History


 

A Journey through Time


Abdulkadir Al Muhaidib
May he rest in peace
 

Al Muhaidib Group has followed a distinguished path since its foundation in the 1940s. Beginning as general traders, the founder and his brother, and later his sons and partners, have become manufacturers, grocers, builders, industrialists, bankers, investors and financiers.

Today, Al Muhaidib Group is a major owner of real estate; it has important strategic investments in leading food companies and the largest supermarket retailer in Saudi Arabia; one of the Kingdom's principal banks, a leading insurance company, as well as in funds and other investment vehicles; The Group undertakes major infrastructure, energy and water treatment projects, and has important holdings in manufacturing, contracting, materials supply, environmental and recycling companies.

Al Muhaidib Group is a highly diversified investor in multiple economic sectors. It is a pioneering partner in development of Saudi Arabia and the Middle East. A legacy has been created for future generations.

The story begins in Basra in the early 1940s. And it starts, as these stories often do, with a small trading company and two young men who were up and working before daybreak.


A Journey through Time: 1940s and early 1950s
"Fortune is Distributed Before Dawn"
 

A thousand palm trees rustle in the faint breeze coming from Shatt Al Arab. It is before dawn on a day that promises to be hot and humid – Basra is not known as the hottest city in the world for nothing. Hardly anyone stirs except for two young brothers quietly picking their way through the old streets, along the bank of Ashar's Creek towards the Amogaiz Indian Market. They are determined to be the first in line to get the best bargains and hear the market news before any of their competitors. Every day they start before dawn.

For centuries Basra has been one of the most important trading ports in the world, bringing agricultural produce and livestock from the lands of Iraq and Iran, together with imported goods from the Indian sub-continent, China and south-east Asia. Most things that can be easily transported are on sale: manufactured items, wheat, barley, a rich array of spices, fabrics, carpets, rice, tobacco leaves, dried lemons, calico and copper pots, incense burners and dates; above all dates.

It is 1943 and traders come to Basra from the Indian Sub-Continent, South East Asia, Iran and other countries. There are many from the central and eastern provinces of Saudi Arabia who come to trade and to import goods into the deeper parts of the Arabian Peninsula.

The young brothers have now reached Amogaiz. In the early 1940s they are establishing their business – and their reputations. They are already well-known to the bleary-eyed merchants as "the brothers who come before dawn." They are becoming recognized, a key to business success. The merchants welcome the young men, so full of enthusiasm and keen spirited and give them the best prices and the earliest news of the day. In return, the brothers share their knowledge of modern banking techniques – letters of credit, mortgages, bonds, escrow accounts, overdrafts and the workings of foreign exchange. They give their advice freely, building the trust and relationships that will, in future years, allow their business to prosper.

The two young brothers, Abdulkadir and Abdullatif Al Muhaidib, come from a long line of traders from the Arabian Peninsula to have sought their fortunes in the souks of Basra. When they were not in Amogaiz, daybreak would find them at the other great market, Hanna-Sheikh Bazaar. And when the weather was hottest, they travelled up-country to seek relief at Al Jazirah, the land between the Tigris and Euphrates, near Baghdad, where they traded for Iraq's rich farm produce: grains and fruits of all kinds, meat and dairy products to be sent to Saudi Arabia. In return, they sold produce from around the world to the farmers of Iraq.

Later still, the brothers will establish an office in Baghdad, though Basra will remain the centre of their operations. With the growth of their business and the arrival of prosperity, the brothers married and raised families. Work is hard, but they had never been afraid of that. As the countries of the region started to benefit from the export of oil, so demand began to grow, along with a call for a wider choice of imported items: food, clothing, utensils and commodities. A particularly fast expanding sector was in the import and sale of building materials for the construction boom in the Arabian Peninsula. Helping to meet the needs of this sector would take the brothers' company into a new phase.

