Admiral Alfred Thayer Mahan, the American naval strategist, called the region the “Middle East,” a name that has stuck though it has negative colonial connotations and is geographically inaccurate. There is no unanimity on which countries constitute the Middle East, with their number varying between 14 and 27 depending on the way the term is interpreted. Today the Middle East is experiencing tumultuous economic changes, with several sectors like real estate, retailing, and telecommunication experiencing explosive growth. This essay presents a broad range of company profiles (in alphabetical order by country) that are representative of the region’s economic vibrancy.
Algeria, Bahrain, and Egypt
Sonatrach, Naftal, and Sonelgaz are generally considered Algeria’s top three companies, followed by airline carrier Air Algerie. Sonatrach is a state-owned integrated oil and gas company having a capacity of 230 million tons, making it one of the largest corporations in Africa. Established in 1963, its principal activities are research, exploration, production, transport, processing, marketing, and distribution of oil products and derivatives of liquid and natural gas hydrocarbons. The company also operates in Libya, Mali, Niger, and Peru.
Gulf Finance House is a publicly listed company of Bahrain set up in 1999 in the international Islamic banking industry. It recently became the first Islamic bank to be listed on the London Stock Exchange. During its seven years of operations, Gulf Finance has successfully launched projects and investments worth US$12 billion. Its paid-up capital is US$239 million and authorized capital is US$300 million. Gulf Finance has provided Islamic investment banking services with an emphasis on regional development, capitalizing on an increasing willingness among Islamic investors to back regional opportunities.
Orascom Telecom Holding is considered Egypt’s first multinational corporation, operating a large and diversified telecommunications services network in the Middle East, Africa, and Pakistan. It is a part of the Orascom group, which was established in 1976. It had a subscriber base of 74 million in March 2008 in six emerging markets. In 2006 its total revenue was US$44.01 billion, net income was US$7.19 billion, and total assets were US$86.75 billion.
Iran And Iraq
National Iranian Oil Company is a century-old oil conglomerate that boasts of being the inheritor of the first oil discovery in the Middle East, and the fourth largest state-owned oil company in the world. It consists of four companies dealing with oil, gas, petrochemicals, and refining and distribution, and a host of subsidiaries. Nationalized after the Iranian Revolution, the company is responsible for the exploitation of the second-largest natural gas reserves in the world and for helping retain Iran’s position as the second largest oil producer among OPEC countries. Its principal areas of activity include exploration, production, refining, marketing and sale of crude oil, natural gas, and other petroleum products. Its current production level is 4,200 million barrels of oil and 437 million cubic meters of gas per day.
Iraq National Oil Company was founded in 1961 by the government of Iraq. The Oil Ministry of Iraq has 15 operating companies under its control and oversees the nationalized oil industry through the Iraq National Oil Company. There are several autonomous companies under Iraq National Oil such as State Company for Oil Projects, Oil Exploration Company, Northern Oil Company and Southern Oil Company, State Organization for Oil Marketing, and the Iraqi Oil Tankers Company. The Iraqi Hydrocarbon Law of 2007 is controversial legislation under consideration that severely limits the control of Iraq National Oil to just 17 of the country’s 80 oilfields, leaving the rest to the provincial governments to award exploration and production contracts to foreign companies.
Israel and Jordan
The biggest Israeli company is generic-drug maker Teva Pharmaceutical, which had a market value of $34 billion in 2008. Teva is among the largest generic pharmaceutical companies in the world. Its business activities are development, production, and marketing of generic and proprietary branded pharmaceuticals and active pharmaceutical ingredients. Headquartered in Israel, 80 percent of Teva’s sales of US$9.4 billion in 2007 came from North America and Europe. Teva has production facilities in Israel, North America, Europe, and Latin America. With more than a century of experience in the global healthcare industry, Teva has a dominating presence internationally through its worldwide subsidiaries.
Arab Bank, set up in 1930 by the Palestinian-Jordanian Shoman family group, is one of the largest financial institutions in the Middle East with high credibility and ratings. With headquarters in Amman, it operates 400 branches in 29 countries across 5 continents. By the end of 2007, Arab Bank Group achieved a pre-tax profit of US$10 billion. Its total assets reached almost US$38.3 billion, while shareholders’ equity base was US$6.9 billion. The bank is considered a catalyst for Arab economic development. Starting with an emphasis on trade and small scale construction finance, it shifted to large-scale project financing.
Kuwait, Lebanon, And Libya
Kuwait-based Zain (formerly MTC group) is a noteworthy mobile telecommunications provider operating in Middle East and African countries. It aimed to have 70 million subscribers through a strategy termed ACE (Acceleration, Consolidation, Expansion) to realize its 3X3X3 vision—to grow regionally, internationally, and globally, with each phase completed in 3 years. In 2007 Zain claimed 42.2 million active customers providing revenue of US$5.91 billion with net profit of US$1.13 billion.
