Sulaiman Al-Rajhi’s life a rags to riches story

Sulaiman Al-Rajhi’s life a rags to riches story
Updated 27 September 2012

Sulaiman Al-Rajhi’s life a rags to riches story

Sulaiman Al-Rajhi’s life a rags to riches story

Saudi Arabia’s rags-to-riches billionaire Sulaiman Al-Rajhi is also a world-renowned philanthropist. He is the founder of Al-Rajhi Bank, the largest Islamic bank in the world, and one of the largest companies in Saudi Arabia. As of 2011, his wealth was estimated by Forbes to be $7.7 billion, making him the 120th richest person in the world. His flagship SAAR Foundation is a leading charity organization in the Kingdom. The Al-Rajhi family is considered as one of the Kingdom’s wealthiest non-royals, and among the world’s leading philanthropists.
Al-Rajhi is a billionaire who chose last year to become a poor man at his own will without having any cash or real estates or stocks that he owned earlier. He became penniless after transferring all his assets among his children and set aside the rest for endowments. In recognition of his outstanding work to serve Islam, including his role in establishing the world’s largest Islamic bank and his regular contribution toward humanitarian efforts to fight poverty, Al-Rajhi was chosen for this year’s prestigious King Faisal International Prize for Service to Islam.
In an interview with Muhammad Al-Harbi of Al-Eqtisadiah business daily, Al-Rajhi speaks about how he was able to succeed in convincing chiefs of the leading central banks in the world, including that of the Bank of England, nearly 30 years ago that interest is forbidden in both Islam and Christianity, and that the Islamic banking is the most effective solution to activate Islamic financing in the world and make it a real boost to the global economy.
The story of Al-Rajhi is that of a man who made his fortunes from scratch, relying on grit and determination. Al-Rajhi threw away his huge wealth through two windows — distributed a major part of his inheritance among his children and transferred another portion to endowments, which are regarded as the largest endowment in the history of the Islamic world. He had to fight poverty and suffering during his childhood before becoming a billionaire through hard work and relentless efforts, and then leaving all his fortunes to become penniless again.
Al-Rajhi is still very active and hardworking even in his 80s with youthful spirits. He begins his work daily after morning prayers and is active until Isha prayers before going to bed early. He is now fully concentrated on running the endowment project under his SAAR Foundation, and traveling various regions of the Kingdom managing activities related with it. He always carries a pocket diary containing his daily programs and activities and he is accustomed to stick on to the schedule he had prepared well in advance.
Al-Rajhi scored excellent performance results in almost all businesses in which he carved out a niche for himself. In addition to establishing the world’s largest Islamic bank, he founded the largest poultry farm in the Middle East. The credit of activating the organic farming experiment in the Kingdom mainly goes to him through launching a number of farming projects, including Al-Laith shrimp farming. He also established real estate and other investment projects.

Excerpts:

Sheikh Suleiman, have you become a poor man again?
Yes. Now I own only my dresses. I distributed my wealth among my children and set aside a portion for endowment to run charity projects. As far as I am concerned, this situation was not a strange one. My financial condition reached zero point two times in my life, and therefore I have had the feeling and understanding (about poverty) well. But now the feeling is accompanied by happiness, relaxation and the peace of mind. The zero phase in life this time is purely because of my own decision and choice.

Why did you choose this path?
All wealth belongs to Allah, and we are only those who are entrusted (by God) to take care of them. There were several reasons that prompted me to distribute the wealth and that resulted in performing this virtue. Most important among them is to foster brotherhood and love among my children and safeguard their harmonious relationship. This is more significant than any wealth in this life. I was also keen not to be instrumental in wasting the precious time of courts in case of any differences of opinion among them with regard to partition of inheritance. There are several examples that everybody could see when children entered in dispute over wealth and that led to the collapse of companies. Nation has lost many large companies and their wealth that we could have been saved if we tackled the matter in a right manner. Apart from this, every Muslim should work on some endowments that could benefit him in the life after death. Likewise, I prefer my children to work on developing wealth, which they inherit after my death, during my lifetime itself rather than I continue working to increase them.

