26Issue

May 2014

2014 InternationalSales Conference

ContentsChief Executive Officer AddressZamil Industrial First Quarter 2014 Financial ResultsZamil Industrial Convenes Ordinary General Assembly SessionZamil Towers and Galvanizing Awarded New Contract for SEC Overhead Transmission Line ExpansionZHIIT Signs Training Agreement with Schlumberger Middle EastZHIIT Signs Training Agreement with El Seif Engineering Contracting Co.Zamil Steel Receives Appreciation Certificate from RAK Civil DefenseZamil Industrial Participates in “Big 5 Saudi 2014” in JeddahZamil Steel Participates in ACETECH 2014 and Exhibits in the Constro International Fair 2014 in IndiaZamil Steel International Conference 2014Zamil Steel Welcomes Visiting Delegations to Dammam FacilitiesZamil Industrial Participates in Saudi Energy Efficiency Forum and Exhibition 2014Zamil Industrial LPD Achievements During the First Quarter of 2014Safety MessageResearch and Studies Zamil Industrial Sports Fest 2014

For further information please contactCorporate Communications Department

Fax: (+966 13) 810 8190 | Email: impact@zamilindustrial.comwww.zamilindustrial.com

1234

56789

101112

13-1516

17-1819-20

MESSAGE

Dear Colleagues,

Greetings and welcome to the latest issue of Impact.

So far, 2014 has found our company deeply involved in developing strategies and guiding the expansion of our many sector businesses. We are careful to consider the major changes taking place within our region – economic, social and technological – and we continue to rely on our core values and vision to make the choices that are most beneficial to the growth of all sector businesses.

Our energies remain focused on supporting Zamil Industrial’s growth momentum. We continue to expand our operations in emerging economies, and to boost development and production of integrated product lines such as our Total Building Solutions concept. In addition, we will continue to build on our successful achievements in training and higher learning in order to provide workplaces that are healthy and safe for our employees, communities and the environment.

This issue contains new information on these important activities, reports on the latest Zamil Industrial participation at vital trade and industry events, and updates on several all-employee gatherings, which always serve to rejuvenate our corporate culture through teamwork and shared energy while contributing to the well-being of all who attend. New and continued sponsorships and career training options provide our youth and their communities with much needed educational and developmental assistance.

I hope that you enjoy reading about all these activities in this issue of Impact, and will contribute your comments and suggestions for inclusion in future editions.

Kind Regards,

Abdulla M. Al ZamilChief Executive Officer

2 FINANCIAL RESULTS

Zamil Industrial Posts SAR 66.1 Millionin First Quarter 2014

Comparison Charts of Q1 2012-2014 Financials (three months)

Zamil Industrial Investment Company (Zamil Industrial) has announced its consolidated financial results for the first quarter ended 31 March 2014.

Net profits for the first quarter of 2014 were SAR 66.1 million (USD 17.6 million), compared with SAR 62.7 million (USD 16.7 million) during the same period in 2013, an increase of 5.3 percent, and compared with SAR 60.1 million (USD 16.1 million) posted in the previous quarter (Q4), an increase of 9.8 percent.

Gross profits for the first quarter of 2014 were SAR 305.5 million (USD 81.5 million), compared with gross profits of SAR 299.8 million (USD 79.9 million) for the same period in 2013, an increase of 1.9 percent.

Operating profits during the first quarter were SAR 94.9 million (USD 25.3 million), compared with SAR 97.2 million (USD 25.9 million) for the same period in 2013, a decrease of 2.3 percent.

Earnings per share grew to SAR 1.10 from SAR 1.04 during the same period in 2013.

37,509 62,692 66,007

Net profit(SAR 000’s)

240,610 299,760 305,512

Gross Profit(SAR 000’s)

70,812 97,173 94,915

Operating Profits(SAR 000’s)

0.63 1.04 1.10

Earnings Per Share(SAR)

1,393,216 1,507,404 1,676,830

Stockholders’ Equity(SAR 000’s)

201420132012 201420132012 201420132012

201420132012 201420132012

3GENERAL ASSEMBLY

The majority of the shareholders agreed to the proposed general assembly resolutions and took the following actions:

1 Approved the Board of Directors’ report for the year 2013.

2 Approved the Zamil Industrial final accounts and auditors’ report for the fiscal year ending 31 December 2013.

3 Agreed to hold the Board of Directors free from any liabilities for the fiscal year ending 31 December 2013.

4 Approved the Board’s recommendation for the distribution of second half 2013 dividends at SAR 1.00 per share, which represents 10 percent of paid-up capital for a total amount of SAR 60 million, in addition to the previously distributed first half 2013 dividends of SAR 0.75 per share. This brings the total distribution for the year ending 31 December 2013 to SAR 1.75 per share, representing 17.5 percent of paid-up capital. Dividend eligibility will apply for shareholders registered at the close of trading on the general assembly date. Dividend distribution will occur on 30 April 2014 by means of transfer through the National Commercial Bank.

