MEED profiles 15 of Saudi Arabia’s leading merchant families and examines how their business activities are evolving in today’s more competitive and open economy.
Merchant families dominate the business life of the Arabian Peninsula. As the Saudi economy expands and diversifies, many of the most established Saudi family firms have surfaced as key investors and partners of large, multinational firms seeking to do business in the kingdom.
Yet despite their age and elevated position, little is known about the true size of the merchant families’ wealth and capital, as few have opted to go public.
MEED profiles the leading family businesses, based on interviews with Saudi experts, MEED research, and the information made available following the Saudi stock market’s (Tadawul) decision to list holdings of more than 5 per cent in August this year.
This is not an exhaustive list of Saudi family firms, nor is it a list of the kingdom’s wealthiest individual investors, which would obviously include members of the royal family such as Prince Alwaleed bin Talal al-Saud.
MEED profiles the activities of the elite Saudi family businesses, rather than individuals, their histories, main business interests, family members and recent changes to their businesses.
Abdul Latif Jameel
Company: Abdul Latif Jameel Group
A rapid increase in car ownership in the kingdom has turned Abdul Latif Jameel Group (ALJ) into one of the biggest non-oil companies in Saudi Arabia. The firm was founded by Abdul Latif Jameel in 1945 but only really took off 10 years later when it secured the rights to distribute Toyota vehicles in the country.
The company began its overseas expansion in the 1970s by spreading its dealer-ship network across the Middle East and now also operates in Europe, Africa, Japan and China, making it the biggest private distributor of Toyota and Lexus vehicles in the world.
As with most Saudi private companies, ALJ remains in family hands. Key personnel within the firm include the founder’s son Mohammed Abdul Latif Jameel, who serves as both president and chief executive officer (CEO), and Abdulwahab Tawik, managing director of corporate affairs.
Headquartered in Jeddah, the firm is organised into three main divisions, focusing on the automotive sector, consumer electronics and real estate.
It employs about 8,000 people and has offices in Algeria, Egypt, Lebanon, Morocco, Sudan and Syria in the Middle East, as well as further afield in China, Japan, Turkey, the UK and the US. In recent years, ALJ has expanded its automotive interests into the forklift truck sector, and also distributes Daihatsu vehicles in Turkey and Sudan.
The company took its first steps outside the automotive industry with investment in property deals in 1969, and subsequently moved into logistics, shipping and finance,
by providing payment plans for its Toyota customers through its United Instalment Sales Company. ALJ has made the most of restrictions on the activities of foreign companies in the kingdom by securing exclusive distribution rights for consumer goods, including Akai electronics in 1979 and Toshiba in 1981.
ALJ has increased its international profile over the past year through a joint venture with the Grameen Foundation to create a social enterprise providing microfinance to the Middle East. Grameen-Jameel Pan-Arab Microfinance is seeking to spread to the Arab world the benefits that microfinance has brought in South Asia and Africa.
Mohammed Jameel says ALJ aims to advance corporate social responsibility in the region and hopes the venture will achieve more to help the needy by promoting education, enterprise and training rather than simply providing donations. The not-for-profit organisation has set a target of creating 50,000 jobs and helping 1 million people in the Middle East by 2011.
Company: Al-Babtain Power & Telecommunication Company
Founded in 1955 in Riyadh, Al-Babtain Power & Telecommunication Company is one of the largest Saudi family enterprises in the engineering and manufacturing sector, supplying power and telecoms products to local and international markets from facilities within the kingdom and Egypt.
The company is rare for Saudi family businesses in that it is a joint stock operation, having sold 30 per cent of its share capital in a public offering in November 2006, which was three times oversubscribed.
The Al-Babtain family - led by Hamad, Mohammed and Ibrahim al-Babtain - retain the remaining 70 per cent holding in the joint stock company.
The Al-Babtains are seeking to separate company management from ownership, and among the senior executive management at the company, the only full family member is Khalid al-Babtain, who heads up the commercial and administrative division. The chairman is Mohammed Abdullah Abdulrahman al-Babtain, with Abdulaziz Ibrahim Abdullah al-Babtain the vice-chairman.
Al-Babtain Power & Telecommunication Company supplies lighting, transmission and distribution, and testing-station services to the power sector. It also designs, manufactures and installs steel towers for the telecoms sector.
