YEMEN Page 1

‘DESPITE DISPARITIES,YEMEN SEES ITSELF

IN GCC BLOCK’

SERVICES Page 3

MODERNIZATION IN TELECOMS

UNDERWAY

INDUSTRY Page 5

‘PRIVATE SECTORRIGHT VEHICLE FOR

DEVELOPMENT’

TOURISM Page 7

DISCOVER THE JEWEL OF

ARABIA

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Thursday, October 11, 2007

YEMEN

www.yementourism.com

Where do frankincense and myrrh actually come from?

Where is the "Manhattan of the Desert"?Where can you see a town with 103 mosques

and 6,000 houses built before the 11th century?What country was chosen as best tourist

destination of 2007?

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BANKING

Moving on from a cash-based economyInternational Bank of Yemenis pursuing a strategy ofrapid but prudent growththat has put it at the fore-front of the development ofretail banking

Yemen still operateslargely as a cash econ-omy, with the bank-ing system holdingless than 60 percentof the money supply.Only three percent ofYemenis own achecking account,and even fewer acredit card.

Efforts have begunto restructure thebanking system,which is underdevel-oped, and suffers from high lev-els of non-performing loans andlow capitalization. According tothe World Bank, the four publicbanks need to be restructuredand privatized, and supervisionof the sector also needs to be im-proved.

Yemen’s first credit card wasintroduced as recently as Feb-ruary 2005, by the Internation-al Bank of Yemen (IBY), aprivately owned bank that hasbeen at the forefront of attemptsto develop retail banking.

Formerly focused on corpo-rate banking, particularly for-eign oil companies in Yemen,IBY now serves both the cor-porate and retail sectors.The sec-ond largest bank in the country

by assets, and the largest interms of deposits, it offers itscustomers a wide range of mod-ern banking services, such asATMs, internet and telephonebanking, SMS banking through

GSM mobiles, andpoint-of-sale cardsthat can be used inmany stores acrossthe country.

Last year, IBYmade a healthy prof-it of YR1.6 bln (US$8mln). Deposits to-taled some YR92 bil-lion (US$462 mln),compared with YR62billion in 2005—an in-crease of 32 percent.

Notably, IBY hasestablished relation-

ships with reputable foreignbanks, enabling it to offer first-class international banking ser-vices. “The bank has a wide and

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Mathieu Brisset PROJECT COORDINATOR:

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Located at the southern tip of theArabian peninsular, Yemen over-looks one of the busiest sea traderoutes in the world, where theRed Sea meets the Indian Ocean.A hot, dry land, it is home to 22million people, living in thou-sands of settlements scatteredacross the country in coastal,desert and mountain areas.

The population is growing fast- set to double in 18 years - andis predominantly young. Sixty-seven percent of Yemenis are un-der 24 years of age, creating apressing need for more educa-tion, services and jobs. And, al-though Yemen is an oil-producingnation, it is one of thepoorest in the Arabregion. Forty-twopercent of the peoplelive on less than twodollars a day, and onein five is malnour-ished. Scarcity of wa-ter is so serious aproblem that in thefuture it may have tobe transported toSanaa, the capital, bypipeline from coastaldesalination plants.

Yemeni crude hasbeen selling this yearfor its highest ever prices since oilexports started in 1981, but oil re-serves are expected to run out by2015, making diversification ofthe economy crucial to the coun-try’s future.

Abdulkarim Al-Arhabi,Deputy Prime Minister for Eco-nomic Affairs, Minister of Plan-ning and InternationalCooperation, says, “We have ma-jor challenges in Yemen and theyare not easy to overcome. Yemenneeds to be assisted with thesechallenges.”

In order to progress with itsdevelopment agenda, and com-

bat poverty and unemployment,Yemen requires the support ofinternational donors and neigh-boring Arab countries. Last No-vember, a conference bringingtogether Western donors andGulf states in London went a longway towards providing it, agree-ing to more than treble assistanceto Yemen to approximatelyUS$4.7 bln for the four-year pe-riod 2007-2010. This September,the World Bank announced thatit was increasing annual devel-opment support to the countryfrom US$90 mln to US$135 mlnfor 2007-08.

Neither a member of the richclub of Arab oil states,nor of Africa, Yemenhas tended to be over-looked. This is startingto change, however, be-cause of the strategicimportance of thecountry in the regionand due to the com-mitment to changedemonstrated by Pres-ident Ali Abdulla Saleh,who has ruled thecountry since the for-merly communistsouth and the moreopen north were re-

unified in 1990. Since reunification, Yemen has

embarked on a program of na-tional reform—democratic, eco-nomic, monetary, administrative,and judicial. Significant advanceshave been made towards democ-racy and political pluralism. Afree market philosophy and lib-eral trade policies have beenadopted, and the country hasopened its doors to internation-al investors.

While there is a long way to go,in the World Bank’s most recentglobal report on good gover-nance, covering 1996-2006,

Yemen is ahead of other more de-veloped nations in the MiddleEast and North Africa in three ofsix key indicators: voice and ac-countability, government effec-tiveness, and regulatory quality.

International observers judgedlast year’s presidential and localelections—in which PresidentSaleh won a resounding victory—to be an open and genuine con-test, and said they marked “a majormilestone in the democratic de-velopment” of the country.

Unlike in neighboring SaudiArabia, for example, women havethe vote and can stand as candi-dates; there are two female min-isters in the cabinet. Reformshave included the passing of na-tional procurement, anti-cor-ruption and financial disclosurelegislation, and the establishmentof the Supreme National Anti-Corruption Authority. The WordBank has also praised efforts tostreamline the civil service andimprove the targeting of publicexpenditure.

“Yemen has achieved a lot andis becoming a kind of model for de-mocratization, freedom of speech,freedom of the press, and humanrights,” states Mr. Al-Arhabi. Hesays that international assistanceto help Yemen is an investment inthe future of the region.

The political and economicstability of Yemen is importantto the wider stability and secu-rity of the Gulf region. PresidentSaleh has expressed his com-mitment to President Bush’s ‘waron terror’ and has been active incombating extremist elementsin his own country. Yemen helpsto maintain regional stability inpartnership with the countries ofthe Gulf Cooperation Council(GCC). Abubakr Al-Qirbi, Min-ister of Foreign Affairs, says, “Wenever decline to help the inter-

Although not a member of the rich club of Arab oil states, Yemen leads regional counterparts in many social indicators such as transparency, accountability and democratization.

CCoommmmiittmmeenntt to change wins support from international donors

Leading the region in socio-economic reform

national community in issues ofthe stability and peace of our re-gion and the world in general—as we have with the United Statesin fighting terrorism.”

AHMED T.N. AL-ABSI General Manager of International Bank of Yemen

ABDULKARIM AL-ARHABIDeputy Prime Minister forEconomic Affairs, andMinister of Planning andInternational Cooperation

CO

RB

IS

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www. c a c b a n k . c om . y e

excellent relationship with manylarge foreign banks, which enablesit to enhance its international deal-ings, and present first-class bank-ing services to its customers,” saysHayel Abdulhak Besher, IBY’sNon-Executive Chairman. Beinglinked to the Swift network makesit possible to provide fast and re-liable electronic transfers.

Correspondent banking with aleading U.S. bank allows Americancompanies to do business inYemen as they would at home.Since 1997, IBY has been the soleagent in the country for WesternUnion, enabling it to provide mon-ey transfers to more than 100,000agents located in 196 countriesaround the world.

Founded in 1979, IBY has 10branches, including five in thecapital city of Sanaa. Recently, ithas made a state-of-the-art up-grade to its computer systems,and its headquarters and branch-es are now linked in a real timeonline environment.

