NIG Prospectus - London Stock Exchange

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Level: 8 – From: 8 – Thursday, August 9, 2007 – 2:19 pm – mac5 – 3776 Section 07 : 3776 Section 07Strategies for Strategic and Financial InvestmentsIn addition to a growing focus on the development of its Core Operating Businesses, NIG’s newstrategy also outlines the following industries as potential areas for strategic or financialinvestment:• telecoms;• real estate;• media; and• steel.As part of its new strategy, NIG intends to proactively source new investment opportunities in theabove mentioned sectors. Investments will be actively managed and monitored in order to ensuretheir value is maximised, either through disposal, retention or an increase in investment therein.Over time, a Financial Investment may develop into a Strategic Investment for NIG, and in turn,may become integrated into one of NIG’s existing Core Operating Businesses. By the same logic,a sector where NIG has Strategic or Financial Investment(s) may grow to become a CoreOperating Business.At the same time, NIG is in the process of restructuring its investment in some industrialbusinesses by reducing its shareholding to retain a material minority stake. This is perceived as aprofitable means of participating in industrial growth driven by private sector investment withouthaving to exercise day to day managerial control. NIG typically maintains its involvement in thestrategic development of such companies by retaining the right to appoint a certain number ofdirectors to the board of directors of such companies.General strategiesIn addition to specifically expanding its six Core Operating Business, NIG also has the followinggeneral strategies:Capitalise on privatisation in KuwaitNIG intends to participate in any privatisation programme which the Government may implementin the future and which is relevant to NIG’s business activities. Electricity generation, waterproduction, port facilities, material handling and logistics and environmental industries constituteimportant areas of activity for NIG’s future growth and all are expected to be part of the futureprivatisation programme in Kuwait. NIG intends to make acquisitions in these strategic industrieswhich will enable it to create new specialised companies and divisions in Kuwait to serve as aplatform for its future operations in the GCC and beyond.Participate in regional joint venturesNIG intends to participate in consortia established to operate infrastructure projects tendered tothe private sector by governments in the GCC region under concession type arrangements.Implement new cost cutting initiativesNIG continues to seek new opportunities to reduce its cost base and enhance its financialperformance.COMPETITION AND COMPETITIVE ADVANTAGESAs a holding company, NIG only faces limited direct competition which principally occurs whenNIG is seeking to make new investments. At the level of the Core Operating Businesses, however,68
Level: 8 – From: 8 – Thursday, August 9, 2007 – 2:19 pm – mac5 – 3776 Section 07 : 3776 Section 07NIG faces different levels of competition in each of the different business areas in which it isengaged.Core Operating BusinessesBuilding MaterialsNICBM experiences a range of levels of competition in relation to its different businesses andproducts, as described further below under “Facilities”. Management of NIG believes thatNICBM’s principal competitive advantages in the building materials sector in Kuwait are:• NICBM’s history as a former majority Government-owned sector manufacturing companyestablishes a strong reputation, providing an easily recognised brand name and franchise.• NICBM has the largest production capacity in Kuwait, reflecting the Government’s originalintention to develop a building materials fabrication capacity with national scope. NICBM, asa result, enjoys economies of scale not available to its smaller domestic competitors.NICBM is also the only domestic manufacturer of certain of its product lines.• NICBM’s products (with the exception of very recent new products) have receivedGovernment approval, and in certain cases, Government tenders refer to NICBM productsby name as tender standards.• NICBM offers its customers a “one stop” service: NICBM believes it has a wider range ofproducts than any of its domestic competitors. Customers of NICBM are able to purchasetheir many building material requirements from one discrete supplier.Specialist EngineeringBI Group is the parent company of an international group of specialist engineering companies.BI Group’s principal competitive advantage is achieved by concentrating upon higher added valueproducts and activities. BI Group recognises the overriding importance of first class quality andcustomer service.PetrochemicalsNIG believes a competitive advantage will be achieved by strategically investing, sponsoring anddeveloping petrochemical projects.Financial ServicesThrough Noor, NIG believes its competitive advantage will be achieved by following a diversifiedinvestment strategy with major investments in private equity and direct investments in capitalmarkets and providing a broad range of financial services, which includes advisory services,underwriting, term financing, and syndications.UtilitiesNIG believes its competitive advantage will be achieved through the Combined National IndustriesCompany for Energy KSCC and The Karachi Electric Supply Corporation Limited which will focuson the utility industry to capitalise on the investment opportunities in the water and powergeneration sectors.69
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NIG Prospectus - London Stock Exchange

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