EXCLUSIVE: Emirati tycoon Khalaf Al-Habtoor plans multimillion-dollar Saudi leisure project

Khalaf Al-Habtoor
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Updated 19 January 2020

EXCLUSIVE: Emirati tycoon Khalaf Al-Habtoor plans multimillion-dollar Saudi leisure project

  • In an exclusive interview, the Al-Habtoor boss reveals his views on the Kingdom, the UAE economy, Trump and Iran

A word often used to describe Khalaf Al-Habtoor — founder and chairman of Al-Habtoor Group, and one of the Middle East’s most venerable business leaders — is “forthright.”

His tweets, TV broadcasts and public statements all display a quality of candid outspokenness rare in senior business leadership in the Arab world.

In the course of an early morning conversation at his headquarters in Dubai last week, he was forthright on a host of subjects, ranging from ambitious expansion plans in Saudi Arabia to the challenges faced by the UAE economy and the global geopolitical scene.

Al-Habtoor is not a man given to diffidence, though he said he would not be sharing his views with the “global elite” preparing to travel to the World Economic Forum annual meeting in Davos next week. “We leave that for the really big people. It’s really entertainment rather than anything else,” he joked.

Entertainment and leisure have been the mainstays of the Al-Habtoor business empire, which is as old as the UAE itself and one of the country’s best-known brands, with interests in construction, real estate, motor distribution and education.

The group has hotel operations in Europe and the US, but the chairman is now looking at Saudi Arabia as a major avenue for expansion, with a multimillion-dollar investment project planned for the Kingdom. The opportunities are mind-boggling, he told Arab News.

“I call Saudi Arabia a continent rather than a country. It has history before Moses and Abraham,” he said.

“We’re seeing now on TV something we’ve never seen before — we see green fields, we see skiing, we see sun and desert. You can’t believe this is the Arabian Peninsula,” he added.

“That makes it very attractive to every tourist or investor because they have variety, because you’re not restricted to one area or sector where you want to build something. You have a choice as to what you can do.”

Al-Habtoor has chosen — in partnership with the Saudi tourism authorities — to back a huge leisure and recreation project outside Riyadh.

It will draw on the successful Habtoor City development in his native Dubai but on a much bigger scale: Up to 7 million square meters of hotels, restaurants, theaters, retail and residential facilities, and — imagine it — lakes and beaches. “You’ll ask me now where does the beach come from in Riyadh. We’ll create it,” he said.

The project is still at the planning stage and subject to final approval from all parties.

It will borrow some of the elements from the successful Habtoor City development in Dubai, notably a Saudi version of the spectacular theatrical production La Perle. But it will not be a straightforward copy of the Dubai attraction, nor indeed of the Dubai development strategy.

“In Dubai, we don’t have oil. If we were dependent on oil, we wouldn’t be like this now. Saudi Arabia has a bigger population — 30 million people, 90 percent of them Saudi, who want to enjoy their lives and their history,” he said.

Born:

• Dubai, UAE.

Education:

• Al-Shaab School, Bur Dubai.

Career:

• Founder and chairman, Al-Habtoor Group.

“We in the rest of the Gulf haven’t seen this history, and I personally would like to go and see this history and see Riyadh, the Eastern Province and the Red Sea.”

Al-Habtoor believes that the Kingdom can use the lessons of Dubai’s development, especially in creating a more liberal social and cultural environment in what is generally regarded as a more conservative country.

“The word ‘conservative’ needs some explanation. The people of Saudi and the UAE are from the same background, the same family. We’re related. When they visit us, they see that,” he said.

“The original people of the UAE are conservative by background, too, but they also enjoy going to restaurants, to the movies, to the theater. They want to go everywhere. They want to be free,” he added, while allowing that there are limitations to freedom.

“Freedom doesn’t mean you should abuse your country, your people or the authorities. You have to protect your culture by educating other people.”

On the question of whether alcohol could ever be served in Saudi Arabia as it is in Habtoor’s UAE establishments, he replied:  “To be honest, I can’t comment on that because I don’t know what their plan is for that.

“But everything is changing, everything is possible,” he added.

