CHAPTER 1

INTRODUCTION

1

1 INTRODUCTION

Arabian Industries LLC, is a leading 100% Omani owned Contracting Company with active

participation in Oman’s Hydrocarbon, Petrochemical and Energy Sector industries since 1990. The

Company posted a growth of approximately 330% during the period from 1990 to 2006 and is

currently rated one of the leading EPC Contractors in the Region.2

I underwent an organizational study at Arabian Industries LLC to acquaint myself with the business

environment for a period of two weeks during the period of Nov. and Dec. 2009, as a part of the

MBA curriculum at the Mahatma Gandhi University, Kottayam, Kerala. This study was conducted

to understand the structure, function and processes of various departments and their inter-

dependence. During the course of study I was able to successfully interact with the employees of

the organization and they were happy to give me all possible information regarding the company.

They also took me to the plants and worksites where I got the first hand information about the

organizational processes and its functions.

The methodology consists of data collection through interview, observation and company

periodicals review. The data collected from different sources are classified, analyzed and

interpreted. Based on which an organizational structure, its functions and various departments are

identified. The various departmental functions are clearly identified and their processes & activities

carried out are recorded. An in-depth analysis is made me to understand the departmental process

based on which a process chart is prepared. The analysis further formed the basis for identifying the

departmental interdependence.

2 OBJECTIVE OF THE STUDY

The organizational study was carried out at Arabian Industries LLC to achieve the following

specific objectives:-

a. To understand the organizational framework & it’s functioning.

b. To gain knowledge about different departments of the organization and the

functions.

c. To study about the procedures of purchase and sales.

d. To study the interdependence of different departments.

2

e. To make a SWOT analysis of the organization

f. To understand the difference between theoretical & practical aspects of

functioning organization

3 METHODOLOGY

This study is descriptive in nature. This is also a grouping, which includes many particular research

methodologies and procedures, such as observations, surveys, self-reports, and tests.

3.1 Data collection

a. Primary data

Primary data have been collected through observation, personal interview and discussion with

managers and employees of the various department of the organization.

b. Secondary data.

Secondary data have been collected from company’s internal records, Publications, Annual

report, Journal, statutory report etc.

4 SCOPE OF THE STUDY

The study is being conducted for Arabian Industries LLC, Sultanate of Oman. And this study tells

us an overall view of organization and functions carried out by different departments like

Manufacturing, Maintenance, Marketing, Human Resource, Sales, and Finance etc..

5 AREA OF STUDY:

The study was undertaken at Arabian Industries LLC and the respondents were the Finance

Manager, Department heads and employees from different departments like finance, maintenance,

fabrication, manufacturing, and marketing etc.

6 DATABASE

The research efforts employ both primary and secondary research techniques to ensure that the

foundation of business intelligence and insight is accurate, current, and reliable. To conduct this

study, both Primary and secondary data have been used.

7 LIMITATIONS OF THE STUDY

a) Time was a major limiting factor.

b) Secondary data available from company manuals were

c) Lack of co-operation from certain departments due to their work load.

3

d) The information provided by the company is assumed to be authentic.

e) The information provided by the company is assumed to be authentic.

8 CHAPTERISATION

Chapter : 1 - Introduction

Introduction chapter gives an idea about the, organization where the study has conducted, the

nature of the study, the method of the study, scope of the study and it’s objectives and the

limitations of the study.

Chapter : 2 - An Overview of Oman Economy and Petroleum Scenario.

This chapter gives us a picture of Oman’s natural resources like crude oil reserves, Natural gas

reserves, it’s production and consumption and exports and imports etc..

Chapter : 3 - Profile of Arabian Industries LLC

This chapter discuss about the history, growth, activities, it’s subsidiaries, joint ventures,

projects, products, vision and it’s quality and responsibilities towards the environment and

society.

Chapter : 4 - Functional Departments.

Functional departments discuss about the various departments in the organisaion, it’s functions

and responsibilities and the functional of interdependence of departments

Chapter : 5 - SWOT Analysis

SWOT analysis of this study reveals the present position of the organization. It is the

assessment of the organization’s internal Strengths and Weaknesses and Opportunities and

Threats posed by its external environment

Chapter : 6 - Findings-Suggestions and Conclusions.

4

This the last chapter of this report and it discuss about the findings of some major

problems identified during the study and certain remedial measures to be taken to

overcome the identified problems and conclusion of this report.

CHAPTER 2

AN OVERVIEW OF OMAN ECONOMY

AND

PETROLEUM SCENARIO

5

OMAN ECONOMY & PETROLEUM SCENARIO

The twenty third of July 1970, the date of accession to the rule of the country by His Majesty Sultan

Qaboos bin Said, Sultan of Oman, is of prime significance in Oman's history. It forms a watershed

between traditional and modern Oman. Since then the Sultanate, under the leadership of His Majesty

Sultan Qaboos bin Said, Sultan of Oman, started establishing the pillars for its modern

The Vision for Oman's Economy: Oman 2020 aims at carrying out a substantial transformation in the

structure of the national economy by developing a multiplicity of income sources, instead of depending

mainly on a depletable source like oil in order to achieve economic balance and sustainable growth.

Accordingly, it is expected that there will be a gradual decrease in the contribution of the oil sector to

the GDP while the contribution of the non-oil sectors to GDP will increase gradually. It is expected that

by 2020 the oil sector contribution to GDP will be 9% while the contribution of the gas sector will

increase to 10 %. This significant transformation of the structural composition of the production base of

Oman's economy is what we mean by economic diversification

Now Oman is a middle income economy that is heavily dependant on dwindling oil resources. Because

of declining reserves, Muscat has actively pursued a development plan that focuses on diversification,

industrialization, and privatization, with the objective of reducing the oil sectors contribution to GDP to

9% by 2020. The drop in oil prices in 2008 and the global financial crisis reduced Oman’s budget

surplus in 2008 and slowed the pace of investment and development projects, but GDP growth still was

positive, in part because Muscat implemented an expansion fiscal policy.

The global financial and economic crisis of 2009 was a major test for all the Gulf countries, but

Oman’s steady and careful development policy and it’s long term vision kept it immune from the worst

implications of the crisis. Now the world economy is on the path of recovery and oil prices are on the

rise again, the Sultanate is geared for further economic growth and development.

Despite a sharp fall in average oil prices in 2009, the Omani govt. has managed to keep it’s fiscal

amount close to balance. Oman’s economy has navigated through the global economic crisis in

6

relatively good shape. Although country’s real non oil growth fell sharply in 2009, it remained in

positive territory. Oman’s financial sector was less affected by the global economic

crisis and the countries modest level of indebtedness has limited it’s external

vulnerability.

Petroleum Development Oman

Petroleum Development Oman is the foremost exploration and production company in the Sultanate. It

accounts for more than 90% of the country's crude-oil production and nearly all of its natural-gas

supply. The Company is owned by the Government of Oman (which has a 60% interest), Royal Dutch

Shell (which has a 34% interest), Total (which has a 4% interest) and Partex (which has a 2% interest).

The first economic find of oil was made in 1962, and the first consignment of oil was exported in 1967.

Details Oil and Gas. Production and Consumption

Oil Production : 806,000bb/day.- (2008)

Oil Consumption : 81,000 bb/day.- (2008)

Oil Exports : 593,700 bb/day- (2008)

Oil Imports : 17,290 bb/day - (2007)

Oil Proved Reserves : 5.5 billion bbl - (Jan-2009)

Natural Gas Production : 24 billion cu – (2008)

Natural Gas Consumption : 13.46 billion cu m – (2008)

Natural Gas Exports : 10.89 billion cu m – (2008)

Natural Gas Imports : 350 million cu m – (2008)

Natural Gas proved Reserves : 849.5 billion cu m (Jan-209)

Chart No.-1

Oman Oil-Production and Consumption

7

CHAPTER 3

Mr.Amer Al Suleimani(Managing Director)

8

ARABIAN INDUSTRIES LLC – A PROFILE

ORGANISATION CHART OF ARABIAN INDUSTRIES LLC

3.1 PROFILE OF ARABIAN INDUSTRIES LLC

Arabian Industries LLC is a leading engineering company catering to the needs of the energy sector

for the MENA region. It has facilities and expertise to meet the varied client needs of the Oil/Gas and

other energy sectors in the production, Processing and delivery phases. Started in 1991 in The Sultanate

of Oman, they have grown steadily and won many accolades and appreciations. The most prestigious

9

Managing Director

Chief Operating

Officer

HSEM

Logistic & Asset

Control Manager

Procurement

Manager

Head AITSLLC

Head AIPLLC

Head AIMLLC

CMGR. QAQC

Marketing Proposal

Internal Auditor

Finance Manager

Joint Venture

(JV) WPAI

HR

Corporate PlanningEngineer

achievement is the Year 2008 “His Majesty Cup award for best five factories”. Their commitment to

the job, quality of work, earnestness to provide Total Solutions and desire to surpass client

expectations has consistently earned repeat business from their esteemed clients. These

qualities enable them to compete in international markets and succeed.

