§§§§§§§§§§OGER SYSTEMS Business Plan 2013 Document Authors: Wael Ghazzawi Contributions by: Nidal Hamdan & Fadi Halabi www.OgerSystems.com Oger Sys. Oger Systems Ltd. is a technology system integrator that pro- vides Turn-Key solutions and services starting from concept, NEXT GENERATION SOLUTIONS design, implementation to comissioning wrapped with Project Management Methodology.
INTRODUCTIONU nderstanding the government planned future city expansion of both Jeddah and Makkah allows us to To do so we need to first start by building financial return models that reflect the investment-cycle for a specificbetter forecast the expected categories, distribution, and category of projects (“Hotels, Universities, Schools, etc.“) in asize of business opportunities that will become available specific region (Makkah or Jeddah) highlighting the factorsat the different growth phases. And as such would allow us that sets or drives the delivery deadline, while integrat-to create a customized set-up that uses selective brands ing the effects that certain region specific risks might poseand develops industry specific services that would insure on our investment (Floods). From that point we can thenproviding a selective edge on competitors which is integral define the project portfolio that is most profitable and hasfor securing Mega-sized projects that follow international the least amount of risk for maximum returns on our invest-standards. ment.The size of our investment should however have an upper Furthermore we will be introducing a new prototype Ariallimit that is a set reflection of the company’s planned size based survey software system that allow us to analyse vastof growth, which maintains an acceptable ratio between our areas and pin-point areas of interest with potentially hightrained & integrated staff to the Man-Power infrastructure yielding projects in addition to providing an initial idearequired to implement these projects. about the type, size, and construction phase of the project before even having to visit the site in person.At the same time the investment needs to be distributedover a multi-category multi-sized type of acquired projects In the sections to follow we will discuss in depth the strat-that mitigates risk by allowing a smooth cash flow-cycle egy we are proposing, while presenting a list of upcomingthat prohibits large projects from hogging all the liquidity in major projects specific to Jeddah - Makkah region.favour of small short cycle projects that offer faster returnswith lower margins.2
MAJOR GROWTH ZONES - JEDDAHJ eddah Municipality released a draft of its upcoming strategic 20 years growth Plan reflecting the zone dis- services tailoring to both Hajj and tourism where by the distance between Jeddah and Makkah is reduced by the hightribution and land use schema to be followed (Please refer speed train services that are in close proximity constitutingto figure 1 on the next page). a second hot area for future growth - (Refer to Opportunity Zone 2).The major change was the creation of a new internationalAirport (KAIA - King AbulAziz International Airport - Jeddah) Note: Additional Opportunities will be presented below.located closer to Obhur Creek. This effectively allowed themove of the city business center to Obhur Al-Shamaliah ( In addition the municipality has created a list of areas that21°43’43.40”N, 39° 5’24.27”E) where the new Kingdom tow- are considered a priority for investment and growth whicher is being built in a Mega-Construction Zone surrounded by consist of the following: Thuwal, Dhaban, Asfan which needan entirely new city -(Refer to Opportunity Zone 1). to be investigated further to understand the type of invest- ment they will attract based on their proposed purpose inMore importantly the municipality is planning to release the overall picture.the old airport land space in favour of urban development,with an area of around 1,200 hectares of vacant strategi- A small highlight of the potential project opportunities thatcally located land space surrounded by several important are currently or will soon be available in Jeddah Region willhistorical, cultural and educational districts as well as other be presented in the upcoming pages with a short summaryproposed developments. The site is due to become the larg- of the logistical value of each opportunity.est single development in jeddah history which will be inclose proximity to a proposed major transportation hub, thatis directly adjacent to the expanded national raid network.Making this area a prime investment location for hotels and 3
