Salam International: An Arabian thoroughbred (page 1 of 2)

Most CEOs would think twice before shelling out $5 million for a consultant to help them reorganize their company. But Qatar's Issa Abdul Salam Abu Issa did not even blink before bringing in Bain Consulting to transform the Doha-based family business.

Issa runs Salam International, which has businesses in diverse areas ranging from retail and IT to oil and gas and construction. The group employs around 3,000 people and has a turnover of $250 million, with growth of nearly 20 percent a year. Salam as a company started in 1952 as a photography shop run by Issa's father, Abdus Salam. By 1982, when he passed away and Issa took over, the company had developed into a sizable retail business.

Two decades later, the group has grown into 22 separate companies, organized in three main groups. The principal one is the Salam Group, which has operations in Qatar, the UAE, Saudi Arabia, Jordan, Kuwait and Oman.

The core business is the retailing and wholesaling of luxury goods. The second group is a public shareholding company, Salam International Investment Company, which was floated on the Doha Stock Exchange in 2000. This group manages about 15 companies that operate in diverse areas like oil and gas, telecommunications, building, construction and IT.

The third principal group of the family business is Omnix Group, which is basically a regional IT company. It is headquartered in Dubai and headed by Issa's brother Jamal. Omnix has close ties with Dubai Internet City.

Omnix is currently undertaking a $1.3 billion project in Dubai Media City where it will construct a string of smart buildings, featuring the latest in technology. Salam was also involved in carrying out the systems integration at Al Jazeera. Since then, it has taken up similar projects with another 30 television stations.

It is this diversity of business and rapid growth in various sectors that led Issa to consider reforming company operations. "Two years ago, we embarked on a transformation of our group," he says.

"The transformation consists of five elements. We used Bain as our strategy partner to create a corporate strategy, and that was done. We hired a German company to restructure our IT systems. We also used an IT consultant, Pricewaterhouse, who have developed our IT strategy. Now we have just signed with Oracle to use their software and we've signed a contract with an Egyptian company to do our implementation.

"I saw the transformation in the world economy, and I saw how small our markets are. If you take the whole GCC, including Saudi Arabia, it's still a drop in the bucket. So I saw the need for transformation. Traditionally, in luxury consumer goods, people opened stores for their own agencies. We have changed. We have started separating our agencies from our retail completely. Those are two separate structures and they both have to make a living. The retail business has to buy from the wholesale, and the wholesale has to fight its way onto shelves and into exposure within our structure. We are also rebranding our retail business to go into the bigger areas."

Two years later, Issa says that he is glad that he finally took the step. "It was crucial for us. We have reached a level where any growth, without restructuring, would have been dangerous for us. We have seen it happening within our group. You lose control when you grow. You can't afford to make mistakes. The opportunities are there but you have to be able to tap them, and for that we needed to restructure our entire operations."

The company was reorganized not only because of its internal requirements, but also because of the changes happening in the marketplace.