The bank’s capital base—origi-nally YR50 million—has been raisedto YR 3.4 bln, allowing for furtherexpansion. According to Mr. Besh-er, IBY aims to grow “rapidly butprudently”. Plans are in hand toopen new branches and to intro-duce Islamic banking services.

On the corporate side, thebank’s future strategy includesincreasing provision of de-velopment loans tosmall businesses inthe industrial, agri-cultural, tourism,and fisheries sec-tors. “Our portfo-lio is primarilytrade related, andwe are focusing al-so on develop-mental projects,”says Mr. Besher.

He adds that the bank is highlyqualified through its shareholdersand correspondents to provideloan syndication and other mer-chant banking services for largeor complex investments and im-port transactions.

Moving on from a cash-based economyCCOONNTTIINNUUEEDD FFRROOMM PPAAGGEE 11

International Bankof Yemen

introduced thecountry’s first credit

card in 2005.

One of the world’s largest naturalharbors, Aden port was once thesecond busiest port in the world,after New York, ideally located toserve the big container ships ply-ing between Europe and the Ara-bian Peninsula, the Gulf states andthe Far East, South East Asia, andthe Horn of Africa. Nearly half ofthe world’s annual container trade,and a significant portion of theworld’s oil shipments, pass withinfour nautical miles.

The government aims to makeAden a world-class internationalcontainer terminal and transship-ment hub. DPI Terminals, a lead-ing international port owner andoperator, has been named preferredbidder to manage and develop ter-minal operations at the port, andplans to invest US$370 mln in newequipment, infrastructure, andmanagement systems to increasecapacity to 3.5 million TEU. TheAden Free Zone, inaugurated byPresident Saleh in 1999, is a gate-way to trade and investment aimedat the increasing integration ofYemen into the global economy.

Development of trade and in-dustry are at the core of efforts torestructure the economy to meetthe requirements of globalization,and advance Yemen’s ambitionsof membership in the Gulf Co-operation Council and the WorldTrade Organization. “Nowadays,everyone looks at globalizationmore as a risk factor rather than apotential, unless trade blocks are

Focus is onboostingindustry andexports MMeemmbbeerrsshhiipp is being sought inWTO and GCC as economy seeks toengage more fully with global markets

set up as suitable tools foreconomies to be part of it,” saysYahya Al-Mutawakel, Minister ofTrade and Industry. “Despite thedisparity of incomes, Yemen seesitself within the GCC block.”

The aim is to achieve full inte-gration into the GCC by 2015.Meanwhile, all conditions for in-tegration into the WTO are to becompleted by next year. “The gov-ernment has clearly stipulated its

He expects to see foreign in-vestment in the country rise fol-lowing the highly successfulinvestment conference held in thecapital, Sanaa, in April and Yemen’srestoration to the list of nations el-igible to apply for the U.S. Mil-lennium Challenge Account (seearticle, right), which he says willaccelerate Yemen’s ongoing re-form process.

The GIA is working with thegovernment to create a highly at-tractive climate for investment.“Our role is to work closely with thegovernment to improve the leg-islative framework, by opening upforeign and banking participationbeyond 45 percent. We are plan-ning to establish a stock exchangemarket, and we are aggressivelypursuing privatization to upgradethe legislative framework and civ-il service. The GIA will be the en-gine behind all these reforms. “

Speaking of the investment con-ference in April, Yahya Al-Mu-tawakel, Minister of Trade andIndustry, says, “The sheer number

of worldwide participants wastremendous and unexpected, in-cluding almost 380 businessmenfrom the GCC countries. Partici-pation itself constituted a breakdown of the psychological barriersto investing in Yemen. Involvementin discussions and agreementssigned turned out to be exception-al—almost 13 were signed, repre-senting some of the first investmentopportunities in the country.”

Dr. Al-Mutawakel says there isa real willingness to overcome anyobstacle facing investors. Moreinvestment conferences would beheld both at home and abroad.“We will definitely be conduct-ing roadshows in Gulf area andeven as far as Europe and SouthEast Asia.

“The United States at somestage will be our target but needsto be studied,” he adds. “The po-tential of U.S. collaboration is key,despite its geographical location.We need to strengthen econom-ical ties since political ties are attheir peak.”

INVESTMENT

Incentives raise drive to attract foreign investment

interest to complete the accessionprocess in the next two to threeyears,” states Dr. Al-Mutawakel.“There has been tremendous lib-eralization in the last few years.We have a very open economywhere protection rates are almostnon-existent. It shows the country’sand government’s commitment tointegrate into the world economy.”

Acceptance into the WTOwould be recognition of the exis-tence of market institutions inYemen and the country’s capacityfor open trade. Yemen and theUnited States signed a trade and in-vestment agreement (TIFA) in

Trade and investment linksare set to increase with a country the U.S. regardsas an important regionalally committed to reform

Congratulating President Salehon his success at the polls lastyear, President Bush said theelections would “set an exam-ple for the region.” Yemen’s in-creasing democratization andreform, and President Saleh’scommitment to working withthe international communityin combating terrorism, are thebasis of a developing friend-ship between the two nations.

The U.S. recognizes Yemen’sstrategic importance in the re-gion, and supports its drive forreform and development. Ear-lier this year, Yemen was re-stored to the list of nationseligible to apply for the Mil-lennium Challenge Account(MCA), a Bush administrationplan that ties aid to governancebenchmarks, in recognition ofits “aggressive reform effort.”USAID-funded projects arepromoting socio-economic de-velopment.

Thomas Krajeski, who hasjust completed a three-yearposting as U.S. Ambassador,says Yemen is “at the forefrontof the war against terror, andvery much a partner of the Unit-ed States and right-thinking na-tions of the region.” He says therelationship has strengthenedto the point where develop-ment of economic, business,and investment relations cantake place. “I’d like to see moreAmerican companies here. Wehave a large military center herein Yemen. I’d like to see thatshrink and our commercial sec-tion increase.”

Trade between the twocountries has been increasingsteadily since the signing of thetrade and investment agree-ment in 2004. Last year, U.S.exports to Yemen totaled al-most US$255 mln in valuecompared to US$191.4 mln in2003, while imports from thecountry reached US$447.4,compared to just over US$66in 2003. Cooperation has alsoincreased in cultural activities.

Abubakr Al-Qirbi, Ministerof Foreign Affairs, says Yemenis an important partner of theU.S. in the region, and has anexcellent record in fighting ter-rorism. “After September 11people thought that Yemenand the U.S. would walk dif-ferent paths, and this has beenproven to be wrong.”

2004, and the government is count-ing on U.S. support for Yemen’s ap-plication for WTO membership.

With the prospect of declining oilproduction as stocks dwindle, di-versification of the economy is vi-tal. Government strategy is focusedon boosting the industrial sector—the most promising for increasingnon-oil production and exports. Inthe public sector, there are movesto make large-scale activities liketextiles, cement, and oil refiningmore productive and competitive.

Action is also being taken to stim-ulate investment—domestic andforeign—in the private sector. Newindustrial zones and estates are be-ing established, and provided withthe necessary infrastructure, ser-vices, and support for exporting in-dustrial products. Steps are beingtaken to raise the quality as well asthe volume of Yemeni exports.

These initiatives are starting tohave an effect. A recent report tothe Supreme Council for Exportsnoted a significant advance in non-oil exports between 2001-2006,

when volume rose from YR25 bil-lion to YR108 billion.

“Despite the fact that Yemen’s ex-port base has been really limited upto now, the country is now tryingto explore its potential,” says Dr. Al-Mutawakel. “Yemen has a com-parative advantage in agricultureand fisheries. It is looking to strikea partnership with U.S. companiesin order to take advantage of our ex-ports and U.S. markets. So far therehave been good opportunities inthe cotton and coffee markets.”