With a market cap of SR3.3bn ($881m) and annual turnover of SR700m, it is a profitable outfit. Revenues grew by more than 24 per cent in 2007 to SR836m, while net profits grew by 27.2 per cent to SR96m, amid strong regional demand in the power and telecoms sectors.
The firm has a diverse transmission and distribution portfolio including transmission towers up to 500kV, monopoles up to 230kV, and distribution poles up to 33kV. It retains a 51 per cent stake in a joint venture with Canada’s LeBlanc Telecommunication. It also has one of the largest steel galvanising plants in the region. In November 2007, Al-Babtain started its fourth galvanising plant in Riyadh, with a capacity of 50,000 tonnes a year (t/y), giving the company a total galvanising capacity of 200,000 t/y.
Company: Saudi Binladin Group
Saudi Binladin Group was formed in 1950 by Mohammed Awad bin Laden, a Yemeni who moved to Saudi Arabia in 1931. Through his relationship with the first king of Saudi Arabia, Abdelaziz al-Saud, Bin Laden was able to secure a series of high-profile construction contracts, including a monopoly on all mosque construction projects.
The company was able to make the most of its ties with the royal family even after Bin Laden’s death in a plane crash in 1968, when members of his large family, which includes 20 sons, took control of the business. Strong ties between the Bin Laden family and many other influential families in the Middle East were cemented by Mohammed’s decision to send his sons to the illustrious Victoria College in Egypt, where their classmates included
royalty from across the region.
The company was headed by Mohammed’s eldest son, Salem bin Laden, until he too died in an accident in 1988. Another son, Bakr bin Laden, took over and has now been chairman of Saudi Binladin Group for 20 years, while other members of the family fill the remaining boardroom positions.
Based in Jeddah, the company remains one of the biggest construction and engineering firms in the Middle East, and has benefited strongly from the construction boom the GCC states have enjoyed over the past four years as a result of high oil prices and economic diversification.
One of the company’s most high-profile projects is the construction of 16 tower blocks in King Abdullah Economic City in the Western Province.
The work is scheduled for completion by the end of 2009. Saudi Binladin has also made increasing use of Islamic financing in recent years to fund its largest construction projects.
In March, it raised $854m to finance the building of a new university near Jeddah, and in September it secured a five-year $267m sukuk (Islamic bond) to fund hotel projects.
The company has also expanded into the automotive, manufacturing and telecoms sectors, partly via joint ventures in Saudi Arabia with foreign companies such as the US’ Citibank, GE and Motorola.
The various Saudi Binladin subsidiaries produce a combined turnover of about $5bn and employ more than 35,000 people around the world. They have offices in Amman, Beirut and Dubai, while an Egyptian offshoot is believed to be the biggest foreign private equity company in the country.
The group’s interests outside the Middle East are handled by the Saudi Investment Company, which is chaired by Yeslam bin Laden.
Company: Al-Fozan Group
Al-Fozan started out in construction in 1969 with the aim of plugging a gap in the kingdom’s building materials sector. The founding Al-Fozan brothers, Abdullatif and Mohammed, then embarked on a diversification drive, while maintaining the company’s focus on building materials.
In the 1980s, Al-Fozan branched out into electrical materials, and then in 1991 it set up Al-Fozan Wood Industries, followed by Al-Fozan Architectural Hardware and ARC Engineering Consultants. Steel and construction operations followed later that decade, then plastics and, in 2001, it created United Transformers Electric Company. Real estate, manufacturing and retail are also now significant components of the company’s operations.
It has won some important contracts. In 2005, Al-Fozan was nominated by state energy giant Saudi Aramco as one of four main suppliers of building materials over the next 10 years, enmeshing the company into Aramco’s extensive supply chain.
The group is also an acquisitive investor, holding equity stakes in a series of affiliates, ranging from banks to petrochemicals companies and retail operations. The group has an innovative approach to taking equity positions, by jointly setting up a major Gulf-based private equity firm.
Abdullah bin Abdellatif al-Fozan, chairman of the holding company and managing director of the Al-Fozan Group, is a member of the board of private equity house Amwal al-Khaleej. Fozan al-Fozan, general manager of Al-Fozan Group in the central province, is also a member of the board of Amwal.
