MEET THE CEO: The man who hit the bull's-eye with fresh milk

Dubai - Dr Ahmed Eltigani, CEO of Al Rawabi Dairy Company, has been at the forefront of many firsts in the UAE's dairy industry

Dr Ahmed Eltigani, chief executive officer of Al Rawabi Dairy Company, has seen a lot of firsts when it comes to the UAE dairy industry. 
Speaking at the 'Meet the CEO' series at the Khaleej Times offices, he looked back on when the company had first started operations in the UAE with just 500 imported cows. 
"When we arrived back in June 1989, there were very few dairy companies in the region. Most of the dairy products came from Saudi Arabia. When we talk about dairy today, especially milk, we know that people enjoy fresh products. Parents want to give their children the freshest products that are vital to their growth," he said. 
At that time, all the milk came from a region in Saudi Arabia that was about 80km north of Riyadh. For it to arrive in the UAE, it had to travel over 1,800km. Transporting the milk over that distance took time, and by the time it arrived in the UAE, it was not fresh. Al Rawabi saw the opportunity to be the first dairy company that would out fresh milk on the shelves. 
While the company was off to a good start, he noted that there were still plenty of challenges that had to be faced early on. 
"There was competition in the market, and people did not understand the idea of freshness. Pricing structures for products were different as well, since our competitors were getting subsidies and we were not. We had to think about how we could penetrate the market, where companies were already established and had lower operating costs compared to us," Dr Eltigani revealed. 
At that time, in 1990, all the dairy companies were selling their milk in half- and one-litre cartons. Al Rawabi saw the opportunity to add another first to its portfolio by introducing something new. 
"We were the first company to change the design and introduce plastic milk bottles," Eltigani said. 
"They are more hygienic and there is no danger of anything getting into the milk and changing its flavour. Immediately, this caught the eye of consumers. We ended up capturing a 5 per cent market share. Two years later, we again saw an opportunity to introduce something new to the market. We saw that family sizes in the UAE were bigger on average, compared to the markets in Europe, so we introduced family-sized bottles that were two litres and then followed that with three-litre bottles. By this time, we had captured 7 per cent more of the market share." 
Dr Eltigani also revealed that in 1992, there was still no sign of fresh juices being sold in Dubai. Shoppers could buy nectars or long-life juices, and many were consuming them under the impression that they contained a lot of vitamins. "But, when you have long-life juices, you must remember that they are ultra-heated to increase their shelf life, and this actually kills the vitamins as they are very susceptible to high temperatures. We immediately began to create a way to bring fresh juices to the market, and we were again the first company in the region to do so," the CEO said. 
Consumers soon started seeing Al Rawabi as a company that was setting industry standards, but Dr Eltigani has noted an increase in competition. He does, however, likes to accept such challenges. 
"During the past 10 years, we have not allowed our prices to increase, despite the fact that our production costs have risen 40-60 per cent, and supermarkets and cooperatives are taking a bigger share - almost 30 per cent. There are challenges from all directions, but we have to face them, find alternatives and find solutions," he said. 
One trend that he is happy to see in the market is the shift in consumer behaviours. "Shoppers are more knowledgeable about what they are buying for their families. We live in an age of readily available information, social media and Google. You see information coming from everywhere about everything. Consumers today don't just see the production and expiry dates on products; they want to see the ingredients, if the product is organic, and how many vitamins they are getting from it. Shoppers want products that are healthier, which make them live longer and which make them look younger." 
This trend has led the company to foray into its most recent product lines. 
"We noticed that people above the age of 40 suffer from various deficiencies," Dr Eltigani said. "Many of them don't even know that they are lacking certain elements, which causes various health problems in both men and women. We saw an opportunity to create functional food products." 
This, he said, is already a huge market in Scandinavian countries, and lots of companies are working on putting elements into everyday food items such as milk and juices. Functional food products, however, are not for everyone; they are designed for people that suffer from problems such as hypertension, obesity, vitamin D deficiency, heart and joint problems, and dementia - all modern diseases that are found in populations all over the world. 
