Who dares wins

In a rare interview, Mohamed Alabbar talks to Anil Bhoyrul about poverty, power, mistakes – and Emaar’s share price.

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By  Anil Bhoyrul Published  July 23, 2006

|~|emaar-200.jpg|~|Ambition: Alabbar is looking to revive earnings through a massive expansion programme.|~|The interview with Mohamed Alabbar finishes, and the boss of Emaar is busy putting his papers away. Next to him, two photographers are packing up their lenses, and Alabbar’s public relations advisor has already left the room. It is all over. Or at least it seems that way. Suddenly, Alabbar looks across the office again with a fixed gaze. There’s something he forgot to say. Then, unprompted, he finally comes out with it. “You know what separates the men from the boys? Do you know what? It’s when you have to run a very large publicly listed company, and every 90 days you have to report the figures. You have to explain exactly what you’ve been doing. No excuses, just results. That’s what separates the men from the boys.” He should know. Alabbar “the man” is no ordinary boss. Emaar is now the world’s biggest property company by market value. Its annual profits are in the billions of dollars – just last week it reported a 21% rise in half year profits to US$1.383 billion. The iconic Burj Dubai may be the project that defines Emaar on the global stage, but Emaar is now well and truly a global company, with billions of dollars invested in Egypt, India, Morocco, Pakistan, Saudi Arabia, Syria, Turkey and Tunisia. As for Alabbar himself, his role as director-general of Dubai’s Department for Economic Development means that he is one of the most influential businessmen in the UAE. Some would argue he is one of the most powerful Arabs on the planet. Away from the deals, there are speeches, awards and now a near celebrity status to contend with. Not just in the Arab world, but across the planet, it seems everyone wants a piece of Alabbar these days (including Emaar shareholders, who have seen the company’s share price dive 30% so far this year). But strangely enough, relatively little is known about Alabbar “the man”. Just who is he? Where did he suddenly come from? And what really makes him tick? Alabbar is quick to give most of the credit to Dubai’s Ruler Sheikh Mohammed bin Rashid Al Maktoum. “You know what he did? He taught me to be daring,” says Alabbar. That he certainly has been – pushing the boundaries of his business on an ongoing basis. In only the first half of this year, Emaar has announced US$21 billion worth of new projects, with a similar amount of new plans on the drawing board. Most of them are the result of Alabbar’s permanent drive, enthusiasm and passion for the job. But it wasn’t always this way. “I never thought I would end up doing all this. It was different circumstances at that time. I wanted to make sure that I could come back (from university) and help my family survive. That was it. “There were twelve children in our family, so priorities were different. The focus was on how to survive, how to make sure we have a roof.” He adds: “But God has his own way with all of us. They call us ambitious some times. You could say God has given me the roof, I’ve made everybody comfortable, my job is finished now. Or you say where do I go next. I was able to achieve that. Maybe I can achieve other things.” Alabbar – who won a scholarship to Seattle University – says his father has been another big influence on his life. “I think it’s in the genes. I’m a copy of my dad. I was sitting with my dad about a week ago, and he was talking to my son. He was talking about his seaman days. He said the merchants who wanted to give him their goods for Pakistan or Somalia, they knew one thing about him; if he decides do something, it will be done. There is no other focus that he will have. What he’s saying is that he is very much an ambitious person. If he puts a plan together he will execute it. I am the same.” Some would argue Alabbar has been over-ambitious. Emaar’s Vision 2010 strategy will see the company diversifying into retail, leisure, hospitality, health, education and finance. It makes the numbers harder to judge; in February this year Emaar posted a 180% rise in profits to US$1.3 billion – only to see the share price fall to US$5.44, its lowest point in six months, and less than half its value last summer. Some analysts pointed out that earnings were in decline, and that profits were inflated by the sale of Dubai Bank – read another way, Emaar had posted its third consecutive decline in quarterly profits. Respected Shuaa Capital fund manager Joe Kawkabani said at the time that Emaar shares were “too sensitive” to talk about. Many Emaar shareholders, sitting on big losses, are very, very worried. Not Alabbar. “I’m not worried but I carry it in my heart. I feel for them, not because the company is not doing well, but there are market forces in the region that are beyond our control. There is greed that is beyond our control, and that’s human nature." He continues: “I do feel for them. I know it’s not my responsibility because I can’t control the market forces. During the dotcom boom, New York taxi drivers were doing the same thing. When greed comes in during the boom time, you get the educated guy who will analyse everything. Then you get a lot of guys who are also participating but not at that level. Ignorance is a big issue, but don’t underestimate greed,” he explains. To be fair, few