For the upcoming bicentennial celebrations of Bahraini-British relations, families like the Al Zayani have a special story to tell having being bilateral business catalysts and trendsetters for many decades. What is Al Zayani’s story with the UK?
We have an exciting story with the UK, which goes back to when my father first visited the UK in 1936. That was pretty pioneering for this part of the world. When he went there, at the time we were a British protectorate, so the world was quite polarised.
If you were a British territory, you were a British territory and you were influenced by the ways and culture of the UK; the same went for the Portuguese territories, the French and so on. It was not like the world as you now see it, where everybody speaks English and the internet can get you from here to there, with no borders.
You would find that the Indians, Malaysians, Singaporeans and people from Hong Kong, South Africa, Malta and Bahrain were looking to England. The Madagascans and Algerians were looking for France. At that time, the British were significant leaders in the car industry, so my father took Land Rover namely, because it was a 4 x 4 car and the only off-track car available at that time, and the only one you could drive in the desert.
He was the distributing agency throughout the Gulf. Our family has a 70-year history in car distribution. We started with Land Rover, and then we went to Aston and Rolls Royce. After 1932, my father took the money from the oil over to the UK, to look at opportunities. We then became the exclusive Land Rover dealer across the Gulf.
I remember in 1962, when I went with my father, and there was not a single asphalted road in Dubai. Dubai Airport was just about opened. The planes used to land in Sharjah, because there was a British base there. I counted 34 cars before I found a car that was not a Land Rover. So that shows you that we had 90% market share at that time in the Emirates.
We were the first family to bring British cars to the Gulf, and distribute them. We continued to distribute them in the Emirates until the 1980s, when the law changed and you needed to have local people. But we are still the leaders in car distribution. We have 30% of the cars on the road in Bahrain. We have a fantastic Rolls Royce showroom.
We have the jewel of the crown, which is Rolls Royce and Land Rover. And Jaguar will be coming soon. Unfortunately the car industry went into decline in the UK, but it is resurrecting now again. You have Rolls Royce, Mini under strong restructured management, and they are all successful. They are not under British ownership, but as long as it is made in the country. We are talking about nation-to-nation and not individual owners.
That is one very shining example that we have for the UK.
Given the exclusive design, manufacture and distribution of British brands, the market has always remained high-end for Al Zayani.
Yes. Quite frankly, on the low-end, they could not compete with the quality that is coming from the Far East. Europe has to remain in the high-end.
The second shining example of our company integration with the UK is this award that we have received last May from the Royal Society of British Engineers. It has been done by the National Grid, which is the cable network that ties up the UK. We are one of the suppliers for the National Grid. We have been supplying and exporting cables to them from Bahrain for several years.
Last year they opened up a competition for those who can provide the best solution for line renovation with the best environmental program. There were 25 contenders that entered the competition, including Balfour Beatty. We received the number one award, because we gave a fantastic ecological, financial solution to them.
The UK, like Europe, started using aluminium electrical cable, as everything before was copper, after the Second World War. You are talking about 60 years for these lines, so their life expectancy and efficiency have come to an end. So we take the old cable, and recycle them into modern, much more effective cables in our cable factory here, where we have an extremely well-controlled facility, so we can take any cable and produce any other type of cable.
We can take a cable, recycle it and turn it into another cable – not many other factories in the world can do that. We take their old cables, recycle them into new cables, and push for more electricity. People always want more electricity. Look at us over the past 10 years – we have started consuming more electricity because we are using things that we did not used to, like computers, mobiles, more TV and chargers. You might even be using an electric car.
So the demand for electricity is ever growing. We will provide them with more electricity, because the cables we give them are more effective. We will recoup something that they have written in their books, because when they bought it, the value of the cables depreciated it in their books, and now we are adding value to it. That has a financial impact on their balance sheet. Imagine you have 100,000 tons of aluminium cables. That is worth nothing in your books because they have depreciated. If you recycle it, then it is worth something. Your assets on your balance sheets all of a sudden become important.
