Saudi Arabia 2017 | ECONOMY | VIP INTERVIEW

TBY talks to Amr Khashoggi, Vice President HR and Group Affairs of Zahid Group, on subsidiary operations, the National Transformation Plan, and female participation in Saudi industry.

What is the group's background and in which businesses is it currently most involved?

Zahid Group is a privately owned organization, led by an established family whose commercial roots date back over a century. Initially, the group focused on passenger vehicles, followed by construction machinery, which represents a major business for us. Over the years we have continued to grow and today we are active in over ten thriving industries. We are one of the largest distributors of Caterpillar machinery in the world. We then expanded into commercial vehicles through a partnership with Volvo and Renault Trucks. We had a truck assembly plant for almost 20 years south of Jeddah, and just recently opened a new state-of-the-art factory in King Abdullah Economic City to meet the rising demand for quality trucks. This factory is fully automated and air-conditioned, with a capacity to produce 7,000 trucks per year on single shifts. We have well-trained and highly motivated Saudi workers who are capable in various segments of our business from management to the shop floor. Besides equipment, we have a joint venture with Total to produce high quality lubricants. That joint venture was the first tenant of King Abdullah Economic City. Furthermore, Zahid is a key stakeholder in the Budget Rent-a-Car franchise in Saudi Arabia, which is the market leader here. We also established AJIL Financial Services Company in partnership with Riyadh Bank, Mitsubishi Corporation, and other Saudi investors. Today AJIL is a leading provider of lease finance products, specializing in the financing of capital expenditures. Our travel business, Zahid Travel Group, is an internationally recognized agency that offers complete and customized solutions for travelers, families, and businesspersons. We also have a one-stop-shop facilities management company through a joint venture we have with OCS, a leading UK-based company. Zahid Industries, based in Yanbu Industrial City, creates a complete system of Caterpillar generator sets in transportable soundproof containers, which can be safely and easily operated and maintained. We also have a building material factory in Yanbu that produces gypsum in partnership with LafargeHolcim that is the largest cement producer in the world. In addition to our efficient expatriate cadres of employees, Zahid Group is committed to the recruitment, development, and advancement of competent Saudi men, women, and disabled people. The jewel of Zahid Group is our Zahid Learning Institutes, in Jeddah, Riyadh and Dammam, providing full training for all our people in soft and technical skills. We take young apprentices and put them through rigorous programs ranging from six months to three years. Upon successful completion, they receive a diploma or certificate and a guaranteed job. We feel this is our duty to our country, and it fits in with our national goals to add technical training capacity across the Kingdom.

How has the Vision 2030 and the National Transformation Plan changed the group's outlook and the opportunities you are pursuing?

First and foremost, we are a Saudi organization and, to a large extent, our focus is on our investments in our country. We do have a few investments abroad; for example, we have expanded our operations with Altaaqa for power rentals by establishing Altaaqa Global, based in Dubai, to serve other countries around the world. Another investment we have made internationally is in Morocco, acquiring a substantial stake in Total's marketing and services affiliate, Total Maroc. We fully subscribe to the vision of our leaders, such as that of the late King Abdullah, which is to create economic cities around the country to bring jobs and prosperity to our citizens. We have been investors in the King Abdullah Economic City from the very beginning, and we continue to increase our investments in this advantageous location, with its close proximity to a modern seaport, advanced high-speed railroad, and convenient road network providing access to the airport and the rest of the Kingdom. All of these forms of transportation allow for more efficient shipment of products. Additionally, close to KAEC there are villages where we can find young Saudi workers whom we can train, develop, and hire for our factories and companies. Vision 2030 provides economic diversity and will eventually reduce our dependence on oil. Through non-oil industries and support for SMEs we strive to create jobs for our future generations. Zahid Group is fully aligned with Vision 2030, and will continue to develop, hone, and improve economic growth and business strategies.

Do you see an IPO or other share sales on the cards for any of the group's subsidiaries other than Budget, which is already listed?

Not at the moment. We have our core businesses, which is construction machinery, commercial vehicles, and energy and utilities, and some of our companies in these areas are working in partnership with public companies. As our local stock market, overseen by Tadawul, continues to mature and develop, I am sure we will review our investment policies and consider our options very carefully, which may include the decision to go public for any one of our companies.

What are your expectations for the coming 12 months?

Now is the time to restructure and refocus on our core competencies and strengthen ourselves in those areas. We are very proud of what Zahid Group has achieved in the past, but there is a lot more we can do. We want to work on developing the skills of our employees and increasing the recruitment of competent nationals even further. The number of our Saudi employees continues to rise, and we are proud that they represent more than one third of our workforce across the various group companies. Equally important is the fact that we are continuing our efforts to increase the number of Saudi female employees in traditional positions in administration, human resources, finance and information technology, and also in technical areas. For example, we have four women in the eastern province who can drive a D9 Caterpillar machine and can answer any complex technical question relating to our construction machinery. We have honored and recognized them in front of their colleagues and the entire company. Additionally, it is important that we do not neglect the hiring of capable persons with disabilities, who have proven their productivity and efficiency in the years they have been with us. Zahid is one of six founders of Qaderoon Business Disability Network, a non-profit employers' organization, which strives to create a conducive work environment and job opportunities for persons with disability. As our country implements our national transformation plan 2020, companies (us included) will face, no doubt, big challenges over the next couple of years, which we will need to overcome through streamlining our operations and increasing our efficiency. As we look to 2017, it will be a year of essential reform, positive change, and creative innovation.