Kunooz Oman Holding: Generating sustainable value in Oman’s mining sector

Kunooz Oman Holding’s vision and mission is simple – to bring natural resources to the world to support the sustainable development of Oman by creating sustainable value.

In 2014, Kunooz was incorporated following the consolidation of five subsidiaries and two associates within the mining, quarrying, transportation and construction materials sector. The ambition? To become a public company.

“The strategy involved ramping up and optimising our current operations and balance sheet,” says Dean Cunningham, CEO of Kunooz.

“We will identify new opportunities and new acquisition targets in order to become a key player in the bulk commodities sectors in Oman.”

Cunningham, whose career has taken him through the South African investment banks, private equity with a focus on the mining industry through to joining Kunooz in 2014 as the company, considered list on the Muscat Stock Exchange.

Over the course of his career, he has worked extensively on the preparation for divestment and listing, mergers and acquisitions, organisational change and most importantly, risk management and problem solving. This, he feels, is key as the company continues to diversify and become that major market player.

“I think my experience has influenced my understanding of project management, building financial models, budgeting, and understanding local and global markets and how to strategically position the company for expanding and contracting cycles,” he says.

“The combined skillset of mining and project management has influenced my management of greenfield or brownfield projects right through their various phases to commercialisation.”

In the quest to become a fully public company, the founding Al Rawas family members have disinvested 20% of their shareholding to the Oman Investment Fund (OIF). Cunningham believes that having OIF as a significant shareholder will increase investor confidence in the company, lend credibility to the company’s ambition and only prove to strengthen this transition.

Currently speaking, close to 60% of Kunooz’s revenue is contributed by subsidiaries and associates that are operational with export activities.

 “Our business is currently export-driven and is aided by both global urbanisation and infrastructure development,” he says. “Given that we operate in related industries and sectors, our businesses are able to benefit from substantial synergies.”

Kunooz is currently looking at a potential dolomite project, with scoping studies to date showing great potential. The firm is planning an exploration campaign with the hope of moving further into a feasibility study and then commercialisation but all this will be based on the outcome of a bankable feasibility study, fingers crossed that we can get there.

This is a key development for the company as, through its mission of bringing natural resources in order to support the sustainable development of Oman, Kunooz is aiming to diversify away from low price high volume products – with dolomite falling into this category.

This diversification however, does not strictly mean moving away from existing projects. Cunningham sees it more as a case of adapting to the market, becoming more vertically integrated by pushing out to into a diversity of products based on our raw materials pool, which combined would create what he describes as a “number of high value products”.  

“It’s a difficult balance,” he says. “Diesel, for example, makes up 50% of our costs, but over the last 18 months we’ve seen the price of diesel rise around 70%. This has really forced us to look at our cost and restructure our business, and I’d consider the last 18 months to be a real achievement for us.”

Add to this that the company is targeting projects and exploration developments that are incentivised by being located strategically in order to reduce those costs associated with transportation.

“We really are looking at minimising the expenditure costs liked diesel and placing ourselves as close to the market and to the customers as we possibly can,” says Cunningham.

As part of his role as CEO, Cunningham works closely with the management team to seek out and implement solutions with the various subsidies and companies that work under the Kunooz umbrella, in order to deliver on the strategic vision of the company and continue to drive down costs. This provides its own unique challenges that are, again, driven by the current market.

“High quality skills are expensive and getting more expensive as commodity market starts to perform, so we try and maximise these skill sets across the group through internal engagement between subsidiaries on a regular basis,” he says.

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This collaboration proves key for Cunningham.

“It allows us to look at the detail, apply a long-term view and take a collective approach to maximise the opportunities for all stakeholders,” he says. “As a company, we look at ways of supporting the industries as a whole, training, educating and improving skills. In doing this we increase the skills pool which will over time uplift the entire market here in Oman.”

Operating across multiple sectors and industries requires a significantly robust and agile supply chain and logistics model in order to succeed and deliver on the company’s promise. Per year, Kunooz invests heavily in consumables and services across all of its sector activity and hence the creation of a centralised procurement function.

“Centralising will get us better pricing as we can then begin to leverage off the volumes required, specifically in transportation costs such as diesel and tyres,” says Cunningham. “It is a key part of maintaining and managing our cost structure going forward.”

As one of its core values, Kunooz aims to create sustainable value for its investors, for the people it invests in and the environments in which it works. This extends to the partnerships that the company creates, develops and fosters in order to successfully service its customers.

This is an area that Cunningham plays an active role in – working closely with the Group General Managers to establish relationships that will deliver true value for both the partner and Kunooz itself.

Cunningham points to the company’s Gypsum business as a strong example of how Kunooz engages with its partners to better serve its customers.

“The Gypsum business extends as far as India to New Zealand and down the east coast of Africa,” he says. “It’s probably the strongest marketing team that anyone has in Oman for any one commodity. It’s a small team, but it is one that is dedicated to engaging with partners and customers, delivering what the customer requires and to the highest of quality.”

Over 600 people are directly employed across the Kunooz Group, stretching from a mining workforce to middle management and finance teams right up to head office. As the company seeks to enrich Oman, it looks far and wide for talent.

“Our employment strategy looks for people across all cultures and from different geographical locations,” says Cunningham. “We deliberately strive to create a mixed work force to create a competitive environment, one that encourages people to think outside of the box.”

This falls in line with the company’s approach to sustainability. Cunningham feels that the key to long term success requires discipline and the rolling out of strategies and processes that make no individual irreplaceable, including himself.

“Our company is about pushing people. They have to feel confident in themselves to deliver and surround themselves with these smart thinkers who challenge them and push one another, including upper management and myself,” he says.

“This will only enhance the business and if channelled correctly, it will add significant value to the business. It’s been a continuous process, and it’s been challenging, but we are achieving it, and we are growing.”

Since the consolidation of Kunooz’s subsidiaries in 2014, it has been a journey of transformation and realignment. As it continues to grow and expand and establish itself in the mining market, Cunningham understands that this is a continuously evolving process.

This includes diversifying its logistics operations away from simply supporting the mining subsidiaries, and into a fully-fledged logistics operation.

But, the main goal remains. “We will continue to grow and diversify our offering in the mining industry on a local level,” Cunningham says. “Once we’ve fully established ourselves, then we will look at the international mining market and look to transfer what we call the Kunooz way on a global scale to truly become a global company.”