Operational reviews – Bidvest Foodservice Middle East

Bidvest Foodservice Europe

Hisham Al Jamil: Regional managing director

Bidvest Middle East operates across the major markets in the Gulf, Turkey and Lebanon. It is present in United Arab Emirates, Saudi Arabia, Turkey, and recently in Oman, Bahrain and Lebanon, and considered the first in its class in the region to have a wide network of five markets. The business comprises mainly multi-temperature Foodservice distribution serving customers in the hospitality, catering, and retail channels. The core strengths revolve around a rich basket of international brands and a professional service characterised by a professional human capital and an efficient value chain.		Hisham Al Jamil – Regional managing director

	Performance continues with a double-digit revenue growth above +20% versus last year despite a challenging year characterised by exceptional necessary increase in operational cost, uncontrolled inflation in certain markets, and disappointing currency devaluation in Turkey. A noticeable improvement in the average margin by 3% points driven by a healthier customer base and an improved mix of brands and products
	Succeeded in adding new brands to the different companies across the region leading to a stronger portfolio and proposition
	Completed the “Green Field” setup in two new markets – Oman and Bahrain – raising the footprint in the gulf region to four markets
	Conducted more than 40 training sessions across the different entities to enhance the skills and capabilities of the human assets.

	Major investments carried out in Turkey across the different value-chain of the business in line with the business strategy
	Implemented “brand ambassadors” resource and expertise for major brands in certain markets supported by the principal suppliers
	Upgraded offices and workplace in Turkey, UAE, and Saudi Arabia to accommodate the business needs
	Initiated association with “culinary institutions” with the objective of strengthening the customer connect
	Implemented “Project Elite” – a series of initiatives that focus on building stronger relationships with our major customers.

	The geopolitical situation and tension in the region remains to be the main concern for the business affecting the spending habits of consumers in the foodservice channel and the investment appetite of foodservice operators
	New players to the distribution business entering the market reflect mixed indicators, but the disappointment is reflected in new comers established and financed by distant investors and groups outside the circle of Food distribution
	Setting up Oman and Bahrain was faced with some administration and legal obstacles that led to a delay in the startup of the operation.

Changes in the operational environment

The major change to the operational environment has been in Saudi Arabia as a result of the “Saudization – a drive to hire Saudi nationals”. This challenge has led to a dramatic change in the different dimensions of the business where 20% of the human capital must be Saudi’s and salaries are pre-set by the authorities. Additionally, this has resulted in termination of low performers, and retaining of high performers in order to accommodate the 20% quota.

In Turkey, major improvement took place during the year to incorporate several functions to be managed internally. Additionally, we moved from a 3PL to own warehouse management.

For UAE, a fully operational set up in Abu Dhabi driving efficiencies and contributing to a substantial share of the business.

Risks and responses

	In Saudi, the Saudisation new laws led to an unexpected disruption to the business for three months, nevertheless mitigated with stock rotation to other markets and sufficient provisions on lost sales and bad debts during the year
	UAE scale on storage capabilities reached its limits but necessary plans have been put in place to address the matter: short and long term
	Despite the difficult circumstances with the demonstrations and political situation in Turkey, we still managed to achieve +30% in revenue versus last year as a result of an increase in portfolio, coverage, and better operational measures.

	Fortifying the current network and expand further to potential markets with a focus on Lebanon and rest of the Levant
	Strengthen the portfolio by leveraging on brands and sourcing capabilities
	Nurturing human capabilities.

The tension in the geopolitical situation of the region can have detrimental effect on the objectives set for 2015 as the Foodservice sector will be directly affected, however we are confident in the future of the region.