3.2 THEIR CAPABILITIES INCLUDE:

1. Engineering – EPC projects, Design and Engineering of Vessels, Skids and Tanks.

2. Manufacturing – Fabrication of Pressure vessels, Skids, Tanks, Heat Exchangers, Columns,

Process piping and Structural works

3. Construction – For the Oil and Gas industry, Refineries, Petrochemical projects,

4. Power plants as well as Power transmission & distribution networks and associated works

3.3 ACCREDITATIONS TO ARABIAN INDUSTRIES LLC.

• ASME ‘U’, 'U2' ‘S’ & ‘R’ Stamps: For the manufacture and repair of Pressure Vessels at their

state-of-art facilities at Rusayl & Sohar work centre.

• Society is their cradle so they need to preserve and enrich it; Customers are their Patrons so

they need to honor their commitments with them;

• The employees are their biggest assets, so they need to nourish and help them grow.

“Arabian Industries LLC and its subsidiaries are committed to become one of the leading

companies providing complete solutions to the energy sector by enhancing customer satisfaction,

strengthening employee & supplier relations and continually improving its product & services

through the Quality Continuous Improvement, Enhancing Employees Safety, Providing proper

resources & suitable working environment, achieving national development and improving

profitability and budget”.

Chart No.2

1 2 34 5

67

89

1011

12

0

10,000,000

20,000,000

30,000,000

Sales

Month

Monthly Sales Growth

Series1

Series1 1, 2, 4, 6, 6, 9, 11131719 2125

1 2 3 4 5 6 7 8 9 1 1 1

10

Monthly Sales for 2010

JAN 1,882,085 MAY 6,959,717 SEP 17,110,852

FEB 2,790,538 JUN 9,208,672 OCT 19,076,943

MAR 4,029,629 JUL 11,125,912 NOV 21,301,852

APR 6,190,402 AUG 13,951,489 DEC 25,966,417

Chart of Monthly sales for 2009

3.4 Prestigious Product Range of Arabian Industries

• Production & Test Separators

• Pressure Vessels & Scrubbers

• Reactors & Regenerators

• Heat Exchangers & Coolers

• Storage Tanks (Shop built)

• Fuel treatment packages

3.5 Arabian Industry sincerely believes in:

• Society is their cradle so they need to preserve and enrich it;

• Customers are their Patrons so they need to honor their commitments with them;

• Their employees are their biggest assets, so they need to nourish and help them to grow.

3.6 SUBSIDIARY COMPANIES & JOINT VENTURES

3.6.1 SUBSIDIARY COMPANIES

3.6.1.1 ◙ ARABIAN INDUSTRIES MANUFACTURING LLC –(AIM-LLC)

Arabian Industries Manufacturing Co. LLC (AIM) (a subsidiary of Arabian Industries

LLC), is the manufacturing division providing complete solutions for engineering,

procurement and fabrication of equipments to cater to clients in the Oil & Gas,

Petrochemicals, Power , Fertilizer, Chemicals, and Refinery industries. The nature of

activities focuses on experience, expertise, performance, safety, reliability and quality.

◙ ARABIAN INDUSTRIES PROJECTS LLC –(AIP-LLC)

Arabian Industries Projects LLC (AIP), a subsidiary of Arabian Industries LLC, is the

Projects Division providing Engineering, Procurement, Construction and commissioning

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services, to cater to clients in the Oil & Gas, Petrochemicals, Power, Fertilizer, Chemicals

and Refinery Industries. The nature of activities involves Management and Execution of

Engineering, Procurement, and Construction projects including associated Health, Safety

and Environmental systems. AIP has a sound Management policy with emphasis on

teamwork, efficiency and personal relations at all levels.

3.6.1.2 ◙ ARABIAN INDUSTRIES TECHNICAL SUPPORT LLC –(AITS-LLC)

Arabian Industries Technical Support LLC (AITS), a subsidiary of Arabian Industries

LLC, is a provider of total maintenance solutions under one roof to cater to clients in the

Oil & Gas, Petrochemicals, Power, Fertilizer, Chemicals and Refinery Industries. With the

strategic location of its Machine Shop facilities, AITS is well poised to deliver its services

promptly on time to its valued clients. Arabian Industrial Technical Support LLC has its

own Fabrication, Machining, Thermal spraying, grinding and NDT facilities.

3.7 JOINT VENTURE

Arabian Industries LLC has entered into a JV with two foreign companies. They are listed below.

3.7.1 WORLEY PARSONS –ARABIAN INDUSTRIES J.V. (WPAI J.V.)

The WPAI - J.V. was formed between Arabian Industries LLC. and Worley Parsons (Oman)

during the middle of 2005 as a framework to cater to the Engineering, Maintenance and

Construction contract for Petroleum Development of South Oman, awarded by PDO. This is a

five year contract which can be extended to 7 years.

The major scope involves the following:

12

Design, Detailed Engineering, Procurement, Construction, Pre-commissioning and

commissioning of Oil and Gas facilities covering the complete Civil, Mechanical,

Electrical & Instrumentation works involved in new and developmental projects

3.7.2 NORM PROJECT J.V.

This is another J.V. formed between Arabian Industries LLC. and an International institution

(specializing in the treatment of radioactive contamination).

NORM STANDS FOR : “Naturally Occurring Radioactive Materials” which are found in the

PDO sites during production of Oil from oil-wells. This project involves a patented process of

decontamination of such NORM contaminated equipments used in Oil processing, to the

Environmental criteria required for releasing them for reuse or scrap. This entails suitable

investments in setting up decontaminating facilities and developing the required infrastructure in

PDO sites for the said purpose.

3.8 PRODUCTS, CAPABILITIES AND SERVICES LISTING

3.8.1 OVER VIEW

Arabian industry is a leading EPC Contracting Company, specialized in design, engineering,

project construction, fabrication, and testing activities in Oil and Gas, Refineries, Petrochemicals

and Power sectors.

EPC Projects • EPC Projects: Gas Treatment Plants;

• Gas Pressure Reducing Stations;

• Steam and Water injection facilities; Power Plants

13

Maintenance Support • Valve Testing , Repair & Maintenance services

• Repair & maintenance of choke valves

• Maintenance of static equipments

• Maintenance...

Process Equipment

• Engineered Process skid packages

• Pressure Vessels

• Heat exchangers & coolers

• Heaters (direct/ indirect) & Shop built storag. Etc..

3.8.2 FACILITIES

ARABIAN INDUSTRIE’S MANUFACTURING AND FABRICATION facilities are located at the capital city of Muscat

and the port city of Sohar, in The Sultanate of Oman.

SOHAR WORKSHOP

Situated in an area of 12000 m2. High roof bays can handle a single section weighing up to 100 Ton

under the shed and 250 Ton in the yard, with thickness up to 150 mm in mono block construction.

RUSAYL WORKSHOP

The Rusayl workshop houses a fabrication facility with a well equipped covered bay and an open yard

which can handle a single section weighing up to 200 Ton in the yard with thickness up to 80 mm in

mono block construction.

