Coral International Hotels

You as a member of the ruling family: Al Qassimi, what is your particular role in Sharjah’s development?

My company is a holding company for different investments, it has operations in hospitality, we have the HMH which is a hotel management company that has 4 brands of varying standards. We have 10 different corporations around the UAE and we hope to expand to 35 in the future. We have a car rental business, a branded products like Looney Tunes, Bugs Bunny, Marvel characters like Spiderman, Batman and Sony pictures, an advertising company, a security company and we have entered into Oil and Gas in Kazakhstan. Each of these companies contributes to the success of Manafa.

Is it a family business?

Yes, that is not Manafa. Manafa is a branch of the family company that includes investments in Hotel management and real estate for example, but we do have some co-investments.

In your oppinion what is Sharjah’s long term strategy?

We are going to be first to introduce new technology to the region, which don’t yet exist; printing facilities for example. Not necessarily in Sharjah, in many other emirates depending on the most suitable.

How do you manage the portfolio of SBUs at Manafa?

At the head office, we only concentrate on strategic decisions and investments, whereas as soon as the investment is made, we treat the company as an individual. So what happens is that the company has its own board, its own managing director and its own small team to move that activity and to guide it.

Is the ownership 100% Manafa?

Not necessarily, usually we have the majority of the ownership in things that we invest in. If it is something that will complement our businesses then we have to take the majority of that business to consolidate but if it’s something that isn’t very important to our company then we don’t mind taking the minority.

How do you identify these market opportunities?

We have a team that is dedicated to looking at opportunities and our strategy, also the goal of the company is to grow from within and to grow to acquire companies that complement the other companies, sometimes we have to diversify to spread the risk but since we are at a growing stage, we prefer to grow on a level that would complement us.

What is your market position with your strategic business units?

For Manafa, I would say in the MENA region and South East Asia as we also sell products to that area, but for Faisal holding we sell to different areas; Europe and America for example. Each company will show their strengths in exporting with their capability to export. This means if the company has an interest in opening for example Japan, they will go and open the corporation there.

You also mentioned that the operating environment is becoming more competitive for the family businesses as we see the emergence of conglomerate companies reaching international level full of financial resources and quality management, as a family run diversified business how do you address competition?

I think this question is constantly asked by family businesses, if the family business is not geared up with the right infrastructure then it will be a target for venture capitals for private equity companies to merge these companies either for RTO or for another stage of investment.

As for the expansion plans and your business units? Are you staying in the MENA region?

As I said yes, we are at a growing stage at the moment and we are concentrating on our base: the MENA region and then United States but we have to be strong in our base. We don’t mind exporting a lot of products to Europe, if there is an opportunity but we would not open the market now because we are not yet ready for it, we have to consolidate and sooner or later it will come; it’s just a matter of time.

Which of your businesses are the most successful and why?

I would say all of the businesses are doing very well in different aspects. Competition is always there but what is important is to concentrate on things that separate you, things that will really make you different. For example, if you specialize in a field then you will be unique, traditionally family businesses diversify but now specialization will make them more competitive and more concentrated on what they are doing.

So your strategy is to concentrate on specializing in fields?

The reason family businesses are going horizontally and not vertically in terms of specialization is to diversify the risk. Now we have reached a level where specialization is very important, of course it doesn’t mean other companies aren’t doing well all companies should do well when they specialize in the things that they do and this would not limit the holding company in opening different opportunities.

You have Reef Real Estate Investment Company. Which started up in 2004 and one of your core values is the delivery of the right product to the right customer at the right time but however what we are hearing in this industry is the lack of supply and rising cement and other resource prices. With this in mind how are you going to stay true to your values?

There are some variable costs that in developing we’d have to put into consideration the cement prices and other variable items they are changing all the time and things are going crazy every day, but it’s not just in this region it’s in the whole world. Everywhere steel and cement prices are rising. What we are trying to do is to have the commitment of the contractor to deliver the product as soon as possible for them not to get effected with the prices, but from our team, from our side we have to make sure that the quality of the product is up to the expectations. The contractor can build the products, but if it’s not up to standard then it’s us to blame. So if the price is fixed in the contract that’s worth 100 million for example and the price of steel and cement are going up this means that the contractors has to finish sooner, the sooner he finishes the less money he will lose. So this forces him to push and deliver the product and for us we have to match up the quality, so this is why the buildings are coming very fast!

Also you figure among the associate companies of Faisal Holding and you also have other associates like Ithmar. So what is the meaning of the strategic alliances and what are your future partnership plans?

Private equity companies like Ithmar Capital, we support them in the investments they make and if the company they are acquiring or buying shares from is making this energy then can we acquire 51% or more? To consolidate, if it doesn’t then we’ll take a minority share.

Are you also looking for some other partnerships for future projects?

Partnerships and opportunities are always on the board so we always need other people, we always see new opportunities and explore them, if they make this energy make sense to us and the market needs it then it’s a good opportunity.

Where are the majority of the offers coming from?

I would say Europe. Why? Because of the cost of production there, it’s much higher than what it is here and in the far East so what usually happens is the companies in Europe tend to move their headquarters to the Middle East especially to the Emirates to have an excellent logistics base for the world whereas they can export their existing requirements from here for the cheaper costs having a better contingency. That is the way the mentality is switched.

So you’re talking about outsourcing?

No, basically a company that is manufacturing milk for example in Germany where the cost is very high but if they were to set up here, they would have the same infrastructure here and would cost them much less but would still be able to export the same product to Germany because of the treaties that have been done between the Emirates and different countries making it a lot easier for companies to set up here giving them lots of advantages.

So it’s the land of opportunities?

Yes, sometimes I meet with the Vice Chairman of the Italian Chamber of Commerce and many Italians and Europeans would like to come here and as an obligation from myself I got to Italy and tell people about the Emirates, to tell them what advantages they could get here. Many people think that the UAE is the land of opportunity, everywhere is the land of opportunity it’s not just the UAE. But in the UAE we facilitate them better, we service them better and this is why they come but at the same time we can’t expect to throw money here and get gold there, many people just come here and invest in anything and expect returns. In one way this is correct because the ,market is in need of the kind of development but the entrepreneur has to push very hard to make this work, not just sit at the office and wait for things to happen.

You mentioned that you go to Italy and you talk to the potential investors, what are the main advantages that you convey to them?

Well of course there are no taxes although soon I think that might change! So, they should take advantage of this now. Well it’s changing slowly as the oil decreases and we must compensate. We also give possible investors a database of possible companies that they might like to work with and we give them full support in terms of office spaces, our expertise and guidance in relation to the area and the market. We will show them around possibly giving them temporary office space until they find somewhere to set up from.

As the chairman and CEO of Manafa what would you say is your most memorable and proudest achievement?

It was the time when I took the decision to start Manafa, I was with the family business and I’m still with them but now I’m with Manafa. It was a step and a challenge for me to see how I would perform without the family business and that challenged me a lot, it made me stronger and made me work very hard. It’s not just sitting in the office, its meeting people, getting things done on time etc.

Is there and particular message you would like to say to our viewers or audience?

For the UAE I would like to say: as you have said, the UAE is a land of opportunities and there are a lot of things that could be greatly improved in the services, added value etc. I would concentrate on 3 things: consistency, quality and quality, in addition you should aim to exceed people’s expectations.