KIPCO enhances asset portfolio with strategic mergers

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“KIPCO is actively expanding its presence in the healthcare sector, exploring advancements through technology and adding hospitals and clinics, potentially extending beyond Kuwait.”

How has the merger with Qurain Petrochemical Industries contributed to KIPCO’s outstanding performance over the past year?

The merger with Qurain Petrochemical Industries Company (QPIC) has been a pivotal development for KIPCO. This strategic move greatly enhanced the group’s portfolio, adding significant assets in critical sectors such as oil and gas, logistics, and dairy, notably Saudi Dairy & Foodstuff Company (SADAFCO).

This expansion has profoundly impacted our operations and growth potential. The merger has diversified our asset base and solidified our market presence, evident from the increase in our capital to KD 500 million. This substantial growth in market capitalization post-merger reflects this alliance’s positive impact and transformative nature with Qurain Petrochemical Industries.

Can you elaborate on KIPCO’s diversification strategies post-merger?

At KIPCO, our strategic approach as a holding company involves meticulously assessing investment opportunities to enhance our presence in sectors with high growth potential. Our investment strategy is timed to capitalize on market conditions, whether it involves acquisitions or strategic exits.

Having recently moved away from the insurance sector, our focus is now on banking with Burgan Bank, real estate, logistics, food and dairy, and oil and gas services. Our recent merger has led to a 45 percent stake in Advanced Technology Consulting (ATC), positioning us firmly in health tech and hospital management.

Additionally, our investments in digital transformation are evident in our ownership of OSN+, a streaming app with a substantial subscriber base, and our recent acquisition of a majority stake in the music podcast app Anghami, listed on NASDAQ.

This strategic move boosts our subscriber reach to 2.5 million and promises substantial revenue of up to USD 100 million, particularly with the integration of AI technology. By transforming OSN into a media-tech company and merging it with Anghami, we aim to create a unique video music podcast platform, leveraging AI to enhance user experience and expand into other digital areas like gaming and e-commerce. This comprehensive digital transformation underscores our commitment to leveraging technology for business efficiency and growth.

Could you provide further details about KIPCO’s decision to sell its stake in Gulf Insurance Group?

In 2023, KIPCO made a strategic move by finalizing a highly beneficial deal, selling an asset over 2.3 times its book value — a remarkable rate rarely seen in the industry. This transaction is emblematic of our investment philosophy: building, scaling, and strategically exiting at peak value.

The synergy from our merger with QPIC has broadened our financial scope, granting us the agility to divest from certain assets and venture into more promising realms, such as media technology. This strategic reallocation is pivotal in fortifying our capital foundation and propelling KIPCO into a future of sustained growth and diversified interests.

How is KIPCO integrating sustainability into its investment strategies for a greener economy?

KIPCO’s commitment to ESG standards, crucial for our international investors, led to the publication of our first Sustainability Report in 2021, aligning with the Global Reporting Initiative (GRI) standards. While ESG reporting is optional locally, we recognize its importance.

We face specific challenges in our oil and gas assets regarding ESG compliance. However, efforts are underway to improve this; we have developed our ESG Charter and formed our ESG Committee, focusing on integrating alternative energy companies and exploring technologies like carbon capture to steer our business toward sustainability.

What opportunities do you anticipate for KIPCO’s economic growth?

KIPCO is actively expanding its presence in the healthcare sector, exploring advancements through technology and adding hospitals and clinics, potentially extending beyond Kuwait. In banking, we are deeply invested and are exploring potential mergers to strengthen our market position.

Logistics technology is another critical area of interest. Focused on Kuwait and Saudi Arabia, we are also leveraging our strong presence in these markets and the Gulf region. Notably, our Bank of Baghdad is a leading private bank in Iraq.

In Saudi Arabia, we have been established since the 1990s with SADAFCO. Emphasizing our role in media tech, KIPCO is shaping the market with innovative homegrown streaming apps like OSN and Anghami.the pandemic struck and these work for the betterment of our team’s health and efficiency.

At this point, we are working using a hybrid model. Some physical interaction is necessary because activities such as networking and negotiation are better done in person. However, organizational administration can, for example, be dealt with via online channels.

The recipe for success comes down to balance and moderation, which is what we have been exploring over the past months. I think the hybrid model is likely to continue as the newer generations are becoming more tech-savvy.”

Sheikha Dana Nasser Sabah Al Ahmad Al Sabah was appointed KIPCO’s Group CEO in 2022 and has been a board member since 2020. She is the founder and chair of the board of trustees of the American University of Kuwait (AUK) and chairperson of United Education Company. She was formerly CEO of Al Futtooh Holding Company and currently holds board positions in Gulf Insurance Group, OSN, and Kamco Invest. Sheikha Dana holds an honorary doctorate of Humane Letters from Dartmouth College in the US and a BA in English literature from Kuwait University. She also studied at Indiana University in Bloomington in the US.