Amwal takes positions in strategic minority equity investments, private placements, privatisations and buyouts in the Middle East and North Africa (Mena) region.
In its four-year existence, it has racked up some ambitious investments. For example, it owns 20 per cent of Injaz Projects, which develops megaprojects across the Mena region and provides technical and financial consultancy services for oil, energy, infrastructure and telecoms projects. Another prominent Saudi family firm, Al-Muhaidib Group, holds a further 40 per cent share, and Al-Fozan holds the remaining 40 per cent.
These investments will take the company further away from its home market: Injaz took a majority stake in Turkish petro-chemicals group Petkim in late 2007.
Al-Fozan and Al-Muhaidib are also joint investors in Saudi-Lebanese investment bank Blominvest Saudi Arabia - a sign of the increasingly fruitful relationship between the two Saudi family firms.
Jeraisy Group is a Riyadh-based holding company for 10 wholly owned subsidiaries, which are engaged in a variety of commercial and manufacturing activities, mainly focusing on office automation and furnishings.
The business began in 1958 with the foun-dation of Riyadh House Company (RHC) by the chairman, Abdulrahman Ali al-Jeraisy, a native of the Najd region.
The group now has 3,500 employees in 40 sales and service outlets across the kingdom, offering office and IT services.
The Jeraisy approach is based on strategic planning with its operating companies and partners. Through its operating companies, it partners with local and international technology groups, including the US’ Hewlett Packard and Sun Microsystems.
RHC remains a key company within the Jeraisy empire, providing office services to its client base. Jeraisy Computer & Communication Services Company is another prominent operating company, the single largest provider of IT services in the kingdom.
It offers a complete portfolio of computing services ranging from desktops to super computers, working in close partnership with HP and Sun. Jeraisy Internet Services Company is a leading internet service provider, marketed under the brand name Atheer Internet Services, which was acquired from Bahrain Telecommunications Company.
In 2003, the link with HP led to the contract to manufacture HP computers within the kingdom, producing 500,000 a year, which are exported to several countries in the Middle East and Africa. The company moved into furniture production in 1989 with the establishment of the Jeraisy Furniture Factory.
Abdulrahman al-Jeraisy has become a senior figure within Riyadh’s business community, holding the chairmanship of the Riyadh Chamber of Commerce & Industry, a position to which he has been elected for three successive years.
Abdulrahman al-Jeraisy is a member of the board of directors of the Arriyadh Development Authority and of Saudi Arabian Airlines, and has used these positions as platforms to speak out on various issues, including arguing against a shift in the Saudi weekend from Thursday-Friday to Friday-Saturday.
Other members of the family retain boardroom positions. Ali Abdulrahman Ali al-Jeraisy is vice-chairman, Khaled Abdulrahman Ali al-Jeraisy is a director, and Ziad Abdulrahman Ali al-Jeraisy is chief financial officer of the holding company. However, non-family members hold senior management positions in subsidiary companies.
Company: EA Juffali Brothers
EA Juffali Brothers has a more diverse economic base than almost any other company in the region. Established in Jeddah in 1948 by Ebrahim Juffali, the company built its repu-tation as a power sector contractor, but quickly expanded into other industries.
For most of its history, the firm was led by Sheikh Ahmed Juffali and his brother, Ali. The firm remains under the control of the Juffali family, with many members in key positions, including Walid Ahmad Juffali, the company’s chairman, and Hatem Ali Juffali, its general manager.
The Saudi firm’s manufacturing interests range from automotive parts and air conditioning to pre-engineered steel structures, latex and petrochemicals. It also owns subsidiaries specialising in medical equipment, printing, insurance, construction and oil and gas, telecommunications infrastructure, home appliances and computers.
One of the company’s biggest advances was made in 1959 when it secured a contract as the exclusive distributor of Mercedes Benz cars, trucks and commercial vehicles in Saudi Arabia, subsequently attracting similar deals for both Freightliner and Massey Ferguson. It built on these deals by forming a joint venture with Daimler Benz to assemble vehicles within the kingdom, while another assembly plant was developed with Massey Ferguson.
