UAE, ABU DHABI - Economy
CEO, Ittihad International Investment
Following a rough start in 2008 due to the global financial crisis, we managed to rationalize our portfolio by divesting a number of our non-core businesses and focusing on growing our investments in the export manufacturing industry and privatized government services. We also developed strategies to nurture our investments in healthcare and education sectors. This strategy yielded its fruits, and we managed to grow revenues by 10-fold since inception. Our exports today cover more than 32 different destinations, and we will continue to grow in the coming years. Ittihad is now the main shareholder and operator of over 26 companies that are categorized into four pillars: Industrial Capital Group (ICG), our manufacturing arm; Emirates Link Group (ELG), focusing mainly on privatized government services; Medical Investments (MED-IN), for investments in healthcare; and Venture Investments (Venture-In) for small businesses and new VC-type investment. They are uniquely structured for Ittihad to focus on each pillar’s development, tap into new markets, and secure its financial needs to maintain its growth strategy.
We have witnessed a number of initiatives toward the privatization of government services over the past few years. Government departments have realized the need to restructure their offerings in a manner to emphasize their role as regulator rather than service provider. Abu Dhabi has been a leader in privatizing the operation and maintenance activities for various infrastructure and municipal services. For example, the first PPP projects in the GCC for water and electricity generation were in Abu Dhabi. However, we currently see further developments toward projects with a BOO or BOOT model, such as the recent announcement of the largest desalination plant in Abu Dhabi, the waste-to-energy plant in Dubai, and a number of PPPs in healthcare. Privatization can play a major role in the coming years to boost the economy in the GCC area, especially in municipal services, transportation, telecommunication, and healthcare.
Over the past few years, Ittihad has developed, strengthened, and grown its partnership with global and business leaders regionally and internationally. Our strategy is based on a win-win philosophy and long-term partnerships. Union Copper Rod, an Ittihad subsidiary, became the core partner of Glencore in the Middle East. Our partnership with GE led to the development of our unique investment in PPPs in healthcare and expanded our market offering. Our cooperation with Khalifa Port has grown from being a regular customer to becoming one of its main partners in exporting over 10,000TEUs per year, which is likely to double by the end of 2020 with the addition of bulk imports. Relationships with local companies, such as Emirates Nuclear Energy Corporation (ENEC), enabled our subsidiary National Cement Factory to be the first cement plant approved for nuclear construction. Collaborations with Fujifilm, Hill-Rom, Steelcase, and many others widen our offerings and enable us to tap in new markets and ventures.
Abu Dhabi urgently needs to rebrand itself to focus on what makes it an attractive place for investors. To start, it needs a new business card. It used to promote itself as a tax haven and a place with inexpensive electricity and labor; these are no longer valid. Perhaps we should start promoting Abu Dhabi as a place with secure and reliable energy, modern infrastructure, and flexible regulations. However, Abu Dhabi needs to put more emphasis on connecting the dots and fostering harmony across all sectors to streamline efficiencies throughout industry, real estate, and energy. We need to leverage our quick decision making, as we have a dynamic structure that can allow us to be ahead of our regional competition.
UAE, ABU DHABI - Health & Education
Executive Director & Deputy Dean, INSEAD
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