Procter & Gamble

Eminently known as a global leader in fast moving consumer goods, Procter & Gamble (P&G) is setting the bar quite high for CSR initiatives in the GCC. According to Yassin Al-Attas, external relations general manager at P&G Gulf, “The way [P&G] looks at CSR in our region is very much linked to the overall definition of CSR. CSR is just one element of the sustainability strategy, which has five different components focusing on environmental protection, improvement of our products and operations, engaging our employees, having an active social responsibility program that is very much linked to the global cause of the company.” Simultaneously, Al-Attas explained, “we aim to target the unique cases and specific needs of the communities and the market[s] that we are in today.” Originating from their global strategy, CSR “has filtered through to the unique programs” that it has created in the Arabian Peninsula. P&G’s international corporate cause is the idea of ‘LLT’ — learn, live and thrive — with the chief aim of promoting health, hygiene, awareness and supporting children aged 0-13 years in order to provide better chances to live and healthier lives to thrive in. Throughout all of its programs across the region, P&G reaches “more than half a million boys and girls on a yearly basis and gives them educational material [while] providing them with samples of [P&G] products to try and experience,” stated Al-Attas. For example, in Saudi Arabia it partnered with the Ministry of Education to set up a science and innovation association coined the ‘Tide Club’. This institution, Al-Attas expounded, “seeks to promote a common goal — spreading knowledge and awareness of science to the boys and girls in Saudi Arabia.” In the general manager’s words, the idea of the Tide Club is “to equip and operate scientific laboratories in biology, physics, chemistry, computer, English language, and auto-robots. This will enable students in their extra-curricular activities and also during their academic year to go through programs and training, which will help them engage more in those scientific studies and experiments.” With the success and positive feedback of the Tide Club, the company is now considering creating similar establishments throughout the region. Overall, P&G has numerous successful CSR initiatives in place across the region. With its constant commitment to improving lives and providing the tools to do just that, P&G’s long-term CSR initiatives are sure to continue making a positive impact wherever they go.

Six Senses

Leading in lavish relaxation and holiday accommodations, Six Senses Hideaway in Zighy Bay, Oman is stepping up to the CSR plate quite quickly. As the managing director of Six Senses, Naim Maadad explained, his company’s philosophy is based on “all around communities, environment, and sustainability.” What is more, said Maadad, is that “the company as a whole is evolving around sustainability.” As a brand new resort in Oman, the spa’s construction was made from completely eco-friendly materials. In terms of being socially responsible, the luxury resort takes a hands-on approach with the local community it neighbors in the Musandam Peninsula. For example, since its inception the hotel has established an interesting contract with the local fisherman in the neighboring village; Maadad said, “any catch they get, they bring it and they show it to us where we have the first option to buy from them directly. So basically we employ them indirectly.” Also, Six Senses has trained the local village youth through English and general etiquette classes, and has employed approximately 18 boys thus far. In another long-term initiative, the resort has sent 46 local individuals to a seven-month Omani hotel school to train and educate them on the basics of the hospitality sector. To make sure its programs are ongoing, each Six Senses resort allocates 0.5% of its total revenues to a fund, which is donated to a pre-approved foundation. Shying away from the term ‘CSR’ — and speaking rather modestly — Maadad believes “the best way to describe [what Six Senses does] is by saying ‘a lifestyle’. We’re trying to make it as a responsibility, as a part of our daily lives, our daily routines.” While Six Senses is still trying to find local partners to help properly channel their allocated funds, the plush resort has generated creative initiatives and is most definitely on the right CSR track.

INTEL

As one of the leading IT companies in the world, Intel tries to follow the CSR programs that it has at a worldwide level. Spending an annual $100 million a year on education worldwide — and more than $1 billion in the last ten years — Intel is wholeheartedly dedicated to improving education. Intel®Teach, the company’s flagship program, has been launched across the MENA region, and most recently into Saudi Arabia and the UAE. Samir Al Shamma, Intel’s GCC general manager, explained that Intel’s long term goal is “to see [the Intel®Teach program] spread all around the Arab world.” In the UAE, for example, Intel signed an agreement with the Sheikh Mohammed Bin Rashid Al Maktoum (MBR) Foundation, to “jointly work towards training two million teachers.” Al Shamma emphasized that, “in general, we strongly believe that where we can make a difference from a technology company’s perspective, is in education.” This opinion is driven by the fact that there are not enough engineers and scientists in the world.

Further demonstrating Intel’s long-term commitments to education is the Intel World Ahead program launched in 2006, an initiative that is focused on getting the next billion people in the world connected to the Internet. Intel World Ahead is characterized by four pillars: firstly, providing broadband connectivity in various communities; secondly, to give people access to technology — be it either through government assisted programs or ‘shared access’; thirdly through worldwide general education programs; and lastly via encouraging creation of the constant development of the community. Al Shamma highlighted the imperative need to be connected in this “knowledge economy,” as he finds that connection and access are “prerequisites” in today’s global village. Prior to Intel World Ahead’s launch, the company embarked on a multi-year program for the Middle East, known as the Digital Plan Coalition Initiative. Holding similar pillars to its descendent, this program, explained Al Shamma, “was focused on advancing education in the region, creating knowledge or competency centers, encouraging entrepreneurship, [and] helping deploy more broadband connectivity.”

Through its competency centers in Abu Dhabi, Dubai, al-Khobar, Beirut, and Cairo, Intel aims “to showcase the latest information technology and train the industry on it, and to set up a collaboration with educational institutions,” with the idea that such institutions and their staff can benefit as well.

The Rolex Awards For Enterprise

The bi-annual Rolex Awards for Enterprise is no regular schmoozing affair. Beginning in 1976 to mark the 50th anniversary of the world’s first waterproof watch, the Rolex Oyster chronometer, this unique event aims “to encourage a spirit of enterprise in visionary individuals around the globe by providing the financial support and recognition they need to implement innovative, working projects that advance human knowledge and well-being.” Known for its innovative timepieces, the Rolex Awards targets five key areas of recognition: science and medicine, technology and innovation, exploration and discovery, the environment, and cultural heritage. Characterized by a long-standing tradition of originality, scientific discovery and an affluent cultural heritage, the MENA region is now a quintessential focus point for Rolex. The luxury watchmakers felt the need to accentuate the region via “encouraging institutions and individuals to put forward the untold stories of progress being made in the five awards areas and reverse the Arab world’s under-representation in the Rolex Awards.” Thus, in the summer of 2007, Rolex Awards launched a rigorous awareness campaign reaching out to NGOs, governments and individuals across the Levant, Gulf and North Africa, hoping to expand nominee applications for the 2008 Awards. It achieved just that — for the 2008 series, they received a record high of 138 applications from 16 countries across the MENA region alone, nearly 294% higher than the entries for the 2006 series. Ranging from taxi drivers to molecular biologists, entrants are regular citizens of any age from around the world. Applicants nominate themselves by submitting their own proposals for a project within one of the five award areas.

This year, a total of 44 projects were short-listed for laureates and associate laureates, with six of those projects coming out of the MENA. For the first time in its 32-year history, the awards ceremony will be held in Dubai on November 18, 2008. Five chosen laureates presenting the most exceptionally innovative projects will each receive $100,000 towards implementing their creative ideas and an inscribed gold Rolex chronometer. Five runners-up — associate laureates — will be awarded $50,000 each along with a steel and gold Rolex chronometer.

Rolex Awards boasts that its program is “one of the world’s most renowned philanthropic programs.” The exclusive luxury jeweler insists it is not out to increase brand awareness, and thus defines its initiative as philanthropy and not CSR. As a global leader in lavish timekeeping, Rolex is definitely not in need to boost its brand, but what company would shy away from positive brand awareness? Relative to its annual sales, an approximate $750,000 is a small price to pay to remind the world you are the crème de la crème of watchmakers and – most importantly – that even without an image problem, you are socially sensitive, by adding the cherry on top with the proactive CSR factor.

TNT

TNT, the leading provider of express delivery services, considers CSR as “an integral part of its key business objectives and not an optional extra,” as stated by Mark Woodwock, TNT sales and commercial director. He added that the CSR approach is integrated “in day to day management of the business,” and its key performance indicators (KPIs) “are given the same weightage as the other operational KPIs.” Furthermore, Woodwock pointed out that “responsibility towards society that one lives in” is an important part of the individual’s a corporation’s life, and every act affects the society “with greater intensity.”

Across TNT countries, numerous CSR initiatives are being implemented, focusing mainly on environmental issues. The ‘Driving Clean’ program aims to reduce the company’s vehicular emissions by cleaning up existing fleets and studying possibilities for future fleets in collaboration with the United Nations Environmental Program (UNEP). TNT aims higher by introducing the ‘Planet Me’ program and planning to “become a zero-emission transport company.” As a transport company, it acknowledges its responsibility to combat global warming and invests its resources effectively in this matter. It also participated in ‘Walk the World Program’, implemented the ‘Road Safety Management System’ to reduce accidents, collaborated with the United Nation’s WFP (World Food Program) in emergency responses as well as fighting world hunger, and obtained third party certifications like ISO 14001 (Environment Management), SA 8000 (Social Accountability) and others.

In the UAE, TNT engages in several local initiatives. One of them is employee inductions, which covers environmental, health and safety issues; other initiatives are using ceramic mugs for coffee and tea, video conferencing equipment to reduce traveling and therefore reduce emissions, selling and delivering greeting cards for the Al Noor Training Center for children with special needs, etc. Moreover, TNT uses the services of ‘Shred It’ to recycle waste paper as well as wooden pallets, and keeps electricity usage under control.

The company issues annual CSR reports, which are distributed with the financial documents to all stake holders. The report is produced according to the GRI guidelines and independently audited by PWC, and the data is gathered from different countries on a monthly basis. With all these initiatives taking place, TNT proves itself as a socially responsible company which actively contributes in sustaining the global environment.

ARAMEX

“We would like to take on a pioneering role in advancing corporate citizenship in the region,” said Raji Hattar, chief sustainability and compliance officer at Aramex. “We can make a significant contribution to our communities and help find solutions to some of the critical challenges we face as a region,” he added. The company views each initiative as a long-term investment, and differentiates itself by its “partnership approach with various stakeholders” and by finding solutions for the problems and challenges the community faces instead of merely making donations.

