Rudain Kawar: CEO of Kawar Group of Companies
Date of Interview: November 2006
The Kawar family is one of the few Jordanian families that can claim to have almost singlehandedly pioneered a series of major industries in the first half of the last century, with their tradition as Jordan’s first entrepreneurs continuing to this day. The founder of the business empire, Amin Kawar, started the mining phosphate in 1935 and began the mining industry within the Kingdom. In 1955 his son, Tawfiq, effectively founded Jordan’s shipping industry, which his grandsons continued, diversifying the business and expanding it’s geographic footprint.
In 2006, Rudain Kawar, the current CEO of the Kawar Group, spoke to Venture about diversifying his group’s companies and expanding their geographical footprint.
From the Interview
Most large and diversified family businesses face serious management difficulties, failing to attract top-notch managers and expertise. How has the Kawar Group managed and what plans are there to take the company to the next level?
We are currently examining the best option for creating the next corporate structure for the group. This is needed to support the major expansion to the group’s existing businesses and ventures in new sectors. To be able to do so, we are studying several options like private equity, closed private share holding with likeminded businesses or an IPO. We now have experienced GMs running our companies and we get more involved at strategic levels.
Family companies have to prepare themselves for better corporate governance and effective reporting and auditing mechanisms. These changes make sense in the long run, as it unlocks the value of the business by turning your shares to liquid assets. It also greatly enhances the potential and long-term viability of the businesses. More than 90 percent of family businesses do not survive the third generation, as problems break out between siblings.
Are you for or against privatization of the Aqaba port?
We in the first place were the ones who encouraged the port authority to bring foreign strategic partners to help restructure the vital port services. Jordanians couldn’t do such mega jobs by themselves, and the companies did come and sign deals to operate the port on a 25-year contract basis. Increasing Jordanian participation ultimately will enhance the port’s overall client services; that’s why we’re planning to get more involved in the operations.
As far as privatization goes, Jordan has to adapt to the changing global environment. We in fact were one of the first businesses to bid for a privatization project in Jordan. That was the privatizing of the railroad connecting Aqaba and Sheidiah; unfortunately, there were several complications and it didn’t fly after we had put four years of work into the project.
You are also the Chairman of Injaz, one of Jordan’s most successful youth support organizations. How is this NGO changing Jordan?
We offer students training in outside-the-box thinking. We also offer many courses on starting businesses, entrepreneurship, and on learning what to expect from a career in one discipline or another. Any student can come to train with us for a couple of days to get career exposure so he or she can eventually decide if their choice is what they really want to practice eventually. I can’t stress enough the importance of career counseling, which is largely missing in Jordan. The decisions of many Jordanians when selecting their study majors at universities are influenced by family members or friends.
They’re mostly clueless when they start their education, not knowing what they’re getting into until it’s too late. The future of Jordan will be created by those students … so they need to be directed according to what they want or see themselves doing. Through the Injaz programs they’d be directed to areas they’d likely be more passionate about and thus be more passionate about their future careers. Such an approach produces the variety in expertise that is needed by industry and business.
What’s happened since?
Despite significant local and regional challenges faced over the last few years, not only has Kawar Group effectively adapted; but they have also been successful in realizing considerable growth. And while their overall corporate structure remains a work in progress, they have solidified their business by allowing for more autonomy in how the group companies are run and by diversifying into new areas. Kawar Energy, in particular, has been a major success, especially with the Shams Ma’an renewable energy project. Additionally, their logistics arm was restructured to become a successful independent entity. Their support for entities like Injaz and other NGOs promoting education and health has also continued to this day.
This is part five of a 10-piece story. Articles in the series of Venture at 10 also include: