Khalaf Ahmad Al Habtoor autobiography: Part three

Arabian Business exclusively presents part three of the UAE business magnate's memoirs
Khalaf Al Habtoor with HH Sheikh Rashid bin Saeed Al Maktoum and engineer Yusef Shalabi reviewing plans at the Dubai Petroleum Complex in the early 1980s.
By Khalaf Al Habtoor
Sun 18 Nov 2012 11:11 AM

The early to
mid-1980s marked the beginning of an era when everything was available and so
much was fresh and exciting. Nationals and expats had swelled to around 200,000
and were reveling in a life of ease and plenty.

Supermarket shelves
were groaning with every kind of imported foodstuff, including Australian lamb,
American beef, giant prawns from Thailand and things most people take for
granted like fresh milk and bottled mineral water. Tens of new restaurants had
opened up and most of the hotels, including my own, were offering vast buffet
breakfasts, lunches and dinners that outdid anything we saw in Paris or London.

The nice thing was
that nobody was treated as just another number. You only had to eat once in a
restaurant and the staff would remember your name months later – and would
sometimes even recall how you liked your steak cooked or what you drank with
your meal. Visitors were made to feel special; everyone was treated like a VIP.

There were boutiques
selling the latest fashions from Paris and London in Satwa and Deira and in our
lone shopping mall, The Al Ghurair Centre, could be found every type of
imported cloth and extensive ranges of leather shoes, sunglasses, watches and
perfumes. Foreign newspapers were now available with newsagents, but at that
time, were heavily censored with black marker pen or in some cases, were
sold with entire pages ripped out.

The city came alive
in the evenings now that there were so many places to go and so much to do.
Residents were spoilt for choice when it came to deciding what to do during the
weekend. People would often head to the simple Sandy Beach Hotel near the Hajar
Mountain range in Khorfakkan or the nearby Hilton in Fujairah, to dive in the
warm waters of the Gulf of Oman that merges with the Arabian Sea.

Or they would drive
past orange-coloured dunes to the mountainous area of Hatta that borders Oman
where they would be warmly greeted by the Hatta Fort Hotel’s warm and effusive
General Manager, Sergio Magnaldi, before their stay in one of the Hatta Fort
Hotel’s Alpine-type chalets. Magnaldi’s professed love of Hatta wasn’t just
sales talk. He retired with his wife, Sandy, to the Isle of Man in 1997, only
to return to his old job six years later.

First-time visitors
to Dubai would be bowled over that such an idyllic place even existed. Dubai
was like a best-kept secret as it didn’t yet feature on the international map.
The government now saw a massive potential in tourism, but it wanted to avoid
mass tourism, preferring to retain Dubai’s exclusive, upmarket ambience. It
wasn’t until the mid-80s that Dubai began to be seriously marketed abroad as a
new tourist destination for the well-heeled.

Instrumental in the
promotion of Dubai far afield was Dubai Duty Free that opened in 1983 as the
first modern, Western-style duty free in the Gulf. It was set up by an Irish
advisory team from Aer Rianta; two of the team’s members, Colm McLoughlin and
George Horan, stayed on as General Manager and Deputy General Manager
respectively. They never returned to Ireland; they hold the same positions
today. Head of Marketing was Anita Mehra, a young American-Iranian woman whose
father had set up the Iranian hospital in the 1970s. Not only was she responsible
for marketing the Duty Free, she was also tasked with marketing Dubai as a hot
new destination. Ms Mehra was an outstanding example of women power in what was
then a man’s world. She did an excellent job.

Dubai Duty Free soon
gained a reputation as being the most value-for money operation of its type;
industry awards followed and the organisation began to sponsor international
sporting events, such as the Dubai Masters, the first major snooker tournament
in the Middle East. Dubai Duty Free is one of the emirate’s greatest success
stories. From an initial annual turnover of just 70 million dirhams, its
turnover in 2010 reached 4.66 billion dirhams.

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Everyone benefited
greatly from Dubai’s new cosmopolitan, open spirit which led to a sea change in
the lives of local Emirati women. More young girls than ever were college or
university-educated, most learned to drive at an early age and were now seen
out with their female friends or husbands in restaurants and coffee shops.

In the years ahead,
it wasn’t uncommon to find Emirati girls working in the public sector and
later, in private businesses. I was pleased that my daughters were able to
enjoy the same kind of freedoms they were used to in the UK and elsewhere in
Europe. They were born at the right time, able to enjoy lifestyles that their
mother’s generation had been deprived of by custom and tradition.

Things were going
well for me too. My hotel business was beginning to pick up, Al Habtoor
Engineering was receiving substantial contracts and the real estate arm of my
group was thriving as so many newcomers needed to rent apartments.

My biggest coup in
the early 1980s was beating back strong competition to land the sought-after
Mitsubishi sole distributorship for the entire United Arab Emirates. Until that
time, most agencies and distributorships were in the hands of non-UAE
companies, so it hadn’t really crossed my mind to pitch for that distributorship.
That was, until I was approached by one of Mitsubishi’s sales managers, Ghazi
Shaker, and Aken Riknor, an American guy who had a very strong relationship
with Mitsubishi’s top executives in Tokyo and who was the current distributor’s
General Manager.

