QATAR - Economy
GM, Dyarco International Group
Ullattil Achu has been the General Manager of Dyarco since 2000 and boasts over 22 years of experience working with prominent international banks, including managing a World Bank-funded project.
The economy was forced to diversify partly because of the embargo. Therefore, one of the major developments was Qatar’s focus on having more local products and services to meet demand rather than depending on its neighbors. For example, there is more attention on agricultural and other consumer good production, complex manufacturing, and warehousing. Previously, goods came in through Dubai and other major regional shipping hubs and were transported to Qatar by truck. This was economically cheaper for the whole region, though now there is a degree of self-reliance in Qatar as a result of the embargo. This alone has started to develop a new economy here. Diversification is taking place, and Dyarco has done the same. We have increased our shipping and logistical volumes, along with the number of resources we are applying. The traditional economic activities of Qatar, which were oil and gas and petrochemical products, are still strong because the country needs a solid economy to support growth, regardless of the viability or economic sense of these activities today. The government is likely to give more subsidies because areas like dairy farms, agricultural manufacturing, and poultry, for example, all need to be developed. These industries cannot be established locally without the government providing incentives, which it has done.
There are certain product ranges and activities that make sense, but those in high demand are not historically produced here. For example, manufacturing plastic pipes is one opportunity that has emerged. I am chairman of the executive board for a local pipe manufacturing company that is ranked number one in terms of turnover and has more than 14 years of experience in the country. This was originally a joint venture with a British company before becoming a UAE company, though it has 14 years of experience in the region. There are products Qatar used to import from the UAE and Saudi Arabia that are now manufactured locally. There is a huge amount of infrastructure development going on in Qatar, particularly in the interior, all of which needs pipes. In the existing cities, infrastructure projects are predominantly for new, faster roads, such as the ring roads in Doha. It has taken some time to build this infrastructure compared to neighboring countries, but Qatar has its own pace because this is the way it has developed. This entire infrastructure will develop new areas of urbanization further out, and there will be demand. The population may fall, though consumption will not change much. The Qatari economy remains strong because the byproducts from gas, such as petrochemicals, are still high in demand. Countries like Qatar are blessed even if oil is only USD45 a barrel.
The economy has to improve, and I have better expectations for 2019. Since the embargo, shipping has been the most active sector in the country. There are sectors where the cost factor is high now. The consumer goods sector, especially fashion and retail, has shrunk dramatically because costs have gone up. Shipping and storage costs have increased. Qatar now pays more attention to making the country more conducive to business and controlling cost factors. The country needs to modernize, mechanize, and look at all the current facilities in order to compete with its neighbors, especially in warehousing and manufacturing facilities. The government is providing many incentives, though there are also many challenges, given the increased demands of setting up industries here.
By sponsoring our events you are able to best participate in the discussions that matter to you, as well as gain unique networking opportunities.