Are you getting enough free time after the distribution of wealth?
As earlier I am still working on developing endowments. I will donate and give alms from it until Allah takes over this trusted deposit. I have worked out a meticulous scheme for this endowment and developed it with the support of specialist consultants and agencies. This idea struck me long before. Usually people in the Islamic world set aside one-third or one-fourth of their wealth for endowment and that will be effective only after their death. But in my case, I decided to implement this decision in my lifetime itself. So I invited my children to Makkah during the end of Ramadan and presented the idea in front of them. They readily agreed it and then I distributed my wealth among my children in addition to setting aside a part of it for endowment. I sought the help of consultants to facilitate the procedures for the distribution of all my assets including properties, real estates and stocks, and that was completed in a cordial atmosphere. All my children are now fully satisfied with my initiative and they are now working on these properties in my lifetime.

How much wealth you distributed among children and set aside for endowment?
He laughed without giving an answer.

How do you feel now about your projects?
I would like to point out that there were some factors that prompted me to make investments in certain specific areas. My experiment in money exchange was the temptation to set up a bank. The absence of any Islamic banking was also another factor in establishing Al-Rajhi Bank, which is now the world's biggest Islamic lender by market value. I began the experiment with opening an office in Britain where we introduced Islamic banking system at a greater level. The experiment was a success and it had received total backing of the Saudi Islamic scholars at that time. I still recall the application made for getting license for the bank was turned down in the beginning. This was because the concerned British officials did not have any idea about Islamic banking. Therefore, I went to London and met with the manager of the Bank of England and two of his deputies. I told them that Muslims and Christians see interest as forbidden (haram), and the Muslim and Christian religious people are unwilling to make transactions with banks based on interest and instead prefer to keep their cash and other valuables in boxes at their homes. I tried to convince them that (if we establish Islamic banks) this money would be helpful to strengthen the world economy. These talks were helpful in convincing them and they agreed to open Islamic banks. Then I traveled widely throughout the world in the West and East, and met with the chiefs of central banks in various countries and explained to them about the salient features of the Islamic economy. We started working and achieved success through launching it in the Kingdom and implementing it in London. When I returned to the Kingdom from London, I met the late Grand Mufti Sheikh Abdul Aziz bin Baz and Sheikh Abdullah bin Humaid, and informed them about the plan saying: 'We would reach, by the grace of Allah, the Islamic banking within a stipulated period of time.' They praised me for the initiative. We started aggressively implementing the project and that is in the form of Al-Rajhi Bank as you see now. Regarding Al-Watania Poultry, the idea of establishing such a venture struck me after my visit to a poultry project abroad. I saw that the way of slaughtering chicken was not proper. Then I decided to make investments in the field of poultry after considering it as a duty to my religion and nation. I started the project even though making investments in poultry involved high risks in those days. Now Al-Watania has become a mega Saudi project that is instrumental in achieving food security in many respects. The company enjoys a 40 percent market share in the Kingdom, and Al-Watania chickens are naturally fed and halal slaughtered in accordance with the Shariah principles.

What about your insistence on introducing organic farming through Al-Watania agricultural projects?
As you see, now I am 85 and still enjoy good health. If we pursue organic farming as our healthy food style, we can bring down cost of treatment to a great extent. We made several experiments in the field of organic farming. Our numerous experiments met with setbacks in the beginning. This prompted many engineers and workers to reach a conclusion that it is impossible to have organic farming and profit together. In the beginning, they were firm in their view that this would not at all be successful. But I insisted that it would work and continued compelling them to proceed with the venture. At one time, I took a firm position and told them either to do organic farming or quit. Now we are reaping the fruits of this lucrative business in line with my vision to provide only the healthiest, safest and most trustworthy food to consumers. Al-Watania Agricultural Company stopped using chemicals and artificial fertilizers and focused exclusively on organic methods such as the use of pest insect repellants and animal manure.

Your austerity and thriftiness on spending are well known. Please comment?
I am not a miser. But I am always vigilant against extravagance. I always try to impart this lesson to all those working with me whether it is in banking or poultry or other projects, and I am more concerned about it when it is coming to the case of my children. In the past, I never gave money to my children when they were young in return for nothing. When any one of them approached me to give them cash, I asked them to do some work in exchange for it. In our life, we practice some extravagance without being aware of it. But it affects our whole life, exhausting us and putting a burden on our country. For example, there is no logic in putting heavy curtain on our windows and then lighting lamps in daytime when we get sunlight free of cost while electric lamps are costly.