Deals with Michelin, BF Goodrich and Bosch completed its automotive operations, which remain a key part of the company’s business. Indeed, Daimler Benz has come to account for 60 per cent of the group’s turnover. The growth in the kingdom’s trucking sector has served Juffali well, with the company emerging as one of the German truck maker’s largest customers for commercial vehicles outside Germany.
Many of the company’s offshoots were created in partnership with foreign companies that were keen to either market or manufacture their products within the expanding Saudi economy. These include many of the best-known consumer brands, including the US’ IBM in the IT sector, Sweden’s Ericsson and Germany’s Siemens in the telecoms industry, and US chemicals giant Dow Chemical.
The firm now employs 4,000 people across its various subsidiaries, including companies based in other parts of the Middle East, North America and Europe. Among its offshoots in other Gulf countries are Middle East Appliances Company and Arabian Chemical Insulation Company in the UAE, and the Saudi National Insurance Company in Bahrain. In addition, many of the group’s Saudi companies, which previously focused exclusively on the domestic market, are beginning to export to customers across the region.
Company: Khalifa al-Gosaibi Group; Ahmad Hamad al-Gosaibi & Brothers
From its origins in the Eastern Province, the Al-Gosaibi family has spawned two of Saudi Arabia’s most prominent companies. These were formed out of a split within the family going back generations. In the 1940s, the five Al-Gosaibi brothers went their separate ways, and by the mid-1950s, the business had fragmented into more than 20 separate parts.
The two main businesses belong to Khalifa al-Gosaibi Group - a large, diversified conglomerate with 16 subsidiaries - and Ahmad Hamad Al-Gosaibi & Brothers. There is, however, no formal link between the two groups.
Khalifa al-Gosaibi Group started out in the fishing industry, before moving into more diverse businesses in the 1970s, including taking on the agency contract for US dairy product company Kraft. Now the Dammam-headquartered group is headed by a board of directors comprising five sons of the founder, Sheikh Khalifa al-Gosaibi, and two non-family directors. The direct descendants of Sheikh Khalifa hold all shareholdings of the group, which now employs 3,000 people in total.
These companies include Khalifa A al-Gosaibi Cold Stores, Khalifa A al-Gosaibi Trading, Khalifa al-Gosaibi Fisheries and Sigma Paints.
AH al-Gosaibi & Brothers was founded by Hamad Ahmad al-Gosaibi as a trading company. The three sons - Ahmad, Abdulaziz and Sulaiman - began in real estate, banking and manufacturing operations, establishing a holding company of which Sulaiman Hamad al-Gosaibi is president and Abdulalaziz Hamad al-Gosaibi is chairman and managing director.
The company has strong ties to the Eastern Province, establishing the first bonded warehouse dedicated solely to Saudi Aramco, and supplied the energy giant’s first locally purchased order for steel pipes, tugboats and tyres. Its operational footprint has expanded into manufacturing, trading, shipping, real estate, agriculture, banking, insurance, travel services, media and hotels.
Investments include the National Bottling Company, which bottles Pepsi cola, and the AH Al-Gosaibi & Brothers Money Exchange Bureau, which holds the Saudi distribution rights for American Express gold card and travellers’ cheques. It also has investments in the International Banking Corporation Bahrain, and a series of financial, shipping, trading and manufacturing ventures. It has formed joint ventures with international and regional blue chip companies such as US packaging company Crown Holdings, Saudi Basic Industries Corporation and UK oil major BP.
The group is a prominent Tadawul investor, with a 7.4 per cent interest in petrochemicals group Nama, and a 5 per cent holding in insurance group Saudi Re.
Company: Olayan Group
The Olayan family is one of the richest in the Arab world, with a net worth of more than $7bn. The family’s fortunes derive from the success of the Olayan Group, which was founded by Suliman Saleh Olayan, born in the Nejd region in 1918. The business is notable today for the power wielded by female members of the family, both in the running of the company and on the wider international stage.
Having worked for the California Arabian Standard Oil Company, a predecessor of Saudi Aramco, in 1947, Olayan created a trucking company providing support to the oil industry. His company diversified into food and consumer goods distribution in 1954, creating the General Trading Company.
Olayan was also a prime mover in the introduction of commercial insurance to Saudi Arabia, when he founded Arab Commercial Enterprises, which is now among the Gulf’s largest insurance companies. With a reputation for shunning the spotlight, Olayan quietly turned the private group into a giant comprising more than 50 firms and affiliated businesses in the kingdom and beyond.