OPPERTUNITY ZONE 1 - HHR - JEDDAHCENTRAL JEDDAHH arameen high Speed Rail project (Jeddah Station) is also known as the “Western Railway” or “Mecca-Medina high speed railway”, is a 449.2 kilometres (279.1 mi) high speed inter-city rail transport system under construction in Saudi Arabia.It will link the Muslim holy cities of Medina and Mecca via King Abdullah Economic City, Rabigh, Jeddah, and King AbdulazizInternational Airport. It will connect with the national network at Jeddah. Its primary purpose is to facilitate the inter-connec-tion between Makkah and Maddinah (the Harameen) facilitating pilgrimage.Logistical Value General InformationThe project is one of 4 building hot spots in Jeddah with a gov- Engineering designs have been prepared by Foster + Partnersernment investment value of over 773 Million USD, and Buro Happold. According to SRO, the stations will be ‘to the highest international standards and specifications’, with ‘aestheti-Project Duration cally iconic’ designs which take into account Islamic architectural traditions. The stations in Makkah and Madinah will be ‘consistentFrom: Q1 2011 with the religious dimension’ of the holy cities.To: Q4 2014 (Delayed)Status: Under Construction - Bidding for LC Systems Main ContractorOpportunity Saudi Oger - El-Seif Engineering Contracting Company.Nidal Hamdan will be forwarding the information for the bidrequirements for El-Seif which is a saudi Oger subcontractor. 5
OPPERTUNITY ZONE 1 - OLD AIRPORTCENTRAL JEDDAHT he decision to reutilize the old airport for urban development made available 1,200 hectares of vacant strategically lo- cated land space surrounded by several important historical, cultural and educational districts as well as other proposeddevelopments. The site is due to become the largest single development in jeddah history which will be in close proximityto a proposed major transportation hub, that is directly adjacent to the expanded national raid network. Making this area aprime investment location for hotels and services tailoring to both Hajj and tourism where by the distance between Jeddahand Makkah is reduced by the high speed train services that are in close proximity constituting a second hot area for futuregrowthLogistical Value General InformationNo Information available yet. No Information available yetProject Duration Main ContractorFrom: - No Information available yet.To: -Status: -OpportunityExpected to be a hotel dominated region that service the Hajjseason and pilgrims.6
OPPERTUNITY ZONE 2 - JCPDCENTRAL JEDDAHJ eddah Center Project Development is dedicated to redeveloping the central business hub of the city of Jeddah and pre- serving the historic area, the project will be the largest city center urban project in the Arab world. Jeddah Center Projecthas a land area of around 6 million square meters and the project will result in a total built-up area of 12.7 million squaremeters. In co-operation with the Jeddah Municipality, the vision is for the Jeddah Central District to once again become theheart of the city. The project will economically rejuvenate Jeddah Central District, create world class business, residential andretail facilities, revive the historical and cultural heritage of Jeddah, purify its marine environment and reunite the city withthe sea. The end result will create job and housing opportunities for Jeddahs young population, 60 % of which is under 25.Logistical Value General InformationThe project is one of 4 building hot spots in Jeddah with a gov- The consortium includes world renowned companies such asernment investment value TBD USD, Solidere International, the company behind the re-birth of Beruit city center, the Urban Development Company, a Saudi real estateProject Duration developer engaged in multiple mega projects in the Kingdom, and renowned regional partners such as Siraj Capital and Al-Tijaria &From: - Venture Capital Bank.To: -Status: Under construction. Main ContractorOpportunity No Information available yet.A new city center consisting of business towers, water front, floodgateways, new infrastructure, Malls, Hotels, Entertainment facili-ties. 7
OPPERTUNITY ZONE 3 - SPORT CITYOBHUR AL-SHAMALIYAHK ing Abdullah Sport City (KASC) consists of a 60,000 seats football stadium, a 2,000 seats multi-sports hall, external athletic stadium with a 1,000 seats tribune, several training fields (football pitches, tennis courts, athletic sports,…), amosque and parking for 45,000 cars. The Major size of the business opportunity will be centered around Public Address,Audio-Visuals, Fire Alarm, CCTV, and news reporter rooms.Logistical Value General InformationThe project is one of 4 building hot spots in Jeddah with a gov- On 12th September, 2011, BESIX signed the Contract for theernment investment value of over 552 Million USD, construction of the King Abdullah Sports City Project. In a 50/50 joint venture with Al Muhaidib Contracting, BESIX will develop theProject Duration KASC Project in Jeddah Saudi Arabia.From: Q3 2012To: Q4 2014 (October 31, 2014)Status: Under Construction - Concrete Phase Main Contractor Aramco - (Al Muhaidib & BESIX)OpportunityNidal Hamdan is currently working to set a meeting with BESIXsince Al-Muhaidib is only responsible for concrete work.8