Despite all your wealth, why don't you still have a private aircraft?
Let me tell you that I have many planes but they belong to various airlines. I have ownership in all of them to the tune of the ticket fare that I pay for each travel. I always travel in economy class with the conviction that Allah bestowed us wealth not for showing arrogance or spend extravagantly but to deal with wealth as a trusted property.

What about the recreation and hobbies of Sheikh Al-Rajhi? How do you spend free time?
I have not any special recreations. However, I find happiness and enjoyment while making a trip to the desert. I never went out of the Kingdom on a tourism trip.

What about your will? What are its salient features?
Regarding my will related with wealth, I have already implemented it in my lifetime. As for the remaining aspect of my will, it is a public matter and also involves certain private matters, besides encouraging my children to maintain their kinship and always reminding them about the life after death.

How do you see your children's private investments? Are there any directives to them?
A number of them are doing an excellent work in accordance with their knowledge and experience. Most often, I try to guide them when I noticed anything undesirable even if it is in their private investments. Regarding my younger children, I always guide them, especially in the case of their investments. This is purely out of my keenness that they should be honest in their work as well as in spending wealth given by God as a trusted property. I am also eager to hear about my children that they are interacting with the society in the best possible manner, and that they are serving their religion and nation.

In what way you like to spend your time? What are the places that you like most?
I used to travel between Riyadh, Qassim, Al-Jouf, and Al-Laith to oversee my projects there. I always prefer to visit the farms in Qassim and Al-Jouf.

How could you preserve many old and precious things and antiques at Suleiman Al-Rajhi Museum?
A long time ago when I was in Jeddah, I was keen on preserving heritage pieces and gathered them together, especially those related with money exchange. There would be a history with every human being. The museum tells the story of money exchange. I particularly kept registers and cash boxes that were used when I started the money exchange business. The first cash box was made of wood, and there was a huge treasure box in which we kept our gold and silver. The artifacts kept at the museum tells the evolution of currency in the Kingdom through issuance of bank notes, as well as some currencies and coins that were in circulation among the Haj pilgrims. A major factor that prompted me to set up the museum was the visits made by a large number of officials from various countries to know more about these old coins and currencies. We have had to exhibit these rare collections in front of them to explain about our history and heritage, especially those related with money. I was keen to furnish the museum with historic and heritage pieces, especially with the same materials used for construction in the past. Hence, the roof of the museum was made of palm branches, and that was the case with the seating arrangements at the museum.

Al-Rajhi's punctuality
The interview also sheds light on many qualities of Al-Rajhi, including his punctuality. "In the beginning of my business career, I had appointments with several top European company executives and officials. I still remember that I reached late for such an appointment due to an unavoidable reason. My delay was only a few minutes but the official excused himself for the interview. Later, after expansion of the projects, the same official came late for an interview with me so I excused myself for the interview. I always carry a paper to note down the schedule of meetings and stick to the schedule at any cost."

Al-Rajhi continued: I am always keen to strictly adhere to the Islamic principles throughout my life. Once I received an invitation from an Arab government to attend an investment conference there. On the sidelines of the conference, I was invited to take part in a dinner reception. When I reached there, I found a recreational program, which is contrary to our religious customs and traditions, taking place. So I quit the place immediately and, Abdul Aziz Al-Ghorair from the UAE also joined me. Soon minister plenipotentiary rushed to us, and we explained to him that the function is against our Islamic tradition. So he informed us that the recreational party would be cancelled. When they canceled that party, we participated in the dinner.

Tackling crises
Al-Rajhi said: There was a huge fire that gutted down one of my factories managed by my son. When he came to inform me about it, I told him: Say praise be to God. I asked him not to submit any report about the losses to the authorities seeking compensation. In fact, the compensation is from Allah and it is essential for us to be satisfied with What Allah destined for us. Assam Al-Hodaithy, financial director of Al-Watania Poultry, said: "When the fire broke out at the factory, we decided not to hurt Sheikh Al-Rajhi by informing about it at that moment. Later, when we met him next morning, he told us to shift the factory to another place and remove the debris until completion of reconstruction." There was a similar fire at Al-Watania Poultry project in Egypt. The company incurred losses worth SR 10 million Egyptian pounds. When the concerned factory official contacted Al-Rajhi to inform about the fire, he was surprised to hear an instant reply from him: "AlHamdulillah."


