Seizing regional opportunity

There is still plenty of room for expansion in the FMCG sector despite retail space over-supply concerns.
Seizing regional opportunity
By Roger Field
Thu 01 Mar 2007 05:12 PM

Few people involved in the FMCG sector would dispute that Gulfood 2007 was an impressive event. By drawing together more than 2000 trade exhibitors from across the world, and some 40,000 visitors, the event generated the kind of critical mass that would have been beyond the imagination of most regional FMCG players just a few years ago. This was further evidence that the Middle East is now established as a mainstream market in the minds of regional and international food and drink companies.

Furthermore, the levels of growth experienced by the region's food and drink sector, which saw sales increases of almost 6% in Saudi Arabia in 2006, look set to continue. And while some industry insiders have voiced concern about a possible over-supply of retail space in the UAE in the next few years, it appears that there is still plenty of room for expansion in the FMCG sector, particularly looking across the wider Middle East.

For example, news that Al Sadhan, a Saudi Arabian retailer, is now planning to take on the country's existing heavyweights of Al Othaim and Hyperpanda, is ample evidence that there is plenty of business for the taking. Al Sadhan's CEO, Mazen Al-Saleh, told
Retail News Middle East

that his company should have 20 hypermarkets in Saudi Arabia by 2010.

For companies, local and international, that are willing to take on the challenge of operating in the Middle East, the rewards can be enormous. This is something that certainly became clear during the recent Retail News Middle East awards ceremony. From Al Islami, to Gulf Food Industries and retailers such as Emke Group, the companies present at the event have all prospered as a result of taking on the challenges presented by region head on. And while many successful companies speak of challnges such as staffing and recruitment, and legal differences between GCC countries, it is clear that the benefits by far outweigh the potential problems.

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