BMMI specialises in the distribution, wholesaling and retailing of food and beverages, and represents a leading portfolio of global household brands. The group is also a strong international player in the provision of contract-based supply services for overseas governments and non-government organisations, building its franchise within the GCC and latterly in Africa, with the establishment of Global Sourcing and Supply, where logistics remains a challenge given the shortcomings of the continent’s transport infrastructure.BMMI has established an office in Washington DC to manage important relations with the US government and non-governmental organisation clients, reinforcing its status as part of the broader- based community involved in government contracting.
Listed on the Bahrain stock exchange, BMMI is one of the fastest growing companies in its sector, with an annual turnover exceeding $200m despite an unprecedented downturn in the global economy in which logistics has been one of the hardest hit sectors.
Last year, 2008, was a record one for the group. Contributing to this success was the opening of a new Alosra outlet at Amwaj Islands in Bahrain – part of BMMI’s new strategy to broaden its supermarket activities in the kingdom. A strong focus will be placed on high quality delicatessen and ready-to-eat items as seen in the launch of the group’s Great Deli division.
While Africa has contributed to a substantial increase in profits, work at home continues at a brisk pace. Since BMMI decided to expand the group’s presence outside Bahrain in 2002, operating profits have more than doubled, indicating that well-managed companies can aspire to regional and international expansion.
Strongly capitalised, with healthy liquidity, no debt, a solid client base and a steady earnings stream, BMMI is well positioned to survive the current difficult market conditions and continue its acquisition programme as opportunities arise.
The company has continually invested in human resources development, launching its internship programme for local school-leavers and an executive programme for graduates.
The Alosra University Sponsorship scheme helps students from low-income families study for a degree at the University of Bahrain. Now in its fifth year, the project has already benefited over 100 students.Like all companies, BMMI is naturally exposed to the same variety of risks that stem from the changing economic environment and the volatility of supply and delivery of products and services. Managing and mitigating risk on a systemic basis has been the key to the group’s success.
Of particular interest to CMM and the readers of Cash & Trade is how successfully BMMI has managed its cash management and trade terms to enhance liquidity and profitability. Several factors should be examined:
Firstly, it came to agreements with many longstanding suppliers to switch from relying on Letters of Credit to developing open account terms, despite ongoing concerns about political risks in the region (see table, right). This move required confidence and conviction to negotiate, and its success is a testament to the investment in people that BMMI has made.
Secondly, having invested in its ORA – CLE ER P-based solution in 2007, it has continued to extract value from the investment, working with ORACLE on a number of fronts to fine tune the system to meet its requirements. For example, it introduced automated invoice processing, which reduced processing times from 10 minutes to 14 seconds, serving not only to speed collections but also to improve liquidity.
Notably, BMMI took the decision to build a dedicated team of ORACLE advisers who came to understand the business and helped leverage further benefits from improved management information to aid day-to-day decisionmaking from the ORACLE system.
Using IT to convert data into customised information and informed management decisions is something few organisations capitalise on successfully.
Clearly, the future for BMMI, as for others, will continue to present new challenges but the group’s ability to develop in-house talent to deal with these challenges will be the key to BMMI’s ongoing success.
Milestone Year 2008
Key Achievements
Completes 125 years of operations in the Arabian Gulf
Expands group’s footprint to 12 countries across three continents
Establishes new African subsidiary GSS (Global Sourcing & Supply)
Opens corporate liaison office in Washington DC
Launches another Alosra store, at Amwaj Islands, in Bahrain
Revenues surpass BD80m ($210m) for the first time
Record operating profit of just under BD10m ($26m)
Total assets increase by 10%
BMMI’s management team
■Mohammed Turaif – Assistant HR Manager
■Ammar Aqeel – Group Financial Controller
■ Laura Mejia – Corporate Quality, Performance and Communications Manager
■ Jad Moukheiber – Legal Affairs Manager
■ Salah Al Haiki – Administration Manager