This plan consists of four strategic decisions: A streamlining operations restructured portfolio growth throug

Maxim Investment,CBE,Mohamed Karrar,MIG,International Business

Monday, 14 June 2021
Chairman and Chief Editor
Bedour Ibrahim

With the aim of creating a new MIG

Maxim Investment rolls out new Strategic Direction for the group

As a catalyst for the company's transformation. This plan consists of four strategic decisions: A streamlining operations; restructured portfolio; growth through focused investments; and the redefinition of the corporate centre.

“I'm talking about a new MIG. A company with the purpose of generating value for all its stakeholders and society for the long term and creating relationships of trust, with growth and efficiency.”

These measures will generate, among other effects, additional revenues and an increase in operating cash flow margin by 2022.

 Maxim Investment Group (MIG) today, during a press conference held at the Kempinski,  rolled out its new action plan that will serve as a catalyst for the transformation of the company. The plan seeks 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.

 To this Dr. Mohamed Karrar, Chairman of MIG,  said that the “macroeconomic and market realities, and high competition in the market require an increasingly demanding allocation of capital.

If in the past the low penetration of services assured future growth, the current maturity of the market and the appearance of new competitors subject to different rules demand a highly focused strategic approach.”

The changes come at a pivotal time for MIG whose portfolio is estimated by Financial Consultants, accredited by the CBE,  at the EGP 15 billion range.  The Group has grown at an exponential rate over the past decade bringing with it operational inefficiencies as by product of a rapid growth focused strategy. The transformation initiative, which commenced 2019, tackled the problems of suboptimal performance with the objective of driving rapid change, delivering improvements in cash, working capital, and profitability. The roll out 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. 

“The pandemic” says Karrar “ 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”.

Covid 19  has brought about profound change, affecting long-standing consumer behaviors and preferences, and in some cases permanently changing competitive landscapes.

Nevertheless “during the past two years, we have made meaningful progress and opened the door to becoming a vibrant, profitably growing company,” With a plan adapted to reflect the new market realities Karrar believes that “Now it’s time to charge through that door.” The aim will be that by the end of 2022, Maxim will reposition its overall cost structure to establish itself as a strong and efficient competitor.

 

These measures will generate, among other effects, additional revenues and an increase in operating cash flow margin by 2022. The new action plan that will serve as a catalyst for the transformation of the company and that will be implemented around the following strategic decisions:

Performance driven operations

The first initiative, launched in 2019, revolved around achieving operational efficiency. This effort will continue in an effort to advance value-driven portfolio management with the aim of ensuring a 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 will focus prioritizing strategic, long-term investment to secure sustainable growth and 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.

In short, concentrating the company’s resources in the most valuable sectors.  In particular the group will be focusing heavily in the hospitality arm of the business with a view to the potential synergies across the business units. With the sector set for early recovery there exists a tremendous opportunity to create value and win market share.

 

The redefinition of the corporate centre

The fifth 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. As a result the role and operation of the corporate centre will be adapted to the new reality, with centralized service functions and “focusing on activities that provide a differential value to the rest of the units and that allow us to capture the value of scale, eliminating some existing duplications with the structures of the companies”.  This will consolidate employee expertise to foster increased collaboration and among asset teams.

Cumulatively 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 sectors expertise across business lines by centralizing service functions and operations. 

 

Active ownership philosophy

Formed in 1980, Maxim Investment Group (MIG) is a private investment group focused on the development, management and investment in all sectors of the real estate market, including residential, hospitality, commercial, and retail.

The Group follows a disciplined, active ownership philosophy where value is created at the property level. With vertically integrated asset management, property management, construction, technology, and marketing services, the Maxim Investment Group team devises 360-degree business plans to dramatically increase the value of its invested assets while creating higher standard of living for its residents.

MIG’s over 7 mn m2 Land Bank consists of a variety of residential, office, retail and commercial properties.  Headquartered in Cairo, MIG continues to grow its estimated EGP 5 bn development portfolio currently under development in the residential and hospitality sectors spread across Egypt, with a focus to deliver a series of topline projects built with the idea of luxury in mind.

Mohamed Karrar is a serial Entrepreneur and investor who has a passion for starting and growing companies and developing win-win partnerships. He is Chairman of Maxim Investment Group, a private investment firm formed in 1980, is one of the largest and most diversified privately held investment companies developing, managing and investing in all sectors of the real estate market, including residential, hospitality, commercial, and retail focused on real estate, hospitality and investment company with more than EGP 15 billion under management.

Maxim Investment Group personifies Karrar’s commitment to the highest standards of quality, integrity, and value. In addition to chairing the company, he is responsible for directing all aspects of the acquisition, financing and management of the company’s diverse portfolio of multifamily, hospitality, retail, office, and industrial properties. Karrar has built a reputation for his ability to navigate the real estate industry, identify successful real estate opportunities, and time the markets.

For the past 30 years, Karrar has structured investments with an asset value of over EGP 15 billion. Into a portfolio of 20 companies and through its affiliates and externally managed companies encompass around 3000 employees. Karrar founded the Maxim Foundation in 2018, to formalize philanthropic giving.

Mohamed Karrar holds a BA in International Business from Schiller International University, Heidelberg – Germany followed by an MBA from California National University. He later earned a PHD in Business Administration from Maryland University in Washington.