Mohammed Saeed, Chairmanof the Federation of Yemen Cham-bers of Commerce and Industry,says the private sector is now seenas the engine of the economy.“Things have changed complete-ly. The President is pro-businessand the private sector has beengetting stronger and stronger, andtaking responsibility for the de-velopment of the economy, withthe government’s encouragement.”

The main challenge is to attractlocal and foreign investment. “Atthe moment, there is only consid-erable investment in the oil sector,but we are also hoping to draw at-tention to other sectors. We hopeto see American investors come tothe country and invest directly orwith local companies.”

Yahya Al-Mutawakel, Minister ofTrade and Industry (left) andMohammed Saeed, Chairman ofthe Federation of Yemen Chambersof Commerce

THOMAS KRAJESKI Former U.S. Ambassador to Yemen

YEMEN / USA

Reformand stanceagainst terror leadto closerrelations

The government hasembarked on an aggressivedrive to attract foreigninvestment by creating anappealing business climate

From oil and gas and minerals toagriculture, fisheries, the portsand tourism, Yemen has a rangeof high potential areas into whichit is striving hard to attract for-eign investment.

“Yemen is a land of opportuni-ties,” says Salah Al-Attar, Presi-dent of the General InvestmentAuthority (GIA). “We are en-

couraging foreign investors tocome and see for themselves.”

U.S. companies within specificsectors will be targeted as part ofthe government’s aggressive in-vestment campaign. To potentialAmerican investors, Mr. Al-Attarsays, “We strongly urge U.S. com-panies not to miss this opportu-nity. They have the know-how andexpertise, and from our side wewill provide them with everythingthey need.”

Yemen is highly competitive,providing generous incentives andwith investment laws that are

among the best in the region. For-eign and domestic investors re-ceive equal treatment. Exemptionfrom profit tax ranges from 7 to16 years. All fixed assets are freefrom customs duties, raw mate-rials are exempt from 50 percentof duties, and agriculture and fish-eries are 100 percent exempt.

In order to cut through red tape,the GIA now operates as a one-stop-shop with sole responsibilityfor all investments in the country.“All organizations that have directrelations with investors are repre-sented here,” says Mr. Al-Attar.

Yemen’s Aden Port was once the busiest port in the world after New York, serving ships sailing round the Horn of Africa or headed east.

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Given the country’s mountainousterrain, and that so many ofYemen’s people live in widely sep-arated communities in rural areas,it is not surprising that expansionof telecommunications has beenslow.

In fact, Yemen has one of thelowest rates of teledensity—tele-phone lines per 100 people—inthe Arab world. Only three yearsago, there were just over half amillion fixed network users in acountry of 22 million people.

Developing telecommunica-tions in the rural areas, wheremore than 70 percent of the pop-ulation lives, is a major challenge.However, through the use of ad-vanced technologies, progress isbeing made. The network is be-ing modernized and internation-al connections have been greatlyimproved. Access to the internetis also increasing.

Kamal Hussein Al-Jebry, Min-ister of Communications and In-formation Technology, says thegovernment gives high priority toconnecting the communities.

“We want to be able to linkeverybody in Yemen. We havethousands of communities, somewith only a few houses to be con-nected.”

It is not, he points out, aprospect that would appeal to aprivate company, so the task hasto be carried out by the state.“Linking these communitieswould not be profitable for a pri-vate operator. If you wanted toopen up the market in those con-ditions, nobody would be inter-ested.”

TeleYemen, the state-ownedfixed-line monopoly operator, wasformed in 1990 as a joint compa-ny owned by Yemen’s PublicTelecommunication Corporation

(PTC) and Cable &Wireless.

When the con-tract period expiredat the end of 2003,PTC bought out allCable & Wirelessshares, and signed anagreement withFranceTelecom tooperate TeleYemenfor five years from2004. The goals of themanagement teamare to restructure thecompany, and devel-op, and enhance its businesses.

In the same year, Huawei Tech-nologies of China was appointedto upgrade TeleYemen’s existinganalogue wireless network to theU.S.-designed CDMA system. “Itwas an important decision.” saysMr. Al-Jebry. “Thanks to this stan-dard we can develop wireless tolandline telecommunications

even in the remote ar-eas.”

Installing telecom-munications involvesmore than just the Min-istry of Communica-tions and Informationtechnology alone. Of-ten it means cooperat-ing with otherministries and state en-tities. “It may requirebuilding a road and sup-plying electricity. It alladds to the cost of a pro-ject,” says the Minister.

However, the evolution of amodern telecommunications in-frastructure is crucial to the ex-pansion of the Yemeni economy,as well as to the social develop-ment of the country. It has madean important contribution to thereunification of the north and thesouth, enabling people to feel theyare all part of the same nation.

“Before reunification there wasa strong gap between the infra-structure of North Yemen andSouth Yemen. Now, if you go fromthe north to the south, you will seethat the infrastructure is the same.There is no longer a difference be-tween the two regions.”

The internet was first intro-duced into Yemen in 1996. De-spite the liberalization of themarket, private operators have yetto enter it. Today there are twointernet service providers, Y.netand Yemen Net—both stateowned.

Internet penetration in Yemenis also among the lowest amongArab states, but is rising. The num-ber of people using the internet—often through internet cafes,which are to be found even in re-mote villages—is increasing steadi-ly.

“Penetration of ADSL remainslow, but there are more than a mil-lion people who connect viaphone lines to the internet,” saysMr. Al-Jebry. “We can say thatcomputers and the internet havedefinitely made their entrance in-to daily Yemeni life.”

He gives an example. “I have afriend who produces honey. Be-fore, he had a small store and couldcount the number of his customerson one hand. He had to wait forpeople to come to him. Now, hehas internet. He can reach theworld, and sell to people even invery distant areas.”

The government has developeda national IT plan, and has decid-ed to import cheap computers soYemenis will be able to afford tobuy them. “The average income ofYemeni people is very low, and it’simportant that the governmenthelps people to purchase IT equip-ment,” the Minister says.

Deposits have doubled andCAC Bank is working withinternational banks to helpfinance private sector projects

Celebrating its 25th anniversarythis year under the slogan ‘A Suc-cess Story’, the Cooperative andAgricultural Credit Bank (CACBank) says it has entered a newera of providing services for bothretail and corporate customers.

“Since 2004 we have movedfrom traditional agricultural lend-ing to progressive commercialbanking,” says Hafedh F. Mayad,the bank’s Chairman. “The newvision of the bank is fully to servethe needs of the free market.”

Established in 1982, as a result ofthe merger of the Agri-cultural Credit Bank(ACB) and the Na-tional Co-operationDevelopment Bank,the state-owned insti-tution operatesthrough its head officein Sanaa and 42branches spreadacross the country. It israpidly extending itsnetwork, and claims to have themost modern data center in Yemen.

Reform and reorientation is al-ready paying off. The bank’s fi-nancial statement for 2006 reflectsa remarkable doubling of its as-sets last year to more than YR55.5bln. This is mainly the result of thegrowth achieved in customer de-posits, which exceeded 124 per-cent, surpassing YR48 bln.

Says Mr. Mayad, “Beside re-flecting the efforts of the bank’sstaff, this growth indicates the mar-ket’s positive response to the spe-cial services we have introduced,and the appreciation of the bank’sefforts to distinguish itself fromthe crowd.”

He identifies three main factorsthat have led to the bank’s recentsuccess. “First of all are human re-sources that we have been devel-oping. Second is the capital baseof the bank. Third are the regula-tions, bylaws, and procedures thathave been introduced.” Staff are

more business oriented and awareof the need to provide high qual-ity service. “If you give your exist-ing customers a good deal, theywill be your messengers to getother customers.”

The bank now relies on mar-keting surveys to ensure it is pro-viding products that meet itscustomers’ needs. “We want toknow how to satisfy the customersthat we have, and how we can at-tract new ones.”

