MODERN ARAB DISTRIBUTION
TBY talks to Khaldoun Hallak, Managing Director of Modern Arab Distribution Ltd. (MADL) and Dr. Jamal Al Sarayrah, Chairman of KEMAPCO Arab Fertilizers and Chemicals Industrieson the Industry sector.
What has been MADL's biggest recent achievement?
We have always driven MADL on the basis that bigger is better. However, we have recently been focusing on becoming a more dynamic, agile, and profitable company. We recently restructured the company to become lean and mean by better managing our portfolio, discontinuing the distribution partnership with a major blue-chip multinational brand, and recruiting new profitable brands. This was a strategic decision to turn the company around from breakeven status into a profitable company in 2018, despite macroeconomic challenges. In 2018, our growth was around 2.5% at a time when fast moving consumer goods (FMCG) were reporting overall declines of 8.6% in nominal terms.
What other aspects of MADL's new strategy will drive growth in 2019?
In 2019, the main driver of growth will be new product development for existing suppliers and venturing into new categories of fast moving consumer goods (FMCG). We are a leading company in the food sector in Jordan and have identified the beverage segment as an area of growth in 2019. As such, we are proud of our new partnership with Lacnor from the UAE to continue our mission of delivering quality products to our Jordanian consumers. There are no official numbers, though based on rough estimates and the size of MADL, we represent 30-40% of the food basket in Jordan. Other than portfolio management, we have finalized our restructuring exercise to allow us to be an agile and efficient operation that maximizes profitability and financial performance. Overall, we are extremely proud of our culture and believe our main asset is people. This is why we will continue to attract and develop our talent, breaking silos along the way, and working harmoniously with and between departments as we grow.
You recently completed the first phase of a major capacity expansion. How are plans going for the second?
KEMAPCO is still studying the feasibility of doubling the company's current production at all levels, including profitability, production costs, and capital expenditure, not to mention marketing options and strategies for selling these new quantities. Our increased capacity is directed toward our export markets. KEMAPCO sells directly or through its distributors to the UK, Italy, Spain, Morocco, France, Belgium, the Netherlands, Germany, East Africa, India, Vietnam, Malaysia, and southern and South Africa.
How does KEMAPCO contribute to the country's aim of developing its downstream industries and value-added products sourced from potash and other raw materials?
KEMAPCO produces potassium nitrate (NOP), which is a water-soluble NK fertilizer containing 13.7% nitrate nitrogen and 46% potassium oxide (38.4%). Compared with other water-soluble potassium sources, KEMAPCO's NOP offers many additional benefits. Water-soluble fertilizer is gaining an increasing interest and is considered one of the greatest innovations made in agriculture. It makes crops grow healthier and is considered more efficient than ordinary fertilizers that are often utilized through application directly to soil. In addition, KEMAPCO produces NPK products with different grades and has the ability to produce dicalcium phosphate (DCP). This adds to the diversity of fertilizer products that Jordan can offer in one basket, which undoubtedly enhances the country's position in different markets around the world.
How do you position yourself in the global fertilizer and chemical industries market?
KEMAPCO supplies around 8% of total global demand of NOP directly and through prominent business partners who can ensure flexible and speedy deliveries. Our products are considered to rank among the highest quality in the world, which helps in building a strong position for the company in major agriculture markets.
MODERN ARAB DISTRIBUTION
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