Western shoppers perusing the shelves of any supermarket in Saudi Arabia cannot fail to notice the many familiar brands of grocery and consumer items on display, from Hershey’s chocolate and Kellogg’s cereals to Avon cosmetics and Jif kitchen cleaner.
What most do not know is that these and many other products are imported and distributed exclusively by the kingdom’s leading trading company, the Binzagr Group, which also manufactures some foreign brands in Saudi Arabia.
Recently having celebrated its 131st anniversary, the group does not just supply the prosperous and booming home market, but also exports its locally-manufactured products to dozens of countries in the rapidly integrating Middle East.
“It is fantastic,” exclaims Group President Sheikh Abdullah Saeed Binzagr. “We have a number of factories and export approximately 70% of what we make because throughout the Middle East everyone wants Saudi-made food and drinks.”
But groceries and personal hygiene items are not all that the Jeddah-based firm handles. It is also the local representative for Pittsburgh Corning glass products, Dunlop and General tires, Pabco roofing materials, and Harbison-Walker industrial products, among others.
The Binzagr Group’s history is highlighted by two distinct events: the signing in the 1930s of its first distribution contract with the company which eventually became Unilever, and 40 years later when the group began manufacturing operations on its own.
This latter period coincided with the unprecedented surge in consumer demand fueled by the spike in the kingdom’s, and the region’s, earnings from petroleum.
“In the 1970s we started to build factories first for powdered detergents, soaps, shampoos and other products in cooperation with Unilever,” Sheikh Abdullah recalls.
“Then soft drinks with a Danish company, matches with a German company, and corn oil processing with an American company. We had a tea factory in Riyadh, then moved it to the United Arab Emirates as part of a joint venture with Unilever and which now supplies around 30 countries around the world.”
The president says the group’s business model is to always create a joint venture with foreign manufacturers that have the know-how and technology to accommodate the necessary innovations and improvements.
|“Although you can learn a lot from multinationals, the passion comes from having something that is your own.” |
“we were the first to introduce into Saudi Arabia the concept of modern retail supermarkets more than 30 years ago.”
Sheikh Abdullah Saeed Binzagr,
President of Binzagr Group
“We have many long-standing relationships with companies through which we have been able to develop the brands with the actual brand owners,” the president says.
“Our skills set is the ability to import, distribute and develop brands along with our partners.
“Added value is the name of the game and unless we add value, we are obsolete.”
However, Sheikh Abdullah cautions that it does not always go according to plan.
“Sometimes it works, and sometimes it doesn’t. My eldest brother was the first to introduce long-life milk from a dairy in Wales. But then a Danish company set up local factories here so we stopped importing milk from Wales because making it with local water is more competitive.”
Throughout its history, the Binzagr Group has been at the forefront in both distribution and retailing in Saudi Arabia. The sheikh’s brother introduced direct sales from vans in the Red Sea city of Jeddah, a practice that so upset the established merchants that they complained to his father.
“But in reality, it was an innovation that transformed the market and created added value,” he argues. “And we were the first to introduce into Saudi Arabia the concept of modern retail supermarkets more than 30 years ago.
“At the time it was a wonder to behold and since then there have been hundreds of copies, although we are no longer in the supermarket business.”
The Binzagr Group was also the first in the kingdom to bring in high-quality, Western-style branding of luxury goods, patterned on the pricey brands from London’s Bond Street. The group, he says, always seeks how to improve either the most efficient or most enjoyable way for its customers to find what they need.
Sheikh Abdullah knows the business thoroughly from top to bottom. Unlike scions of other wealthy business families who automatically assume leadership positions in the family enterprises, he worked his way up to the top post, growing along with the group.
As a young boy, his vacations were spent working in the group and while in college, the sheikh spent time at Binzagr’s various operations or getting hands-on experience with other companies. At one point, he worked for a year as a tea taster with Lipton in Paris.
“Although you can learn a lot from multinationals, the passion comes from having something that is your own,” he explains. “Either people have passion and they succeed, or they lack passion and wilt away like a plant without water.”
The group’s foreign partners acknowledge and honor this concept. The CEO of Unilever regularly visits the Binzagr Group in Saudi Arabia where the company’s global brands like Lux, Dove, Comfort, Signal, Close Up and Sunsilk are household names.
Unilever products manufactured in the kingdom at the group’s local factory, which employs 350 people, are also exported to 10 countries including Morocco, Tunisia, Yemen and Sudan.
Despite that success, Sheikh Abdullah says the group will continue to concentrate its manufacturing operations in Saudi Arabia which it knows best.
“There is a saying in Arabic that putting your money somewhere other than your own country is like bringing up someone else’s child. So we are passionate and focused on Saudi Arabia which is our core competence.”
Efficiently handling that market alone is a gargantuan task, he notes, pointing out that the kingdom is bigger than the United States east of the Mississippi and larger than Western Europe.
“We move things across those distances better and faster than anyone else and that is why our partners remain with us.
We are open to real partnerships, but it has to be in what we do,” the sheikh adds.
“We stick to what we know and what we are good at, and that is Saudi Arabia.”