Anda di halaman 1dari 62

CHAPTER 1

INTRODUCTION

1
1 INTRODUCTION

Arabian Industries LLC, is a leading 100% Omani owned Contracting Company with active
participation in Oman’s Hydrocarbon, Petrochemical and Energy Sector industries since 1990. The
Company posted a growth of approximately 330% during the period from 1990 to 2006 and is
currently rated one of the leading EPC Contractors in the Region.
2

I underwent an organizational study at Arabian Industries LLC to acquaint myself with the business
environment for a period of two weeks during the period of Nov. and Dec. 2009, as a part of the
MBA curriculum at the Mahatma Gandhi University, Kottayam, Kerala. This study was conducted
to understand the structure, function and processes of various departments and their inter-
dependence. During the course of study I was able to successfully interact with the employees of
the organization and they were happy to give me all possible information regarding the company.
They also took me to the plants and worksites where I got the first hand information about the
organizational processes and its functions.

The methodology consists of data collection through interview, observation and company
periodicals review. The data collected from different sources are classified, analyzed and
interpreted. Based on which an organizational structure, its functions and various departments are
identified. The various departmental functions are clearly identified and their processes & activities
carried out are recorded. An in-depth analysis is made me to understand the departmental process
based on which a process chart is prepared. The analysis further formed the basis for identifying the
departmental interdependence.

2 OBJECTIVE OF THE STUDY


The organizational study was carried out at Arabian Industries LLC to achieve the following
specific objectives:-
a. To understand the organizational framework & it’s functioning.
b. To gain knowledge about different departments of the organization and the
functions.
c. To study about the procedures of purchase and sales.
d. To study the interdependence of different departments.
2
e. To make a SWOT analysis of the organization
f. To understand the difference between theoretical & practical aspects of
functioning organization

3 METHODOLOGY

This study is descriptive in nature. This is also a grouping, which includes many particular research
methodologies and procedures, such as observations, surveys, self-reports, and tests.

3.1 Data collection


a. Primary data
Primary data have been collected through observation, personal interview and discussion with
managers and employees of the various department of the organization.
b. Secondary data.
Secondary data have been collected from company’s internal records, Publications, Annual
report, Journal, statutory report etc.

4 SCOPE OF THE STUDY


The study is being conducted for Arabian Industries LLC, Sultanate of Oman. And this study tells
us an overall view of organization and functions carried out by different departments like
Manufacturing, Maintenance, Marketing, Human Resource, Sales, and Finance etc..

5 AREA OF STUDY:
The study was undertaken at Arabian Industries LLC and the respondents were the Finance
Manager, Department heads and employees from different departments like finance, maintenance,
fabrication, manufacturing, and marketing etc.

6 DATABASE

The research efforts employ both primary and secondary research techniques to ensure that the
foundation of business intelligence and insight is accurate, current, and reliable. To conduct this
study, both Primary and secondary data have been used.

7 LIMITATIONS OF THE STUDY


a) Time was a major limiting factor.
b) Secondary data available from company manuals were
c) Lack of co-operation from certain departments due to their work load.
3
d) The information provided by the company is assumed to be authentic.
e) The information provided by the company is assumed to be authentic.

8 CHAPTERISATION

Chapter : 1 - Introduction
Introduction chapter gives an idea about the, organization where the study has conducted, the
nature of the study, the method of the study, scope of the study and it’s objectives and the
limitations of the study.

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


This chapter gives us a picture of Oman’s natural resources like crude oil reserves, Natural gas
reserves, it’s production and consumption and exports and imports etc..

Chapter : 3 - Profile of Arabian Industries LLC


This chapter discuss about the history, growth, activities, it’s subsidiaries, joint ventures,
projects, products, vision and it’s quality and responsibilities towards the environment and
society.

Chapter : 4 - Functional Departments.


Functional departments discuss about the various departments in the organisaion, it’s functions
and responsibilities and the functional of interdependence of departments

Chapter : 5 - SWOT Analysis


SWOT analysis of this study reveals the present position of the organization. It is the
assessment of the organization’s internal Strengths and Weaknesses and Opportunities and
Threats posed by its external environment

Chapter : 6 - Findings-Suggestions and Conclusions.

4
This the last chapter of this report and it discuss about the findings of some major
problems identified during the study and certain remedial measures to be taken to
overcome the identified problems and conclusion of this report.

CHAPTER 2

AN OVERVIEW OF OMAN ECONOMY


AND

PETROLEUM SCENARIO

5
OMAN ECONOMY & PETROLEUM SCENARIO

The twenty third of July 1970, the date of accession to the rule of the country by His Majesty Sultan
Qaboos bin Said, Sultan of Oman, is of prime significance in Oman's history. It forms a watershed
between traditional and modern Oman. Since then the Sultanate, under the leadership of His Majesty
Sultan Qaboos bin Said, Sultan of Oman, started establishing the pillars for its modern

The Vision for Oman's Economy: Oman 2020 aims at carrying out a substantial transformation in the
structure of the national economy by developing a multiplicity of income sources, instead of depending
mainly on a depletable source like oil in order to achieve economic balance and sustainable growth.
Accordingly, it is expected that there will be a gradual decrease in the contribution of the oil sector to
the GDP while the contribution of the non-oil sectors to GDP will increase gradually. It is expected that
by 2020 the oil sector contribution to GDP will be 9% while the contribution of the gas sector will
increase to 10 %. This significant transformation of the structural composition of the production base of
Oman's economy is what we mean by economic diversification

Now Oman is a middle income economy that is heavily dependant on dwindling oil resources. Because
of declining reserves, Muscat has actively pursued a development plan that focuses on diversification,
industrialization, and privatization, with the objective of reducing the oil sectors contribution to GDP to
9% by 2020. The drop in oil prices in 2008 and the global financial crisis reduced Oman’s budget
surplus in 2008 and slowed the pace of investment and development projects, but GDP growth still was
positive, in part because Muscat implemented an expansion fiscal policy.

The global financial and economic crisis of 2009 was a major test for all the Gulf countries, but
Oman’s steady and careful development policy and it’s long term vision kept it immune from the worst
implications of the crisis. Now the world economy is on the path of recovery and oil prices are on the
rise again, the Sultanate is geared for further economic growth and development.

Despite a sharp fall in average oil prices in 2009, the Omani govt. has managed to keep it’s fiscal
amount close to balance. Oman’s economy has navigated through the global economic crisis in
6
relatively good shape. Although country’s real non oil growth fell sharply in 2009, it remained in
positive territory. Oman’s financial sector was less affected by the global economic
crisis and the countries modest level of indebtedness has limited it’s external
vulnerability.

Petroleum Development Oman

Petroleum Development Oman is the foremost exploration and production company in the Sultanate. It
accounts for more than 90% of the country's crude-oil production and nearly all of its natural-gas
supply. The Company is owned by the Government of Oman (which has a 60% interest), Royal Dutch
Shell (which has a 34% interest), Total (which has a 4% interest) and Partex (which has a 2% interest).
The first economic find of oil was made in 1962, and the first consignment of oil was exported in 1967.

Details Oil and Gas. Production and Consumption

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


Oil Consumption : 81,000 bb/day.- (2008)
Oil Exports : 593,700 bb/day- (2008)
Oil Imports : 17,290 bb/day - (2007)
Oil Proved Reserves : 5.5 billion bbl - (Jan-2009)
Natural Gas Production : 24 billion cu – (2008)
Natural Gas Consumption : 13.46 billion cu m – (2008)
Natural Gas Exports : 10.89 billion cu m – (2008)
Natural Gas Imports : 350 million cu m – (2008)
Natural Gas proved Reserves : 849.5 billion cu m (Jan-209)
Chart No.-1

Oman Oil-Production and Consumption

7
CHAPTER 3

Mr.Amer Al Suleimani
(Managing Director)

8
ARABIAN INDUSTRIES LLC – A PROFILE

Managing
Director

HR
Joint
Venture
(JV) Finance
WPAI Manager

Internal
Chief Auditor
Operating
Officer

Logistic &
CMGR. Head Head Head Procureme Asset
HSEM QAQC AIMLLC AIPLLC AITSLLC nt Control
Manager
Manager

Corporate
Planning Marketing Proposal
Engineer

ORGANISATION CHART OF ARABIAN INDUSTRIES LLC

3.1 PROFILE OF ARABIAN INDUSTRIES LLC

Arabian Industries LLC is a leading engineering company catering to the needs of the energy sector
for the MENA region. It has facilities and expertise to meet the varied client needs of the Oil/Gas and
other energy sectors in the production, Processing and delivery phases. Started in 1991 in The Sultanate
of Oman, they have grown steadily and won many accolades and appreciations. The most prestigious

9
achievement is the Year 2008 “His Majesty Cup award for best five factories”. Their commitment to
the job, quality of work, earnestness to provide Total Solutions and desire to surpass client
expectations has consistently earned repeat business from their esteemed clients. These
qualities enable them to compete in international markets and succeed.
3.2 THEIR CAPABILITIES INCLUDE:

1. Engineering – EPC projects, Design and Engineering of Vessels, Skids and Tanks.
2. Manufacturing – Fabrication of Pressure vessels, Skids, Tanks, Heat Exchangers, Columns,
Process piping and Structural works
3. Construction – For the Oil and Gas industry, Refineries, Petrochemical projects,
4. Power plants as well as Power transmission & distribution networks and associated works

3.3 ACCREDITATIONS TO ARABIAN INDUSTRIES LLC.

• ASME ‘U’, 'U2' ‘S’ & ‘R’ Stamps: For the manufacture and repair of Pressure Vessels at their
state-of-art facilities at Rusayl & Sohar work centre.
• Society is their cradle so they need to preserve and enrich it; Customers are their Patrons so
they need to honor their commitments with them;
• The employees are their biggest assets, so they need to nourish and help them grow.

“Arabian Industries LLC and its subsidiaries are committed to become one of the leading
companies providing complete solutions to the energy sector by enhancing customer satisfaction,
strengthening employee & supplier relations and continually improving its product & services
through the Quality Continuous Improvement, Enhancing Employees Safety, Providing proper
resources & suitable working environment, achieving national development and improving
profitability and budget”.
Chart No.2

Monthly Sales Growth

30,000,000
12
11
20,000,000 10
9
Sales 8
7
10,000,000 6
4 5 Series1
3
1 2
0
1 2 3 4 5 6 7 8 9 1 1 1
Series1 1, 2, 4, 6, 6, 9, 11 13 17 19 21 25
Month

10
Monthly Sales for 2010

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

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

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

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

Chart of Monthly sales for 2009

3.4 Prestigious Product Range of Arabian Industries

• Production & Test Separators


• Pressure Vessels & Scrubbers

• Reactors & Regenerators


• Heat Exchangers & Coolers
• Storage Tanks (Shop built)
• Fuel treatment packages
3.5 Arabian Industry sincerely believes in:
• Society is their cradle so they need to preserve and enrich it;
• Customers are their Patrons so they need to honor their commitments with them;
• Their employees are their biggest assets, so they need to nourish and help them to grow.

3.6 SUBSIDIARY COMPANIES & JOINT VENTURES

3.6.1 SUBSIDIARY COMPANIES

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

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


LLC), is the manufacturing division providing complete solutions for engineering,
procurement and fabrication of equipments to cater to clients in the Oil & Gas,
Petrochemicals, Power , Fertilizer, Chemicals, and Refinery industries. The nature of
activities focuses on experience, expertise, performance, safety, reliability and quality.

◙ ARABIAN INDUSTRIES PROJECTS LLC –(AIP-LLC)

Arabian Industries Projects LLC (AIP), a subsidiary of Arabian Industries LLC, is the
Projects Division providing Engineering, Procurement, Construction and commissioning

11
services, to cater to clients in the Oil & Gas, Petrochemicals, Power, Fertilizer, Chemicals
and Refinery Industries. The nature of activities involves Management and Execution of
Engineering, Procurement, and Construction projects including associated Health, Safety
and Environmental systems. AIP has a sound Management policy with emphasis on
teamwork, efficiency and personal relations at all levels.

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

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


LLC, is a provider of total maintenance solutions under one roof to cater to clients in the
Oil & Gas, Petrochemicals, Power, Fertilizer, Chemicals and Refinery Industries. With the
strategic location of its Machine Shop facilities, AITS is well poised to deliver its services
promptly on time to its valued clients. Arabian Industrial Technical Support LLC has its
own Fabrication, Machining, Thermal spraying, grinding and NDT facilities.

3.7 JOINT VENTURE

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

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

The WPAI - J.V. was formed between Arabian Industries LLC. and Worley Parsons (Oman)
during the middle of 2005 as a framework to cater to the Engineering, Maintenance and
Construction contract for Petroleum Development of South Oman, awarded by PDO. This is a
five year contract which can be extended to 7 years.

The major scope involves the following:

12
Design, Detailed Engineering, Procurement, Construction, Pre-commissioning and
commissioning of Oil and Gas facilities covering the complete Civil, Mechanical,
Electrical & Instrumentation works involved in new and developmental projects

3.7.2 NORM PROJECT J.V.


This is another J.V. formed between Arabian Industries LLC. and an International institution
(specializing in the treatment of radioactive contamination).

NORM STANDS FOR : “Naturally Occurring Radioactive Materials” which are found in the
PDO sites during production of Oil from oil-wells. This project involves a patented process of
decontamination of such NORM contaminated equipments used in Oil processing, to the
Environmental criteria required for releasing them for reuse or scrap. This entails suitable
investments in setting up decontaminating facilities and developing the required infrastructure in
PDO sites for the said purpose.

3.8 PRODUCTS, CAPABILITIES AND SERVICES LISTING

3.8.1 OVER VIEW

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


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

EPC Projects

• EPC Projects: Gas Treatment Plants;

• Gas Pressure Reducing Stations;

• Steam and Water injection facilities; Power Plants


13
Maintenance Support

• Valve Testing , Repair & Maintenance services

• Repair & maintenance of choke valves

• Maintenance of static equipments

• Maintenance...

Process Equipment

• Engineered Process skid packages

• Pressure Vessels

• Heat exchangers & coolers

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

3.8.2 FACILITIES
ARABIAN INDUSTRIE’S MANUFACTURING AND FABRICATION facilities are located at the capital city of Muscat
and the port city of Sohar, in The Sultanate of Oman.

SOHAR WORKSHOP
Situated in an area of 12000 m2. High roof bays can handle a single section weighing up to 100 Ton
under the shed and 250 Ton in the yard, with thickness up to 150 mm in mono block construction.

RUSAYL WORKSHOP
The Rusayl workshop houses a fabrication facility with a well equipped covered bay and an open yard
which can handle a single section weighing up to 200 Ton in the yard with thickness up to 80 mm in
mono block construction.

PROJECT FACILITIES are located at their sites and these include temporary facilities like camps with
associated utilities. Other resource mobilizations include Plant, Equipment and Manpower suited to the
typical requirements of each project and client. Support services like procurement, contract
administration, cost control, manpower recruitment, etc. are rendered from Head Office in Muscat. All

14
the operations are backed by a logistic management system overseeing the deployment of a well
maintained fleet of vehicles and equipments.

ARABIAN INDUSTRIES TECHNICAL SUPPORT LLC has its own maintenance facilities at two locations – one
at Rusayl (In Muscat) and another on the coastal city at Sohar.

RUSAYL WORKSHOP
Rusayl Workshop, has its own Maintenance facilities in Rusayl Industrial Estate. ITS-LLC is under
certification process for API Monogram License (6A & 6D). ITS Rusayl workshop has an overall area
of 6550 square meters out of which 900 square meters are covered.
SOHAR WORKSHOP
Sohar Workshop, at Plot No: 257-259,261 &262, P. O. Box 93, Postal Code 327, and Sohar Industrial
Estate has its own Maintenance facilities in Sohar Area. ITSLLC is under certification process for API
Monogram License (6A & 6D). ITS Sohar workshop has covered area of 2310 square meters and
material storage facilities.

3.8.3 CAPABILITIES

ENGINEERING & CAPABILITIES

• Mechanical design of process equipments like pressure vessels, heat exchangers, separators,
manifolds and pre engineered skid packages and columns as per International standards ASME
Sec VIII Div1 & 2, PD 5500 Shell standards.

• Design of Shop and site Storage tanks as per international standards API 650, 653, EN 14015
and Shell standards & Design of direct and indirect heaters, fuel gas treatment plants

• Regular association with reputed international process owners and licensors in the Oil & Gas,
Refinery and Petrochemical industry for the design of equipment internals.

MATERIAL HANDLING, PREPARATION AND FORMING

• In-house mobile cranes of 25,50 & 80 MT capacities , and Over head cranes of single piece
handling capacity up to 50 MT .

• Hydraulic lifting and jacking arrangement for heavy loads up to 250 MT and CNC operated
multi torch profile cutting machine.
15
• Hydraulic rolling machines capable of rolling up to thickness range of 110 mm in cold
condition

• Heavy thick plate shearing and bending machineries and Fast cutting and pipe beveling
machines up to diameter 64” etc.
WELDING AND JOINING TECHNOLOGY

• Core competency and expertise in welding and joining technology of all construction metals,
especially in DSS,CRA and special alloy steels

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

Machining
Arabian Industries workshops are fully supported by in house machining facility with modern lathes,
milling, grinding, drilling, boring and press machines.
Testing

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

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

Heat Treatment

• PWHT facilities by Internal and external firing methods

• Local stress relieving facilities by electrical methods

• Gas fired PWHT furnaces adjustable to equipment sizes.

Painting and Coating


Qualified and certified for specialized painting, coating systems like GRE, Belzona, glass flake,
customized internal linings and corrosion resistant coatings.
Support Services
All their operations are backed up by a well managed fleet of vehicles and logistics existing at both
their facilities.

EPC and CMEI Construction works in:

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

Major Services Offered

16
• Maintenance of Static Equipments and Heat Exchangers including Tube Cleaning,
Re-tubing and Plugging

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


Turbines and DG Sets.

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

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

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

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

• Heat Exchanger internal tube coating using etc.

Site Based

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

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

3.8.4 EQUIPMENTS

SOME OF THE MAJOR EQUIPMENT & MACHINERIES UNDER ARABIAN INDUSTRIES LLC

Description of Equipment Machine Capability & capacity


CNC Profile Cutting Machine CNC operated gantry type multi torch ( 6 No Oxy fuel torches and 1No
plasma torch ) profile cutting( Flame and plasma)machine for plate(CS)
thickness up to 180 mm equipped with programmable CNC controller
4-Roll and 3-Roll Plate Rolling CNC Operated electronic synchronized 4- roll high thick plate rolling
Machines machine(DAVI Make) for cold rolling up to 110 mm and hot rolling up
to 212 mm thickness for 3.0 m width plates. 2 Nos. 3 Roll hydraulic
plate rolling machines
Heavy Duty Fast Cutter Heavy duty fast cutting and pipe beveling machines in diameter ranges 2
to 36 inches for CS/ SS/ LTCS/ DSS/ SDSS/ Inconel/ CRA (Make –
DL RICCI, USA ) with pneumatic/hydraulic drives
Cranes and Lifting equipment In-house mobile cranes of 25 & 50 MT capacities. Over head EOT
cranes of capacities 5/10/25 & 50 MT with single piece handling
capacity under the shed up to 100 MT.Hydraulic lifting and jacking
arrangement for heavy loads up to 250 MT.Jib cranes of 2 Ton and 3

17
Tons el.
Hydraulic Pipe Bender Hydraulic pipe bending machines capable to roll 20D and 40D bends
upto 12" Sch 40

3.8.5 PLANT AND MACHINERY

SOME OF THE MAJOR PLANT AND MACHINERY ITEMS :

Equipment Type Available Qty Model Make


Welding Rectifier 8 Nos XMT400, CST380,TB/10S/1000 Miller, Techsol
High Frequency/ Tig 2 Nos HF251-D1 Miller
Machine
Magnetic Drilling 2 Nos A100, 1150W Unibore, Bosch
Machine
Power Generator 5 Nos 108KV, P12.5P2/PETP3, GEP 33-1/30 Caterpillar, FG Wilson,
KVA-24KW, GEP 65-5/60KVA Olympian
48KW
Portable Generator 4 Nos RGD 500, SDV 7000S Robin, Potenza
Air Compressor 4 Nos XA 136, XAHS 710 CD7FB, XATS- Atlas Copco
156, XA-186
Blasting Pot 1 Nos 24650 Blastline (CE)

3.8.6 STRENGTH OF MANPOWER

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

18
ManPower

2009
2009
2008
2008 2007
2007 Series1
2006
Strength 2006 Series2
2005
2005
Series3
2004
2003 Series4
1 Series5
Year

3.8.7 SOME OF THE MAJOR PROJECTS OF ARABIAN INDUSTRIES LLC

“Over the last few years, AI-LLC, own a strong market presence and customer recognition
with endless capabilities, resources and dedicated manpower. “

1-Petroleum Development of Oman

Petroleum Development Oman is the foremost exploration and production company in the Sultanate. It
accounts for more than 90% of the country's crude-oil production and nearly all of its natural-gas
supply. The Company is owned by the Government of Sultanate of Oman (which has a 60% interest),
Royal Dutch Shell (which has a 34% interest), Total (which has a 4% interest) and Partex (which has a
2% interest).

Project-1

1Project C31/0606: Engineering and Maintenance Contract - PDO


JV Partner Worley Parsons
Type of Contract Service Contract

Project-2

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

Duration of the project 4 Years

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

19
Project-3

Name of Project Fahud Steam Injection Project - PDO


Duration of the project 12 months
Type of Contract EPC Lump sum

Project-4

Project C31/1097: Hubara -Saih Rawl - 132 kv Overhead line, South Base
Duration of the project 25 months
Type of Contract EPC , Lump sum

Project-5
Name of Project Pressure Reduction Terminal -PDO
Duration of the project 25 Months
Type of Contract Main EPC Contractor

Project-6

Name of Project Conversion of Propylene sphere to LPG services -PDO


Duration of the project 24 months
Type of Contract Main Contractor lumpsum

2-Petrofac Engineering & Construction Ltd

Petrofac is an international provider of facilities solutions to the oil & gas production and
processing industries.
1-Name of the Project LP Vessels for Kauther Gas Plant -Kauther Gas Project, PDO
2-Name of the Project Storage tanks ( CS/SS) for Kauther Gas plant (8 No),
3-Name of the Project DSS/SS Heavy wall piping for Kauther Gas plant

3-Worley Parsons Oman Engineering LLC

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

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

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

20
Steam Injection Project
3.4
Name of the Project DSS/SS Heavy wall piping for Kauther Gas plant-(8,000-
Inch.dia),
Kauther Gas Project, PDO

4-KEMPE Engineering LLC


360 T Silos
Name of the Project
Sohar Aluminium Smelter Development Project

10 nos. LP Vessels for PDO Saih Nahada Gas Plant-


Name of the Project Qarnalam .
PDO-Contract C 31/0090

SOME OF THE PRESTIGIOUS PRODUCTS FROM ARABIAN INDUSTRIES LLC.


1-BURHAN THREE PHASE PRODUCTION SEPARATOR.

2-BULK SEPARATOR FOR MARMUL PDO PROJECT.

21
3-LP/HP VESSELS FOR SOHAR REFINERY PROJECT FOR JGC CORPORATION JAPAN.

4-PRODUCTION SEPARATOR – PETROLEUM DEVELOPMENT OMAN PROJECT.

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

22
6-GAS TREATMENT PLANT-BHEL PROJECT FOR PETROLEUM DEVELOPMENT OMAN.

23
ENGINEERING PROCUREMENT AND CONSTRUCTION OF SOHAR REFINERY PRESSURE REDUCTION TERMINAL..
CLIENT: OMAN GAS COMPANY..
1

24
3.9 QUALITY POLICY OF ARABIAN INDUSTRIES LLC.

A dedicated team of Quality Assurance and Quality Control Engineers (lead by the Company’s
QA/QC Manager and Quality Systems Engineer) supports the implementation and monitoring of
Quality Management of the Company. All departments in the Company are certified to ISO 9001
and regular internal and external audits are conducted to check the compliance and renewal of
certificate.

25
ISO 9001:2000 requires that an organization’s quality policy provide a framework for
reviewing the company’s quality objectives. The policy should give an
overall direction for the organization, and its objectives should flow in that
direction. But because of outside forces such as customer requirements and market environments,
business conditions can change. If this happens, the alignment between quality policy and
objectives can become off-centered. So, the standard requires that management periodically
review changes to both the policy and objectives. An organization’s objectives must be
measurable and its quality management system processes designed to meet those objectives.

3.10 MISSION AND VISION

3.10.1 MISSION AND VISION OF AI-LLC

1 Mission

To achieve market leadership through excellence in the quality of product and services by adopting
state of the art technologies and innovative management approaches aim towards customer
satisfaction.

2 Vision

Arabian Industries LLC is committed to providing their clients with the best possible service and
results at a competitive price, without compromising on quality, health, safety, environment, business
ethics or welfare of their staff. “As a recommended supplier, and a preferred employer, AI LLC is
meeting the objectives and needs of their clients & employees.”

3 Policy

Arabian Industries LLC and its subsidiaries are committed to become one of the leading company
providing complete solutions to the energy sector by enhancing customer satisfaction, strengthening
employee & supplier relations and continually improving its product & services.

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

26
• Continually improving the effectiveness of quality Management System
• Enhancing safety of employees and protecting the Environment
• Timely delivery of products
• Providing adequate resources and suitable work environment
• Training & Development of work force and meeting statutory Omanaization target
• Improving profitability

4 Strength

Integrity in diversity. Though their business expands to diverse sectors they still abide by their vision
& policy and maintain integration of their Quality management system and consistency of operations
through empowerment, motivated & dedicated peers and strong leadership

5 Approach

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


customers through out the organization. They achieve this through team-building, supply chain
management and continual training & development of their employees.

6 Credentials

AI LLC’s quality management system established since 1996 has been certified to ISO 9001 – 2000.
Their pressure equipments manufacturing facilities are accredited by ASME for U, U2, S and R
stamps. Oil & Gas field equipments manufacturing facilities are certified by API for conformance to
6A, 6D and 16A requirements.

ISO 9001: 2000

AI LLC’s Quality Management System is certified to ISO 9001: 2000 by M/S. Velosi Quality
Management International Limited. The scope of accreditation includes:

3.11 ARABIAN INDUSTRIES MANUFACTURING LLC

Design, manufacturing and installation of process equipments like columns & reactors, pressure
vessels & separators, heat exchangers, gas treatment packages, manifolds, piping pre-fabrication and
storage tanks in accordance with ASME/U/U2/S/R symbol requirements / BS & other international
standards.
27
3.12 ARABIAN INDUSTRIES PROJECTS LLC

Engineering, procurement, construction, project management (involving project


planning execution, monitoring, installation, commissioning and post delivery maintenance
activities) for oil & gas, desalination & power plant, fertilizer plant, storage tanks, pipeline
construction, flow line construction, electrical over head lines.

3.13 ARABIAN INDUSTRIES TECHNICAL SUPPORT LLC

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


turbines & wellhead equipment repair and re-manufacture of all types of valves pressure vessels,
tanks, heat exchanger cleaning and re-tubing, machining of oil & gas field items, calibration, pressure
gauges, on site service like bolt tensioning, flange facing, cold cutting, on-line repairs of valves.

3.14 CORPORATE OBJECTIVE

3.14.1 To be of service to the nation and to contribute effectively to its economic well being and
growth through the production, supply and marketing of infrastructure facilities to Petroleum
Production and it’s allied industries in Sultanate of Oman.
3.14.2 To sustain and improve its pioneering role in the development of engineering and technology in
manufacturing industry through continuous research and development.
3.14.3 To improve productivity and maintain high standards of quality and adopt effective measures
for controlling cost in all aspects.
3.14.4. To ensure for its customers the availability of its products and services on reasonable terms, for
its shareholders a fair return on capital invested and, for itself, development of adequate
internal resources for continual growth and expansion.
3.14.5 To develop, train and maintain a team of motivated and disciplined personnel with required
skills and abilities, and to encourage innovation and to create a condition for their functioning
and career development so as to improve their overall quality of life

3.15 CORPORATE GOALS

3.15.1 To achieve a net profit of OMR: One Million per year with a turnover of OMR: 100 Million by
the year of 2010
3.15.2 To focus on cost reduction and technology up gradation in order to become competitive in each
line of business.
3.15.3 To constantly innovate and develop new technology and services to satisfy customer
requirements.
28
3.15.4 To invest in new business lines, where profit can be made on sustainable basis over the long te
rm.
3.15.5 To compete through speed, agility and flexibility in recognizing and
capturing opportunities in existing markets.