Each competitor offers something different. All the research of a technical nature is technical-economic. This is another landmark in terms of our relationship we have with the UK. They gave us free membership for a group of C100, which is made up of 100 companies in the world, which are concerned about maintenance, sustainability and so on.
We are following the 200-year celebration of bilateral relations. We want to showcase Bahrain and His Majesty’s Vision 2030 where the whole country is reaching a consensus to move forward following a political and economic recovery. What is the private sector’s role in this national consensus (Vision 2030) and where does the private sector fit into this new concept?
I am happy to start by discussing the shaky situation. The reason why we had disturbances is because we have freedom of speech in this country. If other people are dissatisfied in other countries, they have to shut up. People can express themselves here, but some people misunderstood this self-expression, and they started using it to become destructive.
Law and order was restored, but some people wanted to use the situation to start promoting certain ideologies. But when you look at Bahrain as a country, we maintain a good pattern of growth. We do not have double-digit growth, but we have good, consistent 4% growth. You can almost put it on a nice graph – anywhere between 8% and 4%. It has never slid below 3%. That is good for planning and anticipation.
Secondly, we have to understand that Bahrain has a special relationship with Saudi Arabia. This is a function-economy of another economy. Even our political process has to be coordinated. We do not jump the gun. We have to make progress in relation to our neighbours. We cannot just go and freak out and do things. This is part of the growth, which we have to take into account in Bahrain, which includes human growth and economic growth.
My perspective of Bahrain for the future is very positive, because of the high level of education, the location and the performance of the neighbourhood.
Since Al Zayani Investments has interests in several sectors of the Bahraini economy, what would you say that are the different stages of development of each sector and what are the prospects for growth in each of them?
When you look at the element of manufacturing, we are 100% exporters. When we started this company, it was regional, but then we realised that our strengths and quality are international. We are now manufacturing in Turkey, and we will be manufacturing in Australia and Saudi Arabia in the first quarter of next year and in Mozambique at the beginning of 2014. We are getting closer to our customers. In Turkey, we can access the local market as well as the European market, because Turkey is integrated into the EU market-wise. They have a free trade agreement.
Turkey is also in a good location to serve areas like the CIS countries. We also chose Mozambique so we could serve sub-Saharan Africa, because there is a lot going on, and we chose Australia to serve the Australasia area and also because Australia is growing. In the Americas, we have a joint venture with a Brazilian company in Bahrain, and we are looking to invest in Brazil in the future. It could also be Paraguay, Argentina etc. It depends on the opportunities that arise.
What about the other key sectors that we have spoken about, such as real estate, general retail, cars and other sectors?
As population and wealth increase, the demand for cars will also grow. It is a natural function of one with the other. We have a very diversified car business in Bahrain. We are one of the few that has cars ranging from a Rolls Royce to a Chinese-made car.
What is your view on the human capital of your company?
All of our departments in our engineering sectors are headed up by top Bahrainis. I find that Bahraini engineers are very good in the sense that this is their home turf, and they have to excel in their job. It is different when you bring in an expat, who has in his mind to stay for six to seven years before going back home.
Bahrainisation is the right choice. Bahrainis here are making careers for themselves. This is why I have enabled Bahraini engineers to run our factories and some of them have stayed to retirement with me. Others have served a good number of years, because I give them good work and they deliver excellent results. With Bahrainisation, if you do not deliver, you get fired, especially in the private sector. If you take on hardship by travelling overseas to work, the obvious reason why you are travelling is that you want to make money and have a bit of change and excitement compared to your local routine. But excitement dies down after a year or two. You still want to settle in your home; it does not make any difference whether you are Spanish or British. It is never your focus to stay here for longer than a few years, unless someone falls in love with the place, and there are some people who do. But the majority of people only want to go for a two-year contract, and then renew for another two years, and then after that they might decide to go to another part of the world, or go back home. I am talking about the expat leaders, not those at the worker level.
