May 28, 2012 2:09 pm
Tea with FT Middle East: Fadi Ghandour
By Michael Peel
Weeks before the start of the uprisings that have turned the Arab world upside down, Fadi Ghandour had a memorable chat with another regional business titan, the Egyptian telecommunications magnate, Naguib Sawiris.
During an onstage interview by Mr Ghandour at a November 2010 event in Dubai, Mr Sawiris shocked the audience by saying that his idea of change in the Middle East would be “if everybody sitting here will overturn the governments we have.”
“I said [to myself]: ‘I am not going to go there’,” Mr Ghandour, founder of Aramex, the logistics company, recalls with a laugh. “I am an activist – but as a citizen, not a politician.”
It’s a philosophy that has served Mr Ghandour well during three decades when Aramex grew from nothing to a more than $700m business, becoming along the way the first Arab world company to list on New York’s Nasdaq stock exchange. Now, as he prepares to step down at the end of this year as the company’s chief executive, his mind is focused on the economic side of the political change roiling the region.
“Private enterprise, job creation, youth empowerment are things that I think is what the Arab Spring is all about,” he says in an interview one afternoon in his 23rd floor office, perched above the office parks that are home to Dubai’s media and internet industries. “Yes, political freedom and political expression are important. [But] without economic vibrancy, in any country, democracy becomes an empty promise.”
Mr Ghandour, a 53-year-old Jordanian national, traces his entrepreneurial sense of purpose in part back to his father, Ali. Now 81, Mr Ghandour senior had an extraordinary career that ranged from fleeing Lebanon to Jordan as a political refugee, to helping with the establishment of Royal Jordanian, the national airline. He taught his son “that you have to be on your toes all the time, you have to be alert all the time, maybe some paranoia here and there,” says the wiry and energetic younger Mr Ghandour, who fuels himself with multiple cups of coffee each morning but prefers to avoid it after lunch.
Mr Ghandour was not long graduated from George Washington University when he cofounded Aramex in the early 1980s along with Bill Kingston, a family friend who ran a courier business in the US and spotted a gap in the market in the Middle East. Aramex – Arabian American Express, shortened to be less geographically limiting and to avoid possible anti-Arab prejudice – grew relentlessly towards its Nasdaq listing in 1997, before going private again in 2002 and then relisting on Dubai’s stock market in 2005.
Mr Ghandour sees the whole process of taking the company public as having instilled a discipline essential to any start-up that wants to become a big business.
“We cleaned up the organisation before we went public on Nasdaq,” he recalls. “That was so essential for us for us to become the world class company we are today.”
Mr Ghandour will soon step into the freshly-created job of vice-chairman of Aramex, where he will focus on sustainability, strategy and new investments. The company is expanding through ventures such as Shop & Ship, which uses a network of US and UK post office boxes to pick up deliveries from the many online shopping sites that don’t deliver to the Middle East.
A social media convert from the early days, Mr Ghandour is also hot on maintaining Aramex’s image on the internet. He has a team of about half a dozen people in Dubai and Amman who monitor the web for good, bad and indifferent comments about the company. He says he takes personal charge of, on average, one client query a day.
“Your product reviews are instantaneous and there is a need for instantaneous gratification,” he says, adding that the word-of-mouth said by marketers to affect ten potential customers in the pre-internet era now probably has an impact on thousands. “A client who is in China can say something about your product and someone will hear about you that second in Dubai or Amman and Nairobi. People will monitor how you react – and you had better be prepared for it.”
Another increasingly important strand of Mr Ghandour’s professional life is his backing – both financial and rhetorical – for the next generation of Arab entrepreneurs. Mena Venture Investments, a $40m fund he has set up with Arif Naqfi, the founder of Abraaj Capital, the biggest private equity investor in the Middle East, has already put money into 42 companies.
Mr Ghandour – who says prospective entrepreneurs send him three or four business plans a day – has already scored a hit with his investment in Maktoob, an Arabic language web portal bought by Yahoo of the US in 2009. He sees a “boom” in shopping websites such as Amman-based MarkaVIP, which attracts customers with “flash sales”, or short term discounts.
“Maktoob highlighted that you can build an internet business in the Arab world and sell it and make money out of it,” Mr Ghandour says. “The social media explosion in the Arab world has also made people aware of the internet and the possibilities of the internet. So finance will come, I think.”
While Egypt’s Mr Sawiris continues to play a lively part in his country’s politics – including landing himself in hot water last year after he retweeted a cartoon of Mickey Mouse mocked up with a beard and Minnie Mouse with an Islamic veil – Mr Ghandour has carved out a different role.
He praises the infrastructure available for start-up companies in Jordan and says he believes efforts are being made at political reform, in the face of sporadic protests and changes of government over the past year and a half.
“In today’s world you don’t need to be a politician to make a difference,” Mr Ghandour says. “In fact, it’s the other way around: if you are in politics you are limited in what you are going to be able to do.”
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