With regards to new production facilities for the fertiliser and petrochemical products, GPIC is not adversely affected by that, because I feel that there is a growing demand for our products, though sometimes the relation between supply and demand in our business varies from time to time, due to the cyclic nature of our business. I feel any future expansion of the business has to be in the Arabian Gulf region because of the availability of inexpensive gas and its good strategic location.

OGN: What steps does GPIC take when market conditions become more difficult?

In addition to GPIC's usual focus on customer satisfaction through excellent quality, the company makes serious efforts to cut costs to meet the challenges of adverse market conditions. Higher capacity utilisation and rationalisation of freight and administrative costs are some of the important steps being taken by GPIC to achieve this objective.

Cost-cutting is a very important measure when market conditions become more difficult. However, this is an ongoing exercise that we maintain even when markets are favourable, while maintaining investment in continual improvement projects e g capex, process modifications, preventive maintenance and other safety, health and environment programmes.

At GPIC, we have a very successful programme for stimulating suggestions through employee participation. Evaluating and implementing these suggestions has resulted in considerable cost saving, process efficiency improvements and enhanced safety and environmental performance.

OGN: What are the factors which give GPIC a competitive edge in its key markets?

The company's financial performance has been excellent. Over the years of its operation, GPIC has repaid all bank loans, constructed the urea plant, utilising mostly internal resources and paid dividends to shareholders.

Because of the strategic location of GPIC in relation to Asian and European markets and its comparatively optimum cost of production, GPIC is likely to remain a competitive source of supply to the global markets and will continue to have an edge over competition for export.

GPIC's cost of production is considered to be the most favourable in the region and the world, despite the additional expenses that producers in this region incur, such as high freight charges, cost of spare parts and additional expertise etc.

This fact has been established through various benchmarking studies undertaken by international consultants. As a result, a reasonable profit margin is achieved from netbacks for each product, even when the global market experiences an economic downturn.

Currently, the achievable profit margins from all the three products are generating an excellent rate of return.

I must not fail here to mention and record that our workforce, through their exemplary cooperation, has been a major contributor in allowing GPIC this competitive edge. From the onset, we have established an excellent relationship at all levels of the organisation and maintained a very transparent management system which keeps the employees fully informed and involved in our cost cutting exercises.

OGN: The urea plant is now entering its fifth year of operation. Has this major investment met your initial expectations, and if so, how?

Production-wise, GPIC was able to produce urea at more than 109 per cent of the plant rated capacity during last year. Against a design capacity of 561,000 tonnes per year, the actual production last year was 612,750 tonnes. This is a significant achievement.

As far as the reliability of plant performance is concerned, as of March 30, 2002 the GPIC urea plant had set a record of around 500 days of continuous operation. It is a record practically unheard of for a urea plant of this large capacity. Thus, the onstream factor achieved by GPIC in the last year was 100 per cent.

The above facts clearly establish that GPIC's investment decision on the urea project was based on a realistic assessment of its technical capability. Maximising production at the highest level of onstream factor for the plant is the objective that GPIC has fulfilled within the short span of operation of the urea plant.

However, as far as the return on this major investment is concerned, the net margins available from the netbacks result in positive benefits and profitability and are expected to significantly improve in the future. The urea market is subject to cyclical fluctuations that result in variation in the prices for the urea product.

However, the peaks in urea prices are as inevitable as the troughs.

As China joined the World Trade Organisation (WTO), we expect it to lift the embargo on urea imports and thus the urea market will look more attractive in the short to medium term, as China is considered a major consumer of urea.

OGN: Do you plan to expand any manufacturing capacities in the short to medium-term and, if so, what are the factors which have influenced this decision?

GPIC has been exploring the possibilities of further expansion of its business through the development of new projects such as a large size ammonia plant in the short term, a urea plant in the medium term and a methanol plant in the long term, if the global market situation improves.

There are a number of other medium to large sized projects that are also being studied. There is a strong possibility that the gas for these projects may be available from neighbouring Qatar.

OGN: GPIC is well known for its achievements in preserving the environment. What do you think are the most significant and successful environmental projects undertaken at GPIC since the company was established, and why?

From its inception, the protection of the environment has always been of prime importance to GPIC. This was clearly demonstrated during the design, construction and operation phases.

However, GPIC runs its operation on a 'continual improvement' approach, not only in environmental issues but in all areas of its business, such as process efficiency, profitability, reliability and safety.