PROJECT FACILITIES are located at their sites and these include temporary facilities like camps with

associated utilities. Other resource mobilizations include Plant, Equipment and Manpower suited to the

typical requirements of each project and client. Support services like procurement, contract

administration, cost control, manpower recruitment, etc. are rendered from Head Office in Muscat. All

14

the operations are backed by a logistic management system overseeing the deployment of a well

maintained fleet of vehicles and equipments.

ARABIAN INDUSTRIES TECHNICAL SUPPORT LLC has its own maintenance facilities at two locations – one

at Rusayl (In Muscat) and another on the coastal city at Sohar.

RUSAYL WORKSHOP

Rusayl Workshop, has its own Maintenance facilities in Rusayl Industrial Estate. ITS-LLC is under

certification process for API Monogram License (6A & 6D). ITS Rusayl workshop has an overall area

of 6550 square meters out of which 900 square meters are covered.

SOHAR WORKSHOP

Sohar Workshop, at Plot No: 257-259,261 &262, P. O. Box 93, Postal Code 327, and Sohar Industrial

Estate has its own Maintenance facilities in Sohar Area. ITSLLC is under certification process for API

Monogram License (6A & 6D). ITS Sohar workshop has covered area of 2310 square meters and

material storage facilities.

3.8.3 CAPABILITIES

ENGINEERING & CAPABILITIES

• Mechanical design of process equipments like pressure vessels, heat exchangers, separators,

manifolds and pre engineered skid packages and columns as per International standards ASME

Sec VIII Div1 & 2, PD 5500 Shell standards.

• Design of Shop and site Storage tanks as per international standards API 650, 653, EN 14015

and Shell standards & Design of direct and indirect heaters, fuel gas treatment plants

• Regular association with reputed international process owners and licensors in the Oil & Gas,

Refinery and Petrochemical industry for the design of equipment internals.

MATERIAL HANDLING, PREPARATION AND FORMING

• In-house mobile cranes of 25,50 & 80 MT capacities , and Over head cranes of single piece

handling capacity up to 50 MT .

• Hydraulic lifting and jacking arrangement for heavy loads up to 250 MT and CNC operated

multi torch profile cutting machine.

15

• Hydraulic rolling machines capable of rolling up to thickness range of 110 mm in cold

condition

• Heavy thick plate shearing and bending machineries and Fast cutting and pipe beveling

machines up to diameter 64” etc.

WELDING AND JOINING TECHNOLOGY

• Core competency and expertise in welding and joining technology of all construction metals,

especially in DSS,CRA and special alloy steels

• Qualified for a wide range of welding procedures up to 200 mm thickness

Machining

Arabian Industries workshops are fully supported by in house machining facility with modern lathes,

milling, grinding, drilling, boring and press machines.

Testing

• Hydro/pneumatic testing bays and facilities and RT/MT/UT/PT/PWHT/PMI and other NDT

facilities.

• Tie ups with authorized testing laboratories for the mechanical and chemical testing etc.

Heat Treatment

• PWHT facilities by Internal and external firing methods

• Local stress relieving facilities by electrical methods

• Gas fired PWHT furnaces adjustable to equipment sizes.

Painting and Coating

Qualified and certified for specialized painting, coating systems like GRE, Belzona, glass flake,

customized internal linings and corrosion resistant coatings.

Support Services

All their operations are backed up by a well managed fleet of vehicles and logistics existing at both

their facilities.

EPC and CMEI Construction works in:

• Oil & Gas, Refineries, Fertilizers, Petrochemicals, Steel Industries, Ports etc.

Major Services Offered

16

• Maintenance of Static Equipments and Heat Exchangers including Tube Cleaning,

Re-tubing and Plugging

• Maintenance, Overhauling and Condition Monitoring of Compressors, Pumps,

Turbines and DG Sets.

• Choke Manifolds , Mud Pumps , Blow out preventers , and Well Head Equipment & X-Mas

Trees.

• Other Equipment pertaining to API 6A & 16A , and Valve Testing, Repair & Maintenance

Services etc.

Other Services

• Workshop Based, Metallic and Ceramic Spray Coating , Hard Facing , Dynamic and Balancing

• Crossover & Spare Parts Manufacture , Stellite Coating , All types of machining jobs.

• Heat Exchanger internal tube coating using etc.

Site Based

• Bolt Tensioning , Flange Facing (on Site Machining) , Hydro Jetting , Fast Cutting of Pipes etc.

• Turn Around and Shut Down Maintenance of Plant Facilities etc.

3.8.4 EQUIPMENTS

SOME OF THE MAJOR EQUIPMENT & MACHINERIES UNDER ARABIAN INDUSTRIES LLC

Description of Equipment Machine Capability & capacity

CNC Profile Cutting Machine CNC operated gantry type multi torch ( 6 No Oxy fuel torches and 1No plasma torch ) profile cutting( Flame and plasma)machine for plate(CS) thickness up to 180 mm equipped with programmable CNC controller

4-Roll and 3-Roll Plate Rolling Machines

CNC Operated electronic synchronized 4- roll high thick plate rolling machine(DAVI Make) for cold rolling up to 110 mm and hot rolling up to 212 mm thickness for 3.0 m width plates. 2 Nos. 3 Roll hydraulic plate rolling machines

Heavy Duty Fast Cutter Heavy duty fast cutting and pipe beveling machines in diameter ranges 2 to 36 inches for CS/ SS/ LTCS/ DSS/ SDSS/ Inconel/ CRA (Make – DL RICCI, USA ) with pneumatic/hydraulic drives

Cranes and Lifting equipment In-house mobile cranes of 25 & 50 MT capacities. Over head EOT cranes of capacities 5/10/25 & 50 MT with single piece handling capacity under the shed up to 100 MT.Hydraulic lifting and jacking arrangement for heavy loads up to 250 MT.Jib cranes of 2 Ton and 3

17

Tons el.

Hydraulic Pipe Bender Hydraulic pipe bending machines capable to roll 20D and 40D bends upto 12" Sch 40

3.8.5 PLANT AND MACHINERY

SOME OF THE MAJOR PLANT AND MACHINERY ITEMS :

Equipment Type Available Qty Model Make

Welding Rectifier 8 Nos XMT400, CST380,TB/10S/1000 Miller, Techsol

High Frequency/ Tig Machine

2 Nos HF251-D1 Miller

Magnetic Drilling Machine

2 Nos A100, 1150W Unibore, Bosch

Power Generator 5 Nos 108KV, P12.5P2/PETP3, GEP 33-1/30 KVA-24KW, GEP 65-5/60KVA 48KW

Caterpillar, FG Wilson, Olympian

Portable Generator 4 Nos RGD 500, SDV 7000S Robin, Potenza

Air Compressor 4 Nos XA 136, XAHS 710 CD7FB, XATS-156, XA-186

Atlas Copco

Blasting Pot 1 Nos 24650 Blastline (CE)

3.8.6 STRENGTH OF MANPOWER

Man Power Category 2009 2008 2007 2006 2005Managers: 30 25 22 18 15Engineers: 120 110 95 75 60General Support Staff: 55 45 38 35 25Supervisory workforce: 750 700 690 600 550General workforce: 1800 1725 1600 1475 1400Total Manpower: 2755 2605 2445 2203 2050

18

20052006

20072008

2009

2003200420052006200720082009

Strength

1

Year

Man Power

Series1

Series2

Series3

Series4

Series5

3.8.7 SOME OF THE MAJOR PROJECTS OF ARABIAN INDUSTRIES LLC

“Over the last few years, AI-LLC, own a strong market presence and customer recognition

with endless capabilities, resources and dedicated manpower. “

1- Petroleum Development of Oman

Petroleum Development Oman is the foremost exploration and production company in the Sultanate. It

accounts for more than 90% of the country's crude-oil production and nearly all of its natural-gas

supply. The Company is owned by the Government of Sultanate of Oman (which has a 60% interest),

Royal Dutch Shell (which has a 34% interest), Total (which has a 4% interest) and Partex (which has a

2% interest).