Saudi courier, delivery industry valued at $970 million

Saudi courier, delivery industry valued at $970 million
Updated 20 June 2021

Saudi courier, delivery industry valued at $970 million

Saudi courier, delivery industry valued at $970 million
  • A report says the sector is expected to grow by 6.5 percent annually until 2026 in KSA

JEDDAH: Saudi Arabia’s courier and parcel delivery market, now estimated to be worth $970 million, was expected to grow by an average 6.5 percent per year until 2026, according to new figures.

A report issued by Dublin-based ResearchAndMarkets.com has revealed that the Kingdom was a key Middle Eastern player in the booming sector.

“E-commerce is one of the major factors driving the market growth. With higher connectivity rates, a young working population, and advanced infrastructure, the country is one of the major markets in online retailing in the Middle East,” the study said.

A growing trend highlighted in the report was the popularity of pickup, drop-off (PUDO) points. At present, only about 15 to 20 percent of orders are collected at a physical location operated by courier companies or their delivery partners.

The increased investment by large operators in the e-commerce sector was likely to result in the development of more warehouse facilities and the growth of PUDO points, the research showed.

Global giant Amazon in March announced plans to add 11 buildings to its network in Saudi Arabia, boost its storage capacity in the Kingdom by 89 percent, and increase its geographical delivery network by 58 percent.

According to data produced by research firm Statista, e-commerce revenue in Saudi Arabia is set to reach $7.051 billion this year and grow at an annual rate of 5.38 percent to reach $8.697 billion by 2025.

At the same time, Dubai’s Majid Al-Futtaim recently told Arab News that the surge in demand for e-commerce had seen it expand its fulfillment and delivery network. A new 9,000-square-meter center in Riyadh operates 24 hours a day, seven days a week, handling up to 5,000 orders each day. More than 500 workers process the orders, which are delivered by a fleet of 150 refrigerated trucks, and the company plans to open more centers next year.

The courier and delivery report added: “Given the continuous growth in e-commerce and the fact that building one’s own network is very expensive, more partnerships are expected to happen in the market on the back of pressure on cost reduction.”

Technology will play a big part in changing the industry over the next few years, as a big challenge in Saudi Arabia was the country’s lack of postal codes. The report highlighted that delivery companies in the Kingdom regularly requested landmarks rather than addresses, with drivers often asking for locations to be identified via WhatsApp.

The rate of returns on e-commerce goods in Saudi Arabia was relatively low due to most transactions using cash on demand. However, the report predicted that as digital payments continued to rise, returns would become more common.


Laundry firm aims for 400% expansion across Saudi Arabia

Laundry firm aims for 400% expansion across Saudi Arabia
Updated 20 June 2021

Laundry firm aims for 400% expansion across Saudi Arabia

Laundry firm aims for 400% expansion across Saudi Arabia
  • It is the only laundry shop that has a franchise agency
  • Due to the pandemic, it uses UV machines that disinfect clothes, carpets, and such

JEDDAH: When Abdulkareem Rafeeq took over the family laundry business in Madinah six years ago he began implementing new modern technology.

And despite the coronavirus disease (COVID-19) pandemic denting his ambitions in the short term, he put in place major expansion plans and has set a goal to have 50 branches within five years and 500 throughout the region by 2050, catering to the private and public sectors, and the hotel industry.

His father Mahmoud started the business in 1982, with the first branch of the Princes Express Laundries providing services to residents in the Madinah area.

His son joined the company in 2015 and launched the first branch of the Rafco Laundry chain, which incorporated modern working and processing methods and also offered free home delivery and disinfection of clothes.

Rafco Laundry now has 10 branches covering the majority of neighborhoods in Madinah. Still a family business, with his father the chairman of the board of directors, Rafeeq told Arab News he had big plans for the future.

The company’s goal was to expand to 30 branches in Riyadh and 20 branches in Jeddah and other parts of the Kingdom.

