Smooth succession for inheritor of father’s Dubai mattress company

Intercoil has grown from one showroom with a single manufacturing unit to a company employing 350 people with two manufacturing units and 24 showrooms in the UAE, Arabian Gulf, Lebanon and Jordan.

Hassan Al-Hazeem is the managing director of Intercoil. The company was founded by his father in 1974, Hassan took over in 1999. The company is one of the leading suppliers of mattresses in the Gulf and has a steady hold on markets in Jordan and Egypt. Lee Hoagland / The National
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With a background in computer science, Hassan Abbas Al Hazeem was apprehensive about taking over a family mattress business his father had built up over a quarter of a century. That was in 1999.

Fourteen years later and Intercoil has grown from one showroom with a single manufacturing unit to a company employing 350 people with two manufacturing units and 24 showrooms in the UAE, Arabian Gulf, Lebanon and Jordan.

This expansion was recognised at the recent Gulf Capital SMEinfo Awards, with Intercoil a finalist in the Gulf Capital Business of the Year category.

It’s quite a journey for Mr Al Hazeem, who returned from the University of Missouri four years before taking over his father’s mattress business.

At the time Mr Al Hazeem, the youngest among his siblings, was working at a Dubai bank and studying towards a management degree in international business studies part-time from American University of Dubai.

He was also worried about the generation gap between himself and his father, who was 50 years older than him.

“I was concerned whether he would give me the freedom to apply my thinking,” he reveals. “But I was surprised, he didn’t doubt my abilities.”

At that time (1999) his father Abbas Ali Al Hazeem, who passed away two years later, was the chairman of a group of companies headquartered in Kuwait. He was looking at the Dubai-based mattress business from a macro perspective, depending on his son to take a more hands-on approach to the enterprise.

Like other local family businesses, Hassan took over the reins of the company and expanded it. Today Intercoil exports to 17 countries in the Middle East and East Africa. Mr Al Hazeem says international exposure played a major role in shaping his perspective, as he could see where Dubai was heading when he first returned home from his studies.

While the businessman says he did not face resistance from his father to his ideas, other family business leaders often face that scenario.

“We have boys and girls going abroad to study and trying to bring home the ideas to upgrade their family business, but they face the dilemma of whether to keep the traditional ways of doing business or introduce new ones,” says Walid Chiniara, co-founder and managing director of the Dubai-based consultancy Family Business Advisory Group. “They need to adapt to the local environment, have to make changes gradually, and have to earn the trust of seniors and company executives.”

Mr Al Hazeem, now 39, only needed to look to his father for inspiration. His father started as a carpet seller in Kuwait at 16, arriving in Dubai in the 1960s.

“I was surprised there isn’t much difference between his way and the modern way of thinking. Those are the same business ethics,” says the Intercoil chief.

An entrepreneur also needs to follow his gut feeling, he adds, such as when to expand abroad, something he says he also learnt from his father.

However, one of the first things Mr Al Hazeem did with Intercoil – which launched in Dubai in 1974 under a different name – was to rebrand it, shortening the original International Foam and Furnishing Business to better reflect its identity.

He also placed more emphasis on manufacturing and increasing the number of retail stores.

Today, about a fifth of its total sales come from UAE retail, up from 10 per cent in 1999.

“In retail you have better opportunities to educate customers [on products], and it’s cash payment at the end,” Mr Al Hazeem says, adding he wants to further expand his retail business, increasing its share to half of the company’s total sales.

In 2014, the brand plans to add three domestic showrooms in Abu Dhabi and Ras Al Khaimah and seven in Egypt, Saudi Arabia, Qatar and Oman. It has also lined up distributors in Georgia and more in East Africa.

As for Mr Al Hazeem’s own children, he says they are too young to think of succession planning — his daughter is six and his son, three. But 14 years after he started working in Intercoil, would he want his children to take over?

“Yes,” he replies, “because I didn’t expect it to be this fun.”