Project-1

1Project C31/0606: Engineering and Maintenance Contract - PDOJV Partner Worley ParsonsType of Contract Service Contract

Project-2

Name of Project DCME & I Engineering Service Contract No. C-680046, -PDO

Duration of the project 4 Years

Type of Contract Main sub-contractor for complete mechanical works +

19

Project-3

Name of Project Fahud Steam Injection Project - PDODuration of the project 12 monthsType of Contract EPC Lump sum

Project-4

Project C31/1097: Hubara -Saih Rawl - 132 kv Overhead line, South BaseDuration of the project 25 monthsType of Contract EPC , Lump sum

Project-5Name of Project Pressure Reduction Terminal -PDODuration of the project 25 MonthsType of Contract Main EPC Contractor

Project-6

Name of Project Conversion of Propylene sphere to LPG services -PDODuration of the project 24 monthsType of Contract Main Contractor lumpsum

2-Petrofac Engineering & Construction Ltd

Petrofac is an international provider of facilities solutions to the oil & gas production and

processing industries.

1-Name of the Project LP Vessels for Kauther Gas Plant -Kauther Gas Project, PDO2-Name of the Project Storage tanks ( CS/SS) for Kauther Gas plant (8 No), 3-Name of the Project DSS/SS Heavy wall piping for Kauther Gas plant

3-Worley Parsons Oman Engineering LLC

3.1Name of the Project EPC of Gas floatation & Degassing tanksDesign code DEP 34.51.01.31 & EN 14015-2004

3.2Name of the Project EPC of two no of Settling tanksDesign code DEP 34.51.01.31 & EN 14015-2004

3.3Name of the Project PDO – Fahud Production & test Separators

20

Steam Injection Project3.4Name of the Project DSS/SS Heavy wall piping for Kauther Gas plant-(8,000-

Inch.dia),

Kauther Gas Project, PDO

4-KEMPE Engineering LLC

Name of the Project360 T Silos

Sohar Aluminium Smelter Development Project

Name of the Project10 nos. LP Vessels for PDO Saih Nahada Gas Plant-Qarnalam .PDO-Contract C 31/0090

SOME OF THE PRESTIGIOUS PRODUCTS FROM ARABIAN INDUSTRIES LLC.

1-BURHAN THREE PHASE PRODUCTION SEPARATOR.

2-BULK SEPARATOR FOR MARMUL PDO PROJECT.

21

3-LP/HP VESSELS FOR SOHAR REFINERY PROJECT FOR JGC CORPORATION JAPAN.

4-PRODUCTION SEPARATOR – PETROLEUM DEVELOPMENT OMAN PROJECT.

5-WATER INJECTION UPGRADE FOR AXIA HAWMAR-UK PROJECT.

22

6-GAS TREATMENT PLANT-BHEL PROJECT FOR PETROLEUM DEVELOPMENT OMAN.

1

2

23

ENGINEERING PROCUREMENT AND CONSTRUCTION OF SOHAR REFINERY PRESSURE REDUCTION TERMINAL..

CLIENT: OMAN GAS COMPANY.. 1

2

24

3.9 QUALITY POLICY OF ARABIAN INDUSTRIES LLC.

A dedicated team of Quality Assurance and Quality Control Engineers (lead by the Company’s

QA/QC Manager and Quality Systems Engineer) supports the implementation and monitoring of

Quality Management of the Company. All departments in the Company are certified to ISO 9001

and regular internal and external audits are conducted to check the compliance and renewal of

certificate.

25

ISO 9001:2000 requires that an organization’s quality policy provide a framework for

reviewing the company’s quality objectives. The policy should give an

overall direction for the organization, and its objectives should flow in that

direction. But because of outside forces such as customer requirements and market environments,

business conditions can change. If this happens, the alignment between quality policy and

objectives can become off-centered. So, the standard requires that management periodically

review changes to both the policy and objectives. An organization’s objectives must be

measurable and its quality management system processes designed to meet those objectives.

3.10 MISSION AND VISION

3.10.1 MISSION AND VISION OF AI-LLC

1 Mission

To achieve market leadership through excellence in the quality of product and services by adopting

state of the art technologies and innovative management approaches aim towards customer

satisfaction.

2 Vision

Arabian Industries LLC is committed to providing their clients with the best possible service and

results at a competitive price, without compromising on quality, health, safety, environment, business

ethics or welfare of their staff. “As a recommended supplier, and a preferred employer, AI LLC is

meeting the objectives and needs of their clients & employees.”

3 Policy

Arabian Industries LLC and its subsidiaries are committed to become one of the leading company

providing complete solutions to the energy sector by enhancing customer satisfaction, strengthening

employee & supplier relations and continually improving its product & services.

AILLC and its subsidiaries strive to achieve this through the following objectives:

26

• Continually improving the effectiveness of quality Management System

• Enhancing safety of employees and protecting the Environment

• Timely delivery of products

• Providing adequate resources and suitable work environment

• Training & Development of work force and meeting statutory Omanaization target

• Improving profitability

4 Strength

Integrity in diversity. Though their business expands to diverse sectors they still abide by their vision

& policy and maintain integration of their Quality management system and consistency of operations

through empowerment, motivated & dedicated peers and strong leadership

5 Approach

AILLC is a customer-focused organization nurturing the culture of internal-customers & external-

customers through out the organization. They achieve this through team-building, supply chain

management and continual training & development of their employees.

6 Credentials

AI LLC’s quality management system established since 1996 has been certified to ISO 9001 – 2000.

Their pressure equipments manufacturing facilities are accredited by ASME for U, U2, S and R

stamps. Oil & Gas field equipments manufacturing facilities are certified by API for conformance to

6A, 6D and 16A requirements.

ISO 9001: 2000

AI LLC’s Quality Management System is certified to ISO 9001: 2000 by M/S. Velosi Quality

Management International Limited. The scope of accreditation includes:

3.11 ARABIAN INDUSTRIES MANUFACTURING LLC

Design, manufacturing and installation of process equipments like columns & reactors, pressure

vessels & separators, heat exchangers, gas treatment packages, manifolds, piping pre-fabrication and

storage tanks in accordance with ASME/U/U2/S/R symbol requirements / BS & other international

standards. 27

3.12 ARABIAN INDUSTRIES PROJECTS LLC

Engineering, procurement, construction, project management (involving project

planning execution, monitoring, installation, commissioning and post delivery maintenance

activities) for oil & gas, desalination & power plant, fertilizer plant, storage tanks, pipeline

construction, flow line construction, electrical over head lines.

3.13 ARABIAN INDUSTRIES TECHNICAL SUPPORT LLC

Manufacturing of products according to API monogram maintenance of pumps, compressors,

turbines & wellhead equipment repair and re-manufacture of all types of valves pressure vessels,

tanks, heat exchanger cleaning and re-tubing, machining of oil & gas field items, calibration, pressure

gauges, on site service like bolt tensioning, flange facing, cold cutting, on-line repairs of valves.

3.14 CORPORATE OBJECTIVE

3.14.1 To be of service to the nation and to contribute effectively to its economic well being and

growth through the production, supply and marketing of infrastructure facilities to Petroleum

Production and it’s allied industries in Sultanate of Oman.

3.14.2 To sustain and improve its pioneering role in the development of engineering and technology in

manufacturing industry through continuous research and development.

3.14.3 To improve productivity and maintain high standards of quality and adopt effective measures

for controlling cost in all aspects.

3.14.4. To ensure for its customers the availability of its products and services on reasonable terms, for

its shareholders a fair return on capital invested and, for itself, development of adequate

internal resources for continual growth and expansion.

3.14.5 To develop, train and maintain a team of motivated and disciplined personnel with required

skills and abilities, and to encourage innovation and to create a condition for their functioning

and career development so as to improve their overall quality of life

3.15 CORPORATE GOALS

3.15.1 To achieve a net profit of OMR: One Million per year with a turnover of OMR: 100 Million by

the year of 2010

3.15.2 To focus on cost reduction and technology up gradation in order to become competitive in each

line of business.

3.15.3 To constantly innovate and develop new technology and services to satisfy customer

requirements.28

3.15.4 To invest in new business lines, where profit can be made on sustainable basis over the long te

rm.

