JEDDAH - In a highly competitive business world, having an abundant cash flow is not a guarantee for success. On the contrary, mismanagement could be the cause of catastrophic fall, as recent history witnessed the collapse of some international companies; notably US energy, commodities, and services company Enron and financial giant Lehman Brothers.
It reminds us of the famous quote of Charles Darwin when he said "it is not the strongest or the most intelligent who will survive, but those who can best manage change."
For the Chief Executive Officer of a successful Saudi Holding Group, it is a reminder and a challenge. What matters most is not just to survive, but more importantly to sustainably grow. For Anees Moumina, today's business environment calls for management adeptness, and by that, he means the proficiency to exercise fully the principles of "efficiency, agility, and innovation" to achieve the corporate goals and keep growing.
And in a business group, it applies to balancing the interests of the many stakeholders. These include shareholders, management, customers, suppliers, financiers, regulators and the community. Since corporate governance also provides the framework for attaining a company's objectives, it encompasses practically every sphere of management, including action plans, internal controls, performance measurement, and corporate disclosure.
In an exclusive interview with Moumina, the CEO of Jeddah-based SEDCO Holding Group, he said "SEDCO is a unique family business which practices strong corporate governance. It is driven by the scale, scope and complexity of various local and international businesses, as well as the shareholders vision of a professional, transparent and ethical organization. It differentiates us from other Groups and has been critical in building our reputation as a capable, ethical and responsive business Group."
"Corporate governance has paved the way for future growth, including the ability to attract investors, both locally and internationally. It has enhanced SEDCO's access to capital and financial markets. It has also facilitated a platform for a smooth inter-generational transfer of wealth and growth of family assets," he noted.
We apply best practices in corporate governance. Our board of directors is comprised of eight members, five of which are independent members with the diversity of local and international expertise and experience.
Moumina, added "corporate governance has strengthened the confidence of shareholders and laid the platform for a clear separation between management and shareholders."
This explains why the Group remains strong despite the economic uncertainty over the past few years, both internationally and regionally.
Moumina added "the corporate governance process has enabled SEDCO to distinguish itself from many other regional family businesses, whose shareholders are frequently involved in the management of day-to-day activities".
Moumina is no stranger to this field, with a track record of more than 25 years of work experience in both private and financial markets. Prior to joining SEDCO, he worked with Samba Financial Group as Regional General Manager and Senior Credit Officer. He also worked with Proctor & Gamble Saudi Arabia. He is currently Chairman of Ewaan Global Residential Company, Board Member of Elaf Group, and a board member of several other business, educational and community boards and committees. Moumina holds a Master of Science in Engineering Administration with honors and a Bachelor of Science in Civil Engineering with honors both from The George Washington University in the USA. He has completed a number of extended executive programs including the Global Leadership Program at Harvard University, the Senior Executive Management Program at Columbia University and the Global CEO Program at Wharton.
Moumina stated "We were able to manage our risk well and maintain a strong position which will fuel our growth over the coming years. Over the past few years, the performance of our portfolio of operating companies, real estate and financial investments has outperformed the market."
"Last year was a very satisfactory period in terms of performance", he noted. "Targets were substantially increased from previous years and we were able to achieve them. At the same time, we continued to absorb the changes that have taken place while making further progress with the restructuring that is an integral part of our growth."
"The past year has seen SEDCO make significant progress toward its long-term goals, and the principles that have shaped our transition so far - efficiency, agility, and innovation - will continue to underpin our business culture."
As a Holding Group, SEDCO was founded in 1976 by the Bin Mahfouz Family. It is recognized as a leading Shariah-compliant organization, responsible for a diverse spectrum of operating companies in industries such as: real estate development and management, travel and tourism, hospitality, automobile leasing, casual dining, pharmaceutical in addition to managing private and public equity holdings locally and internationally.
SEDCO Holding Group is among the leaders in providing Shariah compliant investment solutions. "The Group has created products that are Shariah- compliant, serving sophisticated clients seeking these types of solutions and regular clients seeking to invest in a socially responsible manner. SEDCO products are more of a global nature catering to high-net-worth, sophisticated individuals and institutions. SEDCO has been one of the pioneers in innovating new Shariah compliant products which offer the investors diversity.
SEDCO Holding Group typically seeks to create new business or partner with large and medium-sized private companies with a strong track record of profitability and future growth potential. SEDCO also adds value to investee companies by assisting them in realizing their growth plans and applying strong corporate governance practices.
SEDCO's operating company portfolios include over 20 companies which include: SEDCO Capital, SEDCO Development, Elaf Group, Auto World, Intimaa, Tarfeeh, Nahdi Medical Company, Red Sea Markets, Ewaan, Bank Muamalat Indonesia (BMI), Bonnon Coffee, Ejada, Al Mahmal Development, Arabian Farms, Dar Al Fouad, Tazweid, Al Nakheel Centre, Tent Souk and Egypt Hydrocarbon Company (EHC). The Group also owns and manages a diverse and extensive portfolio of local and global real estate.
"Beside the extensive portfolio of products and services, we also take up the role of educators in Islamic finance via speaking opportunities in several international forums and conferences," he added.
Asked about investment challenges in the Arab Spring countries, Moumina said "all companies with investments in Arab Spring countries faced challenges however our diversified investment portfolio combined with the work done by our risk management department with their extensive systems and controls has managed to help our investments performance, and position them for growth in the future."
An example would be Dar Al Fouad Hospital in Egypt which despite the regions uncertainty has operated at roughly 90 percent of capacity throughout 2013, and is expected to exceed this figure in 2014, he pointed out.
He went further to say that "the GCC as a whole and the recent win of UAE Expo 2020 will impact and open up several investments projects. Saudi Arabia is a promising growth market which offers stability, economic expansion and great opportunities. Saudi Arabia is the largest economy in the Middle East holding a 25 percent share of the Arab GDP. This is partly due to its geographic location which provides easy access to export markets to Europe, Asia and Africa. The Kingdom is continuously expanding domestic market (annual population growth of 3.5 percent), which is adding to a young and consuming population with strong buying power.
The investment environment in the Kingdom reflects traditions of open market private enterprise policies and its Foreign Investment Law allows 100 percent foreign ownership.
About SEDCO's regional expansion plans for 2014, Moumina emphasized that growth and business generation will remain a top priority.
"We plan to expand our investments in the Saudi market by venturing into new acquisitions with like-minded investors. This will help develop and diversify our portfolio. We are also examining potential joint ventures with international companies and are confident of bringing some of these to closure over the next 6 months."
"We are also looking for more opportunities for vertical integration within the Group, exploring synergies within our existing subsidiaries by acquiring and establishing new businesses," he expanded.
© The Saudi Gazette 2014
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