The bank recently introduced anew product enabling customersto use their mobile phones to paytheir telephone, electricity, andother services bills. “We were look-ing for a way to increase our mar-ket share. We thought, ‘Everybody

has a mobile, we willopen services throughthe mobile and newclients will come to thebank’.”

On the corporateside, the bank is work-ing to increase its cap-ital so that it can financebusiness projects inpartnership with inter-national banks.

“Our capital base and portfoliofor lending loans is limited, so weact as an intermediate betweenthe international banks and theprivate sector to find financing fortheir projects,” says Mr. Mayad.“We are not yet a direct financebank, but we intermediate with athird party, with internationalbanks in the region, like the ArabBank that financed the steel fac-tory. We were the moderators toestablish the Movenpick hotel withthe Arab Bank as well.

“We have good quality relationswith two American banks, CityBank Group and Bank of NewYork. We are ready to work withAmerican institutions of the high-est standards.”

In April, the CAC Bank spon-sored the investment opportuni-ties conference held in Sanaa,organized by the Yemeni Ministryof Industry and Trade and the Gen-eral Secretariat of the Gulf Coop-eration Council.

Distributed by USA TODAY Thursday, October 11, 2007 33

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YEMEN

YEMEN TELECOM GROUPwww.yemennet.net.ye, www.teleyemen.com.ye, www.yemenmobile.com.ye

� 1.5 MILLION SUBSCRIBERS ON DIGITAL EXCHANGES� 3,000KM OF FIBER OPTIC CABLE

� FIXED, MOBILE, DATA AND INTERNET SERVICES NATIONWIDE

Providing quality telecommunication services that meet theneeds of the community in Yemen

KAMAL HUSSEIN AL-JEBRY Minister of Communicationsand InformationTechnology

Modernization and extension of the telecomsnetwork is underwayCCoommmmuunniittiieess are being linked and use of the internet is on the increase

BANKING

Satisfied customersadd up to success

Yemen’s wireless network was converted to the US-designed CDMA system in 2003.

‘IF YOU GIVEYOUR EXISTINGCUSTOMERS AGOOD DEAL,THEY WILL BEYOURMESSENGERS TOGET OTHERCUSTOMERS’

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The mobile market is set totake off as state-ownedYemen Mobile battles withprivate operators

With its fast growing and pre-dominantly young population,Yemen is a natural market formobile phone operators, and asthe costs come down, and so-ciety modernizes, that marketcan be expected to expandrapidly, and become highly lu-crative. Indeed, it is alreadyhappening with each of thethree current operators serv-ing more than one million sub-scribers, and a fourth operatordue to start operating soon.

Yemen Mobile, launched in2004 as a subsidiary of the

state-owned fixed network op-erator, TeleYemen, has grownfaster than its competitors, hit-ting the one million mark with-in three years, and becomingits parent company’s largestsource of revenue.

Yemen Mobile uses an al-ternative technology to the twoprivate GSM operators thatwere already on the scenewhen it commenced opera-tions, delivering its service viaCDMA-based technology. De-signed by U.S. company Qual-comm, CDMA has been thedominant network standardfor North America and partsof Asia.

“Our commitment is to builda state-of-the-art CDM A

telecommunications networkthat will facilitate long-termeconomic growth in Yemen,”says Mohammed Al-Dahbani,the company’s Executive Man-ager. He is proud of the impactthat Yemen Mobile has madeon the market in such a shorttime, and in no doubt aboutthe virtues of its chosen tech-nology. He sees a bright futureahead for the company.

“Since entering the market,Yemen Telecom has been verysuccessful at competing with

the other operators, and in ob-taining subscribers,” he says.“We have more advanced tech-nology than the GSM opera-tors. The Yemeni people havegreat expectations that we willbe successful. And I predictthat in 5-10 years we will beeven more successful.”

The Yemeni people appearto share his confidence, andthere was a highly positive re-sponse when the governmentlaunched an initial public of-fering last year of 45 percentof the company. Shares weretraded through the banks, asYemen has no stock market.

According to Kamal HusseinAl-Jebry, the Minister of Com-munications and InformationTechnology, there are plans tofloat more of the company ata later date. “We want to gofurther as soon as possible tofloat the majority of the oper-ator,” says the Minister.

Recently, Yemen Mobile hasbeen looking for a strategicpartner to contribute to themanagement and operation ofthe technical marketing as-pects of the business. The com-pany will seek a partnerexperienced in CDMA-basedservices to contribute to thetechnical and marketing as-pects of the business.

Mr. Al-Dahbani says YemenMobile is eager to sustain thepace of development of its firstthree years, and wants a part-ner to help them achieve this.“We can benefit from their ex-perience in exchange for sharesin our company.”

The absorption of Spacetel,one of Yemen Mobile’s GSMrivals, by global telecommu-nications giant MTN earlierthis year, and its subsequentrelaunch as MTN Yemen, isanother clear indication thatthe Yemeni mobiles market istaking off. MTN, which oper-ates in 21 countries through-out Africa and the Middle East,says it will launch innovativeproducts and services.

Meanwhile, Sabafon, whichlast year signed Motorola toincrease the capacity and cov-erage range of its network inthe northern and southern re-gions of the country, says it isaiming to reach two millionsubscribers before the end ofthe year.

MOBILES

Newcomer plans to transform market with advanced servicesOperating as Y, new GSMoperator HiTs-Unitel aims tomake subscribers happy byexceeding their expectations

The fourth mobiletelecommunicationscompany launchingin Yemen is HiTs-Unitel. A recently es-tablished enterprisebacked by capitalfrom Saudi Arabia,Kuwait, the UnitedArab Emirates, andSyria, it promises tohave a major impacton the market.

As the country’sthird GSM operator,HiTs-Unitel plans to bring seri-ous competition to Yemen Tele-com, which uses CDMAtechnology, and GSM rivals MTNTelecom and Sabafon. HiTs-Uni-tel will offer advanced services,and the enticing prospect of 3-Gin the not-too-distant future.

Launching “Y”, the company’scommercial name, in August,Imad Hamed, Chief Executive Of-ficer, said its mission was to “reachand exceed the expectations of

our customers, share-holders, vendors, deal-ers, employees andcommunity alike.”

The slogan ‘AndYemen is Happy’—a playon Yemen’s ancient Ro-man soubriquet, ArabiaFelix—has been chosento reflect a commitmentto contribute to the de-velopment of Yemen’seconomy by creating di-rect and indirect job op-portunities. The

company’s objectives are summa-rized as best coverage, best quali-ty of voice calls, best price offers, bestservices, and community support.

According to Mr. Hamed, thecompany will provide “incompa-rable customer services and arange of value added services.” In-

ternational roaming will be avail-able with most foreign countries.

He says HiTs-Unitel aims toserve the entire population, in-cluding those living in the remotestregions. “Our target is to cover 40percent of the population in thefirst year, then we will expand.”

Yemen’s currently low level ofpenetration in the mobiles marketis an opportunity, he says. “Pene-tration of telecommunications is onthe increase, but remains prettylow—the lowest in the Gulf andthe Middle East. However, the mar-ket is growing, and our aim is togrow fast.”

The company is investing in astate-of-the-art call center, andwill have the advantage of build-ing a brand new network.

“From a technical point of viewthe latest technology will help usto have the best services, as wellas convergence of pre-paid andpost-paid,” Mr. Hamed adds. “Thiswill be a first in the region. We aimto become the best telecommu-

MOHAMED AL-DAHBANI Executive Manager of Yemen Mobile

Its youthful and widely dispersed population makes Yemen a natural market for mobile phone operators.

nications experience in Yemen,and a success story.”

