Abu Dhabi, UAEMonday 1 June 2020

Frank Kane’s working lunch: the inner sanctum of Gulf business legend Mishal Kanoo

It is part majlis, part club and all Mishal Kanoo: the remarkable room at his Bur Dubai headquarters where the head of one of the region’s oldest family businesses shares his thoughts on Trump, trade and transformation.
Illustration by Mathew Kurian / The National
Illustration by Mathew Kurian / The National

Mishal Kanoo had been busy. He had just got back tired from some extended business trips, and had compounded it all by staying up late to watch a big football match. Did I mind just coming into his office for some sandwiches and a lunchtime chat?

Well, normally I would have resisted that suggestion, and reminded my lunch guest that The National’s largesse would allow us to sample the finest cuisine the Emirates could offer, money no object, restaurant of his choice.

In Mr Kanoo’s case, I was actually pleased to be passing the five-star menu. I’d had many chats with him in his office over the years, and found it perhaps the most agreeable and conversation-enabling arena in the UAE.

The HQ of Kanoo Group, in the mercantile heart of Bur Dubai, is a gem of a place that oozes history, legacy and tradition. If family business is the backbone of commerce in the Arabian Gulf, Kanoo is its main lumbar vertebra.

“We were founded in Bahrain in the 1890s, and there are few other family businesses in the Gulf that can claim to be as old,” Mr Kanoo said as he eased himself onto an leather sofa. “I believe in heritage and history.”

Looking around, you could see ample evidence of that in the room. It is in the style of “Arabic majlis meets London gentleman’s club”, and virtually every spare bit of space had some artefact on display, from centuries-old Indo-Persian warriors’ helmets, to a cased display of antique khanjar daggers, to a selection of valuable-looking gold pocket watches. “Hand-picked,” Mr Kanoo said proudly.


Working lunch

Ziad Makhzoumi one of most compelling men on Gulf’s financial scene

Badr Jafar of Crescent Group channelling talk into much-needed action

Hussein Hachem of Aramex is a man in a hurry

Mark Beer of DIFC Courts has many titles but one key role


But first, lunch. A McDonald’s delivery was dismissed on the grounds it was too smelly, and we settled for two 12-inch Subway sandwiches – melt and patty varieties – from the shop in the nearby Al Ain Computer Plaza. Accompaniments were coffee and water for me, and a Cuban cigar for him from the bookcase-sized humidor standing in one corner of the room.

“This is the place where I get away from the rest of the world,” he said, waving an arm around the majlis-club and taking in the Arabic-themed oil paintings on the walls. There was no computer or desk in the room, and Mr Kanoo explained his aversion to the tyranny of email. (Although there is a fully-equipped working office just a door away.)

I asked what was on his mind and sat back awaiting an answer. Mr Kanoo, chairman of a conglomerate that spans shipping, travel, oil and gas, engineering machinery, logistics and property, can be outspoken and even iconoclastic.

He readily offers candid views on any number of controversial subjects ranging from the “stone age” approach of running family businesses in the Gulf, to what he sees as the ongoing problems of corruption in regional economies, and the challenges of Emiratisation.

His forthrightness has got him in trouble on occasion, although he has never been officially told to “cease and desist”, he said.

He took a drag on the Cuban and thought for a moment. “To be honest, what’s on the top of my mind is just trying to keep the business ticking over until the third quarter this year. That’s when we expect to see the effects of Expo 2020 for real, and it’s an important time for us, and for Dubai,” he said.

Rather less controversial an opening gambit than I had been expecting, but maybe he needed time to get warmed up.

“I hope it’s the start of the Dubai engine kicking in. If it’s later than that, it will be a problem, but if you go by Dubai’s history, they will make it,” he said. The Expo has the potential to lift the UAE economy to a higher level, he explained, creating growth for the whole region and cementing Dubai’s role as the logistics hub for East-West trade. “It’s all interlinked,” he said.

The interlinking of global economies has, of course, come under strong attack from the new protectionism espoused most visibly by the US president Donald Trump. I asked Mr Kanoo what he thought of the new administration, and whether he thought Trump was anti-Muslim, as has been suggested after the US’s clampdown on refugees from some predominantly Muslim countries.

“I don’t think Trump is anti-anything on grounds of ideology. You should ask instead what he is for. I think he’s for his wallet and for his name, and if anything goes against those, he will be anti-that,” he answered, getting into his stride.