The Vision 2030 “masterplan” is changing perceptions of the Kingdom, he said. “It really is an excellent strategy. Everything is clear and transparent. There is a huge future for Saudi Arabia as far as investment and visitors and tourists are concerned.”

Al-Habtoor Group has interests in many sectors of the UAE economy, and from this position the chairman is well qualified to give an authoritative opinion on the challenges facing the country as it prepares for the Expo 2020 business exhibition.

The most pressing worry for economic analysts has been the oversupply of residential and hotel developments, and rising prices that some believe are forcing expatriate workers out of the UAE.

“Well, 2018 wasn’t a very good year, and 2019 was also very slow in the beginning, but by the end of the fourth quarter you could see the signs of improvement in the market. You could see it in retail, things were moving. In the land department, people were buying and selling land and real estate,” he said.

In his car-leasing business, in real estate, luxury cars and his education business, he saw signs that the UAE economy was picking up again. “Definitely. I can see improvement,” he said.

But the volume cars business was lagging, reflecting different spending patterns by expats who often now choose to rent a car long term rather than buy. The rising cost of living was also a big factor, he said.

“Everything is becoming more expensive. The only cheap thing in the country is hotel rooms — they’re among the cheapest in the world,” he added.

“There are too many hotel rooms and residential developments, and it’s not recommended that we should build more.”

The UAE government has taken some measures to limit supply of real estate and hotel projects, which Al-Habtoor thinks is a good thing.

But the introduction of VAT was, in his view, a damaging economic mistake that should be rectified immediately.

“I think it should be cancelled, and also all the money taken should be refunded. The idea of VAT is wrong in my country for the time being. Maybe in the future,” he said.

He would prefer to see the cancellation of sales tax and the scrapping of government fees for services such as visas and business licenses, replaced by a standard rate of income tax.

“I’d recommended they stop all the fees and VAT and let them take from income, like Britain, for example,” he said.

In international affairs, his opinion of US President Donald Trump has wavered between condemnation of his policy to ban travel from some Muslim countries, to warm approval of his current policy toward the Middle East.

Now Al-Habtoor seems overwhelmingly positive on Trump and would like to see him re-elected.

“I said that we need a businessman rather than a politician to lead the world. But whatever he said in the past I think it was just to get elected, and a lot of his supporters didn’t know about us, the Arabs,” Al-Habtoor said.

“They don’t know whether we were terrorists or good people. There are a lot of naive people in the US.”

In particular, he is a firm supporter of Trump’s recent policy toward Iran, though he feels that US sanctions could be better focused.

“If Trump wants to make (Iran’s Supreme Leader Ali) Khamenei and his gangs starve to death, he can do that. So I can’t understand why he isn’t doing that,” Al-Habtoor said.

“There are sanctions, but he’s not killing the rich people. They still eat caviar and the best steaks while the poor people are starving.”

On the US killing of Qassem Soleimani, Al-Habtoor is in complete agreement that it was the right thing to do, but hinted that he believed there was Iranian collusion in the attack.

“It should’ve happened a long time ago. He was the biggest criminal on earth. I think maybe the Iranians wanted him gone, too, otherwise how could the Americans have tracked him? But what happened is good, it doesn’t matter who did it,” Al-Habtoor said.

He is adamant that there should be no further escalation in regional tensions, but believes the next big threat will come from Hezbollah, Iran’s ally in Lebanon.

“I think Hezbollah is more powerful than Iran, and I think (Hezbollah leader) Hassan Nasrallah is the biggest threat to peace in the region,” Al-Habtoor said with forthright finality.

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LONDON: The UAE is embracing innovative new approaches to the challenges of sustainable food production and the management of food waste, according to experts.

Food security and waste have been important global issues for some time. But the concerns have taken on a renewed urgency in the past year because of the COVID-19 pandemic, as a result of which global food-supply chains have been disrupted and crop yields have suffered, said Lord Udny-Lister, co-chairman of the UAE-UK Business Council.

He was speaking during a webinar hosted by the council to discuss ways to manage food and food waste across the supply chain and prevent the global food industry from damaging the environment.

“Technology and innovation will undoubtedly be the solution to addressing the food-waste challenge, as well as boosting food security so that nearly 1 billion people who currently go very hungry have a more reliable supply of food in the future,” he said.