In Saudi Arabia, its interests include product distribution, manufacturing, construction, trans-port, services and investment. In 2006, Exel-Saudi Arabia, a joint venture of Olayan and the UK’s Exel Overseas, agreed a 10-year contract to provide logistical services to Saudi Aramco.
In international markets, the group also has various real estate and financial investments. It has held stakes in several large global financial institutions, including Credit Suisse, MetLife and Coca Cola, and has forged partnerships with many more.
The group has a majority stake in Peel Holdings, the large UK property development firm that owns John Lennon Airport in Liverpool.
It also owns LeasePlan, the world’s largest vehicle leasing firm, together with its partners Volkswagen and Abu Dhabi state investment firm Mubadala Development Company.
In Egypt, Olayan Financing Company has established a $200m investment fund in conjunction with partners including Orascom Telecom and Majid al-Futtaim Holding.
On Olayan’s death in 2002, his children, already prominent in the business, took on higher-profile roles. Khaled, his son, is now group chairman, while his three daughters buck the trend of male domination of Saudi business life by holding key positions.
Lubna, his youngest daughter, is CEO and chairman of Olayan Financing Company, which runs the group’s Saudi investments and operations. She joined the board of Saudi Hollandi Bank in 2004, becoming the first woman to be appointed to the board of a Saudi company. She has also sat on the board of global advertising company WPP since 2005, and was on the board of UK property developer Chelsfield Partners from 1996 to 2004. She is regarded as one of the world’s most influential businesswomen.
Hutham, his second daughter, is CEO of Olayan America Corporation, which manages group investments across the Americas. And his third daughter, Hayat, is its vice-president.
Company: Al-Rajhi Bank
The Al-Rajhi brothers - Abdullah, Salih, Suliman and Mohammmed - are among the wealthiest Saudis outside royal circles. Emerging from the Nejd heartland near Buraidah, they started a foreign exchange business in the 1930s, building it into one of the kingdom’s largest and most profitable banks: Al-Rajhi Bank, formerly the Al-Rajhi Banking & Investment Corporation. The brothers are the main equity holders in the joint stock company, which had assets of SR124bn in 2007 and more than 500 branches.
The family has diversified its holdings into real estate, trading, construction, manufacturing and other areas, but banking and finance remain their primary source of wealth. The firms that operated under the Al-Rajhi name were merged into the umbrella Al-Rajhi Trading & Exchange Corporation in 1978, the same year the bank became a shareholding company.
The bank is the world’s largest Islamic banking group by assets. It continues to diversify income resources and build on its strong retail-banking base. In recent years, it has expanded its horizons. In October 2006, the bank set up its first overseas operations, in Malaysia.
The Al-Rajhi brothers continue to dominate the bank’s boardroom. The 88-year-old Suliman bin Abdulaziz al-Rajhi is chairman and managing director, while his son, Abdullah bin Suliman al-Rajhi, is CEO. Suliman holds the largest stake, while Saleh holds the second largest, though his sons now manage his business interests.
Suliman retains an array of business interests, from cement production to organic agriculture. He has an estimated SR S31.7bn worth of stakes in Tadawul-listed companies, including industrial investment group Alujain and Arab Cement & National Agriculture Development Company.
Agriculture is a key investment theme for the Al-Rajhi family, with Abdullah holding a 25 per cent stake in Tabuk Agriculture.
The Al-Rajhi family counts itself among the world’s leading philanthropists. The flagship Saar Foundation fronts a network of charities and thinktanks devoted to good causes. However, Saar was subjected to a raid by federal US agents in 2002, related to anti-terror activities, though no charges were ever brought against it.
The issue is a sensitive one for the family. In July 2007, Suliman al-Rajhi dispatched a letter to the Wall Street Journal denouncing an article that mentioned the bank’s alleged role in financing Islamic extremism - something he said was abhorrent.
Company: Rashed al-Rashed & Sons Group
Rashed al-Rashed & Sons is one of the kingdom’s largest conglomerates, and a heavyweight investor in Saudi banks and other leading corporates. Company chairman Abdulaziz Rashed al-Rashed is also chairman of the board of Riyad Bank, and a board member of Banque Saudi Fransi, in which he holds a significant minority stake.
