camp facilities.

Maintenance Activities:

Arabian Industries Technical Support (AITS) is one of the group companies of Arabian Industries. It provides expert maintenance solutions for all the requirements of Oil & Gas, Petrochemicals and other chemical & refinery industries. AITS provides excellent service as per the needs of global economy and urgency of worldwide clients. Safety is the utmost concern of the industry irrespective of the budget of the client. The services provided by Arabian Industries Technical Support are divided into two parts: shop based maintenance services and site based maintenance services. Shop based services include maintenance of equipments used in oil fields like high pressure valves, mud pumps, chokes and choke manifolds, Blow Out Preventers, Well Head Equipment etc. Shop based activities also include maintenance and monitoring of various pumps, compressors and turbines, manufacturing of drilling spools and crossovers, and testing and repairing of control valves, check valves, control valves and control valves for re- certification. It is also engaged in range for pipe cutting and flange facing[10]. Site based services of Arabian Industries Technical Support are maintenance of beam pumps, casing hangers, X- Mas trees, casing head pools and other well –head equipments. It provides flange management services for bolt tensioning. It assists in plant turnaround and shut down activities, repairing and maintenance of tanks and vessels. AITS conducts electrical flanges testing and pneumatic testing[11].

Internal and External Recruitment Processes:

Arabian Industries requires competent workforce having expertise in technical and administrative field to meet the needs of manufacturing, construction, maintenance and engineering activities[12]. It believes that human resource is the most critical factor for the growth of the organization. Arabian Industries has established programs for training and development of staff & management and provides safe and quality working environment. Company has a vision of development of Omani Nationals. In line with this, Arabian Industries has taken due effort to increase the percentage of Omani Nationals in the company’s operation[13]. Arabian Industries follows both the methods of recruitment, i.e. internal method and external method. In internal recruitment, employees are hired from the existing workforce. External recruitment involves recruitment of fresh candidates from outside the organization.

Some of the methods of internal recruitment are internal job posting, transfer from one department to another, promotion etc. Arabian Industries uses promotion and internal job posting as the internal methods of recruitment. It conducts annual evaluation in which the performance of each employee is assessed and based on the level of performance against various factors; the employees are promoted and deployed in the designation that is best suited to them[14].

Internal job posting is another method of internal recruitment in which employees are informed of the vacancy and are asked to apply for the position, if they find themselves suitable for the post. This provides an opportunity to the workers to change their roles and departments.

External recruitment is more time- consuming process[15]. Arabian Industries follows campus recruitment method of external recruitment in which fresh graduates with unique perspective and fundamental knowledge are hired, trained, assessed and posted in the respective departments[16].

Arabian Industries also uses job portals for recruitment purpose. The jobs are posted on the portal under current openings and application is invited from the suitable candidates to fill the vacancy[17].

Expansion Strategy and sources of funds:

Arabian Industries is a multinational company providing innovative engineering services to oil and gas industry. The company started its journey in 1991 in Oman as a fabrication business that has now expanded to provide solutions to upstream, downstream and midstream operations. Arabian Industries is engaged in constant evolution and has reached to the international markets of UK, UAE, Arab and Iraq[18]. It has recently started construction of a new fabrication plant in Abu Dhabi[19]. Considering the ever-changing world and the expertise of Arabian Industries and its group companies, there is a vast scope of expansion of the company. Arabian Industries must consider expanding in the areas where it has not yet made its presence and constantly improve the services offered in the existing market.

If the company considers expansion, it will need huge amount of funds. For this purpose, the company can use retained earnings as an internal source of finance. The company may choose not to pay higher dividend and use the retained earnings for new investment. It saves the cost of issuing new shares or debentures. Another source of internal financing may be through control of working capital. The company may speed up the account receivables and lengthen the accounts payable.

The company may use bank borrowing[20] and assistance of government as the two methods of external financing. Banks provide loans to meet the short term and medium term financing need and charges interest on the loan amount[21].

The Arabian Industries can seek government assistance in the form of cash grants or other assistance for investment in high technology industries. This will accelerate development of national economy.

Marketing activities for promotion:

The Arabian Industries use various marketing tools for promotion of the products and services offered by it. Some of the tools used by the company in this regard are:

Under this, the Arabian Industries does not use any intermediaries for promotion of its brand. They use direct channel like tele marketing, catalog marketing and face to face selling to deliver the services. It reduces cost for the company.

The Arabian Industries sends emails and brochures to the target market for interaction with prospective clients. In this regard, they value and respect their stakeholders, deliver the right quality to their clients, handle press releases and are committed to maintain the corporate image[22].

Conclusion:

In the conclusion, it can be said that Arabian Industries is a multinational company engaged in manufacturing, engineering, maintenance and construction in various core areas of Oil and Gas Sector. The finding of the report is that Arabian Industries is a fast growing company, which gives a tough competition in terms of quality of products and services and provides a comprehensive solution under one-roof. It has four group companies named as Arabian Industries Energy Solution, Arabian Industries Manufacturing, Arabian Industries Projects and Arabian Industries Technical Support, which provide expertise services in their functional areas at a very cost- effective rate. The company has established recruitment policy for attracting the new talent and designed training programs for nurturing the skills and capabilities of existing talent. Considering the capability of the company, the expansion plan seems to be feasible and various sources of finance that the company might use have been discussed. The company has been quite successful in promotion activities through various marketing strategy.

References:

"AI Energy Solutions | Arabian Industries". in , , 2016, < [accessed 27 December 2016].

"AI Manufacturing | Arabian Industries". in , , 2016, < [accessed 27 December 2016].

"AI Projects | Arabian Industries". in , , 2016, < [accessed 27 December 2016].

"Capabilities | Arabian Industries". in , , 2016, < [accessed 27 December 2016].

"Capabilities | Arabian Industries". in , , 2016, < [accessed 27 December 2016].

"Capabilities | Arabian Industries". in , , 2016, < [accessed 27 December 2016].

"Corporate Message | Arabian Industries". in , , 2016, < [accessed 27 December 2016].

"Corporate Message | Arabian Industries". in , , 2016, < [accessed 27 December 2016].

"Current Openings | Arabian Industries". in , , 2016, < [accessed 27 December 2016].

"Fresh Graduates | Arabian Industries". in , , 2016, < [accessed 27 December 2016].

"Introduction | Arabian Industries". in , , 2016, < [accessed 27 December 2016].

"News | Arabian Industries". in , , 2016, < [accessed 27 December 2016].

"Omanisation | Arabian Industries". in , , 2016, < [accessed 27 December 2016].

"Our Profile | Arabian Industries". in , , 2016, < [accessed 27 December 2016].

"Products & Services | Arabian Industries". in , , 2016, < [accessed 27 December 2016].

"Products & Services | Arabian Industries". in , , 2016, < [accessed 27 December 2016].

DeVaro, Jed, and Hodaka Morita. "Internal promotion and external recruitment: a theoretical and empirical analysis." Journal of Labor Economics 31.2 (2013): 227-269.

DeVaro, Jed. "Internal hiring or external recruitment?." IZA World of Labor (2016).

Mayer, Colin. "Financial systems, corporate finance, and economic development." Asymmetric information, corporate finance, and investment. University of Chicago Press, 1990. 307-332.

Mina, Andrea, Henry Lahr, and Alan Hughes. "The demand and supply of external finance for innovative firms." Industrial and Corporate Change 22.4 (2013): 869-901.

Pickton, David, and Amanda Broderick. Integrated marketing communications. Harlow: Prentice Hall, 2001.

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