The key areas of Aramex’ CSR initiatives in the Middle East are education and youth empowerment, entrepreneurship, community development, sports, emergency relief, and environment. The company also engages in other charities and philanthropic projects on a case by case basis. An example of a CSR initiative would be ‘Ruwaad’, which consists of utilizing eco-friendly packaging and hybrid vehicles throughout the company’s operations. Moreover, Aramex joined the United Nations ‘Global Impact’ initiative last year, a platform which promotes positive global corporate practice. Hattar explained that every initiative the company adopts is supported by both human and financial resources. “Sustainability is integrated into our business strategy and corporate culture” he said. Aramex also issues an annual Corporate Sustainability Report showing its long-term commitment to CSR.

In financial terms, the company allocates approximately 1% of its profits before tax to CSR initiatives. The return on the CSR investment is looked at from both financial and non-financial perspectives. “Investing in education and empowering youth means that you will able to acquire the right talent and skilled labor in the long run,” stated Hattar. Additionally, Aramex assesses the impact of its CSR initiative “in order to improve [its] programs and pass on best practices to others.”

Hattar explained that Aramex wants to be viewed “as a responsible company,” as it will attract the new graduates who are eager to work with corporations that are socially responsible. Moreover, the company would like to “enhance the public image of the private sector’s role in social development.” With its long term commitment to CSR, Aramex plays a leading role in enhancing social growth and sustainable development in its community.

Land Rover

In October 2008, Land Rover announced the extension of its industry leading CO2-offset CSR initiative to the GCC and the Levant. This groundbreaking environmental initiative is the largest program of its kind to be undertaken by an automotive manufacturer. A unique characteristic about this green initiative is that it allows both the company and its customers to participate in balancing CO2 emissions and addressing the lingering problem of climate change. The program originated in the United Kingdom in 2006, which has been offsetting all of the CO2 emissions generated by Land Rover’s manufacturing operations in the European nation. Expressing that now is the “time to act,” Land Rover has appointed Climate Care — an international CO2 offset provider — to manage the initiative in the Middle East. As of October 1, 2008, Land Rover will also offset the first 72,000 km of each customer’s use on all Range Rover, Range Rover, Land Rover and Defender vehicles sold throughout the Levant and GCC. Once customers have reached the 72,000 km mark, they can voluntarily decide to offset their mileage via Climate Care’s website.

As the managing director of Land Rover Middle East and North Africa, Robin Colgan, asserted, his company is “determined to make sustainability a key element in our business.” Furthermore, he found that “the extension of Land Rover’s industry leading CO2 program in this region is an important step in reducing our impact on the environment.” Overall, Land Rover has committed to investing $1.19 billion to developing sustainable technologies to reduce carbon dioxide emissions. Globally, Land Rover aims to offset more than 2 million tons of CO2 through this ambitious CSR initiative. Clearly, Land Rover is dedicated to going green and improving the negative impact it has on its surrounding natural environment.

Visa

Since 1996, Visa has globally embarked on its financial literacy program and has recently brought this CSR initiative to the Middle East. The program aims to help people obtain the tools they need in order to manage their personal funds effectively and wisely. Jeremy Reynolds, head of corporate relations and strategy at Visa CEMEA, believes “responsible money management is a critical part of surviving in today’s world. The strongest financial tool today is knowledge.” In Kuwait, for example, Visa partnered with the Union of Kuwaiti Banks to create a national program promoting financial literacy and raising awareness on financial debt. Reynolds said that Visa’s CSR initiative “has already proven successful in the region with markets such as Egypt, Lebanon, Jordan, UAE and Kuwait taking an active role in spreading the financial literacy message.” As a follow-up to its financial literacy initiative, in 2006 Visa launched a bilingual website (www.ehsib.com) covering the basics of budgeting, saving, bank account management, using credit cards sensibly, on-line shopping tips and precautions against credit card fraud. Reynolds highlighted that the website “is another part of our ongoing commitment to assist in financial education and to manage money wisely.” Prior to its launch, Visa invested time and funds in research studies across Kuwait, Saudi Arabia, and the UAE in order to identify what areas the Middle East needed to be more informed about. “Feedback from central banks indicates that there is a widespread lack of understanding about personal finance,” Reynolds noted. Making sure to substantially inform the entire region, Visa is working closely with governments, central banks, and retail banks across the GCC to further develop and enhance their own national campaigns on financial literacy. “One of the greatest things we can do is to arm young adults with the skills necessary for a financially fit life,” asserted Reynolds. Visa’s CSR initiative is sure to aid the region become more financially aware and overall, more responsible. According to Reynolds, “A fiscally smart young adult becomes a savvy consumer — and that is good for business, the economy and for personal growth and success.”

Saudi OGER LTD.

Being a regional leader in construction, vice president Ali Kolaghassi of Saudi Oger believes in the higher expectations of corporate social responsibility. He explained that, “at Saudi Oger, there is an intrinsic understanding of the power that comes with the partnership of the business community, public sector, academic sector and the general public.” Focused on the economic, social, and environmental impacts of the societies in which it operates, Saudi Oger strives “to address the key sustainable challenges based on the core competencies wherever [they] operate — locally, regionally and internationally,” stated Kolaghassi. For example, the company created the Saudi Oger Training Institute, a nonprofit organization in Saudi Arabia. The company invested $45 million in this initiative in order to cater to training young Saudi men and women, and thus to “prepare them for employment in various sectors by providing them [with] the education and the hands-on training in four sectors: hospitality, technical, construction, and continues training,” Another initiative created by Saudi Oger is the two-year program known as Scuba Saudia, a project in coordination with the Saudi Arabia High Authority for Tourism. This program aspires to protect the marine ecological life as well as to train and educate Saudi youth on the safe and responsible means of diving without upsetting the natural environment. In addition to its own CSR programs, Saudi Oger continuously sponsors numerous events, such as World Down Syndrome Day (in association with the Down Syndrome Charitable Association), the Jeddah Festival, Eid festivals in Riyadh, and is also the main contributor of the Disabled Children Association. Kolaghassi believes that “by participating and becoming a recognized partner with the community, [Saudi Oger] will leverage and help improve social conditions as well as play a major role in the development of [Saudi Arabia].” Kolaghassi is well aware that the Saudi Oger brand name “depends not only on the quality and uniqueness, but on how, cumulatively, [we] interact with the community and environment around us.” With CSR on their mind, there is not much stopping this regional front runner.

H2O New Media

H2O New Media is a social community company, describing its aim as to positively alter “the way people work, create, and play by developing market changing social media and collaboration technologies.” Relatively new in the Middle East, H2O New Media aspires to “reduce carbon emissions, break down cultural barriers, benefit commerce and make it easy for people to communicate, have fun, play, listen, create, enjoy, and even work using innovative social media applications.” Steve Vaile, founder and CEO of H2O New Media, believes that “CSR is ingrained in the company culture,” as it aims to make a difference in people’s lives across the Middle East. Developed by H2O, the Dubai Lime initiative is a pool of companies and individuals in Dubai that encourage the local grass roots music and arts scene throughout the UAE. This program provides a base for native citizens to display their artistic talents through open-mic and live music events, while also contributing the support and inspiration from professional musicians and agents of prominent international recording labels. Dubai Lime is always on the move, as it is a mobile art exhibit that takes places across coffee shops and restaurants around Dubai — thus making it easier, more encouraging, and more entertaining for young amateur artists to get involved. In addition, Dubai Lime hosts not-for-profit music and business networking events which directly donate funds to various charities around the Gulf.

H2O doesn’t sell itself short, as the company also supports other charity organizations such as the Dubai Autism Center as well as the Dubai Centre for Special Needs. H2O contributes awareness of the associations by exhibiting the children’s artwork together with established artists’ own exhibitions. H2O New Media also creates free websites to charity organizations that are in need of web exposure and thus help them with their Internet presence and advertising partnerships. Vaile feels that such initiatives “really work at a grass roots community level, to make a difference and generate awareness in the UAE as well as bringing in an element of creativity and fun.”

National Bank Of Abu Dhabi

At the National Bank of Abu Dhabi (NBAD), “embedding CSR and sustainable business practices into our strategy makes business sense,” explained CSR officer Belinda Scott. Taking a pragmatic approach to their CSR initiatives, NBAD is “developing a more strategic approach with CSR and sustainable activities, both internally and externally.” The bank focuses on their existing initiatives to measure their impact on its triple bottom line. Moreover, as Scott stated, “we are now considering the sustainability of our initiatives, what level of external impact they have, and whether they can be adapted to roll-out in our overseas branches.” Aspiring to be the leading Arab bank, Scott believes that “CSR is a way of doing business and not just about carrying out a series of standalone projects that have no purpose or relevance to NBAD’s vision or direction.” The prime areas of the bank’s core CSR initiatives include learning, environment, community, and employees. For example, NBAD created ASK Lectures (Awareness Sharing Knowledge) — which is made up of four lectures per year on relevant issues affecting the bank’s stakeholder, with the aim of engaging these stakeholders and exchanging knowledge on different topics. Another initiative, the ‘Reduce, Re-use, Recycle’ program, is aimed at cleaning up the environment throughout the UAE through paper recycling, collection of used toner cartridges, etc. The bank’s recycling initiative, noted Scott, is supported by an intranet awareness campaign based on the “importance of reducing the uses of natural resources, identifying recycling/environmental champions and opening communication with employees to submit their suggestions and comments to increase employee engagement.” The bank further motivates its employees by inspiring them to take part in community driven projects, such as the annual NBAD Blood Donation Drives. Concentrating more on the needs of their employees, the bank created Employee Wellness Day, which as Scott explained, is “designated to give [the employees] the opportunity to find out more about how important their wellness is, not only in the personal but also their professional lives.” This program offers employees medical tests and counseling in areas of concern such as obesity, diabetes, coronary health, breast cancer, stress managements, exercise and maintaining a healthy diet. Externally, NBAD has established a partnership with the Dubai Center for Corporate Values (DCCV), is a founding member of Emirates Environmental Group CSR Network and before the end of 2008 will become a signatory of the Abu Dhabi Sustainability Group. Evidently, NBAD is taking on the role of responsible actions quite seriously and doing an exceptional job at it.

Shangri-La Hotels and Resorts

Shangri-La Hotels and Resorts in Dubai considers CSR “not as a ‘soft’ addition to the business, but an indispensable ‘hard’ business component” that customers expect from the company, said Elizabeth DeMotte, vice president for public relations. She added that “CSR has been and continues to be a high priority for Shangri-La; in fact, we were active in this area long before the term came into common usage.” The company has launched a two-year development strategy to develop its CSR activities. The five key areas that Shangri-La engages in are: the environment, employees and the community, health and safety, supply chain management and stakeholder relations.

