Winter 2020

Our Knights & Distinguished Personalities
Son of the Soil

From a small beginning as a transport services company in 1972, Saudi Arabia’s Al-Khaldi Group has grown to become today a behemoth of many industry-leading ventures that contribute in their own way to the economic success of the kingdom.

At the helm, leading the transition of the company into a modern, diversified group is Sheikh Hamoud Mubarak Z Al-Khaldi, the Chairman of the family conglomerate.

Al-Khaldi, 59, is a quintessential traditional Saudi businessman for whom values and people are more important than the profits that businesses bring.

Welcoming the Arabian Knight team into his expansive office, the effusive Sheikh Hamoud punctuates his words with gentle humour; the experience of more than four decades in business showing in his measured sentences.

The Al-Khaldi company was started by his father, the late Mubarak bin Hendi Al-Khaldi, as a transport services enterprise, which grew steadily with the economic growth of the Eastern Province, providing its services to oil fields, construction sites and the chemical industry.

As the eldest son of the family, Hamoud’s role was cut out from the very beginning. He has eight brothers and four sisters.

For young Hamoud, the apprenticeship in business started even before he knew it, as his father would take him along to his office during his free time. And once he completed his school in Al Khobar, Hamoud moved full time into the family business, at the tender age of 18. From then on, there was no looking back.

“My father began mentoring me from an early age. He was protective, but at the same time preparing me for the future.

“Since I am the eldest son, there is more responsibility on my shoulders and my father taught me various aspects of the business from very early in my life. He would take me to the truck yard and allow me to enquire and understand things,” says Sheikh Hamoud, describing his days as a teenager.

“He taught me how difficult it is to make money and how to make money in the right way. He also instilled in me a sense of responsibility, for the company and the family. He was not just a teacher, but a school by himself,” chuckles Sheikh Hamoud.

He also remembers some of his father’s friends as his role models. “My father used to send me to Riyadh on work or to conduct business at a very young age and there his friends would guide me on how to go about the tasks. The hand-holding and the guidance helped me immensely in the years to come,” he narrates.

Hamoud dabbled in various areas of the transport business, helping the company reach the length and breadth of the kingdom and neighbouring Gulf states.

“For several years, the company remained an Establishment (sole proprietorship); and by the time my father passed away in 2007, the company had become a WLL (with limited liability),” he says.

Over the next decade, Sheikh Hamoud catapulted the company into a holding group with a turnover of nearly SR1 billion ($272 million) a year. As his younger siblings came out of schools, they too joined the family business, helping it further diversify.  Currently, all the brothers are involved in the business.

“The fact that my brothers are with me has helped grow the business significantly and having a family member in the business is much more practical as opposed to bringing people from outside, who don’t know the values of the company,” he adds.

Al-Khaldi’s business empire now encompasses the core areas of transportation; trading, services and manufacturing for oil and gas; building materials supply; construction; real estate, and pharmaceutical and medical supplies. It has a workforce of more than 2,000 employees from various countries around the world.

“Transport and logistics is the largest of our companies and we mainly serve leading Saudi companies such as Aramco, Sabic and others,” says Al-Khaldi.

Al-Khaldi Transport & Logistics has expanded its portfolio of services to meet the needs of the market and its changing dynamics. The company has different types of trucks such as 6 x 6, 6 x 4 and 4 x 2 tractor heads; heavy equipment loading trailers; fuel and chemical tankers; water tankers; bulkers for cement and chemical products; dump trucks and pipe dolly (extendable) trailers.

The company has more than 1,500 vehicles providing coast-to-coast transport within Saudi Arabia and to all other Gulf countries and in the process becoming an economic lifeline.

In one of the biggest orders, Al-Khaldi Transport ordered 540 heavy- and medium-duty Mercedes-Benz trucks for operation in the energy and infrastructure sectors in 2017. With the deal, Al-Khaldi’s total fleet of Mercedes-Benz trucks increased to over 1,000 units.

“Our staff is committed to ensuring the success of our clients by combining a can-do approach with incomparable service and highly competitive rates, setting Al-Khaldi apart from the competition,” points out Al-Khaldi.

As the transport business grew and opportunities arose in other sectors, Al-Khaldi seized the chances to launch new businesses, many of which are complementary to the group’s core business of transport.

The first diversification took place in the 1970s itself, with the establishment of Khaldi gas stations. It was made a separate unit and renamed Fuelway in 2013 as further investments were made in it and the company began expanding to other regions of Saudi Arabia. Fuelway now owns 20 gas stations around the Kingdom. It is one of the approved companies to own and operate gas stations in Saudi Arabia.

“We operate modern gas stations that have facilities such as motels, restaurants, supermarkets, garages, etc. within the complex. However, we run only the fuel business and the rest of the facilities are rented to others to operate. Let others too benefit,” he adds.

Al-Khaldi Contracting & Construction is an integrated construction company, which has built many projects for the public and private sectors including towers, shopping malls, schools, housing complexes, industrial buildings and fuel stations. It also carries out fit-out and refurbishment jobs.

The Al-Khaldi Building Materials is an integrated building materials supplier of products such as cement, steel and wood from national and international firms. It offers a comprehensive range of products and professional services to clients.

Al-Khaldi Trading of Petroleum Products Company is a major oil and petroleum products trader in the Kingdom. It is an approved distributor for Saudi Aramco, supplying diesel and gasoline to numerous entities through its group trucks.

“We are one of the few Saudi companies with a big presence in this sector and we provide a comprehensive product range to customers. We have an extensive logistics and storage capability and we handle a significant amount of fuel per day,” elaborates Al-Khaldi. “As a physical trader, we have a first-hand insight of economic fundamentals as they play out on the ground,” he adds.

