Tejari sees growth in emerging markets

Looking for expansion (XAVIER WILSON)


Tejari, the largest business-to-business (B2B) online marketplace in the Middle East and a unit of Dubai World, is scouting for international acquisitions in emerging markets as part of its plan to grow organically and inorganically, a senior executive said.

“Our business as well as acquisition focus is on the emerging markets. We see them as high-growth areas,” Chief Executive Officer Omar Hijazi told Emirates Business.

“Year 2008 is very important for us to establish ourselves as a global company.

“Since we are moving to become a major international company, we are getting solicitations from Sri Lanka to Kazakhstan to Argentina. We would like to do business with companies in Africa, South Asia and Asean nations,” he added.

It already has a presence in Pakistan, Bangladesh, China and Nigeria and aims to expand to South America, Commonwealth Independent States, South Asia and Asean region this year.

Hijazi, however, does not see high potential targets in the West due to on-going financial turmoil. “Our focus is not the West because the United States is in recession and there is a fear of sub-prime having a spill-over affect on Europe.”

Hijazi said his company is utilising the expertise of Istithmar – a private equity unit of Dubai World – to identify potential takeover targets in the emerging economies, including India, China, Africa, South America, South Asia, Asean and CIS states.

“We are a unit of Dubai World; so we are taking help of Istithmar to identify acquisitions,” he said.

He refused to identify the companies Tejari is currently holding talks with. But he said some of the negotiations would bear fruit this year.

“We hope to conclude some of the deals in 2008,” he added. When asked if the company has allocated a specific amount for acquisition, Hijazi said: “No. We will go by the opportunity as and when it arises. We want to be a premier B2B company in the world and will do that by growing organically and inorganically.”

Earlier this month, Tejari signed a strategic agreement with the Government of Qingdao, China, to deliver an e-procurement portal that will boost commerce along the “e-Silk Road” between China and the Middle East.

A number of Dubai-based companies have been on a global shopping spree, buying stakes in international blue-chip companies.

Istithmar last year acquired luxury retailer Barneys New York for $942.3 million (Dh3.4 billion) and earlier this month announced acquisition of a 40 per cent stake in the United Kingdom-based luxury spa company Espa International.

Commenting on Tejari going public, Hijazi said the company would launch an initial public offering (IPO) in the next two years. “We have started structuring the company in such a way to go public in the next two years… but have not yet decided about which stock market to list on,” he added.

Since its launch in 2001, total transactions on Tejari crossed the $5bn mark last year. Hijazi expects transactions value to grow by at least $1bn annually in the foreseeable future. He sees $1.5bn jump in transaction values this year as the company has embarked on massive expansion plans.