Maher Al Kaabi on Al Serkal Group's UAE Legacy and Circular Economy Leadership

From pioneering essential infrastructure like Dubai Electricity and Water Authority and Dubai Telephone Company (now Etisalat), to spearheading circular economy initiatives, Al Serkal Group remains at the forefront of innovation and sustainability. Maher emphasizes the importance of strategic governance in sustaining family businesses across generations and discusses the Group's proactive approach to digital transformation and investments in AI and digital assets. This interview highlights Al Serkal Group's ongoing commitment to driving economic progress and environmental sustainability in the region.

Courtney McQuade (00:00):

Hi, I'm Courtney McQuade with Markets Group, here at our Private Wealth Middle East Forum. With me today is Maher Al Kaabi, Advisor to Group Chairman and Independent Board Member of Al Serkal Group. It's great to see you Maher.

Maher Al Kaabi (00:13):

Pleasure. Thank you very much for having me.

Courtney McQuade (00:15):

So tell me a little bit about your company, your family that you work for and your role.

Maher Al Kaabi (00:22):

Sure. Al Serkal Group has been there as a company, as a family, 165 years old. We had a political role for about 70 years. So all the treaties were established by the British Government and the traditional government over here. They were entrusted to make sure that these treaties are actually getting executed. They also had a role whereby all the permits, issuance for people coming into the country. So they were actually entrusted with that. They were also making sure all the disputes happening between families and tribal, they were the judges for that. And then the family just said, "Okay, we need to pivot." And we started opening businesses.


So one of the first thing the family did is, "What are the things that would impact people's life, and how can we help them?" There was no electricity back in 1957. So they brought the first generator. And then more generator came in and we said, "Okay, why don't we create an authority, and we have our own electricity department?" So we co-founded Dubai Electricity and Water Authority. And similarly we co-founded something similar in another neighboring city, which is Sharjah. But then they said, "Okay, we also need something else to help the people live to progress, which is phones." So we brought the first phone in 1957, and that led to the development of Dubai Telephone Company, which eventually became Etisalat, which is today the world 10th or 12th largest telecom company globally.

Courtney McQuade (01:45):


Maher Al Kaabi (01:46):

And then we said, "Okay, we need to help people with trade. So if you want to do trade, we need to help them with the financial services." So we started the first bank in 1963, which was National Bank of Dubai, which is Emirates NBD as we speak as a brand, which is one of the largest conglomerate in the entire Middle East, spanning across 53 countries globally in Europe, in the region as well. And they're expanding even further. And we opened the second bank, and then we said, "Okay, we pivot to infrastructure building even further." So the metros came up and we do the OEM for the metro since inception.


We also had Etihad Rail came up from the capital in Abu Dhabi. So we are the sole agent for Etihad Rail for both locomotives. So all the locomotives today come from a progressive company in US, and all the wagons come from a company called CRRC in China, which is one of the largest, if not the largest train manufacturers globally, by the way.


We do smart mobility to further help people's life. So if you would like to go to the metro or come off the metro and go to a certain places, so we cut the Dubai into zones. So for various zones we have an app where you can actually call for a mini bus to come and pick you up, to take you through that radius. So your commute becomes easier to use the metro. And you don't end up paying so much of money by taking a cab after you're getting off, or coming up to the metro itself. We have another-

Courtney McQuade (03:14):

That's so smart.

Maher Al Kaabi (03:14):

Yeah. We have another very important vertical, which is related to circular economy. I also happen to sit on the UAE Circular Economy Council. So we look at all the policies in the UAE, we have about 22 policies that we look at. How do we make sure that we move from linear economy to circular economy? So one of the thing group has done early on, which has been entrusted by the government, which is the PPP contract that we have. All the food establishment generates certain waste, which is the fat and oil grease. Earlier, these waste would actually go to the municipal lines and clog them, which is a problem to a lot of governments as we speak today globally. So UAE and Dubai, particularly early on, realized that challenge. And they came to the family because the family were pioneer in introducing so many things. They said, "Find us a solution for this." This was back in 1984. And then we said, "Okay, we'll try to bring something called a grease trap, which will be under the sink. So we will trap all this grease, and shift the problem somewhere else, which is the landfill."


