His Majesty Award for Industrial Excellence.
Almost 50% of its sales are to local market and remaining to exports. GCC countries constitute 70% of the total exports while remaining 30% to other export markets. Oman National Dairy Products Co. Ltd (SAOG) has been availing the services of ECGA since 1993 that for the last 10 years.
COUNTRY PROFILE OF BUYERS OF OMANI INSURED EXPORTS
STATE OF QATAR
The State of Qatar is situated on a small peninsula from north-east of Saudi Arabia on the Gulf. The total land area is 11437 square kilometers. The capital city is Doha. The population of Qatar is 817052 inhabitants.
Export Credit Guarantee Agency has insured Omani exports to various products to Qatar including detergents, biscuits, furnitures, dairy products, etc. The total credit limits issued by the Agency to date amounted to RO.5.7 million to 175 buyers. Of the total credit limits issued by the Agency to Qatar, RO.3.6 million is under open account and RO.2.1 million under letters of credit. It represents 3.7% of the total credit limits issued by the Agency. Since ECGA's inception, total business to date declared by Policyholders to Qatar were RO.18.6 million. ECGA has paid one claim to insured Omani exporter to Qatar.
During the year 2002, total Omani exports to Qatar were RO.13.1 million while imports were RO. 4.6 million
As per International Risk & Payment Review monthly publication by D&B (November 2003), Qatar's risk rating continues to be supported by its positive economic environment. The economic outlook has been buoyed by the country's efforts to increase exports of liquefied natural gas. A number of ECA's provide full cover for Qatar including U.S Eximbank, NCM, ECGD, Euler Hermes UK.
The minimum terms of payment are sight draft (SD) with usual terms of 30 – 60 days.
Questions and Answers
Q- What is a creditworthy buyers?
It is one that has a record of paying his supplier for the goods purchased within terms or close to terms of credit.
Q- What are important reasons for exporters to consider for refusing credit to buyers?
There are several reasons as listed below :-
Other suppliers report slow payment.
Company/business is expanding too rapidly.
Principals/Management do not have enough experience.
Financial data is incomplete or inadequate financial statements and bank information is not comprehensive.
The business is not established.
Business already established in the buyer's market area are causing strong competitive pressures.
The economy in the buyers market area is in cycle of recession. This diminishes the chances for a new business to succeed.
Hint to Exporter
Guidelines for minimizing the problem of slow-pay accounts receivable should include the following :-
A strong, clearly defined credit policy, and a credit management team whose goal it is to adhere to it
A comprehensive screening procedure that include input from current suppliers, credit reporting agencies, banks, financial statements, and such other data as may be available and/or pertinent.
Avoiding the pressure from your own marketing department or from the buyers for a credit decision that offers too much.
Other benefits of service provided to credit insured exporters include domestic credit insurance, post shipment financing through bills discounting by commercial banks as well as issuance of guarantees to commercial banks for pre-shipment financing needs of the exporters.