HiTs-Unitel was established lastyear following the acquisition ofUnitel Yemen by HiTs Telecom,a leading ICT company based inSaudi Arabia. Unitel Yemen,which was set up by China Mo-bile Telecommunications Cor-poration and a group of Yemeniand Arab businessmen, signed aUS$149 mln deal with the gov-ernment in 2005 for Yemen’s thirdGSM mobile phone operating li-cense.

Shareholders in HiTs-Unitel in-clude Al-Dar Telecommunica-tions of Saudi Arabia, KuwaitFinance and Investment Compa-ny, and investors from the Unit-ed Arab Emirates. Totalinvestment adds up to aroundUS$335 mln, including the costof the licensing fee, making theproject one of the largest invest-ments in Yemen.

“Other investors might be in-terested,” says Mr. Hamed. “Thereis no restriction. We already havethe big names from the Gulf, likebanks, and SyriaTel, which hasprevious experience in GSM”

The leading mobile telecom-munication network in Syria,Damascus-based SyriaTel willmanage HiTs-Unitel, under theleadership of Nader Al-Kalai, Syr-iaTel’s Chief Executive, who hasbeen appointed HiTs-Unitel’sChairman.

HiTs Distribution Yemen, a sub-

sidiary of HiTs Telecom, will serveas a lead distributor for HiTs-Uni-tel. HiTs Telecom is making a ma-jor push into Africa, and by 2012aims to have 4-6 million sub-scribers in 10 countries.

In order to finance its networkroll out, HiTs-Unitel increased itscapital to US$190 million at itsfirst general meeting in January. Ithopes to list on the Dubai andLondon stock exchanges withintwo years.

The company will be working

with world leaders in wirelesstechnology supply, such as Erics-son, Huawei, Oracle, Microsoft,Sun Ray, and Alcatel.

“We will be using top-of-the-line billing and IN systems, andwill adopt the most advancedprograms and software in cus-tomer services applications,”states Mr. Hamed.

“We will be following the lat-est technological standards, andour network will be IP-based,as per the 3GPP standardiza-tion, with high quality basetransceiver stations and radionetwork.

“Our network coverage willreach a very good number of ur-ban and rural areas, and we willcover most of the roads con-necting those areas—up to 70percent. During the next year wewill expand our coverage to reachmost areas of the country.”

The company has spared noeffort in building a well-qualifiedteam. Ninety percent of the em-ployees are Yemenis. “There isgood staff potential here,” saysMr. Hamed. “At the beginning itwas tough, but now people workaccording to procedure. In two tothree years time, Yemenis willmanage the company themselves.We are building middle manage-ment. We have 300 employees,and we will reach 450 in the com-ing year.”

He is a firm believer in the fu-ture potential of the Yemenieconomy. “This is a promisingmarket, and it is the right timeto invest, especially thanks tothe investment authority. Herein Yemen there is no competitionyet. In five years it is going to betoo late, and not only in the tele-com sector. Oil and gas,tourism—the country needs for-eign investors.”

The major weakness, he says,is the banking sector. “There isa lack of international names,and it’s impossible to get bigloans here. Only Arab Bank ishere. The banking system is notyet at international standards.”

MOBILES

Competition formobile subscribersis hotting up

HiTs-Unitel, the latest entrant to the mobile market, will be working with world leaders in wireless technology supply such as Ericsson to de-liver the best services to its subscribers.

IMAD HAMED Chief Executive Officer of HITS-Unitel

Cement manufacturing is one ofthe fastest growing industries inthe Middle East. As major infra-structure and real estate devel-opments get under way across theregion, demand for the most es-sential construction materials hassoared—and that is not likely tochange in the foreseeable future.

Huge investment is being madeby cement producers to expandtheir facilities and boost capacity.

In Yemen, as elsewhere in theGulf, construction, and thereforedemand for cement, has tendedto rise with the international priceof oil. Higher oil revenues meanmore to spend on de-velopment of infra-structure, particularlyhousing in the case ofYemen.

Yemen has had a ce-ment industry since1973. There are fourstate-owned produc-ers and private com-panies, but localdemand is far in excessof supply, making im-ports inevitable. Thecountry currently buysaround 60 percent of its cementfrom abroad.

The government has set a pro-duction target of 6.7 mln tons—from 1.5 mln tons in 2004—thatis to be achieved through bothpublic and private investment.State plants are being expanded,and several private companieshave plans for new factories.

In a valley north of Mukalla inthe governate of Hadhramout, amajor new plant is being built bythe private Arab Yemen CementCompany. Backed by the Interna-tional Finance Corporation (IFC),

the private sector arm of the WorldBank, with a US$70 mln loan, plusa further US$55 mln from banks,the greenfield development willbe the first cement plant in east-ern Yemen. Once equipped withstate-of-the-art technology, it willhave an annual capacity of 1.54mln tons.

The total cost of the project hasbeen put at US$250 mln. China'sSinoma International has been con-tracted to complete constructionwithin three years.

Mohammed Habtour, GeneralManager of Arab Yemen Cement,says the project reflects the com-

pany’s belief in the fu-ture of the economy.“Investment in this in-dustry is for the longterm,” he says.

“The cement facto-ry is a 50-year project.We were unsure aboutthe stability of thecountry a few yearsago, but now we are re-assured. That’s why wehave invested.”

The company is ea-ger to be seen as so-

cially and environmentallyresponsible. “We are contribut-ing to the local villages in termsof water, power, and training of theyouth in order for them to be-come the first to work in the fac-tory. We are also going to buildhousing.”

Gas and dust emissions fromthe factory will be carefully mon-itored. “In the cement industry,waste has become an important is-sue: you can recover the heat andthe dust. It is much better than 10years ago,” says Mr Habtour. “Weuse the highest level technology.”

Cement:regionalmarket growsNNeeww ppllaanntt backed by IFC will be thefirst in the eastern part of the country

MOHAMMED HABTOUR General Manager of ArabYemen Cement Company

‘THE LATESTTECHNOLOGY WILL HELPUS TO HAVE THE BESTSERVICES. WE AIM TO BETHE BEST TELECOM INYEMEN, AND ASUCCESS STORY’

CO

RB

IS

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Distributed by USA TODAY Thursday, October 11, 2007 55

Our World Insert is produced by United World. USA TODAY did not participate in its preparation and is not responsible for its content

YEMEN

Family business shows that the way tothe future is through diversificationHHooww aa ssmmaallll trading firm set up by brothers became the leading commercial group in YemenIn Yemen, as in the rest of the Gulfregion, family businesses domi-nate the economy, and are be-coming increasingly importantengines of growth and develop-ment as the state takes a back seatand the private sector assumesthe more prominent role.

More than 90 percent of allcommercial activity in the GCCis controlled by family firms, com-pared with rates of 65 to 80 per-cent in other parts of the world.The larger family-run enterpris-es are already leading the way indiversification—an essential ele-ment in economies that are heav-ily dependant on exports ofdwindling reserves of oil.

Yemen’s foremost private busi-ness conglomerate, and one of theoldest in the region, is the HayelSaeed Anam Group of industrial,trading and services companies,based in the Yemeni city of Taiz.Run by the descendants of itsfounding patriarch, Hayel SaeedAnam, the HSA Group is presentin a wide variety of sectors, in-cluding manufacturing, food prod-ucts, real estate, banking,insurance, shipping, telecoms,tourism, and petrochemicals.

“We believe that the private sec-tor is the right vehicle for nation-al development, and HSA isactively playing its part,” saysShawki Ahmed Hayel Saaed,board member and Deputy Gen-eral Manager of the group’s in-dustrial division. “We are nowthinking of new areas where wecan develop further. We are try-ing to invest in other countries inindustries that we have alreadyestablished in Yemen, and in whichwe have considerable experience.”

