Eyhab Al Haj Hema Energy

We have to think big, while increasing agility in the business model.

Eyhab AL HAJ Group Managing Director Hema Energy

Strength in a shared vision

July 23, 2020

Eyhab Al Haj, group managing director of Hema Energy, talks to The Energy Year about how the company has managed through the pandemic and its strategy for competing in the Omani market. Hema Energy is an Omani company that opened a flanges factory in January 2018.

How have the country and Hema Energy managed through the pandemic?
Not having planned to work from home, the first week or so was quite stressful. We started to use video conferencing tools. Dealing with clients was a bit hard and I can imagine how difficult it was for bigger companies. We have used Zoom, as well as other software through which you can integrate all your actions, such as approvals.
Before, we were only studying the software, but now we will even use it once we are back in the office. We were forced to implement it, so after the first two weeks, things started working quite well. However, if you asked me whether we can work away from the office, I would say no, we need the physical interaction to create momentum and traction at the workplace.
Even if there is no problem doing work via video conferencing, there is a plus in physical meetings that I cannot explain. Somehow you can do more by being in the office. Some people have suggested doing a mix of office and remote work, but let us see first how it goes.

 

How has your portfolio evolved?
We are a group made of 11 departments with 11 focus areas. Being small has a payoff. As we have long been in the oil business, we have never taken oil prices for granted – they will go up and down. Still, every time I set a budget for the year, I set targets that we would never imagine reaching, yet somehow, we do it.
Some people say you should be realistic, but if you are, you destroy your imagination and energy. Maybe the best approach is to envision scenarios. Once the board approves the budget, I say let’s forget the lower target as it will stick in people’s heads. We have to think big, while increasing agility in the business model. I was shocked when I heard that some companies could not sustain themselves for two months during this crisis.
When setting the budget, I always keep enough cash for the year. I don’t rely on the banks for that as taking a loan to pay salaries is a gamble. If you take facilities for a project, that is fine, but when you do it for salaries, it is gambling. On the other hand, all company staff agreed that in order to survive and to stay afloat we need to decrease salaries – and avoid laying off people. As long as you share your vision, it pays off well – during good and hard times equally.

What is your strategy for competing?
We are mainly active in the upstream, in the production sphere. We are of course affected by contracts, but we are not sinking as we don’t plan for only two months. We can accommodate rate reductions while revising the budget while maintaining the same target. Comfort is not a good thing – you always have to think outside the box, stay alert and ready – the essence of agility.
With regards to becoming more efficient and greener, this is something we started a couple of years ago. Oil prices are volatile and there is a big demand to go green. But to me this is more about efficiency. When I am becoming more efficient, I am actually reducing carbon emissions. Going green is a byproduct, and it is how we operate. It should not be the ultimate solution because the investment in green energy may not be there if opportunities are not seen to be paying off well. What we need to drive towards is being efficient.
From day one, we have always wanted to be supplier number one. For this, you always need to innovate, to have new technologies and split up the operation into smaller manageable outfits to be agile, hence sharing the opportunities and risk with the right partners – those with similar values.
We opened the first flange factory in Oman, not because the actual product is innovative in any sense but considering the fact that there was no factory in Oman at the time for such simple products, providing locally for a much needed product is “innovative” in its own way. You always have to be unique. If you are not unique, you are just competing on price, which means low margins, basically more difficulty surviving during hard times. You have to be needed by the clients, even when activity goes down.

What do you foresee for Oman’s energy industry going forward?
Today the situation is very hard, partly because we have never experienced such a crisis. If you look at the European countries, they have been through these situations before. The continent became a superpower after the second world war. That disaster brought out the strength of Europe. When things go well, companies and countries tend to just enjoy the situation and be complacent. But now we have to take action; there is no choice. The good news is we might just unlock the full hidden potential of our economy.
I find it overwhelming that in recent company meetings when the market is bleeding, we’ve been talking about opportunities that we had never dreamt of entertaining in the past – it’s an amazing feeling when you manage to get over the fear and use the situation to think differently, from scratch, and it’s not that hard. It only takes one person to be positive and the rest follow. It is really about the mindset.
We remind ourselves: We are climbing mountains, so if we see a difficult cliff ahead, do we put in less or more power?

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