We said, "This is not an environmentally solution, so we need to find a way that when we shift this, let's treat this waste, and let's use this waste which are going to be economically viable." So we came up with an idea saying that, "Okay, we will take this waste and we'll treat it, and three byproducts will come out of it. One is water, which will be used again back for irrigation. A sludge will come out of it, which we can treat, which can be used as a fertilizer. And brown oil comes out of it, which we can use it for soap manufacturing or cosmetics." So if you happen to use one of cosmetics, it's very organic. So it's not chemicals, it's fantastic to be honest with you.


And then, as we speak, we are under commissioning, opening up another plant in Abu Dhabi where we use another waste generated by the food establishment, which is the used cooking oils. All the cooking they do, there's always oils that they need to dispose. So now we'll take that feedstock and we'll convert it into biofuel. So full circle economy in terms of helping the environment as well.

Courtney McQuade (05:08):

Wow, that's a lot. And in your role as the advisor to this family, which part of this is your responsibility? Is it to figure out which of these businesses or these efforts the family wants to take part in?

Maher Al Kaabi (05:28):

Sure. I was humbled that when I was invited to be on the board quite early on. But then I joined the board somewhere in 2000 just before Covid, 2020, February 7th to be precise. I think the very important role that I had is, how do we make sure that we have the right governance so we can have the family offices sustainable for a longer period? Reason being, the family businesses are a fabric of any economy globally. So family businesses, anything between 60 to 90% of GDB of countries. But the unfortunate fact is, only 40% of family businesses see second generation. And these are global statistics, even in US as well.

Courtney McQuade (06:12):


Maher Al Kaabi (06:12):

Only 16% see the family business's third generation. So you lost so much of value from the economy. So that was the challenge that the family business had. Although they have four generation, so they're lucky that they're able to sustain it, but they want to make sure as family grows, your income [inaudible 00:06:33] which you can distribute. How do we make sure that we actually have a good transition for the family businesses and make them last and be sustainable? So that was mission number one. So to have the governance. But also then, how do we make sure that every single vertical is profitable by itself, and there's no commingling of funds being used? So that's important.


Third was, how do we become relevant to the economy we're living in and global economy. So UAE is very forward-thinking in terms of digitizing everything. So all the government services that we have today, they're completely digital. And this is a good problem that we have, that it's very difficult for private sectors to actually catch up with the government. I happen to work in other parts of the world in Europe, where actually always private sector leads and governments follows. Here's a different problem.

Courtney McQuade (07:17):

It's the opposite.

Maher Al Kaabi (07:18):

Yep, absolutely. So digital economy is in the backbone of UAE since 1995. And they've actually came up because they actually worked with it. Now, it was very important also for the rulers to recognize, how do we safeguard the family offices? So one of the things we work with them, we launched a program called Venture Studios. How do we teach the young generation on Venture Studios, which is much more successful model than accelerator and incubator program? And then the VC program, 30% more. So we actually finished the first cohort just last year, and we trained them. So that was part also the role of working with the ministry, Ministry of Economy, that select the family offices, teach them these tricks so they can be aligned with the economy of UAE, which is transforming to digital.


But it's not only UAE is transforming to digital, the whole world is going to be transforming eventually digital. So there are a lot of technology advancement happening. How as a government we use it, and how as a corporation and family business users? So that's another thing. So one of the things we early worked on in 2000 as well, 2020, is digitizing our processes. But you can't digitize immediately without understanding the culture of the company.


