Gap Assessment: OCI – Company related factors…continued

Major strengths and weaknesses need to be highlighted to evaluate business risk

better
Current Proposed – What approvers
want to see
 Inherent strengths not Emphasize on:
emphasized. Facts are Scale
mentioned
Market share/dominance
Pricing power
Geographic diversification
End-market diversification
Strong marketing and
distribution capabilities
Data points
Scale: 30% meets local
demand
Market share: 80% in Oman,
7% in GCC and 3% in other
markets
Pricing power: Near
monopoly in Oman
Geographic split:
Oman: 30%; GCC: 35%;
Non-GCC: 25%; Others: 10%
End-markets : Power
generation, distribution, mass
transportation, oil & gas,
petrochemicals

Information is presented without inferences. Effect of inherent strengths and weaknesses on

OCI’s business risk need to be brought out clearly in the ‘Business Analysis’ section. Facts and
history should go to ‘Background’ in the new CLA template.
TM
An ISO 27001:2005 Company August 2009
Gap Assessment: OCI – Company related factors…continued
Major strengths and weaknesses need to be highlighted to evaluate business risk
better
Current Proposed – What approvers would Data points
want to see
 Backward integration Mention the impact of OAPI Impact:
initiatives to lower costs Backward integration on the cost Lower costs
are not emphasized structure Expanding product line
Diversification
 Strength of corporate Sound corporate governance, Corporate governance
governance and internal control systems and a structure:
management capabilities capable management need mention Strong internal control
not emphasized in ‘Business Analysis’ section systems
Strong execution
capabilities
Competent
management

Information is presented without inferences. Effect of inherent strengths and weaknesses on

OCI’s business risk need to be brought out clearly in the ‘Business Analysis’ section. Facts and
history should go to ‘Background’ in the new CLA template.
TM
An ISO 27001:2005 Company August 2009
Gap Assessment: OCI – Company related factors…continued
Major strengths and weaknesses need to be highlighted to evaluate business risk
better
Current Proposed – What approvers Data points
would want to see
Does not provide Mention revenue/profit split by Geographic split:
geographic split of regions when talking about Oman – 30%; GCC – 35%;
revenues/profits when geographic diversification Non-GCC – 25%; Misc.
talking about projects – 10%
diversification
Mentions market share
in GCC and other
international markets

Information on the immediate concerns and inherent strengths need to be mentioned in the
‘Business Analysis’ section.
TM
An ISO 27001:2005 Company August 2009
Gap Assessment: OCI – Company related factors…continued
Major strengths and weaknesses need to be highlighted to evaluate business risk
better
Current Proposed – What approvers
would want to see
 Policies on copper Needs mention in rising copper
hedging and exposure to price environment since they lost
currency risk not money in the past
mentioned in Business Exposure to currency risk, if it is
Analysis significant
Data points
Hedging input cost inflation:
Costly in an environment of
rising prices
Foreign currency risk: 70%
revenues from exports

Matters of immediate concern need to be brought out in ‘Business Analysis’ section.

TM
An ISO 27001:2005 Company August 2009
Gap Assessment: OCI – Industry factors
Economic cycles and industry trends must be analyzed while assessing business risk

Current Proposed – What approvers would Data points

Impact of the global
economic slowdown on
OCI is not brought out in
Business Analysis
want to see
Mention that OCI is still recovering >50% revenue decline
from the impact of the global
economic slowdown
Sharp contraction in revenues
Several order cancellations

No mention of growth Growth prospects are good End markets:

prospects in the near term
Strong demand from end-markets Infrastructure, Oil & Gas,
industrials
Presence in growing
countries/regions Countries/regions: GCC,
India, SE Asia

The impact of the operating environment on the borrower’s business (stability & sustainability)
should be brought out in ‘Business Analysis’ and ‘Key Risks & Mitigants’.

TM
An ISO 27001:2005 Company August 2009
Gap Assessment: OCI – Competitive position
What is the game being played on? Price/cost or capabilities?
Current Proposed – What approvers would
want to see
Competition scenario not Mention competition is intensifying
brought out clearly Mention how that is going to affect
OCI
Data points
New entrants in Omani
market
Additional capacities
coming on stream in GCC
New companies coming to
GCC due to low growth in
other markets
This has put margins under
pressure

Competitive scenario need sto be analyzed while assessing business risks. Particularly the fact
that competitive landscape is changing fast for OCI.

TM
An ISO 27001:2005 Company August 2009
Comparative Analysis - OCI: Company related factors
Rating

Stability of Commodity Geographic Market

Company Size End Markets Shock Resistance Diversification Dominance
Riyadh Cables
Power & Biggest in GCC,
Very Large Telecom High Well diversified No. 1 in KSA
Saudi Cable
Company Energy &
Large Telecom Medium Well diversified No. 2 in KSA
Oman Cables
Industry
Power, Oil& Gas, 80% market share
Large Transportation Medium Well diversified in Oman
Gulf Cable &
Electrical
Industries Impressive track
Large Power Medium Primarily GCC record
National Cable
& Wire Mfg. Co. Power &
Small Telecom Low Diversified Limited
Arab Electrical
Industries
Very Small Power Low Diversified None

TM
An ISO 27001:2005 Company August 2009
Comparative Analysis - OCI: Company related factors
Company Rating
Revenue Market Cap Total Assets Comments
(FY2008) (Current)
Riyadh Cables  Outlook contingent upon electricity
infrastructure activity recovery in KSA
 Increasing competition in domestic market
$1,329mn NA NA due to entry of Bahra, Red Sea, El Sewedy

Saudi Cable  Outlook contingent upon electricity

infrastructure activity recovery in KSA
Company  Increasing competition in domestic market
$654mn $457mn $888mn due to entry of Bahra, Red Sea, El Sewedy

Oman Cables  Intensified competition from regional

players
Industry  Backward integration boosts cost synergies
$404mn $352mn $260mn and efficiencies
Gulf Cable &
Electrical Industries  $5bn spending on power projects in
$379mn $1230mn $817mn Kuwait over the coming years positive for
the Company
National Cable &
Wire Mfg. Co $45mn $25mn  Intense competition from regional players
$52mn of Syria and Kuwait
Arab Electrical
Industries PSC  Seeking joint venture relationship with an
$11mn $5mn $15mn international company to increase its size

TM
An ISO 27001:2005 Company August 2009