Business planning • Forum
In order to retain an attractive base, businesses are evolving with the times and adapting and reengineering most of their core services.
OVER 40 YEARS AGO, I established my first business venture, a garment factory under the name of Palmon Exports, in Mumbai. A decade later, in 1985, Palmon moved its operation to Dubai after a chance meeting with Sultan bin Suleyam, after which Palmon became one of the first companies to establish in UAE’s first free zone in Jebel Ali. The main advantage of setting up in Dubai was a quota-free environment and other trade benefits. Moreover, the location was not far from India, allowing access to our export markets. From one small factory, we expanded to 14 factories in Jebel Ali with 4,000 workers. JAFZA offers support to individual companies and helps create a better ecosystem for the overall industry. Our growth has been phenomenal, and we attribute much of this to the free zone and Dubai. In terms of numbers, JAFZA adds 23.8% to the UAE’s GDP. JAFZA has become a benchmark for all the free zones in the region and the world. In order to maintain this growth, we are focusing on commercial and industrial real estate, which is extremely important for JAFZA. 80-90% of its business is logistics, and we just formed an industrial and logistics REIT. We are expanding on that front in JAFZA and neighboring industrial areas. Our experience in JAFZA makes it our preferred location for REIT assets, but we have assets across several industrial areas including Dubai Industrial Park, Dubai World Central, and National Industrial Park.
ALPHA MANAGEMENT IS BASED and regulated in both principal financial centers in the region, Dubai International Financial Center (DIFC) and Abu Dhabi Global Market (ADGM), and it is in a unique position to ensure that clients get access to the best structures from the best jurisdictions available. Our challenge is to play a significant role in this massive transfer of wealth with the sole purpose of keeping these businesses intact, preventing them from fragmenting and thereby preserving the legacy of the patriarchs. Achieving a successful transfer of wealth takes time, effort, patience and it is critical that the next generation of owners and managers become involved in the business from an early stage. There needs to be a clear and concise succession plan and each of the next generation of family members need to be on the same page. The patriarch needs to identify the skill sets required for managing each of the business verticals and ensure that the individuals selected have and can exercise the required management and soft skills to carry the business forward. Accepting change and ceding control is often a difficult thing to achieve, particularly when the business was started by the patriarch who believes that only they know how the business should be run. When we are introduced to entrepreneurial families, we need to understand the business, the patriarch’s wishes, skill sets within family members, assess individual strengths and weaknesses and formulate an orderly succession plan for the passing of control and transfer of shares. This is an area that needs very careful attention.
THE DUBAI LANDSCAPE has transformed admirably and tremendously since the 1990s. Sensing the need to create diverse revenue streams, Dubai leveraged its strategic location. Having a vision is one thing, but the ability to execute it is always a challenge, which is why the key to Dubai’s success has always been its ability to execute plans in a timely and efficient way. This approach has created several successful entrepreneurial ventures that have adopted the UAE as their global platform while being able to cover the region, Africa, and the Indian sub-continent. The current economic conditions are challenging, but there is an emerging confidence that Expo 2020 will have a long-term positive impact on the UAE. Furthermore, a good entrepreneur should not stop investing when the markets are not doing well. Instead, investors should identify opportunities that deliver long-term value. Needless to add, there is a definite shift toward digital transformation that cannot be ignored by any business. Investing in professional managers and empowering them is also essential. When we commenced business 25 years back, we realized the immense potential for Dubai to serve as a center for us given its location, infrastructure, and market reach. From here, we have been able to penetrate several markets in the region, in addition to Africa, Asia, and Latin America. Our plans to diversify were based on the need for geographical and domain diversity. To create a sustainable portfolio of business assets, we had certain target sectors in mind, such as hospitality, retail, and food.