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Dubai: Emirates Investment and Development Company (Emivest) seems to have a flair for seeking good investment opportunities.
The company was formed in 1997 with 14 UAE-based shareholders keen to develop the food processing business in Dubai. The Investment Corporation of Dubai owns more than 25 per cent of the company. Dubai's economic boom soon created new economic opportunities. Emivest is now stepping up its activities overseas. Its most significant acquisition was in June this year when it acquired 80 per cent of Sino Swearingen Aircraft Corporation (SSAC), a US-based executive aircraft manufacturing company. This was the first such acquisition by a Middle East company in the US.
In an exclusive interview with Gulf News, Emivest's chairman Butti Saeed Al Ghandi talks about the company's investment strategies and its new focus on the aviation sector. Born in 1967, he holds a Bachelor's degree in business administration from George Washington University. Al Ghandi is also vice-chairman of Oman Insurance Company, a second vice-chairman of the Dubai World Trade Centre, a board member at Union National Bank and managing director of several companies within the Al Ghandi Group.
Gulf News: Could you describe the nature of Emirates Investment and Development's activities?
Butti Saeed Al Ghandi: The company was started to get into the food processing industry, but when we did business did not look that attractive. In 1997-98, the economic boom had started in Dubai and we moved the money to stock market. There was a phenomenal growth for one and half years. Then we started a joint venture with fertiliser producer Kemira, a Finnish company. We set up a plant in Jebel Ali called Union Kemira. Three years later, something turned us into a private equity firm: we sold the fertiliser company. Normally our culture in this part of the world does not accept selling companies.
We do not sell companies, but create them and hold on to them. A company from Brazil approached us and we sold it [Kemira] to them. Based on that, our focus changed from greenfield projects to acquiring companies and then divesting them after a certain period. We changed our name from Emirates Investment to add the word Development. Private equity is very passive, but we have created a business model whereby we take part in re-engineering a company. We try to find companies that are unique in their segment. We build them and let them acquire other competing companies. In 2004, we went international. We bought two companies in Malaysia.
Which industries are you focusing on?
We are interested in the services, financial and property sectors. We are a multi-investment company. Unfortunately, we have been low-profile. We own 50 companies and our subsidiaries employ about 10,000 people.
What is the significance of the aircraft manufacturing company you have acquired in the US? Is this is your biggest investment so far?
It is one of those acquisitions that normally companies do not think of doing. We worked very hard on this acquisition and we are very proud of it. Being part of Dubai gave us a lot of credibility when we moved towards this deal. We started thinking about the aerospace sector about one year ago. This company came to Dubai to exhibit at the air show in November. We took the lead from there. There was a credit crunch in the US, and this company needed financial fuel and some management. That is where we came in. It manufactures executive jets from A to Z.
What is Sino Swearingen working on at present?
We have just one aircraft programme. In 18 months to two years, we will build the company's capability to manufacture 100 aircraft [per year]. We already have more than 250 plane orders. We are going to be participating in the air show in the US in October. We are going to relaunch the company there. We are re-engineering the company and getting more people. The company has so far delivered 10 planes. It took 10 years to reach the US Federal Aviation Administration's approval stage. They spent $700 million on developing the plane till they got the certification.
There is a growing market for executive jets in the Gulf region. What is your view of this market?
We are going to set up an office in the region. We already have commitments from customers. Next month our plane will come to Dubai. The US used to be the biggest market for executive jets. But now it is 50-50 between the US and the rest of the world. The rate of growth outside the US is higher and it is dominated by demand in the Middle East, Russia, China and India. The GCC is also an important market. One special feature of our aircraft SJ30 is that even at 41,000 feet the pressure inside the cabin is the same as the sea-level pressure.
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