You could call it the Manchester United syndrome. The old boss, who has won everything in the game, departs, and hands over to his chosen successor. How can the new man hope to live up to the legend he has replaced?
Hussein Hachem is approaching the second anniversary of his appointment as chief executive of Aramex, the UAE-based global logistics group. He succeeded a legend of the Middle East corporate world, Fadi Ghandour, who set up Aramex 30 years previously and made it an international player in the business.
So far, Mr Hachem has taken the new role in his stride, with none of the slip-ups suffered by the English football club. Profits have kept on rising, showing nine successive years of growth, even with the distractions of the Arab Spring and trying conditions in the global economy. How has Mr Hachem managed to keep his eye on the ball?
“You have to remember I’ve been with the company 23 years. Fadi, of course, was the founder, he built the company from nothing, he was my mentor, almost my brother. But the succession was well planned, for a long time.
“Fadi had put in place a fantastic corporate culture of empowerment and delegation, with a fantastic management team. That has seen us through – the consistency of that culture,” he says.
The branding experts, whose job it is to weigh the intangible value of the company’s name and image, believe Aramex is one of the few companies from the region that has the ability to become a truly global brand.
In Mr Hachem’s office in Dubai Media City, a map of the world dominates one wall. With a couple of exceptions – Latin America, Russia – Aramex is everywhere, Mr Hachem explains, and he does not rule out expansion into the so-far unexploited territories.
“We’ve gone far beyond where we started, far beyond the region. It needs determination, and it needs an adventurous spirit. We have those,” he says.
Of course, it also needs a sound business model, and that is one of the areas in which Mr Hachem has been able to exploit the legacy he inherited.
“We have always been an ‘asset-lite’ company. We’ve been able to create a global network without owning a fleet of planes or other expensive assets. Instead we go to the commercial market, and we are in the best possible place to do that with the UAE as our hub. In these circumstances, owning a plane would be a liability.”
Aramex relies instead on its global network of partners – local operators who think in a like-minded, cost-conscious, customer-aware fashion. “With the competition, it [a courier parcel, for instance] is always picked up and delivered by the same company. We don’t do that, as long as we can find partners who think the same as us.”
But being asset-lite does not mean being reluctant to invest. Aramex is committed to spending to expand its network in places that it thinks make sense as part of the global strategy.
At the moment, that is Africa. “You could say one small thing I’ve done differently from Fadi is to target Africa more aggressively, but that is the pattern of global trade, where the growth is, and the UAE is at the centre of that.”
Aramex already has a big presence in North Africa, with Egypt and Libya recovering from the effects of social and political turmoil. But Mr Hachem sees special potential in sub-Sahara Africa, and is ready to back his judgement with hard cash in other parts of the continent.
The source of that cash is open for discussion. Aramex has a long history of involvement with equity markets, having in 1997 become the first Middle East company to float on a foreign exchange – New York’s Nasdaq. It was taken private by Dubai-based Abraaj Capital in 2002, but refloated, this time on the Dubai Financial Market, in 2005.
Mr Hachem has some criticisms of local markets, and of the system that prevents foreign shareholders from owning more than 49 per cent of the shares in a local company. “It is a handicap for us, because we are a global company,” he says, urging the authorities to change the laws quickly.
But if that does not happen, Aramex’s track record of revenue growth and cash generation would stand it in good stead in the bond markets or for leveraging up with bank debt.
Mr Hachem cut his teeth in the logistics business, under Mr Ghandour’s guidance, in the Kuwait operations that were devastated by the Iraq War of 1991, and that part of the Arabian Gulf region retains an attraction. “Iran and Iraq between them have a population of 100 million, and unlocking them would be a very interesting prospect,” he says.
His record is one of catching the rising tide – as Aramex has done very successfully in the surging e-commerce business – and of reversing seemingly negative situations, such as Kuwait in 1991, or during the financial crisis, when Aramex bought assets at good prices while others retreated.
Maybe he should be on the phone to Manchester, offering some advice?