The Al-Rashed group of companies was founded by Sheikh Rashed Abdulrahman al-Rashed in Al-Khobar in 1950. Its trajectory is typical of the largest Saudi family conglomerates, beginning in the building materials trade, then staking out territory in manufacturing, services and investment.
Al-Rashed has significant stakes in the Saudi banking sector, with a 9.8 per cent stake in Banque Saudi Fransi, as well as a 9.9 per cent interest in Arab National Bank and a 22 per cent stake in Bank al-Jazira.
Rashed al-Rashed & Sons Group has transformed itself into a holding entity for companies in a wide variety of industries, from consumer and industrial products to services, contracting and development, though trading in building materials remains the group’s core business activity.
Through several affiliates and partners, it supplies products ranging from building materials to automobile and truck parts, office equipment and other products, to a variety of industries. The major global brands it represents in the kingdom include Goodyear, IBM, Acer, Sharp and Minolta.
Manufacturing operations cover pre-cast concrete, electronics and electrical equipment, chemicals, gypsum, packaging materials and more. In 1982, the group established a steel products manufacturing company.
Since then, the company’s operations have expanded to keep pace with growing domestic market needs, and the group now has affiliates such as Al-Rashed Steel Products Manufacturing Company, Al-Rashed Fasteners & Engineering Fabrication Services, Saudi Filters Industry Company, Saudi Vetonit Company, Al-Rashed Polystyrene Factory and Al-Rashed Wood Products.
Construction and contracting is another focus for the group, and Rashed has undertaken major projects such as the Mecca-Taif water-transmission system, the Mecca reservoirs complex, overhead electrical lines, and retail centres such as Al-Rashed Mall in Al-Khobar, one of the region’s largest retail complexes.
Al-Rashed Food Company has developed strategic alliances as a supplier to restaurant chains for major global brands such as McDonald’s, Burger King and Hardees, as well as regionally known brands.
Company: Saad Group
Chairman and controlling shareholder Maan al-Sanea is one of the most recent entrants to the elite group of Saudi business leaders. A one-time air force pilot of Kuwaiti origin, Al-Sanea founded the Saad Group in the early 1980s. Headquartered in Al-Khobar in the Eastern Province, it now employs about 11,000 people and has operations throughout the Arabian Peninsula and beyond.
In little more than 25 years, Al-Sanea has built Saad into a solid proposition. In 2007, the group became the first unlisted corporate family conglomerate to be awarded an investment-grade rating by ratings agencies Standard & Poor’s and Moody’s Investors Service.
The group’s business interests range from civil construction and engineering to property development and management, investment, banking, medical services, information technology, travel and education.
Its main Saudi division, Saad Trading, Contracting & Financial Services Company (Saad Trading), was formed from the original Saad business and continues to grow its operations. According to Moody’s, the division has built a substantial long-term investment portfolio comprising mostly equity shares in the Saudi and international banking sectors, as well as domestic real estate. It also trades IT products and services.
Al-Sanea has not followed the traditional path of direct family control. Day-to-day management of Saad Trading is exercised by its shareholders, executive committee, risk management and operational committees, as well as experienced local and international business professionals.
The company has achieved a sizeable asset base. At the end of 2007, it had SR44.8bn worth of total assets, including substantial investment property worth more than SR15bn, SR13.3bn in investment securities, and SR12.9bn in cash. Al-Sanaea has injected large amounts of capital into the unit. In 2007 alone, Saad Trading’s capital, including partners’ funds, rose by close to $4.8bn.
Al-Sanea is a prominent investor in global blue chip companies, and in 2007 the group acquired a 3.1 per cent stake in HSBC, which at the time was worth £3.3bn. Al-Sanea’s other investments include Citigroup, Bank of China and the 3i infrastructure fund.
Land development is a growth area for Saad. Saad Trading’s strategy is to exploit the substantial real estate it already owns, with a major land bank in the Eastern Province, which it continues to grow through acquisition as opportunities arise. It has acquired substantial new sites in the Al-Khobar region, with the Oasis Residential Resorts Housing Developments considered the flagship of the property division of the Saad Group. However, in May 2004, the Oasis compound was attacked by terrorists, killing 22 residents.
