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BACK             Issue No. 2/2004
 Non-Oil Omani Exports increased

 Annual General Meeting of ECGA for year 2003 held.

 Claims paid by ECGA in 2003

 Arab Meeting for Small and Medium Industries

 Training Program on Financial Planning & Control

 Prague Club Meeting to be held in Warsaw, Poland

 Annual Credit Alliance Meeting to be held in Paris

 Highlights of ECGA's Performance.

 Country Profile of Buyers of Omani Insured Exports


 Questions & Answers

 The Omani Insured Exporter by ECGA

 Tips to Exporters

 Your credit management technique can determine whether you succeed or fail

 Congratulatory Message

 
Non-Oil Omani Exports increased
The growth of Omani non-oil exports for the year of 2003 has been remarkable as per the latest export statistics issued by the Ministry of National Economy. Total Omani non-oil exports of Omani origin (excluding re-exports) for year 2003 were RO.304.1 million compared to RO.261.6 million of 2002 or significant increases of 16.2%.

 
Annual General Meeting of ECGA for year 2003 held.
The Annual General Meeting of the Export Credit Guarantee Agency (S.A.O.C.) was held on March 27, 2004. The meeting was presided by H.E. Sheikh Yaqoob bin Hamed Al Harthy, the Chairman of the Export Credit Guarantee Agency (S.A.O.C.). The year 2003 marked the twelfth year of its unique credit insurance operations. The year was characterized by not only outstanding achievements of its credit insurance operations but also introduction of domestic credit insurance services to supplement its highly successful export credit insurance support to the exporters.

The AGM reviewed the operations, activities and achievements of the Agency during the year 2003. It is worth mentioning that the total credit limits issued by the end of the year 2003 were RO155.6 million compared to RO.142.8 million in 2002 or a growth of almost 9%. The year 2003 covered exports to 3345 buyers in 91 countries compared to 3057 buyers in 2002. The Agency’s Gross Premium Income increased during the year 2003 to RO.277,787/- compared to RO.241,961/- for the similar period in 2002 or a rise of almost 14.8%. The net income after tax of RO.153.466/-. The Agency's equity capital increased from RO.7.45 million in 2002 to RO.8.57 million in 2003.Thus the Agency has continued to remain profitable and self-sustaining while contributing in the promotion of Omani non-oil exports through its various credit insurance services as supported by significant level in the increases of the Omani produced non-oil exports as stated above.

 



 
Claims paid by ECGA in 2003
During the year 2003, ECGA paid 3 claims amounting to RO.22041 of which RO.3131 pertains to the Underwriting Year 2003 and the remaining amount pertains to the Underwriting year 2002. As ECGA continues to indemnify eligible qualified claims to policyholders, they have valued credit insurance as an essential tool in mitigating the risks of non-payment as it provides necessary protection by covering both commercial and non-commercial risks.

 
Arab Meeting for Small and Medium Industries
The Agency participated in the 3rd Arab meeting for Small & Medium industries organized by the Ministry of Commerce & Industry at Al-Bustan Palace Hotel during the period 15-16 February 2004. The Agency participated as one of the co-sponsors. The Agency stand received positive response from many participants. The stall provided brochures, leaflets and power-point demonstration of its valued services. The Agency was awarded by the Ministry of Commerce & Industry with the Merit Certificate in appreciation for its fruitful participation and contribution of activities of the meeting.

 
Training Program on Financial Planning & Control
Two of the ECGA’s Underwriting Officers attended separate short term training courses organized by the Oman Chamber of Commerce & Industry - Mr. Ahmed bin Khalfan Al Balouchi and Mr. Seif bin Nasir Al-Mahdi both Underwriting Officers attended Financial Planning & Control Course from 28th February – 3rd March 2004 and Strategic Planning & Implementation Course on 10th to 14th April 2004 respectively.

