30/07/2012
An expert in family businesses said that there are approximately SR15 billion frozen in family businesses because of disputes between the siblings of the families after the death of the founders of the company. These disputes also cause the family-owned companies to collapse or failure.
Mr. Sami Tysir Sulaiman revealed this while delivering a lecture session organized by the Eastern Province Chamber of Commerce and Industry on last Tuesday. The lecture session discussed challenges of family businesses in order to find their solutions. He said 98 percent of the companies operating in the Gulf Cooperation Council (GCC) are family-owned firms.
The volume of investments of family businesses in the Kingdom exceeds SR250 billion. Forty-five family companies fall within the biggest 100 companies in the Kingdom. Revenues of these companies touched SR120 billion in 2003, and they employ nearly 200,000 people, he said. He added that these companies' contribution to the GDP estimated from 22 percent to 30 percent. 98% of the all companies in the Gulf region are family-owned, he noted.
Mr. Sulaiman said that 33% of these companies are run by the second generation of the family, 15% are managed by the third generation of the family and only 4% of the companies are operated by the fourth generation of the family.
Mr. Sulaiman pointed out that there is a need for continuity of family businesses and this continuation means the growth of wealth in the family businesses. He stressed that the family businesses should be managed by a group of people, not by some individuals. While talking about the challenges, he said that these challenges are mainly dormant in the weaknesses of the next generations.