Company: Al-Subeaie Group
Employees: Not available
The Al-Subeaie family are from Mecca and the group was formed in 1933 by two brothers, Mohammed and Abdullah Ibrahim al-Subeaie, starting out in currency trading to service pilgrims arriving in the kingdom’s holy cities.
They established Al-Subeaie Currency Exchange Company, which led to financial investments and interests across the banking sector. From this base, Al-Subeaie has moved into real estate, trade, industry, agriculture and services.
The two brothers continue as the group directors, with Mohammed acting as chairman and Abdullah as deputy chairman. The sons have assumed management positions and develop trading and industrial activities, while the fathers maintain a supervisory role overseeing the whole business.
Currency exchange and financial investment remains a core focus of the group, which is still geared strongly towards pilgrimage to Mecca and Medina. The group is also an active investor in the Tadawul, taking shares in cement, electricity, petrochemicals (through Sabic), agriculture, financial investment and services companies. Its investment strategy is focused on strategic opportunities to build volume in key product positions. These investments have led the Al-Subeaie family to take positions on the boards of several Saudi firms.
The brothers were among the founding investors of the kingdom’s newest bank, Bank al-Bilad, an Islamic financial institution formed in 2004 from the merger of several Saudi currency exchange houses. The two brothers retain a 23 per cent interest in the bank and are board members of Al-Bilad. They were also founding shareholders of Saudi investment bank Jadwa, which was set up in 2007.
The family are closely involved in the development of Mecca and are represented on the board of the Jabal Omar Development Company, a major real estate project to redevelop the kingdom’s holiest city.
Real estate represents a growing line of business for Al-Subeaie group, as does construction. In 2005, the group set up a new real estate company based in Riyadh, but with branches throughout the kingdom. It has been active in buying and developing land for commercial and residential development. It has also invested in the tourism sector, with investments in the Durat al-Hada resort in Taif, a hotel in Qassim, and furnished apartment developments in Riyadh and Mecca.
The construction boom of recent years has encouraged the group to establish a building materials supplier, United Building Materials, based in the Dammam area. This produces nails and mesh for the construction sector.
Company: AA Turki Group of Companies
Dammam-based AA Turki Group of Com-panies (Atco) is an example of a diversified Saudi conglomerate that is still under the direct control of its founder, Abdulrahman Ali al-Turki. Formed in the mid-1950s, Atco now employs 3,000 staff and operates in the industrial, public and consumer sectors, operating through 23 divisions, joint ventures and stand-alone companies.
It has evolved into one of the country’s leading family groups, focusing on construction, marine services, shipping, oil and gas equipment and control systems.
Abdulrahman al-Turki is chairman and CEO of the group, with his son, Ziad Abdulrahman al-Turki, executive vice-president. The company’s interests span construction, port management and marine services, storage and custom clearance, travel, commercial agencies, earth and foundation works, industrial services, electrical board manufacturing, construction, chemicals, industry and office supplies.
Abdulrahman al-Turki is chairman of several high-profile companies in which the group has equity stakes, including Al-Sagr Co-operative Insurance Company (SCIC), Memphis Hotel Group in Egypt and Dhahran International Exhibition Company in Saudi Arabia. He is vice-chairman of Bahrain Specialist Hospital.
Like many Eastern Province business leaders, he has strong interests in the Bahrain economy, and is a director of Investcorp, a leading provider and manager of alternative investment products. He is also on the board of Saudi International Petrochemical Company, Arab Investment Company and Golden Pyramids Plaza Company in Egypt, and Zara Investment (Holding) Company in Jordan.
Like many other senior Saudi business leaders, he has also spent time in government. Abdulrahman al-Turki’s previous public service roles include stints at the Communications Ministry, Saudi Government Railroads, King Abdulaziz Port and the Chamber of Commerce & Industry in the Eastern Province.
The business will remain a sole proprietorship, but the Al-Turki business model allows its affiliates to go public. For example, SCIC launched an initial public offering in February 2008 on the Tadawul, offering 42 per cent of its shares to the public.
Ziad Abdulrahman al-Turki is a major figure in the Saudi business world, with several other prominent directorships including Honeywell Turki Arabia, Keller-Turk Corporation, National Air Services and SCIC.
