Mubadalah – Abu Dhabi Based Company

Write an assignment on Mubadalah – Abu Dhabi Based Company

 

Mubadalah 

Introduction 

Lt. Sheikh Zayed bin Sultan Al Nahyan visualised an organization that will transform and accelerate the economic growth of Abu Dhabi one day. His vision has come true now and Mubadalah is now among those revolutionary strategic investment company which is engaged in global investment and capital deployment across the world with a motive to integrate and pace up the growth of UAE as a whole.
The organization has now presence in 13 sectors over 30 countries. Majorly it has given importance to the sectors like petroleum, aerospace, ICT, semiconductor, metals and mining, renewable energy and utilities and diverse financial holing (merger and acquisition) management. Today the company is earning a revenue of $22.7 billion USD and become a company of $126.7 billion USD which is remarkable. It has bagged many awards and recognition like most efficient storage terminal, top employer in chemistry and pharma sector and bronze medallist in CSR activities and many more. [Wikipedia. (2018).]

Vision statement   

To make Abu Dhabi an example for knowledge and collaboration on advancement of energy resources, technological advancement and sustainable development.  

Mission statement 

To be the driver of advancement and adoption in commercially viable energy solutions and sustainable development which addresses the sustainable challenges of UAE, the Middle East and other international markets. 

Purpose of organization

 The company started with a global mission and vision directed towards growth of its home land. Thus the purpose of the organization is divided into 4 essential sectors which are investment and infrastructure, petroleum and petrochemical, technology, manufacturing and mining and lastly aerospace, renewable resources and IT sector which all together put into 13 business sectors. The aim is to scale and manage portfolio for the growth by managing corporate governance and risk management. 

Strategic business units of Mubadalah 

The company has always put the money on the sectors where it finds the opportunity to get the maximum outcome which will contribute towards Abu Dhabi development. As discussed earlier, the whole business of Mubadalah is spread into 4 parts and those 13 sectors are divided in these 4 categories. Here is a brief explanation about it-[ Bloomberg. (2018).]

Category-1- Alternative investments and infrastructure 

This category is about the capital investments of Mubadalah like in healthcare, real estate and infrastructure portfolio. These sectors are helping the organization to manage the portfolio and capital deployment in new or existing market. 
Capital investment- It is the investment in global public and private securities. The company applies value oriented approach which leads to long term benefits and capital preservation. 
Healthcare- Facilitating the need of healthcare by investing in specialised and world class healthcare researches and facilities and also working on building regional capability. 
Real estate and infrastructure- Developing the society by providing world class infrastructures. It is an integration of both physical and social infrastructure.

Category-2- Petroleum and Petrochemical

 It is the core business of Mubadalah as Abu Dhabi is rich with petroleum and petro chemical elements. This company has made investments in 13 leading companies deal with hydrocarbon and petroleum. The motive is to diversify the investment opportunity and utilize its rich resources to the best possible way. 
Mid-stream- This business sector is dealing with transportation of oil and gas to overseas for further processing. This transportation takes place via pipelines, ships or vehicles which reaches the final consumer as LNG (Liquefied Natural Gas)
Refining and Petrochemical- It acts as the downstream of value chain process where the crude oil refinement is done and outputs like petrol, diesel, kerosene etc. come. The oil and gas are processed which is used in making plastics and chemicals for detergents. 
Upstreaming and integrated- It is the team that finds the location to extract oil and gases. This ensures success in commercial project developments to various MNCs who are willing to do this business.

Category-3- Technology, Manufacturing and Mining

This category looks after the diversification of business and economy for Abu Dhabi. This category ensures developing new industries for Abu Dhabi with use of advance technology and critical resources like gold, aluminium, copper, zinc etc. 
Metal and Mining- It is taking UAE into the fastest growing metal and mining business in global scenario along with the creating huge employment opportunity for the UAE people.  
Semi-conductor- It’s not China or Korea or Japan that is dominant in semiconductors like microchips, Mubadalah is making it sure for UAE to be a leader in near future. 

Category-4- Aerospace, Renewables and IT 

This is a broad category which intakes 25 corporate houses engaged in field of Science, Technology, Engineering and Mathematics (STEM). These all contribute towards learning and development of people in Abu Dhabi. 
Aerospace- Creation of value added products and services in aerospace engineering is main aim of this company investment. 
Defence service- The Company has partnership with Emirates Defence Industry Company to provide all assistance in developing world class defence equipment to protect the national security.
ICT- Mubadalah has understood the importance of Information and Communication Technology (ICT) to grow economy and society in current scenario. It has created opportunities in field of cognitive computing, telecom and satellite operation. 
Renewable- The Company is now committed to develop and commercialize renewable resources to be the alternative for petroleum and natural gas in Abu Dhabi to make it as centre of excellence in renewable energy. 