5 Approved distribution of SAR 2,000,000 as Board remuneration for the year ending 31 December 2013 at SAR 200,000 per Board director.

6 Approved the related party transactions between the company and affiliated companies of Zamil Group Holding Company that took place during 2013 and approved them for an additional year. It is worth noting that all the following agreements are annual, or remain in effect for a specific period of time. They are automatically renewed, have been agreed upon for years and are related to prolonged business relationships. The agreements were finalized using agreed upon normal and standard applied commercial terms and as per internal company policies. These agreements are as follows:

a. Approved related party transactions for the value of SAR 3,286,026 from Zamil Architectural Holding Company, which is owned by Zamil Group Holding Company. The latter is represented by Mr. Khalid Al Zamil who is also the Chairman of Zamil Industrial.

b. Approved related party transactions for the value of SAR 14,527,339 from Zamil Chem-Plast Industries, which is owned by Zamil Group Holding Company. The latter is represented by Mr. Khalid Al Zamil who is also the Chairman of Zamil Industrial.

c. Approved related party transactions for the value of SAR 63,393,935 from Zamil Trade & Services Holding Company, which is owned by Zamil Group Holding Company. The latter is represented by Mr. Khalid Al Zamil who is also the Chairman of Zamil Industrial.

d. Approved related party transactions for the value of SAR 18,349,920 from Zamil Real Estate Holding Company, which is owned by Zamil Group Holding Company. The latter is represented by Mr. Khalid Al Zamil who is also the Chairman of Zamil Industrial.

7 Approved the appointment of Deloitte & Touche (Bakr Abualkhair & Co.) as external auditors, as per the recommendation of the Audit Committee, to audit the company’s quarterly and annual accounts for the year 2014 and the first quarter of 2015 and agree to their service fee.

Zamil Industrial Announces Ordinary General Assembly Resolutions

Zamil Industrial Investment Company convened its ordinary general assembly meeting at the Zamil Air Conditioners Auditorium in the First Industrial City in Dammam on Wednesday, 16 April 2014.

4 STRATEGIC GROWTH

These 380 kv transmission lines will connect the entire northeastern operating area and will provide power to the King Abdullah Project for Waad Al Shamal City development.

“Zamil Towers & Galvanizing is proud to be selected for these important projects, which will expand the electrical power infrastructure of the Kingdom and create all sorts of new opportunities for development,” said Osama Bunyan, COO of Zamil

Industrial. “We look forward to working with AETCON and SEC and to bringing our expertise to the endeavor in the form of top-quality steel products and solutions.”

Zamil Towers & Galvanizing Company has been providing design, manufacturing and hot dip galvanizing of lattice steel structures for power transmission lines and telecom companies, gantries and support structures for substations since 1985. The company also provides type

testing of power transmission line towers at independent test stations, in compliance with international standards, as well as telecom and IBS passive and active solutions.

During its 29 years of operation, Zamil Towers & Galvanizing has supplied approximately 1,000,000 MT of lattice steel structures, of which a considerable portion was exported to 35 different countries around the globe.

Zamil Towers & Galvanizing Company Ltd., a subsidiary of Zamil Industrial Investment Co. (Zamil Industrial), has been awarded a contract worth SAR 120 million (USD 32 million) by the Arabian Electrical Transmission Line Construction Co. (AETCON) to supply lattice transmission line towers and gantries for the 380kV Overhead Transmission Lines projects between Tabarjal Bulk Supply Point (BSP) and Waad Al Shamaal BSP, as well as between Qurayyat BSP and Waad Al-Shamaal BSP, as part of the Saudi Electricity Company’s (SEC) expansion projects in the northern part of Saudi Arabia.

Zamil Towers and Galvanizing Awarded SAR 120 Million Contract With AETCON for SEC Overhead Transmission Line Expansion

5STRATEGIC GROWTH

Dr. Mohamed Abdulla Sharif, the director of the Institute, stated that the newly recruited employees will be trained as oilfield maintenance (upstream) technicians and that the educational program has been specifically developed for this category of employee. He also stated that the program will be delivered in separate segments in order to develop the basic skills of the trainees before the Institute launches the specialized training sessions.

The first segment of the program includes general and technical English language skills, technical mathematics, work ethics and other basic support skills to ensure that the language and other vital skills of the trainees are developed before they begin the rigorous technical training segment of the program. Specialized technical courses included in the program cover topics such as low and high pressure treating equipment; types of pumps; basic oilfield electrical, pneumatic and

hydraulic equipment; and preventive maintenance of a number of components.