A key saying Abdulkadir Al Muhaidib passed onto his sons was to start early on projects, on discussions and in seizing opportunities: "Fortune is distributed before dawn." He had shown the truth of that himself.

A Journey through Time: The late 1950s and 1960s
"Will I be able to Deliver the Quality?"

Trading has been part of the Al Muhaidib family tradition for centuries. The modern era for the family began in food and general trading business at the port of Basra, from where they served the hinterland of Saudi Arabia and the Gulf.

The founders built their company through endeavour and ingenuity. Buying food, ironmongery, construction materials and garments and selling them wholesale to merchants from Saudi Arabia and the Gulf, and to farmers in Iraq. As the oil industries began to generate prosperity, so their trade grew and they formed long-lasting connections back in their homeland.

Then in 1958, all their years of effort was threatened by the revolution in Iraq making conditions for business extremely difficult for a while. At the same time, the Saudi and Gulf ports were fast developing, so the brothers relocated to form new enterprises: Abdullatif to Dubai while Abdulkadir went to Dammam to re-establish his food and building materials business. Seeing the incredible rate of construction around him in Saudi Arabia, he was soon importing steel, timber and cement using the hard-won experience he had learned in Basra to guide him in his new ventures.

Saudi Arabia's huge distances daunted some, but to Abdulkadir they were an opportunity. He formed a partnership with Mohammed Al Nafea, a Jeddah businessman, whereby they would both import goods and supply them to each other for marketing, splitting the profits 50-50. It was a traditional way of doing business on trust, and it worked well. Formed as Al Muhaidib Nafea, the new company now had country-wide coverage and gave Al Muhaidib's operations access to the well-established Jeddah market.

Oil earnings in Saudi Arabia ushered in what was probably the fastest pace of development ever seen in any part of the world. Abdulkadir Al Muhaidib responded with vision in anticipating needs, grasping opportunities early and understanding trends. He was to start many more businesses and partnerships in different areas, using his experience and knowledge of sectors that were related or similar in structure. When planning a new start-up he would ask himself the question: "Can I do it; will I be competitive, and will I be able to deliver the quality?" It is a message that is remembered to this day when planning new ventures.

A Journey through Time: 1970s
"Trading Needs Real Estate"

As the economies of Saudi Arabia and the Gulf swiftly expanded, so did the needs of their peoples. From being a supplier of food and building materials, Abdulkadir Al Muhaidib expanded his business into related areas where he recognized potential. Food importing led to food production; building materials supply generated contracting; banking gave rise to investment, and supply to government agencies opened the door to working in partnership with official bodies. The formation of two companies, Al Muhaidib Technical Services and Al Muhaidib Contracting addressed growing demand in construction. An investment was taken in the newly formed Saudi British Bank and Abdulkadir became one of the founders of Savola, destined to become a food and retailing giant.

Above all, Abdulkadir appreciated the value of developing real estate, understanding the importance of owning rather than renting land and premises. "Trading," he would tell his sons, "needs real estate."

Following the establishment of his business in Dammam, he opened operations in Riyadh that, from 1970, were run by the eldest of his sons, Abdulhameed Al Muhaidib. Abdulhameed showed early promise but tragedy struck when he passed away in a warehouse accident in the Saudi capital in 1972, may he rest in peace.

The family was devastated and it hastened the arrival in the business in 1974 of the second son, Sulaiman, who was in med-school. Sulaiman Al Muhaidib took up residence in Riyadh where he has remained and, in time, became Chairman of Al Muhaidib Group.

The plan was to have Group offices in each of the Provinces: a head office in Dammam, a significant and growing presence in the Saudi capital of Riyadh and, by the end of the 1970s, a Jeddah operation. In 1979, on the ending of the partnership with Nafea, the Group was renamed A. K. Al Muhaidib and Sons. The third son, Emad, took up residence in Jeddah after graduating from university and would go on to set up United Feed, the Group's major undertaking in the animal feed business, eventually becoming Group Vice Chairman.