 
Prague Club Meeting to be held in Warsaw, Poland
The Prague Club will held its second bi-annual meeting of the year 2002 in Warsaw, Poland hosted by the Export Credit Guarantee Agency of Poland (KUKE) from 24th to 26 May 2004. ECGA of the Sultanate of Oman will participate in the conference and its workshop. ECGA became the first ECA from an Arab country to be a member of the Prague Club in the year 2000. The Prague Club which operates under the auspices of the Berne Union – that is the International Union of Credit & Investment Insurers consists of a number of ECAs from the emerging markets including Central and Eastern Europe, Africa, Middle-East and Asia.

 
Annual Credit Alliance Meeting to be held in Paris
The annual general meeting of the Credit Alliance will be held in Paris from 24th to 25th June 2004. Apart from COFACE and its owned subsidiaries, the Alliance consists of a number of ECAs from the emerging markets. ECGA of the Sultanate of Oman joined the Credit Alliance in 1996 when the Alliance had only 16 members and since then it has grown to over 60 members worldwide with the total market representing more than three quarters of world trade. Apart from the annual meeting, both the Regional Committees and General Steering meetings will also be held for which the General Manager of ECGA will attend as Chairman and Regional Coordinator for Africa-Middle East and member of the General Steering Committee of the Alliance.

 
Highlights of ECGA's Performance.
The table below provides the highlights of the operating and financial results of ECGA since 1992 to 2003.



HIGHLIGHTS OF THE PERFORMANCE OF ECGA
Operation Results
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
Credit Limits Issued(Total exposure in Million RO)
10.2
22
30.3
38.2
49.7
63.0
86.7
98.9
116.9
138.5
142.8
155.6
Number of Exporters
30
38
50
60
68
81
89
97
110
134
144
153
Number of Countries of Exports
23
34
39
50
58
64
70
76
80
88
89
91
Number of Overseas Buyers
154
410
696
952
1198
1412
1757
2077
2310
2703
3057
3345
Claims Paid Underwriting Year-wise ()'000
-
0.75
22.12
273
19.3
11.8
15.7
18.8
19
15.2
18.9
3.1
Number of Overseas Buyers
-
1
3
4
3
2
2
3
3
2
2
1
 



Financial Operation
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
Total Operating Income ('000R.O.)
404
408.2
521.7
563.1
771.2
669.5
660.9
738.8
626.3
529.6
550.8
Gross Premium Income ('000 R.O.)
74.9
94.1
112.2
112.3
133.4
163.8
167.2
199.6
232.9
242
277.8
Investment Income ('000 R.O)
121.2
296.4
370.4
410
568.1
518.6
547.4
601.3
459.2
360
343.6
Income Before Subsidy Payment ('000 R.O)
125.5
213.3
288.9
302.6
486.5
439.5
420.8
432.7
316
249.5
213.2
Net Income After Subsidy Payment ('000 R.O)
37.5
152.8
212.4
228.6
375.9
318.5
308.3
350.4
200.2
162.2
164.0*
Agency's Capital & Reserves(R.O million)
1.75
3.3
4.94
7.15
7.75
7.17
7.47
6.84
7.1
7.46
8.57

* Net Income after provision of income tax paid to the Ministry of Finance of RO.10428 would be RO.153466
   


 
COUNTRY PROFILE OF BUYERS OF OMANI INSURED EXPORTS STATE OF FRANCE

France is situated in Western Europe. The total land area is 547030 Square Kilometers. The capital is Paris. The population of France as per the estimated statistics for 2003 is 60.2 million inhabitants.

Export Credit Guarantee Agency has insured Omani exports to various products to France such as fish, aluminium profiles, vegetable oils, marine products, carpets, pipes and fittings, plastic products etc. The total credit limits issued by the Agency to date amounted to R.O.991,000/- to 42 buyers. Of total credit limits issued by the Agency to France, R.O. 698,600/- are under letters of credit and R.O. 292,400/- on Open account.

