New horizon for regional companies

With the pace of development in the GCC's food and drink sector at record levels, many local companies may soon be in a position to compete directly with their multinational counterparts.

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By  Roger Field Published  April 9, 2006

|~|Sun200.jpg|~||~|Working closely with companies in the Middle East’s FMCG sector, it is easy to take the remarkable pace of development for granted. Each month, numerous food producers and distributors announce expansion plans – often involving several million dollars – while the region’s main supermarket groups continue to eye each other’s territory and pitch for the best sites. Furthermore, statistics confirm that the Middle East is experiencing levels of growth in its food sector that are seen in few other parts of the world. Saudi Arabia’s food industry alone was worth some US $2.9 billion in 2005 – a rise of 11% on 2004’s value – according to figures from ACNielsen. Meanwhile, growth in the three months from December 2005 to March 2006 saw a 9% increase compared with the same period the previous year. The UAE has also been at the forefront of growth, with trade in foodstuff in Dubai having increased by 128% between 2001 and 2005, to reach a value of AED20 billion (US $5.44 billion), according to figures from the Department of Statistics at Dubai Ports, Customs and Free Zone Corporation. Amid this level of activity, a number of interesting battle lines are being drawn. Firstly there are the supermarket groups, which will no doubt continue with their bullish expansion strategies based on opening ever-bigger stores as quickly as possible. Another front is opening up between the multinational FMCG players and numerous regional companies that are investing heavily in quality control, among other important business strategies. These are investments that could put local players in a position to become credible competition for their global rivals. As Alex Andarakis points out in ‘Battle for supremacy’ (see p27), local and regional companies have various advantages over multinationals that could, if properly tapped, support this transition. It is against this backdrop of growth and innovation that Retail News Middle East is holding its awards ceremony in Dubai on April 19. The event, which is expected to bring together about 250 people from the region’s FMCG sector, will highlight the best brands across diverse categories and award the best retailers, producers and distributors in the region. The event will also be a rare opportunity for some of the best-known faces, from all sides of the industry, to gather in one room. Roger Field. Editor. E-mail: roger.field@itp.com ||**||

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