Najla Al-Midfa, CEO of the Sharjah Entrepreneurship Center, said: “In the MENA (Middle East and North Africa) region, reports show that we waste up to 250 kilograms of food a year per capita. And when it comes to the UAE, food waste sets us back an average of $3.5 billion every year, with an average person wasting about 197 kilograms of food per year,” she said

The UAE Food Bank, which was launched in 2017 to provide food to those in need and eliminate food waste, works with local authorities and local and international charities to create a comprehensive ecosystem to efficiently store, package and distribute excess fresh food discarded by hotels, restaurants and supermarkets.

“The UAE’s hospitality sector, which contributes more than 30 percent of all food waste, is stepping up its efforts, with the key players in the industry taking up the UAE Food Waste Pledge to fight food waste in their kitchens,” Al-Midfa said.

The Sharjah Entrepreneurship Center is also partnering with Etihad Airways on a pilot program to introduce in-flight meal trays that use smart technology to collect data on how much food passengers waste when they fly.

“Recording food preferences helps the airline industry reduce food waste, an issue that costs the industry about $3.9 billion every year,” Al-Midfa added.

Lord Benyon, parliamentary under-secretary of state at the UK’s Department for Environment, Food and Rural Affairs, said there is the potential for a great amount of synergy between UAE and the UK in the global food industry, and that authorities in Britain aim to reduce food waste by 20 percent by 2025.

Trade between the countries was worth more than £15 billion ($20.9 billion) last year, £3 billion less than 2019 as a result of disruption caused by the pandemic.

Essam Sharaf Al-Hashimi, the head of Dubai Municipality’s Food Trade Control Section, said the city is completely dependent on imported food, with almost 8 million tons shipped in each year.

In 2015, almost 16,900 tons of imported food was rejected and ended up in landfill. By 2016, this had been reduced to 13,586 tons, and by 2020 to a little over half a ton.

Claire Hughes, director of products and innovation at British supermarket chain Sainsbury’s, said UK authorities have set a target to reduce carbon emissions to net zero by 2040, while also reducing water use, increasing recycling, and reducing food waste by 50 percent by 2030.

She said Sainsbury’s is working on developing electronic price labels on shelves and a digital system that will automatically reduce prices on food items close to their expiration dates, something that currently has to be done manually.

Martin Wickham, a food and drink investment specialist at the UK Department of International Trade, said 1.3 billion tons of food is wasted worldwide each year, which costs the global economy about $1 trillion.

However, food waste contains numerous chemicals that have a wide range of potential commercial applications, he added, and there are many small startup businesses making real inroads in this area.

He predicted that we will see the development of a very different environment for the consumption, production and transport of food and the ways in which we deal with its waste.

Khalid Al-Huraimal, the CEO of Emirati environmental-management company Bee’ah, said up to 38 percent of food is wasted in the UAE, and this figure rises to 60 percent during Ramadan.

“Today we have achieved a diversion rate away from landfill of 76 percent, which is the highest in the Middle East, and once our waste-to-energy plant is commissioned later this year, we will be close to hitting zero waste going to landfill,” he said.

He added that one of the UN’s sustainability goals is to reduce food waste by 50 percent by 2030, and the UAE is committed to achieving that target. Bee’ah has also launched programs to educate communities on the importance of segregating waste. The company is also planning to implement its strategies in Saudi Arabia and Egypt.

Al-Huraimal said the pandemic has made people more aware of the challenges relating to sustainability and climate change.

Ignacio Ramirez, the managing director of Winnow, a company that helps businesses reduce food waste, said wasted food is three times worse for the environment than single-use plastics in terms of carbon emissions but the issue is considered taboo.

He said Winnow helps its clients save $42 million a year in food waste, equivalent to 36 million meals, and about 10 percent of that is in the UAE.

Sean Dennis, the CEO of UAE-based online marketplace Seafood Souq, said almost half of all caught seafood is wasted in developing countries and about 25 percent in developed countries.

“It’s probably the most highly valuable highly perishable item that’s traded globally that we consume,” and one of the most important sources of income and health he said.