3.16 ARABIAN INDUSTRIES LLC AND IT’S CORPORATE SOCIAL RESPONSIBILITY

3.16.1 CORPORATE SOCIAL RESPONSIBILITY-(CSR)”

Corporate Social Responsibility a concept whereby organisations consider the interests of


society by taking responsibility for the impact of their activities on customers, suppliers, employees,
shareholders, communities and other stakeholders, as well as the environment. This obligation is seen
to extend beyond the statutory obligation to comply with legislation and sees organisations voluntarily
taking further steps to improve the quality of life for employees and their families as well as for the
local community and society at large.”

• Reduced costs, Increased business leads,

• Increased reputation, staff morale and skills development

• Improved relationships with the local community.

29
• Innovation in processes, products and services
• Managing the risks a company faces.

3.16.2 ECONOMIC RESPONSIBILITIES:


The first criterion of social responsibility is economic responsibility. The business institution is, above
all, the basic economic unit of society. Its responsibility is to produce goods and services that a society
wants and to maximise profit for its owners and shareholders. Economic responsibilities, carried to the
extreme, is called profit-maximizing view; it was advocated by Nobel economist Milton Friedman.
This view argued that a company should be operated on a profit-oriented basis, with its sole mission to
increase its profits so long as is stays withing the rule of the game. The purely profit-maximizing view
is no longer considered an adequate criterion of performance in the world in general. Treating
economic gain in the social as the only social responsibility can lead companies into trouble.

3.16.3 LEGAL RESPONSIBILITIES

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

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

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

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

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

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

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

3.16.4 ETHICAL RESPONSIBILITIES


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

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

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

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

30
Unethical behavior occurs when decisions enable an individual or organization to gain expense of

society.

3.16.5 SOCIAL AWARENESS AND EDUCATION


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

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

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

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

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

businesses responsible for their actions is growing.

3.16.6 STAKEHOLDER PRIORITIES


Increasingly, corporations are motivated to become more socially responsible because their most
important stakeholders expect them to understand and address the social and community issues that are
relevant to them. Understanding what causes are important to employees is usually the first priority
because of the many interrelated business benefits that can be derived from increased employee
engagement. Key external stakeholders include customers, consumers, investors (particularly
institutional investors), regulators, academics, and the media).

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

31
Arabian Industries LLC is committed to contributing to the sustainable development of the
communities in which its businesses are operated. They recognize that achieving
corporate social responsibility while meeting their business objectives requires
balance among all stakeholders, including shareholders, customers, staff, business partners, community
and environment. Therefore, the organization has been participating in various initiatives, including
charity, education, culture & sports, environmental protection and promoting staff's well-being and
volunteerism, to enhance their positive impact on people and communities”

CHAPTER 4

32
FUNCTIONAL DEPARTMENTS

1-FINANCE DEPARTMENT

1. Objectives

8.1 To Manage & account for the financial resource of the Organization, to forecast its requirement
in the future and plan accordingly and to check for deviation.
8.2 Report the financial performance of the company to Management, stakeholders & and to
comply with the Govt. rules and regulations

33
2. ORGANISATION CHART OF FINANCE DEPARTMENT.

MANAGER-FINANCE

MANAGER FINANCE
(ASSISTANT

CHIEF ACCOUNTANT

ACCOUNTS-PAYABLE ACCOUNTS-RECEIVABLE

ACCOUNTS-PAYABLE ACCOUNTS RECEIVABLE

ACCOUNTS-PAYABLE BANK MANAGEMENT

INVENTOR MANAGEMENT CASH MANAGEMENT

ASSET CONTROL DEPARTMENT SALARY AND WAGES

FUNCTIONS OF FINANCE DEPARTMENT

Some of the major functions in finance departments are, Management of Accounts Receivable,
Accounts Payable, Accounting of Materials, Banking, Managing of Financial Resources and
Budget preparation, Cost accounting, Auditing, Preparation of financial statements & Reports,
Corporate Planning etc.
According to the nature of the functions, Finance department in AI LLC is divided into four main
sections for carrying out its process. They are:
34
3.1 Stewardship of Finance Functions
3.2 Servicing and Monitoring of Project Management Activities
3.3 Management of Company Accounts
3.4 Implementation of Corporate and Contract Budgets.

3.1 Stewardship of Finance Functions

3.1.1 Development of finance facilities


3.1.2 Liaison with bankers and other funding agencies.
3.1.3 Managing funding flow and cash balances.
3.1.4 Providing for requirement of Corporate Budgets.
3.1.5 Reporting on financial status to Management.
3.1.6 Liaising with Customers & Suppliers regarding cash flow.
3.1.7 Publishing monthly, quarterly, and Annual Financial Statement.
3.1.8 Development of Management Information system.

3.2 Servicing and Monitoring of Project Management Activities.

3.2.1 Supporting Estimation and Tendering Effort

3.2.2 Approving entries for Finance and Accounts in Estimate summary.

3.2.3 Supporting with Finance and Accounts Services during execution.

3.2.4 Monitoring and Reporting Progress during execution.

3.2.5 Reporting Project Performance on Completion.

3.2.6 Insurance Management.

3.3 Management of Company Accounts.

3.3.1 Banking Management and Controls (Cash Book ledger)


3.3.2 Accounts Receivables and Accounts Payables Management
3.3.3 Inventory/Purchase Administration-(AP Ledger)
3.3.4 Salary and wages, Administration, End of Service
3.3.5 Preparation of Year end Accounts/Management of External Auditing.
3.3.6 Preparation of quarterly and Annual Performance Report
35
3.4 IMPLEMENTATION OF CORPORATE AND CONTRACT BUDGET

3.4.1 Review of Project control budgets


3.4.2 Management of corporate budget Exercise.

3.5 PROCESS OF FINANCE DEPARTMENT.

3.5.1 Accounts Payables.

3.5.1.1 Receiving Invoices from suppliers


3.5.1.2 Verification of invoice with PO and supporting documents.
3.5.1.3 Sorting the invoice according to the divisions and logged in ERP accordingly.
3.5.1.4 Getting the approval in the invoice from the respective buyer
3.5.1.5 Prepare GRN and ARN and approval for the service category invoices
3.5.1.6 Booking the invoices in ERP on the basis of Purchase Order.
3.5.1.7 Print and attach Purchase Journal Voucher along with invoices.
3.5.1.8 On due basis releasing the payment to the suppliers.

3.5.2 Account Receivable.

3.5.2.1 Receive Customer order from Marketing or operation department.


3.5.2.2 Receive copy of DO or JCR from the operation department
3.5.2.3 Generate Print and compile Invoice from ERP
3.5.2.4 Scrutinize the invoice with relevant documents.
3.5.2.5 Distribute the invoice to the customers
3.5.2.6 Follow up for the payment and prepare receipt for the payment.

3.5.3 Cash Payouts.

3.5.3.1 Cash payment vouchers for sundry office expenses


3.5.3.2 Employee settlement as per the advice from salary department.
3.5.3.3 Verification of document with supporting
3.5.3.4 Take approval from Account head.
3.5.3.5 Closing cash book every day
3.5.3.6 Physical cash verification of cash balance on a daily basis.
36
3.5.3.7 Surprise check of cash balance weekly basis.
3.5.3.8Taking approval, Pay and book the voucher in ERP.