Zamil Higher Institute for Industrial Training provides training programs accredited by the Technical and Vocational Training Corporation in Saudi Arabia and Edexcel-UK, an international qualifications awarding body. The Institute is

also accredited by a number of major national companies as a registered corporate training provider. The Institute utilizes the newest innovations in industrial training equipment and employs highly qualified and experienced professionals to develop and deliver customized training programs in addition to those on the regular schedule.

Zamil Higher Institute for Industrial Training recently signed a one-year renewable training agreement with Schlumberger Middle East. The Institute will deliver a customized program to train 60 employees in oilfield maintenance technology.

Zamil Higher Institute for Industrial Training Signs Technical Training Agreement with Schlumberger Middle East

6 STRATEGIC GROWTH

The Institute will provide three two-year diploma programs for 180 of their newly recruited Saudi employees in the following disciplines: Welding and Fabrication Technology, Refrigeration and Air Conditioning Technology, and Manufacturing and Production Technology.

Dr. Mohamed Abdulla Sharif, the director of the Institute, stated that the newly recruited employees will be trained to become competent technicians in the above-mentioned disciplines. He also stated that the training programs will focus on developing the practical skills of the trainees by providing

ample opportunities for them to fully utilize industrial-type equipment and simulators that are available at the Institute’s workshops and laboratories while they are guided and supervised by highly qualified and experienced trainers.

He added that the diploma programs are accredited by the Technical and Vocational Training Corporation and that they are designed in such a way that key skills, such as communication, teamwork, problem solving and decision making, are developed alongside technical skills in the three disciplines.

The trainees will be assessed on a continual basis throughout the duration of the diploma programs through different types of theoretical and practical tests, short quizzes, case studies, special assignments, and end-of-semester examinations. This will also ensure that their progress is monitored on a regular basis to identify the level of skills acquired and to help trainees overcome any difficulties they may encounter during the training period. The entire program will enhance and develop their specialist skills and knowledge.

Zamil Higher Institute for Industrial Training recently signed a two-year renewable training agreement with El Seif Engineering Contracting Company.

Zamil Higher Institute for Industrial Training Signs Training Agreement with El Seif Engineering Contracting Company

7RECOGNITIONS & AWARDS

Zamil Steel Ras Al Khaimah has recently received a certificate of appreciation from the Ras Al Khaimah Civil Defense Department in recognition of its contributions to the success of World Civil Defense Day 2014.

Zamil Steel Receives Appreciation Certificate from RAK Civil Defense

The event, which falls on March 1st each year, included the distribution of brochures and publications to raise public awareness about safety threats in order to encourage both citizens and residents of the country to apply safety measures at their homes and workplaces.

The activity is also in line with the RAK Civil Defense commitment to principles of social responsibility and its drive to educate people about public safety measures and professional health and safety practices.

The RAK Civil Defense Department valued the commitment of Zamil Steel and the efforts exerted to implement the highest measures of safety and security so that everyone lives and works in a stable, secure and comfortable environment.

8 EVENTS

Zamil Industrial sector businesses, Gulf Insulation Group companies: Arabian Fiberglass Insulation Co. (AFICO), Saudi Rockwool Factory Co., and Saudi Pre-Insulated Pipes Industries, in addition to Building Component Solutions Co., participated in the fourth annual International Building & Construction Show “The Big 5 Saudi 2014” event, which was inaugurated by Jeddah Mayor Dr. Hani Abu Ras and held at the Jeddah Center for Forums & Events from March 9 to 12, 2014.

Zamil Industrial Participates in“Big 5 Saudi 2014” in Jeddah

This is the fourth year that the largest building and construction event in the Kingdom has been held in Jeddah, with more than 500 exhibiting companies from 35 countries. The Big 5 Saudi has grown to meet participant demand and now encompasses the entire space at the exhibition center as well as a specially constructed arena.

On-site representatives from the Zamil Industrial businesses reported brisk activity on each day of the event. Current customers came to the stands to check on new developments and renew connections, while many potential clients took the opportunity to become acquainted with the company’s total building solutions philosophy and the product offerings of the individual sector businesses. Attendees included contractors, consultants and construction professionals from the entire GCC region as well as Saudi Arabia.

Exhibitors showcased the latest products and technologies to support the more efficient and sustainable construction drive by the Kingdom. Visitors who attended the show have gained knowledge from the new two-day free seminar series, which delivered sessions on a range of hot industry topics, with local, regional and international experts providing their insights and best-practice examples. Educational opportunities also included four on-site workshops covering asset maintenance, concrete repair, project management and an introduction to LEED v4.

