Maxim Investment Group (MIG) rolls out its new strategy, during a press conference held at the Kempinski, which will serve as a catalyst for the transformation of the company, Invest-Gate reports.
MIG plans to prioritize markets where the company can be relevant and grow sustainably in the long term, boost its growth potential while leveraging the value of its infrastructure, and increase agility and improve efficiency.
Mohamed Karrar, chairman of MIG says, “Macroeconomic and market realities and high competition in the market require an increasingly demanding allocation of capital,” adding that, “If in the past the low penetration of services assured future growth, the current maturity of the market and appearance of new competitors subject to different rules demand a highly strategic approach.”
The transformation initiative, which commenced in 2019, tackled the problems of suboptimal performance with the objective of driving rapid change, delivering improvements in cash, working capital, and profitability. Meanwhile, the new plan includes consequential decisions in short order—rapidly modifying business models, accelerating digital transformation, seeking out new revenue streams, moving or re-thinking operational activities, entering new product or markets, and improving customer experiences.
Speaking of the pandemic, Karrar notes that “[The pandemic] has added a layer of challenges to that process as we were forced to slow down the roll out and consider the implications on our strategic priorities moving forward,” mentioning that Covid 19 has brought about profound change, affecting long-standing consumer behaviors and preferences, and in some cases permanently changing competitive landscapes.
Karrar mentions that “During the past two years, we have made meaningful progress and opened the door to becoming a vibrant, profitably growing company,” remarking that “Now, it’s time to charge through the door.”
The new measures aim to generate, among other effects, additional revenues and an increase in operating cash flow margin by 2022. The new action plan will be implemented around the following strategic decisions:
- Performance-Driven Operations:
The first initiative, launched in 2019, revolved around achieving operational efficiency in order to advance a value-driven portfolio, in order to ensure strong corporate governance, financial stability, and solid management in an effort to increase corporate value.
- Portfolio Restructuring:
The second initiative constitutes the creation of a new structure that is based on four business units, Development, Hospitality, Commercial and Retail, and finally Services. These four business lines concentrate approximately 90% in revenues and operating cash flow.
The strategic review of the portfolio has the double objective of modulating the exposure while creating the conditions to maximize its value via growth, consolidation, and possible corporate transactions. The vertical structure benefits from an integrated approach that will allow each business unit to obtain potential synergies with other units, with a view to guaranteeing and maximizing the service offered to customers.
- Focus on Revenue-Generating Assets To Accelerate Growth:
The third initiative is to focus on prioritizing long-term strategic investments to ensure sustainable growth and operational stability. The plan prioritizes most investments in these four business lines, improving the products and services offered to customers, leveraging the existing infrastructure in relevant markets, and with potential for growth in this new era. This initiative is summarized in focusing the company’s resources on sectors that achieve the highest value, especially the hospitality sector, with the possibility of synergistic operation between the four business sectors of the group. With the sector set for early recovery, there exists a tremendous opportunity to create value and win market share.
- The Redefinition of The Corporate Center:
This initiative responds to the need of gaining agility in the implementation of the necessary changes and provide better service to customers while taking advantage of the scale and synergies of the group. To realign organizational resources with the company’s updated portfolio, MIG is implementing a more integrated, centralized structure that will reduce redundancy and increase operational efficiency. This will consolidate employee expertise to foster increased collaboration and among asset teams.
Accordingly, these changes represent a significant step toward streamlining MIG operations in a way that will greatly enhance their ability to maximize recovery and minimize costs. This new structure will enable them to allocate resources and personnel expediently as industry conditions dictate.
In addition, the consolidation of their portfolio into centers of excellence, will support each operating business line and strengthen their ability to capitalize on each sector’s expertise across business lines by centralizing service functions and operations.
It is noteworthy that MIG is a private investment group that focuses on the development, management, and investment in all sectors of the real estate market, including residential, hospitality, commercial, and retail.
