HOLDING COMPANIES

UAE, Sharjah 2017 | ECONOMY | B2B

Strong, multinational reputations combined with localized products and solutions are the key for holding companies to thrive in Sharjah, the region, and the world.

Badr Jafar
BADR JAFAR
CEO
Crescent Enterprises
HE Sheikh Mohammed Bin Faisal Al Qassimi
HE SHEIKH MOHAMMED BIN FAISAL AL QASSIMI
Chairman & CE
Manafa LLC

What has been your approach to diversifying and entering the global market?

BADR JAFAR At Crescent Enterprises, we understand the benefits of offering a universal solution that is nuanced for the local market, especially in industries such as ports, logistics, power, and general infrastructure, where we can have a significant impact. Through our ports subsidiary, Gulftainer, for example, we not only offer efficient logistics solutions in the ports we manage across five continents, but also add sustainable value to the economy by supporting local industries and creating local jobs.

HE SHEIKH MOHAMMED BIN FAISAL AL QASSIMI At Manafa, we mainly focus on investments in real estate, capital markets, and private equity. Our current investment strategy is based on the global and regional market changes. We believe a strong brand speaks to and taps into the market far more effectively in today's competitive marketplace. There is no doubt that the competition is very strong here, with many international as well as local brands that want to prove themselves. We offer excellent and consistent service and quality, which is why customers come to us for repeat business.

How would you assess the business climate and entrepreneurial ecosystem?

BJ Entrepreneurship is a top priority across the MENA region, with over half of these countries ranking in the top 50% of the Global Entrepreneurship Index. It is a source of pride to see the UAE lead in the space, with the likes of Souq.com and Careem emerging as recent champions of the region's entrepreneurial ambitions. Today, amidst the digital revolution, we also need to realign our business models toward this new paradigm of entrepreneurship. While profitability and financial returns continue to be primary drivers, we stand a better chance at long-term success by building strong global brands, generating jobs and developing essential skills, and moving from being just a solutions-utilizer to a solutions-provider. At Crescent Enterprises, we are channeling this approach through CE-Ventures, which is our internal incubation division that follows a social enterprise model of business, one that puts people, the planet, and profits into a symbiotic framework and generates a multiplier effect on impact. The goal here is to build responsible, sustainable, and change-evoking start-ups, which are grounded in innovation, and at the same time focus on maximizing stakeholder value-creation, and generating sustainable opportunities for our youth.

SMBFAQ I look at the Emirates as a whole, and although we are based in Sharjah, our operations are spread across all the Emirates. The UAE, including Sharjah, has a very strong and appealing business environment for all, including the private sector. The stability of the country, its accessibility, and location as gateway between East and West capturing the right time zone, safety, infrastructure, choice of business platforms for investors, tax structure, and flexibility of capital movement give foreign investors the perfect foundation for success.

Where do you see new opportunities for growth?

BJ Broadly speaking, besides our home markets in the Middle East and North Africa, the two regions that we are looking to expand into are Sub-Saharan Africa and developing countries in Asia. These regions are emerging as the fastest growing in the world, with overall GDP growth projections over 3%, and in some countries within these regions as high as 5-7%. We are also expanding in the US. Over the last few decades, the investment made toward upgrading US ports' infrastructure has been grossly inadequate. Expanding trade has put severe pressure on the existing system, increasing congestion and threatening US economic competitiveness. Hence our US expansion was driven by the glaring need for modernization and upgrade of US port infrastructure.

SMBFAQ I still believe Dubai is the most attractive place for investors, but there are other Emirates that might generate a greater ROI than Dubai because of their lower cost base. There is no doubt that Dubai has a strong appetite for the international market because of its exposure. However, this also has an element of cost, which means that the return of investment will be less for investors in comparison to areas such as Sharjah, Ras Al Khaimah, or other emirates. There are more returns further north because of the cost base being lower. This is because land in Dubai is much more expensive than in Sharjah, which is more expensive than Fujairah. The reason is that the government of Dubai is pursuing initiatives, like the canal for example, and when you do dredging the cost of the land next to it goes up. This is natural evolution; there is a nicer lifestyle and better urban planning, but a smaller return, requiring compensation.