In 1982, Essam, the youngest brother, started in Dammam after finishing his university studies, and would become responsible for the Group's interests in the Eastern Province. Essam is now the Group Chief Executive Officer after taking on several capacities starting in sales while still in school, and continuing after he graduated university with Al Muhaidib Foods, then later with Al Muhaidib Contracting where he worked his way to head of operations.

Supervising all was the father, Abdulkadir. He remained committed to the future and grasped what benefits technology could bring. Faced with the high cost of buying one of the first fax machines to become available in Saudi Arabia, he bought three - for each of the Group's main offices. He remained actively involved in the businesses he had created until he passed away.

A Journey through Time: 1980s
"Trust Needs to be Earned"
 

Through the 1980s the Group continued to expand to meet market needs. Its modus operandi for new ventures remained true to the spirit of the founder:
 

  • to open in areas related to current business where a presumption of existing expertise could be made;
  • to engage with others in joint stock or joint venture partnerships, and to share the concept of ownership with new investors;
  • to be at the forefront of trends, especially in terms of the needs of Saudi Arabia and neighbouring core markets,
  • and to further separate the concepts of management and ownership.


In 1980, Bawan was founded as a joint venture with Abdullatif and Mohamed Al Fozan Company. Bawan Holding today has grown into one of the leading private sector industrial enterprises in the region with its own manufacturing operation in metal, timber, cement and electrical transformers.

Al Muhaidib Metal Industries followed (1982), then United Feed Company (1983) selling produce to the farming market. In 1985, Al Muhaidib Land Transport was formed to provide a distribution resource for Group companies. Al Muhaidib Hardware commenced operations supplying the construction industry. Each new venture was interrelated and could build upon the synergies of the growing organisation. Just as Emad Al Muhaidib led the foray into the animal feed business, so his brother Essam spearheaded a move into the fast expanding retail market.

Abdulkadir engaged in new ventures with other in forming Gulf Union Insurance and Property Company, formed in Bahrain 1982. In 1984 a stake was taken in the significant start-up, Riyadh Cables and in 1988 United Wood Products began operations.

Reputation had always counted for a lot in the Arabian markets, and with the coming of greater opportunity so this began to assume yet more significance. Again, the words of Abdulkadir Al Muhaidib were important: "Trust needs to be earned with everyone," he had advised, "and you should always hold yourself to high standards."

 


A Journey through Time: 1990s
"Address Problems Immediately"
 

The founder of the Group, Abdulkadir Al Muhaidib, had always been open to working in cooperation and partnership with other businessmen. Now this took on a new dimension. During the 1990s, the emphasis started to change towards investing in businesses and financial markets, which included a focus on the new and expanding stock markets of Saudi and the Gulf, Egypt and on international bourses.

The importing and distribution of food, especially, rice had been from the start a major area for the Group. Now, the decision was taken to invest in production. A rice mill was opened in Haryana in India in 1992 producing basmati rice, then in 1995 Reem Rice Mills opened in Lahore with what were Pakistan's largest rice cleaning, drying and storage facilities. Kawther Grains in the Punjab commenced in 1999.

In the 1990s, the fast-growing Savola extended its operations into plastic packaging, sugar refining, retailing and fast foods, and factories were established in seven countries outside the Kingdom. From a base of 200 employees, Savola and its subsidiaries today have a workforce of nearly 24,000 people.

The Group launched "Giant Stores" Supermarkets in 1990, one of the pioneers in the wholesale retail markets. The company thrived and reached 14 supermarkets, and by 2008, they were acquired by Panda, in a share swap agreement. The landmark transaction inspired a 2013 deal, which saw Al Muhaidib Group swap its new shares in Panda, along with original shares in Savola Food Company for shares in the publicly listed Savola Company, which made Al Muhaidib Group the largest single shareholder in Savola today.

Another major venture that was established in the 1990s in concert with others was Arabian Pipes, which commenced manufacture and supply of carbon steel pipes in 1996.

The founder, Abdulkadir Al Muhaidib, passed on many highly valuable messages for his successors. One of the most important was to identify and address potential conflicts early. "Problems don't solve themselves."


A Journey through Time: 2000 to 2010
"Build Relationships with Everyone"

Growth of the Group imposed its own challenges. Diversification, while absolutely important, presented risks in new, untried areas. Greater size can mean that operations are harder to manage as systems come under strain and processes are outgrown. Opportunities can be missed.

The operating environment in the first years of the 21st Century was transformed, often at bewildering speed. It was affected by new technology, changing market demand and significant rule change. The liberation of business legislation in Saudi Arabia ushered in huge new competitive forces; government sought greater partnership with the private sector; economic diversification from oil gathered momentum; demographic pressures impacted education and training, while environmental concerns changed industrial applications.

This is when the wisdom of gradually moving from operational management to investment management became apparent. The Group had anticipated the change of business conditions and was now well placed to plan strategically and rise to the new challenges. Increased emphasis was placed on co-investing which allowed the Group to share in a wider range expertise and resources.

In 2000, Middle East Paper Co, MEPCO, was formed to recycle paper and board, while utilising wastewater in the production process. Four years later it launched its own subsidiary, Wasco, collecting and recycling waste. In 2015, MEPCO was a listed company in Tadawal stock exchange.

The foundation of the joint venture ACWA Holding in 2002 provided a business vehicle to meet demand for water treatment, power generation and the management of utilities from the private sector.

Demographic pressures spurred expanding needs for real estate development and the Group helped found Al Oula (2002), which led to the partnership between Al Oula and Emaar in 2004. In 2007, Rafal was formed.

Abdulkadir Al Muhaidib believed that all businesses and individuals have something to offer and that it is important to establish the widest possible network of associates. He advised. "Build relationships with everyone," and this has continued to be a guiding philosophy as the trading house became a company, the company became a group, and the group became an investment conglomerate.

A Journey through Time: From 2010 and beyond
"Always Look to the Future"

The population of the Kingdom of Saudi Arabia is expanding at between 2.5 and 3.0 per cent a year, which means that over every 25 years or so, infrastructural support has to double in size. In the decade from 2011 to 2020 this means the demand for millions of new homes, thousands of new educational establishments and medical facilities, hundreds of thousands of kilometers of additional roads, a new railway network and six completely new economic cities in Saudi Arabia.
To meet the needs of this growth is more than a matter of commercial fulfilment: it is also a national duty!

Al Muhaidib Group is shouldering its share of this responsibility through companies which it has formed jointly and with others over the past 70 years and new ventures inaugurated in the present era. The Group is helping to provide financial opportunity to the general public by opening investment in companies such as Gulf Union Insurance and Bawan Holding.

Al Muhaidib Social Foundation sponsors social and charity initiatives for those less fortunate. It is involved in educational and investment initiatives to stimulate the spread of expertise, opportunity and to underpin welfare. Members of the Al Muhaidib family are sought for their expertise and sit on the boards of community and charitable groups, educational and social establishments.

Special consideration has been given to creating employment and personal skills development for nationals in its domestic markets. The Al Muhaidib Group support projects to stimulate entrepreneurship among young people and lends its knowledge to help others start along the same path in business trodden by the founder of the Group, his sons and grandsons. Al Muhaidib Group is moving into a new era focused on domestic demand, regional needs and increasingly, international opportunity. The vision is exactly what it should be: "Always look to the future," said Abdulkadir Al Muhaidib. He often added that he would like to come back every fifty years to see how things were coming along.

Inoitiated activities in Basra mainly in foods 1943

The Al Muhaidib Group has followed a distinguished path since its foundation in the 1940s. Beginning as general traders, the founder and his brother, and later his sons and partners, have become manufacturers, grocers, builders, industrialists, bankers, investors and financiers.