OPPERTUNITY ZONE 4 - KT - CITYOBHUR AL-SHAMALIAHT he expansion and growth Plan set for Jeddah City requires the creation of a new business center that utilized the unused space at Obhur Al-Shamaliah which is logistically located close to the new KAIA international Airport and KASCSport City. This new area has a central peace which is the Kingdom Tower but more importantly it is surrounded by an entirelynew city similar to KAFD in Riyadh with multiple Tower, Hotels, Hospitals, Malls and an entirely new infrastructure to serviceit. Moreover the location is considered as one of the major attractions for tourism in Jeddah, which allows us to predict thatthe major distribution of building will be for tourism services with Hotels and Malls constituting the majority of the buildings.Logistical Value General InformationThe project is one of 4 building hot spots in Jeddah with a gov- The partners of Jeddah Economic Company (JEC) are Kingdomernment investment value of over 15 Billion USD, Holding Company, Mr. Samaual Bakhsh, Abraar, International Hold- ing Company, prominent Jeddah businessmen Mr. AbdulrahmanProject Duration Hassan Sharbatly and Saudi Bin Laden Group (SBG). The capital of JEC is made up of SR8.8 billion in land value, assets that are SR7.3From: Q4 2011 billion, plus SR1.5 billion in cash contributed by SBG that furtherTo: Q1 2017 demonstrates their confidence in this extensive project. The TowerStatus: Under Construction - Concrete Phase will be surrounded by a new City with its own hotels and towers.Opportunity Main ContractorThe real value for us is actually in the vacinity towers and hotels TBAbeing constructed where we can secure a full Solution Contract. 9
MAJOR GROWTH ZONES - MAKKAHM akkah as a city is built around the holy tourism indus- try and as such the majority of construction projects This continues seasonal demand creates a business environ- ment that is short-cycle low-risk fast-return with small toare either Hotels or Residential houses that are active medium investment values where by a standard full systemseasonally. This fact presents an interesting component to hotel would have a sale opportunity value of around 14projects that are specific to the Makkah region, where by Million SAR.their date of completion is actually driven by the seasonstart date of major holy events such as Hajj. This is why no This means that when we decide on the type/location andhotel in Makkah would have a construction span longer return of our to be acquired projects we need to take intothan 2 years and the period becomes shorter as the property consideration the profit margin versus the investment peri-becomes closer to the haram location. od. Since and if the selection of the client was done properly the rate of return from these small investments provides aThe high demand and low availability of housing in the holy very profitable model for Oger Systems to grow.seasons creates a highly competitive environment for deliv-ering on time to maximize the profit returns of the investor Furthermore we highlight the fact that most constructionwhich is an insured 400% reservation rate as a minimum, sites in our field would actually provide the physical cablewe note here that the pervious value is not a mistake but pulling via their own child company meaning that ouris a result of standard hotel policy in Makkah where by implementation phase is reduced to testing commissioningthey modify the room layout to fit the maximum number of and programing which can be fit in around 4 month at most.beds in the available area as such a hotel with 300 singlebed rooms would actually contain 1200 people during theseason as a minimum.10
OPPERTUNITY ZONE 4 - MAKKAHANYU nlike Jeddah, Makkah has a continuous build spree of hotels and residential housing in nearly any free space available and as such you would see hotels in an otherwise uncommon non-logical place this is a result from having Hajj Officesdo the reservation and provide transportation to and from The Hajj Fara2id. This leads to an interesting setting wherebyand as a result of the distribution complexity and high build rate resulting in a market that is simply harder to survey andreport resulting ultimately in less competition and higher profit margins. Add to that the lack of IT solution service providerswhereby IT companies have the choice of selecting which projects to take to maximize return based on their limited maxi-mum man power.Logistical Value General InformationProject values differ based on the solutions required by the hotel A sample of these projects that are common to Makkah and Ma-but are usually between the value of 6 Million and 14 Million SAR. dinah are Bazel Al-Kheir 3, Al Rayan, Jabal Al Kabaa, Al Shurfah Project, Burj Al-Jiwar, Multlaq Tower, Abraj Al-Bait, etc...Project Duration Main ContractorFrom: AnytimeTo: Next Year at Ramadan or Hajj season. Private Company (IBS, etc...)Status: -OppertunityElectronic GIS Survey followed by site visits allow us to pin-pointpotentially rewarding areas where multiple hotels are being 11constructed simultaneously.
