By Andrew Mernin
Since its birth in Abu Dhabi a little over a year ago, Al Qudra Holding has matured into a colossal investment empire with over 20 subsidiaries and another ten set to be launched this year. Andrew Mernin talks business and politics with the company’s tireless chairman, Salah Al Shamsi, to find out where next for the lightening-paced enterprise
|~||~||~|Arriving for our meeting marching through a set of glass doors deeply engaged in conversation with a hands-free mouthpiece dangling from his ear, Salah Al Shamsi is clearly a man who is constantly on the move.
Perhaps he’s discussing bilateral trade between the Arab world and the West in his role as president of the GCC Chamber of Commerce and Industry (CCI). Or perhaps, as chairman of Al Qudra Holding, he’s plotting, along with a colleague, which sector to break into next. Or he could even be talking sport with a fellow board member of his beloved Al Ain football club. Who knows? With Al Shamsi the possibilities are endless in more ways than one.
Apologising for being late, we get straight down to business. Just the way he likes to do things. “We have 20 companies now and by the end of the year we will have 30,” he says boldly referring to Al Qudra’s meteoric growth since launching in 2005 with a capital of AED 550 million (US $150 million).
“We don’t want to be a local company, we want to be a global one,” he adds with vigour. Having set-up operations in sectors as varied as sports management, energy and education, and with a recent deal signed with the Moroccan government to develop and work on infrastructure projects, the group looks well on the way to becoming a global force. And the financial results so far would also suggest that the Abu Dhabi-based general investment company is reaping the rewards of continually adding new businesses to its portfolio. In the first half of 2006, Al Qudra’s profits stood at US $81.7 million, blasting away the profits (US $57.7 million) achieved in the whole of 2005.
“We have so many projects at the moment and are interested in four main areas — industrialisation, real estate, privatisation and creating new companies. This year we are seeing a huge amount of growth in real estate, last year it was in the financial sector.”
Spearheading one of the largest groups borne out of the UAE’s capital, Al Shamsi has every confidence in Abu Dhabi as a global trade centre to rival its booming neighbour, Dubai. And he insists that Abu Dhabi is changing to strengthen its armoury in the battle with Dubai over foreign investment.
“In the past, the rules in Abu Dhabi did not permit us to welcome foreign investment. We didn’t have freehold properties allowing 99-year leases to foreigners and we didn’t have a place like Jebel Ali Free Zone (in Dubai). But we do now,” he says.
“Now we are focusing on industrialisation and have created so many specialised industrialised zones and are inviting companies to service their businesses there. We also have a shortage in real estate in terms of hotels, apartments and offices, so for Abu Dhabi to grow as a business centre, that will have to change,” he adds.
While Al Shamsi retains belief in the financial benefits of doing business in his native emirate, he also sees the value of investing in less developed areas of the UAE.
The chairman recently met with the crown prince of Ras Al-Khaimah (RAK) to discuss ways in which trade ties between Abu Dhabi and RAK can be developed. “We have successfully exploited various sectors in Abu Dhabi and (we) are ready to expand its specialised services (to) support this prosperous emirate (RAK),” said Al Shamsi at the meeting.
One of the main draws to the less developed areas of the UAE to Al Qudra could well be the cheaper cost of doing business there, compared to the rising start-up costs in Abu Dhabi and Dubai. Remaining diplomatic, Al Shamsi, as president of Abu Dhabi, the UAE and the GCC’s CCI, denies that inflation in the UAE’s two leading business centres is any cause for concern to his or other businesses in the region.
“The two main factors affecting inflation are rising oil prices and rising rents. The UAE, however, is still a very practical place to do business because of the piece of mind, the opportunities, the infrastructure and the social tolerance,” he says defensively. “Besides, salaries are being adjusted to match inflation and there are great opportunities in the UAE — at the CCI, we are constantly looking to work with foreign agencies to improve the country’s competitiveness.”
As well as inflation, another issue that must surely be on the mind of the president of the GCC’s chamber of commerce is the tension between Israel and Lebanon, and the economic effect it will have on the region as a whole.
Playing down the blow the war has inflicted on the region’s reputation as a safe destination for foreign trade, he insists the Gulf will remain unaffected. “The GCC has remained isolated from Lebanon and Iraq and it has been able to adjust to the problems surrounding it so will be no direct effect,” he says.
MORE TO LEARN
Despite holding such senior positions in both politics and business, Al Shamsi believes there is room to improve his leadership skills and urges other chief executives in the region to follow his studious example.
“I am applying to enrol on a management PHD course specialising in benchmarking — a technique to help you understand your competitors,” he says. “I think CEOs should always be on their toes to come up with and be open to new ideas, to attend courses, go to conferences, talk to other people to see what they are doing and to converge themselves with others,” he adds.
As well as building on management skills, Al Shamsi also believes that employing compliance officers, press management staff and corporate governors are additional tools that can help improve you and your business’s ability to meet the challenge of competitors.
In June, Al Shamsi announced that Al Qudra would become a public shareholding company at the start of 2007, stating that it had received state approval to sell up to 49% of shares to foreigners. He cites the reasons behind the move as having a higher participation from shareholders from all over the world, to increase capital and to bring more transparency to the company.
STRINGS TO THE BOW
In addition to the plan to go public, Al Qudra’s strategy for growth since its launch has involved constantly diversifying by adding a string of new companies from different sectors to its portfolio.
Currently the Al Qudra stable includes Q Energy (natural gas distribution), Q hospitality (that owns a series of luxury restaurants in Egypt) and GEMS Al Qudra (management solutions for education centres).
Al Shamsi intends to continue adding to the lengthy list of subsidiaries — a regular task for the Al Qudra CEO.
“We are interested in building links with any markets where there is a potential to gain, such as Africa. In fact we recently met a delegation from South Africa to encourage them to invest in the UAE.”
Of all the Al Qudra subsidiaries, perhaps the one closest to Al Shamsi’s heart is the sports management arm. “Although I don’t practice any sports, I am a big supporter of the Al Ain football club (the UAE’s most successful club and winner of the Asian Champions League in 2003) and am an honorary member of the board,” says Al Shamsi enthusiastically.
It is Al Shamsi’s passion for sport that has led to the creation of one of the largest sports management companies in the Middle East, employing over 700 people. “As you know, most (residential and hospitality) developments have a health club but developers have no experience of developing them — that is where we help — we develop it, manage it and maintain it.”
As we wrap up, Al Shamsi reveals that he has recently returned from a trip to London. I ask him if he had a chance to see any of the sights, he laughs, claiming that he never has the free time to enjoy such niceties.
And, with all his business, political and sporting responsibilities, something tells me that the non-stop chairman isn’t joking.