The Group has passed through different phases from being primarily hands-on operational managers, to the forming of partnerships and the of sharing expertise, and the overseeing of the management of its investments.

Today, the Group is a major owner of real estate; it has important strategic investments in leading food companies and the largest retailer in Saudi Arabia; shares are held in one of the Kingdom's principal banks; we are heavily involved in major infrastructural, energy and water treatment projects; there are important holdings in manufacturing, contracting, materials supply, environmental and recycling companies. The Al Muhaidib Group is a highly diversified investor in multiple economic sectors. It is a pioneering partner in development of Saudi Arabia and the Middle East. A legacy has been created for future generations.

The story begins in Basra in the early 1940s. And its starts, as these stories often do, with a small trading company and two young men who were up and working before daybreak.

 

 

Inoitiated activities in Basra mainly in foods 1960

The Al Muhaidib Group has followed a distinguished path since its foundation in the 1940s. Beginning as general traders, the founder and his brother, and later his sons and partners, have become manufacturers, grocers, builders, industrialists, bankers, investors and financiers.

The Group has passed through different phases from being primarily hands-on operational managers, to the forming of partnerships and the of sharing expertise, and the overseeing of the management of its investments.

Today, the Group is a major owner of real estate; it has important strategic investments in leading food companies and the largest retailer in Saudi Arabia; shares are held in one of the Kingdom's principal banks; we are heavily involved in major infrastructural, energy and water treatment projects; there are important holdings in manufacturing, contracting, materials supply, environmental and recycling companies. The Al Muhaidib Group is a highly diversified investor in multiple economic sectors. It is a pioneering partner in development of Saudi Arabia and the Middle East. A legacy has been created for future generations.

The story begins in Basra in the early 1940s. And its starts, as these stories often do, with a small trading company and two young men who were up and working before daybreak.

 

 

Inoitiated activities in Basra mainly in foods 1973

The Al Muhaidib Group has followed a distinguished path since its foundation in the 1940s. Beginning as general traders, the founder and his brother, and later his sons and partners, have become manufacturers, grocers, builders, industrialists, bankers, investors and financiers.

The Group has passed through different phases from being primarily hands-on operational managers, to the forming of partnerships and the of sharing expertise, and the overseeing of the management of its investments.

Today, the Group is a major owner of real estate; it has important strategic investments in leading food companies and the largest retailer in Saudi Arabia; shares are held in one of the Kingdom's principal banks; we are heavily involved in major infrastructural, energy and water treatment projects; there are important holdings in manufacturing, contracting, materials supply, environmental and recycling companies. The Al Muhaidib Group is a highly diversified investor in multiple economic sectors. It is a pioneering partner in development of Saudi Arabia and the Middle East. A legacy has been created for future generations.

The story begins in Basra in the early 1940s. And its starts, as these stories often do, with a small trading company and two young men who were up and working before daybreak.

 

 

Inoitiated activities in Basra mainly in foods 1980

The Al Muhaidib Group has followed a distinguished path since its foundation in the 1940s. Beginning as general traders, the founder and his brother, and later his sons and partners, have become manufacturers, grocers, builders, industrialists, bankers, investors and financiers.

The Group has passed through different phases from being primarily hands-on operational managers, to the forming of partnerships and the of sharing expertise, and the overseeing of the management of its investments.

Today, the Group is a major owner of real estate; it has important strategic investments in leading food companies and the largest retailer in Saudi Arabia; shares are held in one of the Kingdom's principal banks; we are heavily involved in major infrastructural, energy and water treatment projects; there are important holdings in manufacturing, contracting, materials supply, environmental and recycling companies. The Al Muhaidib Group is a highly diversified investor in multiple economic sectors. It is a pioneering partner in development of Saudi Arabia and the Middle East. A legacy has been created for future generations.

The story begins in Basra in the early 1940s. And its starts, as these stories often do, with a small trading company and two young men who were up and working before daybreak.