He is also a founder shareholder in a new investment bank, Samena Capital, formed in 2008 by a series of heavyweight investors from Asia and the Middle East. The bank intends to take advantage of the increasing integration of businesses across high-growth markets.
Company: Xenel Industries
The house of Alireza is the oldest of the Saudi merchant houses, dating back to the mid-19th century, when the dynasty’s founder, Zainal bin Alireza, arrived in Jeddah. His early fortune was made servicing the Hajj pilgrimage, engaging in import and export and through traditional agency activities.
Xenel Industries was formed in 1973 by the sons of Sheikh Ahmed Alireza as a diversified holding company at the heart of a group of companies active in a broad range of sectors, including energy, industry and construction.
Xenel’s chairman is Mohammed Ahmed Zainal Alireza. Its vice-chairman is Khalid Ahmed Zainal Alireza and its headquarters are in Jeddah. The main holding company remains in family hands, though the co-pany’s standalone structure allows its subsidiary com-panies to go to the market, as four have already done.
Xenel is an opportunistic investor, leveraging its wide spread of activities as a platform for further geographic and sectoral expansion. The company prefers to come in early to capture the full value of business opportunities.
It is one of the kingdom’s build-own-operate pioneers, backing an independent power project in Pakistan and subsequently taking on other privately financed schemes, including the new Red Sea Gateway terminal.
Alireza’s holding company structure allows the different arms operational independence, and enables Xenel to team up with joint venture partners to offset any risk of overstretch.
The company established an early footprint in the petrochemicals sector with its affiliate National Petrochemical Company. Xenel is looking to take advantage of Saudi Arabia’s position as a major trade hub, partnering with Malaysia’s MMC Corporation to build a container terminal at Jeddah Islamic port.
The group’s considerable expertise in healthcare is now being be exploited, with clinics opening up in Egypt, Qatar and Oman, under the healthcare subsidiary Magrabi Hospitals & Centers.
Xenel maintains an acquisitive outlook, with plans to grow its land bank alongside the company’s diverse portfolio of self-generated ventures.
Company: Zamil Group
The origins of Zamil Group can be traced back to the central region of the kingdom, where the founder, Sheikh Abdullah al-Hamad al-Zamil, was born in 1897.
But the company’s base is in the Eastern Province, with its headquarters in Dammam, and the first commercial business operated in Bahrain. Having starting in trading, Abdullah moved into real estate.
The Zamil Group holding company’s board of directors comprises 12 sons who, continuing their father’s legacy since his death in 1961, have been actively involved in strategic expansion, diversification and growing the international presence of the group.
The Saudi economic boom of the 1970s provided the basis for the company’s biggest expansion, enabling it to start up an industrial base. Following the creation of Zamil Air Conditioners (ZAC) in 1974, the family expanded into the steel, glass and service sectors. In the 1990s, it started to focus on petrochemicals and the export market.
Zamil was also one of the first major Saudi family firms to go public. Zamil Industrial Investment Company was established in 1998, as a joint stock company, representing a break with Saudi corporate culture. Zamil Industrial Investment Company, now known as Zamil Industrial, owns ZAC, Zamil Steel Industries, Zamil Glass and Arabian Fiberglass Insulation Corporation. The group originally maintained a 60 per cent stake in the firm, offering the rest to other local and Gulf investors.
Now the Zamil family stake is down to 50 per cent. The current chairman is Mohammed Abdullah al-Zamil, while Abdulrahman Abdullah al-Zamil, a powerful member of the kingdom’s Majlis al-Shura (parliament), and a member of the Committee for Economic Affairs & Energy, chairs the company’s Saudi Operations.
The Saudi economic boom and growing international sales have delivered Zamil Indus-trial robust revenues and a 20 per cent increase in profits to SR123.4m in the first six months of 2008, compared with the same period in 2007. Zamil Industrial has a market cap of SR5.4bn, operating across 70 countries. It is regarded as a market leader in manufacturing and fabrication, and has a growing foreign presence: two steel plants in Egypt and Vietnam and two air-conditioning plants in Austria and Italy.
The next step is into the Indian sub-continent, with trial production starting in February 2008 in pre-engineered steel buildings at its state-of-the-art facility in Pune, Maharashtra.
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