3.5.4 Salary Processing and Accounting.

3.5.4.1 Collect, Re-concile and compile attendance data.


3.5.4.2 Attendance is recorded at each location on daily basis.
3.5.4.3 Inform res. division for missing attendance.
3.5.4.4 Collect overtime data and verify with OT rules of the company.
3.5.4.5 Alter employee’s earnings and deduction for arrears.
3.5.4.6 Final processing of salary.
3.5.4.7 Print Bank transfer letter and detailed statement.
3.5.4.8 Getting authorization.
3.5.4.9 Forward transfer advice letter to bank.
3.5.4.10 Print and distribute salary slip.

3.5.5 Annual Budgeting

5.5.1 Update the Budget Assumptions.


3.5.5.3. Operating Expenses
3.5.5.4 Man Power Cost
3.5.5.5 Revenue and Over Heads
3.5.5.6 Capital Expenditures
3.5.5.7 Cash Flow.
3.5.5.8 Collect data for Next year annual budget in prescribed format.

3.5.5.9 Review the assumptions listed by Operation’s Department .

3.5.5.10 Define capacity level of each divisions and bottleneck operations.


3.5.5.11 Update Budget Model.

3.5.5.12 Compiled data received from Operations Department.


3.5.5.13 Verify cost element wise data’s with last years actual.
3.5.5.14 Compare operating cash flow with capital out flow.
3.5.5.15 Presenting budget to senior management
3.5.5.16 Release the budget to operating divisions.
3.5.5.17 Monitoring budget utilization on regular basis
3.5.5.18 Conducting quarterly budget review
37
3.5.5.19 Compiling actual financials for the period
3.5.5.20 Preparing detailed variance report

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

3.5.6 Internal Auditing

3.5.6.1 Identify the scope of Audit

3.5.6.1.1 Checking with various departments about their need of Auditing.


3.5.6.1.2 Review the recommendations of the external auditors

3.5.6.1.3 Review the result of previous auditors.

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

3.5.6.1.5 Then summarize this information in list of possible audit.

3.5.6.1.6 Review this list with Audit committee and seek their advice.
3.5.6.1.7 Finalize the list of audits, noting approximation of resources and time
requirement.
3.5.6.1.8 Short the report by priority level

3.5.6.2 Obtain Audit Committee Approval

3.5.6.2.1 Presenting the Audit list to Audit Committee


3.5.6.2.2. Make the final adjustment recommended by audit committee.

3.5.6.2.3 Communicate the audit program and audit methodology to department


heads.
3.5.6.2.4 Conduct audit as per schedule.
3.5.6.2.5 Create preliminary audit report

3.5.6.2.6 Assembling all the findings from the internal audit department.

3.5.6.2.7 Add recommendations to the reports.


3.5.6.2.8 Sending reports to the department heads.

3.5.6.2.9 Adjust the report based on any review comments.

3.5.7 Fixed Asset control system.

3.5.7.1 Receive Asset Purchase Requisition


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

38
3.5.7.3 If asset is not available, evaluate the proposal and record the fact in evaluation form.
3.5.7.4 Send the asset purchase evaluation for approval and get the
approval.
3.5.7.5 Prepare purchase requisition.

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

3.5.7.8 Update the asset master in ERP..

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

3.5.7.10 Up date fixed asset register.

3.5.8 Depreciation Process

3.5.8.1 Monthly process depreciation in ERP


3.5.8.2 Fixed asset can be update with monthly depreciation process

3.5.9 Fixed asset accounting

3.5.9.1 Fixed asset disposal


3.5.9.2 Fixed asset physical verification
3.5.9.3 Evaluation of fixed asset proposals.

3.5.10 Monthly Management Information Report

3.5.10.1Freeze attendance for the month after confirming with pay roll executive
3.5.10.2Provision for retirement benefit-(Auto thru ERP)
3.5.10.3Provision for leave
3.5.10.4Provision for end of service benefit

3.5.10.5 Provision for Bonus

3.5.10.6Provision for Air Passage


3.5.10.7Provision for Long Term service benefit
3.5.10.8Provision for social security insurance
3.5.10.9Verify GL balance before and after posting the above positions

3.5.10.10 Process Depreciation

3.5.10.11 Process depreciation on Temp node in ERP

39
3.5.10.12 Process depreciation in update mode and pass JV.

3.5.10.13 Transfer GL data for the month to management thru Transfer


Management account section in ERP.

3.6 SOME KEY INFORMATION

3.6.1 Insurance schemes

“In personal and business affairs; the correct Insurance is vital. Wrong or inadequate
cover, can lead to disastrous consequences for individuals, as well as business
enterprise. The right advice makes all the difference and prevents costly mistakes. As
far as a business a firm concerned, the most obvious things need, is to insure it’s valued
human power, and other properties like; buildings, plant and machinery, stock and
goods in transit (export and import)etc

To ensure all this AI LLC is having a Health Insurance Policy for it’s valued man
power, for all exports imports an Open Marine Policy, and also other various policies
are under various schemes with a reputed insurance company in Oman.

The various insurance schemes are:


1 Fire Insurance.
2. Machine break down insurance.
3. Electronic equipment insurance.
4. Insurance for vehicles and heavy equipment.
5. Personal health insurance.
6. Storage insurance.
7. Open cover policy for all inland and foreign purchases, and for exports and
imports.

3.6.2 Corporate Plan

40
Corporate plan is prepared by taking estimates and future projections for the coming
year. The corporate plan is revised every year by changing current year data’s and
adding New Year data’s. This plan projects the company’s position for the next years.

3.6.3 Working Capital Management

The Working capital is essential for any Organization to meet its day to day
requirements. Working capital may be specified as the firm’s current assets over
current liabilities. As a large scale company, AI LLC is also requires sufficient
working capital to meet its daily requirements.
AI LLC uses letter of credit and bank guarantee mainly for the purpose of financing the
import of raw material and for executing the project works. If the Co. needs to avail
more than the approved limit, the finance department will have to take permission of
Board of Directors.
Arabian Industries LLC approaches different banks to raise funds to meet its working
capital requirement and it maintains a consortium of banks for the same. They are:

BANKERS SUPPORTING AI LLC.

1. National Bank of Oman


2. Bank Dhofar
3. Bank Sohar.
4. HSBC
At present Arabian Industry maintains financial arrangements with all these four banks
for it’s working capital requirements.

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


Ten Million), Guarantee’s up to an amount of OMR#15,000,000/- (Riyal Omani:
Fifteen Million) and Letter of Credit up to an amount of OMR#15,000,000/- (Riyal
Omani : Fifteen Thousand).

41
2 PURCHASE DEPARTMENT

The purchase procedure covers the following areas of procurement of


goods and services for the company.

1. Joint Venture related materials purchases


2 Capital items (For project and other purposes).
2. Equipment and Spares.
3. AI-LLC Project related Material purchases
4. Service items
5 Office stationery and other items
2.1 OBJECTIVES

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

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

2.1.3 To provide the necessary expertise, advice, information to the Curators and Education
Officers with regard to the best quality of material available in the market, supplier’s
capability and performance etc.
2.1.4. To develop and maintain good buyer-seller relationship.
2.1.5. To promote source development.
2.1.6. To maintain PDO standard, reputation, and credibility in the market by fair dealings
and prompt payments.

