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Tarek El Sakka

General Manager, Dubai Refreshment Company

Mohit Malhotra

Executive Director & CEO, Dabur International

What is the most common bottling method here? TAREK EL SAKKA The UAE does not have a returnable business anymore. All of the business is in non-reusable packages. Cans continue […]

What is the most common bottling method here?

TAREK EL SAKKA The UAE does not have a returnable business anymore. All of the business is in non-reusable packages. Cans continue to be the biggest part of the market because people like the cold feel of cans, and they like the convenience, the size, and the transportability. Other packages are also making some in-roads. There are the 500 ml plastic bottles, which are re-sealable. There are the large bottles, which are a great value proposition for large families or parties. Then, there is the fountain business, which is convenient, for quick service outlets and malls, because they require less space and can serve a large number of people quickly.

Can you tell us about your R&D facilities?

MOHIT MALHOTRA We have around 100 full time R&D staff, all of whom are both Ayurvedic medical practitioners and PhD scientists, botanists, anthropologists, and so on. We invest about 1% or 2% of our company’s annual turnover in R&D. We also have an R&D strategy. We are huge in hair oils, and we are the world’s largest hair oil company, leading the market wherever we are. Our center for excellence for hair oils is where the science of hair oils is in India. Our center for excellence in washes and styling is in Turkey, on the other hand. We work with a company called Hobi Kozmetik, which is a market leader in washes and styling products. Dabur is the inclusion of bio-infusion in our products. We have hundreds of hectares of land in Nepal, which has a lot of important and rare herbs and medicinal vegetation that we use in our Ayurvedic medicines. The problem is that as these herbs and vegetation become more popular and commercialized, they are also in danger of going extinct. In that respect, we are acquiring land in the foothills of the Himalayas and encouraging farmers to grow those herbs and cultivate them, and we guarantee them that we’ll buy them at the prevailing market rate.

What are your expansion plans for the coming years?

TES For the first time in several years, local business is growing again. We had a significant price increase in 2011, and that resulted in a decline in the top-line and in the local business. On the negative side, the export business was down last year, which is why we had an overall reduction in our turnover and profit. The export business is opportunistic in nature; it is not a regular business for us, so we will often experience great years, when there are opportunities, and occasionally we could suffer a decline. In 2014, we are seeing indications that exports are coming back. Competition is becoming increasingly intense in the market, so that requires more spending from our side. At least we see growth emerging in the local market, and we see growth in exports. Our new factory will be coming on-board, and we are also hoping to launch some new products, so the future is looking good.

MM Africa has a lot of potential. We want to strengthen our presence in South Africa and so we’re in the process of acquiring a company there. This will take our business forward throughout the region, as we’ll have a manufacturing unit there and grow out. In East Africa, countries like Kenya, Uganda, Ethiopia, and Tanzania operate under the ECOWAS treaty, whereby you produce in one country and sell in the other, with all the countries duty free. For that reason, we want to set up a manufacturing base there, too. In West Africa, we already have two manufacturing locations in Nigeria, which is a hub for the region. In Central Africa, the hub is Congo. We are looking at a growth of about $200 million in Sub-Saharan Africa, whereas currently we have just a $20 million business throughout the region.

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