An interview with Mutlaq Al-Morished, former director of the GCC BDI and CEO of Tasnee
Mutlaq Al-Morished is a busy man. As well as being on the board of GCC BDI, the Saudi Arabian national is the CEO of Tasnee, one of the country’s largest diversified industrial companies.
Previously, Al-Morished was CFO at SABIC, the country’s largest petrochemical firm. Currently, the business veteran is a board member for General Organisation of Saudi Arabian Airlines, Alinma Tokio Marine, Aluminum Bahrain and chairman of the board at Alinma Investment Company.
Here, he talks exclusively to the GCC BDI news team about Tasnee’s plans for the future and why corporate governance is a “must-have”.
GCC BDI: As KSA embarks on its major economic diversification plan, how has this initiative affected Tasnee’s production and plans?
Al-Morished: There is no gain without pain. When companies or countries go through a major restructuring, there is always a pain in the beginning.
We faced some difficulties last year with markets changing. We see now that there is an opportunity to get into more areas. We are a chemical company, so we will stay within our domain but we plan to expand domestically and also outside Saudi Arabia. We are looking at countries that will give us advantages, such as feedstock advantages or market advantages. We are looking at areas such as the US, countries in Africa or the Middle East.
GCC BDI: What will drive Tasnee’s growth plans going forward?
Al-Morished: For sure, there will be some opportunities that are available within the Kingdom, however, mostly we will look outside for growth, in places such as the US.
GCC BDI: What is your prediction for the outlook of the KSA petrochemicals industry?
Al-Morished: The outlook is positive but I say that with caution. Since the advent of shale gas in America, the competition has changed. We used to have a significant advantage in the region and an advantage over China. Now we are almost equal, if not worse off, compared to the shale gas situation in America.
The Americans and the Chinese have the advantage of good feedstock and the access to big markets; Saudi Arabia has the advantage of good feedstock but not the market access.
We have to ship to market, which will cost a lot, but will be worth it. This is changing the rules of the game and we have to be very, very cautious.
In Saudi Arabia, we have access to smaller domestic markets but more difficult access to larger international markets, such as 1.3 billion people in China. It is logisticallyexpensive for us to ship our goods.
GCC BDI: Has Tasnee reviewed its IT strategy as the region becomes more driven by big data?
Al-Morished: In light of what’s going on in the world and the rise in cyber attacks, we have beefed up our IT security and we are looking at new technologies such as data mining.
How is Saudi Arabia doing on its efforts to improve its corporate governance landscape?
Al-Morished: I have to be honest, we are not America or Europe; they are well ahead of us because they started before, however we are really changing. Things are really improving. The GCC BDI is also pushing for more transparency and more inclusion of females in the boardroom and in the workforce. It is slowly improving.
If you look purely at financial metrics, it’s clear that companies with better corporate governance do perform financially better. They also avoid a lot of major disasters, whether it be environmental, ethical, or financial regulators.
It’s become almost a market requirement to have corporate governance outside KSA, but KSA is slowly but surely catching up.
Proper corporate governance is your ticket to do business these days. The day will come soon when if you don’t have corporate governance, you’re out.