He did not think much of the new US president, or his policies. “The average American Joe buys his stuff from Walmart, and 95 per cent of that comes from China. If he [Trump] starts building trade walls and pushing China out, who will suffer? Joe of course. Tariffs will affect him and his family and their standard of living. At the moment his electorate feels safe but the moment it starts to hit them in the wallet, it will be a different matter,” he said.

The effect of the new protectionism would be to raise prices of everything in the US, from KFC meals to Gap jeans to cigarettes, he said, and in any case nobody could stand in the way of world trade. “The idea of globalisation just dying out is nonsense, just politicians posturing,” he said.

But the new president has got a better press in the Arabian Gulf than probably anywhere else in the world, I pointed out. Why did Mr Kanoo think that was?

“I think a deal has been struck in this region at some point,” he said inscrutably, but he didn’t want to be drawn on what he meant by that, or what the details of “the deal” were.

I changed the subject. Kanoo is big in Saudi Arabia with an HQ in Dammam, home of the soon-to-be-privatised Saudi Aramco. There is a big oil and gas component to his business there, so he might be expected to have views on the National Transformation Plan being pushed through under the auspices of deputy crown prince Mohammed bin Salman, age 31.

He had no hesitation. “I sincerely hope from the bottom of my heart that the proposed changes come to fruition. Once a change in Saudi mentality kicks in, it will be transformational, a catalyst for positive change in the whole region.”

It will not be plain sailing, however. “The problem does not lie in the ideas he’s proposing, but in their execution. There are a lot of people with vested interests – political, social, religious – who might oppose it,” he said.

“I honestly don’t know whether he will be successful. Only time will tell. He is a young man and is taking the burden of responsibility for everything on himself.”

Mr Kanoo appears to be a great believer in the leadership principle, under which great men (and occasionally women) affect the course of history by the sheer force of their personality, in politics and in business. In a rapid couple of sentences he reeled off the names of history changers who used the “cult of personality” to effect transformation: Hitler, Churchill, Roosevelt, Ataturk, as well as Jack Welch of GE and Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai.

Mr Kanoo is the fifth generation of his family in charge of the business in its current form. Although it has 4,000 employees throughout the GCC and a strong executive team in Dubai, he is the public face of the company. I got the sense that he too is beginning to feel the weight of responsibility on his shoulders.

“Usually it is the third generation of a family business where it begins to break up. It is the classic story of rags to riches back to rags. We’ve been through that and managed to hold it together,” he said.

Kanoo Group is working on a plan to take the family out of the line of executive management, by appointing professional managers to run the business, while keeping the next generation of Kanoos involved with the company through senior board positions and ambassadorial roles, he explained.

I riskily pushed the analogy with Saudi Arabia. The Saudis have made a centrepiece of their transformation the privatisation of Saudi Aramco, the state oil company that generates most of the country’s revenue through sales of crude oil and gas, in what has been billed as the biggest IPO in history.

Kanoo has also from time to time considered the benefits of privatisation, “but I’ve always resisted the temptation,” Mr Kanoo said.

“I think it’s a huge mistake to think that privatisation solves everything. It often just adds more pressures and problems. When you go public any shareholder has the right to question you. Sometimes in business you have to make unsavoury decisions, and these are best done in private. Disclosure and transparency are good things in principle, but not always good for the business,” he said.

The kind of “unsavoury decisions” he meant related to issues of business confidentiality and partner relationships, understandable in the Gulf where counterparties are often members of ruling families or governments. “For these things, you need to have closed doors,” he said.

My coffee is drunk, his cigar nearly smoked through, but our Subways remain untouched. I’m sure they would have been delicious, but eating a cumbersome sandwich and writing notes at the same time is a skill I have yet to perfect. The Subways are gifted to the office staff.

It was time to leave the Kanoo inner sanctum, take what he said is the oldest lift in Dubai to the ground floor, and head out again into the hurly-burly of Bur Dubai. This, and Deira over the Creek, is where the great transformation of the emirate was begun in the 1970s, and the area retains a sense of old-fashioned commercial buzz, although slightly shabby now.

Pretty soon, Kanoo too will respond to the southward gravity of Dubai, with glittering offices being prepared on Sheikh Zayed Road near the new canal. I just hope Mishal Kanoo packs up his majlis-club lock, stock and barrel and takes it with him.


Follow The National’s Business section on Twitter

Updated: March 4, 2017 04:00 AM



Most Popular