3.15.5 To compete through speed, agility and flexibility in recognizing and

capturing opportunities in existing markets.

3.16 ARABIAN INDUSTRIES LLC AND IT’S CORPORATE SOCIAL RESPONSIBILITY

3.16.1 CORPORATE SOCIAL RESPONSIBILITY-(CSR)”

Corporate Social Responsibility a concept whereby organisations consider the interests of

society by taking responsibility for the impact of their activities on customers, suppliers, employees,

shareholders, communities and other stakeholders, as well as the environment. This obligation is seen

to extend beyond the statutory obligation to comply with legislation and sees organisations voluntarily

taking further steps to improve the quality of life for employees and their families as well as for the

local community and society at large.”

• Reduced costs, Increased business leads,

• Increased reputation, staff morale and skills development

• Improved relationships with the local community.

29

• Innovation in processes, products and services

• Managing the risks a company faces.

3.16.2 ECONOMIC RESPONSIBILITIES:

The first criterion of social responsibility is economic responsibility. The business institution is, above

all, the basic economic unit of society. Its responsibility is to produce goods and services that a society

wants and to maximise profit for its owners and shareholders. Economic responsibilities, carried to the

extreme, is called profit-maximizing view; it was advocated by Nobel economist Milton Friedman.

This view argued that a company should be operated on a profit-oriented basis, with its sole mission to

increase its profits so long as is stays withing the rule of the game. The purely profit-maximizing view

is no longer considered an adequate criterion of performance in the world in general. Treating

economic gain in the social as the only social responsibility can lead companies into trouble.

3.16.3 LEGAL RESPONSIBILITIES

All modern societies lay down ground rules, laws and regulations that businesses are expected to

follow. Legal responsibility defines what society deems as important with respect to appropriate

corporate behavior. Businesses are expected to fulfill their economic goals within the legal framework.

Legal requirements are imposed by local councils, state and federal governments and their regulating

agencies. Organizations that knowingly break the law are poor performers in this category.

Intentionally manufacturing defective goods or billing a client for work not done is illegal. Legal

sanctions may include embarrassing public apologies or corporate ‘confessions’.

3.16.4 ETHICAL RESPONSIBILITIES

Ethical responsibilities include behavior that is not necessarily codified into law and may not serve the

organization’s direct economic interests. To be ethical, organization’s decision makers should act with

equity, fairness and impartiality, respect the rights of individuals, and provide different treatments of

individual only when differences between them are relevant to the organization’s goals and tasks.

30

Unethical behavior occurs when decisions enable an individual or organization to gain expense of

society.

3.16.5 SOCIAL AWARENESS AND EDUCATION

The role among corporate stakeholders to work collectively to pressure corporations is changing.

Shareholders and investors themselves, through socially responsible investing are exerting pressure on

corporations to behave responsibly. Non-governmental organizations are also taking an increasing role,

leveraging the power of the media and the Internet to increase their scrutiny and collective activism

around corporate behavior. Through education and dialogue, the development of community in holding

businesses responsible for their actions is growing.

3.16.6 STAKEHOLDER PRIORITIES

Increasingly, corporations are motivated to become more socially responsible because their most

important stakeholders expect them to understand and address the social and community issues that are

relevant to them. Understanding what causes are important to employees is usually the first priority

because of the many interrelated business benefits that can be derived from increased employee

engagement. Key external stakeholders include customers, consumers, investors (particularly

institutional investors), regulators, academics, and the media).

WHEEL OF SUCCESS

“Upholding the belief that "giving back to the society from which one is benefited",

31

Arabian Industries LLC is committed to contributing to the sustainable development of the

communities in which its businesses are operated. They recognize that achieving

corporate social responsibility while meeting their business objectives requires

balance among all stakeholders, including shareholders, customers, staff, business partners, community

and environment. Therefore, the organization has been participating in various initiatives, including

charity, education, culture & sports, environmental protection and promoting staff's well-being and

volunteerism, to enhance their positive impact on people and communities”

CHAPTER 4

32

FUNCTIONAL DEPARTMENTS

1- FINANCE DEPARTMENT

1. Objectives

8.1 To Manage & account for the financial resource of the Organization, to forecast its requirement

in the future and plan accordingly and to check for deviation.

8.2 Report the financial performance of the company to Management, stakeholders & and to

comply with the Govt. rules and regulations

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2. ORGANISATION CHART OF FINANCE DEPARTMENT.

FUNCTIONS OF FINANCE DEPARTMENT

Some of the major functions in finance departments are, Management of Accounts Receivable,

Accounts Payable, Accounting of Materials, Banking, Managing of Financial Resources and

Budget preparation, Cost accounting, Auditing, Preparation of financial statements & Reports,

Corporate Planning etc.

According to the nature of the functions, Finance department in AI LLC is divided into four main

sections for carrying out its process. They are:

34

MANAGER-FINANCE

MANAGER FINANCE(ASSISTANT

CHIEF ACCOUNTANT

ACCOUNTS-PAYABLE

BANK MANAGEMENTACCOUNTS-PAYABLE

ACCOUNTS RECEIVABLEACCOUNTS-PAYABLE

ACCOUNTS-RECEIVABLE

INVENTOR MANAGEMENT CASH MANAGEMENT

ASSET CONTROL DEPARTMENT SALARY AND WAGES

3.1 Stewardship of Finance Functions

3.2 Servicing and Monitoring of Project Management Activities

3.3 Management of Company Accounts

3.4 Implementation of Corporate and Contract Budgets.

3.1 Stewardship of Finance Functions

3.1.1 Development of finance facilities

3.1.2 Liaison with bankers and other funding agencies.

3.1.3 Managing funding flow and cash balances.

3.1.4 Providing for requirement of Corporate Budgets.

3.1.5 Reporting on financial status to Management.

3.1.6 Liaising with Customers & Suppliers regarding cash flow.

3.1.7 Publishing monthly, quarterly, and Annual Financial Statement.

3.1.8 Development of Management Information system.

3.2 Servicing and Monitoring of Project Management Activities.

3.2.1 Supporting Estimation and Tendering Effort

3.2.2 Approving entries for Finance and Accounts in Estimate summary.

3.2.3 Supporting with Finance and Accounts Services during execution.

3.2.4 Monitoring and Reporting Progress during execution.

3.2.5 Reporting Project Performance on Completion.

3.2.6 Insurance Management.

3.3 Management of Company Accounts.

3.3.1 Banking Management and Controls (Cash Book ledger)

3.3.2 Accounts Receivables and Accounts Payables Management

3.3.3 Inventory/Purchase Administration-(AP Ledger)

3.3.4 Salary and wages, Administration, End of Service

3.3.5 Preparation of Year end Accounts/Management of External Auditing.

3.3.6 Preparation of quarterly and Annual Performance Report

35

3.4 IMPLEMENTATION OF CORPORATE AND CONTRACT BUDGET

3.4.1 Review of Project control budgets

3.4.2 Management of corporate budget Exercise.

3.5 PROCESS OF FINANCE DEPARTMENT.

3.5.1 Accounts Payables.

3.5.1.1 Receiving Invoices from suppliers

3.5.1.2 Verification of invoice with PO and supporting documents.

3.5.1.3 Sorting the invoice according to the divisions and logged in ERP accordingly.

3.5.1.4 Getting the approval in the invoice from the respective buyer

3.5.1.5 Prepare GRN and ARN and approval for the service category invoices

3.5.1.6 Booking the invoices in ERP on the basis of Purchase Order.

3.5.1.7 Print and attach Purchase Journal Voucher along with invoices.

3.5.1.8 On due basis releasing the payment to the suppliers.

3.5.2 Account Receivable.

3.5.2.1 Receive Customer order from Marketing or operation department.

3.5.2.2 Receive copy of DO or JCR from the operation department

3.5.2.3 Generate Print and compile Invoice from ERP

3.5.2.4 Scrutinize the invoice with relevant documents.

3.5.2.5 Distribute the invoice to the customers

3.5.2.6 Follow up for the payment and prepare receipt for the payment.

3.5.3 Cash Payouts.

3.5.3.1 Cash payment vouchers for sundry office expenses

3.5.3.2 Employee settlement as per the advice from salary department.

3.5.3.3 Verification of document with supporting

3.5.3.4 Take approval from Account head.

3.5.3.5 Closing cash book every day

3.5.3.6 Physical cash verification of cash balance on a daily basis.36

3.5.3.7 Surprise check of cash balance weekly basis.

3.5.3.8Taking approval, Pay and book the voucher in ERP.