To promote environmental sustainability, the company focuses on five areas — climate change, ozone depletion, water management, waste disposal management and indoor air quality. For example, it fitted all guest rooms with water saving devices and is working on reducing carbon dioxide emissions per room by using new technologies, alternative energy resources and building more efficient buildings. Moreover, the hotel’s management recognizes its staff as their most important asset and provides fair employment and staff development opportunities. The company has also established a Shangri-La Academy in Beijing and one in Manila.

Finally, Shangri-La Barr Al Jissah and Spa in Muscat has a dedicated Turtle Ranger who gives special attention to the rare green turtles that come ashore. This shows that Shangri-La is not only dedicated to the safety of its guests and staff, but also considers sustaining biodiversity as an integral part of its CSR obligations. 

Bank Muscat

Being Oman’s leading financial institution, BankMuscat is dedicated to serving society and making significant differences in the country by supporting various community projects. “[Our] corporate social responsibility initiatives aim to make a positive and tangible difference within disadvantaged communities and enable young people to access quality and relevant social, economical and educational programs,” stated AbdulRazak Ali Issa, CEO of BankMuscat. Additionally, BankMuscat has founded an independent CSR department to demonstrate its commitment and dedication to developing Omani society and ensuring a successful future for the coming generations.

Recently, a memorandum of understanding (MoU) was signed between the bank and Dar Al Ata’a entitled ‘BankMuscat for Family Care’. Through this MoU the bank has been funding a widespread campaign to provide food rations for low income families in Muscat Governorate. BankMuscat has also been active in helping children by renewing its support to the Early Intervention Program for Special Children with Special Needs. The bank distributed cards and postcards with the children’s drawings which were sold on many occasions to raise funds. “The bank strongly believes in its vision and mission to ensure a better quality of life for children with special needs and their families,” commented the bank’s chief executive.

To prove itself as being environmentally responsible, the bank also engaged in many environmental initiatives. It participated in the United Nations Environmental Program for Financial Institutions in order to assess the effects of financial globalization on the environment. BankMuscat is also engaged in implementing the ‘Equator Principles’ program, which is a globally recognized system of guiding principles for social and environmental risk management and assessment.

Moreover, BankMuscat did not forget to support the new generation of entrepreneurs by building a partnership with Intilaaqah, one of the social initiatives of Shell Oman Marketing Company. “[We] work diligently towards supporting government objectives and consider it an obligation and responsibility to contribute back to society … to secure the future of Oman,” explained the CEO. Intilaaqah aims to encourage and motivate young entrepreneurs in order to reduce the dependence of the economy on oil and boost employment in Oman. BankMuscat covered CSR from many different aspects and was able to prove itself as a successful financial institution that holds responsibility towards the underprivileged segment of its community.  

Oman Oil Marketing Company

“Since its inception in 2003, corporate social responsibility has formed an integral component of Oman Oil Marketing Company’s operations which has enhanced the competitiveness of its business and maximized the value of wealth creation and quality of life to the sultanate,” explained Omar Ahmed Qatan, CEO of Oman Oil Marketing Company (Omanoil). Additionally, Qatan added that Omanoil considers itself as being a role model of ethical and responsible operations having the interest of the Omani people and the nation as “its guiding principle.”

Omanoil targets in its CSR initiatives the Omani youth — aged under 18 — since this age group represents more than 50% of the population. The company considers itself as “fostering an empowered generation that will lead the nation forward to new frontiers and even greater successes.” In 2006, Omanoil established the Omanoil Football School (OFS) to help young Omanis achieve their ambitions and goals and become the football stars of tomorrow.

Having a fundamental belief that “charity begins at home,” the company has partnered with the Dar Al Atta’a Association and provides donation boxes in its network of filling stations and quick shops across the sultanate. “Through this successful partnership, Omanoil hopes to empower citizens to make a change and gain insight into the diversified means of support the general public can provide by taking the first step in recognizing the core issues which need to be addressed within various sustainable community projects,” commented Qatan.

Concerning health, safety and environment considerations, the company’s staff and contractors are required to “think safety” in all their actions to achieve a goal of zero accidents which would benefit the community at large. Omanoil has also introduced new technologies in environmental cleanup, which were designed, developed and implemented for the first time in Oman and the Gulf as a whole.

The company is proud to have a dedicated team to overall corporate objective.  As Qatan concluded, “operating in an increasingly competitive business environment, the company has continued its strong performance focus and consistently achieved its primary safety, operating and financial targets.”

Radisson SAS Hotels & Resorts

At Radisson SAS Hotels & Resorts in Dubai, CSR is “an investment in a strategic asset or distinctive capability, rather than an expense,” explained Farida Parekh, marketing and communications manager. She also described CSR as being the character of a company and having a value that cannot be measured in monetary terms. The Radisson SAS’ approach to CSR is rather unique as it benefits construction workers, a segment of the society that is usually ignored in the UAE.

In August 2008, Radisson SAS in Dubai launched, in collaboration with many other companies, the Shoe Box Appeal initiative aimed to help construction workers. According to Helping Hands, a UAE based charitable organization working with industrial workers and one of Radisson’s partners, many of these workers in UAE live in unfavorable conditions. They live away from their families for a long time, are subjected to extreme weather conditions and suffer from social pressure and isolation. The campaign consists of raising donations and offering them to construction workers. Radisson SAS has set a list of items that can be donated, which includes T-shirts, caps, disposable razors, shaving cream, and other basic needs. Although no money or food can be offered, both individuals and corporations are welcome to donate. 

According to Parekh, the resorts’ campaigns are differentiated by their uniqueness and their presence at both the principle stage and the practical level. The company also established a long-term CSR strategy, and identified the most important driving forces behind it, which are the company’s long-term profitability as well as its leadership and ability to anticipate the future. 

With its noteworthy initiative, Radisson SAS Hotels & Resorts has entered the CSR world with an innovative and uncommon idea. Hopefully, more companies will engage in such initiatives in order to help foreign labor and all the underprivileged workers to better cope with the extremely hard working conditions. Because, as Susan Furness, CEO of Strategic Solutions, stated, “The construction workforce has contributed to Dubai and the UAE’s growth, and thus to all of our tomorrow. It is time to stand up in recognition and do something, however small, to acknowledge the favor.”

Al Ahli Holdings Group

Lina Hourani, the CSR officer of Al Ahli Holdings Group (AAHG) in Dubai, stated that educating, supporting, and empowering the Emiratis youth are the main objectives behind the company’s CSR initiatives. She added that AAHG wants to contribute to solving the 2020 Job Opportunities Challenge by enhancing the entrepreneurial skills of young Emiratis and enabling them to lead their own future.

In May 2008, AAHG developed the Global Business Opportunities (GBO) initiative in partnership with Junior Achievement Argentina. This program aims to create new opportunities for Arab youth aged from 18 to 25 years old by exposing them to professional business training. Twenty students — 10 Emiratis and 10 Argentineans — were selected and divided onto five companies. Afterwards, they began three weeks of intensive training in Argentina. These five companies worked on business plans and competed on the best plan to be presented in October 2008. “It is our aim to lead by example and show the private sector what can be achieved with active and actual social responsibility,” said Muhammad Khammas, the CEO of AAHG. He added that “this encouragement is invaluable in giving the next generation the confidence and tools to take business to the next level.”

High caliber judges were appointed to choose the best business plan according to certain criteria — the business idea, the written presentation of the project, potential market, legal structure and other important measures. One of the judges, Louis Hakim, vice president of Royal Philips Electronics and CEO of Philips Middle East, stated that he is “glad to be supporting such an initiative. Such a training program like the ‘Global Business Opportunity Initiative’ will not only bring out the youth’s creativity but also add to their cultural enrichment which is the key [for] today’s globalized business environment.”

Al Ahli Holdings Group’s CSR initiative is highly important for the Arab youth, especially with the rising employment and career challenges. With a dedicated CSR division, the company is able to successfully motivate and empower young Arabs and guide them to the fulfillment of a bright and successful future.

Ernst & Young Middle East

Celebrating entrepreneurs and the businesses they build and grow has always been a priority for Ernst & Young, a leading global professional services firm. For the past 22 years, the company has been encouraging ambitious and motivated entrepreneurs in the Middle East by honoring them in the Ernst & Young Entrepreneur of the Year Awards. This program has been conducted in 135 different cities in over 50 countries. “It is noteworthy that this year [2008], the program has attracted such high caliber entrants, following on from the benchmark initial program held in 2007,” stated Fouad Alaeddin, Managing Partner of Ernst & Young Middle East. 

Entrepreneurs who are eligible for the contest “include both founders of companies and those who organize, manage and assume the risks of a business or enterprise early in its life cycle or during its growth and are still active in the company.” Winners are chosen according to their financial performance, entrepreneurial spirit, strategic direction and other similar criteria. This year, 18 finalists were chosen and will be interview in late November. Nominees benefit from marketing and public relation opportunities, networking opportunities, stronger recruiting image and other important advantages. The Middle East winner will have the chance to participate in the World Entrepreneur of the Year Awards, which will be held next year in Monaco.

International Islamic Bank of Qatar

Abdel Baset Ahmad Al Shibi, CEO of the International Islamic Bank of Qatar, considers CSR as a duty that the bank has towards its society. Additionally, these initiatives should be long-term and necessitate continuous follow-up and involvement. The bank is engaged in various activities including education and scientific research.

The bank made a significant contribution by offering marriage loans free of commission or profit for couples wanting to get married in 2007/08. For choosing suitable initiatives, the bank looks for activities that benefit a broad category of people in the long run. A special committee regularly receives project suggestions and takes a decision depending the project’s importance and the bank’s priorities. Additionally, the bank’s staff can also suggest initiatives that are then studied and implemented if approved. 

The annual budget for the bank’s CSR initiatives is discussed in coordination with the relevant department responsible for development projects to ensure that these funds are allocated properly. “We look at financing reputable companies under the state’s supervision, and not to let any money go to inappropriate institutions … I believe that our funds are being effectively allocated to this end,” explained the CEO.

Al Shibi also recalled a recent meeting initiated by the Qatari Prime Minister with the executives of different private companies, during which it was agreed that a proportion of corporate profits should be allocated to the development of social projects. It was also suggested that a committee be responsible for supervising and monitoring the flow of these funds.