Solidere is Lebanon’s largest company by market value. It was created in 1994 as a unique public-private partnership with the mandate to rebuild the Beirut Central District after the devastation of the civil war of 1975–90. Besides the Hariri family, who are the principal shareholders, most of Solidere’s investment comes from Arabian, European, and North American investment firms. Its principal activities are land development, real estate development, property ownership, property and services management and operations. Solidere’s share capital is US$1.65 billion and assets are $8 billion, with 50 projects being developed by private investors. Through Solidere International, the company is set to expand business activities into the United Arab Emirates (UAE), Egypt, and Monaco.
Libyan Iron & Steel Company (Lisco) is one of the largest iron and steelmaking companies in Northern Africa. Established in 1979, it has an annual capacity of 13.24 million tons of liquid steel. Lisco’s operations are primarily supplied by imported steel pellets from Brazil, Canada, and Sweden. Natural gas is used to manufacture sponge iron and hot briquette iron. More than half of the production is exported to European countries including Italy and Spain and some Middle Eastern and southeast Asian countries.
Mauritania, Morocco, And Oman
Mauritania’s Société Nationale Industrielle et Minière is the primary African supplier of iron ore to European steelmakers. It has a majority government ownership. Its production capacity is 12 million tons a year. Major investments of US$170 million were made in 2001–02. It has diversified into drainage, civil engineering, transport and maintenance, production and sale of granite and marble, mechanical construction, port handling, iron and steel, gypsum and plaster, and tourism services.
Attijariwafa Bank of Morocco, established in 1911 and headquartered in Casablanca, is the leading financial group in terms of total assets. The bank’s principal activities are to provide personal and professional, corporate, investment, and international banking. It also offers real estate, insurance, and banking services through its subsidiaries. The bank operates in North Africa with over 500 branches across Morocco and 35 points of sale in France, Belgium, Spain, Italy, China, Tunisia, and Senegal. It claims to be serving more than 1.5 million customers. Attijariwafa Bank aims to become by 2010 the leading bank for Moroccans living abroad.
Oman Telecommunications Company (Omantel) is the largest communications service provider and public company in Oman. Established in 1980, Omantel provides fixed-line, mobile, internet, and data and other telecommunications services directly and through its subsidiaries. The company’s 2007 revenues were US$952 million and profits were US$292 million from 1.87 million subscribers. Omantel completed its first international acquisition in 2008 with a 65 percent stake in Pakistan-based fixed and internet service provider World call for US$200 million.
Qatar
Qatar Airways, the national carrier of Qatar, is widely recognized as one of the fastest-growing airlines in the world with average 35 percent growth yearon-year for the past 10 years. It flies a modern fleet of 60 aircraft to 81 destinations worldwide and has placed large orders for 200 aircraft worth US$30 billion with Airbus and Boeing. It carries nearly 10 million passengers annually. It operates a hub-and-spoke arrangement from Doha International Airport. It acted as the official airline of the 2006 Asian Games, held in Doha.
In a region dominated by state-owned and state-censored mass media, Al Jazeera is a refreshing change. Started in 1996 as an Arabic channel financed by the Qatar government, it began telecasting in English in 2006 and plans to offer programs in other languages. Al Jazeera English is the world’s first global English-language news channel to be headquartered in the Middle East. It has four broadcasting centers in Doha, Kuala Lumpur, London, and Washington and supporting bureaus worldwide. The unique selling proposition of the channel is to offer a different perspective from that of the dominating Western media like the BBC and CNN. In doing so, it attempts to become an English-language channel of reference for Middle Eastern events, balancing the largely one-way information flow from the developed world.
Saudi Arabia
Saudi Aramco, a state-owned crude oil producer, has grown from an exploration and production company prior to the 1990s to become an integrated global petroleum enterprise. It owns and operates an extensive network of refining and distribution facilities, and is responsible for the gas processing and transportation installations that fuel Saudi Arabia’s industrial sector. It owns a number of international subsidiaries and joint ventures and a large fleet of supertankers, delivering crude oil and refined products to customers worldwide.
Saudi Basic Industries (SABIC) is probably the most globalized of the Middle Eastern corporations. It operates in more than 40 countries and is a leading manufacturer of chemicals, fertilizers, plastics, and metals. SABIC had a net income of US$7.2 billion on sales revenue of US$33.6 billion with total assets of US$68.27 billion in 2007. It has 17 manufacturing affiliates in Saudi Arabia, two manufacturing plants in Europe, and sales offices in Africa, Singapore, and the United States.
