Local Procurement

We aim to support the local communities in the locations where we operate by fostering economic development. Local procurement strengthens the local economy and meets the local procurement expectations of neighboring communities. Increased local procurement has had the added benefit of reducing business disruption in recent years. Our local procurement activities in Yemen have focused on the communities immediately neighboring our facilities as well as regional Yemeni suppliers. The aim is not only to generate revenue locally but also to provide training to local suppliers to optimize the local supply chain. This in turn provides faster response times and higher quality of service delivery to OMV as we build up local suppliers through effective supplier relationship management.

Management and Due Diligence Processes

Training

We support local communities and suppliers to further their development through capacity building. For instance, OMV Yemen began providing workshops to educate and train local suppliers and contractors in 2019. The focus was on enhancing technical and financial capabilities.

Fit for Purpose

Moreover, OMV Yemen set up an annual local procurement plan and adjusted its procurement processes accordingly. Such adjustments included modifying internal standards and contract templates to enable more local procurement by using a fit-for-purpose approach.

Tracking Value Creation

In 2020, a local content dashboard was developed to measure the efficacy of the local procurement strategy in Yemen, and it continued to be utilized in 2021. The dashboard tracks items including order totals, the local personnel of our main contractors, local equipment rented, local suppliers qualified, and local spend. An informal and friendly competition was also launched among suppliers in three categories: top supplier for local personnel hired, top supplier for local equipment rental, and top supplier for local spend to local contractors. The aim was to further encourage local procurement throughout the supply chain. In 2021, the aim was to define a local content contracting strategy for material stock replacement/reordering with significant input from OMV’s warehouse and CSR teams to prepare and engage the local market for this upcoming tender. This strategy will further ensure that future purchases are conducted through local suppliers as a preferred option.

2021 Actions

In 2021, we increased our construction activities in Yemen conducted by local suppliers in addition to ongoing carryover activities from 2020. We aim to have a fully defined local content strategy for material supply with a focus on stock materials.

In 2021, in addition to Yemen, we began focusing on local procurement in Tunisia. In Tunisia, our focus is on employability and skills building, local content, and business capacity building. OMV believes in developing local suppliers and maximizing local content. As part of project implementation, especially in the case of Nawara, OMV required contractors to commit to specific targets to increase employment and procurement opportunities for local communities. Extensive work was carried out by the local procurement department to identify local capacity and match it with operational needs, while addressing the gap by designing and implementing a business capacity building project. Various contracting strategies were elaborated that lead to several contracts with local companies to secure some services for OMV operation needs.

Outlook

We will continue to roll out country-specific local procurement strategies in countries with the highest needs.