FROM FARM TO TABLE – INVESTING IN AGRICULTURE AND RETAIL

18 January 2022

FROM FARM TO TABLE – INVESTING IN AGRICULTURE AND RETAIL

FROM FARM TO TABLE – INVESTING IN AGRICULTURE AND RETAIL
Our conversation with Younis Al MULLA, Senior Vice President of Development & Government Affairs at Majid Al Futtaim Retail, one of the largest conglomerate companies in the UAE, will be devoted to issues related to the current state and prospects of trade and economic relations, especially the delivery of fruits and vegetables to this country, which is in demand all over the world.

 

- According to statistics, Uzbekistan’s exports to the UAE last year amounted to 64.8 million USD, which is a decrease compared to 2019. Of course, this indicates that the coronavirus pandemic has had a significant negative impact on the foreign economic activity of our countries. At a time when humanity is slowly moving towards overcoming the pandemic, do you think trade and economic relations between our countries have revived? Is there an increase in mutual export-import indicators?

– I am pleased to say that all regions of the world are projected to see significant improvements from the pandemic losses experienced during 2020. The World Economic Outlook report indicates that the global economy is projected to grow by 6% this year, following a 3.3% contraction in 2020. As for the Middle East and Central Asia region, we expect to see a growth of 3.7%. Throughout the region, in each market we are present, Carrefour is a fully owned Majid Al Futtaim business. We make every effort to partner with local stakeholders to benefit from the country’s best infrastructure, knowledge, and experience. In doing so, we support the revival of local economies in the short term while stimulating sustained growth over the long term. To that end, we look forward to creating meaningful employment opportunities for local employees and fulfilling our brand promise of creating great moments for everyone every day. Carrefour’s entry into the market aims to create 2,500 direct and indirect jobs and work with more than 600 local suppliers, manufacturers, producers and farmers across Uzbekistan. Further, as a business with a strong sustainability strategy, we seek to source local produce as much as possible in every market. While import and export trade is important to all countries, our goal is to support local businesses and develop strong partnerships within each location. All of which creates strong indicators that mutual growth and benefit can be achieved by this Carrefour expansion.

– Today, the UAE is a fast-growing country with a high per capita GDP, advanced industrial economy and excellent infrastructure. Do you see similarities between the strategies of developing the national economies of our countries? How do you assess the opportunities and potential of Uzbekistan in the field of economic development?

– According to the World Bank, Uzbekistan was one of only three economies in the Europe and Central Asia (ECA) region that maintained positive economic growth in 2020. Despite the economic impact of the pandemic, reforms implemented in the early phase of the nation’s transition to a market economy supported growth in 2020. With further growth expected and a rising appetite for modern retail and customer experience, we believe thereis a strong prospect and opportunity to expand Carrefour within Uzbekistan, and we are ready to invest in the local economy. Key factors in our decision to enter the country include unifying the exchange rate, trade liberalisation, and tax reforms. Furthermore, Uzbekistan currently lacks the presence of an international grocery retailer. With the food market expected to reach 5 billion USD in Tashkent alone by 2023, it marks a significant opportunity for Majid Al Futtaim as it aims to boost the country’s economy further and drive modern retailing standards. As an international retail brand with decades of best practice, Carrefour is well-positioned to fill this need and satisfy the demand for new products and services and support the country’s economic development.

– Speaking about the activities of your company, we know that since last year, the Majid Al Futtaim Retail has begun to open supermarkets and hypermarkets in the capital. It is worth noting that the general public welcomes this very warmly and is pleased with the growing competition in the implementation of international standards in retail trade. Can you tell us if there are any obstacles or problems in the process of opening outlets in Uzbekistan under this international brand? How will the supermarket chain be operating? Is there cooperation with local producers?

– At the beginning of September this year, we opened the first Carrefour hypermarket in Uzbekistan, at Compass Mall, in the Bektemir district of Tashkent. This opening follows the introduction of Carrefour to the country in December 2020. Entering a new market is always an exciting and challenging experience. Fortunately, Carrefour offers a unique proposition for Majid Al Futtaim. The retail chain requires relatively low CAPEX, and as an organisation, it is nimble and flexible. Furthermore, enjoying global best practice, expertise and supply chain solutions, Carrefour can also mitigate key risks encountered in the expansion, particularly surrounding the supply chain and challenges associated with sourcing local products.