The Kingdom has an estimated $75 billion worth of construction projects to be awarded in 2014 alone, and this year’s event provided a number of opportunities to understand the most effective ways to support the country’s rapid growth.

9EVENTS

Zamil Steel Buildings India Co. Ltd. showcased its product innovations and solutions at the Economic Times ACETECH 2014 exhibition, held from February 7 to 9, 2014, at the Science City Exhibition Grounds in Kolkata, India.

Zamil Steel India also participated in the 13th edition of Constro International Fair, held from February 13 to 16, 2014, at the Agriculture College Ground in Pune, India.

Zamil Steel Participates in ACETECH 2014

… and Exhibits inthe Constro International Fair 2014 in India

ACETECH 2014 is dedicated solely to the construction industry, and this is the first time it has been held in Kolkata. The event attracted hundreds of architects, engineers, builders, technical experts, agents, and building and construction industry professionals from all over the country.

The exhibition displayed important products like modular steel systems, steel building components, decorative and architectural lighting, windows and doors, shutters, automated gate systems, cabinet hardware, industrial control and automation systems, color-coated metal roofing sheets, garage and parking elevators, and innovative products

and equipment related to the building and construction industry.

Zamil Steel’s participation in the event enabled the company to meet and network with visitors and secure some good project leads for the coming months.

Held for three consecutive days, the exhibition is an important platform to learn and showcase all matters relating to the fast-growing and very popular construction industry. The Indian construction industry has a major influence on the country’s economy, as it is one of the fastest-growing sectors in India and comes with a promising future.

The Constro International Fair is the only exhibition that represents the construction industry in Pune. It was an important opportunity for Zamil Steel India to showcase its innovative building products and solutions on home ground and was a most relevant event, as the theme this year was “Pre-engineered Construction Techniques.”

The Zamil Steel booth attracted numerous contractors, consultants and customers from Pune and across India. The company showcased its expertise and specialized products and services to business representatives and spent the successful three-day session cultivating new contacts and inquiries as well as interacting with the other exhibitors, leading structural engineers, consultants and architects.

10 EVENTS

The program focused on the company’s excellent performance in 2013, reviewed its 37-year history of successful achievements, and presented plans to continue the success of the past for the remainder of this year and beyond. It also demonstrated the ongoing capacity of the company’s visionary strategy to ensure sustained growth within the highly competitive steel and global construction industries.

The program included informative presentations about the company’s great performance in 2013, as well as updates on the latest engineering, manufacturing, sales and marketing operations and the strategic plans of Zamil Steel Construction Company for the future.

The 2014 conference was deemed successful by the attendees.

Many of those present were grateful for the opportunity to connect with representatives from other business units and share information that will enhance work performance and career development.

Participants left the conference refreshed and ready to implement the plans that will increase productivity and develop the new business that will undoubtedly be covered in the reports presented at next year’s international sales conference.

The Zamil Steel PEB annual sales conference was held at the JW Marriott Marquis Hotel in Dubai, UAE, on Sunday, 18 May 2014. More than 50 personnel participated in the all day event, including executives, managers, sales and marketing personnel, and representatives from the company’s support departments.

Zamil Steel Demonstrates Success and Reaffirms Commitment to Future Growth at 2014 International Sales Conference

11EVENTS

A delegation from the Kuwait National Petroleum Company, accompanied by officials from Samsung Engineering and Construction Company, paid a visit to the Zamil Steel facilities in Dammam First Industrial City on Tuesday, April 15, 2014.

Kuwaiti Business DelegationVisits Zamil Steel

The corporate marketing team welcomed the delegation prior to attending a presentation held by Majed Alshubili that described the company, its products and services, and the latest

manufacturing operations and methods applied at the Zamil Steel factories. A technical presentation on Quality Control and Safety was also delivered by Osama Khalil, Operations Manager.

The delegation also toured several departments and production lines within the factory, and members were impressed by the advanced level of ongoing operations at the high-tech manufacturing facilities.

Zamil Steel welcomed a visiting delegation of about 30 employees from Saudi Aramco to the Pre-engineered Buildings (PEB) factory on Sunday, April 28, 2014.

Zamil Steel Welcomes Visiting Delegation from Saudi Aramco

The delegation was welcomed by the Zamil Steel corporate marketing team, and then attended a presentation held by Majed Alshubili, Marketing Department, that introduced the company, its products and services, and the latest manufacturing operations and methods applied at the Zamil Steel factories. Technical

presentations by Eng. Fouad Al-Malazi, Product Research and Development, followed.

The delegation also visited the Pre-engineered Buildings plant, accompanied by engineers and technicians who provided a detailed briefing on the facility’s operations and state-of-the art production equipment.