Country Specific Strategy – UAE perspective 

The company incorporated with a motive to develop the economy of Abu Dhabi and UAE as a whole. The capital investments and continues searching for portfolio opportunities are lied on the concept this philosophy.
Here’s what the philosophy of Business strategy for Mubadalah says-
The company’s diverse portfolio, concept of integration, opti9mization and growth of assets under the global business scenario is meant for creating and realising maximum financial and strategic returns so that it can contribute towards diversifying the economy of UAE. 
Here some of the strategic moves the company has taken for UAE-
Mubadalah is making the hope for UAE to save its floundering fund reputation that has lost in past decade. It is the merger strategy that the company is taking in UAE to make it as international investment centre especially with Mubadalah petroleum. 
The joint venture with Nibras Al Ain Aerospace park which is aimed at ensuring investments and support from regional aerospace industry. [Masder company. (2018).]
Mubadalah is not only making the investment opportunity and space to do business but also it is working on changing the people’s attitude towards market oriented practices in financial sector. For ex- Port infrastructure.
The company has committed to Soft Bank vision fund (Japan) with a mission of acquiring majority and minority interest in both public and private sectors to establish IT and funding to multi billionaire companies who need substantial growth funding. 
Its investment strategy in knowledge based industries and hi-tech technology is taking Abu Dhabi to become world’s second largest producer of semi-conductor. Such an investment is an example of technological eco-system in this region. The contribution has resulted an increase of 40% of total GDP.
Mubadalah is supporting Abu Dhabi Aircraft Technology which acts as 3rd part MRO solutions provider catering almost 70% of commercial aircraft customers around the world. The Aerospace division is now eyeing at USA to extend its manufacturing capability to become World’s top 3 composite and metal parts of aeroplanes.  
Recently it has tied up with European Fund Manager Ardian for private equity portfolio and institutional investments in UAE industrial developments.
In case of its healthcare sector, it has achieved 183211 appointments and 8098 surgeries which is telling the truth of improvement in healthcare services in UAE.
These all are the few examples of the strategic actions that Mubadalah has taken over last few years. They have made investments in USA, Vietnam, China, UK and many more countries and dragging their attention towards UAE and especially Abu Dhabi.

Generic Strategy     

Cost Leadership- This is the phase where a firm enjoys economies of scale, superior technology and preferential access to raw materials and other factors of production. Mubadalah for example enjoys the cost leadership strategies by utilising the petroleum and other petrochemical elements due to richness of Abu Dhabi in that. It performs both upstreaming and down streaming activities that help them to reduce overall cost of extraction and supply to many places across the world. Moreover the partnership and joint ventures with MNCs help the company to reduce the cost of transportation and other value chain process. [Mcauley, A. (2017)]
Differentiation- It is the uniqueness that the company enjoys and it is highly valued by the customers. It can be said as the Unique Selling Proposition (USP) of the organization. In this case, the company takes competitive advantages due to its differentiation strategy of building business alongside establishing international partners in multiple sectors. It is among the few players which has integrated technology with renewable resources. [Mubadala. (2018).]
Cost focus- The aim of cost advantage from the targeted market is the basic behind cost focus strategy. The company is using the strategy of diversifying its portfolio for its capital investment and innovation focused approach to reduce the cost in each projects. 
Differentiation focus- It is the strategy that involves in differentiation in a targeted segment. The company’s business activity division into 4 segments can be said to be the differentiation focus strategy as each such category is focusing on a particular sector of business. For ex- its petrochemical and petroleum are focusing on upstream and downstream of the petroleum products and natural gas to supply across the world. Its real estate sector is engaged in developing the social and physical infrastructure of Abu Dhabi people. 

