Family businesses contribute 25% of GDP

Family businesses are the backbone of the Kingdom's economy contributing SR 350 billion or 25 percent of its gross domestic product, according to Jeddah Chamber of Commerce and Industry (JCCI) Chairman Saleh Kamel. "There are more than 5,000 family businesses across the Kingdom, of which only 156 are listed on the Saudi bourse. This is a small figure compared to the prospects this market holds," Kamel said while opening a forum on 'Family-owned businesses vs. Saudi stock companies' Monday night. He urged authorities to remove all obstacles facing these businesses to become joint stock companies. Fourteen economists and experts were among the participants. There are a number of factors that make owners of businesses hesitate on converting them to joint stock firms, most importantly the issue of inheritance, technical difficulties and fear of losing family revenue, Kamel said. He added that transformation of family businesses to joint stock companies would lead to opening new investment opportunities for them and making their businesses flourish. He said the move would provide stability to millions of employees working in these companies. "Family businesses are now studying how to restructure themselves in line with the circumstances that occurred in the markets recently," he said. "Companies are now trying to cope with market changes like avoiding dependence on a specific investment strategy, diversifying their portfolios with new activities and adopting plans inspired by the post-global financial crisis," he said. "These initiatives will raise awareness of family companies to apply the rules of governance and quality to enable them acquire the advanced positions in local and global markets," he said. Adnan Mandoura, secretary general of JCCI, highlighted the chamber's support to various businesses to confront global economic changes. Abdullah Al-Suwailemi, CEO of Tadawul, estimated the total market value of companies listed on the Saudi bourse at SR 1.3 trillion. "The Saudi capital market provides a variety of services and products, adding value to the beneficiaries," he said. "We will work hard to live up to our services provided to all dealers in the market and to maintain our position as the best financial market in the region. Our aim is to be an attractive destination for companies and investors locally and globally with the application of best practices for financial markets," he added. From arabnews