Stronger Together: Oweis Zahran, Founder And Chairman, OWS Auto
The founder and Chairman of OWS Auto on building a family-run business that's now all set to go public.
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By the time you read this, OWS Auto, a UAE-based automotive group consisting of OWS Spare Parts Sales, OWS Fleet Maintenance, and OWS Automotive Consultancy, will probably have made its stock market debut. I talked with founder and Chairman Oweis Zahran last month, which was when he described his company going public on Nasdaq in January 2020 as the final leg of a successful entrepreneurial journey. "We are going public to confirm the success of the company, and to grow," Zahran explains. "Our public investors will enjoy a risk-free business, because we know this business so well that it will be very difficult to fail. I'm very confident in what's next. Many people have asked me, why share that success? But when you go public, you are creating very public partnerships, and I believe that you grow through partnerships."
One example of this is in the joint ventures his enterprise has formed with UAE government entities - Rafid, AJ Industries, and Etimad Auto. And the measure of their significance is in the numbers too: while his core business employs approximately 75 people, the three joint venture companies have 855 people on the books. "Our joint ventures are much larger than our own companies," Zahran explains. "That's how I want them to be because that's smart business. What that means is that our heavy lifting is done on the joint venture level. My risk is minimal."
OWS Auto team (L - R): Oweis Zahran, founder and Chairman; Hudaifa Zahran, Chief Financial Officer; Talha Zahran, Rafid Operations Manager; and Mahmood Zahran, Business Development Manager.
Source: OWS Auto
It is certainly easy to get the impression that it would be very difficult for OWS Auto to fail when you meet Zahran in person. He has a calm, poised demeanor, his answers are self-assured and explained to the tiniest details (he obviously knows his business inside out); by all means, there seems to be no incongruity between speech and action. Another proof that he is wholeheartedly committed to the concept of partnerships is on our front cover- forging strong bonds starts from within the Zahran family, and spreads throughout all other areas of his life and business. "When I pulled my brothers into the business, it was more to keep them off the street, to make sure that everyone is productive, but then I saw something," Zahran explains. "Each and every one is talented in different elements, and those turned out to be all which I myself suck in. For example, my eldest brother is excellent in finance, while my youngest brother is a sucker for details who will make sure that we have ticked all the boxes before a product is released. Very quickly, I realized that this is a unit that cannot be separated. I've said this before, but there really is a reason why there are seven emirates [in the UAE]. Together, you are stronger."
His three brothers have contributed to the company from the very beginnings through its exponential growth, with Talha Zahran today serving as Rafid Operations Manager, Mahmood Zahran as OWS Business Development Manager, and Hudaifa Zahran as OWS Chief Financial Officer. With new plans on the horizon, Zahran says, the four of them have already started discussing who will be taking which new responsibilities and where. "Our approach is one of "divide and conquer,' born out of our graduation from the learning and growth that we have received at OWS," Zahran says. "So, it's not only me helping them, but them helping me."
Oweis Zahrain, founder and Chairman, OWS Auto
Source: OWS Auto
Interestingly, it is our talk about treating everyone with respect, which Zahran insists on, or a lack thereof, that shed some light on a defining moment that led to him starting up OWS Auto in the first place. When his Porsche broke down some years ago, a dealer in the UAE quoted AED9,000 to get a starter repaired which, Zahran explains, was hugely overpriced. "And, the dealer told me, "Toyota is cheaper.' He looked down on me, and made me feel cheap, and as if I don't matter, in a very arrogant way." This lack of kindness (let's describe it that way), sparked the start of OWS Auto. Zahran adds, "I went home and removed the starter with my own toolbox, sent it off to the US, had it remanufactured, and brought back here. When the starter was installed, I took the vehicle to the dealer who thought it was brand new. In fact, it was remanufactured, but it had been done to such a high quality that even they could not tell the difference. My point is that the whole exercise cost me US$150, and so, as a businessman, I saw a real opportunity there. I started importing parts, and selling them as remanufactured. Remanufacturing will always be so dear to my heart, because it sparked all these other businesses."
Before we delve deeper into how OWS Auto expanded into other business verticals, Zahran explains the three key elements that have made it a preferred and trusted partner of some of the UAE's government entities, starting with OWS Auto's first client- Dubai's Road and Transport Authority (RTA). "Firstly, the fact that remanufacturing preserves the environment," he says. "Secondly, the fact that our parts are higher quality items than new ones. How this industry works is that when they manufacture a new vehicle, they make money on spare parts, not the car. It is because you will be buying spare parts all your life, whereas your car only one time. So, spare parts are manufactured to fail, not to last, but when they are remanufactured, they are designed to never fail. We give a lifetime warranty on spare parts. So, how we win the business with the government, is the environmental protection, the quality, and the price, because we are 60% cheaper than other dealers. When we control spare parts, we control everything, because we are not going to the dealers, and thus the Dubai government has saved more than AED1 billion over the three years of dealing with us."
