Dubai: Al Ghurair Investment, a Dubai-based multi-billion dollar conglomerate, has restructured its business units to maximise operational efficiencies, a top official said.
Al Ghurair Investment, recently rebranded as Al Ghurair, has operations spanning 20 countries.
As part of the new strategy, Al Ghurair's business will be driven by eight distinct business units — construction, resources, foods, energy, education, property, retail, printing and publishing, Eisa Al Ghurair, Vice-Chairman of Al Ghurair Investment, told Gulf News in an interview.
"Al Ghurair has witnessed phenomenal growth since its establishment and is currently acknowledged as an important business leader," he said. "However, an organisation's work is never done and it is now time to take the next important step forward in our evolution and streamline our operations around a single ideology."
Each operating business unit will be responsible for corporate governance, strategy and business plans and will report directly to Al Ghurair Corporate, which will continue to be the parent company. The group is headed by its Chairman Abdul Aziz Al Ghurair, who is also the Chief Executive Officer of Mashreq Bank.
Eisa Al Ghurair added that the restructuring will reflect the organisation's recent acquisitions, growth in new markets, and management of new business groups.
"As we embrace newer disciplines in our multi-business operations, it is only logical to group our business units according to their business models, growth prospects and geographical spreads."
In the interview, Eisa Al Ghurair elaborated on his views.
Gulf News: What is your view of the economy as we close one more eventful year marked by the Arab Spring and European debt crisis?
Eisa Al Ghurair: As far as the UAE is concerned, the worst is over. We have overcome the most difficult part. The year 2011 was better than 2010 and 2009. My view is 2012 will be better than 2011.
Among the key sectors, trade, tourism and manufacturing will do better while construction and real estate will remain depressed.
The UAE will have a strong current account surplus due to high oil prices. However, how that is allocated for the economy is to be seen.
The government has already increased the salaries of Emirati government employees, which will help boost consumer spending. On top of that, the government has already increased social spending.
At the GCC level, I see more projects coming up for execution that will increase public spending and create more jobs and businesses for the private sector.
I am not worried about the effects of the Arab Spring on the region as oil prices will continue to hold over $100 per barrel, helping economic development in the region.
Our strong economic and trade links with India and China will help our growth as both Asian giants are growing fast.
What is your view of the recent developments in the energy sector, especially the downstream petrochemicals sector?
New gas discoveries in Saudi Arabia will fuel more activities in the energy sector and will help the development of the downstream petrochemical industries.
As far as the development of the downstream industries are concerned, we are late, but not too late. The dynamics of the markets have changed over the last three decades.
The Abu Dhabi National Oil Company (Adnoc) is expanding capacities while International Petroleum Investment Corporation (IPIC) is investing in refineries. Obviously, the government's policymakers are looking into the development of these areas.
What about manufacturing and the small- and medium-sized enterprises (SME) sectors? A strong domestic manufacturing sector helps economies to cushion its consumers from external shocks. How do you see the development of these sectors in the region?
We do have lots of manufacturing companies that are doing well as we belong to a region that is still growing. I do not see much risk in the sector.
However, the SMEs need to be nourished. Most companies in the Gulf are SMEs and they employ a large chunk of people. If they do well, then they will help the economy better. We need to renew focus on this sector and see how financing could be made easier for SMEs.
Coming to Al Ghurair Investment, could you tell us the rationale behind the latest round of restructuring?
The financial crisis of 2008 has influenced us to look inwards. Prior to that, everyone was looking outwards, chasing businesses — with very little time to reflect.
The crisis has helped us to reflect on our businesses and look at ways to do things differently and to focus on streamlining and realigning operations to maximise efficiency.
In 2010, we started to look at our core operations and decided to streamline the businesses and bring them under a set of verticals for operational efficiencies.
During the last three years, we did not reduce the salaries of the employees, but reduced headcount wherever we had to.
You set up the first shopping destination in the UAE — Al Ghurair Centre — that remained a landmark, until BurJuman Centre was opened in 1993. However, your company seemed to have shied away from retail expansion. Why?
We want to capitalise on our core strengths and knowledge. There could be more malls. However, we have restricted ourselves to the core businesses.
In the retail sector, we own 50 per cent of the franchise rights of French hypermarket chain Geant. Discussions are currently going on to expand the brand in Abu Dhabi.
What about expanding in other markets — especially in India. Your company is a partner of ETA-Ascon-Star Group, which has strong footprints in India?
There are lots of opportunities in different markets. But you need to invest wisely, and go confidently in other markets.
India is a growth market for us and it is very much on our radar. However, the bureaucracy and the lengthy process is a major hindrance.
How do you see the latest about-turn by the Indian Government on opening up the retail sector to foreign investment?
It is a major setback. It is a setback for the UAE companies and us, who were looking closely at the Indian market for investment. Investors are getting mixed signals.
The Indian Government should not have made the announcement of opening the sector for investment in the first place, before backtracking.