Staying Power
Areej Mohsin Haider Darwish, Chairperson for ACERE at Mohsin Haider Darwish, has led the family firm through a pandemic while helping build the foundations for a new generation of success. Her strategy now is on resilient sectors and a sustainable future.
Areej Mohsin Haider Darwish, Chairperson for ACERE at Mohsin Haider Darwish, has led the family firm through a pandemic while helping build the foundations for a new generation of success. Her strategy now is on resilient sectors and a sustainable future.
TThrough the computer screen, Areej Mohsin Haider Darwish appears calm and collected with a warm smile on her face. She’s grown accustomed to life through Zoom—and it’s just as well. It’s already late afternoon in Muscat, but there are more video calls and virtual meetings to come for the chairperson of the automobile, construction equipment, and renewable energy (ACERE) cluster at the diversified family firm, Mohsin Haider Darwish LLC (MHD). Since COVID19 struck, office timings are out the window, and the line between work and play has become well and truly blurred. “What can you do?” she shrugs. There is no substitute for meeting face-to-face for the Omani businesswoman, but she is not about to let a screen stand in the way of success.
If figures are anything to go by, MHD is holding its own. According to Areej, throughout the ups and downs of the past 12 months, the group’s net worth has remained stable at around $200 million, and while revenues dipped 4% year-on-year, EBITDA remained at a healthy $25 million. MHD even managed to grow its bottom line by 10%. However, January 2021 saw the company regroup, with all MHD’s divisions now divided into two independently-run clusters. Until December last year, Areej was the chairperson for the MHD group, but after nearly three years in that role—and having managed the business through a pandemic year—she has now taken a seat as the head of the ACERE cluster, while her sister Lujaina heads the infrastructure, technology, industrial, and consumer solutions (ITICS) cluster. The sisters have regular meetings to discuss the company’s future, with decisions on investments, new ventures, and expansion taken jointly.
Settling into her new role, Areej is now exploring growth opportunities in ACERE. Last year, MHD set up a solar division and established Areej’s son, Mohsin
Hani Al Bahrani, as CEO. The business already has close to $11 million in orders in the pipeline for solar panels and related equipment, and Areej is optimistic about the future. “Oman’s demand for energy is expected to rise in the coming decades, so I see immense potential in this sector,” she says.
The exact size of the opportunity is hard to pinpoint, but Oman has set a target of deriving at least 30% of its electricity from renewables by 2030. And it is starting from zero. Low-carbon sources accounted for just 0.002% of Oman’s energy in 2019, the most recent year recorded by World Bank Data. From such a low base, the only way is up.
MHD’s venture into solar amid a global pandemic is a sign of resilient management. And while some family businesses have struggled to deal with the impact of COVID-19, the professionally-run conglomerates have prevailed. “Decision-making is much faster in a family setup,” says Thomas Kuruvilla, Managing Partner at consulting firm Arthur D. Little Middle East. “So, if the leadership is strong, then that is very positive in a pandemic situation.”
For Areej, it’s less an issue of a company set up than the sectors a company relies on. “If it’s a family business or not, covid hits in the same way,” she asserts. She speaks from experience. Yes, MHD’s workforce and balance sheet remain intact, but there’s no escaping the fact that 2020 was tough. “Our business operations were affected by the total lockdown, and our revenue did dip for the first half of the year,” admits the math and computer science graduate.
To Oman as a nation, the pandemic has dealt a harsh blow. The sultanate’s GDP shrank by 4% in 2020, and in the face of ongoing challenges, various media reports suggest the country is considering turning to its neighbors to help cover the losses. Amongst them is Qatar, which has already shown its willingness to lend a hand, giving Oman $1 billion in direct financial aid late last year.
There have been losses at MHD too, but there are no wealthy neighbors to turn to for help. For example, the group’s automotive division, which counts Jaguar Land Rover, McLaren, and Michelin among its partners, experienced a drop in revenue at the height of the pandemic. According to Areej, it has since rebounded, but the industry picture across the GCC is telling. The region has experienced a slump in sales not seen since the global financial crisis of 2008, with 2020 revenues from one-time car sales falling 23.9% year-on-year, according to Statista.
Against a backdrop of slow sales, MHD ramped up its e-commerce capabilities to sell cars online, but just
like conducting meetings via video link has its drawbacks, buying a vehicle through a screen has its limitations too. It is a reality that Areej fully accepts. “The automotive sector is a personalized one, and customers don’t buy a car on a whim,” she points out. “It’s a high-end purchase. Hence they would always prefer to test drive the car.”
Still, with more than two decades of experience under her belt, Areej is nothing if not resilient. And her approach hasn’t gone unnoticed by MHD’s partners. “Areej has been instrumental in holding together the vision built by MHD’s founder…and she was bold to weather a difficult market without losing ground or sacrificing that vision,” says Naser Shashaa, Regional Director of Michelin Middle East. For Michelin, she has proven to be a valuable ally through the coronavirus crisis too. “What was really exceptional during this period was our ability to transform this unknown into an advantage through increased collaboration, co-creation, and innovation,” adds Shashaa.
Brett Soso, Managing Director of McLaren MEA, agrees. In particular, he points to MHD’s openness to exploring digital solutions throughout the crisis. “Our local retail partners have quickly adapted to the new reality via digital solutions and more personalized activities,” says Soso, explaining that MHD held a “very successful” digital showroom inauguration back in December 2020.
Meanwhile, as MHD devised strategies to bolster its automotive business, demand for products within the group’s electronics, mobile device, and technology division surged. “This is the only sector that did very well during the lockdown last year,” says Areej.
This was no accident, according to the division head. “We had a carefully calibrated action plan put in place that worked to overcome the constraints placed by the pandemic and accompanying factors like lockdown,” explains Lujaina Mohsin Haider Darwish, Chairperson for the ITCIS cluster. “This created a sense of security within the channels, and also reinforced the loyalty they have for the company and its brands.”
As the custodians of the family business, it is the sisters’ job to look ahead—and that means planning for all eventualities.
“Strategy is less a matter of responding to the particulars of this crisis, and more a matter of preparing for a robust future,” Areej explains. Critical to that is developing multiple strategies for multiple scenarios.
Getting it right matters, not just for the company but for the country too. In the sultanate, as in the wider GCC, family businesses are vital to the national economy. Research suggests that family-owned businesses account for around 60% of GDP in the GCC and employ more than 80% of the region’s labor force. “Family businesses have long been a foundational part of Oman’s economy and business environment,” says Rebecca Olsen, Executive Director at the Oman American Business Center. “It is hard to overemphasize their importance.”
Then there’s the family name to protect and a reputation that began when Mohsin Haider Darwish established his group back in 1987. Today, the buck stops with his daughters.
Growing up in their father’s shadow, they knew the day would come when they