Interview: Reviewing the Growth Potential in the Middle East for Feed Additives

Kaleem Iqbal Quazi, a Consultant for Gulf Feed Formulators, who will be presenting our final session at Feed Additives 2018, provides exclusive insight into the potential for the region.

[Feed Additives] What’s are the key differences to doing business in the Middle East as opposed to the rest of the world?

[Kaleem Iqbal Quazi] You will be most of the times dealing directly with individual customers as against through your dealer or distributors in other markets. In fact some of the customers are so big and their requirement so high that it makes sense in dealing directly with them.

[Feed Additives] What are the biggest misconceptions about the Middle East?

[Kaleem Iqbal Quazi] That they are not quality and cost conscious. It is not true anymore. They are both quality and cost conscious and expect high degree of service. All commitments regarding quality and supply need to be kept. Uninterrupted supplies are of paramount importance in the Middle East because they do not have many alternative sources like in Europe. They appreciate openness and transparent dealings. If you have issues in keeping any commitments please let them know.

[Feed Additives] What is the most important consideration for firms looking to expand in the Middle East?

[Kaleem Iqbal Quazi] Reduce delivery time, ensure fresh quality and supply smaller lots at shorter intervals.

 [Feed Additives] Which market or country in the Middle East has the most potential?

[Kaleem Iqbal Quazi] The kingdom of Saudi Arabia has got the most potential for growth for many reasons. For instance currently it produces only 42% of its chicken meat requirement, the rest is all imported as frozen chicken. With 650 million broiler birds population growing at 5% CAGR you may imagine the potential. Moreover KSA produces 65% of meat in GCC countries and consumes 47% of it. With more people turning to chicken due to its low cost and health benefits the demand is going to go up as the human population is growing at 2.5% CAGR. The local population prefers fresh meat over frozen so imported frozen chicken is next to local fresh chicken in preference.

[Feed Additives] If the audience was to leave Amsterdam with only one take-home message of your presentation, what would you like it to be?

[Kaleem Iqbal Quazi] Have production facility in Middle East to reduce delivery time, supply fresh quality in smaller lots. This will help in reducing the cost for customers, improve quality and offer better service. Currently a customer has to order say at least a container load of material even if his monthly requirement is much lower as part containers take longer to sail. In order to maintain minimum safety stock he has to order at least three months in advance to cover order confirmation and voyage time from any European market. It means he will always be using 2-3 months older stuff and also he has to block his capital for this period. Moreover he will have to store this stuff in an air conditioned ware house because of very high ambient temperature during most part of the year which increases his storage cost. Moreover, in case of any quality defect he cannot have access to alternate stuff immediately. Also if he wants to change formulations due to health issues in his livestock or due to weather changes he cannot do it in time to be useful and effective.

[Feed Additives] A key theme of this conference is innovation and disruption. What part of the industry do you think ready for a new entrant to disrupt?

[Kaleem Iqbal Quazi] The feed additives industry without a doubt. It has the best chance for innovation and growth because for instance there is a great pressure on local producers to reduce cost of production and increase growth rate as the cost of broiler chicken production is very high because almost all ingredients are imported. Since use of antibiotics is banned as growth promoters other new non antibiotic growth promoters are in demand like enzymes, acidifiers, vitamins etc. the average growth rate of these feed additives is 4% CAGR. This offers great opportunity for new innovative growth promoters in broiler chicken.