So the first thing we did is, had a culture outing session. We wanted to understand what the senior management team and board members, what is the culture we want to adopt, which is going to be meaningful for us going forward. So we addressed that. Once we addressed that, now this is something, they own it. They mentioned several problems that we need to look at. One of the things they mentioned was, how do we become digital in whatever we do? So that is something they came up with, although they've never done it before. And that was problem number one they wanted to solve. It becomes relatively easier to do, because there is an easy adoption, because it was their recommendation themself. And there were many other things. And then of course when we put governance in place, you put also something very important. You work on so many projects, how do you put a project management office, which we look after overseas, the entire group's project management, so it's done in a properly governed manner, so you are more efficient and be relevant?

Courtney McQuade (09:35):

And it makes it actually happen. That's a very pragmatic approach.

Maher Al Kaabi (09:39):


Courtney McQuade (09:40):

Well, speaking of digitizing, you just came off a panel session talking about investments in AI, Web3 and digital assets. What were some of the key takeaways from that panel?

Maher Al Kaabi (09:53):

Anything we want to do, we need to understand why we are going to do it. Don't jump on the bandwagon just because people are doing it. KPMG and PwC came up with the report. 67 of projects fails, 67%. These are staggering numbers. And these are 67% projects, are into digital transformation they fail, because you jumped on the wagon without understanding why you want to do these things. The use case was not clear. First, we'll get clarity on the use case, understand what you want to do, and then bring the relevant technology to it. Of course, before that, you need to make sure that your culture is aligned. You have the people, you've got training done already. But first, understand what is it that you want to do. If you don't want to have a use case for AI, don't do it. But having said that, AI going to be penetrating into every single industry, which it already did, and it's going to further do that. So that's lesson number one.


When it comes to digital assets, it is very important to understand, yes, this is a very volatile asset. It's a very new asset, but this asset is here to stay. The sooner we understand it, the faster we'll be also make it part of our portfolio, even if it's a small allocation. So don't worry about the train leaving the station, doesn't matter. But make sure that you understand it, so you can also put some allocation to that thing, but you need to make sure that you have a right risk framework behind it, and then you move forward. I think these are the two key takes, I would say, in my humble opinion.

Courtney McQuade (11:27):

That makes sense. Especially too, as you'd mentioned on stage today with the regulators not yet fully caught up. When they do get caught up, they might be looking backward a little bit.

Maher Al Kaabi (11:40):

That's true. And regulators are working differently in different parts of the world. Now that will tell you how wise the governments are or how forward-looking they are. And some of them have doing a fantastic job. Ourself, we started with something called VARA, a regulator for virtual assets very early on, three years ago. And that brought a lots of people who could not do anything on digital assets globally, and they flocked them over here. Because we have a regular platform, we have the regulation in place, we've got a sandbox to test and make sure that people can do it. And of course, regulation is also adaptable, IE, is not something we've done and that's it. But it's going to evolve as time passes by.


But the beauty about doing this regulation, it was not done in an ivory tower. We actually brought the subject matter expert in the private sectors who are in the digital space. So we collaborate with them what should be the right regulations? So when you do it this way, it is easier for it to be implemented from regulator perspective where you are more safer, because the use cases are there and they're working with you. So now they are partners.

Courtney McQuade (12:52):

That makes sense.

Maher Al Kaabi (12:52):

It's not regulators in private sectors, it's now your partners. And we continuously do that. And some of these partners are actually on the board of the regulation itself.

Courtney McQuade (13:02):

That is a collaborative effort, which makes sense. Well, thank you so much for joining. Have you been enjoying the event so far today?

Maher Al Kaabi (13:11):

Absolutely. I honestly believe such events are creating huge awareness to people. You've seen probably inside, I've been asking question to the audience, how many of them have cryptocurrencies, investment? Whether the investment is digital? Quite a lot of them don't know it. But with this such events over here, it actually help to create awareness, and that is how you will actually move forward.

Courtney McQuade (13:34):

Agreed. Well, thank you so much for taking the time, Maher, it's great to meet you.

Maher Al Kaabi (13:38):

Pleasure, likewise. Thank you very much.

Courtney McQuade (13:39):

And we're live at our Private Wealth Middle East Forum.