Kingdom Holding Company, listed as first among the Gulf ’s most admired companies by ArabianBusiness.com, is owned by Prince Alwaleed Bin Talal. It holds the distinction of being the largest company in Saudi Arabia. A diversified investment company, its interests include banking, real estate, telecommunications, broadcasting and media, entertainment, hospitality, computers and electronics, agriculture, restaurants, upscale fashion, retailing, supermarkets, tourism, travel, and automotive manufacturing. Kingdom Holding has made rapid strides in its internationalization drive, making investments in several foreign companies. Its assets are valued at US$25 billion and total operating revenue of US$1.23 billion as of December 2006.
Sudan, Syria, And Tunisia
The two biggest companies in Sudan in terms of total revenue are in the telecommunications sector. The top-ranking company is Sudanese Mobile Telephone Company. The second is Sudatel Telecommunications Group, a public company set up in 1994 providing telecommunications and internet service, dial-up access, leased lines, and DSL broadband services. The company is also responsible for the construction and maintenance of Sudan’s telecom infrastructure. It has made rapid strides into regional markets. In 2006 it extended its voice and data services in Mauritania. In 2007 it won a telecommunications license to provide mobile services in Senegal and purchased a 70 percent stake in Intercellular, one of Nigeria’s leading privately owned telecom operators.
The largest companies in Syria are in the telecommunications sector where each of the top two companies, Syrian Telecommunications Establishment and SyriaTel Mobile Telecom, generated revenues of over US$600 million in 2007. But more exciting are the four new holding companies set up in 2006. Of these, Cham Holding has the largest capital base of US$350 million contributed by over 70 Syrian investors. It has ambitious projects and plans in the pipeline. It is also investing US$1.3 billion in developing several projects in the tourism, housing, banking, energy, industry, health, and transport sectors. These ambitious plans are spurred by changes in statutory regulations facilitating real estate investment activities that jumped up to US$50 billion in 2006.
Petroleum and mining, particularly of phosphates and iron ore, are Tunisia’s top two industries and top export commodities. Phosphate-rock production is entirely controlled by the government-owned Com- pagnie des Phophates de Gafsa (CPG) established in 1896. CPG is the largest company in Tunisia, both in terms of employees and capital investment. It operates several phosphate mines in Gafsa governorate. Annual production of merchant phosphate in 2007 reached 8 million tons, placing Tunisia fifth in the world for phosphate production.
UAE
Dubai-based UAE company Emaar Properties represents one of the growing real estate development companies in a region of the world experiencing fast growth in construction activities. The builder of the world’s tallest towers, the Burj Dubai, Emaar is a publiclylisted conglomerate with 60 companies operating in 36 markets aimed at the twin objectives of geographical expansion and business segmentation. In 2007, Emaar had total revenue of US$47.82 billion with net profits of US$17.80 billion and total assets of US$149.17 billion.
UAE-based Emirates group is a popular Middle Eastern holding company that owns the Emirates Airlines and Dnata, which is a ground handling and travel service. The Emirates Group has been consistently profitable. It had a net profit of US$1.45 billion with a turnover of US$11.2 billion in 2007. Increasing fuel costs had a negative impact on the company’s financial performance. Emirates Airlines is a fast-growing airline operating services to 90 destinations.
West Bank And Gaza Strip
Palestine Development and Investment Company (PADICO) is a Nablus-based holding company registered in Liberia in 1993. Since 1994, when political control passed from Israel to the Palestinian Authority, PADICO has become the biggest and most influential company in the West Bank and the Gaza Strip. It is a holding company which has 11 subsidiaries in the industrial, real estate, tourism, and capital market sectors. Besides being the largest company traded on the Palestine Securities Exchange, PADICO also owns the Palestinian phone monopoly Paltel. PADICO had a market value of $600 million in mid-2007, about a quarter of the value of all the shares traded on the exchange.
Yemen
Hayel Saeed Anam (HSA) Group of companies is representative of old, established family business groups in the Middle East. HSA of Yemen was established in 1938 and is the largest company in terms of the number of employees—more than 16,000. A diversified conglomerate, its activities include industrial, trading, and services in as many as 25 business areas. The company acts as the agent and partner for nearly 35 international brands. All these activities take place in Yemen as well as several other countries including Egypt, Indonesia, Malaysia, and Saudi Arabia.
Bibliography:
- com, “Revealed: Gulf ’s Most Admired Companies,” www.arabianbusiness.com (cited March 2009);
- DinarStandard, “The 2007 DS100: Top 100 Companies of the Muslim World,” dinarstandard.com (cited March 2009);
- com, www.zawya.com (cited March 2009).
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