MCDONALD’S

“We have an obligation to give back to the communities that gave us so much,” stated Roy Kroc, the founder of McDonald’s. This statement shows that CSR has been a part of the McDonald’s vision since it was founded in 1955. McDonald’s Kuwait, which is owned and operated by local and Arab businessmen with a 100% local investment, has been operating under the same vision and supporting several causes in its community like “children’s well-being, responsible employment, environmental care and commitment to serve high quality products,” as stated by George Khawam, the marketing director. Khawam added that they look at CSR from three main perspectives. The first is “cause and requirement”, which requires corporate attention, second is “the evaluation of the resources and application of best practices to fulfill this requirement,” and third is “the means to sustain the initiative in the long run.”

The main commitment of McDonald’s Kuwait is to play a positive role in children’s well-being. In 2007, the McDonald’s World Children’s Day campaign was launched under the theme ‘A smile is just a thought away’. In November of the same year, the campaign ended with a memorable celebration under the title ‘Draw what you think will make other kids happy’ with the collaboration of MBC3 and the Kuwait Association for the Care of Children in Hospital (KACCH). It targeted children from six to 12 years old and aimed to “increase awareness among children and adults about World Children’s Day and encourage them to be a part of it.” A donation of $10,954 was gathered for the KACCH.

In March 2008, McDonald’s Kuwait also lunched the Champion Kids Program to “educate the children in Kuwait about the Olympic Games and adhering to its commitment to promote active lifestyles”. On April 2, it held a Mini Olympic athletic event including children eight to 13 years old. The winners were awarded a four day all-expenses-paid trip to Beijing accompanied by an adult family member. Moreover, Ronald McDonald, McDonald’s Chief Happiness Officer (CHO) in Kuwait is very committed to CSR by making regular visits to pediatric wards, orphanages, and hospitals in different cities in Kuwait. He is also a ‘Balanced Lifestyle Ambassador’ and a certified entertainer and sports advocate.

Dubai Center For Corporate Values

Established in 2006, the Dubai Center for Corporate Values (DCCV) is a unique nonprofit organization operating in the UAE. Formed by the Dubai Technology and Media Free Zone Authority (DTMFZA), DIFC, and the Dubai Airport Free Zone Authority (DAFZA), the DCCV in itself is a cutting-edge initiative aimed at promoting the awareness and practice of corporate social responsibility throughout the UAE’s business sector. The organization is currently formulating the ‘Dubai CSR Model’, expected to be released sometime next year, which aspires to create a generic CSR framework for all companies, organizations, governments, etc. to implement and increase socially responsible actions. The DCCV has its own CSR committee to help draw up the model, which is made up of 45 members from the private sector, government-linked companies, government departments, as well as local and international NGOs. Karim Al Falasi, Emiratization manager at Chicago Bridge & Iron Company N.V., feels that the CSR Committee “is an eye opener for what is happening in a variety of sectors.”

Taking bits and pieces from international models — such as the GRI and EQM frameworks — the DCCV is trying to get “the best of both” from the western and Arab worlds said Najeeb Al-Ali, executive director at the organization. “There are some basic criteria that wouldn’t be different wherever you go; [for example] the minimum environment criteria does not vary anywhere in the world — you still have to follow the minimum criteria,” Al-Ali explained. Aware that his organization’s feat is not of a simple nature, Al-Ali noted that “the guideline needs to be simple … If we try to make it very specific and detailed, it won’t work for all companies — maybe for some, but not for others.” Accrediting the GRI, Al-Ali asserts that, “one of the reasons why it is actually very successful is because it is a large set of criteria, and companies [can] pick and choose which criteria suit their environment.” Emphasizing that one needs a system that is flexible enough for companies, organizations, etc., Al-Ali said that this exactly what the DCCV is doing. This initiative may just be what the UAE and the Gulf needs to get on the CSR bandwagon. Until next year, keep your fingers crossed.

MOTOROLA

The global communication leader Motorola in Dubai aspires to “benefit the communities where it operates” by supporting projects that address multiple community concerns. These projects include environmental sustainability, education, and social services. For the last three years the company has been managing an annual global community service program. This year, the ‘Global Day of Service’ is themed “Green and Global” and emphasizes the company’s commitment to environmental sustainability. This program will engage more than 10,000 employees in 45 countries, who will be teaching an environmental curriculum in classrooms across the globe. Muhammad Akhtar, the country manager at Motorola UAE, stated that “With the outstanding dedication of our employees to the communities where they work and live, we celebrate our tradition of service and innovation by committing our time and our talent to foster a brighter, greener future for our global community during this year’s Green & Global Day of Service.”

Additionally, Motorola Foundation, the benevolent and philanthropic arm of the company, aims to build strong community partnerships as well as promote innovation and engage different stakeholders. It focuses on funding education, science, engineering, technology and math programming. The foundation will have a non-profit organization plant a tree for every employee volunteer at Motorola. A second tree will be planted in the honor of the employees who re-use their apparel from preceding events.

Locally, ‘Children in Need’ will be the center point of Motorola employees during the ‘Global Day of Service’. More than 230 children will benefit from these projects at the Al Noor Training Centre for Children with Special Needs, which is a non-profit organization that provides education and training to disabled children. Since 1953, Motorola Foundation and the company’s employees gather each year to arrange the annual service event that promotes team work and enables colleagues company-wide to engage with organizations addressing critical social issues.

Motorola’s focus on environment and children is mainly due to the company’s commitment to operate ethically and support the communities in which it conducts its business. The company has proved itself to be highly committed to promote sustainable development and benefit its society both locally and globally on continuous and long-term basis.

National Commercial Bank Of Saudi Arabia

The National Commercial Bank of Saudi Arabia (NCB) engages in a wide range of activities to enhance the development its community and help sustaining a clean and healthy environment. It has established a dedicated CSR department to develop, implement and monitor charitable and humanitarian activities. Mahmud Muhammad Al-Turkistani, head of CSR units at NCB, classified the bank’s CSR activities into five strategic goals: contributing to the reduction of the unemployment rate by providing job opportunities, contributing to the support of educational activities in the society, contributing to the support of health activities in the society, adopting various social programs to help the needy and promoting the concept of volunteerism in the community.

To open up new job opportunities, one of the initiatives that NCB launched for this purpose is the ‘Al Ahli Small Business Program’ that provides training courses for young Saudi and helps them to start their own business. Two years ago, 800 Saudis engaged in this program, 20% of were women, and 40% started their own business. Additionally, 1,853 families benefited from the ‘Al Ahli Productive Families Program’ that helps women in difficult economic circumstances develop vocational crafts to secure a source of steady income. Concerning education, NCB was involved in helping orphans to continue their postgraduate studies, and established computer labs in educational institutions. The bank also supported the development of the health sector by supplying non-profit health institutions with 95 additional renal dialysis units, providing four equipped ambulances for the emergency medical services, and enhancing health awareness among various segments of the society. Moreover, the bank has been a major contributor to charities. It also supported orphans by supplying them with school uniforms and equipment as well as medical care. Environmental awareness is also on NCB’s agenda since it aims to reduce electricity consumption by using power-saving lights and encouraging its employees to adopt energy and material conservation practices. From an ethical prospect, NCB’s products and services are all sharia-compliant, and every product or transaction is reviewed by the NCB Sharia Board. 

The bank also has an independent budget for CSR activities, which can be recognized by the four awards it has earned, among them the CSR Leader Award from the Jiddah Chamber of Commerce and Industry (JCCI) and ITP Publishing Group. NCB continues to support its community by implementing CSR initiatives that are beneficial and essential for its long-term development.

ICDL GCC Foundation

As a not-for-profit organization, the International Computer Driving License (ICDL) GCC program is the Gulf extension of the European organization funded by the European Commission. Aiming to spread digital literacy and create an e-society, ICDL GCC has recently granted free ICDL certification to thousands of children aged 12 and under across the Gulf region. This CSR initiative aspires to develop computer literacy in children at young, impressionable ages enabling them to use information technology as a tool for sustainable education. By campaigning via the region’s education ministries, educational zones, schools and other academic organizations, Arab youth will, without a doubt, benefit from such an engaging initiative. Jamil Ezzo, director general at ICDL GCC, emphasized the importance of providing children in the Arab world with the right tools to learn, saying “the inclusion of children in our digital literacy movement has become instrumental to reforming educational systems around the world, and we are proud to contribute with such initiatives that reach out to the youngest children.” Ezzo finds that training other individuals to become digitally savvy is a priority as well. “We encourage organizations from the public and private sectors to also participate in similar programs through their own CSR budgets to further digital literacy not only among children, but also among women, retirees, people with special needs, job seekers, and other social groups.”

This new program complements the foundation’s region-wide efforts to create a digital society, reflecting the significant role of the Arab youth’s role in the region’s sustainable development. The NPO’s latest initiative will run until the end of the 2008/09 academic year. Notably, during the summer of 2008 ICDL GCC organized special training camps for more than 10,000 students across the Gulf, helping to enhance their IT skills. Additionally, all ICDL GCC youth programs provide classes on the ethical and safe use of computers. In October 2007, ICDL GCC reported to having reached more than 600,000 individuals enrolled in its program across the Gulf region, and through its 1,800 approved centers in Iraq, Kuwait, Bahrain, Oman, Qatar, Saudi Arabia, and the UAE the foundation is sure to make a longstanding difference.

Sharjah Chamber of Commerce and Industry

On September 15, 2008, the Sharjah Chamber of Commerce and Industry (SCCI) inaugurated its corporate social responsibility campaign to promote the concept of CSR and its mechanisms across all enterprises. It aims to achieve sustainable development by benefiting various segments in its community. “[The campaign] will be based on social cooperation and will ensure that joint efforts will be productive enough to achieve comprehensive and sustainable development in different sectors of the society,” said Ahmed Muhammad Al Midfa, SCCI’s chairman. This initiative will encourage the private sector to focus more on social responsibilities, especially because this sector is an essential partner in the implementation of different programs covering economic, environmental, humanitarian, and social development.

Overall, said Hussein Muhammad Al Mahmudi, director general of the SCCI, the concept of CSR launched within the chamber is characterized by “green business,” environmentally friendly based initiatives, general business principles — i.e. transparency, reporting, governance, creating accountability and ethical practices — and the development of human capital by working with the private sector to develop human resources across the UAE. Al Mahmudi believes the SCCI’s approach is unique because it uses a systematic approach to CSR through the public private partnership strategy.

Over the past three years SCCI has funded numerous education, humanitarian, social, entertainment and sports activities, and contributed AED46 million ($12.5 million) to social causes. For example, SCCI supervises ‘Tawasul’, a program aimed at providing education for orphan students that is sponsored by businessmen, private companies, and other organizations in cooperation with Takmeed and Sharjah University. According to Al Mahmudi, director general, the CSR initiatives aim to unify the efforts of the government and the private sector towards social and environmental development, to benefit both the civil society and private enterprises.