12 EVENTS

and initiatives around the world, highlighting the most prominent energy-efficiency policies and strategies in the Kingdom as well as ideal energy-efficiency practices in the building, transportation, and other industrial sectors.

Part of the forum was dedicated to recognizing the sponsors of the SEEC’s energy conservation campaign (air-conditioning), where Zamil Industrial has been honored as one of the corporate sponsors.

Dr. Abdulrahman A. Al Zamil received the honorary shield on behalf of the company. The first phase of this energy conservation campaign is among several that SEEC plans to launch over the next three years. The campaign aims to raise public awareness of air-conditioning energy efficiency and conservation, to shed light on the effects of energy conservation in the community, and to clarify the steps and guidelines for buying efficient air-conditioning systems.

The forum held energy-efficiency training workshops for stakeholders in both public and private industrial sectors. The event also featured a comprehensive exhibition that included air-conditioning, lighting, thermal insulation, and other companies, both importing and national, that showcased their main products, modern technologies, and global trends in rationalizing energy consumption and raising energy efficiency.

Several Zamil Industrial sector businesses and Gulf Insulation Group companies, including Zamil Air Conditioners, Arabian Fiberglass Insulation Co., Saudi Rockwool Factory Co. and Saudi Pre-Insulated Pipes Industries, in addition to Ikhtebar (Climate Control Lab Testing Co.), participated in the Saudi Energy Efficiency Forum and Exhibition 2014, which was organized by the Saudi Energy Efficiency Center (SEEC) and held from May 20 to 22, 2014, at the conference hall in the King Abdulaziz City for Science and Technology in Riyadh.

Zamil Industrial Participates in Saudi Energy Efficiency Forum and Exhibition 2014

A number of their highnesses and excellencies were present, as were Kingdom energy-efficiency specialists. The forum and exhibition targeted government agencies and leading private-sector companies interested and specializing in energy conservation, air-conditioning, insulation, lighting, and energy services. The event also highlighted preparations undertaken through the SEEC’s national energy-efficiency program as well as the efforts and achievements of administrative committee members.

In addition, the forum discussed similar international programs

13HEALTH & SAFETY

Health, Safety and Environment Operations

• In January 2014, ZI LPD actively participated in preparations for the official inauguration of the new Arabian Fiberglass Insulation Co. (AFICO) factory in Dammam Second Industrial City. The department’s role was to provide support for all safety aspects of this growing joint-venture company.

• ZI LPD has successfully implemented the color coding and labeling of the pipe systems and tanks at Zamil Industrial facilities. Color coding and labeling is based on the fluid type, direction and pressure of flow. The system was implemented in order to identify the contents of pipes and tanks as well as to alert the employees of any impending workplace dangers. The project is scheduled to be completed at all locations by the end of the second quarter of this year.

• ZI LPD collaborated with the Saudi Industrial Property Authority (Modon) at the Zamil Air Conditioners Unitary & Applied (U&A) plant in the Second Industrial City to resolve exposed

health hazards due to a gas leak originating from a neighboring industrial facility. An agreement was recently reached between the two parties that does not compromise man-hours or production. The continuing ZI LPD relationship with Modon ensures that nearby factories can be persuaded to operate in an efficient and secure manner, avoiding danger to themselves and to other enterprises located within the operating zone. ZI LPD intends to include a link to Modon Regulations in its intranet portal to be used as a future reference for all employees.

• The loss prevention operation at Armacell Zamil Middle East Co. (AZMEC) is now officially integrated with the ZI LPD programs and activities starting from the first Quarter of 2014.

Zamil Industrial Loss Prevention Department (ZI LPD) is committed to the development of a genuine partnership between management and employees that is based upon trust, respect, and cooperation within the organization. As a result of this commitment, ZI LPD continues to offer and provide value-added services to Zamil Industrial companies, business units, joint venture companies, and other factories outside the Kingdom of Saudi Arabia.

Zamil Industrial LPD Achievements During the First Quarter of 2014

14 HEALTH & SAFETY

ZI LPD has also designated one AZMEC engineer as an in-house safety representative to coordinate information and initiatives with the Loss Prevention department.

• ZI LPD has successfully conducted Environmental Surveys at all Zamil Industrial business units during the first quarter of 2014. The surveys focused on multi-gas monitoring, noise level monitoring, and food safety in the canteen. The department also performed comprehensive environmental audits at each factory. The results of these surveys and audits have yielded positive results at all Zamil Industrial factories.

• ZI LPD worked to provide additional CCTV systems at Zamil Steel PEB facilities and at the former premises of Zamil Glass.

