Six years ago, when we first hosted the CEO Middle East Awards, judging the winners was a pretty easy affair. In those days, it was all about size. The biggest projects, the biggest expansion plans — and the biggest profits.
Fast forward a few years, and it’s clear to see that there is a different calibre of company emerging — one that perhaps reflects the growing maturity of business in the Gulf. The recession has weeded out a number of the flashier players, and what is left is a breed of firm that reflects the genuine needs of the region.
What is one of the Gulf’s most pressing concerns? An estimated 20 percent — or roughly one in every family — of the region’s inhabitants now has diabetes, and, if current trends persist, that number is likely to double by 2030. Some estimates suggest that the UAE alone spends half a billion dollars every year combating the disease, but — despite the vast outlay, and the strain on Gulf exchequers — disease incidence has thus far shown no sign of waning.
While regional policymakers have been racking their brains to come up with a solution to this crisis — with apparently little success so far — one of our award winners has really taken the bit between its teeth. Julphar, the Ras Al Khaimah-based pharmaceuticals company that is already making a name for itself on the global stage, is the first Middle Eastern firm to produce its own insulin.
The move hasn’t come cheap — it has cost Julphar a cool $136m to set up its insulin plant, but demand is such that it’s an investment that is likely to provide not only a much-needed service to the community, but also some tidy profits as well.
Then there is the example of Yahsat CEO Tarek Al Hosani, whose award represents the first time that the telecoms prize has been handed out to a non-conventional telco. Set up only five years ago in Abu Dhabi, Yahsat has already launched two satellites into orbit, enabling the company to deliver high-quality broadband services to markets in the Middle East, Africa and South Asia. As the Gulf nations have realised, broadband is key to the development of the knowledge economy and companies like Yahsat, alongside its more traditional peers, are playing a vital role in developing next-generation telecoms infrastructure.
And then there is the King Abdullah Economic City (KAEC) project in Saudi Arabia. While the development — possibly the biggest real estate development anywhere on the planet right now — certainly fits into the mould of the Gulf megaprojects announced in the boom years, KAEC represents the kind of project that is crucial in the kingdom’s development.
While Saudi Arabia’s foreign assets may be bulging, perhaps the two biggest challenges the country faces are jobs for a rapidly rising population, and diversification away from the energy sector.
The KAEC plan fulfills both of those missions. It has already created 12,000 jobs but, in truth, the work being carried out by CEO Fahd Al Rasheed is now beginning in earnest. As companies start to move into their premises in the project’s Industrial Valley, a city that was a figment of the imagination just a few short years ago, is starting to take shape.
What do all these achievements tell us about the Gulf today? The three examples above are of firms that have made light of the recession and invested heavily for the future. This is a market in which — with a few exceptions — companies are planning for what the region actually needs, and staying away from the vanity projects for which the Gulf has become renowned.
It is this maturity that will ensure, I suspect, that last week’s winners will still be in the spotlight, not just in six years’ time, but far beyond.
Ed Attwood is the Editor of Arabian Business.