The go-getter

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Pagarani: we have three Bhs stores and five supermarkets planned for India.

Deepak Pagarani achieved his ambition of doubling the bottom line within three years after his appointment as CEO of Dubai-based Al Maya Group in 2004. Fuelled by victory, he is now gearing up to hopefully bask in a repeat glory on his 2009 deadline.

"We're starting in India to see how that goes, as the potential is massive, if that takes off then this [Dubai HQ] will look like a small division of the Indian company.

"If it does well, we could open 500 supermarkets in the country."

"Retailers in India announce 500-1000 stores, and there are a lot of big players in that market. I'm approaching it as anyone else would, having never lived there."

He says understanding the mindset of Indian shoppers will be an interesting hurdle. "I want to go into densely populated areas, to really find out what my customers want: Are they comfortable with home deliveries? Can I have accounts for them? To understand the Indian temperament takes a lot of time."

The company has just opened its first supermarket in Mumbai supported by a locally based team, an obvious location, he says, as simply it is a big city easily accessible from Dubai with logistical advantages. Pagarani reveals the company plans to open eight stores in India this year, three Bhs stores and five supermarkets.

Pagarani is adamant that acquiring central locations plays an overriding role in the success of FMCG, and choosing the best cities and the best parts of those cities is imperative to expansion.

"If I started a retail fashion brand, I would start in Dubai at City Centre and Mall of the Emirates and if it didn't work there I would pack my bags. If it doesn't work there, where is it going to work?"

Al Maya Group - which encompasses its supermarket chain, non-food retail, food distribution, manufacturing and clothing distribution - has further plans for India, he enthuses, on the heels of signing a potentially lucrative FMCG deal with renowned beverage brand Pocari Sweat.

The company has secured a joint venture with the beverage brand to establish three factories in India, where currently "there is no such drink."

Available in a can or powder, Pocari Sweat replaces lost fluids and in the body lost during perspiration. Al Maya currently represents the drink in most of the GCC and overseen its presence at the Asian Games in Doha. "We will market it the same way as we do in Dubai," he says.

The group has come a long way since its 1979 inception with a standalone supermarket in Ajman, known as Lal's at that time, and focusing predominantly on wholesale trading and the supermarkets.

Al Maya Group later opened offices in the UK and Warsaw, in a bid to purchase more efficiently for the mother company in the UAE. In 1985, the group acquired the British Home Stores (Bhs) franchise for the Northern Emirates.

Social responsibility has been central to Pagarani's direction of the Pocari Sweat brand. "We supply it to labourers working through the summers as part of our social awareness, often for free, as we see they are working in harsh conditions."

Al Maya has opened 10 Bhs stores in the Middle East since first introducing the British fashion and home retailer, and recently debuted the brand with its first outlet in Mumbai, with "four to five stores" set to be unveiled in the region this year.

Pagarani comments that as the franchisee, the group is "pretty restricted and only perform as well as the master company. So if they do badly in the UK, due to bad merchandising or planning that will all reflect here as our merchandise is selected from there."

The retailer has been aggressively promoting its Tammy brand in the UK, which will be reflected by the group in the region.

And like a rigorous poker game, those deals keep coming for Al Maya Group. He reveals Al Maya Group has been appointed as the agent for Fruit of the Loom across the Middle East, and big business will be guaranteed as the company supplies its t-shirts to the rest of the market.

Pagarani's high-powered approach to business extends to his strategy for the Middle East, where he intends to open as many supermarkets "as soon as I can find a reasonable priced location," with at least five stores scheduled to open this year, differentiated from rivals by their 24-hour opening and delivery service.

"I have signed up for all three supermarkets at Jumeirah Beach Residence, have another one coming up in Satwa, another in Fujairah, plus there's always some location or another coming up so I'll just take what I can when rentals are reasonable."

Pagarani says he would "love to open as many supermarkets as I can get my hands on as I see the construction, the influx of people, and I'm bullish about Dubai."

The existing supermarkets are currently being transformed. "We are constantly looking at new layouts, new lighting, and more efficient stores, such as lighter trolleys and freezers with nice glass fronts to make the products more appealing."

He reveals the majority of upcoming supermarkets are positioned within densely populated areas, and although it is "definitely not cheap to do business, I think there is enough space for everyone."

"For the next 10 years, nothing is going to slow down, yet rentals are very, very high particularly over the past 18 months. Even manpower is a problem and all of the costs are catching up. I pay high rent at the supermarkets and my managers pay high rent at home. Twenty years ago, a can of Coca-Cola was AED1 and it still is."

Al Maya Hypermarkets will also make their debut soon, he reveals, to incorporate 10,000m² stores, "modelled on the supermarkets but the strategy will be completely different, more service-oriented."

He slams the widespread tendency of hypermarkets to offer a hard sell, rather than a complete sell, and vows hypermarkets operated by Al Maya would deliver "caring" customer care, to be achieved by more manpower than existing players in the format.

The influx of hypermarkets in the region has been valuable to Al Maya Group in its dealings with suppliers.

"Their negotiations have opened up a lot of avenues for us. Before Carrefour came, there was no such thing as rebates and issues with expired goods, it has helped our retail market evolve a lot," he says.

"I don't know if it has helped our relationships with suppliers, but we definitely make a lot more money."

Al Maya Group aims to the niche for convenience in the format. "Initially when Carrefour opened, it was nice to go there but then there was two hours of traffic to negotiate, there is more need for convenience now."

Pagarani believes Al Maya's supermarkets have stood the test of time and delivered impressive results at a wide spectrum of locations as they are "not standardised."

The company has focused on serving the needs of specific target audiences, from its expatriate shoppers on Sheikh Zayed Road to local consumers in Sharjah, which has swayed the choice of brands for sale.

For 2008, Al Maya's concentration on new brands, openings and new markets will be part of a wider strategy, which will also boost the number of locally produced lines it sells by pushing own labels, chiefly "food brands that I feel have been neglected."

"We have a brand called Daily Fresh that has been around for 20 years, but it hasn't been marketed properly or adequately. It offers everything from rice to spices from the Al Quoz factory, while we also do a lot of third party packaging for local suppliers."

Al Maya Group controls the Borders franchise for the Middle East, and currently operates stores at Mall of the Emirates, DIFC, Deira City Centre and Muscat City Centre. The group is now set to bring the bookstore chain into Kuwait, Saudi Arabia and Doha.

"This year we have at least three Borders coming up. We have secured already secured a location at an upcoming MAF shopping centre in Mirdiff and the response in Oman has been very nice," he says."

Pagarani predicts a solid future for the company, and attributes his unquestionable achievements in the driving seat to "hard work and luck."

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