Beyond the Bazaar

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Government reforms have helped, but it is innovation that has made Mohammed Farid Khamis, founder and CEO of Oriental Weavers Carpet Co. in Cairo, the Pharaoh of Egyptian exporters. Starting with a single loom in 1980, he has become the leading producer of machine-woven carpets in the world. From a string of factories in the industrial 10th of Ramadan City, 34 miles northeast of Cairo, Oriental Weavers ships 70 million sq. ft. of carpets a year, yielding $280 million in revenues. Its customers include such retailers as Wal-Mart, Home Depot, Ikea and Carrefour. With 63% of the shares held by the Khamis family, the firm has a capitalization of $600 million.

A factor in the company's success, explains Khamis' daughter Farida--who, like her sister Yasmine, is a vice president of the firm--is that Oriental Weavers has been globally competitive from the start and has never relented. Khamis shattered industry standards by introducing the world's first 1 million--point carpet and created variations all the way up to 6 million point.

Oriental Weavers has been adding capacity at 20% annually since 2003 to meet demand for its value-for-money products. That includes a small weaving facility outside Atlanta to reduce lead times for urgent U.S. orders. Eyeing a huge potential customer base in Asia, the company opened a plant in Tianjin, China, this year that will serve the Chinese market. Lately it has been having fun with a deal to produce carpets with the Andy Warhol Foundation, using the artist's designs. Farida Khamis says the company aims to become a market leader in a new product line: home textiles. It has inked deals to make sheets and towels for such brands as Cannon and Fieldcrest (whose parent, Pillowtex, closed its U.S. mill in 2003). "We have not reached our maturity," she explains. "We want to become even more global, penetrating markets we did not sell to before."

Over the past three years, Emaar Properties, an outfit in the United Arab Emirates, has become one of the world's leading real estate developers. Emaar was founded in 1997 by ruler Sheik Mohammed bin Rashid al-Maktoum to lead the Dubai construction boom. The 70/30 business-government partnership, run by chairman Mohammed Ali Alabbar, started taking its expertise on the road in 2002, achieving a market cap worth $20 billion. Currently, in addition to constructing Burj Dubai, touted as the world's tallest skyscraper, Alabbar is busy with undertakings from hotels in Miami to a convention center in Hyderabad, India. His eye-catching projects include the $26.6 billion construction of an entire new metropolis in the Saudi Arabian desert to be called King Abdullah Economic City and a global hotel and condo partnership with Italian designer Giorgio Armani.

Some of Emaar's success is explained by the nearly 300% rise in oil prices since 1997, which is pumping vast sums of unexpected new revenue into Arab investments. But much of it is also due to the savvy of executives like Alabbar, who can put Emaar's clout to advantage. "You go where your $100 million will work hardest," says Alabbar. "I'm looking at developing economies. Mature economies like those in Europe are not that exciting compared with India, which is growing at 7% or more. I'm looking eastward seriously, toward China." In July Emaar became the first Middle East property developer to open an office there.