Rising stars of Middle East power a global recovery
Four Middle East companies, including three from the UAE, are listed among the 100 "hidden engines" that are driving the world's economy, says a major US consultancy.
In a report entitled Companies on the Move,the Boston Consulting Group (BCG) identified Emirates Airline, Etisalat and DP World as among the fastest-rising stars in developing economies. It also identified Saudi Basic Industries Corporation (SABIC) - marking the first time a Saudi Arabian firm has appeared on the list.
These companies "have a strong local presence, but more so global", said Thomas Bradtke, the author of the reportand a partner at BCG's office in Dubai. "I would expect them to come strengthened out of the recent [global] turmoil."
While the report's researchers began with a pool of more than 2,500 companies from around the world, only those with at least US$1 billion (Dh3.67bn) in revenues or large, cross-border merger and acquisition deals, among other criteria, survived the final cut to 100. Collectively, these top firms generated $1.3 trillion in revenues in 2009 and averaged an annual sales growth of 18 per cent over the past decade - compared with just 6 per cent among multinationals headquartered in developed countries from the same industries.
A spokeswoman for BCG declined to identify which, if any, companies on the list it had worked with.
DP World, one of the world's largest shipping container operators, and one of the most profitable concerns under the Dubai World umbrella, was singled out as being the conglomerate's "strongest piece of the puzzle", said Mr Bradtke. Etisalat also made the list, as did Emirates Airline, for successfully generating revenues by offering a premium service at relatively low cost.
All three UAE companies appeared in a similar BCG report in 2009.
Emaar Properties also appeared in that list but the Dubai company fell short this time. It seemed to have "great real estate concepts for developing markets, but they didn't work out for the short or long term with the [economic] downturn," said Mr Bradtke. "The business concept needs to be tested further," he added.
Overall, the economic state of the Middle East has improved rapidly. Five years ago, when BCG first conducted its study of companies in developing economies, it failed to name a single firm from the region.
"I'd expect more companies from the Middle East to join the list [in future]. I think it's one of the regions to really watch out for," said Mr Bradtke.
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Published: January 24, 2011 04:00 AM