As an example of its recent successful environmental projects, GPIC has, on a volunteer basis, installed sophisticated on-line monitoring equipment for sulphur oxides and nitrogen oxide (SOx and NOx) emissions on its vent stacks. This project aims to enhance the monitoring of our environmental aspects and allows for early detection and control measures.

As part of its commitment to care for global environmental issues, GPIC has replaced all Halon-based firefighting systems in the complex with an environmentally-friendly fire extinguishing gas mixture.

The GPIC complex was declared Halon-free in the year 2000, ten years ahead of the compulsory requirement.

As part of the urea plant project and associated facilities, air conditioning units have been installed which use environmentally-friendly gas R-407C, rather than the more commonly used gas Freon 22, a proven ozone-depleting substance Freon 22. The use of R-407C has made GPIC the first industrial user of this environmentally-friendly refrigerant system in the region.

Another example of environmental initiatives that we are very proud of is the 'Charity Fish Farm'. This was constructed in 1996 near the seawater outfall in the South side of the GPIC complex.

The aim of the Fish Farm Project was the enrichment of marine life, the increase in Bahrain's fish stock and to demonstrate to the public, in a very practical way, that industrial development can coexist with a clean and healthy marine environment. Due to its success, GPIC expanded the size of its Fish Farm in 2001, to breed more of the various species found off the coast of Bahrain.

The improvement evident in the environment around GPIC has encouraged us to further demonstrate our care for our surroundings by establishing a Bird Sanctuary. A reasonable-sized nesting area and a fresh water pond have been created for the birds to enjoy their natural habitat with the view of maintaining and improving the environment around GPIC.

OGN: How many staff does the company employ? What percentage is Bahraini? What steps is GPIC taking to ensure the development of high calibre Bahraini staff for the future?

At the end of last year, there were a total of 550 employees, out of which 393 were Bahraini and 157 expatriate (i e a Bahrainisation level of 71.5 per cent). There was an increase in the number of expatriates in the period from 1996 to 1999 due to the recruitment of expatriate staff with the necessary experience for the urea project.

The GPIC management decided to start the commissioning and operation of the urea plant with at least 50 per cent Bahraini staff. To achieve this, experienced Bahraini staff were transferred from the existing plants to the urea project. They were trained in all aspects of urea technology.

The training and development of employees has always been of paramount importance to GPIC. The Company developed a training culture to develop its local manpower requirements, on the understanding that the success of any organisation depends predominantly on its human resource base.

GPIC has a state of the art Training Centre equipped with modern facilities and staffed by professionals who design and deliver a wide range of technical and professional training programmes.

OGN: As general manager of one of Bahrain's \leading, pioneering industries, what are your long term hopes for the Company?

The steady increase of Bahraini employees over the years is the aim of GPIC's Bahrainisation programme.

At the end of last year there were a total of 393 Bahraini and 157 expatriate employees, constituting 71.5 per cent Bahrainisation. GPIC plans to enhance Bahrainisation, as a strategic objective to 80 per cent by the year 2007 and 90 per cent by 2012.

In terms of future plans, GPIC looks forward to opportunities for further expansion of its existing business as well as further downstream diversification to embody added value to its primary products.

Based on various studies carried out by the Company, the following projects were assessed to be feasible for future implementation at the GPIC complex:

GPIC is investigating access to state-of-the-art technology for these projects from international process licensors.

Today, GPIC is a world-class operator and a leading petrochemical producer in the world. However, significant challenges lie ahead and GPIC will have to look at new ideas and adopt new practices and further develop its competitive edge to stay ahead in a new era of business.

Although GPIC is regarded as a model of successful cooperation of GCC countries, its expansion in terms of new production facilities does not match its successful performance records consistently achieved over the years.

A situation has now been reached in terms of development of the skilled workforce, the potential availability of natural gas from Qatar and the demand of local society that expansion has become imperative. The following strategic plans are being developed to ensure further growth of GPIC in the longer term:

It is hoped that implementation and follow-up of the above strategies in these critical areas will ensure the achievement of GPIC's mission, which is:

''To provide the world with the best quality petrochemical products, manufactured efficiently, economically and in a safe and eco-friendly environment by a creative and motivated workforce within a learning organisational structure''.

Thus, the above mission will enable GPIC to realise its vision: ''To be the best petrochemical company, recognised worldwide as a role model in its field of operation''.