Category Archives: Portfolio

First Meaningful Role in Corporate Finance Budgeting

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National Central Cooling Company (PJSC) – “Tabreed” is one of the world’s largest commercial district cooling providers in the world.  The UAE based company had an incredible growth rate from 2006 to 2008, designing, building and commissioning some 30 new plants.  Owing to the nature of the business, wherein Tabreed finances projects and recovers its investment over a span of 20 to 25 years, Tabreed relied heavily on debt financing.  However, after the 2008 credit crunch, Tabreed ran into liquidity challenges prompting Tabreed’s shareholders to appoint a new board of directors and senior management with their main mandate to restructure Tabreed’s debts.  As part of the recapitalization program, they wished to assess Tabreed’s existing plants, customers and potential customers.

I was tasked by my director to run an assessment of the current customers (legal and commercial) and leads that I was working on and to assist my colleague in capturing this information and reflecting their financial impact on a plant by plant basis.

My main challenge was to forecast the revenues and supply dates of some of Tabreed’s existing customers. The challenge was due to existing disputes, weak / ambiguous contracts or bad customer credit rating.  To complicate matters, at the time there was a set of 4 or 5 varying versions of existing contracts.  After standardizing them into a single spreadsheet, I added my forecast of future customers based on discussions I had with them.  In tandem, I assisted my colleague in capturing this information on the company’s financial model and ran a sensitivity analysis to assess the impact of our forecast on the plants’ profit margins.  I then went on compiling evidence and correspondences that would substantiate my forecast.  I also set about meeting with existing customers to better understand their requirements for the future especially for those under weak / ambiguous contracts.  After a couple of weeks working on this assignment, my colleague and I met with our director to walk him through our forecast and provide supporting evidence to our forecast.  After a couple of meetings and revisions based on his input we completed our assignment and submitted our final version to our director.  I was also asked by my director to attend the senior management review and provide substantiation and defense of the numbers when required by the CFO, CEO and external advisers.  My forecast, after a couple of revisions, was accepted by the CFO, CEO and external advisers and would later on be integrated within the main report that would be presented to the company’s lenders.

After months of negotiations with the company’s lenders, the company finally reached an agreement for the recapitalization of its debts.  Although, the revenue forecast was but a small part of this effort, it was nonetheless an important step to assess the company’s future profit generation potential.  I was particularly proud that I was asked to assist in this important company mission, I was content with the level of faith my director and senior management had in my abilities, work and customer relations.  I was even more proud that my numbers and forecast were largely accepted by my senior management.

This was one of the first more meaningful corporate finance experiences I was fortunate to have; it instilled in me a sense of admiration and curiosity to learn more about this subject and was one of reasons I decided to pursue my MBA training and education.

Organizational Behavior Challenges of a Junior Project Manager

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In 2010 during my employment in the capacity of Business Development Manager with National Central Cooling Company (PJSC) – “Tabreed” in Abu Dhabi – United Arab Emirates I was provided with an opportunity to internally lead one of the biggest bid submissions in the company’s history; an estimated $270m project.  Tabreed provided district cooling utility services in which the company financed, owned, operated and charged for the use of chilled water by the end customers.  The project in question was government sponsored entailing the development of 4 completely new commercial / residential medium rise buildings planned to house more than 100,000 occupants.  The district cooling aspect of the project required a total of 120,000 Tons of cooling capacity (Tabreed’s installed cooling capacity at the time was 500,000) through 4 district cooling plants and associated network at an estimated cost of AED 1 billion (USD 270 million).  Announcement of this project and some preliminary planning work took place even before I joined Tabreed in 2008. Tabreed, especially, the engineering department had worked substantially on this lead, providing the client with a number of preliminary designs, specifications and advisory work.  However, it was, like most big government sponsored projects a bureaucratic nightmare when it came to contract negotiations and decision making; for a long time it seemed that there was no traction or progress.  When the financial crunch hit in late 2008, there were rumors that the project was shelved; however, it picked up again in late 2009 with a modified commercial and development structure regarding the district cooling system. The project was now based on the Design Build Operate and Maintain (DBOM) model which basically transformed Tabreed to a contractor and operator rather than an owner and service provider, something that Tabreed has never previously undertook on such a large scale.  Hence, it was a learning experience for the company as a whole and required a great deal of internal discussion, collaboration and input to mitigate the risks involved.

Although this setup was more suitable to all district cooling providers as it took away the financing burden it raised additional constructional and operational risks.  All of these issues instilled an uneasy feeling within the company with the general feeling that this project will not take off.  Hence the project was not on the priority list especially for the O&M and Projects departments both of whom had a great deal of ongoing challenges to deal with.

