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Brick by brick

March 2008
Ever since Al Qudra , the Abu Dhabi-based diversified group, was launched in 2005, it has set up companies with such alacrity and in such varied sectors that business observers silently admire its growth and achievements. By Stanley Carvalho.
Al Qudra in Arabic means 'ability,' a name that Al Qudra Holding , the Abu Dhabi-based diversified group, is trying its best to live up to. "What is the use of having a name like Qudra and you do not prove your ability?" asks Salah Salem bin Omeir Al Shamsi , the Chairman of the Group, without batting an eyelid.

In a short period of time we have demonstrated our ability in our successful investments, our leadership and our vision to become a leading general investment group with strategic partners," he proclaims even as he's busy signing documents in his well-appointed office in Abu Dhabi, a few hours before taking an overseas flight for an important meeting.

Indeed, Al Qudra has blazed a new trail in creating more than one score companies within three years, being the first company in the region to offer more than 50 per cent of its shares to women, and building up its brand regionally in a short time. Not surprisingly, the company's board includes a woman.

The group's portfolio of companies represents a diversity of sectors, ranging from energy to education and transport to trading. Capitalised at Dhs600 million ($163.5 million), Al Qudra 's strategy for growth has been to add a string of companies from different sectors (see box). Al Shamsi intends to continue adding to that list of subsidiaries.

"We are interested in building links with any markets where there is a potential to gain, such as the GCC and Africa or even Asia and Europe. In fact, we recently met a delegation from South Africa to encourage them to invest in the UAE. And we will set up new subsidiaries whenever necessary," he says as a matter of fact.

Having just announced its financial results for 2007, Al Shamsi says that the performance is very satisfactory. "2007 was another good year, in fact a continuation of 2006." Al Qudra 's net profits rose to Dhs703 million ($192 million) in 2007, up from Dhs637 million ($173.6 million) in 2006, which were in turn up 202 per cent over the previous year, when the company began operations in May. The company is upbeat about prospects in 2008.

"This year is going to be strong. There is a big pipeline of projects in each of our companies and many of the subsidiaries launched last year will contribute to this year's revenues. You will see better growth this year," he assures optimistically.

"And don't forget," he asserts, "We will be going public this year." Al Qudra plans to raise Dhs3.7 billion ($1.01 billion), equivalent to 25 per cent of its share capital through an Initial Public Offering (IPO) in early March, Al Shamsi announced after the company's annual general meeting last month.

"The public offering is to raise funds for existing projects of the company and its expansion," he said. The Al Qudra IPO will be the second biggest IPO in the UAE after Dubai's DP World , which raised almost $5 billion in November. Shuaa Capital is arranging the IPO. "It is a natural trend to go public to get the benefits of a publicly listed company and also to enable the general public to own the company's shares," he justifies. Shuaa Capital is advising Al Qudra on the IPO.

Beyond borders
Significantly, Kuwait's Al Safat Investments recently bought a 10 per cent stake, or 60 million shares, in Al Qudra valued at Dhs600 million ($163.5 million) according to estimates. "It shows that regional companies are interested in Al Qudra ," claims Al Shamsi .

The two companies plan to launch projects jointly and a memorandum of understanding to the effect has been signed. "Our cooperation with Al Safat comes as one of the most important investment agreements we have achieved with any company in either the public or private sector in and outside the Arab world throughout 2007," he maintains. "Our business dealings with Al Safat Investments will open doors for further development and broaden the scope of our investments in the region and the world," Al Shamsi proclaims.

With a portfolio worth $40 billion of real estate projects under construction in the UAE, Al Qudra has set its sights outside the country and has ventured into markets in the Gulf and the wider Middle East. "Our plans to launch into international markets has come after a strategic expansion plan aimed at achieving the objective to be the preferred strategic partner from Abu Dhabi," he reasons.

Last year, the company's real estate subsidiary signed an agreement with Yemen's General Investment Authority to develop Abraaj Sana'a. Work on the mixed-use project has commenced and it will comprise commercial and residential towers, a luxury hotel, a club and villas, says Al Shamsi .

Al Qudra has also made its entry into Morocco and is mulling over investments in tourism, real estate, farming, fishing and manufacturing and wants Gulf developers and investors to team up to build 'giant' tourism complexes.

As part of its expansion strategy, the company is planning investments in Algeria, Libya, Tunisia and Mauritania. Asia figures prominently on Al Qudra 's radar and Al Shamsi hints that preliminary talks are likely to start with potential partners in India where the economy is booming and demand for real estate is surging. "India is a big market for any real estate developer," is all that he says at this point. While Al Qudra has ventured into some of these markets on its own, it is also part of an Abu Dhabi joint venture called Al Maabar that seeks to develop properties in the Gulf, North Africa, Europe and Asia. The other partners are leading property developers such as Aldar, Sorouh and Reem Investments.

Before wrapping up the interview, I fire my final salvo: where do we see Al Qudra after 10 years? "We will be a global investment player by creating strategic partners. We will be active in the UAE, the Gulf and the MENA region, and we will also be a player in other countries," Al Shamsi concludes as he signs on the dotted line of another document.

Growth story
Al Qudra earned net profits of Dhs703 million ($192 million) in 2007. "The company has grown geographically over the last 12 months and we have taken advantage of investment opportunities in Morocco, Algeria, Mauritania, Egypt, Syria, Senegal, Yemen, Eritrea, and many other countries," said Salah Salem Bin Omeir Al Shamsi , Chairman and Managing Director of Al Qudra Holding .

Total assets of the company were up 63 per cent over the previous year while shareholders' equity jumped 60 per cent. " Al Qudra Holding has already opened offices in many parts of the world which are in the process of investing in many large projects. We also have many other projects that are still in the process of being studied and will be announced soon," said Al Shamsi .

Salah Al Shamsi : Profile
Salah Al Shamsi , the Chairman of Al Qudra Holding , wears many hats. Locally, he is also the Chairman of the Abu Dhabi Chamber of Commerce and Industry (ADCCI), as well as Chairman of the Federation of UAE Chambers of Commerce and Industry. In fact, he is the first elected chairman of the ADCCI following the historic elections in 2005.

So he is well positioned to comment on the emirate's economy. "Abu Dhabi's economy is on a strong growth path, not only because of high oil prices, but also due to the growth of the non-oil sectors - mainly real estate, tourism, banking and industry," he maintains.

The economy will grow over 8 per cent this year and about 13 per cent in the next three years with the emirate's GDP rising proportionately, he predicts. "The growth will continue, no doubt. But in the last two years, we have seen a major role played by the private sector. It is new era in Abu Dhabi now where you are seeing public-private partnership," explains Al Shamsi .

He emphasises that the private sector will be the main pillar for future growth and in keeping with this aim, licensing will be liberalised for the private sector, particularly in real estate and industry. "Our vision is ambitious and our strategy is to promote investments in different sectors through public-private partnership," he says. "Our aim is also to promote sustainable development and put Abu Dhabi on the world map."

Al Shamsi also sits on the boards of several companies and organisations and is also a sporting personality who is honorary member of the board of Al Ain Football Club, one of the best teams in the UAE. No wonder, one of the many subsidiaries of Al Qudra Holding is a sports management company, which is also the largest such firm in the Middle East.

For all his achievements, Al Shamsi remains unaffected. "The success is due to the whole team at Al Qudra . We are constantly seeking new opportunities, we don't wait for opportunities to come to us," he says when asked to share his success recipe. Al Shamsi did his BSc in Civil Engineering from North Carolina University and an EMBA in Business Administration from the American University in Sharjah.

© Gulf Business 2008