Focusing on best practices and smart growth, Alghanim Industries leads growth in the region with its progressive approach to business
With a respected commercial history dating back to the late 19th century, the innovative strategies and practices of three generations of the Alghanim family have built Alghanim Industries into the diversified, multi-national conglomerate that it is today.
As early as the 1890s, the Alghanim family was actively involved in the country’s shipping and trading sectors, playing a key part in Kuwait’s commercial development. This leadership role was evident when the Emir of Kuwait appointed Ahmed M. Alghanim, and later his son Sir Yusuf A. Alghanim, to officially represent Kuwait in its successful efforts to bring the Anglo-Persian Oil Company (later British Petroleum) to the country in the 1920s and 1930s.
The family’s commercial pursuits continued to grow and diversify with its expansion into construction, automobiles, packaged foods, and other local support services. A key step in the company’s evolution was its role in introducing American-made vehicles into Kuwait in the late 1940s through its association with General Motors (GM). From these beginnings, Alghanim Industries has grown into one of the largest, privately-owned companies in the Gulf region. The company now operates across a broad spectrum of industries, including advertising, automotive, consumer credit, engineering, fast-moving consumer goods, insurance, manufacturing of insulation and pre-engineered building structures, office automation, electronics and home-related retailing, shipping services, talent development and travel.
Employing over 12,000 employees worldwide, Alghanim Industries is committed to maintaining world-class standards. A multi-national business with operations in forty countries, it is a multi-billion dollar conglomerate with more than thirty businesses. The company has a strong presence in the Middle East, India and Turkey, with operations also extending into Eastern Europe, Africa, East and Southeast Asia. Keeping an eye on ever-evolving market trends, Alghanim Industries continually seeks smart growth opportunities in its core businesses as well as in new and complementary business sectors.
A culture built to last
Alghanim Industries’ progressive attitude and performance-driven culture have long been among its defining characteristics. In the 1970s, Yusuf’s son, Sir Kutayba Y. Alghanim, envisioned and implemented a modern, international-style management structure, decentralising the company’s decision-making processes to managers closest to the customers, a unique and fairly radical approach in the region at the time. The company’s modern management practices and unique culture made it the business partner of choice for many of the world’s leading brands, including Xerox, Whirlpool, Frigidaire, Hitachi, Haier, Philips, British Airways, American Express and Saint Gobain.
Alghanim Industries’ current senior management team continues this progressive tradition, bringing an impressive mix of world-class experience and cultures to the table.
The company is led by Omar K. Alghanim, the company’s Harvard-educated chief executive officer, who worked in Morgan Stanley’s banking division in London prior to joining Alghanim Industries. He is supported by an experienced executive team, all of whom have held senior positions with global leaders such as General Electric, General Motors, Tyco International and Goodyear. The next level of senior management hails from over fifty different countries, bringing impressive levels of expertise and diversity to the company.
This talented group of leaders has fostered a modern business culture and management philosophy within the company. This culture is based on a set of core values, including straight-talking, customer-centricity, employees as core assets, diversity and respect, empowerment, meritocracy and teamwork.
These values are embraced by the company’s owners, the management team and its employees at all levels. With this culture in place, it is no surprise that Alghanim Industries has been recognised as one of Hewitt Associates’ Best Employers in the Middle East and an Asia’s Best Employer Brand.
Doing the right thing
In a region not subject to many of the regulatory requirements typical of Western economies, Alghanim Industries is one of the few privately held companies to proactively implement a whole host of corporate governance best practices. Seeing it as the right thing to do for the health and sustainability of the business, Omar Alghanim made the establishment of a robust corporate governance framework a top priority when becoming CEO in 2006.
“Privately owned companies have a choice as to how seriously they approach corporate governance. For us, the decision was easy, given the company’s values and culture. We have worked extremely hard to create an environment that is transparent and fair for all our stakeholders. Our investment in strong corporate governance practices is already producing results, from improved banking relationships and stronger internal controls to a more informed and engaged workforce,” says Omar.
