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As the world’s biggest supplier of fossil fuels, it is in the GCC’s immediate interest to bank on its resources by boosting downstream industries and investing in alternative energy
Khalid R. Al Zayani, Chairman of Al Zayani investments that focuses on industry, banking, and real estate and owns several local dealerships of major car brands such as Rolls Royce, BMW, Land Rover, Mitsubishi and Hyundai. In an exclusive interview with BUSINESS LIFE, Al Zayani spoke about his company’s operations and future prospects. He also spoke about the worldwide food shortage, the possible solutions and the dangers of global warming.
BL: How do you think that the pressure on the US currency is going to affect your sales?
Khalid R. Al Zayani:To start with, cars imported from the USA will meet with increased demand in this part of the world due to the fact that our currencies are dollar based. Furthermore, due to Bahrain’s FTA with the USA, there will be no duty on American cars; they will definitely be cheaper than cars imported from Europe, Japan and Korea. For example, BMW manufactures their X5 and the new X6 in the USA and would therefore be duty free in Bahrain, while their 7 series coming from Germany will incur duty. Hence, everything manufactured in the USA will be cheaper in our local market. A similar situation exists with Mitsubishi’s exports from their US factories... US manufactured Mitsubishis will be cheaper than those manufactured in Japan or other parts of the world. As far as Bahrain and other GCC states are concerned, our currencies are directly linked to the dollar. We cannot dislodge ourselves from a dollar based currencies because our national income is generated in dollars. Oil is priced in dollars, and consequently everything derived from oil such as petrochemicals and energy intensive industries such as aluminium are also dollar based. We may be currently disadvantaged in relation to European and Japanese goods, but, hopefully, when we unify our GCC currencies, we will able to adjust the value of our unified currency to the dollar by raising it, say, by 20%. This would give a more realistic value to our GCC currency. However, even then, we shall have to remain linked to the US dollar simply because our national products are priced in dollar.
BL: You are the agent for Mitsubishi, Rolls Royce, BMW and what else?
Khalid R. Al Zayani:Rolls Royce, BMW, MINI, Ferrari, Maserati, Range Rover, and Land Rover are sold through Euro Motors. Zayani Motors markets Mitsubishi Motors, FUSO trucks, and heavy equipments. First Motors does Hyundai. We also have another company called Zayani Leasing. But auto business is not our only business, and is not our largest.
BL:What do you think about renewable energy as a replacement for oil especially that some economists say that it is possible whereas others say that it is impossible?
Khalid R. Al Zayani:Definitely, I am in favour of using renewable energy. We were addressing such an issue in our group. There’s a great possibility of using solar energy to produce energy in the form of electricity, water desalination, heating and cooling of buildings. Though we practically have a sunny day every day of the year, are ready to burn our gas and oil while we have free natural energy shining on us every morning.
BL: Zayani, would you elaborate regarding your new project for renewable energy and it is going to get started?
Khalid R. Al Zayani: Actually, we are in contact with some European and US based companies that are focused on such projects and it is in the development stage right now so I cannot promise you any information since that could be premature at this time. But there will be an announcement once it is completed. I can assure you again and again that this is something that is going to be of importance for the region and the rest of the world.
BL: What are your comments regarding the increased demand on food which is due to overpopulation, ethanol production, and changing eating habits in Asia?
Khalid R. Al Zayani:Food shortage is a global issue these days. The price of food is increasing due to the demand and mainly due to Asia’s influence. Nowadays, affluent people in India and China can now afford to pay the cost of more food and therefore consume more of it. There is also a growing culture of waste. People are no longer focusing on agriculture as much as they are focusing on industry. Climate warming is not a great help. Crops are grown to produce fuel rather than food. This raises a question: who is more important, the motor car or the human being? It is a shame that this is taking place, but this problem has to be globally addressed. There’s a lot of waste in Europe. Food is being destroyed rather than exported. Some agricultural companies in Europe are being paid so not to produce in order to maintain a level of pricing. That food could still be produced and given to the poor... There’s a lot of waste in America and Europe while poverty is on the increase in Africa and other parts of Asia. It is a problem and it has to be addressed to obtain a global solution. Maybe we could see an initiative from the United Nations. Britain is taking a leadership role in this field. Some sort of a solution should be found to address this problem.
BL: What kinds of solutions do you suggest?
Khalid R. Al Zayani:To provide constant aid is not a solution. We must find more constructive solutions where there are sustainable sources of food for Africa. For example, what stops us from making Sudan the food basket of the Arab world or the region? There’s a great potential in the agriculture industry within Sudan. Unfortunately, this is not developing as fast as we would like due to instability. There’s no reason why we should not invest into agriculture in Morocco for example. We should also address creating better logistics. Is it easier for us to transport food from Australia or Brazil than Morocco! With subsidies, within the GCC we can afford paying extra price for our food, However, this is not a sustainable solution.
BL: Do you think that the GCC could for some reason have a food shortage?
Khalid R. Al Zayani:We should not worry much in the GCC because we do not have a big population. The whole population in the GCC is not more than 20 million. My worry is for countries in Africa because countries there are totally undeveloped when it comes to sourcing their own food within their own boundaries. Countries in Africa lack stability. This problem does not affect India now they have become richer and they can handle it in-house. India is a vast country and there’s a plenty of water supply and they will be self sufficient. I am also not worried about China’s future. However, China is now part of the problem because its population is consuming more.
BL: Global warming is having a detrimental effect on many countries and it could spread. What are your comments?
Khalid R. Al Zayani:Global warming is again a problem. We need to address it seriously and we need leadership especially from the USA as it is currently one of the greatest producers of greenhouse gases. They could use more economical cars, consume less fossil fuel and therefore pollute less.
BL: What about our region?
Khalid R. Al Zayani:Our region could be an increasing polluter, but again as we do not have a large population, our foot print will remain very small. Per square mile we, are less populated than Europe, China, or USA. I believe that oil should be down streamed at its source. There is no reason why we should continue to supply all our oil as crude while we can downstream it to produce added value and create jobs for our people. I also believe that with the right techniques, we can do that without harming the environment. It is cheaper to produce energy related products within our region rather than send crude oil to Europe or the USA or Asia and get the job done there. Within our group, in the early 1970’s we started down-streaming from Alba; we produce high tension cables and we export throughout the world. We are the world’s largest producer high tension electricity conductors. We also produce rods that we supply to all cable manufacturers in the region.
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