Dr Eltigani noted that as part of the company's research into what are the most common problems that people suffer from here in the UAE, they spoke to the Ministry of Health in Dubai, and found that the number one problem is vitamin D deficiency. Over 80 per cent of residents in the UAE suffer from vitamin D deficiency, and this is a major cause for concern because people that suffer from this deficiency get increasingly lethargic as the day progresses. This causes their productivity to drop. They also suffer from joint and back pains. In addition, their immune systems are also impacted, so they tend to repeatedly fall victim to the flu. 
"We worked with the ministry to produce our Vitamin D milk. Then we introduced another product called Super Milk," Eltigani said. 
"After this, we saw the opportunity to create another product for people with very busy lifestyles. We realised that a large portion of residents were skipping breakfast in the mornings, because they didn't have time. They are skipping the most important meal of the day and simply having a cup of coffee. We immediately started working on Nutree Boost, which is a drink made from natural products that are designed to satisfy the body for eight hours. It is a replacement for breakfast if you don't have the time to sit down and have it." 
He added: "We are also developing several other health products. Currently, we are working on a drink that helps you lose weight. We are also developing products for people with hypertension and for people with diabetes. In addition, we are also looking to create health and fitness products for people that regularly workout at the gym." 
Asked about the secret behind the popularity of Al Rawabi's products, Dr Eltigani pointed to one thing - cow comfort. 
"Happy cows give you good milk. Our cows come from Friesland in Holland and Holstein in Germany, and these geographies are very close to the Nordic Sea so it is very cold. Temperatures can drop to negative-20 degrees Celsius. Now compare this with summers in Dubai, where the temperature humidity index is the highest in the world. We get temperatures that reached over 50 degrees last year and humidity that stood at more than 80 per cent," he explained. 
"We have a cooling system that reduces the temperature to 28 degrees, and we invest in a lot of technologies and healthcare facilities that ensure that our cows don't get sick. We do metabolic profiles on all our cows to ensure that they are healthy and that they are getting the right nutrition from their feed. Also, nobody is allowed to shout at the cows: happy cows, happy farmers and happy consumers.
Keeping it short and simple
Dr Eltigani has one rule when it comes to weekly manager meeting - keep them short. 
At Al Rawabi, meetings take place only once a week and last for 20 minutes. All the managers present are allowed around three minutes to talk about the most pressing matters that they have, and how they plan to tackle them. 
"Be patient, think about alternatives and don't quit easily," he advised. "There is always a solution. Also, don't get nervous and frustrated over small matters. Looking back, you will see that 90 per cent of the time, you emerged from a situation without suffering any harm." 
Speaking about the future, he said that the dairy market in the GCC is progressing in line with the population. 
"We recorded a 12.5 per cent year on year growth in 2018, and our target is 15 per cent year on year growth for this year," he said. "We are planning to go for an IPO, and our shareholders are considering it in the coming two to three years. In addition, we are also planning to expand our farm capacity in Liwa, with 400 hectares, which is double our current capacity. We are also planning to invest in Africa, and have been approached by several African companies to develop their dairy industry. In addition, are also looking to expand our reach into other markets such as Morocco, Tunisia, Algeria, Syria, and Iraq."
Why Africa?
Dr Eltigani noted that it is important for organisations to have goals that tackle the issues of food security. Research from Harvard, he said, has shown that the world could face a potential famine starting as early as 2022. By 2030, this famine will be the cause of several deaths in developing countries. 
"There are many reasons for this; the first is that several geographies are today incapable of producing the same quantity of food that they did 50 years ago. This is because the soil and water has been contaminated due to the use of chemicals and various pesticides. The second reason is booming populations around the world that out even more pressure on food production. Lastly, as the standard of living increases so does the demand for more and various types of food," he noted. 
He added: "Experts have noted that the answer to food security lies in Africa, which still boasts a large volume of virgin land that is suitable for agriculture. Another answer revolves around the production of meat in laboratories, which will reduce the damage on land that is being used for animal farming."
- rohma@khaleejtimes.com