On another note, and to give this project a political dimension, Tabreed’s board of directors contained a number of individuals who were also members of other Abu Dhabi Government affiliated companies that were involved in this development. 

My director at the time was handling this project and I was involved peripherally.  This changed in mid-2010 when my director decided to appoint me the point of contact and junior project manager within the commercial department.

I started to review previous correspondences, presentations, held discussions with Tabreed’s O&M, projects and legal departments to better understand the project.  After a couple of weeks I was able to draw a clearer picture of the project and its requirements.  With the assistance of my director, we created a non-hierarchical task team including myself, my director and co-workers and directors from the legal, projects and O&M departments. 

Other than negotiating and understanding the client’s requirements and risks involved, one of my biggest challenges was to get my co-workers and other department heads motivated, to respond within the deadlines and be clear on what they can accept and what they can’t.  In short, my challenge was to get everyone involved to push together in the same direction.

Relying heavily on their inputs, I had to create some movement and progress.  At times, I would reason with my co-workers that since this was a governmental project and that most of Tabreed’s board of directors were in one way or another connected to the Abu Dhabi Government affiliated companies they took special interest in this project.  Which meant that a failure to deliver on this project would put all of us in their black books; however, on the other hand if we did succeed in delivering on this project we will all be recognized for our efforts.  At other times, I reasoned especially with my Projects Department colleagues that if we end up winning this project, it will be bring heaps of benefits to Tabreed not to mention that such a project will keep them busy and sustain them for 3-4 years to come at a time when Tabreed was cutting down on its overheads.  It was a daunting mission, as I often found myself caught in the middle of sharp differences in points of views especially between the O&M and Projects directors that would grind our progress to a standstill.  Each director was trying to safe guard or minimize the risk placed on his department at the expense of the other.  At times my director and I were able to challenge their arguments and points of view to reach a consensus; however, at other times especially when a much larger risk was involved we were not able to play the role of mediators.  Hence, my director and I increased the frequency of the periodic meetings involving the departments’ directors with our senior management to keep things in check and leverage the senior management authority and conflict resolution capabilities.

Although direct negotiations with the client and client representative task team was led by my director, it was my responsibility to keep him well informed of progress made internally and contribute my perspectives during these discussions.  At one point I realized that the client’s project manager who was leading the group of client’s representatives which was comprised of Westerns and Arabs was not all too clear on how our financial pricing went about as his experience was mainly technical.  With the approval of my director and CEO, I went about meeting with him one on one, running him through our financial pricing model and linking it to the risks involved in undertaking this project so that he would have a better appreciation of our suggestions and remarks. This helped ease the tensions during our meetings and assisted us in reaching common grounds on a lot of thorny issues.

In the end, we did submit our final proposal on time after gaining our senior management and board of directors’ approval.  I also found, later on, that our proposal was largely accepted by the client’s task team via unofficial discussions I had with the project manager.  However, a couple of months after the submission, it was officiated by the government of Abu Dhabi that this project has been indefinitely postponed.

Nevertheless, this experience remains one that I am fond of the most, one that helped me grow as a professional and an individual.  Taking on such a complex bid process I have learned a lot in a variety of business management fields: legal, commercial/financial, customer service, project management, risks and mitigation, negotiations, time management, prioritization and most importantly organizational behavior.  In retrospect I have gained a huge respect for organizational behavior from this experience.  A company can possess all the analytic and “brain” power to handle complex projects however it will all be in vain if it doesn’t possess a good handle on organizational behavior and internal communication aspects!

Oil & Gas: Growth Opportunities

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The oil & gas industry has always fascinated me, due to the sheer size of operations, intensity and multidisciplinary coverage.  Very few industries are as vertically integrated or as geographically diverse, which to me are key attraction points for they offer the opportunity to experience the majority of aspects making up the modern business administration philosophy as nested in divergent cultural contexts.  Coming from a mechanical engineering background and having worked in the oil & gas industry while currently undergoing my MBA training, the oil & gas industry offers a unique opportunity for me to experience the best of the two worlds.

