Crescent Enterprises CEO Badr Jafar: "For too long, we've assumed that there is a trade-off between profit and purpose. I totally disagree with that"
One word comes to mind when speaking to Crescent Enterprises CEO Badr Jafar: busy.
After all, Jafar – who, at just 39, is one of the country’s best-known businessmen – stands at the helm of an extremely diverse global business that spans five continents.
When he speaks, however, it is clear that he has ambitions far beyond the company’s bottom line.
Crescent Enterprises (CE) – along with a sister company, Crescent Petroleum, of which Jafar is also president – is a subsidiary of Crescent Group, a family-owned business dating back as far as the UAE itself, to 1971.
Although still relatively young, having been founded in 2007, CE has grown into a far-reaching organisation with four distinct verticals – dubbed CE-Operates, CE-Invests, CE-Ventures and CE-Creates. With more than 4,500 employees in 20 countries, the companies span sectors such as ports and logistics, power and engineering, venture capital, business aviation and healthcare.
We see a lot of opportunities in the region, but as a business we have to make sure we’re investing on a merit basis
Speaking to Arabian Business inside the palatial Sharjah Chamber of Commerce and Industry, Jafar brings one word up again and again: ‘impact’ – and whether it be in business or philanthropy, it’s clear that he has big plans.
Nowhere is this more apparent than in the United States, where earlier this year Gulftainer, a part of CE Operates – through a subsidiary, GT USA – signed a 50-year, $600m concession to develop and operate the port of Wilmington in Delaware. The deal is the largest ever by a UAE company in the United States, and the largest investment by a private UAE company in the US.
Of Gulftainer’s $600m investment, $400m will be used on a new 1.2 million 20-foot equivalent unit (TEU) container facility at DuPont’s former Edgemoor site. Other plans include the establishment of a training facility for the ports and logistics industries that is expected to train and upskill as many as 1,000 people each year.
For Jafar, the Delaware deal – Gulftainer’s second foray into the US market after Cape Canaveral in Florida in 2014 – is just one of a wide array of “exciting” opportunities that exist in the US.
Jafar readily admits that he was initially surprised at the possibilities that America holds in the ports and logistics sector, having originally thought it to be a “saturated market for operators”.
“I thought that surely they don’t need our capital, and I imagined they had the expertise,” he says. “But the more we looked into it, the infrastructure plays and the opportunities there are very exciting. There are two aspects to it. The first is dilapidated infrastructure that is in need of refurbishment and enhancement. But in some cases, brand new infrastructure is required to connect new population centres together.”
Gulftainer’s presence in Wilmington, according to Delaware Secretary of State Jeffrey Bullock, is a “very big deal” for the state, with an impact that reaches far beyond the modernisation of the port, which, in Bullock’s own words, was “in a really bad shape” until recently, at a time in which Delaware was “haemorrhaging jobs.”
“If you just run the models, the economic activity can double the growth of jobs in and around the port,” he says. “Current direct and indirect employment around the port is about 5,000 or 6,000. Our first priority is to maintain the employment we already have, and then provide a path forward for the port to grow. We’ve accomplished [these goals] and the third aim is to create new jobs. Whether it’s 1,000 jobs or 5,000 remains to be seen but we will create new opportunities.”
There are a number of corporate venture capital arms, but they’re still relatively limited when you consider the whole Middle East
According to both Bullock and Jafar, the deal also has the potential to help “bridge the cultural gap” between the peoples of the US and UAE. Both men are keenly aware of historic US resistance to Middle Eastern investment in the country, perhaps best exemplified by the highly controversial “national security debate” that erupted in 2006 when the UAE’s DP World made moves to enter the American market.
“It’s very powerful. Some of the hesitation in the United States is from the fear of the unknown,” Bullock says. “We are different and that’s okay. But we have a lot more similarities than differences.”
Looking towards the future, Jafar says that, at least at the moment, Gulftainer doesn’t have any specific plans to expand to any other locations in the US. That isn’t to say, however, that they aren’t on the hunt. “We’ve been highly encouraged by our experiences there so far,” he notes, smiling. “We’re excited about the future and as opportunities come about, we’re not going to sit on our hands.”
As Jafar talks through the various and diverse parts of CE’s business, it’s clear he has a particular enthusiasm for CE-Ventures, the venture capital arm of the company that was launched in late November 2017 and is focused on strategic investments in early to late-stage tech-enabled businesses and in select VC funds around the world.
Of the $150m that CE-Ventures has pledged to invest by 2020, half of it is to be invested in the Middle East and North Africa (Mena), evidence of what Jafar says is a new “era of corporate venture capital” in the Middle East, despite the relatively limited corporate VC arms that currently exist.
“Corporate venture capital is just starting to bloom. This is exciting, both for incumbent players, larger corporates here in the region and the startup community alike,” he says.
“There are a number of corporate venture capital arms, such as Majid Al Futtaim, Aramco and Sabic, but they’re still relatively limited when you consider the whole Middle East.”