Moreover, SCCI is planning to provide financial aid to social organizations like Tamkeen, a program for the elderly and people with special needs, as well as engage in other activities like consumer protection, the use of eco-friendly technologies, manpower safety, performance level and job satisfaction development. The chamber is also planning to encourage the implementation of CSR projects by “studying the creation of an award program for the initiative which would help evaluate the CSR activities of businesses and organizations,” Al Mahmudi explained.

Ritz-Carlton Hotel

At Ritz-Carlton hotels worldwide, not only are the staff and management involved in CSR activities, but also the guests, who while enjoying their stay can engage in helping and supporting the community in the region where they are spending their vacation. “Many of [our guests] are active volunteers in worthwhile activities at home and want to continue this spirit of giving when they visit other parts of the world,” said Simon F. Cooper, president and chief operating officer of The Ritz-Carlton Hotel Company. Ritz-Carlton Dubai encourages its guests to join the hotel’s employees to dive right in. “When our hotel guests come, they want an experience… they want something that impacts the local culture,” said Vivienne Gan, regional director of public relations for the Ritz Carlton Middle East. 

In April 2008, as a part of ‘Community Footprints’, Ritz-Carlton’s social and environmental program, the hotel launched ‘Give Back Gateway’, a new program that offers guests numerous opportunities from constructing a library for young children of migrant workers in Beijing to supporting children with autism in Bahrain. In the Middle East, three of the five Ritz-Carlton hotels have committed to preserving the natural environment. One example is the hotels’ efforts to conserve the beauty of Wadi Shawka in Ras Al Khaimah, a subterranean water table that creates a habitat for many species. In Bahrain, the hotel is closely associated with RIA Center for Children and encourages its guests to meet with local children who are suffering from autism and other communication disabilities.

In July 2008, Ritz-Carlton offered a new opportunity at team-building called ‘VolunTeaming’. Sue Stephenson, vice president of ‘Community Footprints’, described the program as “combining team building with volunteer activities that create lasting memories for the participants.” Guests do not have to engage in full-day activities, but can spend as little as two hours depending on their schedule. Activities can range from building bikes for children and offering them to a local charity, to building housewarming gifts for local families who will be moving into their first Habitat Home. Finally, as Stephenson stated, “The Ritz-Carlton Hotel Company has always been committed to the support of local charities and causes … our employees around the world worked for months … and are immensely proud to have the opportunity to share the soul of our company with our guests.” 

Pfizer Pharmaceutical

Focusing on the medical field, over the last years Pfizer Pharmaceutical in the Saudi Arabia launched many CSR initiatives ranging from spreading awareness of various diseases to supporting national institutes. In 2004, the company initiated training sessions for pharmacists covering all regions in the kingdom. These sessions covered various diseases, ways for dealing with patients, managing warehouses, and other important matters.

In 2006, Pfizer launched the ‘PEN Physicians Education on Neuropathic Pain’ project that consists of training doctors to be able to diagnose and treat nerve pain through a series of lectures given in cooperation with George Washington University by video conferencing, as well as special Saudi consultants and foreign experts. Moreover, with the full support and cooperation of Pfizer, a Saudi Hypertension Management Society (SHMS) was launched in 2007. It aims to fight hypertension and spread awareness about the disease and its causes. The company also supported the establishment of the National Institute for Training in Egypt. This special training centre is the first of its kind in the Middle East and trains Arab doctors in different areas.

Pfizer sends Saudi doctors to attend different training courses depending on their specialization, and provides full or partial support to local and international conferences set by public hospitals. The company not only focuses on graduating doctors and pharmacists but also on university students, especially at the King Abdulaziz University, by organizing scientific conferences and providing the faculty with the needed medical equipment. Finally, Pfizer plans to launch a national campaign in Saudi Arabia to raise awareness about the dangers of smoking by distributing flyers and conduct awareness activities in hospitals and shopping malls.

While other companies had a broader perspective of CSR, Pfizer decided to concentrate on the field that it knows best. These initiatives will surely have a long-term effect on the local community, since newly trained doctors and well educated graduates will be able to better take care of their patients and have a positive impact on the health condition of their society.

MVM Events Dubai

MVM Events Dubai, the dynamic and award-winning global conference and events company, is committed to assisting its clients in implementing ‘green’ CSR strategies. The company has recently conducted the second phase in its series of global ecological surveys, capturing the attitudes that companies hold towards environmental CSR policies when organizing their events. The survey results showed that companies are spending too much time discussing the importance of the environment, rather than implementing strategies and addressing the actual issues. Speaking about the GCC Richard Beggs, managing director at MVM, stated that “CSR is quickly becoming a buzzword in the region, with many companies talking about environmental issues. However, we need to ensure that companies based here don’t take the same road as their counterparts in the UK and continue to discuss the issue without positive action. They need to actively drive CSR and environmental policies.”

MVM Events is the only company in the region that has a dedicated ‘eco-specialist’, who is responsible for conducting environmental audits of events and advises companies on the most effective means to decrease environmental footprints without affecting the quality of their event. Minimizing the effect on the environment can be done in many ways like using suppliers who have an effective CSR policy, hosting paperless conferences, ensuring minimal waste and energy usage during the event, etc.

The company aims to work with clients who want to ‘go green’ and demonstrate their commitment to ecological policies. “A year ago our survey showed that only 10% of the region’s companies had a CSR eco-policy when organizing events,” explained Beggs. He added that, “A staggering 87% of companies stated that they would be considering CSR ecological issues more over the next five years. However, according to the latest survey results, not much has changed.” This year, 78% of companies are still unaware of the importance of environmental CSR. Nevertheless, there are some indications that there is a new attitude emerging since 71% of companies stated that their supplier procurement policy is highly influenced by the supplier’s effective CSR commitment to the environment.

This survey by MVM Events is a part of a three-year commitment to assess the current position and observe trends in the changing awareness of companies in Dubai, London and Sydney with respect to CSR management and the environment. Hopefully, with MVM’s efforts to spread ecological awareness among these companies, the next survey will show improved and satisfying results.

Magrabi Hospitals and Centers

Since its inception in 1955, Magrabi Hospitals and Centers has expanded to cover the whole MENA region as the largest medical care network in the Middle East. Over the years, it has engaged itself in providing quality medical care for its community and enabling the underprivileged to have access to its services. In 1999, Magrabi established the Magrabi-Al Noor Foundation, aiming to provide high-quality cataract surgery for rural and slum communities.  With 13 branches worldwide, the foundation is considered to be Magrabi’s charity wing. Some of the services it offers are conducting surveys and epidemiological researches, developing training curriculum and programs for all eye care cadres and running health awareness activities.

In addition, since 2003 Magrabi has established a relationship with the Ebsar Foundation for Rehabilitation and Vision Impairment Services. It has supported Ebsar by undertaking many initiatives, such as allocating SAR1 ($0.27) out of every check-up fee at Magrabi hospitals and centers, assembling and manufacturing visual aids, setting up scientific research centers as well as special schools for those who are visually impaired, and the like. In September 2008, Magrabi also made generous in-kind and therapeutic donations to two charity houses — Kafel and Ensan — supporting widows and orphans. The donations included household appliances and opened the doors for free check-ups and discounted treatment. Overall, the value of the donation amounted up to SAR 25,000 ($6,674). During Ramadan, every Thursday Magrabi welcomed all underprivileged patients for free treatments, as a part of its commitment to enhance social development among this segment of the society. 

Marriott International

Marriott International has proved its commitment to corporate social responsibility by engaging in a wide scope of activities that benefit both the local and international communities. Barbara Powell, senior director international social responsibility at Marriott, divided the hotel’s CSR initiatives into five key areas: shelter and food, environment, readiness (for hotel careers), vitality of children, and embracing diversity and people with disabilities. Powell believes the Marriott is “really touching community needs” and is “empowering [its] local managers to determine what is right for the communities” through its CSR programs across the region.

In Dubai, the Marriott Business Council and Spirit to Serve Communities conducted many clean-up campaigns, planted trees and through charity golf tournaments raised money for the local Al Noor school for children with special needs. Additionally, on May 6, 2008, and in association with the Red Crescent in Dubai, the hotel entered into an agreement with the United Nations World Food Program (WFP). Through this program, AED5 ($1.36) will be added to all guest bills — with the consent of the hotel guests — and will be collected to support WFP’s Food for Education program. The hotel’s target is to raise $27,200 by the end of 2008. Moreover, Marriott supports the local Children’s Garden School and donates function space and coffee breaks to all its yearly events.

In April 2008, as a part of Marriott’s environmental awareness month, 700 associates of the JW Marriott Hotel Kuwait and Courtyard by Marriott Hotel Kuwait participated in planting over 200 plants and trees in Kuwait City. In Egypt, the Marriott Business Council decided to continue funding the maintenance of all SOS Children’s Villages facilities. In 2006, the hotel offered money and in-kind donations in the value of $410,000.  

Marriott International hotels all around the world have tailored their programs and initiatives to protect and preserve the wildlife and their natural surroundings. They partnered with local environmental experts in order to create programs that would offer guests insight for the wildlife in the areas surrounding the hotels. Many initiatives are taking place in Brazil, Costa Rica, Hawaii, Mexico, Russia, and other parts of the world. Operating on a global level, the Marriott not only tackled important issues in its CSR initiatives, but also expanded its efforts to cover as many parts of the world as possible.

Imperial College London Diabetes Centre

The Imperial College London Diabetes Centre (ICDLC) Abu Dhabi, specialized in diabetes treatment, research, training and public health, has launched the ‘I Play Sport’ program. The program was initiated in June 2008 and took place during Ramadan this year. It represented the fifth pillar in the award-winning ‘Diabetes.Knowledge.Action’ public health awareness campaign. The four other pillars were the ‘I Wonder’ screening program, ‘I Eat Right’ school lunch box drive, ‘I Cook Healthily’ recipe collection, and the ‘Walk UAE’ walkathon.

“The center is using sports as a vehicle to promote the importance of an active lifestyle in the prevention of diabetes and other related complications,” stated Maha Taysir Barakat, consultant endocrinologist and medical & research director, during the launching of the program. She added that “the upcoming ‘I Play Sports’ tournament is an opportunity for the business community to have fun, while allowing the players and supporters to be ambassadors of the diabetes awareness message across the UAE.”