The total credit limits issued to France represent 0.64% of the total for all the countries. ECGA paid two claims to insured Omani exporters to France amounted R.O. 8753/168 Both claims were for fish exports.During the year 2003, total Omani exports to France were R.O.4.25 million while imports were R.O.60.7 million.

A number of ECAs provide full cover for France including US Eximbank, Atradius, ECGD UK, Euler Hermes.

It is also worth mentioning that Export Credit Guarantee Agency maintains partnership agreement with Coface – the French Export Credit Agency through its association with Credit Alliance Network.

 
Questions and Answers
Q- Once the Claim has been paid by ECGA, does it take over recovery action?
A- After payment of a claim, ECGA has the right to take over the debt, but while it does exercise this right in some instances, it will normally require the policyholder to continue recovery action along the path already agreed with ECGA subject to any further requirements it may have The involvement of the policyholder is important as the Company is the contractual party.

Q- When should a claim be submitted?
A- A claim should be submitted as soon as it becomes clear that the policyholder’s efforts to minimize loss have been exhausted. Take a potential buyer default, for example. Assuring that the buyer had not paid on ‘due date’ and that policyholder had spent, say, six months in chasing action (in consultation with ECGA following notification of a probable loss), the Company would be justified in assuming that its probable loss had turned into a fairly certain one and that a formal claim was now called for. Were the submission of claim be delayed much longer there would be a danger that ECGA would not be given sufficient time to examine and process the claim and to settle it at the earliest date permissible under the terms of the Guarantee.

Q- Does ECGA contribute to recovery costs?
A- Yes. Where action is taken to recover the debt by the policyholder in accordance with its requirement, it will be prepared to reimburse the policyholder the legal fees paid to lawyers in the buyer’s country up to the proportion in which liability for the debt has been admitted by ECGA.
 
The Omani Insured Exporter By ECGA
Al Jazeera Tube Mills Company (S.A.O.G)
Al Jazeera Tube Mills Company (S.A.O.G) in one of the leading steel pipe manufacturers in the GCC Region. Apart from a very strong presence in the GCC countries, the company successfully markets it products in USA, Canada, Germany, Belgium, Netherlands, UK and has made inroads into East and West Africa including Ethiopia, Eritrea, Kenya and Nigeria other countries include New Zealand, Australia, Brunei, Yemen, Syria and Egypt. Total export sales have increased from 66727 tons amounting to RO.9.7 million in 2002 to 84554 tons amounting to RO.14.7 million tons in 2003. The company has utilized the services and facilities provided by ECGA since its inception. ECGA has issued a total credit limit to date of RO.5.3 million for Al-Jazeera Tube Mills Co. (S.A.O.G.)


   
 


 


 
Hint to Exporter

 Smart Credit Managers know that concerted, assertive and effective system on accounts receivables will improve the Company's cash flow and assist more quickly the money their customers owe you, without risking their future business.

 A letter cancelling credit should be a straightforward statement of that fact. By this time your customer knows payments have been delayed, therefore cancellation letter of the limit will be no surprise.


 
CONGRATULATORY MESSAGE
The Omani exporter have long recognized and appreciated that one of major keys to success is to insure with ECGA for safe export business. The Agency provides confidence, encouragement and incentive in support of its services to exporters during the past ten years.


ECGA is here to help you minimize your risks

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.


Workshop on Export Credit Finance held at the Oman Chamber of Commerce & Industry
Workshop on Export Credit Insurance sponsored by the National Bank of Oman and organized by OCIPED was held at the Oman Chamber of Commerce & Industry on April 20th. The General Manager of ECGA Mr. Nasir bin Issa Al-Ismaily was one of the key invited speakers.

He gave presentation to senior representatives of Omani companies and other participants on the important role played by ECGA in developing new export markets through its credit insurance services offered to Omani exporters. Other topics in the workshop included export finance, issues surrounding the use of letters of credit and how to guard against export fraud





   
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