SAUDI ARABIA - Economy
Managing Director, Haji Husein Alireza & Co.
Ali Husein Alireza was born in 1961 and received his Bachelor’s degree in Business Administration from the University of Southern California in Los Angeles. He then went on to obtain a Master’s in the same subject from Pepperdine University in Los Angeles. He is currently the Managing Director of Haji Husein Alireza & Co., Saudi Arabia’s oldest automobile distributor. As an active member of the business community, he also sits on the boards of various companies and institutions in Saudi Arabia, and is also the Vice-President of the Commerce and Industry Committee at the Jeddah Chamber of Commerce, as well as the Vice-President of the International Relations Committee.
We were established in 1906 as a family company, which we remain to this day. We have also been engaged in a diverse range of businesses. In 1926, we entered the automotive sector, becoming one of the first automotive importers on the Arabian Peninsula. The first car we imported was a Fiat, but shortly thereafter went entered into an agreement with Ford to launch its models locally, too. Over the years, we have come to represent numerous brands, such as Nash and Hupmobile. Until the 1970s, we were also present in sectors such as food and building materials; yet, we decided to specialize in the automotive sector. Today, we prefer to offer a variety of brands that address a diversity of needs. We sell German truck-maker MAN, as well as Peugeot, and we have represented Mazda in Saudi Arabia since 1968. In 2012 we also signed a partnership with Geely, China’s largest independent auto manufacturer. We also represent Aston Martin, which should give you a fuller idea of the scope of our automotive offering. Nonetheless, we shun competing products, so as not to cannibalize our brands. We also purchased an IT company called NATCOM, which is a hardware and solutions provider, 15 years ago. It was established in 1978, and is one of the oldest and most experienced IT companies in Saudi Arabia. We provide IT technology and services for both the public and private sectors. We have other businesses that are related, for example, by offering financing to our customers, which has also given us a foothold in the finance market. The nature of our company means that we have a solid presence in every corner of Saudi Arabia, also owning substantial real estate to support our businesses. Thus, by default, we have also become a real estate developer. In fact, one notices that most family companies in Saudi Arabia tend to be diversified into many different businesses.
Today, anything that caters to consumer needs has merit, including the retail sector. However, if you are talking about essential commodities, aside from oil, I would pinpoint the construction and housing sector. There is a shortfall between the fast growing population and the housing supply. This situation will not change for the next few years, and therefore the housing market would be the most interesting industry because evidence suggests that demand is not being met. The biggest complaint of all Saudis, be they rich or poor, is the lack of appropriate housing.
The good thing about the Saudi market is that it is open to all players, as long as they comply with Saudi regulations. This means that a wide variety of car manufacturers are represented here, competing on a level playing field. The good thing about the Chinese brands in general is that they are cost effective, and provide the same features as their competition from the US, Japan, and Europe. Local people are becoming attracted to them as they are very well priced. Now, it is up to the vehicles to stand the test of durability and longevity to establish a loyal customer base. We were actually surprised by how quickly the Chinese established a foothold in our market, and I foresee an interesting future for them. The prices of automobiles have increased over the past decade, especially those of the Japanese and the Korean brands. People who used to buy full-priced Korean products are today buying Chinese alternatives because the Korean products have moved up the market now and stand shoulder to shoulder with the Japanese in terms of features and price. This has left a gap, which the Chinese brands have swiftly occupied. I think there is a very promising future for the Chinese brands as long as they keep an eye on quality.
Some of the companies listed on the stock exchange started life as family businesses and have evolved that way. I think that the important point here when talking about regulations is that they have to help companies with modest family beginnings to become contributors to the economy. Regulations should help them take the next step to becoming publicly traded companies because such entities contribute to the economy, not just in terms of GDP, but also employment. In order to secure the future and continuity of these organizations, you need to take them away from the non-business pitfalls of being a family company that have the potential to hinder their progress. We need regulations that encourage and reward these family organizations that are important to the economy to help them transform, firstly to ensure their continuity, and secondly to give opportunities to other investors to contribute to their growth.
© The Business Year – May 2014
SAUDI ARABIA - Finance
Member of the Board of Directors, Capital Market Authority (CMA)
SAUDI ARABIA - Health & Education
Co-Founder & CEO, Arabius Technologies, Saudi Arabia
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