By Manoj Nair gulfnews.com
Nidal Haddad is someone who prefers the packaging to say everything about the contents within. And he has every reason to as in many instances his company Al Bayader International is responsible for the packaging.
If you shop at a Carrefour or a Spinneys and travel on Emirates airline, chances are you would have come across Al Bayader International’s packaging in some form or another. With new production capacities being commissioned at its Jebel Ali Free Zone facility last October, the company is set to make a bigger impact on the regional marketplace.
But it’s what the company did to stay on course during the worst phase of the downturn that offers lessons to local manufacturing enterprises.
“We had to look within to improve internal efficiencies, improve control on our sourcing as well as change the external and internal communications with both suppliers and customers,” Haddad, who is CEO in the family-owned business, said.
“While the market was in decline, our industry had to confront the rapid increase in prices of paper, aluminium and plastic. In fact, one tonne of PS (polystyrene plastic used in packaging) went up from $1,000 a tonne to $1,600. The increases were plain incredible.” (At the Jebel Ali plant, Al Bayader International uses PET.)
At the same time, Al Bayader International could not pass on the higher costs in a depressed market.
The solution then lay in creating new products and reworking existing ones.
“For instance, there was no need to have the same thickness on a plastic cup as during the good times,” Haddad said.
“But reducing this does not mean compromising on the product’s integrity or quality. It was just a matter of doing the same with less.”
Here’s where having an in-house R&D capability — including a food laboratory — helped. The company worked in tandem with clients to customise packaging solutions more in sync with the changed economic environment.
“While we didn’t lose even a single client during this phase, the order books were reduced, in some instances quite drastically,” Haddad said.
Time for creativity
“But more than during the good times, the importance of retaining a client is magnified in a downturn. The recession for us was the mother of creativity.
“We don’t just see ourselves as being a packaging solutions company.
“The mindset is of being a true supply chain company with the industrial dimension, the marketing one and the other elements thrown in as well.
“What worked for us well was the various departments worked in harmony. If a client reduced his order size, then marketing had to come up with alternatives. They usually did.”
Another investment — and one made before the downturn occurred in late 2008 — that paid off was deploying a comprehensive warehouse management software.
That allowed Al Badayer International to operate its logistics facility with installed capacity for up to 425 40-foot and 12 20-foot containers with just 19 people, and across a 24-hour cycle.
In “normal” times, such an extent of operations would have required as high an employee count as 80.
“It’s the same software courier companies use and the radio frequency links allows clients to keep regular track of their order shipments instead of them having to call up our customer services all the time,” Haddad added.
A more insidious concern also cropped up in the form of some clients delaying on payments. In fact, across the various sectors of the local and regional economy, this is seen as a problem that is still very much there. According to Haddad, its impact on his company has been kept within bounds.
Here To stay: A Place for plastic
Plastic, it seems, will never outlive its uses. This, despite repeated attempts to spread the word about it being environmentally unfriendly while looking for other solutions at the same time.
Nidal Haddad has seen it all. “Honestly, I don’t see plastic getting replaced totally,” he said. “I don’t think plastic will disappear even though all policies that seek to reduce environmental concerns are correct. The solution lies in creating plastic that’s completely recyclable with the least impact on the environment. That’s what the manufacturers can do and are doing.”
What to do
- Increase the company’s coverage and not have dominant exposure to just one market. On its own and through distributors, the company has interests across the Gulf and in Syria.
- Innovation, and that’s not only in making products, but in finding solutions for all possible challenges.
- The commitment to see it through.