Some idea of the range of HSAGroup’s activities can be gleanedby surveying just a few of the cur-rent activities of its affiliate com-panies. Hood Oil, for example, isinvolved in the construction of a$600 million refinery on the RasIssa Peninsula on Yemen’s Red Seacoast. A joint venture with Re-liance Industries Limited of In-dia, the facility will have aninstalled production capacity of60,000 barrels per day.

The National Cement Compa-ny, another HSA subsidiary, hasannounced that it will begin pro-duction by next year at a new $200million plant north of Aden, witha production capacity of 1.6 mil-lion tons per year. Backed by theInternational Finance Corpora-tion – the private sector arm of theWorld Bank – the project will beone of the largest private sector in-vestments in the country outsidethe oil industry.

A recently formed joint venturewith Tameer Holding, the lead-ing real estate developer in theUnited Arab Emirates, will ad-vance Yemen’s tourism industrywith several mega-sized resortdevelopments, among other land-mark projects. Meanwhile, in the

health sector, together with theApollo Group, Asia’s largest inte-grated private healthcare provider,HSA will jointly run the new $25million 200-bed Apollo Hayel Su-per-specialty Hospital at Taiz.

Celebrating its 70th anniver-sary next year, the global businessthat is the HSA Group todaytraces its roots back to humblebeginnings in 1938, when HayelSaeed Anam and his brothersstarted trading in leather, fruits,and vegetables, between Aden and

East Africa. By 1950, the compa-ny had become a leading mer-chant house both in northern andsouthern Yemen.

After the 1962 September rev-olution, North Yemen emergedfrom decades of isolation, and thebusiness started to expand. In1968, following the independenceof South Yemen from British rule,and a socialist regime coming topower, the company left SouthYemen and established its head-quarters in Taiz.

“Until 1970, we were mainly inthe trading business, importing alot of commodities,” recalls Mr.Saaed. “We had also branched outinto a new sector—services—in-volving shipping, travel, andtourism, insurance, etc.”

The following year, HSA em-barked on its first industrial ven-ture and established a biscuitfactory—the very first factory inTaiz. It was a small plant with 200people, including Yemen’s first-ever female worker. “From thereon, we opened three to four fac-tories every 10 years.”

After the reunification of thecountry in 1990, the company re-turned to South Yemen, where thefounder died, aged 89. The busi-

ness survived the 1994 civil war be-tween the North and the South,and has prospered ever since.

The HSA Group’s industrial ac-tivities include production ofcanned foods, juices and dairyproducts, soap and detergents,mineral water, packaging materi-als, cigarettes, cosmetics, auto-mobile oil, and cement. In Yemenitself there are 14 affiliate compa-nies and complexes, with a fur-ther nine in the region and otherparts of the world.

Trading activities include im-port, local marketing, and exportfor vital products such as wheat,flour, rice, and sugar.

In the services sector, HSA sub-sidiaries provide financing andbanking, insurance, shipping,clearance, travel, ownership andmanagement of hotels and hos-pitals. Agricultural and marineservices include cultivating veg-etables and fruits, breeding, hon-ey production, and marineresources.

Mr. Saaed believes the countryis moving in the right direction.“His Excellency the President hasmade tremendous efforts to im-prove the Yemeni economy dur-ing the past 15 years. Opening upYemen to international marketsis being taken very seriously.

“We now have a very good in-vestment law, and it is going to befurther modified for the better,”he adds. “The future of Yemen isin all kinds of activities like oil,minerals, and tourism. Yemen isstill largely untapped in terms ofinvestment in these fields, butYemeni people are naturally fastlearners and if they are trained,they can be very good workers.”

SHAWKI AHMED HAYEL SAEED, Deputy General Manager of the HSA Group, one of Yemen’s longest established conglomerates.

INTERNATIONAL ACTIVITIES

A presence in the global market

SOCIAL RESPONSIBILITY

Dedicated toserving the localcommunity

Exporting to almost 40countries and representingworld famous firms, the HSAGroup is a player on theinternational scene

A global concern, the HSA Groupowns subsidiary enterprises inSaudi Arabia, Egypt, Malaysia, In-donesia, and the UK, manufac-turing a range of products fromcanned foods, snacks, and edibleoils to packaging, soap and tex-tiles. “We have a strong interna-tional presence,” says ShawkiAhmed Hayel Saeed. “We startedmanufacturing activities in theUK and Saudi Arabia in 1980s,Egypt and Indonesia in 1990s andMalaysia in 2002.”

The group’s larger internation-al subsidiaries include LongulfTrading, a diversified trading, en-gineering and manufacturingcompany based in London, theNational Biscuits and Confec-tionary Company in Saudi Ara-bia, and Pacific Inter-link in KualaLumpar, a highly diversified groupthat has become one of the lead-ing export houses in Malaysia.

The HSA Group exports goodsto 38 countries, mainly in the Mid-dle East, the Far East and Africa,boasting regional trading officesin places ranging from Egypt, Mo-

rocco, Nigeria, Ethiopia, Malaysia,and Indonesia to the UK, Russia,and China. It also owns severalinternational shipping companies.

Companies in the group alsooperate as agents and partners formore than 35 international trade-marks, such as Unilever, SmithK-line Beecham, Johnson & Johnson,Shell, British American Tobacco,Hewlett-Packard, General Elec-tric and Ford.

“We have learnt a lot from ourexperiences with internationalcompanies and we have very goodrelations with all of them,” says

Shawki Ahmed Hael Saaed. “Mostof our foreign principals have en-couraged us to manufacture theirproducts in our factories and al-so to introduce our own localbrands.”

Employees in Yemen andabroad total more than 25,000,and the group has established itsown technical and vocationaltraining center, equipped with themost up-to-date teaching aids andfacilities.

Thus far, the group has not ex-tended its reach to the UnitedStates. “We have no business ac-

tivities yet in the United States.Nevertheless, we do have goodrelationship with America as afamily and as a business group.We represent a number of bigAmerican companies in Yemen.”

Mr. Saaed says the relationshipwith the U.S. is getting strongerand that Yemen encourages andwelcomes American companiesto come to the country. “Yemenis becoming very open to foreigninvestment and there is a lot ofinternational business taking placehere. I think the potential lies inthe infrastructure, oil, gas and min-erals industries.

“Yemen is lacking investmentsin these sectors, and there is a lotto be exploited. This is the futurefor American companies inYemen. There are a lot of excellentlocal companies here to have jointventures with.”

He urges potential investors tovisit Yemen. “When you live here,you feel that the country is com-pletely different from what youhear through the media. This is thefeeling and opinion of most of theforeign tourists and businessmenhere. Yemen offers a relativelypeaceful climate for foreign in-vestment and the government isdoing all it can to build trustamong foreign investors.”

In addition to its businessactivities, the HSA Grouphas long been involved incontributing to socialdevelopment and helpingthe disadvantaged

Putting something back intothe community is a widely ac-cepted concept among majorcorporations across the worldthese days, but the charitableand civil work of the HSAGroup extends back for almostfour decades. The Hayel SaeedAnam Charity Association wasestablished in 1970, when thecompany was still mainly atrading business.

The humanitarian and so-cial activities undertaken bythe group today are a directcontinuation of initiatives tak-en by its founder, the late HayelSaeed Anam. “My grandfatherinsisted that we established anassociation to provide servicesto the needy, and improve ed-ucation and health facilities forpoor people,” says ShawkiAhmed Hayel Saeed.

The HSA Charitable Asso-ciation engages in a wide va-riety of activities for the benefitof society, ranging from giv-ing assistance to poor families,orphans, widows, and thehandicapped, to providingmedical care for the sick, andsupport for students. It hasbuilt schools, mosques, healthclinics, water wells, roads, andbridges across the country. Ithas also built homes for the el-derly and a school for the deafand mute. Many hundreds ofpoor families have gained away of earning a living throughits training programs insewing, embroider y, andweaving.

