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BACK             Issue No. 1/2004
 Board of Directors reviewed ECGA’s performance

 Omani Non-Oil Exports registered remarkable growth

 Oman ranked sixth in Monetary Policies world-wide and leading in economic freedom

 General Steering Committee Meeting in Paris & Country Risk

 Claims paid by ECGA

 Certificate of Merit awarded by the Agency

 Seminar on Business Finance

 ECGA congratulated five of its credit insured exporters for His Majesty Award & 5 others for Appreciation Certificates


Omani Insured Exporter by ECGA

Country Profile of buyers of Omani insured exports

 Questions & Answers

 Hint to Exporter


 
Board of Directors reviewed ECGA’s performance
The Board of Directors of Export Credit Guarantee Agency under H. E. the Chairman Sheikh Yaqoob bin Hamed Al Harthy reviewed the performance report of the Agency of the year 2003 at its twelfth meeting of the year. The report which provides the assessment of the performance of the Agency’s operational as well as financial position were encouraging. The Board was pleased with the performance as the Agency continued to be on the right track as supported by various positive operational and financial indicators. The Agency remained self- sustaining while extending its credit insurance services to increasing number of Omani exporters.

 
Omani Non-Oil Exports registered remarkable growth
Total Omani non-oil exports for the first 9 months period of 2003 were RO.220.3 million compared to RO.187.5 million for corresponding 9 months period of 2002 thus registering remarkable growth rate of 17.5%.

 
Oman ranked sixth in Monetary Policies world-wide and leading in economic freedom
The Sultanate of Oman was ranked sixth in monetary policies field at the world level among 123 countries in the classification of a Canadian Institute operating in legal consulting field. Reports issued by the Institute in 2003 showed Sweden first in the monetary policies field followed by the US and Taiwan.

It is also worth mentioning that as per the latest annual report of the World Economic Freedom 2003 released by the Fraser Institute, Oman has the world's 18th highest level of economic freedom out of 123 countries world-wide and it is the second economically free nation in the Middle-East.

 
General Steering Committee Meeting in Paris & Country Risk
The General Steering Committee of the Credit Alliance Network held its meeting in Paris followed by Country Risk Conference on January 26 and 27 respectively. The General Manager of ECGA Mr. Nasir bin Issa Al-Ismaily who is also a member of the General Steering Committee and Regional Coordinator for Africa-Middle East Group attended the meeting and the conference.

 
Claims paid by ECGA
ECGA indemnified three claims to its policyholders during the year 2003 that is Oman Printers & Stationers Ltd. Co, Gulf Mashroom Products Co. SAOG and Al Khaleej Propylene Products Co. SAOG for an amount of RO.14910/660, RO.4000/- and RO.3131/242 for their buyers in UK, USA and India respectively.

 
Certificate of Merit awarded by the Agency
ECGA has awarded Certificate of Merit to two of its employees - Ms. Shamsa bint Hilal Al-Rubaee – Secretary and Mr. Omar bin Saif Al-Shaqsi – Messenger cum Driver for completion of ten years of service with the Agency.

 
Seminar on Business Finance
ECGA's Finance & Accounts Officer, Mr. Mousa Al- Rahbi attended a high-profile two days seminar on business and financial risks which took place at Grand Hyatt Muscat organized by Oman Resource Development Consultants. The seminar focused on management of financial and business risks within a broad perspective including credit risks, interest rate risks, exchange rate risks, and market performance risks. The seminar also focused on issues such as asset efficiency in business, managing costs to manage profitability and valuation of mergers & acquisitions.

 
ECGA congratulated five of its credit insured exporters for His Majesty Award & 5 others for Appreciation Certificates
Export Credit Guarantee Agency (SAOC) has congratulated five of its policyholders/exporters for being awarded His Majesty the Sultan's Cup for the best five factories for 2003. These were Amiantit Oman, Mohsin Haider Darwish, the National Detergent Company, Voltamp Transformers Oman and Voltamp Manufacturing Companies. The Agency also congratulated additional five other winning factories which are also credit insured exporters by ECGA for being presented with the appreciation certificates by the Ministry of Commerce & Industry. These include Al Anwar Ceramic Tiles, Oman Textile Mills, Jotun Paints, the National Heaters Industries and Oman Packaging Companies. ECGA has been associated with the above exporters in extending its services for a number of years.

 
OMANI INSURED EXPORTER BY ECGA
ECGA devotes this section by introducing Omani exporters that have availed the Agency's services through the years. This will be a regular feature which will appear in subsequent issues of ECGA's Newsbulletin.Oman National Dairy Products Co. Ltd (SAOG) is engaged in the production, processing and sale of milk and milk products, yoghurt, ice creams and juices under its popular flagship brand ZAIN. Apart from supplying and meeting domestic requirements, Oman National Dairy Products also exports its dairy products to various countries world-wide. It is worth mentioning that during 1992 the company was awarded
His Majesty Award for Industrial Excellence.


 
ECGA
 

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?
A- 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?
A- 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.

BUYER’S RISK
COUNTRY RISK
   buyer’s insolvency/bankruptcy

   buyer’s failure to pay

   buyer refusing delivery of goods


   foreign exchange transfer delay

   import bans or cancellation of import licence

   payment moratorium

   war, civil disorder, natural disasters

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.
   
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