One of the main drivers of this growth in the past five years was the rapid modernization of the BRIC nations (Brazil, Russia, India and China).  Granted that any slowdown in the growth of these nations will have an adverse effect on the growth of this industry, the GPD growth of these nations is expected to continue growing although at a slower rate than in previous years, continuing to represent a potential opportunity for the industry.1 Another drivers for increased price and thus increased production are 2:

  • the fast emerging middle class in India and China and the growth of in motor vehicle use
  • the rising pressure on developing countries to fund measures aimed at combating increased poverty

The industry, although has seen its revenue slashed by 39.7% in 2009, has shown an average rate of growth of about 1.3% since 2008 with a forecast of a 3% growth rate in 2013 alone, revenue has risen from $4.2 trillion in 2008 to an expected revenue of $4.5 trillion in 2013.  This growth is expected to grow at an annualized rate of 2.5% to $5.1 trillion over the next 5 years to 2018. More importantly, profit and employment are expected to grow over the same period with the former growing at an annualized forecast rate of 2.9% while the latter at an average annual rate of 1.5% to 1.4 million people. This growth is driven by the rising production of oil and gas and the increased difficulty of extracting oil.3

In addition to the above forecast of growth, the industry as a whole is characterized as being 4:

  • low concentrated
  • highly competitive and the trend is increasing
  • high barriers to entry and the trend is steady
  • highly globalized and the trend is steady

With the above information in perspective, it is my view that companies within the industry will place additional emphasis and importance on improving their supply chain management and strategic planning to maintain or increase their market share and competitiveness.  This view lines rather smoothly with my previous training/experience and intent to pursue the Product Service Management career track with emphasis on Strategic Management.

 

Notes: 1, 2, 3 & 4 – David Young (2013). IBISWorld Industry Report B0531-GL. Global Oil & Gas Exploration & Production. Retrieved Sep 2013 from IBISWorld Database

Welcome to the Third Phase of my Life

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I believe that every individual should constantly set goals, personal and professional. Although these goals may change with time, the main ingredient to success lies in the proper layout of solid plans and foundations, while constantly monitoring the progress, displaying persistence and resiliency to reach one’s objectives ethically and responsibly.  Risks and initiatives are part this adventure and whilst nobody likes to fail, failure is a natural step in the right direction if and only if one can draw the right lessons from that experience.

My initial plan during my mechanical engineering undergraduate studies at the American University of Beirut was to apply for graduate school; however, due to circumstances, that meant putting my family under a considerable financial burden.  Even though I was offered all the support by my family, I opted against it.  Instead, my new plan was to seek professional development and financial independence that would lead to graduate school.

Thus I left Lebanon the country I grew up in leaving behind me my safety network and my comfort zone nevertheless I was armed with a goal and a promise of new experiences.  For the next 8 years, my adventure took me to the United Arab Emirates and Qatar where I was the Sales and Marketing Engineer for a pre-insulated pipes manufacturing company, the Progress Engineer for an oil & gas contractor, the Business Development Manager for a district cooling provider and the Technical Sales Manager – Middle East for a desalination start-up.  I purposefully sought to be exposed to different industries in my early career to gain a wider, more diverse and well-rounded experience.  This has come in handy especially when I took on commercial roles as I was able to draw from my engineering background and technical experiences to perceive the commercial world from different perspectives and angles.  Some of the highlights of these 8 years were living and working at a remote industrial area, getting introduced to the business world, work related achievements and development.  However, it wasn’t only limited to professional matters, I was also able to travel to some of parts of the globe and experience different cultures (South East Asia, Europe and North America), take on scuba diving which very quickly developed into my favorite hobby and experience life in a multicultural city like Dubai where expatriates from about 200 nationalities reside.  Alas, I wanted more! Enter Vancouver and Sauder School of Business.

I wanted more professional development, I wanted more diversity, I wanted a bigger adventure.  My goal is to make my way into the business world and have positive impacts on the companies I join.  For that, I need an MBA training that would provide me with the adequate managerial skills, discipline and edge, business-making decision tools and the certification that would brand me a business professional with an engineering background, rather than an engineer with some business experience.  These attributes were one aspect of what drew me to the Sauder School of Business, the other and more important was the process that Sauder followed in its teaching philosophy; hands on, experiential, global immersion, creativity, professional and leadership development.  What more is that I will be surrounded by a diverse student body, professors and staff that I am certain I’ll be learning a lot from as well as sharing insights from my own experience.  Adventure? Vancouver is the place for it, whether it is innovation, intellect, international cuisine, festivals, art, outdoor activities and the list just keeps on going.  I am looking forward to the next 16 tough, intense and challenging months, 16 months where I will learn and experience the modern business administration concepts and equally important learn and discover new aspects of myself.

By the end of 16 months, I will not only gain an MBA degree but also friends, colleagues and a network for life.  You know what?  I think I have already gained a few of those even before the official start of the program.

This is the start of the third phase of my life, a phase that will surely open up many more!

Welcome to the third phase of my life.