Recently, the group handedover to the government abrand new engineering andtechnology college, which isattached to the Taiz Universi-ty. “Education of our people isone of our main concerns,” saysMr. Saaed.

It has also established a Fac-ulty of Islamic Social Sciencesfor the teaching of general hu-manitarian and social sciences,civilization, communication,and arts, with a particular em-phasis towards discouragingextremism and radicalism.

The group makes a majorcontribution to Yemeni scien-tific and cultural developmentthrough the Al-Saeed Foun-dation of Sciences & Culture,the first and largest scientificand cultural foundation sup-ported by the private sector.

Established in 1996 in com-memoration of the group’sfounder, the foundation pro-motes scientific and culturalinnovation, and has built a new

scientific and cultural estab-lishment in Yemen. Based in amodern complex with a mag-nificent 100,000-title libraryand inaugurated in 2000, it or-ganizes seminars, lectures, sci-entific conferences, andexhibitions, publishes scien-tific studies, and collaborateswith research and cultural or-ganizations in Yemen andabroad.

The Haj Hayel Saeed AnamAwards for Sciences and Artsthat the foundation distributesevery April for work in thefields of medical sciences, Is-lamic sciences, and literature,are highly prized. An Al-SaeedFund for supporting scientificresearch was inaugurated in2002.

Some family members haveplayed a role in Yemeni politics.“My uncle, Ali MohamedSaeed, the Chairman of thegroup, is a member of Al-Shu-ra Council, and two other fam-ily members were elected asmembers of parliament led by

the President’s political party,”says Mr. Saaed. “At the sametime, we maintain good rela-tions with other political par-ties as well. We do notdistinguish between parties, weserve the people of the nation.”

He believes the HSA Group’snon profit-making activitieshave worked to its advantage.“Our social commitment to so-ciety, as well as to the generaldevelopment of the country,has protected us. Over theyears, the good reputation ofHSA Group has kept us out ofany disagreement with the gov-ernment, the people of Yemen,and our associates alike.”

The signing of a joint venture between the HSA group, Tameer Holding of the UAE, andTadhamon International Islamic Bank, to build major real estate projects in Yemen.

“MY GRANDFATHERALWAYS INSISTED THATWE PROVIDE SERVICESTO THE NEEDY ANDIMPROVE EDUCATIONAND HEALTH FACILITIESFOR THE POOR”

Above: a highly diversified business, theHSA Group is active in sectors rangingfrom manufacturing, food products, realestate, banking, and insurance toshipping, telecoms, tourism, andpetrochemicals.Below: the Al-Saeed Foundation ofSciences and Culture.

“WE BELIEVE THAT THE PRIVATE SECTOR IS THE RIGHT VEHICLEFOR NATIONALDEVELOPMENT, ANDHSA IS ACTIVELYPLAYING ITS PART”

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Distributed by USA TODAYThursday, October 11, 200700 YEMENYEMEN

Located in a beautiful valley in the Dawaan province, Khaylla is a uniquely splendid village that takes the visitor back to

the Middle Ages, without leaving modern comforts behind. With a lovingly and authentically decorated hotel inside the

recently restored colorful Bugshan Palace, Khaylla is one of Yemen’s best kept travel secrets.

Tel: (+967) 551 5030 Fax: (+967) 551 5034

66 YEMEN

Our World Insert is produced by United World. USA TODAY did not participate in its preparation and is not responsible for its content

The coastline of Yemen extendsapproximately 2,500 kilometers,from the eastern border withOman to the western border withSaudi Arabia. The clear, unpollut-ed waters of the Gulf of Aden teemwith fish, including some of thebest yellowfin tuna in the world,and Yemenis have fished them forgenerations.

Today, it is estimated that almosta quarter of a million Yemenis de-pend on fishing as their principalsource of income. Fisheries has be-come the third most importantsector in the Yemeni economy, ac-counting for at least 15 percent ofgross domestic product.

Production of fish has risen wellabove the level of growth envis-aged in national developmentplans. Yemen currently produces250,000 tons of fish per year.Around 70 percent goes to the do-mestic market. The rest is export-ed to 50 countries.

The value of fish exports in-creased to $259.2 million last year,an increase of $17.7 million, withfresh fish accounting for almosthalf the sales. The largest customeris Saudi Arabia, followed by Chi-na, France, and Egypt.

Some $120 million has been al-located to the fisheries sector un-der Yemen’s five-year plan for2006-2010. The Ministry of Fish-eries Wealth is working with theWorld Bank and the EuropeanCommission and, with their sup-port, recently launched a new fish-eries resource management andconservation project to develop

Bringing the bountyof the sea to the worldDDeevveellooppmmeenntt of key sector hassupport from World Bank and EU

A wide variety of fish and other seafood is caught and processed by the Yemeni Fish Company for export to 50 countries.

the sector and improve the quali-ty of fishing products. Investmentis particularly needed in storage,as current capacity is around on-ly 20,000 tons.

Mukalla, the largest city of theeastern governate of Hadhramout,and one of Yemen’s most impor-tant sea ports, was founded to be-come a fishing town in 1035. Andit is here that the Yemeni Fish Com-pany set up its headquarters whenit was established, rather more re-cently, in 2002.

Yemeni Fish supplies highquality fresh seafood from theseas of the Gulf of Aden to mar-kets in the United States, Europe,and Japan. The company boaststhe largest facility of its kind inthe Southern Arabian Peninsu-la, extending over two square

kilometers. Its state-of-the-artprocessing plant, built to the lat-est EU hygiene requirements, iscapable of processing up to 30tons of fish per day. Also on siteare an ice storage facility, a qual-ity control laboratory, and a train-ing center.

The harbor, extending 400 me-ters and protected by two break-waters, is the home of thecompany’s fleet, and also serves asa safe landing area for artisan fish-ermen. The firm also has its ownlogistics network of refrigeratedlorries, and works in partnershipwith airfreight carriers.

Fishing operations commencedwhen Lena 1, an 18-meter multi-purpose fishing vessel, equippedwith the latest longline technolo-gy and a refrigerated fish roombuilt to EU standards, set out fromMukalla in April 2003. The com-pany’s first shipment of fresh fishwas transported by air to Europein October the same year. Sincethen the fleet has been extendedto four vessels.

Fish supplied by Yemeni Fish in-clude yellowfin tuna, grouper, snap-per, mahi-mahi, cobia, swordfish,marlin, shark, crocker, cuttlefish,

and other species. “We process thefish according to our clients’ spec-ification,” explains AhmedBatawail, the company’s Market-ing and Sales Manager.

The crews are trained in the bestcatching and handling methods.Only techniques such as longlineand dropline fishing that do notdamage the natural environmentare used.

Local fishermen have been con-tracted through the fishing co-op-eratives and given extensivetraining, and their boats have beenmodified to provide iced storagefor the catch.

In the beginning, Yemeni Fishdepended heavily on foreign know-how. “We needed EU expertise totrain and assist the Yemenis,” saysMr. Batawail. “But our chairmanbelieves that Yemeni Fish must be

run by qualified local people, andnow we have no other nationali-ties. Our Yemeni employees havebecome very skilled and expert,and you can count on them to keepup the high level of quality andwork performance.”

Yemeni Fish is certified underthe highest norms, including thoseof the U.S. Food and Drug Ad-ministration and the EuropeanUnion. It is also the only Yemenifirm that has exported high qual-ity fish to Japan.

“We are very strict about keep-ing to the world’s highest stan-dards, which are applied from thecatching, handling, processing, andshipping of the fish until the prod-ucts arrive safely in our customers’hands,” states Mr. Batawail.

Full traceability is guaranteedfrom the packaged product backto the vessel and location where thefish was caught.

