Case study The Al Mamnoon Story
Tharawat Family Business Forum 2011 All rights reserved.
The Al Mamnoon Story The Beginning Back in the 1950’s Mohammad Al Mamnoon was an ambitious young Kuwaiti, with great visions and plans for his future. Coming from a long tradition of traders, he started a little business by importing food and spices and selling them locally at his own establishment. His eye for quality and a reputation for reliability quickly turned the business into a success and in 1967 Mohammad founded the Al Mamnoon Group in Kuwait City. Mohammad and his wife Alia had two sons, Rashid and Khalid. During the 1970’s when Rashid was in Egypt for his engineering studies, he got married to Mona Al Massri, whose family owned and operated a large cotton plantation in Egypt. After Rashid finished his studies, they both moved to Kuwait and for years only visited Egypt for holidays.
The business growth By 1975, Mohammad was happy to see that his two sons Rashid and Khalid both wanted to join the family business. He therefore decided to use his son’s
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1950
Mohammad Al Mamnoon started a little business by importing food and spices and selling them locally his own establishment.
1967 1970 1975 1980
Mohammad founded the Al Mamnoon Group in Kuwait City.
Alia
when Rashid was in Egypt for his engineering studies, he got married to Mona Al Massri, whose family owned and operated a large cotton plantation in Egypt. Rashid and Khalid both wanted to join the family business. Rashid had a lot of entrepreneurial drive and convinced his father not to only import construction material, but to start a cement factory in Kuwait. Mohammad saw the advantage of diversifying from the trading activity and the factory was founded.
Mona
Khalid
1995 2000
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Rashid
Salwa
Rashid decided to build a cotton factory in Egypt.
Ahmed Ali
Mohammad, who had been Chairman and CEO of Al Mamnoon Group for 33 years decided to leave Kuwait due to sudden health problems, and to settle in the South of Spain with Alia.
Yasmeen
2011
Mohammad
Tariq
Between 2000 and 2011, Rashid was the Chairman of Al Mamnoon Holding and Khalid was a board member of both the Holding and all subsidiaries.
Marwa
additional talent to venture into the growing real estate sector by importing construction materials. Rashid, however, by now a mechanical engineer, had a lot of entrepreneurial drive and convinced his father not to only import construction material, but to start a cement factory in Kuwait. Mohammad saw the advantage of diversifying from the trading activity and the factory was founded in 1980. Khalid on the other hand, Mohammad’s second son, had done a business degree but had always been passionate about the fine food and service industry. He tried to convince his father to start a restaurant for gourmet dining, but in the Kuwait of the 1980’s Mohammad was reluctant to start a business so unrelated to the new core of the company, trade and manufacturing.
Diversification Over the next 20 years, the family expanded its trading activities and built strong relations especially with Japanese partners for agricultural products. The cement factory was quite successful. The family further diversified with investments in the real estate sector and in the financial services industry by becoming a major shareholder in a Kuwaiti bank. Khalid and Rashid both were active as managers, as well as on the boards of all companies of the Al Mamnoon Group. Always looking for further business opportunities, in 1995 Rashid decided to build a cotton factory (spinning and yarn manufacturing) in Egypt, based on his in-laws as his main cotton suppliers. Mohammad agreed to be the main investor in the new factory, through the investment arm of the Al Mamnoon Group. The factory did very well during the first few years, and therefore he decided to build another factory in Alexandria, this time a weaving plant to export high quality fabric to Europe and the US. In 2000, Mohammad, who had been Chairman and CEO of Al Mamnoon Group for 33 years decided to leave Kuwait due to sudden health problems,
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Financial Data of Al Mamnoon Holding (million $) in 2011 22.12 17.69 24.77
35.39
Revenue
200 Al Mamnoon Trading
250
400
CemCo
Al Mamnoon Investment
280 Egyptian Cotton Ltd.
and to settle in the South of Spain with Alia. He handed over the day-to-day business to Rashid and left it up to him to decide how he wanted to deal with the situation.
The ERA of change Suddenly and unexpectedly Rashid was in charge of the business. As he had always had a very close relationship with his brother, he invited Khalid to his summerhouse to discuss the possibilities they had of managing the business into the future. The brothers decided to establish a holding group to streamline the management processes and to have all their business
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activities under one umbrella. They also agreed each one of them should own 30% of the shares and their father 40%. Mohammad was reluctant to agree, since he had wanted Rashid to be in full control of the business. However, after some negotiating he finally gave in. After this equity restructuring the brothers renamed the companies Al Mamnoon Holding, with its subsidiaries Al Mamnoon Trading, Al Mamnoon Investments, CemCo and Egyptian Cotton Ltd. Between 2000 and 2011, Rashid was the Chairman of Al Mamnoon Holding and Khalid was a board member of both the Holding and all subsidiaries. During this period, non-family executives took over the management of the company.
The Third Generation Two of Rashid’s children Ahmed and Marwa went back to their mother’s homeland and became actively involved in the Al Massri cotton plantation. In recent years both yields and quality of cotton had gone down due to changes in climate patterns. They also became responsible for the management of the relationship between the Al Massri plantation and Egyptian Cotton Ltd. His other son Ali has recently completed an internship in Al Mamnoon Investment, however he is not sure if he wants to join the family business. Ali had always been a fan of technology and attempted several times to set up a business in this field together with some of his friends. Pondering about what he wants to do with his life, he now contemplates the growing field of clean-tech. Khalid and his wife Salwa have two children. Their son Tariq is active in the family business as a manager in Al Mamnoon Trading. Their daughter Yasmeen in the meantime has become a highly decorated chef in London with offers to open her own business in Europe.
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