They told me that
Mitsubishi wasn’t happy with the way that A.A. Al Zayani & Sons from
Bahrain was handling the distributorship. “They’re not doing well at all;
they’re not selling enough,” said Shaker. “We heard about you and thought you
might be interested in taking it because it isn’t really functioning at
present. Rather than allowing it to be handed to someone outside, we figured
it’s better for someone here in the UAE to take it.”

To be fair to the Al
Zayanis, the problems with their franchise wasn’t so much due to a bad business
plan, but rather a protracted interfamily dispute that led to boardroom
wrangling. That sounded like a good opportunity to me and as I’ve never been one
to walk away from a sound business opportunity, I got in touch with Mitsubishi’s
head office in Tokyo; and within no time, the agreement was signed.

Until then, it had
all been smooth sailing. We liked and trusted our Japanese partners, they had
confidence that we could do a good job of marketing their product, so
everything in the garden was rosy... Well, it would have been if the green-eyed
monster hadn’t popped out of nowhere to show its ugly face.

There were several
influential people in the region pushing to take the franchise, with yet more
influential individuals supporting their bids. Some of them approached me
directly to ask whether I would be willing to pull out of my contract with
Mitsubishi and I discovered that higher authorities had written to the
manufacturer recommending other potential distributors.

Needless to say, I
wasn’t very happy with that cut-throat state of affairs. Full marks to
Mitsubishi’s management! All those demands, including a few from top UAE
officials, were rejected or ignored. In fact, the Japanese made it clear that
their decision was set in stone and if I wasn’t allowed to import their cars,
then they were not prepared to partner with anyone else from the UAE.

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I can never forget
their staunch moral support throughout those tense times. They were under
enormous pressure, but not once did they consider bending to it; they even used
to forward copies of those letters of recommendation, so that we knew exactly
who was sending them. As relieved as I was to receive Mitsubishi’s support,
there was still a major hurdle to overcome.

Every distribution
agency had to be registered with the Ministry of Economy and Commerce.

Ours remained in the
pending tray of the Undersecretary, who, as we came to understand, favoured other
interested parties. After a lengthy and unusual wait, I called the
Undersecretary to ask him to expedite registration, but it soon became clear
that under his watch, that wasn’t going to happen. He and whoever was pulling
his strings clearly believed Mitsubishi would eventually get fed up with the delay
and dump me.

However, when I
discussed the matter with my Japanese partners, they said, don’t worry, we’re
with you. We’re prepared to be patient for as long as it takes. They knew that
we were a young, energetic and enthusiastic team and saw how successful we had
been in construction and in our other business ventures. We were in frequent
communication and were always transparent with one another, which laid a solid
foundation of trust.

When Sheikh Rashid
formed a new cabinet, he appointed Saif Al Jarwan as the new Minister of
Economy and Commerce. I think that Mr Al Jarwan already knew about the underhand
attempts to cut me out of that contract. As soon as he moved to the Ministry,
and without any prompting from me or my people, he instructed that my
distributorship should be registered forthwith.

Nobody asked him to
do that. He did it because he was a man of principle who wasn’t about to give
envious bigwigs free rein to steal bread from the mouths of their fellow
nationals.

That rocky start to
our relationship with Mitsubishi in fact cemented our business relationship.
They looked upon us more like partners than just another one of their
distributors. I was happy to give them every support. When we took over the
Mitsubishi agency, the climate was just right. Japanese cars were relatively
inexpensive, but had acquired a reputation for quality and reliability – and
importantly for the UAE, they came with good air conditioning systems that
didn’t overheat on a hot summer’s day like some of their American and European
competitors.

In earlier decades,
Emiratis and some expats believed bigger was better when choosing an
automobile, which was why American ‘full size’ brands with their plush
interiors, cruise control and comfortable suspension were popular. But as
petrol prices soared worldwide and parking spaces were at a premium, car manufsacturers
began downsizing according to the demands of the market. Those problems weren’t
yet noticeable in the Emirates, but smaller, more compact cars were viewed as
more trendy and more fashionable than the American dance halls on wheels.

Consumers started
realising that big might be beautiful but was no longer practical, which
provided a perfect window for Japanese makers. In the UAE, Mercedes and BMWs
remained popular choices for men and women, but more and more families were
looking for more economic second and third cars for their children while
companies began buying utilitarian Japanese cars for their employees. In later
years, of course, Japanese manufacturers successfully targeted the luxury car
market.

With the Mitsubishi
franchise, Al Habtoor Motors was born. In the years that followed, we added
Bentley, Rolls Royce and Aston Martin to our stable and enjoyed a long and
fruitful partnership with the manufacturers of the latter two, until we
amicably parted ways some time ago. More recently, the Turkish coach and truck
manufacturers Temsa, McLaren sports cars; and the crème de la crème of
luxurious, high-speed cars, Bugatti were great additions to our
showrooms.

In 2009, the company
emerged as the number one Dealer of Bentley Motors Worldwide for the year 2008,
which was an amazing achievement for my brother, Sultan, and my son, Ahmad, who
take care of the motoring arm of my group.

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