Palestine Development and Investment Company (Padico) is to appoint Samir Hulileh as its chief executive officer (CEO) ahead of a major restructuring of the group, one of the Middle East's largest conglomerates.

Hulileh is currently managing director of the Portland Trust, a non-profit group that promotes peace between Palestinians and Israelis through economic development. His appointment is exptected to be approved at Padico's annual general meeting on 11 May, and he will take over after the Palestine Investment Conference in Bethlehem on 21-23 May.

Following the appointment, Padico will essentially be split into two divisions, with Hulileh heading up a division focusing on projects in the West Bank.

The current CEO, Farouk Zouaiter, will head Padico's financial investment division, which includes businesses outside the Occupied Territories.

This part of the business, particularly the company's investment in the Gulf, has essentially kept Padico afloat since the start of the second Palestinian Intifada in 2000. Zouaiter's job title has not yet been decided.

Hulileh is expected to lead a major restructuring of the Palestinian side of the business. Its industrial operations will be sold off or restructured, while the finance business will be expanded, with a major move into the Palestinian banking sector. A new real estate business will also be brought into the conglomerate.

"We will do due diligence for a number of weeks when I arrive, but these are the areas we have targeted," says Hulileh. "We will identify two smaller banks that have not been performing but that we feel have potential, and look to acquire and merge them."

He says the industrial arm of the business has undermined the group's highly successful performance over the past two years.

Padico's pre-tax profits dropped to $46.6m in 2006, from $122m the previous year. "The company has profits of $47m but it should easily be producing more than $100m," says Hulileh.

"Paltel [a telecoms group in which Padico holds a 28 per cent stake] alone produced $93m, but other parts of the business have not been profitable. We will get rid of industry and bring in real estate, finance and banking."

Finance and banking are areas of expertise for Hulileh. At the Portland Trust, he has been instrumental in developing a series of financial initiatives aimed at boosting small and medium-sized businesses in the West Bank and encouraging entrepreneurship.

Loan guarantees and micro-finance schemes have been launched by the trust, and Hulileh has worked with the Palestinian National Authority (PA) to overhaul the Palestinian pensions law. The territory's first private sector pension scheme is expected to be established in the summer.

Working with the PA and the private sector, the Portland Trust has also developed a $1bn affor-dable housing scheme that will result in 15,000 new homes being built across the West Bank over three years.

Padico was set up by its chairman, Munib Masri, in 1993 and accounts for 20-25 per cent of the Palestinian economy.

Padico has 12 subsidiaries and affiliates. Its holdings include a 70 per cent stake in the Palestine Securities Exchange, and it also owns majority stakes in the Jerusalem Tourism Investment Company, Palestine Industrial Estates Development & Management, Palestine Real Estate Investment Company and Palestine Industrial Investment Company.

In addition, Padico holds minority stakes in the Palestine Tourism Investment Company, Palestine Electricity and Palestine Mortgage Housing.

Selected Padico investments

• Palestine Securities Exchange

• Jerusalem Tourism Investment Company

• Palestine Industrial Estates Development & Management

• Palestine Real Estate Investment Company

• Palestine Industrial Investment Company

• Palestine Tourism Investment Company

• Palestine Electricity

• Palestine Mortgage Housing