Focused, hands-on investor

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Al Anwar Holdings is proud of what it has achieved during the last year and looks forward to a promising future. At the same time, the company keeps its eyes set on the tasks and goals ahead, says Reji Joseph, CEO, in an interview with Visvas Paul D Karra.

Can you briefly comment about when you joined Al Anwar and how has your experience been in Al Anwar?

I joined Al Anwar Holdings a year ago during the middle of last year. Previously I worked with some of the large investment banks, accounting firms and corporations in the Middle East and South East Asia. Most recently, I was the Director at KPMG Corporate Finance, Qatar.

I have been able to work at a rapid pace to assess and garner enough information to make my initial decisions. This is because of the strong and competent board we have at Al Anwar. My work strategy involves a thorough understanding of the business in operation, as well as the people responsible for its efficient functioning. At the Al Anwar group, it was refreshing to note that the strength of the management as well as the determination and the passion of the employees makes this group great.

NAPCO and Voltamp are two of the big success stories of Al Anwar. Do you plan to continue with the same formula for future investment cycles?

NAPCO and Voltamp were excellent deals. More recently we did a few interesting transactions; and this included our successful sale of a major stake in Sun Packaging and our stake increase in Taageer Finance. This is in line with our strategy. We also have Al Maha Ceramics in our group which has been doing well. Al Anwar is dependent upon the performance of its investments during the holdings period by share of profits and dividends; and at successful exits. The businesses within our group are part of a very dynamic and competitive market.

We have carved out a niche in each of the businesses and we continue to track the frequent changes in technologies and shifts in market dynamics. At the Al Anwar Holding group we stay responsive to market signals and view each shift as an opportunity. We believe that we have developed our capability to constantly relook at our processes, develop new products and enter newer markets. Our track record has given us the ability to anticipate the changing preferences of our customers by understanding the industry trends and visualising new markets. We maintain our operational focus in the business we operate in to optimise our participation.

What are the other companies that Al Anwar is presently involved in?

In Oman we have investments in two listed entities namely Taageer Finance Company and Voltamp Energy and three unlisted companies namely Falcon Insurance Company, Al Maha Ceramics and Sun Packaging Company. We have a few regional investments in Bahrain, Kuwait and India.

What is the basis on which your disinvestment policy works?

Our investment policies which are based on sound investment principles. We seek to time our exit from any of our investments when it matures in its life cycle. We exit an investment when we have completed our mission of taking the entity to the next level and when we believe that the introduction of new shareholders will benefit the entity; this is precisely what we did with Sun Packaging last year and earlier with NAPCO and Voltamp besides others. In Sun Packaging, we did not sell the entire stake because even though we exited, we still believe in the company. So for us, if we didn’t exit we could still be satisfied with the investment.

Do you have any opportunities in the present circumstances by which you can enhance shareholders’ value?

We are looking at a few opportunities and are evaluating them. We have a stringent evaluation process and we participate in opportunities where we believe we can add value – our belief is in “Operational Enhancement” based investment. Our style of investments is through partnerships – one of our core strengths. We shall consider participation where we are certain that we can add value and which pass our robust evaluation processes. We have made it a priority to constantly seek and implement best business practices and we constantly recalibrate ourselves to optimise our position. The current macroeconomic factors remain dynamic in the Sultanate and this will continue to provide Al Anwar with opportunities.

Please share with us some numbers like your company’s present net worth and total investments
Al Anwar Holding’s consolidated net worth as on March 31, 2012 is RO18mn. The present estimated market value of its total investments is RO24.5mn.

Does Al Anwar have any investments outside Oman?

We have three investments outside Oman and these are in Bahrain, India and Kuwait. However our current focus shall be Oman and UAE.

What is the pattern you follow in order to diversify your stakes?