analysts would advise against Emaar shares in the long term. And the quality of the firm's projects is often second to none: the Burj Dubai, though two years from completion, is already widely seen as a piece of both architectural and engineering brilliance. The company’s US$20 billion Saudi Economic City may prove another landmark project, while new deals in Morocco and Syria are likely to keep the positive headlines rolling. Alabbar though, is refreshingly honest. He admits the journey here has been far from easy. “The game is so much bigger now, but I feel more comfortable because I’ve been through so many alleys. I think I will make some mistakes, but not as bad as in the past. “Of course we made mistakes in market forecasts, in human resources capability. We made mistakes in choosing the contractors we needed to use to deliver to our customers. We made mistakes by going to good contractors who just had not done jobs of this size. As I result I’ve faced my customers with delays, or sometimes issues of quality.” He adds: “Also, it’s learning that the competitive environment around us is not what we used to think of. Our shareholders' expectations have changed. We have always been pushing our numbers up. I always begin with the end in mind. I always thought I was cautious and looked for 20% increases, then you get to US$1.5 billion net profit and that 20% is suddenly very different to when you are making US$100 million. I think with experience you become more resilient. You learn your way around, you focus, you concentrate.” That he has been doing. Alabbar has stepped back from much of the daily administrative work involved in running the world’s biggest property company, but he still chairs the company’s design workshops every two weeks – bringing together the top designers from every Emaar project, and personally looking over all their work. To say he is a “perfectionist” is an understatement. Take, for example, the paving stones that will be laid around the Burj Dubai. Alabbar told his designers that he wanted them to be of better quality than at the Champs-Elysées in Paris. To be sure, he has also made the contractors lay the very same stones around his house in Dubai. “My wife was yelling at me this morning, asking me what was going on outside our house. I told her don’t worry, it will be just four more days. I want to see every one of these stones, walk on them, feel every inch of them. What I do has to be better than what they have in Paris,” he says. Alabbar adds: “We are keen on progress, which takes many shapes. I’m not the type of person who draws up a plan and leaves it in place. I draw up a plan, and as I'm 30% of the way through, I think maybe we can expand it. Or maybe we keep it the same size but the plan can be executed faster. If you’re a progressive person you want to move on with life.” The Emaar boss has done more than his fair share of moving on. Outside the company, he is chairman of the UAE Golf Association, chairman of Singapore sports retailer RSH Limited, and a joint venture partner with Tan Sri Syed Mokhtar Al-Bukhary in the Gulf International Investment Group (GIIG) for a range of projects in Asia and the Middle East. But it is within his role as director-general of the Dubai government’s Department of Economic Development that Alabbar has had the most impact – pushing for fast track development across the emirate. Under Alabbar’s guidance, the Department of Economic Development, which he set up in 1992, has met with notable success in its move to initiate innovative public policies to strengthen the emirate's trade and business environments and establish a culture of transparency and openness. The retail and tourism sectors continue to be re-energised through focused annual festivals, like the Dubai Shopping Festival and Dubai Summer Surprises. His strong relationship with Dubai’s ruler Sheikh Mohammed has been of paramount importance; and Alabbar is in no doubt of the Ruler’s vision and guidance. Alabbar explains: “He doesn’t just motivate and support you, he also understands the world order. He knows what’s going on India and China. He taught us about having a positive state of mind. I mean, for him to support Sultan bin Sulayem (the chairman of Dubai Ports World) in taking over P&O, that was daring. Maybe it can fail, maybe the management won’t perform, maybe the market will crash. But no, let’s be positive and do it.” He adds: “He has a very simple philosophy, which is that if we don’t go and try things, we will just sit back like many other developing countries. People say ‘don’t do that, you might fail. Just sit around instead'. Not him. He created the culture, and the art of speed.” There has been a great sense of speed in everything Alabbar has ever done; even spending an hour in his company is a fast moving, ever changing experience. No question is avoided, no passion is hidden, and no secrets are hidden. He has done a lot, more than most. Nobody can argue with that – not even Alabbar himself. “Is it really power or is it achievement? Of course I like to be recognised as a person who has achieved much and contributed to the development of his country. The sense of achievement is the most important thing. Everything else will follow. As you achieve things, people get to know you, the media come after you and you become a public figure. But where is the value in that? Isn’t it about what you’ve actually done?”||**||

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