The strategic importance of in-country value

Abdulla J. Al Nowais, CEO of Al Nowais Group, talks to The Energy Year about the intricacies and challenges of the UAE’s in-country value (ICV) scheme. Al Nowais Group creates partnerships with international manufacturers and service providers to supply technological solutions for various sectors of the UAE and Saudi economies.

What intricacies and challenges does the ICV scheme present in the UAE?
The UAE government has made laudable efforts to support ICV. We have been working together with ADNOC to comply with ICV through our company PM Piping Petroleum, which supplies services to the NOC.
We are prequalified for different activities, mainly pipelines, fittings and flanges. In addition, we have a partner in Ras Al Khaimah called SeAh Steel. The UAE climate being open to all who wish to do business, I must say we enjoy the competition from other companies as we aim to maintain our ICV and supply high-quality machinery. Our factory has an ICV level range of 42-43% for now and we are yet to make adjustments here and there until it is higher.
ICV is a splendid initiative. However, like any other implementation we still must work on it and our compliance with it will also promote progress on its processes and prerequisites as feedback.
In the tendering process of any project, there are various fundamental elements depending on business activities. If one aims to attract companies from outside, a strong ICV score is the way to go. That is one of the keys that will make you competitive today. Foreign companies use large companies with an established footprint and high ICV score as gate-openers instead of new companies with lower scores. The market in the UAE has a pool to choose from, and one has to assess one’s business goals and see which organisation can lead one in this climate.

To what extent have recent legal changes impacted local agents and sponsors?
A while back, Abu Dhabi used to be very good at attracting foreign companies. We used to be far stronger because we used to be companies’ sponsor, agent and partner. However, the law recently changed where foreign companies can now sponsor themselves without the need of a local partner. This has affected us as local representatives.
We have been working as a sponsor for certain foreign companies for more than two decades, but now they want to branch off and be their own sponsors. Legally they can do it, and this is obviously affecting local agents such as ourselves. This kind of change in climate has also led us to review our product and service development and move with the current times – after all, we are a family company and the legacy should live on with the current business trends.

In what ways are you supporting sustainable biofuel and biogas initiatives?
We are open to looking for new partners, but it will depend on the sector. In energy we are looking most at hydrogen, new technologies that increase efficiency and sustainability. These three areas are critical today.
Hydrogen, for instance, is an area everyone is talking about, and we have witnessed a proactive approach that will eventually make the UAE a global hydrogen hub. We are looking to dive into the hydrogen scene soon.
On this note, we recently partnered with a UK-Australian-based company called Green Eco Technologies, which supplies machines for processing organic waste. The waste can be eventually used for aeroplane biofuel. They are also trialling the machines at cement factories in Ras Al Khaimah.
We are also looking into the production of biogas. We are in talks with ADIO [Abu Dhabi Investment Office] to kickstart this initiative. It is aligned with the principles of sustainability, which the UAE is effusively promoting.

How important is establishing a strong footprint in Saudi Arabia for Al Nowais Group?
Saudi Arabia is a high potential market. The Saudis are extremely active, not only in the oil and gas sector but in every sector. They are driving their own diversification strategy.
We started penetrating and being active in the Saudi market early on because we know that, in a few years’ time, given the development the country is experiencing, we will have made our mark. Moreover, they welcome investments from GCC nationals. We currently have offices in Saudi Arabia, and we have worked with Aramco in the past to supply them with equipment. Our current companies are Al Nowais Group, PMPiping, Neom International Contracting and Transportation Company, and Emirates United Economy, and our expansion plan in Saudi Arabia is still in progress.
Our aim is to strengthen our relationship with the country and Saudi clients by having offices there. The prospects are immense, as indicated by, for example, the recent gas discoveries they have made or with their development projects such as NEOM and The Red Sea, which are pivotal for their Vision 2030.
Our aim is to grow in parallel with the Saudi market. Since 2005, we have grown continuously, built ties with every government entity in Abu Dhabi and built on our experience, people, companies and partners. Many of our long-standing partners are now keen on establishing themselves in Saudi Arabia, and we are willing to help them in that journey.

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