KUWAIT: National Offset Company (NOC)

National Offset Company launched in Kuwait
SOURCE: http://www.ameinfo.com/137815.html

The National Offset Company (NOC), a state-owned closed shareholding company with limited liability, announced the launching of its activities for the Kuwait Offset Program, on behalf of the Ministry of Finance (MOF).

Kuwait: Sunday, November 11 - 2007 at 11:22PRESS RELEASE

The announcement was made during the first press conference held on 1st November.

NOC has started operations in September, 2006 and spent last months in completing needed administrative and financial requirements, equipping its offices, and recruiting staff. This special occasion coincided with also announcing the adoption of the new Guidelines for Kuwait Offset Program procedures.

Dr. Adel Assem, Chairman of the Board of Directors, gave the opening speech, in which he welcomed the attendants, and explained the purpose behind establishing NOC to be a developmental and economic enhancer through executing efficiently Kuwait Offset Program. This role entails implementing offset procedures, providing necessary facilities and support for foreign companies with offset obligation resulting from government contracts awarded to them, so as to help these companies fulfill their commitments through establishing joint offset business ventures (OBVs) with the Kuwaiti private sector.

These OBVs will be approved depending on the extent they fulfill the three stated goals of the Offset Program, which include transferring and settling of modern technology in the State of Kuwait; creating job opportunities for Kuwaiti citizens; and offering training and educational opportunities for nationals.

Dr. Adel Asem pointed out that NOC represents a unique experience in the country, as it is the first time a company takes over the role of a governmental department, through transferring the responsibility of managing the Offset Program from the Ministry of Finance (MOF) to it. Dr. Asem further indicated that NOC will be endorsing private sector methods and practices in conducting its business, focusing on efficiency, productivity, professionalism, best practices and customer service cutlure.

On the other hand, Mr. Mazen Madooh, NOC Managing Director, explained in his speech the various stages of development which the company witnessed since he took charge of its management. He also announced the adoption of the new Guidelines for Kuwait Offset Program No. (9) - 2007, based on Minister of Finance Decision No. (38) for 2007, entering into force as of the 9th of September 2007, and to be applicable in all tenders, practices and negotiations related to military and civilian contracts. Under the new Guidelines, the Offset commitment remained at 35% of the monetary value of military contracts that are equal to or exceed KD3m, and the civilian contracts that are equal to or exceed KD10m.

Mr. Madooh explained some of the fundamental changes that were introduced in the new Guidelines, especially those related to the multipliers system, which determines the incentives granted for the Offset Business ventures (OBVs), according to the extent to which they serve the three basic goals of the program, and if they were Direct Offset projects that serve the government authority that benefited from the contract. Other facilities and benefits include reduction of the value of sub-contracts granted to Kuwaiti companies, and purchases of products and services of national origin, from the total monetary value of the contract, according to certain conditions.

Mr. Madooh confirmed that NOC will maintain a flexible and transparent approach in applying these procedures, in a way that guarantees the national best interest and encourages contracting foreign companies to fulfill their offset obligations promptly. He added that the new Guidelines for Kuwait Offset Program are available on the NOC website in both Arabic and English.

Mr. Mazen Madooh explained the mutual benefit realized for both the Kuwaiti private companies and foreign companies with Offset obligations, through establishing joint Offset business ventures (OBVs). The Kuwaiti companies benefit from the support to their competitiveness capabilities, and expansion of their production and distribution channels. At the same time, the foreign companies with offset obligation will benefit from having apt opportunity to expand their external activities, position themselves in the local market, and create long term investment relations with new partners.

At the end of his speech, Mr. Mazen Madooh reiterated the aspirations of NOC to play a vital role within the overall economic strategy of the country, especially after finalizing the preparation of its First Business Plan for the coming three years, which will be ready by end of the first quarter next year.

This should be conducive to ensure its success in creating a cluster of promising investment and developmental projects, the positive impact of which will extend to various sectors in the local economy, and will support Small & Medium Enterprises (SMEs) and entrepreneurial initiatives, which will foster the desired prosperity.

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