We make no attempt to diversify our investments. We maintain a clear focus on the sectors we follow and companies in which we participate. We are not a generalist investor but a focused and hands-on investor. However we do practice several risk management actions to protect our investments and capital. We have a system of thorough and consistent tracking of the sectors and evaluation of our investments along better risk management practices. This is on account of considerable efforts of the management of the different companies within our group that has helped to shape our progress.

Family owned companies are the dominant market forces in Oman. How do you view such an investment climate as compared to other markets you have worked in?

There are several large family groups here in Oman and these form a very valuable source of business expertise while also being a source of capital. I am truly impressed with the level of sophistication which some of them work with. The family groups here are quite versatile and form a new class of investors which play a huge role in the local economy. I have worked in several markets around the world and each has its own set of dynamics. Oman is different but has its charm of doing international business with a sense of ethics and maturity. The courtesy and politeness which is a part of the Omani culture, is the foremost and the most obvious and powerful impression I have. There is this richness of culture that has been preserved even as there is great modernity all around. I have travelled and lived in several countries and the culture that I find in Oman is both unique and refreshing.

Personal dignity and ethics are the cornerstones to businesses here in Oman. This ensures that governance and fair play are observed. The local businesses are becoming more sophisticated and Oman is sure to make huge progress in the years to come.

And the vision and wisdom of His Majesty Sultan Qaboos bin Said will continue to move Oman forward and reach new heights.

Are there any areas of challenge in your associate or subsidiary companies?

Our performance is related to the performance of each of our individual investee companies. We do not walk away from challenges but see them as new opportunities for growth and efficiencies in our efforts to continue improving our earnings. We are in a phase of a fast evolving market place. Our regional investments have the local environmental and business dynamics. It is also refreshing to note that the MOCI, CMA and the other regulatory agencies have laid the formulation of good corporate governance and transparency along with a robust legal system. This makes the environment extremely business friendly.

Each of our investments has their unique challenges which are inherent to the business and the location in which they operate. However we have a robust and thorough monitoring system and we track the performance of each of our investee companies. We actively participate in the boards and the sub committees. By this participation we add the maximum value to our investments. In our companies we strive to widen the gap with our competitors by strengthening our technological and market leadership. We hope to secure absolute competitiveness and also to survive any market downturns by enhancing overall efficiency. We assist our investee companies by participating in the build-ups of their strategic long term blueprints for growth and direction. We are very hands-on investor and look to use our experience in building business more efficiently and economically.

Due to prevailing global market conditions, the capital market in Oman is facing a major crunch. What is the way forward for investing companies such as yours?

I believe that capital markets will constantly make adjustments. However economies in Europe will be further tested and the issues with borrowings and spending will need to be addressed. The global economy is currently going through several changes. All this will throw us challenges and this will come regularly. I believe that once these challenges are met there will be fresh ones which we will have to tackle. We have taken multiple scenarios’ into consideration and have devised our investment strategy. These are times of great opportunities and investment companies with the right strategy can benefit from this. The advantage we have is that we do not have a fund structure and this enables us to readjust quickly to the changing dynamics. The critical input for success in any business is the ability to use the capital it employs more wisely, and this is more pertinent to our industry.

The past events have shown that we are a sector in transition. We have seen several market stresses on similar business models. The direction the industry is moving towards is apparent if we look at some of the key trends. There is a greater emphasis on prudence, and the irrational exuberance in investing in certain highly volatile sectors, is declining. This is good and it shows the maturity of several of the regional investment houses. However this is not a voluntary turn of events but was a forced outcome of the financial crisis. Perhaps now some key lessons have been learnt and we hope that this message is not quickly forgotten when markets open up again.

While the world is changing, our values shall not change and we are guided by our principles. We continue to manage our business around the evolving needs of the market place, so that we can be at the vanguard of change. To accomplish our goals we have committed ourselves to our principles on what we do and how we do it. 2011 was an interesting year with a challenging economic environment along with the consumption slowdown in developed countries as a fall out of the European crisis.


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