The U.S. market is a prime tar-get for the company. “The Amer-ican fish market is the mostattractive market for the future ofYemeni Fish,” Mr. Batawail says.“We are planning to have a goodshare in that market, with a strongAmerican business partner.”

AHMED BATAWAILSales and Marketing Manager, Yemeni Fish

InbriefOil is primarysource of foreigncurrency■ Oil accounts for approximately30 percent of gross domesticproduct, 76 percent of governmentrevenues, and more than 90 percentof export revenues. Yemen hasproven crude oil reserves of 4 billionbarrels. Proven gas reserves areestimated at 17 trillion cubic feet.

Production target of500,000 bpd■ Yemen can reach its oilproduction target of 500,000 barrelsper day by 2009, says KhalidBahah, Minister of Oil and Minerals.He expects production to increasesubstantially as a result of increasedexploration activity and the use ofnew technology. The Oil Ministry hasupdated the oil block map,increasing the number ofexploration blocks from 87 to 100.

Offshore blocks putup for auction■ The attention of global oilcompanies has been focused onYemen’s coastal waters with thelaunch in August of the country’sfourth international bidding round.All 11 exploration blocks being putup for auction are located offshore.The Ministry has encouragedOccidental Petroleum and other U.S.oil giants to bid.

LNG plant to startoperations in 2008 ■ Nine thousand workers areconstructing a natural gasliquefaction plant and a 320-kilometer pipeline for Yemen LNGCompany. Capacity of the line,which will run from processingfacilities in Marib, one of the mainoil producing areas, to Balhaf onthe Arabian Sea, will be 6.7 milliontons of liquefied gas a year. YemenLNG, which is owned by Frenchenergy giant Total, Hunt Oil of theU.S., and the government, expects to commence production by the end of 2008.

“WE ARE VERY STRICTABOUT KEEPING TO THEHIGHEST STANDARDS,WHICH ARE APPLIEDFROM CATCHING THEFISH TO DELIVERY TOTHE CUSTOMERS”

YEMEN=USAT pp5-8.qxd 24/9/07 16:47 Página 2

Our World Insert is produced by United World. USA TODAY did not participate in its preparation and is not responsible for its content

Distributed by USA TODAY Thursday, October 11, 2007 77YEMEN

The Greenfield Cement Project, under the auspices of a group of highly esteemed entrepreneurs, has been conceived in order to fulfil the growing demand for cement in Yemen while decreasing reliance on imports.

Construction will be finished by mid 2008 and the plant, located in eastern Yemen, is expected to have a production capacity of 1.2 million tonnes per year.

www.ayccl.com, Tel: (+967) 532 6951/2/3, Fax: (+967) 532 6950Arabian Yemen Cement Company Ltd.

The newly restored 37-room Bugshan Palace Hotel and the hilltop Cairo Palace define the majesty of Khaylla.

Known by the Romans as Ara-bia Felix—Happy Arabia—forits wealth and prosperity,Yemen is possessed of a richcultural heritage, evident todayin its ancient historical ruins,tall fortresses and striking reli-gious buildings.

It is claimed to be the home-land of the Queen of Sheba,who is mentioned in the Bibleas having traveled by camel car-avan to visit King Solomon withgifts of gold, frankincense, andprecious stones.

History, civilization, archae-ology, architecture, traditions,

customs and popular folkloregive Yemen huge potential as adestination for tourism. Yemenboasts three World Heritagesites: the old city of Sanaa, partsof which have been inhabitedfor more than 2,500 years; thewalled city of Shibam inHadhramout, whose tower-likestructures have won it the nick-name ‘the Manhattan of thedesert’; and the ancient townof Zabid, once the capital cityof Yemen, which was declaredcultural capital of the Arabworld for 2004.

Yemen is a land of great nat-ural beauty. For walkers, thereare the mountains and beauti-ful valleys, with their naturalgreenery, water springs, andclean air. Then there is thedesert, and camel safaris. Un-

spoiled beaches are to be foundon the long coastline and theislands scattered in the Red Sea.The beautiful island of Socotracurrently attracts only a fewhundred visitors a year, but is agreat location for eco-tourism.

The therapeutic propertiesof mineral baths, or hammams,have potential for attractinghealth tourists, and there areplans to develop the conferenceand meetings sector.

Tourism development pro-jects are underway, and the gov-ernment is eager to get touroperators interested, and to at-tract investment to provide thenecessary infrastructure of in-ternational-standard hotels andresorts.

Visitor numbers have beenincreasing rapidly in recentyears. Arrivals in 2006 totaled360,000, and are forecast toreach 800,000 by 2010. Mostare from other Arab states. Se-curity concerns, reinforced byU.S. State Department travelwarnings, have damagedYemen’s reputation with West-ern tourists, although Nabil Al-Fakih, Minister of Tourism, saysthis does not reflect the trueposition. “Yemen is safe,” he in-sists.

“The tourism industry hasenormous potential, but is yetto be exploited. We are work-ing on how we can improve ourimage and the quality of the ser-vices, and we are trying hard toattract investors—especially tothe islands. We welcome Amer-ican investors, and are ready tohelp them.”

Ahmed Al-Biel, Director ofthe Tourism Board, urges touroperators to take a closer lookat all the country has to offer.He says, “Come to Yemen, andsee what we have.”

Discover the jewel of ArabiaAAnn aaggee--oolldd center of civilization and natural beauty,Yemen has much to offer the adventurous tourist

Sanaa has a history going back more than 2,500 years. The old city is a World Heritage site.

NABIL AL-FAKIH Minister of Tourism

The Khaylla valley lies twohours drive from Mukalla, atthe south west of Hadhramoutin Dawaan province. The cli-mate is cold in winter and hotand dry during the summer sea-son, but for most of the inhab-itants the most importantweather is rain, as they dependon agriculture for their living.Many have migrated to SaudiArabia to find better living andworking conditions.

Today’s tribal leader, Abdul-lah Ahmed Bugshan, is one ofthe most prominent business-men in Saudi Arabia, with in-terests ranging fromcommunications and informa-tion technology, civil and me-chanical works andpetrochemicals to soft drinksand perfumes. In 2002, he re-turned to the village of his fore-fathers, and was shocked bywhat he saw.

Sheikh Bugshan decided itwas his duty to transform theliving conditions and futureprospects of the people. Sincethen he has built a 40-mile road,a 2-megahertz electricity net-work, schools for the local chil-dren, and a new hospital.

The Sheikh has invested hun-dreds of millions of dollars in anumber of major projects else-where in Yemen, ranging fromthe Aden Free Zone to the newcement plant in Mukalla, and afisheries processing plant.

For his ancestral village, hesees tourism as the key to futuredevelopment. The village itself

has been lovingly restored usingtraditional techniques—theSheikh is a trained civil engineer.

Restoration of the BugshanPalace began in 2003 and wascompleted two years later. To-day, the palace has been trans-formed into a remarkable37-room hotel.

Architecturally striking, theexterior walls of the multi-tieredbuilding are decorated with a

variety of pastel colored pan-els, ranging from pink to green,blue, brown, grey, and yellow,making it stand out from itsneighbors in the village. An an-nex to the palace has been trans-formed into a museum.

Life may be hard for the peo-ple who live there, but the land-scape of rugged natural beautyoffers a unique experience tothe more adventurous traveler.

Tourism is key to village’s future

AHMED AL-BIEL Director of Tourism Board

Khaylla is a unique place, offering a rare authenticity for visitors.

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The HSA Group is a giant with strong,

infallible roots.

With nearly 70 years of experience and a

strong presence in Gulf countries, the UK,

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HAYEL SAEED ANAM GROUP OF COMPANIESHead Office P.O. Box 5302, Taiz, Republic of Yemen

www.hsagroup.com

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