Thankfully, we can serve the local community better and support local workers in the process through our commitment to cooperating and supporting local producers. As with any larger hypermarket and supermarket chain, Carrefour requires a sizable number of local employees who understand the country and its nuances to deliver a quality service to the people of Uzbekistan. By hiring from the local region, we actively provide support and deliver opportunities to the broader local economy. An example of effective cooperation with local producers is our dedication to growing our private label brand. To ensure new consumer needs are met, we are investing further in the Carrefour private label range - addressing a growing demand from shoppers for high-quality products at affordable prices. At the time of writing, the UAE is one of five countries developingCarrefour private label products locally (UAE, Egypt, Pakistan, Lebanon, Jordan) as we move towards a more local approach with lower ‘food miles’. Entering a new market is always an exciting and challenging experience. Fortunately, Carrefour offers a unique proposition for Majid Al Futtaim. We seek to expand this list of local producers as we progress in our journey.

– It is well known that Uzbekistan fruits and vegetables are becomingincreasingly in demand in the world market with their taste and quality. Are you personally satisfied with the statistical figures regarding the volume and type of fruits and vegetables exported from our country to the United Arab Emirates? What measures are needed to increase the indicators in this regard?

– Majid Al Futtaim is proud to support local economies; as such, it sources more than 80% of its products from the region to support local producers, suppliers and families. We understand that buying from a local distributor directly helps the local economy. This fact is crucial for people to know, and it addresses a growing consumer demand for increased brand alignment on issues including sustainability and corporate responsibility.

In fact, Carrefour is the most local of the international retailers in the countries where it is present. For example, in fresh products, we have doubled localisation in the UAE to 20% from the 10% that it was in 2020, and it will be near to 40% by 2023. We aim to follow a similar trajectory across all our markets. While we are satisfied with the export data between the two countries, at Carrefour, we continue to seek solutions to supply challenges by working with all our stakeholders at both a local and global level. As an organisation, we maintain a long-term vision and seek to develop lasting partnerships with all our suppliers. We are committed to a continued process of improvement.

Future opportunities exist for international companies to establish relationships with buyers in local markets, and buyers will have a future need for reliable produce coming from the international market. Therefore, together with our valued partners, we will continue to seek more sustainable solutions, supporting the country’s economic fabric for a bright, more resilient tomorrow.

– What horticulture products and berries of Uzbekistan are popular in the UAE?

– The United Arab Emirates and Uzbekistan work closely to strengthen trade relations, explore collaborative opportunities to export goods, and support exporters in this pursuit. As a country composed of diverse nationalities, the UAE caters to a diverse global community. This diverse society produces business opportunities for a wide variety of horticulture products, including those from Uzbekistan. Looking ahead in 2021 and beyond, there are bountiful opportunities to develop and increase the volume of products being imported from Uzbekistan and sold in the UAE.

– You must have witnessed that there are many entrepreneurs and farmers in Uzbekistan who are enriching their long-standing traditions and experience in the field of horticulture? Have you had the opportunity to get acquainted with the activities and achievements of our farmers? What was surprising to you?

Majid Al Futtaim Retail had the privilege of meeting a number of entrepreneurs and farmers from Uzbekistan, many from traditional farming backgrounds, in addition to those operating highly developed production facilities. We are impressed by the diversity and scope of the sector in Uzbekistan, witnessing innovation and ingenuity from across all players in the field. Of the many achievements we see in Uzbekistan, we are pleased to see experts in horticulture developing relationships and partnerships with businesses across different markets such as the Commonwealth of Independent States (CIS) Russia and China. Many of these markets are highly developed, utilising advanced processes for sorting, calibration, packaging and quality. Uzbekistan is progressing rapidly in this regard, meeting the various international standards in place. We are ready to work alongside our partners in the country to deliver mutual benefits for all involved while providing the consumer with premium quality products that would not otherwise be available in the local market.

 – If this is not a secret, can you please share the plans and goals of Majid Al Futtaim Retail for contribution to further improvement of trade and economic relations between Uzbekistan and the UAE?

 – Majid Al Futtaim Retail can support the Uzbekistan-UAE trade relationship by using our synergy between all countries where we operate to pool volumes on specific categories, such as fruits and vegetables, confectionery, electronics and textile. Further, cherries, apples and pears are products currently exported from Uzbekistan, mainly to Russia and China, and could be tested for sale in the UAE. Significant production of tomatoes and cucumbers could also be considered for export. We look forward to exploring all these exciting opportunities and more in the coming months and years. Majid Al Futtaim’s presence in Uzbekistan is a strategic move that sends a message of confidence to other companies in the UAE that Uzbekistan is ready for business and hold untold new opportunities.With the food market expected to reach 5 billion USD in Tashkent alone by 2023, it marks a significant opportunity for Majid Al Futtaim as it aims to boost the country’s economy further and drive modern retailing standards.