ZI LPD Development & Technical Support began the year 2014 with numerous initiatives aimed at supporting the safe and smooth operations of various Zamil Industrial business units and joint ventures. Noteworthy activities included:

• Continuing development and implementation of Emergency Action Plans (EAP) for Zamil Industrial factories in Dammam (AFICO-1 / AFICO-2 / AZMEC) as well as some Riyadh-based factories - Ranco Zamil, Saudi Rockwool Factory (SRWF), and Saudi Pre-Insulated Pipes Industries (SPPI). The results of the EAP fire drills were rated as “very good to excellent”, with numerical scores that ranged from 89-98%

• Planning and development of the Emergency Action Plan (EAP) program for 2014, prior to the beginning of the EAP drills at Zamil Industrial business units (manufacturing plants and establishments fully-owned by Zamil Industrial), which are scheduled to take place in the second quarter.

• ZI LPD on-site Safety, Health and Environment (SHE)

and fire assessments were conducted in cooperation with the management of Zamil Industrial factories in Riyadh: Ranco Zamil on March 12, 2014, as well as SRWF and SPPI factories on March 13, 2014. These assessments will be used to further improve SHE procedures and programs and update the ZI LPD business plans for each factory.

• Participation in this year’s Safety Awards Program, held on March 3, 2014, at which ZI LPD awarded the Best Factory in Safety for the year 2013 to the Unitary & Applied (U&A) business unit at Zamil Air Conditioners for the second consecutive year. The Safety Awards Program is an annual event spearheaded by ZI LPD in cooperation with the management of Zamil Industrial business units, aimed at improving the safety performance at each factory and encouraging adherence to management-approved ZI LPD policies and procedures that apply to all Zamil Industrial business sectors.

• Assisted with the preparations for the visit of the ZI LPD Corporate Director to Zamil Steel Vietnam factories in Hanoi and Dong Nai during February 17 - 21, 2014, and conducted the SHE Survey at each factory to determine compliance and adherence to ZI LPD SHE programs. Planning assistance and support services were likewise extended to both factories in implementing their EAP Programs.

• Completion of the review and revision of the upcoming Zamil Industrial Home Safety Handbook, developed specifically for Zamil Industrial employees. The new publication provides general safety guidelines for use not only in the workplace, but at home and within the community. The Home Safety Handbook will be available in both Arabic and English versions, which are scheduled for publication later this year.

15HEALTH & SAFETY

ZI LPD Trainingand Support Services

Supervisor Development Program In 2014, the Loss Prevention Health, Safety and Environment (HSE) Training department first offered its Supervisor Development Program. This new training series addresses leadership and management philosophies, empowered employees, self-directed teams, hazard control and risk reduction, as well as other current best practices that focus on improving safety conditions and sustaining safety performance.

By the end of first quarter of 2014, the LPD HSE Training department conducted 160 training sessions in both Arabic and English. A total of 1,841 participants have attended various training and awareness programs so far this year in all Zamil Industrial factories.

Government PermitsLPD provides support services that assist Zamil Industrial factories in obtaining the required Civil Defense permits as well as the Presidency of Meteorology and Environment Protection certificates, which are necessary for the operation of industrial factories in Saudi Arabia.

In addition, the Corporate Loss Prevention HSE Training department participated in the Yanbu National Petrochemical Company (YANSAB) Safety Campaign – Fire Safety & Prevention, in support of Zamil CoolCare projects in Yanbu. The HSE training department handled the entire initiative, from selecting the topics to preparing the required educational materials.

The department also conducted specific training programs for two Gulf Insulation Group companies: SRWF and SPPI in Riyadh. To date, twenty-eight

hours of training have been completed by 130 participants, including operators, maintenance, supervisors and administrative personnel. This program focused on important topics designed to increase employee knowledge and awareness of occupational safety, such as personal protective equipment, volunteer fire brigade, materials handling safety, forklift safety, electrical safety, machine guarding safety, and compressed gas safety.

16 HEALTH & SAFETY

According to reports, most people who became infected with MERS-CoV developed a severe, acute respiratory illness with symptoms of fever, cough and shortness of breath. Although some patients were reported as having a mild respiratory illness, 30% of cases have resulted in death.

MERS-CoV is closely related to the Asian flu SARS, which sickened thousands of people and left nearly 800 dead a decade ago. Thus far, MERS, which was first detected in 2012, is not believed to be nearly as contagious as SARS, and not everyone who contracts the disease becomes ill. However, MERS-CoV is significantly more lethal, and there is no known vaccine or cure.

MERS-CoV is spread by close contact with an infected patient, as evidenced by observed transmissions from infected patients to healthcare personnel. In fact, according to the Ministry of Health, most of those who have acquired the disease are healthcare workers who did so through contact with hospitalized patients. Clusters of cases in several countries are currently under investigation.

Some public health experts have cautioned against overreacting, pointing out that as long as the virus remains difficult to contract, it is unlikely to develop into a full-blown epidemic.

