Page 87 - Aamir Rehman Gulf Capital and Islamic Finance The Rise of the New Global Players

CHAPTER 2 Entrusted Stewards 71

One example of a highly successful family conglomerate in the
Gulf is the Al-Futtaim Group of the UAE. Al-Futtaim is, without a
doubt, one of the strongest family enterprises in the GCC and one of
the most effective local agents any multinational could find. Besides
representing an impressive (and comprehensive) list of multinational
firms such as IKEA, Toys ‘R’ Us, Hertz, and Honda, Al-Futtaim has
been at the forefront of retail property development through its port-
folio of shopping malls (known as “MAF Shopping Malls,” for Majid
Al-Futtaim). Its City Centre shopping mall in Dubai—a pioneer at the
time of its creation and for years considered the city’s most popular—
has been a convenient venue for locating and promoting Al-Futtaim
businesses such as Carrefour and Toyota/Lexus. Al-Futtaim has
expanded its shopping mall development capabilities well beyond
Dubai, undertaking projects elsewhere in the UAE and the GCC.
Muscat City Center in Oman, for example, is an MAF Shopping Malls
property. Al-Futtaim’s powerful real estate capabilities give multina-
tionals confidence that, if they partner with the group, their outlets
will be in prime locations with significant shopper traffic. Carrefour,
for example, has chosen Al Futtaim as its franchisee in the UAE,
Qatar, and Oman and as a joint franchisee with the Olayan Group for
the Saudi Arabian business.
As an illustration of how broad family conglomerates in the
region can be, it is worth taking a closer look at the business portfolio
of the Al-Futtaim Group. Table 2.6, though far from comprehensive,
presents some highlights of the group’s activities.
Al-Futtaim has managed to build formidable businesses across a
range of industries and has attracted distribution agreements with
leading US (e.g., Chrysler), European (e.g., Carrefour), and Asian
(e.g., Toyota) firms alike. The breadth and depth of its expertise, along
with its capital base, makes Al-Futtaim and other leading local con-
glomerates key pillars of their local economies and serious investors
in regional and overseas businesses.
The journal Arabian Business publishes a ranking of the “World’s
Richest Arabs”—a regional equivalent of the Forbes 400 ranking
of America’s wealthiest individuals. Estimating private wealth is
very difficult to do, since (1) many family businesses are not listed on
public exchanges and therefore are not required to provide public dis-
closure of their financials, (2) the precise shareholding of individual
family members in a conglomerate’s businesses is rarely known, and
(3) individual tax filings (which often provide insight into private
wealth) are customarily not required. Nonetheless, the “rich list” is