The tournament attracted many leading brand names like Mubadala and Dolphin Energy, ALDAR, Abu Dhabi Aircraft Technologies, Injazat Data Systems and others who sponsored and participated in the tournament. The audience reached up to 1,000 people and included families and community supporters. “The good news is that a healthy lifestyle is the smart and simple way to treat and even prevent diabetes. ‘I Play Sports’ is set to encourage the corporate community to take up a fun sporting activity such as football, as part of their regular routine,” Barakat concluded.

Hill & Knowlton

Leading regional communications consultancy Hill & Knowlton knows about the ins and outs of corporate social responsibility. As CEO Dave Robinson explained, “It is an area that we are deeply involved in. We all have intimate knowledge of the practicalities and theories of CSR, and we work with some of the largest corporations in the region, advising them on their CSR, so we know how to understand it and develop it.”

Central to Hill & Knowlton’s CSR initiatives are those that involve the education and health of children. One program to which the company has committed itself to for the past few years is the Arab Children’s Health Congress, a pan-Arab program designed to raise awareness on health issues that effect children in the Middle East. “The point of our involvement is that we’re able to contribute something to our community by using our expertise, knowledge and skills,” Robinson stressed. Hill & Knowlton’s other major youth-oriented CSR focus is its partnership with an INJAZ Junior Achievers Worldwide Chapter for the Middle East and North Africa, which familiarizes students with the concepts of entrepreneurship, business and commerce. As Robinson outlined, “Children are encouraged to understand the dynamics of the real world, it adds a dimension to their education that typical formal education doesn’t provide, and helps them to have better opportunities in the work world.”

Robinson also described another way that Hill & Knowlton contributes to the community. The company encourages its staff to become involved in various activities through volunteering. Employees use their free time, and occasionally their work time and resources, to involve themselves in community activities, social activities and environmental activities that they wish to be a part of on a personal level.

“We want to be involved in activities where we can meaningfully contribute; writing a check is a good thing, but it doesn’t actually engage you,” Robinson emphasized. The company invests approximately $50-100,000 worth of time per year to CSR activities, a distinct percentage of its profits. “We commit our time, we actively become involved, we become genuine partners in the things that we are trying to facilitate and organize, because they are things which we find personally important and worthwhile.”

Lebanon and cars have a long and illustrious history together. Many car dealers in Lebanon go back to the 1950s as official importers for some of the world’s best known vehicles. Saad & Trad, for instance, hold the record for being the oldest car importers in the world for Jaguar, when Robert Trad was the first person to import the Jaguar XK120. Michel Trad, director of Saad & Trad and son of Robert Trad, announced in 2008 that, “we have broken the record for all the years that we have imported Jaguars.” Monumental sales have occurred on the Lebanese automotive market: year-to-date most companies are up by over 50%, and for many, sales have seen a 100% increase.

The reason for this dramatic rise in car sales is political (in)stability in Lebanon. Since the assassination of former Prime Minister Rafiq Hariri, pent-up demand occurred, as people delayed buying cars in the tense socio-political environment. This built-up demand was then released when the Doha agreement was signed.

Since Doha, car dealers have not been able to stock vehicles fast enough. Farid Homsy of IMPEX, car dealers for Hummer, Chevrolet, Cadillac and Isuzu, said before the Doha agreement they had diverted many of their cars to the Gulf. “But when the Doha agreement occurred we rushed to stop the diversion of cars and tried to order even more because we saw a super summer coming as the mood in the country was very positive. In Chevrolets, August ‘07 to August ‘08, we have had an improvement of 154%, for Cadillac 134%, for Hummer 117%,” he said.

The gloom of the past three years has now moved on to different shores. Car dealers in Lebanon are no longer green with envy as they watched the GCC’s car sales grow exponentially, year after year. However, the excitement is not overwhelming, as Assaad Raphaël, chairman and general manager for the Porsche Center Lebanon, said while in the region Porsche has grown easily by 10-15%, in Lebanon the company is still struggling to reach the figures of 2005. This is a pattern that is replicated at almost all the dealerships in Lebanon: even with the spectacular growth of 2008, car dealers are still only recovering the lost ground since 2005.

Price responsive?

Lebanon may not have grown as fast as the GCC in terms of car sales but buying trends at the top end of the automotive market are very much the same. Lebanese want to have the newest and most technologically advanced cars possible. Negib Debs, the brand manger for Gargour & Fils car dealers for Mercedes-Benz, explained that this can be a problem for them because “people will stop buying a car if a new model is coming out in a year.” For car dealers in Lebanon, like most of the region, a lot rides on how successful a car is in the period immediately after it has been released. An important difference between Lebanese and inhabitants of the GCC, in the luxury automotive market, are sports cars. As a proportion of sales, sports cars are far more popular in Lebanon than in the Gulf. The Porsche dealership in Lebanon, for instance, despite the Cayenne being an almost iconic ‘must have’ for the Beiruti elite, has one of the best splits in the region. Sports cars and Cayennes are split at 45:55 in Lebanon, compared to a region where the sports cars to Cayenne ratio is 20:80. This is despite road conditions in Lebanon hardly being ideal for sports cars. Raphaël argued that, “Yes, if road conditions were better we would sell more sports cars, but Lebanese roads are great for Porsches because of the winding roads and the way the Porsche handles these roads.” Ultimately, it does not appear to matter what the road conditions are, as Michel Trad explained. “In Lebanon people are not buying many Lamborghini’s at the moment because it is not the right time, not because of the price or the road conditions. If the person can afford a Lamborghini and he wants it, he will buy it, regardless of the road conditions.”    

However, road conditions do play a part in driving the trend of the popularity of big SUVs. Unlike in Europe and the US, where the trend for big cars is being moved away from rapidly, in Lebanon, like the Gulf, SUVs are as popular as ever. Small cars like the SMART car, which is doing very well in Europe and America, simply have not got a hope in this market. Debs said that they fought very hard to get the SMART car to Lebanon and are the only country in the Middle East to sell the car. “But we are not selling this car in high volumes. Firstly, because it is expensive due to the safety features of the car and secondly, because people are asking me: ‘You want me to put my son or daughter into that small car? No way!’” he said. Thus it should come as no surprise that huge vehicles such as the Hummer have been a big success on the Lebanese market and are IMPEX’ biggest seller. When Hummer was launched into the Lebanese market IMPEX was unable to get enough units from the manufacturer, even during a time when the Lebanese economy was experiencing a downturn. Now the quota issues have been solved with the manufacturer and IMPEX has just received 40 new vehicles that it expects to shift rapidly. Unsurprisingly, in Lebanon the rise in petrol prices has not affected those at the top end of the market, with regards to the type of cars they buy. It has only been those in the mid-lower quartile buying small to medium-sized cars that have shown a desire to dealers to have a more fuel efficient engine. At VW, for instance, Gergi el-Murr, the Kettaneh VW brand manager, said, “We are experiencing a move to smaller and more efficient engines … habits are changing.” However, Negib Debs also said, that at Mercedes they are also beginning to see a shift from six to four-cylinder cars, which suggests in the future Lebanon will see a general shift to smaller more fuel efficient engines in all segments.

Thus, in the Lebanese market and the Levant in general, and much more so than in the GCC, car importers are expecting more emphasis to be placed on fuel efficiency. For all those people that are buying more fuel efficient cars the benefits can only be seen if the cars are driven in “a stable manner,” stressed Gergi el-Murr, the VW brand manager. “Driving in a stable manner” is unfortunately not what the Lebanese are known for when it comes to their driving abilities. Road safety is one of the major reasons full-size SUVs are so popular in Lebanon. As Farid Homsy of IMPEX explained, “with SUVs of course people want to avoid big engines but the trend in this segment has not been directly affected by the fuel hike because this type of consumer is researching safety and comfort for their families, rather than fuel consumption.” The demand for safety has also led to an increase in the number of new cars bought. The Lebanese have often been adept at importing used cars and selling them to each other. Now, Jamil Selim Ramadan, a certified clearing agent for the customs authority, said that, “the Lebanese Importer Association has done very well in convincing the Lebanese of the advantages in buying new cars in terms of their safety and the guarantees that come with the car.” In the past the Lebanese car buyer has been reluctant to ‘mortgage’ his car but now bank facilities are becoming easier to access with many different packages and this has helped people purchase new cars. With interest rates currently low it also means that there is a good climate at the moment to buy new cars and this has been articulated in the current market atmosphere. Further to this, buying used cars with no guarantee and little known history is a major safety and reliability concern of which the Lebanese are becoming more aware, through the work of the Lebanese Importers Association.  

“Crisis managers”

Identifying the type of cars the Lebanese will buy and encouraging the consumer to purchase a vehicle is one thing. Identifying when people will buy the cars and trying to cope with the domestic political and economic situation in Lebanon is quite another. Subsequently, the biggest challenge for Lebanese car dealers is projecting into the future. Nabil Bazerji, the managing director of Bazerji & Sons representing Maserati, Suzuki and Lancia, explained that to cope with change they never commit over a year. “Managers in Lebanon are crisis managers and the best in the world. This is because there is no similarity in changes that occur; we always have to adapt,” Bazerji said. Manufacturers on the whole have encouraged car dealers in Lebanon to be bullish about their projections and helped local car importers in Lebanon follow the philosophy of adaptation. In the May crisis T.Gargour & Fils cancelled a shipment of 100 Mercedes that were to be delivered. “Luckily, Mercedes is very supportive and have forced cars onto other countries when times have been bad and also have forced cars from other countries here when times are good,” Debbs explained. Currently, Lebanese car dealers are looking nervously at the horizon despite the extremely positive sales environment at the moment. Next year’s general elections, and the potential unstable political environment these elections could bring, are coming all too soon and there is fear in the market as to how the global economic crisis will affect Lebanon.

Bazerji is concerned, saying that, “Lebanese all over the world were hit and we need their money in the economy, but thank God the country was not too heavily involved.” So far though, Lebanon has gotten off lightly and even had some positive affects as Lebanese expatriates and Arab nationals transfer parts of their massive assets to Lebanese banks. Despite this, the affect will still be felt. “There is not a person that I know that has not lost money in trading but we just don’t know how much this is going to affect us and so it will be very complicated next year,” said Negib Debs. Regardless of the uncertainty on the market there is unanimous sentiment that Lebanon can sell more cars and subsequently most of the importers are seeing significant expansion to their infrastructure. In October of this year Bazerji & Sons opened an after-sales facility for its three brands spread over 400 square meters, one of the biggest in Lebanon. Kettaneh, the dealership representing VW, has just opened a new showroom earlier this year, Porsche has recently opened a new pre-owned center and Saad & Trad are making significant expansions to their showrooms for Bentley and Lamborghini. As well, T.Gargour & Fils had planned to build a new showroom but this has been delayed since the 2006 War.