He said: “We plan to have 50 new branches in five years in the Kingdom that reach different regions. During the past two years, we opened 10 branches in the Madinah region. “It is the only laundry shop that has a franchise agency. Most franchises are cafes and restaurants, we decided to think outside the box and create a laundry franchise. “We made eight contracts so far with more than SR6 million ($1.6 million) and established these laundry shops. It takes us two months to open a laundry shop with its key and trained staff,” he added.

However, the onset of the COVID-19 pandemic last year affected the company’s plans. “There was a decrease in growth, but the company fixed it and we saw the strengths and weaknesses in the market,” Rafeeq said.

His idea to offer free disinfection of clothing was a key component in helping the business to recover, as during the pandemic many customers were concerned about the spread of the virus, especially in the early days when little was known about it.

“We brought in consultants, and the solution was to bring equipment from the US — ultraviolet (UV) machines that disinfect clothes, carpets, and such.

“We began to wash, iron, and disinfect. The disinfection (service) was for free, and we did a lot of marketing for it — through social media and the posters we handed out along with the clean clothes. People started coming to us, we created an opportunity out of a crisis,” he added.

Rafeeq said the innovations his team introduced had earned Rafco Laundry a good reputation as a modern establishment that had expanded its service offerings.

“We provided a shoe washing division. We also wash women’s handbags and students’ schoolbags. We have UV disinfection machines and clothes and sheet fresheners,” he added. The company had been planning a mobile app in 2019, but the digital boom brought about by the global health crisis accelerated its development and growth. The number of app users rose quickly during the pandemic, and it currently has around 1,500 regular customers. Rafeeq said: “The electronic app was not active when we first launched it, but during the lockdown and when everyone was at home, we relaunched the app and we made very good sales and depended on it essentially during the pandemic.”


Property firms lead Tadawul trading surge

Property firms lead Tadawul trading surge
Updated 20 June 2021

Property firms lead Tadawul trading surge

Property firms lead Tadawul trading surge
  • Leading the pack was Red Sea International Co., which was trading 1,452 percent above its average

RIYADH: A total of 88 listed firms on the Saudi Stock Exchange (Tadawul) were trading above their three-month average when trading ended on Thursday, according to data compiled by financial information website Argaam.

Leading the pack was Red Sea International Co., which was trading 1,452 percent above its average.

The surge comes as the company reported last week that it had won a SR52.9 million ($14.1 million) contract to design and build a housing complex in AlUla, northwest Saudi Arabia.

In second place, but much further behind, was fellow property firm Saudi Real Estate Co. (Al Akaria), which on Thursday was trading at 893 percent above its three-month average. This was despite the fact that it reported a net loss after zakat and tax of SR4.6 million for the first quarter of 2021, up from a similar loss of SR2.9 million in the same period the previous year.

Retailer BinDawood Holding Co. reported a 50.8 percent decline in net profit after zakat and tax to SR62.1 million for the first quarter of this year, as revenue declined 20.4 percent. However, it was still third on the list, with a 583 percent surge in trading on Thursday.

Earlier this month, the company announced it plans to hold a general meeting on June 28 and shareholders will be asked to vote on contracts valued at SR135.96 million. With the two brands, BinDawood and Danube, BinDawood Holding Co. currently has a network of 74 stores in 15 cities throughout Saudi Arabia. In 2019, it announced plans to reach 100 stores by 2024, meaning an average of five to six stores per year.

Fourth on the list, trading 331 percent above its three-month average, was Saudi Re for Cooperative Reinsurance Co., which last month reported a net profit of SR16.2 million for the first three months of 2021, up from SR7.4 million the year before.

Rounding out the Top-5 and trading 309 percent higher was Saudi Cable Co., which a month ago reported a net loss after zakat and tax SR35.9 million for the first quarter 2021, 17 percent better than the SR43.2 million loss in the same quarter last year.

Among the other big Tadawul hitters, Saudi National Bank was trading 248 percent above its average, while energy giant Saudi Aramco was performing 149 percent higher.


