Lessons to learn from the legend of Aujan

Transparency and hiring outside execs have been key to success of Saudi drinks giant
Adel Aujan’s Coca Cola deal is a game changer for the company
By Anil Bhoyrul
Sun 25 Dec 2011 07:29 PM

It’s been a year of knocking hasn’t it? Let’s face it, given the past twelve months we have had, there has been no shortage of targets for Arabian Business. Profits diving, shares crashing, jobs disappearing. Over three years since the fall of Lehman Brothers, we seem to be back to square one.

But rather than dwell on the past, it is nice to be able to end the year on a positive note. Last week I had pleasure of catching up with Adel Aujan, the chairman of drinks company Aujan Industries. As we describe in our cover story this week, Aujan has just inked a deal to sell close to 50 per cent of his company to Coca Cola for $980m. Rarely have I seen such a great deal, and such a deserving man to achieve it.

Even without the money of Coca Cola, Adel Aujan has spent the past few years on an incredible winning streak. In 2005, he embarked on the ambitious ‘555’ programme, to generate $500m in revenues within five years, from just five brands. That took just three years to achieve. This year, revenues have topped a record $850m. And over the last twelve months, the company has sold 95 million cases of Rani and 30 million units of Barbican. With Aujan drinks now in 70 countries, this Saudi-based company has already made its impact on the global stage.

But in many ways, for all the incredible achievements to date, I suspect the real Aujan story is only just beginning. The deal will give Aujan access to Coca Cola’s global distribution and manufacturing system. It means that the biggest problem Aujan has always had – not being able to keep up with demand for its drinks – will have been taken care of. As Adel Aujan told me: “This deal is a game changer for us; it takes us to another level. In five years time, I think you are just as likely to be sipping a can of Rani in New York as you are a can of Coke.”

There will be many Arab companies looking at this deal and thinking “why not us?” It isn’t every day that a big international giant pumps a billion dollars into an Arab company that is primarily family owned.

But here lies the key: while the Aujan family have retained overall control, they have been one of the region’s greatest advocates of both transparency and bringing in outside executives to run the show. Adel Aujan has spent years searching for and hiring the best management team he can. He has successfully stepped back, allowing his well qualified executives to do their job, given them advice, leadership and inspiration – but ultimately, letting them do their job.

This is one of the key reasons Coca Cola was keen to get involved with Aujan. The real proof is that not a single Coca Cola director is being added to the Aujan board, and not a single senior executive is leaving Aujan.

As Aujan himself says: “We are family owned, but  unlike many others the family doesn’t run it. The family is in the board and specifies the goals,  but actually it is run by professionals from all over the world. Our CEO was from Coca Cola. We hire the best and they run it.  So we have started this process and with Coke on board it will get even better. They have been at it on a much larger scale than we have.”

A big international giant having complete confidence in the management team of an Arab company they have take a billion dollar stake in. How often to do you see that? Adel Aujan has cemented his place in history. But if other big Arab companies want a piece of the action (and investment) they should study closely how this company was run over the past decade.

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