Ajlan & Bros Holding Company

Saudi Arabia invites global participation

Sheikh Mohammed Alajlan, Vice Chairman, Ajlan & Bros Holding Company, is spearheading Saudi Arabia’s industrial goals by inviting international investors to share in the nation’s upwards economic trajectory.

Ajlan & Bros Holding Company has grown dramatically from its roots as a textile shop in the center of the Deira market in Riyadh to an international powerhouse and one of the main private sector players supporting the country’s current diversification strategy. Throughout more than four decades, the entity has developed by continuously taking on new challenges, establishing manufacturing assets in China and extending its reach beyond retail into a plethora of areas, including real estate, energy, infrastructure, minerals and mining, financial services, event management, facility management, defense, space, food, environment, logistics, beverages, textiles, entertainment, tourism, and healthcare. Ajlan & Bros Holding Company is now actively looking to join the aerospace and waste management sectors. In 2023, the company stands out as one of the region’s largest family-owned conglomerates, employing over 15,000 workers across more than 75 companies in 25 international markets. In the previous year, the holding company signed a considerable number of partnerships that will raise Saudi Arabia’s international participation and local capacities in manufacturing and innovation to the next level.

The family company was founded by four brothers and is strongly aligned with Saudi Arabia’s Vision 2030 initiative, which looks to diversify the economy away from oil and gas towards making the Kingdom a leader in a multitude of industrial sectors, including digital technologies, manufacturing and logistics. “When the Vision 2030 initiative was launched in 2017, we understood this was the future,” said Sheikh Mohammed Alajlan, Vice Chairman of Ajlan & Bros Holding Company. “If one is not aligned with this initiative, one will be left behind and forgotten.” Along these goals, the company agreed to invest $13.3 billion with the National Industrial Development and Logistics Program in September 2021 to build up local mining and minerals industries. Additionally, the company signed two agreements in July 2022 with Saudi Aramco to invest in semiconductors and evaluate opportunities in plastic recycling.

Standing on strong pillars

Retail and real estate remain key segments for the family business and have grown significantly to cater to the entire Middle Eastern region. The company entered the real estate market in 2000 through the establishment of Abdulaziz Alajlan Sons for Trading & Real Estate Investments Company, which specializes in residential, commercial, industrial and warehousing spaces. The subsidiary now has one of the largest real estate portfolios in Saudi Arabia, with more than $10 billion in assets. The entity has also helped to attract foreign real estate investors to the country since it was conceived, pulling around $3 billion into the local market from Asia, Europe and the United States.

The holding company is also currently involved in updating and operating Saudi Arabia’s infrastructure, including implementing the $690-million Jubail 3B independent water desalination project. The facility will produce 570,000 cubic meters of water per day based on reverse osmosis technology when it comes online in Q1 2024. Ajlan & Bros Holding will operate the asset alongside global utility company Engie and local construction entity Nesma & Partners Contracting Company. Additionally, Ajlan & Bros Holding Company acquired a flour milling company in 2021 alongside its reputable partners. The company runs three mills in the Kingdom with a combined capacity of 1.3 million tons of flour per year.

Securing a slice of the defense market

Another new focus segment for Ajlan & Bros Holding Company is the defense industry. Saudi Arabia is heavily involved in the defense sector and is the sixth largest spender in the segment behind the United States, China, India, Russia and the United Kingdom. Formed at the beginning of 2022, the holding company’s fully owned SCOPA Defense is rallying to further increase Saudi Arabia’s involvement in the sector. The entity is registered in both Saudi Arabia and with the Directorate of Defense Trade Controls in the United States. It is focused on co-operation with companies from the United States and European Union that follow North Atlantic Treaty Organization’s guidelines.

In November 2022, the defense subsidiary signed a memorandum of understanding with local manufacturer National Company for Mechanical Systems to produce Paramount Group’s Mbombe 4 mine-resistant armored vehicle in Saudi Arabia. “Vision 2030 clearly stipulates that Saudi Arabia is aiming to localize 50% of its military expenditures by 2030, which is the main reason we entered this sector,” said Sheikh Mohammed Alajlan. At the beginning of 2023, SCOPA Defense signed up to be a main partner for the World Defense Show, which is set to take place in Riyadh in 2024. The previous show saw around $7.92 billion in defense deals signed.