Follow these safety tips to protect against MERS-CoV and prevent the spread of respiratory illnesses:

• Practice the same basic prevention measures as prescribed for any respiratory illness: regular hand washing, covering the mouth with a disposable tissue when coughing or sneezing, and avoiding close contact with people who are ill.

• Wear a face mask when in direct contact with patients infected with MERS-CoV (it is mandatory). However, it is not necessary to wear masks in public places.

• Avoid touching the eyes, nose and mouth with unwashed hands.

• Avoid close contact, and do not share cups or eating utensils with sick people.

• Avoid unnecessary direct contact with live animals.

• Clean and disinfect frequently touched surfaces, such as toys and doorknobs.

• Travelers who develop symptoms either during their journey or after their return should seek medical attention and are encouraged to share their travel history. People who display symptoms of acute respiratory infection should practice standard cough etiquette (maintain distance, cover coughs and sneezes with disposable tissues or clothing, and wash hands) and delay travel until they are no longer symptomatic.

There are no specific treatments or vaccines recommended for illnesses caused by MERS-CoV. Medical care focuses on support and the relief of symptoms. While the Ministry of Health and the World Health Organization have not declared the recent outbreaks of MERS-CoV an epidemic, it is vital that all countries cooperate in preventing its spread. Information is key to containment, especially among the people and workers who form the first line of defense against the spread of this dangerous illness.

Coronaviruses are quite common and appear worldwide, usually in the form of a common cold. But the Middle East Respiratory Syndrome coronavirus, or MERS-CoV, has recently caused severe illness and death to people from several countries.

Preventive Practices Are Key to the Containment of MERS

RESEARCH AND STUDIES

The IMF forecasts global growth to average 3.6 percent in 2014 – up from 3 percent in 2013 – and to rise to 3.9 percent in 2015.

The strengthening of the recovery from the Great Recession in the advanced economies is a welcome development, according to IMF staff. But the latest WEO also emphasizes that growth remains subpar and uneven across the globe.

“The recovery which was starting to take hold in October is becoming not only stronger, but also broader,” said IMF Chief Economist Olivier Blanchard. “Although we are far short of a full recovery, the normalization of monetary policy – both conventional and unconventional – is now on the agenda.”

In this setting, the global economy remains fragile despite improved prospects, and important risks – both old and new – remain. Risks identified

previously include finishing the financial sector reform agenda, high debt levels in many countries, stubbornly high unemployment, and concerns about emerging markets.

New worries on the horizon include persistently low inflation in advanced economies, a weaker outlook for emerging markets than estimated in the second half of last year, and recent geopolitical strains. Against this background, the WEO underscores that stronger policy efforts are needed to fully restore confidence and ensure a durable and sustained global recovery.

Advanced economies strengthening

A major contribution to global growth has come from the United States, where annual growth in 2014-15 is projected to be above trend, at about 2.75 percent. More moderate fiscal consolidation is responsible,

along with support from accommodative monetary conditions, a recovering real estate sector, and higher household wealth.

In the euro zone, growth has turned positive, and a strong reduction in the pace of fiscal tightening is expected to sustain additional expansion. Outside the core euro area, contributions from net exports have assisted the turnaround, as has the stabilization of domestic demand. However, growth in demand is expected to remain sluggish, given continued financial fragmentation, tight credit, and a high corporate debt burden. Growth performance will therefore continue to lag the core euro area.

Emerging markets and developing economies

Emerging markets and developing economies continue to be responsible for more than two-

As the global economic recovery broadens, the changing external environment poses new challenges to emerging markets and developing economies, according to the International Monetary Fund’s (IMF) latest World Economic Outlook (WEO).

17

Advanced and Emerging Economies Face Challenges as Global Economy Grows

Advanced and Emerging Economies Face Challenges as Global Economy Grows

18 RESEARCH AND STUDIES

thirds of total global growth, and expansion in these markets is projected to increase moderately from 4.7 percent in 2013 to 4.9 percent in 2014 and 5.3 percent in 2015. The weaker momentum, in comparison to advanced economies, reflects in part the adjustment to a less favorable external financial environment and, in some cases, continued weak investment and other domestic structural constraints. Going forward, stronger exports to advanced economies are expected to underpin moderate increases in growth.

The Middle East and North Africa region faces challenging conditions, with regional growth projected to rise moderately in 2014–15. Most of the recovery is due to the oil-exporting economies, while many oil-importing economies continue to struggle with difficult sociopolitical and security conditions.

China’s forecast is for growth to remain broadly unchanged at about 7.5 percent in 2014–15, as the authorities seek to put the Chinese economy on a more balanced and sustainable growth path. In India, real GDP growth is projected to strengthen, partially due to government efforts to revive investment growth.

