Alkhorayef Group – Family Values, Corporate Standards

The Alkhorayef Group is a family business. Family business brings to mind images of small, mom & pop operations, but the Alkhorayef Group is far from that. Instead, it is a conglomerate of companies founded in 1957. Operating across a range of countries and business sectors, the Group is present in the oil and gas field producing oil pumps, and in the commercial field representing international brands such as Yamaha, Linde, Kalmar, Hangcha, Volvo Penta, John Deere, Zodiac and others.

We learn how this family-owned conglomerate is remaining adaptable and up to date in a rapidly shifting economy.

“We also have an array of pumping solutions where we sell pumping machines, water and power,” explains Abdullah Alkhorayef, CEO of Commercial Division. “It’s a contracting business for the infrastructure sector. We have industries that manufacture centre pivot irrigation systems, generators, western turbine pumps and gear motors. We also have our holding company taking care of real estate development and different types of investments.”

Indeed, while the entire Group is family-owned and operated, professionalism and good corporate governance are the watchwords of the company.

“We are a family company that is aware of corporate governance and the proper constitution of the company,” Alkhorayef says. “Since the 1980s we did comprehensive work on the company’s authority matrix and governance across all our companies from a financial, accounting and succession point of view. It is about professionality, not family members. They compete with other peers for CEO positions or any other position in the company like everybody else. We have been a professional family business for a very long time, depending on systems and procedures rather than the people itself.”

The size of the conglomerate means it is present in a range of industries, but some things remain true in every aspect of the business.

“It’s very simple. We are selling solutions and providing our customers with top after-sales services. We consider ourselves partners with our customers,” Alkhorayef tells us. “In most of our projects, we have long-lasting relationships with customers. For example, we work with a large agricultural company in Saudi Arabia. We provide them with a unique training program for employees. Instead of us doing their services we train mechanics and technicians and open our diagnostic tools up to them. We make their life easier, not by making them dependent on us, but by allowing them to depend on their own team. This is one of the unique ways that we work. We also have a lot of service contracts for preventative maintenance.”

Big Enough to Adapt

The size and variety of industries Alkhorayef Group operate in means its eggs are never in one basket, and the Group can adapt and rebalance the business depending on market circumstances. For a long time, the Group was concentrated in the agricultural sector, but when the government established laws ending the production of wheat in Saudi Arabia the Group diversified into different business sectors.

This sort of flexibility keeps the business successful while also allowing the Group to reflect government strategy on a national level.

“We work to reflect the vision of Saudi Arabia within the company,” Alkhorayef says. “For instance, now with localisation of production, the government is trying to have more and more products manufactured within Saudi Arabia. It is something we’re seriously talking about. We are looking at production lines, robotic systems, and leveraging the government ambition to drive recruitment in Saudi Arabia. In our Research and Development divisions, we are looking at localising our procurement for some of our potential products that can be sold in the Saudi market. We’re keeping everyone busy, especially with facilities around Jeddah, and we’re looking at things that can be sold in the future.”

The Alkhorayef Group pays close attention to what is going on in the economy so that it is able to adapt to fit the market environments it is working within.

“Moving forward the sectors we work in depend on commodities prices, oil prices obviously affect us, and then the purchasing power of the government affects our ability to develop infrastructure projects,” Alkhorayef says.

The good governance that is core to the way Alkhorayef Group works is on display here, with each person being held responsible for ensuring the success and smooth running of their own sector of the Group.

“Everybody in their own sector is responsible for the future of day-to-day operations, along with the board who decide how to take care of the future of the company as a whole,” Alkhorayef says. “Back in the 1980s we realised we needed to enter new business sectors, so every sector has its own board and faces its own challenges in how to move forward in their domain. Diversification helps.”

Of course, this approach depends on having the right people in the right places within the company, and Human Resources are a key element of the Group’s success.

“On a group level, we have our corporate HR department that carries out acquisition, training, and recruiting. They take care of the high-level strategy approach for the company when it comes to budget controls, systems, and day-to-day operations with employees,” Alkhorayef says. “We have our own recruiting department that knows exactly what we need, and they help us directly recruit or work through recruiting agencies to find the best calibre candidates on the market. They also support the CEO of the Group, comparing the salaries we offer with the competition, making sure employees’ satisfaction levels are high. Then we also invest more in a plug-and-play strategy which means we can take on newcomers sooner than before by giving them a proper induction programme.”

The Group continues to adapt to changes in the market by upgrading its technology and procedures.

“The company is going through a major digitalisation project. It is the future, taking care of the business in every respect, leveraging the data we have gathered throughout our businesses,” Alkhorayef tells us. “We’re taking a very holistic approach. Through our development department, we’re testing different ideas related to the Vision 2030 project, including renewable power, looking at our existing portfolios and challenging the future of these projects and how they will be perceived.”

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