2.2. MAIN FUNCTIONS

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

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


2.2.2. Checking of requisitions/purchase indents.
2.2.3. Selection of suppliers for issue of enquiries.
2.2.4. Issuing enquiries/tenders and obtaining quotations.
2.2.5. Analyzing quotations and bids etc., and preparation of comparative statement

42
2.2.6. Negotiating contracts.
2.2.7. Checking legal conditions of contracts.
2.2.8. Issue of Purchase Orders.
2.2.9. Verification and passing of suppliers’ bills
2.2.10. Maintenance of purchase records.
2.2.11. Maintenance of vendor performance records/data.
2.2.12. Clearance of foreign consignments.
2.2.13. Development of reliable and alternate sources of supply.

2.3. CENTRALIZED PURCHASES

2.3.1. As every divisions has a Purchase Department, all purchases of stores shall be
centralized in the interest of economy, uniformity and as a matter of policy since
custodian and consumer should not be the same. Accordingly the purchase of office
stationery, forms, liveries, furniture etc., shall be made by the Purchase Department
and not by the administration sections. Transfer/adjustment of staff shall be made
where necessary.

2.3.2. Local/cash purchase of stores shall continue to be made in exceptional cases by the
Heads of Divisions/projects under their power but as far as possible Purchase Officer
should be associated even while making such purchases.

2.4. VENDOR DEVELOPMENT AND VENDOR PRE-QUALIFICATION

Pre qualified vendor list shall be maintained by purchase department. The vendor list
comprise of all pre-qualified vendors under each category stating clearly the respective
capability in terms of volume of work, specification, level of technology, etc with rating of
the vendors. Addition/deletion to vendor's lists is made on a continuous basis on the above
criteria.
There are three types of Purchase Requisition (PR) as follows:
1. For projects and major capital equipment
2. For stores, including stationary and office supplies, spares

3 For Services.

43
PURCHASING DEPARTMENT ORGANIZATIONAL CHART

MD

COO FM

BUH
BUH BUH

PURCHASE PURCHASE
PURCHASE
MANAGER MANAGER
MANAGER

PURCHASE PURCHASE
PURCHASE
CLERK CLERK
CLERK

MD – Managing Director
COO – Chief Operating Officer
FM – Finance Manager
BUH – Business Unit Head

44
3. MARKETING DEPARTMENT

3.1. Marketing Structure

MD

BUH BUH

Marketing Executive Marketing Executive

3.2. MARKETING STRATEGY

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


Industries LLC. This involves the following analyses:

3.2.1. STRATEGIC PLANNING

Evaluate current operations

Examine competitor capabilities

Forecast market trends

Identify related markets and growth opportunities

3.2.1.1. UNDERSTANDING MARKETS :

Strategic perspective of the market requires skilful analysis of the trend and how they
affect the market size and demand for the firm’s product.

3.2.1.2. FINDING MARKET NICHES :

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

45
3.2.1.3. Product and service planning

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


firm and competitors, besides an analysis of the situation in which the customer
prefer the product and services.

3.2.1.4. Distribution :

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


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

3.2.1.5. Managing for result :

With pressure on costs, prices, and margins, marketers will have to make effective
utilization of every baizas spent in marketing.

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

Porters model is based on the insight that a corporate strategy should meet the
opportunities and threats in the organization’s external environment. Especially,
competitive strategy should base on and understanding of industry structures and the way
they change.

Porter's Five Forces is a technique that enables better strategic planning in business.
The original competitive forces model, as proposed by Porter, identified five forces which
would impact on an organization’s behavior in a competitive market.

A Porter's Five Forces is a technique that enables better strategic planning in business.
B The Five Forces have become the defector standard in analyzing a company's strategic
position and its ability to generate-profits.

1. The rivalry between existing sellers in the market.

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

3. The impact of the suppliers on the sellers.

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

5. The threat of substitute available in the market.

6.
46
Application
Market opportunity assessment, competitive analysis, and industry blueprint

Benefits:
A comprehensive framework that leads to deep understanding of an industry and qualitative
trends.

COMPETITIVE STRATEGY + SMART PLANNING + FLAWLESS EXECUTION = SUCCESS

4. HUMAN RESOURCES DEPARTMENT

4.1. GENERAL INFORMATION

Human resource management is one of the most complex and challenging fields of
endeavor. It is considered to be the most expensive and important resource of every
organization. In AI LLC the scope of Human Resource Department is very vast.

4.2. OBJECTIVE OF HR DEPARTMENT

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

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

47
ORGANIZATION CHART OF HR DEPARTMENT

48
Administration Manager

HR Manager

HR Executive Payroll Executive

HR Assistant Payroll Assistant

HR Assistant Payroll Assistant

49
4.3. Functions of HR department.

4.3.1. Organizational human resource planning & development


4.3.2. Retirement & selection
4.3.3. Wage & Salary administration
4.3.4. Employee records maintaining
4.3.5. Performance appraisal
4.3.6. Welfare programmer
4.3.7. Job evaluation
4.3.8. Handling employee grievances
4.3.9. Handling the legal issues within & outside the Organization

4.4. PROCESS OF HR DEPARTMENT

The human resource department has 3 blocks which are:


1. Establishment
2. Industrial relation
3. Welfare

4.4.1. Establishment Section


The main functions are:

4.4.1.1. Recruitment & selection


50
4.4.1.2. Transfer, rotation and placement of employees.
4.4.1.3. Wage and salary administration
4.4.1.4. Performance Appraisal
4.4.1.5. Retrenchment
4.5. Well-being of the employee

The main objective of welfare measures is to maintain healthy working environment and
raise the standards of living of employees which create loyalty to the organization among
the employees.. Arabian Industry has always maintained very healthy welfare measures.
Statutory scheme Agreement scheme

4.6. Following are the various facilities provided by Arabian


Industries LLC to their Employees.

4.6.1 Statutory and Agreement scheme

1. Payment of gratuity
2. Health, safety, welfare
3. Transport facilities
4. Uniform & footwear to the workers
5. Leave & holidays
6. Retirement benefit fund
7. Local travel expenditure
8. Conveyance Allowances
9 Special vehicle loan & Leave travel concession

4.6.2 Voluntary Scheme and Incentives scheme

1. Free food and accommodation for the worker


2. Production incentives & Business incentives
3. Group personnel accident insurance scheme
4. Vehicle loan & Sports & Recreation
5. Incentives for employees & Suggestion scheme

4.7. Industrial Engineering


51
The main objective of this section is to make effective utilization of
the manpower resources and restructure it for the benefit of the
organization.
The main functions are:

1. Manpower planning that composes of Manpower audit


2. Custodian of manpower inventory
3. Removing system bottlenecks
4. Maintenance scheduling

5. Work environment study and Employee problem analysis

4.8. Administration wing

The wing is headed by Ad. Manager and maintains orderliness in internal affairs of the
department.
The main functions are:

1. Checking the performance of each employee.


2. Consolidating the reports of different HR sections
3. Act as a linking chain between different sections
4. Office and admin work of HR department
4.9. Recruitment Policy

The Recruitment policy is done as per prescribed recruitment specification with proper
authority appointed by Board of Directors..
The following are the sources of recruitment.