A modest acceleration in activity is expected for the Latin American region, with growth rising from 2.5 percent in 2014 to 3 percent in 2015. This is due to the fact that certain economies have recently faced strong market pressure.

Near-term prospects in Russia and many other economies of the Commonwealth of Independent States (CIS) have been downgraded to reflect the fallout from the Ukraine crisis. In emerging and developing Europe, growth is expected to decelerate in 2014 before recovering

moderately in 2015, largely reflecting changing external financial conditions.

Key downside risks

The WEO notes that the balance of risks to global growth has improved, but that some hurdles remain along the way. These include the following:

Danger of low inflation. The report reiterates the risk from persistently low inflation in advanced economies, especially in the euro zone. Inflation is projected to remain below target for some time, as growth is not expected to be strong enough to cause economic slack to decline rapidly.

Expectations for longer-term inflation are then more likely to drift down in response, and risks of lower-than-expected inflation, or even deflation, will increase, because interest rates are already near zero and limited monetary policy response options remain. Resulting effects include premature increases in the cost of borrowing and a higher real debt burden. The danger lingers because the longer inflation remains weak, the more vulnerable the region becomes to damaging debt deflation in the event of adverse shocks to activity.

Emerging market risk. Tighter financial conditions and the resulting higher cost of capital could lead to a larger-than-projected slowdown in investment and durables consumption in emerging markets, and thereby weigh on growth.

The potential for reversal in capital flows from emerging markets to advanced economies as risk averse investors seek relatively more attractive advanced economies’ assets remains another concern. There is also a risk of renewed bouts

of market volatility with the expected normalization to a more neutral monetary policy stance in the United States. In either case, the result could likely lead to financial turmoil and difficult adjustments in some emerging markets, with a risk of contagion.

Policy implications

For advanced economies, the report underscores that policymakers need to avoid a premature withdrawal of monetary accommodation, given continued fiscal consolidation, still-large output gaps, and very low inflation. In the euro zone, more monetary easing, including via unconventional measures, is recommended to sustain activity and help achieve the European Central Bank’s price stability objective. In Japan, policymakers need to deliver on the “third” arrow of Abenomics – structural reforms to lift potential growth.

For emerging market economies, the appropriate policy measures will differ. But allowing exchange rates to respond to changing fundamentals and facilitate external adjustment will often be a critical step to ensure stability. Many economies also need a new round of structural reforms in order to increase potential growth. These include investment in public infrastructure, removal of barriers to entry in product and services markets, and, in China, rebalancing growth away from investment toward consumption.

Low-income economies will need to avoid a buildup of external and public debt. Many of these economies have succeeded in maintaining strong growth, partly as a result of improved macroeconomic policies, but also in response to changes in external environments.

... Advanced and Emerging Economies Face Challenges as Global Economy Grows

19OUR COMMUNITY

More than 200 Zamil Industrial employees gathered on Friday, 4 April 2014, at the Zamil Camp in Rakah, Khobar, for start of the company’s annual Sports Fest. They came to spend an enjoyable time participating in four team-oriented sports – basketball, football, cricket and volleyball. The company-sponsored sport, camaraderie and good-natured competition

With each passing year, the benefits of Sports Fest become more obvious to the planners and participants involved in this enjoyable athletic event.

Zamil Industrial Employees Gather to Enjoy Sports Fest 2014

20 OUR COMMUNITY

highlight the importance of teamwork in the workplace as well as on the court or field, in keeping with this year’s theme, “We Are One Team”.

The excitement was evident during the opening ceremony, which featured a parade of teams, arranged according to business unit and bearing flags and torches in the Olympic tradition through the fully-decorated and very festive venue.

Competitive spirit continued at high levels as the tournaments began. For nearly three weeks, the rivalries and contest played on, ending on April 24.The closing ceremony was held on April 24, and Mr. Ahmed Al Zamil was in attendance to congratulate all the participants and tournament winners. A large group of executives and senior managers from various Zamil Industrial sector businesses also attended in support of their favorite teams.

As always, sincere thanks go out to all of this year’s event planners, organizers, and participants – everyone whose hard work and contributions of time and talent made Zamil Industrial Sports Fest such a rousing success.

Zamil Industrial Sports Fest is an annual athletic event sponsored by the company and organized by Zamil Industrial Facility Management. All staff members are encouraged to participate and take advantage of the excellent opportunities that the event provides for meeting new people from other Zamil Industrial businesses, enjoying the benefits of teamwork and taking a break to enjoy the company of co-workers. The informal setting helps participants build social relationships while they benefit from physical exercise and the excitement of shared competition.

Congratulations to the winning teams at this year’s Sports Fest, and good luck and success to the other teams in upcoming tournaments.