What is the current scale of your operations?
HISHAM ALBAHAR We started in Kuwait, which we consider our backyard. Kuwait is where the entire company was born, and from there we realized we needed to demonstrate a greater localization in the region and become a company that understands exactly what customers want. We started a company that took deliveries to the next level. From there, the company started to grow within the region; it has expanded to Bahrain, the UAE, and Egypt. Our expansion in still ongoing in order to become the number-one logistics company within the emerging markets based in the Middle East. Saudi Arabia is our next focus. The evolution of e-commerce has given us a new understanding of how to serve the market and its customers. There is a need for us to be available across the region, and this means we need to be available in Saudi Arabia.
ALI JAROUCHE 2017 was not a growth year, despite the fact that we played a significant role in a project for the new airport. We handled all the machinery and equipment and were involved in building infrastructure for it. That gave our company additional volume in 2017, though the rest of the year was a little slow. The building materials companies saw smaller volumes in 2017. To increase profit, we have to reduce costs by being more integrated in terms of vehicles and staff. In order to continue operating a profitable business, we were forced to cut back in some areas. The end of the wars in Iraq and Syria is expected to help greatly, and oil prices are rising again. Now, we no longer have to reduce costs, and instead will chase new business segments.
What are some of the unique characteristics of the Kuwaiti market?
HA It again comes to our key concept of localization. We have to understand the culture, which is where we stepped ahead of our competitors. We understand exactly what customers need and that is what we built on. We started by offering solutions that would be more convenient for the Kuwaiti market. Customers can select the best time for the package to be delivered. We have also developed an innovative solution unique to our region that allows customers to avoid paying online. In terms of percentages, about 75-80% of online orders are paid on delivery. Large companies today do not have any such service, whereas we have been offering this since 2014. The company has been growing 30% YoY since then.
AJ The geographic location of Kuwait gives it many opportunities, especially when it comes to Iraq. Iraq has been completely destroyed and needs a great deal of work. It cannot possibly rebuild alone, and will need help from its neighbors. The most suitable partner in this regard is Kuwait. We already do overland shipping to Iraq for US contractors. To date, the private sector has not started in Iraq. Around 14 years after the regime change, we are still waiting for business to begin there. When it does, we will be waiting. Thus far, only oil companies and military contractors have been doing business there.
What do your partnerships bring to the company?
HA We build alliances. In our industry specifically, the sharing economy is up and coming. This is the reason why we recently formed an alliance with an Egyptian partner, officially establishing a presence in Egypt. We have also formed an alliance with Qatar. We have a partner in Saudi Arabia now, which is usually how we initiate alliances. For Turkey, we also have a potential plan, although the language there is an opportunity and a challenge. One of our ideas has been to tackle Turkey, though we currently prioritize others.
AJ We have reliable agents that track our shipments with the manufacturer and loaded carriers. Our partners visit Kuwait to learn about what is going on here. They have to be familiar with the situation here. Secondly, they need to understand the international economy and dance accordingly with the rhythm. Shipping lines are more eager for business, as it seems like their opportunities are shrinking because of high competition. They want to reach out to us or to the clients to try and increase their volume.