Some of the Asian workers would like to stay here, because it is an improvement compared to what they had. Once they get a certain amount of money to cover their mortgage, people would like to be closer to their culture. Then it comes to the issue of raising kids – the Spanish want their kids to be Spanish, and the British want their kids to be British etc.
The other human element that Bahrainis have is discipline. People have discipline. They can acquire the technical knowledge, and this is one advantage that Bahrain has over some of our neighbouring countries. The workers can be trained. Trainable means that people know the rules of the company, which they have to respect. A lot of the third-world countries miss out on this. The countries that have this kind of discipline have gone a long way – places like Singapore and Hong Kong. For their neighbours that have not, this is because the discipline is not there.
The culture is rooted. If you have a flash of money coming in, you do not keep the discipline.
This comes down to Bahrain as the first Gulf country to find oil and invest in education.
But we were rich before oil too. That is the point I am trying to make. We had civilisation before the oil – we are not like one of these countries where civilization came with oil. We were prosperous in the pearl and marine business. We did not have the same standard of living as that which we are talking about now of course, but we had a good and stable life. All these things are really functions of consistency.
Vision 2030 puts a lot of emphasis on the environment. What is the vision in your company to uphold the environment as something that must be taken care of?
Luckily today the world is moving to one set of environmental standards. Countries meet up on a global level and try to develop one policy. Everybody uses the environment – it is a very journalistic and campaign word used in elections. But the true reality is that we live in an environment and wasting the environment is a waste of money.
If you can combine the two, it starts to make sense. But there are times when you have to waste assets to create other ones. Environmental standards in the world are becoming almost one. It may be that some countries are more conscious of it than others, but eventually, because we are a company that exports, we make sure that we have ISO 1400 environmental standards throughout our company. I produce things to the highest environmental standards, to Western standards, as well as US and Japanese standards, because I export to these countries. I find that it is good to be as neat with the environment as you are efficient with your environment. It is a natural cause and effect. It comes just naturally.
Before you get awarded any project in this country, you have to get environmental approval. We produce the most advanced machinery in terms of the environment. Environmental protection is part of our mission and vision. It comes naturally.
CSR has become a cultural norm in Bahrain, both given the small size of the population and the sense of brotherhood and solidarity in society. What is Al Zayani Investments’ position in this regard?
We follow the Islamic code of Zakat. It is one of the five pillars of Islam, where you take 2.5% of your surplus to spend on charitable work. This group strictly applies this code. Every year we put aside the money from the revenue and use this Zakat money for social responsibility initiatives. We have done a lot of work with that, ranging from public park rebuilds, building a community mosque and setting up a cancer centre in the Bahrain Specialist Hospital. We also give cash to people in need. We do not have to import Western standards; we have our own religious standards that we apply. We do not have to import Ivy League terminology from America for this. We have our own code and we apply it. I think it is effective.
Since you and your brothers have followed your father’s steps towards building higher and higher this diverse conglomerate of companies, what are some of the values and teachings that remain from him and that you apply to the companies today?
The simpler the things are, the more effective they are. Basically, hard work, professionalism and transparency – if you do these things naturally, you will naturally be successful. You do not have to push and pull, and use terminology. It is simple performance. And you get peace of mind at the end of the day, because you are just doing it right. This is how I look at values – being natural and simple, and moving on. No complications.
We always talk about hard work as something we admire and all tend to do, but everybody works in an organisation where you need a leader who inspires you to work harder.
Naturally, you deliver results through people. One way of achieving this is to make people who you work with very important, career-wise and financially. You have to make them enjoy the success with you, in a moral and financial sense. One of the things that I pride myself in is that I have taken many young graduates and made them professionals. They are professionals now. We do it through people. You give them the chance, respect, motivation, and you see the results.