Today, OWS Auto includes OWS Spare Parts Sales, OWS Fleet Maintenance Services, OWS Automotive Consultancy. "All governments want one reliable partner," Zahran says. "The turning wheel effect on our business was the remanufacturing element, but then it transitioned very quickly into us becoming a full-service automotive solution provider for the government. That's what we are known for now, and no longer spare parts, which is now just one element. The bigger picture is that OWS Auto is your partner to help you, as a government, to regulate your automotive sector. That will remain our ambition when we expand into other markets. That's what the majority of our value is based on."
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A native New Yorker, Zahran has witnessed the growth of the region's economy from an early age, having travelled here since the early 90s to help develop his father's MZ Holdings Group and its 16 subsidiaries. Over the years, he has learnt that having a strong alliance with the government is particularly important in the GCC region. "The fact of the matter is that with the region being so young, the government is still very much hands-on involved in almost everything," he says. "They do that in order to maintain a grip over things, and make sure they don't lose control. To succeed as an entrepreneur, I realized early on that you have to team up with the government, if nothing else, to understand the laws that are ever changing. Also, when you partner with the government to provide a service, you are in a better position from a business perspective to dictate the terms, and to provide guarantees. As a government associated entity, you will be bound to succeed."
His respect for different cultures and ability to build bridges with governmental entities has remained a gift that kept on giving. To provide an example, Zahran says that his team is currently working on a project which he describes as an insurance telematics system for the local automotive sector. "One major advantage that this system will add will be, for example, when you have an accident, the telematics system in the vehicle will communicate directly with the first responder," he says. "Also, there's a lot of insurance fraud that we will be able to control. We will be working along with the insurance authority of this country to dictate how that will be done, and we will be the only platform that the government is interfacing with. So, millions of cars on the road will have to see us. That's a prime example of what I mean by how when something does not exist, the government is looking for a way to obtain the right knowledge, and what better way to do that other than partnering with an expert, and learning as you go."
Year after year, Zahran says, OWS Auto has been through cycles of exponential growth. Still, there have been many painful lessons to be learnt along the way. "Especially in their first independent business, entrepreneurs tend to forget that failure is okay, but you have to know when to let go," he says. "I haven't learnt to let go yet, because instead of letting go, and starting over with fewer mistakes, I made sure that this thing went forward. Now, I'm glad I did it, because it came back tenfold. But if I could go back, I'm not sure I would do that again."
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In 2013, at the very start of OWS Auto, he invested all his savings into the business in order to have it set on strong foundations, starting with building a team of experts. However, not all of it proved to be a fruitful endeavor. "I brought some experts from the US, but age and experience do not necessarily make you good, because if you do something wrong for 30 years, it does not make it right," he says. "For example, they were ordering spare parts for cars that were not even in this market. They were my biggest downfall. What I would do differently is letting go of them quickly. It was not until I took a more direct position in the business, that the business succeeded. I rolled up my sleeves with my brothers, we fired all these highly paid executives who were clueless, and then we did it ourselves. So, knowing when to let go of people, relationships, even the whole business, is important."
The Zahran brothers at their No Games Crossfit gym opened at the back of one of OWS Auto's warehouses in the UAE
Source: OWS Auto
However, when building a family business, Zahran adds, this rule has to be applied cautiously when it comes to the siblings involved in the business. "Because, out of 10 family businesses, as per statistics, six fail from within," he says. "That's a scary number, because your odds are to fail, not to succeed. When you work with people, you'll have problems, because people bring problems in general. We're going to deal with it accordingly. When it's your family, you should give them an extra chance, help them understand, and learn why something is important. It's important to be patient and invest more in it, because if it works, the return will be like nothing other."
As for the future, OWS Auto plans include expanding into Saudi Arabia. "We will definitely do it with the government, not privately," Zahran says. "We've been receiving a lot of offers from people wanting to sponsor us, or to partner with us, but after what we have learnt here, I like to work in partnership with the government. Ultimately, I want to open a factory there, which will supply this whole part of the world. That's what I mean about not being possible for us to fail, because I already have a home for everything that the factory will produce. The beautiful thing about our business is that it is self-sustainable. Everything we produce, we will consume the majority of, and then sell the extra, but 80% of our success comes from within the company."
Other expansion plans revolve around Asia and South East Asia, including China, Philippines, and Brunei. "One of the princes of Brunei is a very good friend of mine, and we've been talking about that market for a long time," Zahran says. "I think that that market is very similar to the one here. It's not very large, but it's very important. I like the country personally; it has a good appetite for our business with little to no competition. We'll have a plant in the Philippines that will support Asia and South East Asia. The numbers there are phenomenal, you have millions of people. The Asia plans will happen immediately after IPO. That's what the money will be used for." At the same time, Zahran plans to also dedicate more of his time to his philanthropic engagements in Africa -over the past seven years, he has been facilitating a provision of clean drinking water to people in Ghana and Nigeria- which is good enough reason for us to wish that his first IPO proves successful, and helps accelerate these plans sooner.