Forays into financial services

The holding company is also keen to unlock Saudi Arabia’s nascent fintech sector, which saw growth of 79% and investments of $400 million in twelve months ending in November 2022. According to Checkout.com, more than one tenth of Saudi’s spend money online at least once per day via e-commerce platforms. Additionally, using cash in lieu of digital payments in the country reduced from 27% in 2021 to 20% in 2022, with the trend expected to continue into 2023. Due to the skyrocketing potential of the sector, Saudi Arabia has outlined a fintech strategy that aims to increase digital transactions to 70% by 2025 and up the sector’s contributions to the nation’s gross domestic product to $3.46 billion by 2030.

To this end, Ajlan & Bros Holding Company created Tiqmo alongside Chinese mobile payment entity SwiftPass, which has built a unique e-payment platform from scratch. In October 2022, the Saudi Central Bank fully licensed the new entity. Similarly, Ajlan & Bros Holding Company and Qatar National Bank Group signed a joint venture agreement to bring the Qatari bank’s digital banking platform into Saudi Arabia as part of the bank’s globalization strategy.

Growing its global footprint

The conglomerate is one of the oldest Middle Eastern investors in the Chinese market, with direct participation spanning more than three decades. The holding company has recently begun to build up its portfolio alongside Chinese partners, notably in logistics with its AJEX Logistics entity partnered with Chinese courier giant SF Express; Tiqmo with the digital payment company SwiftPass; and a joint venture with biotechnology company Berry Genomics that works to identify genetic diseases.

With China beginning to unlock its market after letting go of its zero-COVID policy in December 2022, Ajlan & Bros Holding Company has furthered its co-operation in the market, with investment deals with 15 Chinese companies worth around $8.6 billion signed in late-December 2022, including deals with electronic equipment manufacturer CHINT, natural resource company Chifeng Jilong Gold Mining Company and medical design and automation entity Shanghai General Healthy Information and Technology Company. “We have significant partnerships with China because Chinese companies have a large appetite and are eager to access Middle Eastern markets,” said Sheikh Mohammed Alajlan.

While China remains a key partner for the conglomerate, Ajlan & Bros Holding Company is also seeking participation in other global markets and sectors. In July 2022, the company signed three memorandums of understanding with American companies worth around $2.1 billion. The first is with Texas-based reinforced thermoplastic pipe player Specialty RTP for participation in the non-metallic pipe segment. According to Sheikh Mohammed Alajlan, the global segment was worth $36 billion in 2022 and is expected to grow by 28% annually. The second is with global smart energy entity Solar Edge, which is currently valued at $14.7 billion and operates in 153 countries. The partners intend to co-operate in the development of green energy, sustainable transport, hydrogen, robotics and smart manufacturing. The third agreement with American healthcare technology firm Lightbeam will see the two companies pursue opportunities in remote patient monitoring to improve the quality of healthcare in Saudi Arabia.

The conglomerate has also made forays into Egypt, with around $5 billion in deals made with Egyptian players in July 2022. The Saudi company intends to develop a multi-purpose terminal in Damietta Port on the Mediterranean coast and establish eight new entities in the Egyptian market in tourism, logistics, fintech and banking. Additionally, the Saudi holding company signed deals with Kazakhstani companies in July 2022 worth $200 million in the areas of food, mining and environmental protection. In August 2022, Ajlan & Bros Holding Company signed agreements worth around $7 billion with Malaysian companies in the areas of manufacturing, healthcare, technology, entertainment and defense. The company also created new entities with Japanese trade and investment conglomerate Marubeni and Qatar’s United District Energy International in January 2023 to develop Saudi Arabia’s cooling sector. With this huge uptick in partnerships and investment, Ajlan & Bros Holding Company is set to contribute towards revolutionizing both Saudi and international markets and be one of the driving forces behind the nation’s goal to become the center of industry for the region.

Supporting the local community

Along with backing Saudi Arabia’s industrial goals, Ajlan & Bros Holding Company continues to make efforts to support the local community through its environmental, social and corporate governance campaigns. During the COVID-19 pandemic, the entity alongside fellow local conglomerate Rashed Abdul Rahman AlRashed & Sons Group contributed $2.66 million each in April 2022 towards the country’s Health Endowment Fund to provide patients with equipment, treatments and rehabilitation. Additionally, the company donated $2.66 million to the National Charity Campaign that ran throughout Ramadan in 2022 to promote social responsibility and development work. Ajlan & Bros Holding Company also continues to donate towards education, including legacy donations towards summer camps and women’s charities.