Looking ahead

Despite Lebanon’s constantly fragile political situation and widely fluctuating market, currently there is confidence in the automotive sector. If the domestic political scene remains stable and the affects of the global financial crisis are mitigated, Lebanese car dealers can expect to continue their bullish expansion in both infrastructure and sales. The trend to buy large SUVs and other gas guzzling automotives will continue to be popular until serious rises in petrol occur and better road safety is implemented. The government has shown signs it is getting serious about road safety with a recent aggressive campaign on illegal parking and passenger seatbelts. But more will be needed to significantly improve safety on the streets. However, there will be an increase in sales of mid-sized SUVs that will increasingly come onto the market and there will continue to be a trend of a gradual shift to smaller, more efficient, engines. Local car importers in Lebanon will be hoping that they are moving to a greener future, but most of all to a calmer one.

Nadim Mehanna, an automotive engineer, was the first to introduce motoring on TV in the Middle East in 1992. In 1999 he founded N.M.PRO, a multi-media production company producing five different motoring shows for five different TV channels, the most popular ones being ‘Motorshow’, ‘Speed’ and ‘RPM’. N.M.PRO launched www.motoringplanet.com in 2002, the world’s largest motoring website by content volume — for car fans of the Middle East and the world over — where visitors can watch more than 1,500 hours of video-on-demand (VOD) and free live motoring web TV, broadcast worldwide 24 hours a day.

E What is the current state of the luxury automotive industry in the region?

The luxury automotive market in the region is the healthiest in the world. What I mean by this is that we have all the new models from most of the manufacturers. In the region people like cars, the car is a member of the family, they are proud of it.

I was at the last Paris Motor Show where I saw one guy from the Middle East who wanted to buy one of the concept cars. Concept cars are very confidential, each hand made, cost millions to produce and give you ideas for the future. The executives at the stand were astonished and tried to explain to the man that they cannot sell the concept car, that it is not for sale. This shows you how much people in the Middle East love to have the newest cars. Look at the Dubai syndrome — they want to have the biggest, the longest but it is nice sometimes it makes things happen.

Dubai, is especially healthy, because it is running the whole Middle East automotive business as most of the car manufactures have head offices and regional offices there. This is a very important development in the way that manufacturer run their Middle East operations in the region. Now the manufacturers know the market a lot better than before, when Nissan, for example, would run their Saudi operations from Tokyo.

With their regional headquarters in Dubai they have hands on contact with all clients, dealers, after sales, media and so on. They also have all the insight of what it is going on in the region and they monitor what the competition is doing. The dealers are also very active, firstly because they themselves are very passionate about cars, they also love the competition to have the biggest showroom, highest sales and biggest after sales facilities and so on.

But now they are also ‘afraid’, so to speak, because they are monitored a lot more closely by the head office, by the manufacturers, which are now based next door. For instance, ten years ago none of the showrooms respected corporate identity; every showroom was done based on the mood of the dealer or his family. You would have cars being sold next to fridges — if the dealer sold other products, they would all be combined in one place.

Now if the dealer has three different brands then they all have to be displayed separately, with all the appropriate corporate identities that go with each brand. There is a lot more professionalism now and having the head office here is making the Middle East look very corporate.

It has been important as well for the media that the manufacturers moving to the region because we now have access to products much faster. The media now in the Middle East is seeing concept cars sometimes before Europe because of the good market here. In general, there is a large amount of growth in all the GCC, where they are making good money.

E Have facilities been improved in the region?

A lot, especially the after-sales workshops are also something that has been greatly improved and this is very important. Before, you would buy a very advanced car and a warning light would go on in the dashboard and you would have a problem, the mechanics would look at you and would not know what to do. Now, due to the presence of manufacturers in the region, after-sales teams are trained and monitored much more effectively and car dealers are putting a lot bigger emphasis on this sector. In Kuwait, for example, the biggest and most advanced after-sales facility workshop in the world was just opened for GM. This means it is not about just selling cars; you have to sell the car and you have to be able to repair it properly and bring back the customer with your next model. This is something that has not been happening in the region until now. So currently the whole cycle is rotating properly in the region.             

E Is there going to be a shift to mid-size SUVs in the region, as people want more fuel-efficient cars?

To a certain extent, in the Middle East people love big cars. Families are bigger in the Middle East than in the US or Europe and also petrol is a lot cheaper. Firstly, it must be made clear that there is a misusage of SUVs. Before, these types of cars were used for industrial and military purposes. It has only been the last 10 years where there has been a huge demand for

SUVs on the road, for many reasons. People like the high cars for psychological reasons, for the perception of safety and the space, although it does not have as much space as they think.

In the GCC there is a huge chunk of SUV buyers that do go off road to the desert and in the desert you need to have a big car, big tires, high ground clearance. So for those that just use their SUV on the road, yes, some will move to medium-sized

SUVs but I would say this will only be 20% of the big market. The mid-size SUV will get most of its clients from those that are upgrading from sedans. But for those that have many kids and go to the mountains on the weekend or the desert then you have to have the big SUV; it is a real need.

E Lebanon this year had amazing growth but this is obviously not sustainable. What is the country’s market capacity?

The market here will not exceed 30,000 units. The growth in Lebanon this year is an exception. You had companies like IMPEX having a growth of 111% but this will not continue.

The market in Lebanon is not based on expatriates like in the Gulf where you have 50-60,000 people coming in every year. In Lebanon you also have people leaving and feeling very upset with the situation.

What happened this year is not a real indication of the market as there were just many people waiting after the 2006 War and the 2007 tensions. In the last week of May, when the plane landed from Doha, everyone came out and bought cars. Buying cars was like compensation for the buyers as a reward for getting through the troubles.

The market here is very emotional, even if there is a small incident people stop buying cars. Next year, I think, car sales will go up but in a much more calm and sustainable way.   

E Will there be a move to green cars in Lebanon?

There is only one dealer in Lebanon that has tackled hybrid cars and this was BUMC, who was the first to import the hybrid Toyota Prius, which is a medium sedan and can do 400 plus km per 20 liters of petrol, which is amazing for this size of car. But you have to pay around $35,000 which is double what you would pay for this sort of car normally. They will import the new model of the Prius in 2009.

When looking at reducing the engine size I have not seen this trend. In Lebanon people like options, like having a DVD in the back of the car and when you want these luxuries you have to have a big car. Also, the tremendous rise in petrol has not been constant and now it has dropped again. Some companies did reduce the size of their car fleet but it did not happen in a significant way. 

E What are the most successful cars in the Lebanese market at the moment?

Asian cars have been in the top spot for the last few years. Japanese and Korean cars are the most popular in Lebanon; it is a continuous fight between Nissan and Toyota for the pole position. These cars are popular because they are very reliable and don’t consume a lot of petrol, added to a very good resale value.

E In Lebanon more sports cars are sold than the rest of the region. Why is this?

The Lebanese love to show off and, of course, if you come with a convertible sports car it will be much more effective when you park in front of Sky Bar. The nature of the country is that there is no real restriction on speed and the mountain terrain is also good for these types of cars. The dealers as well are much more aware of the importance of having sports cars in their showroom. Plus, we have the rich GCC tourists that come every vacation and they also love to show off with their cars, and have bought them here and keep them here. 

Used cars in the GCC and Levant could not be more contrasting. While in the Levant the used car market has been the mainstay of car sales for decades and is seen by those in the industry as saturated and even dangerous, in the GCC the used car market is weak, very poorly developed and seen as a primary target for growth. Until now, the used car business has not been taken very seriously by official importers in the GCC and is seen as a risky business and one to stay away from.

Changing perspectives

Manufacturers are trying hard to change the view of the used car market held by their official import partners in the Gulf, but it is a big task. Charles Strothard, chief operating officer for Al-Habtoor Motors, official importers for Mitsubishi, Bentley and Aston Martin, explained that the used car market is seen as tricky because it is very difficult to control the trade in terms of prices, and that there is a big potential for fraud. “The market has not really demanded used cars, this is driven by the fact that finance providers are reluctant to finance used vehicles and when they do it is at a premium interest rate,” Strothard said. Thus, currently the used car market has been left to the traders’ suqs, such as al-Aweer in Dubai that has up to 200 showrooms. However, manufacturers disagree with the idea that there is not a demand for used cars in the GCC and see this market as increasingly significant and an important area for growth. The establishment of a controlled used car market is seen as critical by manufacturers because it is an essential element for maintaining the re-sale value of their cars, broadening the customer base and can be a great source of income. What is needed most in the GCC, the manufacturers argue, is a change of mindset amongst the official importers.

“Generally, the focus has been to change the mindset and showing the dealers that there is an opportunity here. In the past, other people have tried it and have not been successful,” explained Terry Johnsson, president and managing director of General Motors Middle East. GM, for instance, sells less than one used vehicle for every 10 new and, Johnsson said, he wanted the achieve the ratio of at least four or five to 10. This is compared to a more mature market where the ratio is 12-15 used cars sold to every 10 new ones. Jeff Mannering, managing director for Audi Middle East, asserted that Audi identified the “critical need” for a used car program in 2005. “Now we are starting the Audi Approved Plus car program. We are spending a lot of time and effort on Audi Approved Plus in Dubai, Abu Dhabi and Saudi Arabia and this program will be rolled out elsewhere,” Mannering said. Johnsson noted that things are changing rapidly in the used car market. Specifically, two important changes have occurred. “For the first time we are seeing organized auctions and web locator work put in place. Also Red Book, which is an Australian based company that publishes used vehicle prices, are just publishing their first edition for the UAE market. This is extremely important for getting a standardized view on used vehicle prices and re-sale values, and builds the foundations for a strong used car business,” he said. Mercedes has also been growing its used car sales business but Frank Bernthaler, director of sales and marketing for Mercedes-Benz, noted that, “we don’t get many quality used cars because people don’t trade their cars; they keep them and pass them down the family.”