The achievements of the past five years have been the result of the teamwork and dedication exhibited by the company’s business and functional leaders. This teamwork is encouraged by an organisational structure that gives the managers of key governance functions, such as controllership and treasury, dual reporting responsibilities to business and functional heads. The functional heads are responsible for maintaining consistency and compliance to the standards set out by the company.
To establish this consistency, policies were developed that clearly outlined the company’s expectations for employees’ conduct with vendors, customers and other employees. In addition, an independent compliance department was created, reporting directly to Sir Kutayba Alghanim, the company’s chairman. As a result, employees can now report suspected ethical violations, fraud, or other inappropriate behavior, directly and confidentially to compliance officers, without fear of retribution.
In addition, the finance organisation prepared the first-ever financial policies and procedures manual, providing a comprehensive framework to ensure the integrity and consistency of financial reporting, in full compliance with International Financial Reporting Standards (IFRS). Concurrently, the company voluntarily increased its disclosure and reporting to its lenders, which was publicly recognised by key bankers in the region. This provided yet another clear signal to the market that Alghanim Industries was a regional leader in adopting best practices.
In 2009, a strategic initiative was launched to significantly strengthen the company’s internal controls. Over the past two years, over 700 key control processes have been identified, documented and successfully tested. To support this effort, Alghanim Industries was one of the first companies in the region to implement the best-in-class BWise governance, risk and compliance software, enabling the efficient monitoring and administration of the program. The company is now in the process of obtaining an attestation from its external auditors confirming that its internal control framework meets COSO III standards, a designation that will set it apart from its peers in the region.
Winning the war for talent
Alghanim Industries’ early adoption of progressive management practices is not limited to corporate governance alone. In fact, the company is recognised as a leader in the region for its integrated and systematic process of attracting, assessing, developing and retaining leadership talent. Its talent strategy is defined by a number of key components:
Leadership development: Alghanim Industries believes in preparing its people for future top-level positions, supporting the retention of top talent while also building a leadership pipeline. Based on international best practice, the company’s programmes offer an integrated learning experience that includes classroom-based workshops, business simulations, experiential and e-learning components, and executive coaching.
Succession management: The company’s succession management strategy enables it to identify qualified internal candidates who are ready to move into key leadership positions. It includes the development of talent profiles, the identification of high potential employees, talent calibration and semi-annual talent review meetings. As a result, 79 percent of senior management positions in 2011 were filled internally, compared to less than 20 percent in 2005.
Performance management: Alghanim Industries believes that effective performance management is an ongoing process that should be implemented continuously throughout the year, building clarity, alignment and engagement with employees. Key elements of the Alghanim approach include goal setting and alignment, performance monitoring and support, as well as career development planning.
Building on success
As the company implemented these progressive corporate governance and talent-focused strategies, it also continued to invest in key development projects to strengthen and grow its portfolio. Some of these projects include the company’s 2007 acquisition, together with Saint-Gobain, of 95 percent interest in Izocam, the leading insulation company in Turkey.
In 2008, Alghanim Industries opened the largest GM service centre in the world to serve the Kuwait market and expanded into South East Asia with the opening of Kirby Building Systems’ pre-engineered building manufacturing facility in Vietnam. In addition, over the past five years, the company has solidified its leadership position in the Kuwait retail market by opening 12 new X-cite consumer electronics stores, as well as recently launching the multi-category xcite.com e-commerce website. Looking to the future, the company will continue to implement its smart growth agenda, both within the region and beyond, examining new market sectors and identifying business opportunities that will complement and expand its existing diverse portfolio.
Alghanim Industries has a long heritage as a successful commercial enterprise, with a proven track record of capitalising on economic and market changes. As a result, this diversified multi-national corporation has built a reputation for market leadership and is committed to becoming the most successful and admired company in the region.