Corporate venture capital, he believes, has a number of benefits for startups when compared to institutional venture capital, including working in industries in which a certain technology may have an application and being “closer to the actual on-the-ground operations from day one, as opposed to having to grow into an established brand.”
However, Jafar says that CE-Ventures still has to “do more work” if it is to achieve its target of investing half its capital in the region.
The best opportunities are ones in which you are able to align profit and purpose
“We have some ways to go to get up to 50 percent,” he remarks, estimating that the figure currently hovers around 30 percent. “We see a lot of fantastic opportunities here in the region, but as a business we have to make sure we’re investing on a merit basis.”
When it comes to finding ideas in which to invest, Jafar and CE don’t just look outwards – they also look within, with one of the company’s verticals, CE-Creates, serving as an internal incubator. The goal is to turn early-stage concepts into economically viable and scalable businesses. Ideas can come from anyone within the CE family, whether senior executives or labourers. While Jafar says that not all of the 14 concepts currently being incubated will make it to launch – “as is normal in any incubator” – he proudly points to the ones that have already started coming to fruition.
Among them is Kava & Chai, a specialty coffeehouse which Jafar says will eventually “take Starbucks by storm” after it expands across the UAE (there are currently two, with two more opening soon) and into the American and British markets. A second idea – that Jafar says was originally his own after an encounter with maintenance staff in a lift – is ‘Shamal’, a high-tech line of clothing designed for blue-collar workers working in the oppressive heat of the Arabian Gulf.
You have to give one up or compromise one if you want to generate some of the other. I totally disagree with that
“It turns out that there was not a dedicated workwear clothing company that made overalls for people specifically in warm climates,” he notes, adding that over the course of more than a year, CE worked with partners in India and US-based labs to develop a line of clothing specifically for the GCC’s workforce.
The final product, he says, combines the materials used by those in the sports industry, such as footballers and golfers, with new technology that allows the health of workers to be monitored in real-time. “Foremen wanted to know when there is a problem on-site with someone, or there are health issues, blood pressure issues or issues of fatigue,” he explains. “They usually don’t know until it’s too late and it can be very dangerous. But with tiny sensors that are dirt cheap and embedded into these suits, the foremen in their offices can have a full map of all the vitals of all their workers on site, and can, in advance, see if there is anything out of the ordinary.”
As Jafar tells it, CE’s work with Shamal points to what he considers a fundamental aspect of Crescent’s overall business strategy. “The best opportunities are ones in which you are able to align profit and purpose,” he explains. “For too long, we’ve assumed that there is a zero-sum game, that there is somehow a trade-off between profit and purpose, and you have to give one up or compromise one if you want to generate some of the other. I totally disagree with that. You just need to be a little bit creative.”
The more sustainable ideas, Jafar believes, are the ones that have social – and “ideally also environmental” – impact built into the concept, rather than as an unintended consequence.
“That’s what we try and do with CE-Creates and all the other businesses, including the investments,” he says. “Profit isn’t a bad thing. Businesses aren’t bad beings, as such, and it’s not about businesses being immoral. But perhaps they are too amoral and not necessarily having a defined social compass in their operations. That’s not a bad thing, necessarily, but it’s missing out on a lot of opportunity.”
In 2010, Jafar founded the Pearl Initiative, a business-led organisation that seeks to promote a culture of accountability and transparency to help drive economic growth in the Gulf and the greater Middle East. Since its founding, it has worked with dozens of universities and companies across the region, including Siemens, Saudi Aramco, Shell and Philips.
In May 2018, Badr Jafar became one of a number of high-profile UAE-based business leaders and philanthropists to join the Giving Pledge created by Bill and Melinda Gates and Warren Buffet which invites the world’s wealthiest philanthropists to commit more than half their wealth to charity during their lifetimes or in their wills. “Recognising the rapid generation shifts occurring in developing markets, including the Middle East, my philanthropic activities are built around this urgency to promote a culture of strategic high-impact philanthropy as an imperative for private resources to serve public good,” he wrote in his pledge letter.
In June, Crescent and Bee’ah, the Sharjah-based environmental management company, announced ION, a joint venture that will develop, acquire and manage electric vehicle fleets for commercial use, deployed through ride-hailing apps and corporate or government fleets. Earlier, in May, ION piloted a fleet of turquoise Tesla Model S electric cars through ride-hailing service Careem, allowing users to book electric vehicles for a ride anywhere in Dubai.
Kava & Chai, the local coffee house incubated by CE-Creates, currently has two locations in the UAE, including one in Al Seef near the Dubai Creek and another at AU Sharjah.
Two more – in Mall of the Emirates and DIFC – are slated to open this year, with expansion to the US and UK expected after that. According to Jafar, poetry and the spoken words are an important aspect to the coffee shops, which are designed to bring back the originally Middle Eastern concept of coffee houses as a “community melting pot.”