The group has a full-spectrum automotive business named Auto Gulf Company (AGC). Based in Al Khobar in the Eastern Province, AGC has carved a name for itself in the market since its establishment in 2012, dealing with major clients and suppliers of vehicles in the Gulf region and beyond.

AGC provides specialised services to a range of clients with specific requirements and whose work locations include outlying and remote areas. These include oil and gas, drilling, dredging and services to resolve their immediate and long-term needs. It represents some of the world’s leading automobile brands.

Another important unit of the Al-Khaldi Group which serves both the group itself and others is the Saudia Falcon Travel & Tourism Company. Established in 2016, it is among the leading travel service providers in the Kingdom.

“Our vision is to make travel a delightful experience at an affordable cost. Empowering every individual with the joy of travelling is what keeps us going. We believe in giving the best deals and fares to our customers, without any compromise on quality for a travel experience like no other,” says Sheikh Hamoud, explaining the company’s ethos.

Another subsidiary on which the group is placing a lot of emphasis at the moment is Saudi Drill Company, which is one of the fastest growing firms in providing products and services to the oil and gas industry.

“Saudi Drill’s primary focus is oil and gas, petrochemicals, chemicals, saline water and power sectors. We constantly strive to provide new and innovative technologies with high-quality standards at competitive prices for the industry,” adds Sheikh Hamoud.

Apart from these, the group also has a boutique for special luxury cars in Dammam.

Al-Khaldi, while giving insight into the various aspects of the business, takes pride in steering a group that has successfully turned the dreams of so many people into reality.

Speaking on the current business environment in the kingdom, Sheikh Hamoud admits there are many challenges. “Competition is fierce, expenditure is increasing and technology is changing. People have to be more focused in terms of what needs to be done,” he says.

How do you compare the way business is done today to earlier days, we ask the veteran. “Compared to the past, there are many more companies fighting for the same business. If there is one tender, there are 10 or more companies competing. This is causing tremendous price pressure and businesses built on quality standards  are suffering,” he explains.

Despite the challenges and competition, the group has stood the test of time and Al-Khaldi has earned an enviable reputation in the Kingdom.

What are the key principles guiding the business, we ask. Without batting an eyelid, he says: “Honesty is the best policy. Give everybody what is due to them and one shouldn’t burden oneself with too many responsibilities; you have to delegate responsibility.

“We have to be content with what we have; what’s meant to be, will be. The most important thing in life is to help others,” he avers.

Continuing further on his liberal outlook to life and business, he says if any member of the company’s staff wants to have a side business or wants to start his/her own firm, he will support him/her. “Quite a few of my staff have left and started their own establishments.  I am very happy to see them progress in life,” says Sheikh Hamoud with a sense of satisfaction.

Meanwhile, Al-Khaldi is optimistic about the reforms happening in Saudi Arabia. “Now, there is a vision for the Kingdom’s development – Vision 2030. A lot of reforms are taking place in the Kingdom with the view of translating this vision into reality. I am hoping that all will reap the benefits of this. Maybe, it will take some time, but I am optimistic about its success.

“It is important for everyone to be aligned with the government’s vision and businesses also have to work in tandem with the vision for it to succeed and for them to reap the benefits from it,” he adds.

So, what does the future hold for Saudi Arabia? “It’s a hard question to answer … We are optimistic and hopeful. The changes happening in the country have made it more vibrant; coffee shops and restaurants have become lively, and cars sales have increased because of an increasing number of women drivers on the road. The removal of the ban on women drivers has given them much-needed freedom. It’s also better for women since they don’t need to go in a taxi with an unrelated driver,” he says.

On the opening up of the economy, the business magnate says most of the initiatives have been positive and the negatives, if any, can be remedied.

Does Al-Khaldi Group have any plans to start new businesses? Sheikh Hamoud says there are major plans to expand in the industry and manufacturing related to the upstream, downstream and environmental services and original equipment manufacturing. “This is something that we are investing along with some renowned international partners by forming joint ventures and alliances that will offer services regionally,” he says.

“There is a plan to set up a factory in the Dammam Second Industrial Area this year for building materials,” he reveals. “The most challenging aspect is not launching a business, but finding markets for the products. If you start a business and if you can’t sell, what’s the use of it? First, we want to ensure that the products we make are needed by our companies, so we have a captive market already,” says Al-Khalid drawing from his decades of experience.

The company has offices across the Kingdom including Riyadh and Jeddah, apart from its headquarters in Dammam.

Asked if there is an intention to offer shares of any of the group companies to the public, Sheikh Hamoud reveals that plans are actually in the works to make few companies  joint stock firms. About 30 per cent of the units will be offered to the public and the group will retain a majority shareholding in the companies, he says.

Al-Khaldi lives in Al Khobar with his three wives and 13 children, the youngest one is aged four. Two of his children are already helping him in the business and one is studying Masters in the US.

On his hobbies, he says he loves travelling and prefers to visit the country-side.

He also likes to relax in the family’s camel farm in the desert. “My father used to take me to the desert and to the farm. I inherited the farm and the love for the desert from him. My father was my best friend and guide,” he reminisces.

For Al-Khaldi, religion has a major positive impact on him. “It teaches us to give respect to people and conduct ourselves with dignity; how to develop one’s character and be a part of the community we live in,” he enumerates.

As a successful businessman, what will be his advice to today’s youth? “One must hold on to one’s core – religion and knowledge. Knowledge is the real weapon in one’s armour as he/she faces the future. Honesty, transparency, treating people with humility, helping the needy, being respectful to others are the main ingredients to be a good human being and to become successful.

“For me and my family, these values are handed down from generation to generation; my late father has lived by it, I am implementing them, and I want my children to carry on with the same philosophy in life,” he concludes.

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