Family affair

He’s the third generation of his family to take over the reins of the Easa Saleh Al Gurg Group but as he tells CEO Middle East it’s not the same economic climate as it was 50 years ago
Family affair
Born to lead Abdulla Al Gurg is the third generation of the prominent Emirati family to take over the helm of the business
By Shane McGinley
Fri 08 Apr 2011 11:33 AM

Nestled in the corner of Easa Saleh Al Gurg Group office stands a beautifully ornate telescope. Although the view across Dubai Creek warrants its presence one suspects it might be used for the group’s general manager, Abdulla Al Gurg, to survey his empire.

“We have three thousand products, of which nearly 400 are agent agreements. So a long list of keeping everybody happy,” jokes Al Gurg, who took over the day-to-day running of one of the Gulf’s most successful family conglomerates in October 2009.

Eighteen months is a long time in business, as Al Gurg knows only too well. As the region comes out of the worst recession in living memory, business is slowly starting to pick up but that doesn’t mean life is a walk in the park for the group general manager. In addition to increasingly unjustified mall rent increases the conglomerate, like so many other UAE-based businesses, is also battling to bank outstanding payments from the emirates’ five-year property boom.

Al Gurg is in no mood to mince his words. “Some of the major retailer asset owners have increased their rents to 35 percent for [2011]. It really just doesn’t make sense. What is the rationale behind it? [Mall owners are] playing a monopoly role, by owning the majority of real estate in retail,” he says.

Nor does he hold back on long-standing speculation that the troubled property developer Nakheel is offering trade creditors early payment on debts in exchange for a cut on the amount due. “In some cases, yes they have [tried to renegotiate debts] ‘Give us a discount and we will finish your payment upfront,’ that is what [Nakheel] has got to say,” he confirms.

How times have changed. More than 50 years ago when Al Gurg’s grandfather, Easa Saleh Al Gurg, first set up his company life was very different. Now, as the third generation of the prominent Emirati family to take over the helm of the business, Al Gurg is responsible for 23 different divisions covering an array of diverse sectors, including cigarettes, tyres, building materials and chemicals, as well as some 4,000 members of staff.

But don’t assume Al Gurg was handed the reins of the family firm simply because of his surname. The 30-year old businessman (who still shares the top floor of his office with the group’s founder) spent several years working as chapter development manager for the Young Arab Leaders as well as a project manager for the now stalled Tiger Woods golf course in Dubai, honing his business skills before his appointment at the Easa Saleh Al Gurg Group.

Under Al Gurg’s stewardship the Young Arab Leaders opened eleven offices, including Saudi Arabia, Morocco and Lebanon. His time with the group, which aims to engage the Arab youth to create positive change in the Arab world, had a profound effect on him. “The biggest challenge I noticed in my time as a chapter development manager was that access to opportunity was the hardest challenge. People who are in the professional sector tend to forget about opening doors and embracing people to come and learn from us,” he says.

“You are so involved in your job you don’t realise that if a person from a college was to come and sit next to you and just listen they would pick up four or five lessons. That opportunity is not given to the youth,” he continues, adding that he would dearly wish to see more mentoring of young people amongst the business community.

Today, in addition to the 23 divisions, Al Gurg is also responsible for the day-to-day running of the family company’s joint ventures. These include long running partnerships with the international tobacco group British American Tobacco, Dunlop, Benetton Group, Siemens as well as Osram. Perhaps its most significant venture is with the British-Dutch multinational corporation, Unilever, which owns everyday mega-brands such as Lipton, Flora and Dove. The consumer goods company’s partnership with the Al Gurg family dates back to March 1965 and is one of its most important and successful partnerships. Last year the two companies opened their regional headquarters for the North Africa and Middle East region in Dubai’s Jebel Ali Free Zone.

Al Gurg cites his company’s family-orientated approach as well as Dubai’s long-standing tradition as a trading hub in the Middle East as the reasons for the partnership’s success. “We are an old trading family and we understand the value or trading and the value of knowing our limitations and we are honest with them if there is something we can’t do,” he explains. “We feel that the essence of success of all our partnerships is that they have all been over 40 years old and all those members have been treated as members of the family,” he continues. “They have direct access and can pick up the phone any time and we will facilitate any approval or anything they need for a multinational to operate. When you give that sort of support and that sort of commitment to making a multinational a success and open doors for them it makes them feel more secure about whom they are doing business with.”

Perhaps this is why, despite the economic climate, the firm was still able to grow its business by around 12 percent in 2010. Looking ahead Al Gurg hopes to increase this figure through organic growth.

He remains particularly optimistic that the country’s retail sector, which declined around 20 percent at the height of the downturn, will start to show signs of recovery. “[Retail] picked up in the last three months of 2010. The earlier stage of the year has been very bad but we have really recovered the market for around 1.5-2 percent from the first half of the year.”

Another subject Al Gurg is happy to talk about is credit management, which he believes is one of the key factors for long-term success. “You need to know your customers and be confident who you do business with and make sure no one takes advantage of who you are. Unfortunately many people have done so in the markets - not with us - but it is a common phenomenon,” he explains.

While credit is tight, he is confident that the purse strings are starting to loosen at the banks and money is starting to flow again. And despite news that Nakheel is renegotiating its debts, Al Gurg says its reengagement with trade creditors is still encouraging news. “For two years we did not see a drop and now we have seen the faucet at least move in the right direction.” The Dubai-based developer was probably guilty of Al Gurg’s other golden rule for success: growing too fast too quick. “The risk of growing more than you should is the second biggest challenge of the leaders. We are used to eating big meals and now when you give us a small meal it doesn’t fill our stomach… Be content with what you have.”

One gets the impression that the founder of Easa Saleh Al Gurg Group would be happy with it’s new group general manager.

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