1. Confirmed employees within the division or company


2. Recruit qualifies candidates from out side

4 FUNCTIONAL INTERDEPENDENCE OF DEPARTMENTS

52
5.1 Finance & Materials

Finance department procures fund for production and accounts for it. With these funds materials
are brought. During purchase the company has to enter into contract, give letter of credit and
other necessary documents, which is done by the finance department for procuring materials
Manufacturing, Marketing, Materials and finance

Manufacturing department will product the items to be produced and Marketing department helps
to canvas business and such way finance dept. can raise the fund required by the Company as a
whole. Materials department supply the materials to the manufacturing unit.
Finance and Production

Production targets are made on the basis of finance budget which checks the economical
feasibility of the plan and finance budget cannot prepared without knowing the production plan.
Quality & Marketing

Quality preserves the customers delight by ensuring the quality of the product produced and
services rendered to the customers. QA and QC department will counter checks all the quality.
They further goes to the workshop and check the products whether it reaches the market safely
with quality.

H.R Department

H.R department ensures the development of human resource and its productive utilization by
directing it in the right channel.

IT Department

53
The department enhances inter-departmental and intra-departmental flow of information and

speedy data processing. Data access is controlled within and between

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

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

department cannot operate without the absence of the other. The performance of the company
depends on the interdepartmental functioning rather than the department wise functioning”

FINANCE
DEPARTME
NT
SALES AND PURCHA
MARKETIN SE
G
IT
Departmen
t
Maintenan PROJECTS
ce
Manufactur
ing

CHART OF FUNCTIONAL INTERDEPENDENCE OF DEPARTMENTS

54
Chapter 5

SWOT ANALYSIS

4.1 SWOT ANALYSIS

SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of
planning and helps marketers to focus on key issues. SWOT stands for strengths, weaknesses,

55
opportunities, and threats. Strengths and weaknesses are internal factors. Opportunities and
threats are external factors.

AIM OF A SWOT ANALYSIS

• Reveal the competitive advantages of the firm.

• Analyze the prospects for sales, profitability and product development

• Prepare the company to overcome problems

• Allow for the development of contingency plans

A. STRENGTH

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


engineering, project construction, fabrication, and maintenance activities in Oil & Gas,
Refineries, Petrochemicals and Power sectors.

• 20 Years prolonged execution and experience with Petroleum Development Oman, Oman Gas
Company, Oman Refinery, Petrochemical and Power sectors in Sultanate of Oman.

• Well facilitated Workshops at Rusayl & Sohar Industrial Estates.

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

• Experienced and long term serviced management and employees

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

• Heavy investment on Manpower and machinery

B. WEAKNESS

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

56
• Un-availability of local manufacturers for specific materials and equipment requirements.

• Unstable technical staff movements due to the exorbitant manpower


requirements in the market.

• Insufficient deployment on marketing.

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


performance levels.
C. OPPORTUNITY

• Stable growing and requirements in Oil and Gas field

• Progressive development of Petroleum Development Oman

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

• Government funding on future developments

• Availability of information about best practices in human resources.

D. THREATS

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

• Unanticipated intervene on investment by the Government

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

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

• Financial recession on world economy.

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

57
CHAPTER 6

FINDINGS, SUGGESTIONS

&

CONCLUSION

12.2 ABOUT THE STUDY

This study was conducted for the Operational, Financial, Marketing and Sales at it’s Head office at Al-
Khuwair , Maintanance and Fabrication at it’s Rusayl and Sohar work shop. Arabian Industry has 12

58
main departments and are interdependent and inter dependence on each other as shown in
Organizational chart and inter dependence of departments chart..

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

1- Operational division
2- Finance divisions
3- Maintenance division
4- Fabrication Division
5- Sales and Marketing division.
6- Administration and HR Division.

12.3 FINDINGS

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

12.3.1 Being a large business unit, all the departments are well organized and managed by
different managers, and all the departments are functioning very well and active.

12.3.2 The organisation structure is divided in to several units like Finance, Marketing, Operation
& Quality, Human and Resources etc… These all departments are headed by different head
units but at the same time they work for same objective with full co-ordination which
shows the unity level about the organisation.

12.3.3 During the study, it was found that it is indeed a healthy organization with a lot of well
unique functions. This organization basically being an engineering industry, it has a large
investment and a large number of people working in it and there is a well established
59
organizational structure with the top level management, the middle level management and
the bottom level management.

12.3.4 All departments in the Company are certified to ISO 9001 and regular internal and external
audits are conducted to check the compliance and renewal of certificate. There is a full
swing total quality management system and it works efficiently and ensuring the total
quality of the organization and it’s product and services.

12.3.5 In the company’s system of materials management, there are very less chances of damaged
goods and scrap items being raised. The company takes necessary steps to see that no items
become scrap in the store and damaged goods doesn’t come in and go out of the company.

12.3.6 The fabrication and mfg. departments are well equipped with all the necessary
requirements and there is well functioning tool rooms which care to the needs
manufacturing and fabrication. There is also effective scrap management functions carried
out to the utmost profit of the company.

12.3.7 All the employees and labourers work very hard towards achieving the goal. Even the
higher authorities work very hard without wasting time towards the organization goal

12.3.8 An organisation study also makes me learn that any objective cannot achieve with a short
span of time it has to be done through systematic ways. Finally, in any organisation time
management play important role because each activity should be done at a right time at
right place.

12.4 SUGGESTIONS

12.4.1 One important suggestion is that more care and concern should be given to the clients to
retain the trust of existing valued customers.
60
12.4.2 Advertisement like exhibitions do not helps Arabian Industry to
generate so much of business, but they also should be participated in
all exhibitions to generate customer awareness regarding their entire operations.

12.4.3 Company should try to improve technical service after the installation of all it’s
manufactured items. No doubt the company products have technically edge over
competitors but in long run they have to build stronger strategies in marking their
products..

12.4.4 Company is hiring lot of heavy equipments for the completion of the jobs in time. It is
advisable that, If they would purchase more heavy equipments like heavy duty cranes and
excavators, they would be in a position to make more profit..

12.4.5 During the study, it is noticed that, open purchase orders are issuing for the purchasing of
materials. Open purchase orders are the order with no value. This may leads to malpractice
and it should be discontinued immediately.

12.4.6 Another important matter which was noticed, in rare cases purchase orders are issuing after
the supply of materials. This practice also should be discontinued So that the chances of
mis- appropriation can be controlled to a grate extent.

12.4.7 An important area which is to be taken more care is the awarding of sub contract works. It
is advisable that, the company is in a position to execute the same job which is sub
contracting, profit earning can be increased to a grate extent.

12.5 CONCLUSION.

61
The study in Arabian Industries has enabled me to understand the various needs of an organization,
how an organization of a corporate nature functions and how important it is to have a right
relationship between the employee and employer or the management.

Training in Arabian Industries LLC, will help the trainee to understand the various needs of an
organization, how an organization of a corporate nature functions and how important it is to have a
right relationship between the employee and employer or the management.

The study was conducted with a view to understand the functions of an organization, and its various
department. During the course of study I was successful in achieving these objectives and could
familiarize with an organization and its environment.

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

62