3.5.4 Salary Processing and Accounting.

3.5.4.1 Collect, Re-concile and compile attendance data.

3.5.4.2 Attendance is recorded at each location on daily basis.

3.5.4.3 Inform res. division for missing attendance.

3.5.4.4 Collect overtime data and verify with OT rules of the company.

3.5.4.5 Alter employee’s earnings and deduction for arrears.

3.5.4.6 Final processing of salary.

3.5.4.7 Print Bank transfer letter and detailed statement.

3.5.4.8 Getting authorization.

3.5.4.9 Forward transfer advice letter to bank.

3.5.4.10 Print and distribute salary slip.

3.5.5 Annual Budgeting

3.5.5.1 Update the Budget Assumptions.

3.5.5.3. Operating Expenses

3.5.5.4 Man Power Cost

3.5.5.5 Revenue and Over Heads

3.5.5.6 Capital Expenditures

3.5.5.7 Cash Flow.

3.5.5.8 Collect data for Next year annual budget in prescribed format.

3.5.5.9 Review the assumptions listed by Operation’s Department .

3.5.5.10 Define capacity level of each divisions and bottleneck operations.

3.5.5.11 Update Budget Model.

3.5.5.12 Compiled data received from Operations Department.

3.5.5.13 Verify cost element wise data’s with last years actual.

3.5.5.14 Compare operating cash flow with capital out flow.

3.5.5.15 Presenting budget to senior management

3.5.5.16 Release the budget to operating divisions.

3.5.5.17 Monitoring budget utilization on regular basis

3.5.5.18 Conducting quarterly budget review

37

3.5.5.19 Compiling actual financials for the period

3.5.5.20 Preparing detailed variance report

3.5.5.21 Revise budget accordingly and gets final approval from senior management.

3.5.6 Internal Auditing

3.5.6.1 Identify the scope of Audit

3.5.6.1.1 Checking with various departments about their need of Auditing.

3.5.6.1.2 Review the recommendations of the external auditors

3.5.6.1.3 Review the result of previous auditors.

3.5.6.1.4 Highlight the area which have not audited for a long time.

3.5.6.1.5 Then summarize this information in list of possible audit.

3.5.6.1.6 Review this list with Audit committee and seek their advice.

3.5.6.1.7 Finalize the list of audits, noting approximation of resources and time

requirement.

3.5.6.1.8 Short the report by priority level

3.5.6.2 Obtain Audit Committee Approval

3.5.6.2.1 Presenting the Audit list to Audit Committee

3.5.6.2.2. Make the final adjustment recommended by audit committee.

3.5.6.2.3 Communicate the audit program and audit methodology to department

heads.

3.5.6.2.4 Conduct audit as per schedule.

3.5.6.2.5 Create preliminary audit report

3.5.6.2.6 Assembling all the findings from the internal audit department.

3.5.6.2.7 Add recommendations to the reports.

3.5.6.2.8 Sending reports to the department heads.

3.5.6.2.9 Adjust the report based on any review comments.

3.5.7 Fixed Asset control system.

3.5.7.1 Receive Asset Purchase Requisition

3.5.7.2 Check the availability of the asset; if available; follow asset transfer procedure.

38

3.5.7.3 If asset is not available, evaluate the proposal and record the fact in evaluation form.

3.5.7.4 Send the asset purchase evaluation for approval and get the

approval.

3.5.7.5 Prepare purchase requisition.

3.5.7.7 On receipt of asset ; ARN is prepared thru asset module.

3.5.7.8 Update the asset master in ERP..

3.5.7.9 Asset invoice and ARN to be sent to accounts for making the payment.

3.5.7.10 Up date fixed asset register.

3.5.8 Depreciation Process

3.5.8.1 Monthly process depreciation in ERP

3.5.8.2 Fixed asset can be update with monthly depreciation process

3.5.9 Fixed asset accounting

3.5.9.1 Fixed asset disposal

3.5.9.2 Fixed asset physical verification

3.5.9.3 Evaluation of fixed asset proposals.

3.5.10 Monthly Management Information Report

3.5.10.1Freeze attendance for the month after confirming with pay roll executive

3.5.10.2Provision for retirement benefit-(Auto thru ERP)

3.5.10.3Provision for leave

3.5.10.4Provision for end of service benefit

3.5.10.5 Provision for Bonus

3.5.10.6Provision for Air Passage

3.5.10.7Provision for Long Term service benefit

3.5.10.8Provision for social security insurance

3.5.10.9Verify GL balance before and after posting the above positions

3.5.10.10 Process Depreciation

3.5.10.11 Process depreciation on Temp node in ERP

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3.5.10.12 Process depreciation in update mode and pass JV.

3.5.10.13 Transfer GL data for the month to management thru Transfer

Management account section in ERP.

3.6 SOME KEY INFORMATION

3.6.1 Insurance schemes

“In personal and business affairs; the correct Insurance is vital. Wrong or inadequate

cover, can lead to disastrous consequences for individuals, as well as business

enterprise. The right advice makes all the difference and prevents costly mistakes. As

far as a business a firm concerned, the most obvious things need, is to insure it’s valued

human power, and other properties like; buildings, plant and machinery, stock and

goods in transit (export and import)etc

To ensure all this AI LLC is having a Health Insurance Policy for it’s valued man

power, for all exports imports an Open Marine Policy, and also other various policies

are under various schemes with a reputed insurance company in Oman.

The various insurance schemes are:

1 Fire Insurance.

2. Machine break down insurance.

3. Electronic equipment insurance.

4. Insurance for vehicles and heavy equipment.

5. Personal health insurance.

6. Storage insurance.

7. Open cover policy for all inland and foreign purchases, and for exports and

imports.

3.6.2 Corporate Plan

40

Corporate plan is prepared by taking estimates and future projections for the coming

year. The corporate plan is revised every year by changing current year data’s and

adding New Year data’s. This plan projects the company’s position for the next years.

3.6.3 Working Capital Management

The Working capital is essential for any Organization to meet its day to day

requirements. Working capital may be specified as the firm’s current assets over

current liabilities. As a large scale company, AI LLC is also requires sufficient

working capital to meet its daily requirements.

AI LLC uses letter of credit and bank guarantee mainly for the purpose of financing the

import of raw material and for executing the project works. If the Co. needs to avail

more than the approved limit, the finance department will have to take permission of

Board of Directors.

Arabian Industries LLC approaches different banks to raise funds to meet its working

capital requirement and it maintains a consortium of banks for the same. They are:

BANKERS SUPPORTING AI LLC.

1. National Bank of Oman

2. Bank Dhofar

3. Bank Sohar.

4. HSBC

At present Arabian Industry maintains financial arrangements with all these four banks

for it’s working capital requirements.

In the case of Over Draft, a limit up to an amount of OMR#10,000,000/- (Riyal Omani:

Ten Million), Guarantee’s up to an amount of OMR#15,000,000/- (Riyal Omani:

Fifteen Million) and Letter of Credit up to an amount of OMR#15,000,000/- (Riyal

Omani : Fifteen Thousand).

41

2 PURCHASE DEPARTMENT

The purchase procedure covers the following areas of procurement of

goods and services for the company.

1. Joint Venture related materials purchases

2 Capital items (For project and other purposes).

2. Equipment and Spares.

3. AI-LLC Project related Material purchases

4. Service items

5 Office stationery and other items

2.1 OBJECTIVES

2.1.1 To maintain uninterrupted flow of materials to support the development schedules.

2.1.2 To procure materials economically at a cost consistent with the quality and service required.

2.1.3 To provide the necessary expertise, advice, information to the Curators and Education

Officers with regard to the best quality of material available in the market, supplier’s

capability and performance etc.

