The conditions are ripe for a new generation of regional companies to compete on a global scale, says Jeremy Lawrence
As a rule I don’t answer my phone on Saturdays, but when Badr Jafar’s name flashed up on my screen a few weeks back I took the call. The Crescent Enterprises CEO wanted to share the good news that one of his businesses, Gulftainer, had signed a 50-year, $600m concession to develop and operate the port of Wilmington in Delaware.
This was indeed a big deal – the largest ever by a UAE company in the United States in fact – and the largest investment by a private UAE company in the US. For Jafar, the Delaware deal – Gulftainer’s second foray into the US market after Cape Canaveral in Florida in 2014 – was just one of a wide array of “exciting” opportunities that exist in the US.
As he later told our chief reporter, Bernd Debusmann, Jafar 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”.
For years, home-grown success stories had more than enough opportunities in this region, without looking anywhere else
“I thought that surely they don’t need our capital, and I imagined they had the expertise,” he said. “But the more we looked into it, the opportunities there are very exciting.”
The deal greatly benefits both parties. Massive infrastructure investment will enhance Crescent Enterprises’ global reach, and create jobs in a state that, according to Delaware Secretary of State Jeffrey Bullock, was “haemorrhaging jobs”.
And it’s not the first of its kind. Our cover interviewee last week was the Invest Group Overseas CEO Anas Kozbari, who has a $1.2bn real estate project in Frisco, Texas, which is starting to take shape. On November 9, he will unveil Dubai Way, the first 1.5km of road that has been finished at the site, at an event featuring ambassadors and Greg Abbott, the governor of the State. Another project is set to be announced shortly as Kozbari looks to invest more resources into American’s fastest growing state.
Both CEOs 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. Hopefully that regrettable phase is firmly in the past and we are now seeing a phase where a greater number of UAE companies are not just competing with the best in their sector here in this region, but across the globe.
And, of course, our leading businesses have long been able to compete in terms of standards. The likes of Emirates and Dnata, Jumeirah, Emaar and DP World have been globally recognised brands for some time now. Meanwhile, Masdar has quietly become a world leader in renewable energy solutions. More latterly, the likes of Careem and Rotana have expanded in this region so successfully that if cannot be long before they choose to compete further afield.
One big reason why there may be many others set to join them is that the market conditions here are forcing them to look further afield. For years, home-grown success stories had more than enough opportunities in this region, without looking anywhere else. But now that the economy has matured to the point where the margins aren’t as generous as before, it makes sense to seek out new territories.
And as the infrastructure develops to not only compete with the best but to be the best, more opportunities will arise. The next leap in innovation absolutely depends on faster internet speeds to allow for the Internet of Things (Iot) to work in practise. If the UAE can get a head start on these new technological frameworks, the private sector will run with it and create the next generation of companies that will take this innovation to the world.
It’s an exciting thought and, should it come to pass, I hope to get many more weekend phone calls to tell me all about it.
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