09 July 2011
JEDDAH - One of the biggest family-owned conglomerates in Jeddah with total investments estimated at more than SR1 billion has split. The split took place quietly.
The company has with 10 subsidiaries operating in the fields of food, commercial franchises and industry. (The Saudi Gazette reserves the right to withhold the name of the company.)
The split occurred after over two years of negotiations during which several reconciliation efforts failed.
According to a well-known economist the split was unexpected "because of the company's long service of the national economy and its strong name and reputation in the local market."
Businessman Muhammad Al-Abdullah Al-Anqari, who cited a number of successful family-owned businesses, said it is important for such companies to have a family covenant and to strategically plan to guarantee their continuation and development over the years.
He called for setting up specialized centers to serve family companies, stressing the importance of convening specialized conferences and symposiums.
Dr. Nouf Al-Ghamdi, a strategic planning consultant and organizer of a forum, "Family-Owned Companies and Survival," said family-owned companies are the backbone for the local economy.
She cited some difficulties facing these companies and said it is important to set up laws that guarantee the continuation of these national economic entities.
Family-owned companies in Saudi Arabia and other Gulf countries face five risks, she said.
"The risks include long-term planning, their role and importance in countries' economies, dealing with the impacts of the global economic crisis, the possibility of continuing success or splitting, and vision, strengthening the role of the family and improving their business," she said.
She stressed the importance of organizing the companies' boards of directors and arranging the transfer of management among generations, as ways to deal with difficulties and obstructions that lead to the split of partners.
Family companies also deal with the risks of organizing work and family and ownership within management transfers between the second and third generations, she added.
Businessman Bandar Al-Humaidi said one of the risks facing family-owned companies is the large size of the family.
JEDDAH - One of the biggest family-owned conglomerates in Jeddah with total investments estimated at more than SR1 billion has split. The split took place quietly.
The company has with 10 subsidiaries operating in the fields of food, commercial franchises and industry. (The Saudi Gazette reserves the right to withhold the name of the company.)
The split occurred after over two years of negotiations during which several reconciliation efforts failed.
According to a well-known economist the split was unexpected "because of the company's long service of the national economy and its strong name and reputation in the local market."
Businessman Muhammad Al-Abdullah Al-Anqari, who cited a number of successful family-owned businesses, said it is important for such companies to have a family covenant and to strategically plan to guarantee their continuation and development over the years.
He called for setting up specialized centers to serve family companies, stressing the importance of convening specialized conferences and symposiums.
Dr. Nouf Al-Ghamdi, a strategic planning consultant and organizer of a forum, "Family-Owned Companies and Survival," said family-owned companies are the backbone for the local economy.
She cited some difficulties facing these companies and said it is important to set up laws that guarantee the continuation of these national economic entities.
Family-owned companies in Saudi Arabia and other Gulf countries face five risks, she said.
"The risks include long-term planning, their role and importance in countries' economies, dealing with the impacts of the global economic crisis, the possibility of continuing success or splitting, and vision, strengthening the role of the family and improving their business," she said.
She stressed the importance of organizing the companies' boards of directors and arranging the transfer of management among generations, as ways to deal with difficulties and obstructions that lead to the split of partners.
Family companies also deal with the risks of organizing work and family and ownership within management transfers between the second and third generations, she added.
Businessman Bandar Al-Humaidi said one of the risks facing family-owned companies is the large size of the family.
© The Saudi Gazette 2011
