A Quarterly Newsletter from UAE and Oman Offices

VOL 12, Issue 1 January 2010

Interview

Mr. Saadi Rais is a Partner of Rais Hassan Saadi Group of Companies. The firm of Rais Hassan Saadi was founded in 1910 and ranks amongst the leading commercial enterprises in Dubai. Since inception, the core business has been shipping and freight related services. Over the years the Group has expanded its operations into warehousing and logistics, travel, insurance, real estate, BPO and many other fields. The Group has taken a shape of large sized Dubai based conglomerate. With offices in all the major UAE ports, the group employs over 1200 trained and experienced personnel, well versed in all aspects of ship agency and allied activities. The Rais Hassan Saadi Group has an excellent network of own offices & sub agents in the Gulf countries, Pakistan, Africa & India and is thus, well placed to take full advantage of the rapid economic development in the region. 

Q. The RHS group will complete a century of operations next year [est. in 1910]. Your thoughts on the sea changes that have happened in your scope of operations and the manner in which business has been conducted over this period?

A. In the last century, Dubai has witnessed a vivid growth. The economy has grown from a small town to a city to a fair size international metropolis- This is Dubai today. We have seen and experienced dramatic changes of an unprecedented scale by virtue of improvement in infrastructure and economic and social developments of the country as well as the progress in the region as whole. However in my opinion the one thing that has had the most profound impact on how we conduct our business is continuous advancement in communications and information technology. In this century we have moved from mail service to telegrams to the telex machine to the fax machine and then on to emails and Internet and further the advent of e-commerce. The vast increase in the volume of work over the years necessitated timely and accurate relay of information which was made possible by this advancement in information technology.

Q. The group has now seen two major world recessions – the great depression of the 1930s and the Global Meltdown of 2008-2009. What are your views on the impact on the world economy and the local economy?

A. The first major recession in the 1930s, had some impact in the region but the economy of the region, in particular the Dubai and the United Arab Emirates was quite small. As a result, the effect of that was felt but not to a very large scale. Whereas the present global meltdown in 2008 – 2009 with Dubai’s economy grown much bigger in size and quite strongly linked to the international markets of the world, obviously, the impact is felt on a bigger scale. The local economy has taken corrective measures and will eventually recover. I think it may take a couple of years of slow growth before it starts accelerating on a much more healthier level. As for global economies, I believe some regions and certain industries will be impacted more than others. The western industrialized world will have a very shallow growth for some time to come before the real recovery. Asia will see a more robust growth despite the financial meltdown. So whereas Asia may witness an average growth rate of five to six percent, see the western economies probably growing at one to two percent.

Q. What is your view on the future of real estate sector in Dubai?

A. What is really the future of real estate in Dubai – The real estate sector in Dubai in my opinion has to be segregated into two areas. One which is referred to as old Dubai, where the properties will still be owned by the UAE and GCC nationals and the one called New Dubai which is now open to ownership by all nationalities, both individuals and companies. Whereas old Dubai has not been affected much and in my opinion will continue to operate pretty much on the same basis as it was before with a steady growth and sound base. As for new Dubai it was evident from the massive scale of development and quite a bit of that probably of speculative nature that a correction would have taken place somewhere along the line. But it unfortunately coincided with this global financial crisis and perhaps accelerated by this global meltdown. In any case, the correction would have taken place sometime, but would not have been as severe as we are going through now. However, there are quite a number of these developments that are executed with long term planning in mind and with a strategic view. Probably they are a little bit ahead of time and those will catch up with time sooner and will come back to normal trend. As for the highly speculative segment the question marks will remain about their future. However, I think even those within five years at the most should recover.

Q. Since the Group’s main area of focus is on the shipping and logistics sector how do you see this business in the coming years?

A. The fundamentals of Dubai has not been shaken or changed by this global meltdown. Dubai is still a major hub for shipping, logistics, trade & commerce. Also it is a big destination for holidays and leisure. In addition to that it is extensively used for conferences and trade fairs. So those fundamentals are still very much in place and quite strong and will continue to grow steadily. The shipping and logistics industry has witnessed a slowdown in the inflow and outflow of consignments because of this global meltdown and its impact on international trade. But given the scale of this upheaval around the world, the effect here on the shipping and logistics sector has not been that big. There has been a slowdown but not a drastic one. I think because the fundamentals are strong, this will correct itself very quickly. I believe, this is a high growth region with still a lot of wealth from natural resources coupled by a large and rising young population. So the growth potential will be very good for many years to come. Dubai will continue to play a pivotal role in the servicing of this region in Shipping, logistics, trade, commerce and financial services. Dubai is still a place of choice for many companies to headquarter their operations for the region. Dubai also remains the place of choice for a lot of individuals who would like to work or set up enterprise in this region. It is a very safe and secure place to live with modern amenities as well being liberal in its social and business environment.

Q. Is your Group considering to expand out of the UAE into the GCC and other Middle East countries?

A. Yes, we have already expanded. We have our presence in all of the UAE and expanded to other GCC countries like Oman, Qatar and we are represented through business partners and associates in Saudi Arabia, Kuwait and Bahrain. We also have Joint ventures in other countries and our own presence in India and Pakistan. We have recently ventured into East Africa with offices in Mombasa, Kenya and Dar E Salam, Tanzania.

Q. What will be your advice for the young and budding entrepreneurs?

A. I believe firmly in this region being a high growth area with a lot of resources and a young population with quite a lot of industries being setup both by the public and private sector. This creates huge opportunities for the youth both on the employment side as well as on more creative and innovative ventures. So I would advise them to equip themselves with proper skills and knowledge to be more productive and participate in the growth of this economy and society.