Mubadalah’s Strategic Direction 

It is sum of all those activities that an organization takes to achieve its mission and vision. Mubadalah achieves the success in its corporate strategies with the support of its sole shareholders and long term support from the Government of Abu Dhabi. It is the Board of Directors that reviews the strategic plans and business actions. 
Corporate Parenting    

Mubadalah is following the Strategic planning and controlling as per the corporate parenting. 
Strategic Planning- Under this, the corporate parent is to enhance the coordination across the business units like here in this case it is the chairman of the Mubadalah Sheikh Mohamed bin Zayed Al Nahyan who is looking after all its 13 sectors along with wide range of policy, legislature and economic responsibilities of Abu Dhabi. [Mubadala group. (2018)]
Strategic Control- The board members are not only planning abut also ensuring the leveraging of resources and competencies to build values around its business. It is the team of Mubadalah which is looking at each and every possible opportunity to uplift the company and the economy of UAE as a whole.
How they work?
Waleed Al Mokarrab Al Muhairi- He serves as the CEO of Alternative investment and infrastructural division. Under his guidance, healthcare, infrastructure (real estate) and portfolio and capital investment come. [Rahman, F. (2018).]
Musabbeh Al Kaabi- He manages the Petroleum division and also acts as the representative of Abu Dhabi National Oil Company. The value chain of petroleum and petrochemical are coming under his roles and responsibility.
 Ahmed Yahia Al Idrissi- He looks after the mining, IT and manufacturing division of semi-conductors. 
Khaled Abdulla Al Qubaisi- He has the responsibility over Aerospace, renewable resources, ICT and defense service portfolio. 
These individuals has their own team to carry out the plans and policies but they all work in an integrated manner and also accountable to report the chairman. [Abdelal, R. E et.al2007]

Portfolio of Mubadalah

 Total Revenue- $22.7 billion USD
Total Profit- $1.2 billion USD
Total Operating Income- $1.5 Billion
Total Assets- $126.7 billion
Share price- $7.150 AMD quarterly price [Mubadala Portfolio Investment. (2018)]
International Strategy-
The company follows merger and acquisition strategies along with investments in global companies like GE energy, Air bus, Shell etc. It is the partnership with various companies that is helping this company’s portfolio strategy to grow its business across the globe. [Saleh, H.,et.al2018]

Recommendation

It should continue the investments in foreign projects in order to get currency flow and FDI into Abu Dhabi.
It should focus more on its renewable resources as many world level environmental organizations and governments have made tight policies and procedures in use of petroleum and its related products.
It should invite foreign players to do business here in Abu Dhabi for the economic development. [FADILAH, M. A. (2018). ]
It should allow cultural diversity in its workforce to bring more set of knowledge and ideas.

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References

Bloomberg. (2018). Retrieved from http://gulfnews.com: http://gulfnews.com/business/sectors/investment/mubadala-is-said-to-mull-options-for-920m-rhb-stake-1.2155800
Gnana, J. (2018). Retrieved from www.thenational.ae: 2018
Masder company. (2018). Retrieved from www.masdar.ae: http://www.masdar.ae/en/masdar/detail/about-mubadala
Mcauley, A. (2017). Retrieved from www.thenational.ae: https://www.thenational.ae/business/mubadala-investment-company-names-new-divisions-and-pushes-ahead-on-122bn-merger-1.79516
Mubadala. (2018). Retrieved from www.mubadala.com: https://www.mubadala.com/en/who-we-are/about-the-company
Mubadala group. (2018). Retrieved from www.mubadala.com: https://www.mubadala.com/en/who-we-are/board-of-directors
Mubadala Portfolio Investment. (2018). Retrieved from www.mubadala.com: https://www.mubadala.com/en/interactive-portfolio
Rahman, F. (2018). Retrieved from http://gulfnews.com: http://gulfnews.com/business/aviation/mubadala-aerospace-looks-at-new-opportunities-to-expand-1.2164329
Wikipedia. (2018). Retrieved from en.wikipedia.org: https://en.wikipedia.org/wiki/Mubadala_Development_Company
Abdelal, R. E., & Tarsis, I. (2007). Mubadala: Forging Development in Abu Dhabi.
Saleh, H., Bayasi, N., Mohammad, B., & Ismail, M. (2018). Self-powered SoC Platform for Analysis and Prediction of Cardiac Arrhythmias. Springer International Publishing.
FADILAH, M. A. (2018). ANALISA PRESSURE BUILD UP SERTA PERKIRAAN BESARNYA REMAINING RESERVE GAS MENGGUNAKAN METODE MATERIAL BALANCE PADA LAPISAN ‘X’LAPANGAN ‘Y’, MUBADALA PETROLEUM INDONESIA (Doctoral dissertation, Universitas Pembangunan Nasional" Veteran" Yogyakarta).

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