The Peggy-Karl Saga
When good ideas are backed by finance, success, they say, is round the corner. The corner in question is very much in Oman, at the Salalah Free Zone. OER quizzes the investor-promoters

At first appearance, they resemble a couple on a holiday. Picture perfect they are, as the accompanying visual reflects. The truth is they are not. They are, however, married to a common idea viz., making money, or rather, to creating wealth for themselves as well as others.

As Peggy Farley, Chief Executive Officer (Public Capital Markets) of the New York-based Ascent Group, puts it: “Before December this year, you will see us investing US$3 million in Oman”. Farley watches you closely before throwing this one: “It is just the beginning. We have already collected US$30 million and by June end, our kitty will be roughly US$100 million. All this money is meant for investing in the Middle East – particularly Jordan and Oman.”

She is not joking. She is a seasoned financial wizard. In the 1970s, she worked with the Citibank in the Middle East. Returning to New York, she was roped in by Morgan Stanley, where she had spent close to six years counseling them on the Middle East ground realities. Around 1988, she met Karl Groth, Chief Executive Officer (Private Capital Markets), an alumni with a science background from the University of Minnesota. That is when Ms Wizard met Mr Ideas and decided to partner a new venture.

Why Oman? The Free Trade Agreement (FTA) with the United States, pat comes the response from Groth. The Peggy-Karl duo has already identified an Omani joint venture partner to set up shop in the Salalah Free Zone. Ascent Group and Salalah Medical Supplies Manufacturing Company have filed an application with the Ministry of Commerce and Industry to float a new corporate entity – Salalah Medical Device Manufacturing Co – with 40 per cent equity each, while the balance 20 per cent is reserved for employees.

According to Groth, their search for an Omani partner began earnestly in 2003 and Salalah Medical Supplies Manufacturing Company’s track record was stupendous. Farley goes to the extent of giving it a 9 out 10 rating in terms of global practices. Above all, what convinced the private equity fund or venture capitalists is the European Union approval for the Salalah company’s processes conducted every six months. “We did our own due diligence and have no complaints,” adds Groth. As and when the new facility goes upstream in sometime 2008, it will generate 200 jobs for Omanis.

If all goes well, the equipment for the new Salalah plant ought to be in place by September. After recruitment and rigorous training, the plant should go on stream in early 2008. Obviously, there will be a new management team in place, representing the requisite skill sets – both managerially and technically. The European Union, GCC and the US will be target markets for the Salalah-produced products.

The initial investment of US$3 million is okay. But it is a niggardly sum compared to the huge corpus of US$100 million they will have soon. “We are constantly on the look out for new projects and new partners in this region. Jordan and Oman are prime target areas for us, thanks to the FTA which is already in place,” elaborates Farley. Significantly, the Ascent Group is preparing a feasibility report to manufacture ‘D-ribose’ – a cardiovascular medical device – in the Salalah Free Zone again. It will be a greenfield project and one of the focus areas for the new investors is to assess the local ability to fabricate and build a world class manufacturing facility from scratch. “We are confident Omanis are capable. If that happens, it will slash down the cost drastically,” says the 60- plus Farley. Believe it or not, Oman has arrived on the global radar, asserts Groth. World class products at relatively low cost to feed the huge market for such devices from Omani soil. Isn’t it enticing?
 

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