2.1.4. To develop and maintain good buyer-seller relationship.

2.1.5. To promote source development.

2.1.6. To maintain PDO standard, reputation, and credibility in the market by fair dealings

and prompt payments.

2.2. MAIN FUNCTIONS

The main functions of the Purchase Department are defined as follows:

2.2.1. To maintain uninterrupted flow of materials to support the sources..

2.2.2. Checking of requisitions/purchase indents.

2.2.3. Selection of suppliers for issue of enquiries.

2.2.4. Issuing enquiries/tenders and obtaining quotations.

2.2.5. Analyzing quotations and bids etc., and preparation of comparative statement

42

2.2.6. Negotiating contracts.

2.2.7. Checking legal conditions of contracts.

2.2.8. Issue of Purchase Orders.

2.2.9. Verification and passing of suppliers’ bills

2.2.10. Maintenance of purchase records.

2.2.11. Maintenance of vendor performance records/data.

2.2.12. Clearance of foreign consignments.

2.2.13. Development of reliable and alternate sources of supply.

2.3. CENTRALIZED PURCHASES

2.3.1. As every divisions has a Purchase Department, all purchases of stores shall be

centralized in the interest of economy, uniformity and as a matter of policy since

custodian and consumer should not be the same. Accordingly the purchase of office

stationery, forms, liveries, furniture etc., shall be made by the Purchase Department

and not by the administration sections. Transfer/adjustment of staff shall be made

where necessary.

2.3.2. Local/cash purchase of stores shall continue to be made in exceptional cases by the

Heads of Divisions/projects under their power but as far as possible Purchase Officer

should be associated even while making such purchases.

2.4. VENDOR DEVELOPMENT AND VENDOR PRE-QUALIFICATION

Pre qualified vendor list shall be maintained by purchase department. The vendor list

comprise of all pre-qualified vendors under each category stating clearly the respective

capability in terms of volume of work, specification, level of technology, etc with rating of

the vendors. Addition/deletion to vendor's lists is made on a continuous basis on the above

criteria.

There are three types of Purchase Requisition (PR) as follows:

1. For projects and major capital equipment

2. For stores, including stationary and office supplies, spares

3 For Services.

43

PURCHASING DEPARTMENT ORGANIZATION AL CHART

MD – Managing DirectorCOO – Chief Operating OfficerFM – Finance ManagerBUH – Business Unit Head

MD

BUHBUH

BUH

COO

PURCHASE CLERK

PURCHASE CLERK

PURCHASE CLERK

FM

PURCHASE MANAGER

PURCHASE MANAGER

PURCHASE MANAGER

44

3. MARKETING DEPARTMENT

3.1. Marketing Structure

3.2. MARKETING STRATEGY

Strategic thinking is key to the evolution of successful marketing strategies of Arabian

Industries LLC. This involves the following analyses:

3.2.1. STRATEGIC PLANNING

Evaluate current operations

Examine competitor capabilities

Forecast market trends

Identify related markets and growth opportunities

3.2.1.1. UNDERSTANDING MARKETS :

Strategic perspective of the market requires skilful analysis of the trend and how they

affect the market size and demand for the firm’s product.

3.2.1.2. FINDING MARKET NICHES :

Price, service, convenience and technology are some of the niches in Oman market.

MD

BUH BUH

Marketing Executive Marketing Executive

45

3.2.1.3. Product and service planning

Analysis of the customer’s demand and the supply, both of the

firm and competitors, besides an analysis of the situation in which the customer

prefer the product and services.

3.2.1.4. Distribution :

Structural changes in inventory management, distribution patterns are some of the

key factors which are affecting the distribution process in the Oman market.

3.2.1.5. Managing for result :

With pressure on costs, prices, and margins, marketers will have to make effective

utilization of every baizas spent in marketing.

3.3. AI LLC’S TRATEGIC PLANNING WITH THE PORTER'S FIVE FORCES FRAMEWORK

Porters model is based on the insight that a corporate strategy should meet the

opportunities and threats in the organization’s external environment. Especially,

competitive strategy should base on and understanding of industry structures and the way

they change.

Porter's Five Forces is a technique that enables better strategic planning in business.

The original competitive forces model, as proposed by Porter, identified five forces which

would impact on an organization’s behavior in a competitive market.

A Porter's Five Forces is a technique that enables better strategic planning in business.

B The Five Forces have become the defector standard in analyzing a company's strategic

position and its ability to generate-profits.

1. The rivalry between existing sellers in the market.

2. The power exerted by the customers in the market.

3. The impact of the suppliers on the sellers.

4. The potential threat of new competitors entering the market.

5. The threat of substitute available in the market.

6.

46

Application

Market opportunity assessment, competitive analysis, and industry blueprint

Benefits:

A comprehensive framework that leads to deep understanding of an industry and qualitative

trends.

COMPETITIVE STRATEGY + SMART PLANNING + FLAWLESS EXECUTION = SUCCESS

4. HUMAN RESOURCES DEPARTMENT

4.1. GENERAL INFORMATION

Human resource management is one of the most complex and challenging fields of

endeavor. It is considered to be the most expensive and important resource of every

organization. In AI LLC the scope of Human Resource Department is very vast.

4.2. OBJECTIVE OF HR DEPARTMENT

4.2.1. To maintain the optimum manpower required to sustain the growth of Organization.

4.2.2. To motivate & manage human resource and train them to ensure their personal and

organizational development.

47

ORGANIZATION CHART OF HR DEPARTMENT

48

Administration Manager

HR Manager

HR Executive Payroll Executive

HR Assistant Payroll Assistant

HR Assistant Payroll Assistant

49

4.3. Functions of HR department.

4.3.1. Organizational human resource planning & development

4.3.2. Retirement & selection

4.3.3. Wage & Salary administration

4.3.4. Employee records maintaining

4.3.5. Performance appraisal

4.3.6. Welfare programmer

4.3.7. Job evaluation

4.3.8. Handling employee grievances

4.3.9. Handling the legal issues within & outside the Organization

4.4. PROCESS OF HR DEPARTMENT

The human resource department has 3 blocks which are:

1. Establishment

2. Industrial relation

3. Welfare

4.4.1. Establishment Section

The main functions are:

4.4.1.1. Recruitment & selection

50

4.4.1.2. Transfer, rotation and placement of employees.

4.4.1.3. Wage and salary administration

4.4.1.4. Performance Appraisal

4.4.1.5. Retrenchment

4.5. Well-being of the employee

The main objective of welfare measures is to maintain healthy working environment and

raise the standards of living of employees which create loyalty to the organization among

the employees.. Arabian Industry has always maintained very healthy welfare measures.

Statutory scheme Agreement scheme

4.6. Following are the various facilities provided by Arabian Industries LLC to their Employees.

4.6.1 Statutory and Agreement scheme

1. Payment of gratuity

2. Health, safety, welfare

3. Transport facilities

4. Uniform & footwear to the workers

5. Leave & holidays

6. Retirement benefit fund

7. Local travel expenditure

8. Conveyance Allowances

9 Special vehicle loan & Leave travel concession

4.6.2 Voluntary Scheme and Incentives scheme

1. Free food and accommodation for the worker

2. Production incentives & Business incentives

3. Group personnel accident insurance scheme

4. Vehicle loan & Sports & Recreation

5. Incentives for employees & Suggestion scheme

4.7. Industrial Engineering

51

The main objective of this section is to make effective utilization of

the manpower resources and restructure it for the benefit of the

organization.

The main functions are:

1. Manpower planning that composes of Manpower audit

2. Custodian of manpower inventory

3. Removing system bottlenecks

4. Maintenance scheduling

5. Work environment study and Employee problem analysis

4.8. Administration wing

The wing is headed by Ad. Manager and maintains orderliness in internal affairs of the

department.

The main functions are:

1. Checking the performance of each employee.

2. Consolidating the reports of different HR sections

3. Act as a linking chain between different sections

4. Office and admin work of HR department

4.9. Recruitment Policy

The Recruitment policy is done as per prescribed recruitment specification with proper

authority appointed by Board of Directors..

The following are the sources of recruitment.