China cracks down on cryptocurrency mining

China cracks down on cryptocurrency mining
Updated 20 June 2021

China cracks down on cryptocurrency mining

China cracks down on cryptocurrency mining
  • Authorities order closure of 26 suspected mining projects

SHANGHAI, HONG KONG: China’s crackdown on cryptocurrency “mining” has extended to the southwest province of Sichuan, where authorities ordered cryptocurrency mining projects closed in the major mining center.

Crypto mining is big business in China, accounting for more than half of global bitcoin production. But the State Council, China’s Cabinet, last month vowed to clamp down on bitcoin mining and trading as part of a series of measures to control financial risks.

Other popular mining regions, such as Inner Mongolia, have cited cryptocurrency mining’s use of electricity generated from highly polluting sources such as coal in orders targeting the industry.

Friday’s move in Sichuan — where miners mostly use hydropower to run the specially designed computer equipment used in verifying bitcoin transactions — suggests the crackdown is more broadly based.

The Sichuan Provincial Development and Reform Commission, and the Sichuan Energy Bureau issued a joint notice, dated Friday and seen by Reuters, demanding the closure of 26 suspected cryptocurrency mining projects by Sunday.

Sichuan is China’s second-biggest Bitcoin mining province, according to data compiled by the University of Cambridge. Some miners move their activities there in the rainy summer to take advantage of its rich hydropower resources.

The notice orders state electricity companies in Sichuan to conduct inspections and make corrections, reporting their results by Friday. They are to immediately stop supplying electricity to crypto mining projects they have detected. The authorities urged local governments in Sichuan to start combing for crypto mining projects and shut them down. It banned new projects.

Other regional mining centers including Xinjiang, Inner Mongolia and Yunnan have ordered crackdowns on bitcoin mining.

Friday’s notice appears to indicate that Beijing’s displeasure with cryptocurrency mining extends beyond cases where it uses electricity generated by burning coal. “Renewable power does not help,” said Winston Ma, NYU Law School adjunct professor and author of the book “The Digital War.”

“The four largest mining regions — Inner Mongolia, Xinjiang, Yunnan and Sichuan — have implemented similar crackdown measures, even though mining in the latter two are mostly based on hydropower, whereas the first two are on coal,” Ma told Reuters.

Some miners have been considering moving elsewhere due to the crackdown.


Boeing 737 MAX model takes off on maiden flight

Boeing 737 MAX model takes off on maiden flight
Updated 19 June 2021

Boeing 737 MAX model takes off on maiden flight

Boeing 737 MAX model takes off on maiden flight
  • The plane completed a roughly 2-1/2-hour flight over Washington State, returning to Renton Municipal Airport near Seattle

WASHINGTON: Boeing Co.’s 737 MAX 10, the largest member of its best-selling single-aisle airplane family, took off on its maiden flight on Friday, in a further step toward recovering from the safety grounding of a smaller model.

The plane completed a roughly 2-1/2-hour flight over Washington State, returning to Renton Municipal Airport near Seattle at 12:38 p.m.

The first flight heralds months of testing and safety certification work before the jet is expected to enter service in 2023.

In an unusual departure from the PR buzz surrounding first flights, the event was kept low-key as Boeing tries to navigate overlapping crises caused by a 20-month grounding in the wake of two crashes and the COVID-19 pandemic.

Boeing must also complete safety certification of the plane under a tougher regulatory climate following two fatal crashes of a smaller 737 MAX version grounded the model for nearly two years — with a safety ban still in place in China.

Boeing has carried out design and training changes on the MAX family, which returned to US operations in December.

Boeing Commercial Airplanes CEO Stan Deal said the company is producing about 16 737 MAX jets a month at its Renton factory.

Boeing is working on safety enhancements for the 737 MAX 10, including for its air data indication system and adding a third cockpit indication requested by European regulators of the “angle of attack,” a parameter needed to avoid stalling or losing lift. Deal’s comments were provided to the media via a pool reporter inside a Boeing aircraft delivery center.

“We’re going to take our time on this certification,” Deal said.

The flight showcased a revamped landing gear system illustrating an industry battle to squeeze as much mileage as possible out of the current generation of single-aisles.

It raises the landing gear’s height during takeoff and landing, a design needed to compensate for the MAX 10’s extra length and prevent the tail scraping the runway on takeoff.