Bukhamseen: Strengthening the Economic Development of Kuwait
Dr. Emad Bukhamseen’s career began at an early age, immediately after earning his Bachelor’s degree to develop his experience by working with his father—Mr. Jawad Ahmed Bukhamseen, the Founder of the Bukhamseen conglomerate—to eventually merge his academic knowledge and work experience to expand the business. Today, he is the Vice Chairman and CEO of the third largest group in Kuwait. He commenced his journey towards success by obtaining many educational achievements, such as a Master of Business Administration from the University of Liverpool and Ph.Ds. in Business Administration from the European School of Management and from the American University in London. He has had an active presence and participated in more than 100 regional and international conferences and training courses in various fields.
The management of the conglomerate’s subsidiaries is characterised by its diverse activities in a variety of sectors, including but not limited to: Investment, banking, insurance, aviation, tourism, industrial, service, media, newspaper daily, logistics, hotels, food and beverages, construction, real estate and development.
Dr. Bukhamseen holds memberships in the Board of Directors and in the top management of companies locally and in the region. He regularly meets with Heads of States and Government officials and has to date received many awards and certificates of appreciation, the latest being Preferred 100 Arab CEO for 2017.
In our Front Cover Feature this month, Dr. Emad discusses the journey that Bukhamseen Group has faced over the years, with an in-depth look into how it runs and its impact on Kuwait.
What difficulties arise when transforming a small family business to one that has interests across several economic sectors in Kuwait? How have you overcome these challenges?
The core business of the group started in real estate. During this period, we had started to create complimentary services. After the establishment of real estate, the need to establish contracting services was seen as a necessity, and further, the establishment of the commercial sector that is banking and other sectors such as oil were following each other to compliment the main business. During the past 60 years, we have managed to cover all these sectors. The major difficulties faced in transforming this small business into a large one was to establish procedures and systems that could create an independent culture in each company. After this, we will be overlooking the performance of these activities through a central system, which supervises the independent management of each sector to establish the direction and the main goals of each company and the corporate group.
What was the Manakh crisis and how did it affect Bukhamseen Group?
The Manakh crisis started in 1982, when there was a sudden increase in share values and volume traded in the region and specifically in Kuwait, whereas trading was predominantly done on margin, with extreme levels of leverage becoming acceptable to the market. The traders were overwhelmed by quick profits with high margins. This in turn pushed valuations even higher, creating unrealistic values of these shares over a short period of time, creating a market bubble. Eventually, and at the first counterparty default, the bubble did burst and the market collapsed after it discovered the weakness of this business model, primarily the counterparty risk. Since Bukhamseen was a main player in the business of share trading and the establishment of group members of some companies, the group was affected by this crisis and, over time, managed to remove itself out from this crisis with strategic solutions. (Although the group was affected by the share market crisis, since it was diversified in various business sectors such as real estate and tourism, it managed to sustain itself through this crisis period.)
What would you say have been the most active sectors in Kuwait in the past twelve months?
All the sectors are down, however predominantly, real estate is playing a major role and most active in the economic activities in Kuwait besides its drop in the last year. There were some activities that have slowed down in the market and this has been noticed in the economic sector. The finance sector has started to become active along with real estate, and is gaining momentum with slow activity and profitability. On another note, banking has been fairly active as well, be it in the stock market or in mergers and acquisitions.
Where do you see opportunities for transaction growth in the hospitality sector coming from in the future?
The main growth that we envision in the future is from the hospitality sector, more specifically international corporate activities from companies interested in entering the Kuwait market and in joining big infrastructure and government contracts.
What is the current state of tourism in Kuwait, and what role does Bukhamseen play in this?
The current state of tourism is from the neighbouring countries and due to the friendly and family attractions in Kuwait (such as restaurants and shopping malls). These activities are well furnished and serviced by the group in conjunction with the hotel business and the travel agencies coordinating together in this endeavour.
What has Bukhamseen achieved in the Education sector? What has been its impact?
