A Quarterly Newsletter from the UAE and Oman member firms of the PKF International Ltd.

VOL 13, Issue 3 July 2011

Interview

Mr. Buti Saeed Al Ghandi is the Managing Director of Al Ghandi Investment Co. Dubai. The business activities of these groups include; Electronics, Automobiles, general trading, logistics and transport.

Mr. Buti Saeed Al Ghandi is currently also holding various positions viz. Chairman of Emirates Investment & Development Company, a quasi-government diversified private  equity investment company, Chancellor of Canadian University of Dubai, and Vice Chairman of Dubai World Trade Centre.  Mr. Buti Saeed Al Ghandi is also a Board Member in Union National Bank, Dubai Chamber of Commerce & Industry and Zakat Fund and Managing Director of Al Khaleej Ceramics Company.

Q. The Al Ghandi name seems to have a Midas touch to it! Al Ghandi Investments Co, LLC (Al Ghandi electronics, Al Ghandi Auto, Al Ghandi General Trading, Al Ghandi Freight Services, Oman Transport Establishment), EMIVEST, Canadian University of Dubai, Al Khaleej Ceramics, DWTC, Oman Insurance and Union National Bank – all sector luminaries in their own right. Looking back what are your thoughts on being associated with these companies?

A.: I feel fortunate to have been a part of these organizations.

Q. The slowdown has also slowed down investments. What is your vision for the future of investments in this region?

A. We can view this region and UAE in particular in two phases. The first – from the beginning of the millennium 2000 till 2007; the other from 2007 till date in 2011. Before the real estate boom in 2007, UAE was still growing at around 5 to 7 per cent per annum. Once the real estate boom begun as a global trend, in 2007, Dubai joined the ride, as I call it. I still believe we learned a lot from this period. It has benefitted us in certain ways. After the market and economy crashed, many analysts all over the world said, Dubai has gone bust! The truth as we all know is very different.

Even, we as a business did get hurt, but the fact is that we are still positive but within three years our assets will be fully utilized properly. Occupancy levels are low all around, as we all know. The biggest lesson that we have learnt and are now implementing is that we are in the process of re-engineering our business.

Q. Do you feel the unrest in the region that has escalated this year, will benefit UAE commercially?

A. A period of five months is frankly too brief a period to assess the commercial impact thus far. Also, there is no statistical backing that has cropped up to support this general feeling that everyone seems to have. Any political scenario takes time to play out and only when the dust settles we can view the relative opportunities and threats. On a related note, before this political unrest, despite the Gulf war and other regional conflicts, there was a certain harmony amongst the peoples of this region.

I hope that the people of all these countries facing turmoil and internal conflict prevail in the end. I hope that some good comes out of all this upheaval. If they are happy, it will reflect positively on our businesses as well. That is the perspective we are looking at.

Q. The EIDC investment roster is really impressive. From manufacturing to construction, from aviation to telecom, what is the thought process behind this seemingly random clutch of industries?

A. EIDC is a PE driven company. We invest in any sector based on the probable earnings and returns that it is able to generate. Our brand of investing is not based on the activity of the business. It depends on the returns it delivers. Whether it is real estate or the education sector, any other industry or service line, we are looking at return oriented sectors. As we speak, we are looking at three varied investment opportunities. Our business model is creating opportunities and then divesting them in the foreseeable future. Our investments always have exit plans in place.

Q. EIDC can truly be called global investor, how have global happenings affected your investment and risk appetite?

A. We are more conservative in our approach and would call ourselves a small firm with modest operations. The global scenario, snowballing into the local region, particularly in 2009-10 has seen us letting go of assets. We have moved certain operations and assets into areas where opportunities exist. In this investment climate, we are in asset protection mode rather than in a investment mode.

Q: What in your opinion is the period that the local real estate industry will take to recover from the downturn / slowdown?

A. I recently read a report about the effect, rise and fall of real estate valuations in Singapore, Malaysia and even the USA, before and after the bubble burst, and the time these economies took to bounce back. Typically I have observed that the time from rock bottom to a sense of normalcy has taken from seven to nine years. Dubai is currently in its third year of slowdown. By that logic we are looking at around 2015 for a complete recovery and full asset utilization, in terms of space / area already built or being built.

Q: What is your advice for budding entrepreneurs and investors in this region?

A. During my keynote speech at the Canadian University in Dubai, I told the students, the new age mantra is to work globally- cut borders, work as a team, create your own cluster of communities. It is important to know the people around you, create your network, and know those who are old as well as those who are young.

It is also important to find your talent. Nobody can teach you that. Do something that you love. Invest your time, knowledge and money in exploring the talent within you. If a Chef has a business degree, he must add his culinary talent and the knowledge gained through the degree, to and create value around him. If an interior designer has a marketing degree, he must explore the opportunities to make both these worlds meet.

When I was studying in the George Washington University, our Dean during one of his talks showed us two posters – one of Michael Jackson and the other of Mike Tyson. He said, we have given you all the knowledge that we have, but we are not rich. I am not rich. These two guys, he said, pointing to the posters, have no degree, but they have limitless talent. Tyson – his fists and MJ his voice. They have amassed wealth through it. But, they don’t have knowledge. You need to combine your talent and knowledge, go in to the world, reach out and use it to your advantage.

My advice to youngsters all over and particularly to those in this region is to find something that they like doing and make the most of the opportunities they get. Also, for this generation and the next, networking is very important. They must work together if they want to succeed.

Q: What are the corporate social responsibility (CSR) initiatives that you and your family have taken in this region?

A. A month and half ago, there was a career fair for UAE Nationals at the World Trade Centre. I was asked why we did not exhibit at this fair. I told them, it is because I cater to  the  sentiments of, and teach a population that will not come for such fairs. This is the physically handicapped and impaired section.

Today we have about twenty handicapped / semi handicapped people recruited in our Group. We are now focusing on their growth and development. There is one person with a form of Parkinson’s disease. However, he feels normal when he works for us. His family is happy and he is happy that he is contributing to his family.

My social responsibility is to identify people from this segment and fit them into my organisation. In fact this responsibility has been mandated by my father!