1. Confirmed employees within the division or company

2. Recruit qualifies candidates from out side

4 FUNCTIONAL INTERDEPENDENCE OF DEPARTMENTS

52

5.1 Finance & Materials

Finance department procures fund for production and accounts for it. With these funds materials

are brought. During purchase the company has to enter into contract, give letter of credit and

other necessary documents, which is done by the finance department for procuring materials

Manufacturing, Marketing, Materials and finance

Manufacturing department will product the items to be produced and Marketing department helps

to canvas business and such way finance dept. can raise the fund required by the Company as a

whole. Materials department supply the materials to the manufacturing unit.

Finance and Production

Production targets are made on the basis of finance budget which checks the economical

feasibility of the plan and finance budget cannot prepared without knowing the production plan.

Quality & Marketing

Quality preserves the customers delight by ensuring the quality of the product produced and

services rendered to the customers. QA and QC department will counter checks all the quality.

They further goes to the workshop and check the products whether it reaches the market safely

with quality.

H.R Department

H.R department ensures the development of human resource and its productive utilization by

directing it in the right channel.

IT Department

53

SALES AND MARKETIN

G

Maintenance

Manufacturing

PROJECTS

FINANCE DEPARTME

NT

IT Departmen

t

PURCHASE

The department enhances inter-departmental and intra-departmental flow of information and

speedy data processing. Data access is controlled within and between

departments. Constant updating is done to catch up with the modern developments.

“All departments are interdependent and interrelated to each other for their functioning. One

department cannot operate without the absence of the other. The performance of the company

depends on the interdepartmental functioning rather than the department wise functioning”

CHART OF FUNCTIONAL INTERDEPENDENCE OF DEPARTMENTS

54

Chapter 5

SWOT ANALYSIS

4.1 SWOT ANALYSIS

SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of

planning and helps marketers to focus on key issues. SWOT stands for strengths, weaknesses,

55

opportunities, and threats. Strengths and weaknesses are internal factors. Opportunities and

threats are external factors.

AIM OF A SWOT ANALYSIS

• Reveal the competitive advantages of the firm.

• Analyze the prospects for sales, profitability and product development

• Prepare the company to overcome problems

• Allow for the development of contingency plans

A. STRENGTH

• A leading EPC Contracting, Manufacturing and Maintenance Company specialized in design,

engineering, project construction, fabrication, and maintenance activities in Oil & Gas,

Refineries, Petrochemicals and Power sectors.

• 20 Years prolonged execution and experience with Petroleum Development Oman, Oman Gas

Company, Oman Refinery, Petrochemical and Power sectors in Sultanate of Oman.

• Well facilitated Workshops at Rusayl & Sohar Industrial Estates.

• Advanced and modified Equipments to meet the progressive requirements in the field.

• Experienced and long term serviced management and employees

• Stable and Concrete Fund Flow. & High profiled and empowered shareholders.

• Heavy investment on Manpower and machinery

B. WEAKNESS

• Lack of self motivated technical-know-how that leads to depend on other establishment for

consultancy.

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• Un-availability of local manufacturers for specific materials and equipment requirements.

• Unstable technical staff movements due to the exorbitant manpower

requirements in the market.

• Insufficient deployment on marketing.

• Lack of accountability of managers and employees to achieve clear and measurable

performance levels.

C. OPPORTUNITY

• Stable growing and requirements in Oil and Gas field

• Progressive development of Petroleum Development Oman

• Enhancement of Refinery activities all over the Sultanate of Oman.

• Government funding on future developments

• Availability of information about best practices in human resources.

D. THREATS

• Booming investment by the foreign establishments creating stringent competitive market.

• Unanticipated intervene on investment by the Government

• Deficit utilization of huge invested fixed assets due the variation of awarding and duration of

contracts

• Insufficient room for allotment of establishment costs in case of idle periods.

• Financial recession on world economy.

• Other Organizations may attract employees and business away from this industry.

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CHAPTER 6

FINDINGS, SUGGESTIONS

&

CONCLUSION

12.2 ABOUT THE STUDY

This study was conducted for the Operational, Financial, Marketing and Sales at it’s Head office at Al-

Khuwair , Maintanance and Fabrication at it’s Rusayl and Sohar work shop. Arabian Industry has 12

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main departments and are interdependent and inter dependence on each other as shown in

Organizational chart and inter dependence of departments chart..

To conduct the study, Arabian Industries LLC has divided into 6 major divisions:-

1- Operational division

2- Finance divisions

3- Maintenance division

4- Fabrication Division

5- Sales and Marketing division.

6- Administration and HR Division.

12.3 FINDINGS

After spending two weeks at Arabian Industries LLC, my major finding in that organization is

as follows:

12.3.1 Being a large business unit, all the departments are well organized and managed by

different managers, and all the departments are functioning very well and active.

12.3.2 The organisation structure is divided in to several units like Finance, Marketing, Operation

& Quality, Human and Resources etc… These all departments are headed by different head

units but at the same time they work for same objective with full co-ordination which

shows the unity level about the organisation.

12.3.3 During the study, it was found that it is indeed a healthy organization with a lot of well

unique functions. This organization basically being an engineering industry, it has a large

investment and a large number of people working in it and there is a well established 59

organizational structure with the top level management, the middle level management and

the bottom level management.

12.3.4 All departments in the Company are certified to ISO 9001 and regular internal and external

audits are conducted to check the compliance and renewal of certificate. There is a full

swing total quality management system and it works efficiently and ensuring the total

quality of the organization and it’s product and services.

12.3.5 In the company’s system of materials management, there are very less chances of damaged

goods and scrap items being raised. The company takes necessary steps to see that no items

become scrap in the store and damaged goods doesn’t come in and go out of the company.

12.3.6 The fabrication and mfg. departments are well equipped with all the necessary

requirements and there is well functioning tool rooms which care to the needs

manufacturing and fabrication. There is also effective scrap management functions carried

out to the utmost profit of the company.

12.3.7 All the employees and labourers work very hard towards achieving the goal. Even the

higher authorities work very hard without wasting time towards the organization goal

12.3.8 An organisation study also makes me learn that any objective cannot achieve with a short

span of time it has to be done through systematic ways. Finally, in any organisation time

management play important role because each activity should be done at a right time at

right place.

12.4 SUGGESTIONS

12.4.1 One important suggestion is that more care and concern should be given to the clients to

retain the trust of existing valued customers.60

12.4.2 Advertisement like exhibitions do not helps Arabian Industry to

generate so much of business, but they also should be participated in

all exhibitions to generate customer awareness regarding their entire operations.

12.4.3 Company should try to improve technical service after the installation of all it’s

manufactured items. No doubt the company products have technically edge over

competitors but in long run they have to build stronger strategies in marking their

products..

12.4.4 Company is hiring lot of heavy equipments for the completion of the jobs in time. It is

advisable that, If they would purchase more heavy equipments like heavy duty cranes and

excavators, they would be in a position to make more profit..

12.4.5 During the study, it is noticed that, open purchase orders are issuing for the purchasing of

materials. Open purchase orders are the order with no value. This may leads to malpractice

and it should be discontinued immediately.

12.4.6 Another important matter which was noticed, in rare cases purchase orders are issuing after

the supply of materials. This practice also should be discontinued So that the chances of

mis- appropriation can be controlled to a grate extent.

12.4.7 An important area which is to be taken more care is the awarding of sub contract works. It

is advisable that, the company is in a position to execute the same job which is sub

contracting, profit earning can be increased to a grate extent.

12.5 CONCLUSION.

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The study in Arabian Industries has enabled me to understand the various needs of an organization,

how an organization of a corporate nature functions and how important it is to have a right

relationship between the employee and employer or the management.

Training in Arabian Industries LLC, will help the trainee to understand the various needs of an

organization, how an organization of a corporate nature functions and how important it is to have a

right relationship between the employee and employer or the management.

The study was conducted with a view to understand the functions of an organization, and its various

department. During the course of study I was successful in achieving these objectives and could

familiarize with an organization and its environment.

“This study has improved my confidence by its successful completion to undertake such studies in

the future.”

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