Wrecks on the road

In Lebanon, the problem is quality, not quantity. Nabil Bazerji, managing director of G.A. Bazerji & Sons, car dealers for Suzuki, Lancia and Maserati, estimated Lebanese used car sales at 50,000 per year but has major reservations regarding the market. “What the government does not understand is that import of used cars in Lebanon is too big for the local need. This has negative effects on the country. One is fuel consumption, because people will upgrade if they buy a used car for the price of a new one, and they buy bigger cars with bigger engines. Secondly, the older the car gets the more it will pollute. Thirdly, there is a safety issue, as the imported used cars, in order to be competitive for the traders, have high mileage or are out of circulation in the countries they come from.” Safety issues have been a major concern when it comes to used cars in Lebanon and can be seen as one of the biggest motivations for the growing trend of Lebanese to buy more new cars. Nadim Mehanna, presenter and producer of the first and leading Middle East car show ‘Motorshow,’ voiced concerns over the lack of monitoring of used cars in Lebanon and the significant danger that this represents. ‘Cut and shut’ cars are of particular danger; this is when two halves of different cars are welded together. Mehanna warns that, “Even if the welding is done extremely well, if you brake heavily the slightest difference — I am talking millimeters — will make the car swing all over the place, and if it seriously hits another obstacle separation can easily occur.”

Bazerji is particularly scathing about the government’s sluggish response to this situation. “Unfortunately, I believe that the government’s mind is elsewhere, or sometimes there are some personal interests even if they are not involved financially. But politically, it helps to support these operations even if they are not beneficial to the country,” he said. A better regulated system has slowly started to appear with the Lebanese government gradually attempting to clamp down. By and large, one no longer finds shop owners putting two used cars for sale outside their stores. More importantly, however, is the fact that, encouraged by the manufacturers, official importers in the GCC have started to see used cars as a more important business opportunity. Porsche, for example, has just opened a brand new center for pre-owned vehicles. For Lebanon this is especially important because of the Lebanese habit to punch above one’s weight. “You have the Lebanese syndrome of ‘what car are you driving?’,” Mehanna explained, “If you make a survey of those in Lebanon that want to spend $20,000, 60% will go and buy a Mercedes or a BMW 2003 model, and only 40% will buy a new Renault or Kia instead. It is very important for the Lebanese to have these types of cars and this is what is keeping the used car market alive.”

The region’s used car market is alive and well, and should continue to be so. As official car importers take this market more seriously, at the behest of the manufacturers, this can only be a positive thing for those buying used cars. An end to unofficial and semi-official dealers and a move to a more institutionalized and professional used car market will be a happy development for those concerned about road and car safety. Soon it will become the norm in the region to buy used cars at all levels in the market, as in mature markets, but also expect with the used car a warranty and guarantee. And a lot of old cars are about to get cleaned up.

In recent years, Middle Eastern sales of Ferrari and Porsche grew faster than in the US and Europe. Aston Martin, now partly owned by Kuwaitis, is also focusing its attention on the region to help boost its sales. Even car manufacturers that are traditionally considered to fall into the ‘affordable vehicle’ bracket have been catching up with their luxury market segments, following the money trail. As an example, sales of luxury Hyundai cars rose by 12-15% last year, while in 2006 sales of smaller cars had dropped by 15%. A June 2008 Reuters report quoted Julian Millward-Hopkins, Middle East and Levant press manager for German luxury brand Mercedes-Benz, as saying, “If you look at sales worldwide it is a pyramid. At the bottom are smaller cars and at the top are luxury sports cars. In the Middle East it’s an inverted pyramid. Luxury cars do proportionately better here than elsewhere.”

While in Gulf economies sales of luxury cars are driven by high growth rates, high revenues, low gas prices and low tariffs on imported cars — even ones that fall into the higher end bracket — in Syria, Lebanon and Jordan the situation greatly differs. In Lebanon, Hadi, the owner of a brand-new Ferrari, explained that he imported his car from the Gulf and is using a UAE license plate in order to avoid the high taxes imposed by the Lebanese government. “My car was worth $180,000 and I would have paid $100,000 more if had opted to buy it locally,” he said. Hadi believes that many Lebanese prefer to purchase their luxury automobiles from the Gulf and re-export them to Lebanon to avoid a high mark-up on the car value. The same scenario can be found in Jordan and Syria, where car dealers said that taxes imposed on cars could vary from 80% to 175% of the car value, depending on the type of car, number of options and size of the engine.

Luxury sells

In Jordan, Zaid al-Abdallat, general manager of the Abu Khader group, exclusive dealers for Cadillac, GMC and Hummer, said that nevertheless he has been enthralled by the rising demand for luxury vehicles such as the CTS, in spite of unfavorable conditions such as soaring oil prices and high tariffs. He believes the luxury market is equally divided between four-by-four models such as the Cadillac Escalade and luxury sedans, with all cars imported fully loaded. “We have witnessed double-digit growth in the luxury segment in the last few years. Cadillac remains, however, a value driver, more than a volume driver for our company. Although gas prices have affected the automotive sector to a certain extent, new technologies applied to American cars, allowing for dramatically reduce fuel consumption as well as changes in consumer behavior — with most of our clients owning more than one car — have reduced the adverse effect,” added al-Abdallat. In Jordan, sales of luxury vehicles constitute 11% of total sales.

In Syria, Bassam Saadi, general manager for Bahi Motors, exclusive dealers for BMW and Mini Cooper, said that buyers of luxury cars have been relatively immune to the increase in the price of oil, which in any case is highly subsidized. Omar Shallah, managing director of Rakhaa, Nissan dealers in Syria, described the luxury segment to be essentially driven by fashion trends, contrary to what can be seen in the entry level car category. “Our luxury models, starting with the Murano, tend to witness high growth levels essentially in the first year after their launch. Luxury vehicles seem to have short life cycles here in Syria, and still lack customer’s brand loyalty.”

Soaring oil prices and fear of a possible ‘Carbon Judgment Day’ have pushed car makers and governments the world over to steer the automotive industry towards carbon efficient vehicles. The Middle East is, however, no California. Unlike their American counterparts who proudly boast their PZEVs (Partial Zero Emissions Vehicle) Arab movie stars tend to favor more traditional ways of transport.

PZEVs are vehicles equipped with engines that control carbon emission by increasing fuel mileage. Although PZEV, also known as Hybrid Electric Vehicles (HEV), run on gasoline, they also offer extremely clean emissions. Among the cars falling into the category is the Honda Civic Hybrid. In 2007, about 500,000 HEV were sold worldwide according to the website Marklines. In the US, sales of hybrids in January 2008 climbed 27.3% to 22,392 units, according to the website Green Car Congress, and this figure even excludes sales by GM.

Variety on the market

PZEV models are already offered by Toyota, Ford, Honda, GM, Subaru, Volvo and Volkswagen. Much of the time they feature similar models to ones we may be familiar with whether the Honda Civic or the four-by-four Lexus.

The green car fashion, although far from turning into a generalized frenzy in spite of high oil prices, has certainly been gaining momentum. Tesla Motors, the maker of the Tesla roadster electric sports car recently declared it had plans to raise $250 million in the next two years through debt financing and an IPO to bring its second model to the market. Hybrid car makers are also determined to structure a viable supply chain, reported The Times of London, noting that Think Global had signed a deal with Enova Systems to provide at least 1,000 power-control units for its small Think City electric car this year.

Traditional car manufacturers are also joining the fray by competing with new, state of the art models. As an example, Toyota plans to develop mass market cars powered by bio-fuels as well as plug-in electric batteries. To achieve its ambitious goal it has joined forces with Panasonic to expand production of lithium ion batteries to meet demand for a plug-in hybrid vehicle available in 2010, the car maker announced in June 2008.

Getting to the green

To catch up with the green fever, proper infrastructure will have to be put in place meeting certain standards including recharging electrical stations as well as hydrogen fuel stations.

Luxury cars are turning to green technology to respond to the trend and tap into the segment of high net worth individuals. Lexus was one of the first to hop on the bandwagon. Its four-by-four model is already available in the region, in Cyprus. Other luxury car makers have followed suit with BMW launching its BMW 7 Hybrid series last year.

Emerging markets are following suit. Three years ago Toyota started building its successful hybrid Prius in China in a partnership with FAW, China’s biggest car maker. FAW-Toyota announced that in 2008 it would be selling more than 1,000 cars in China, up from 400 in 2007.

Governments also seem to be upping up the ante. Europe’s carmakers are to ask the European Commission to lend the industry some 40 billion euros to support their efforts in producing more environmentally friendly vehicles, the Financial Times reported in October.

In the Middle East, the world’s prime oil producer, countries are trying to curb oil consumption of vehicles and implement alternative fuel schemes. Green Car Congress reported that government and private organizations in Egypt, Iran, United Arab Emirates and other oil-rich nations are implementing programs designed to reduce consumption of gasoline and diesel with natural gas vehicles. According to the International Association for Natural Gas Vehicles, “as many as one million natural gas-powered cars, trucks and buses could be plying Middle Eastern roads by the end of this decade.”

While Egypt already had some 70,000 natural gas vehicles driving over its roads and highways in 2006, the country has aims to reach 145,000 by 2010, and Abu Dhabi plans to have 10,000 vehicles running on natural gas. Even Iran has joined the race for green cars. In 2007 the BBC reported that Iran had announced it “will stop producing purely petrol-driven cars and produce more dual-fuel vehicles, which also run on gas.” In 2006 some 1,150,000 vehicles were manufactured in Iran.

Arab governments are also investing in the green car business. An affiliate of the Qatar Investment Authority (QIA) led a $65 million financing round for Fisker Automotive Inc., a producer of plug-in electric hybrids, reported Cutting Edge news. “Al Yousuf, a Middle East investment house and trading group based in Dubai has, since last March, financed two alternative vehicles companies, the Ontario-based Phoenix Motorcars and Zap Inc., an electric car company, in Santa Barbara, CA.,” stated Cutting Edge. In anticipation of the key role Lithium batteries will play in the electric car industry, Al Yousuf also invested in the Nevada-based lithium ion battery maker Altair Nanotechnologies Inc.

Word on the street

Zeid al-Abdallat, general manager of the Abu Khader Group, the dealer for Cadillac, Hummer, GMC, Opel and Chevrolet in Jordan, is enthused by the green trend. “We have been negotiating the import of green cars to Jordan with GM, which offers a wide variety of hybrid cars and expect to have them on the market hopefully very soon,” he said and underscored that he had been surprised by the number of people inquiring about hybrid cars in Jordan.

On the other hand, Bassam Saadi, general manager of Bahi Motors, distributors for BMW in Syria, is doubtful as to the readiness of the local market to embrace green cars, saying, “I don’t see it happening before at least five years. It is matter of cultural awareness, one that still lacks in the region.”

The current economic recession might also be another obstacle that may hinder the propagation of hybrid cars in the Middle East. With the economy slowing down, car makers might also be more reluctant to invest in green technology, at least for the foreseeable future.