Bukhamseen Group has one of the major educational companies in Kuwait, and we are in discussions with major international schools to establish a base in Kuwait for an introduction into the specific education sector of hospitality and culinary education. We believe that this is of great necessity as it is not as efficiently available in the region. The impact will be to create resources for food and beverage, the hospitality business for the local nationals/citizens and even for those in the region. This is a vision from the corporate management level for the future of the sustainability and economic development of Kuwait and the region.
How do you maintain the quality of service that Bukhamseen Group provides?
Bukhamseen, with its multi-functions and industries, always follows the international standards of high quality in its various and diverse sectors. This is done through quality controls that are in place internally and/or internationally (through ISO standards) in the technical field. Bukhamseen Group have employed competent audit teams who conduct their checks financially and technically as per a set schedule. On the other hand, we always pay close attention to our clients and their needs or criticisms with an aim to mitigate the challenges, thereby improving our products and services on a continual basis. This applies to all sectors under the umbrella of the Bukhamseen enterprise. Above this, each company has their team of auditors, risk analysts and quality specialists who brief their respective executive management and Board of Directors on the progress of quality management.
As CEO of Bukhamseen, what responsibilities does a typical work day involve for you?
As the CEO, my main activities are to look over all the companies under the group in different sectors and try to compare the activities with our vision. Further, I get involved with all the companies, specifically in the public relations sector. I find solutions for obstacles on a daily basis and maintain informative reporting to the Board of Directors. Looking at the size of the group and its diverse activities, the main aim is to sustain and maintain stability in the existing lines of business, with improvements by continuing to add brand new activities. A typical day would involve ensuring each of the activities are self-sustained with the capability to run independently.
“We always pay close attention to our clients and their needs or criticism with an aim to mitigate the challenges, thereby improving our products and services on a continual basis.”
Are there any notable upcoming projects that you can share with us?
There are a lot of projects in the pipeline which are still under review stages. One of the major upcoming projects is a mall in the Dajeej area, with multipurpose usage, and it should be considered as one of the landmarks for shopping in the area. Another is the Bukhamseen Square Project, the new headquarters and to house a luxury five-star hotel.
What is your top advice for managing a company in multiple sectors?
My top advice will be to invest in people: finding the right management for every company and setting up an efficient structure with competent team members is key to success. Performance monitoring and strategy reviews should be carried out on a periodical basis.
What would you say are the key factors behind a successful business such as yours?
In my viewpoint, the key factors behind a successful business are (i) to understand the business itself, (ii) to know the market and the competitive landscape, (iii) to maintain the optimal capital structure adequate to each stage in a business’ lifecycle, and last but not least, to have the right pool of Human resources; attention to all these key factors makes every bit of difference and is behind every successful enterprise.
What is the next goal in sight for Bukhamseen?
The goal of Bukhamseen would be to sustain business and keep developing the activities in all core sectors, and to expand into new areas of business locally and internationally, which can adapt and integrate within the Bukhamseen Group, creating synergies and value: key sectoral focus would be attributed to investments in the IT, Health and Education sectors. Furthermore, the Bukhamseen Group grants its attention and budget to social and impact investing, whereas corporate social responsibility is an integral part of our corporate culture.
The Bukhamseen Group, under the leadership and supervision of the Chairman, Board of Directors and the CEO, always aims to add value to the society, locally and regionally. This would include tackling and improving each industry, empowering human resources and workforce. We are very active in sectors that support the economy. Further, our vision is to create a complete network between companies in the group by enhancing current services and products and venturing into fields/new activities that will support and complement the Bukhamseen success story. Although at the end of the day, profitability is our goal, it is not our end target; profitability is a result that is achieved due to consistent efforts and cooperation with various sectors. Meeting specified targets and achieving profits is in demand to sustain the business, however, creativity and upholding the business values, ethics and most importantly, business integrity is a key ingredient that ensures continuous growth, and profitability as the result. In line with the long-term planning structure of the economies, we aim to penetrate into the booming markets, to continue contributing to their growth and to the growth of the economies we are present in, socially and economically.