PROJECT PIPELINE§ SAR 62,161,757.96 SAR 12,500,000.00 TBA TBA S I OTAIR Group SAR 5,900,000.00 S I Al-Khoreji Co. PROJECT PIPELINE The Chart Above reflects in 3 colors the project pipe- Our plan moving forward is to have 64% of our business line for Q1 and Q2 of 2013, in which the color Green opportunities per year in small investment cases, which designates in Bid Projects, the color Blue designates allows a high profit margin in a short return cycle imple- already won projects being implemented, the Color mentation project. This allows us to become more agile as Purple reflects newly won projects that will have a the liquidity will not be held for elongated period in MEGA start in implementation in the designated Quarter. project scenarios. The total sell value of the above projects totals 74 mil- lion SAR not including the selling value of the upcom- ing KAP 1 which is undergoing final PO generation. Of which the total profit is larger than 11 million SAR. 12
UPKEEP SPENDING PLANThe following information specified below reflect the upkeep cost for maintaining and operating Oger Systems’ Jeddah Officethat coveres the area in and around Jeddah province and Makkah province for the purpose of detecting upcoming projectsand generating the financial paperwork required for the targeted projects. Oger Systems - Jeddah Office 2013 Q1 Q2 Q3 Q4 Office Rent (Jeddah) 75,000.00 SAR 0 0 0 Office Supplies (Consumables) 1500.00 SAR 1500.00 SAR 1500.00 SAR 1500.00 SAR Design Workstations (1 units) 8,250.00 SAR 0 0 0 Design Software (NetformX License - 1 seat) Quotation R. 0 0 0 AutoCad 2013 (License - 1 seat) Quotation R. 0 0 0 Fax Line (Cancelation) -2000.00 SAR -2000.00 SAR -2000.00 SAR -2000.00 SAR PABX Service (Cancelation) -325.00 SAR -325.00 SAR -325.00 SAR -325.00 SAR Internet Solution - 6MB - Unlimited (Replaced) 380.00 SAR 290.00 SAR 290.00 SAR 290.00 SAR Local redundant Back-Up - 6 TB - Network Drive 0 0 0 0 Car Rent (1 units) 3800.00 SAR 3800.00 SAR 3800.00 SAR 3800.00 SAR Project Acquisition - Fuel Cost (estimate) 1200.00 SAR 1200.00 SAR 1200.00 SAR 1200.00 SAR Project Acquisition - Mobile Calls (estimate) 800.00 SAR 800.00 SAR 800.00 SAR 800.00 SAR 22” LCD Screen (6 units) 4800.00 SAR 0 0 0 NoteBooks (4 units) 12,000.00 SAR 0 0 0Annual Spending Total = 130,500.00 SAR(Excluding Licenses) 1.2% TOTAL UPKEEP VALUE The Spending Plan presented above covers the requirements for operating an actively project seeking office where by a large per- centage of the spending allocation is directed towards the opera- tions required to establish communication with clients and to process The Up-Keep Value represents 1.2% of the required paperwork to generate a successful bidding solution. current Net Profit return taking only Q1 & Q2 into consideration and is expected to shrink to a value of 0.8% by the end of Q4. 13
ORGANIZATIONAL CHART Ali Zimmo SETA Manager Nidal Hamdan Wael El-Ghazzawi Wester Region Branch Manager Western Region Project ManagerFadi Halabi Raafat HassanienSales Manager Sales ManagerJeddah - Makkah Madinah KAI - CCJ Project IBS- ARAC Hotel Al-Hamraa Hotel Project Manager Project Manager Project Manager Site Forman Site Forman Site Forman Technicians Technicians Technicians KAP 1 - Maddinah KAP 1 - Makkah KAP 1 - Jeddah Project Manager Project Manager Project Manager Site Forman Site Forman Site Forman Technicians 32 SITE Technicians 16 SITE Technicians 14 SITE14
WORKFLOW CYCLE (7)Technical Feedback (4) Project Evaluation Wael El-Ghazzawi Western Region Project Manager Nidal Hamdan Wester Region Branch Manager (3) Oppertunity Documents Fadi Halabi Sales Manager (9) Financial Proposal (1) Project Detection Jeddah - Makkah (2) Client Evaluation (5) Deal Estimation Raafat HassanienSales ManagerMadinah (6) Design Generation (8) Technical Proposal Oger Systems Design TeamREPORTING HIERARCHYThe organization chart on page 12 reflects the report- specified consultants which are mostly centralized in Jed-ing and responsibility chain of command that will dah.be in effect on the western region (Makkah, Jeddah,Madinah). The Western Region Project Manager will handle the as- sessment of potential projects and identifying the uniqueThe Sales department will be centralized in Jeddah technical difficulties specific to each site this will bewhich is the most logistical location to cover all 3 reflected in the implementation costs of any out-going Bid.provinces taking into consideration the project hotspot distribution, where the structure calls for a per- In addition he will handle the Planning, Coordination andmanent presence of a sales manager in Madinah and selection of the Project Managers, formans and techniciansanother sales manager to cover Jeddah and Makkah. specific to each acquired project while providing high level technical direction for the different technologies beingBoth Sale managers will be reporting to the Western deployed and handling the logistics of shifting man-powerRegion Branch Manager, who will coordinate and as- between sites to keep the overall delivery deadline of allsist in the communication and information transfer projects on track.between the sites which are mostly located in Makkahand Madinah and there respective owners and 15