A new market player
Khamis Mohammed Buharoon
Khamis Mohammed Buharoon, chairman of Burooj Porperties, a subsidiary of Abu Dhabi Islamic Bank, recently signed an agreement with Datasoft, a Bangladeshi software company, to form a join venture based in UAE. He speaks to The Daily Star on business issues and opportunities.
What are your views on the current condition of the UAE, as it was suffering financially in recent years?
What happened in the Gulf is not only pertinent to the UAE, but to the whole world due to recession in recent years. In UAE, it happened because we are ahead of other neighbouring countries, ahead in everything. I would like to say that the country invested billions of dollars on infrastructure development, like airports, roads, malls, hospitals, metros, etc. They made plans 20 years ahead, which cost a lot of money and thus, inflation took place. The population of the country is only 6 million but we do have the Dubai airport that carried 40 million passengers in 2010. It is above expectations. That is how a lot of expenses were incurred.
The good news is that a sort of correction took place for us. Our overhead costs were too high for us. Now that recession has receded, it will be easy for end users to go and buy what they want. This is a better year. The year 2012 or even the middle of 2011 will be better than now. Banks will go back to finance and the circle of life will return to normalcy.
Why did you choose Bangladesh for this joint venture, rather than, say, India?
We chose Bangladesh because of labour costs and a few other factors. I don't think Bangladesh is less experienced than India. DataSoft is experienced enough with their knowledge of 300 people. They are already trained and they have implemented a lot of systems. So, for us to go to India, would cost a lot of money. And we believe Bangladesh is a new player in the market.
We are with the Bangladeshi company DataSoft as a partner. It is not our investment only, it is their investment as well. And we will make it together. We will support and work together. Bangladesh is better than its neighbouring countries. It has more educated people. In the information technology (IT) site, I was told, more than eight thousand graduates are coming out every year. So from them, we will take the best of the best and do business.
The joint venture is a 50-50 investment. What will be your contribution?
Our support is in our knowledge and experience on markets and people. Our doors are open. I was a banker for the last 20 years. I know all the banks and what the market needs. I know what is exactly right or wrong in my country. It would have taken DataSoft a long time to learn these if it started on its own.
Secondly, I will give them all my promises. Our set up is already there. We will invest in them and we will supply the customers.
On the other hand, they will bring in their knowledge to the joint venture. The system programmes are all ready. They just have to be upgraded and adjusted to market needs and regulations in the UAE.
The partnership is not only in UAE. For example, in Cairo, I was the chairman of National Development Bank, a development bank in UAE with 70 branches and 2,600 staffs. SME (Small Business Enterprises) is a major business here and there. I will do business on both sides. I will do the business in Cairo or Morocco; or even in Bangladesh. What is not in here, I will bring from UAE. So both parties will be benefited from this joint venture.
We have learnt that you are looking for more opportunities to invest in Bangladesh, especially in the power sector. What are your thoughts actually?
I have a joint venture in Egypt. We act like brokers as well as investors. We are taking a lot of factories to other countries we have shifted factories from Europe to other places after recession. It can be done in Bangladesh or UAE. One of my partners is involved in factories, like tiles, aluminium, porcelain, steel, medicine, and power plant. So we are involved in such businesses. We have shifted 200 factories to other places.
I know gas is a problem in this country. But this can be solved. So by setting up power plants, we can solve other problems too. Once the storage is opened you will create many more factories. And people will find jobs. All of these are linked together. From my investment site, I can create more funds and more budgets with syndication loans. I can shop around to bring in more money to do this.
What kind of help do you expect from the Bangladeshi government or regulators?
Of course we want to make our life easy with regulation, taxation or money transactions. We have met the governor of the central bank of Bangladesh in this regard. As an investor, I don't want to see my money blocked here. Investors want to get their money back and they want the local banks to participate.
The foreign investors also want to involve the local banks. If Bangladeshi people do not spend money, how can they expect the people from other countries, like China, Europe or Arab countries, to invest here? With local participation, it would be possible to take 20 or 25 percent in loans from the local banks.
A number of people are working in the UAE. What are the differences you noticed after you came to Bangladesh?
We have more than 800,000 people working in the UAE from Bangladesh. They are mostly involved in agriculture.
I also have a construction company where Bangladeshi people work for me. You will see them working in garages, factories and a lot of other jobs. I found a huge potential with them, like in the hotel business. I can use their experience here in Bangladesh, or even there. They are already working in many different factories. I can take educated people from here, especially from IT.
To make each system programme, you need six months and 50 people, working 12 hours a day. I can take human resources from here. I can hire them with comparatively cheaper salary packages than in my country. There are a lot of ways to work between the two countries.
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