Exclusive Interview: Ben George, Mohebi Logistics
It’s not often you come across a company with plans for a modest organic growth strategy. Globalisation, increasing competition and the drive to grab a bigger market share and deliver profits to shareholders has often driven firms to undertake ambitious growth strategies and acquisitions to stay competitive in both domestic and global economies and markets.
Many successful businesses have failed at this game too because they grow too quickly and don’t have the working capital required to accommodate the growth. Another influential factor has been the inability of management to cope with sudden growth as demands have grown. Further measures to maximise growth opportunities have meant the implementation of franchising arrangements, alienating companies from their customer base.
Whilst many logistics firms take great pride in rapidly growing their brand, family owned Mohebi logistics has not been one of them. Rather than subscribing to a “grow at all costs” strategy, they have preferred to remain low key, focusing on getting their core competencies and customer service right before attempting any extravagant growth strategies. And it is a policy that has paid off, as over extended firms have crashed and burned as a result of the global financial crisis.
“We thought it important to prove to our customers that we can do what we promised and we thought we would let people understand by our actions,” executive director, Ben George, comments in relation to why the company had chosen to keep growth plans modest.
But as George explains, the growing logistics firm is about to leave all that behind as the company embarks on a strategy spurred by a belief in its capabilities and proven track record. Emphatically George states: “Now we have done that, it is now time to make more awareness.”
Mohebi has constructed an enviable reputation over the years, built on modesty and customer service. From humble beginnings in 1931, Zainal Mohebi Group have since gone on to grow steadily, diversifying into food wholesaling, distribution, travel, shipping and aviation. Today Mohebi Logistics employs 400 staff and has contracts with some of biggest brands on the planet including; McDonald’s, Nestle and Marks and Spencer, but as George explains, this has not happened overnight.
“We believe in what we know and we rarely go out to any area we don’t,” George states in reference to the firms careful approach to the market. “Simply because people are making money doesn’t mean that we will necessarily follow.” The company also sees the importance of providing excellent customer service as a means of building customer loyalty. “If you have made a contract, you do not go back once you commit,” George explains. “You make sure that day and night you work to deliver it,” he adds.
Mohebi knows the quality of the service it provides and knows what sets it apart from other competing firms. With its slogan being “The Benchmark”, its clear the company has set an agenda to deliver the best in whatever they offer. “When we say benchmark it is not only in service, it is in technology and assets. We are not box movers, we are solution providers,” George exclaims. “When a client comes to me, I sit with them and design a solution for them. Storage and box moving is a small part of our old strategy.”
Whilst Mohebi has spent a lot of time internally focusing on ways to enhance their operations, this is not to say the firm has taken its eye off the competition. On the contrary, they have always carefully monitored other successful companies and markets, identifying strategies to further shape their business.
“Dealing with the multi-nationals and clients we got exposure to all the best practices they follow. We learned that with globalisation, the brands will manufacture the products in different parts of the world and therefore they are not always close to the raw material place or end consumer place,” George identifies in relation to logistics firms needing to understand brand protection.
“In this process, it’s very important that the integrity of the product is protected from the time it leaves the factory all along the supply chain until it reaches the end consumer. Take chocolate for example, if it’s not cut properly in the ideal temperature, all along the supply chain, by the time it reaches the end user, it may not have the same taste it had when it left the factory.”
Armed with this information, Mohebi Logistics has realised that they have a significant role to play in enhancing client’s brand’s, further strengthening their position as a quality logistics supplier in the region.
Mohebi’s understanding, knowledge and experience has seemingly stood the company in good stead, seeing off a global financial crisis without having to lay off one single staff member, and in fact, were even able to recruit during the downturn. But with positive economic times returning to the region and the infrastructure to take advantage, it is now time for the logistics firm to move up.
Mohebi has some impressive assets and technology that it has acquired in recent years. In 2008, Mohebi opened its US$54.5 million, 51,000 square metre, Jebel Ali Third Party Logistics (3PL) warehousing facility. Boasting TAPA compliancy, the warehouse includes temperature controlled and ambient storage and docking facilities, Infor warehouse management system and wireless handheld and truck mounted technology to support both barcode and RFID methodologies. On top of this, the company has purchased a BT and Jungheinrich very narrow aisle (VNA) forklift, both valued at approximately $136,000 each.
Not content with its present facilities alone, the firm is due to take possession of a new warehouse adjoining their current one, which will dramatically extend the company’s floorspace. “The second warehouse is due for completion in December 2011. It will allow for a 30 per cent increase in pallet positions, George enthuses. “We are also in advanced negotiations with Dubai Logistics City for 140,000 square metres of land.”
In terms of the UAE, Mohebi logistics sees the city offering fantastic opportunities for the growing company. “We believe whatever we do is in alignment with the infrastructure in Dubai. We want to take advantage of the city itself and the vision of UAE leaders and how they want to bring the place up,” George comments enthusiastically.
But the company also has a wider gaze, looking to surrounding GCC countries and the subcontinent. “In Qatar we are operational, in Oman we have bought land, and in India we have submitted an application for special approval from the government. All these plans are not talk,” George explains of the company’s growing footprint.
If the growing infrastructure is not enough to lift the company to the next level, then the company is content to let competition further drive its growth. “If you’re talking about competition we like it − why, because the logistics industry here itself is not a full blown industry. Many people do things in a traditional way. I would say 95 per cent of the industry is not outsourced, they are doing it themselves, so the more competition that comes in the more awareness that will come.” In line with the firm’s integrity, the company has a strong policy not to steal customers preferring to ‘migrate’ them instead.
“We have not stolen business from anybody. We have migrated them from a traditional way of doing things to a new platform. We haven’t stolen any clients from anybody,” George states proudly. Whilst the company is seemingly on the up and up, like most companies in the world they are faced with rising energy costs as well as a responsibility to clean up their environmental act.
“Electricity costs are high in terms of other cities and we have high power consumption assets,” George comments. “We are talking to people to try to make our operations more environmentally friendly. We have spoken to firms from the USA to see how we can use sunlight absorbing sheets and how we can convert that energy back into something we can use. We want to be as friendly as possible to the environment.”
But it’s not a problem the company needs to address on its own. Mohebi’s trucks now run on “McDonald’s” biodiesel (converted cooking fat from McDonald’s restaurants) and with co-operation from Mohebi customers, it could see the technology applied to other areas of the company. “We need co-operation from our customers. We are talking to them about how we can use their catering company’s oil for other power consumption areas,” George says. Though the company is looking to ramp up its operations, Mohebi Logistics will not compromise its approach to business that saw it through the global financial crisis.
“If you own your own asset, you can create things the way you want, with the right equipment and the right quality − everything. When we rent, it may not be up to our specifications, we always want to create our own assets.”
Company founder and present CEO Mohammed Mohebi stated back in 2007 that the firm’s ambition was to become one of the region’s biggest supply chain companies. With the opening of the new warehouse facility, a recruitment process to employ 400 new staff, the latest technology and a proven track record of excellent customer service, it looks as though those predictions are set to become a reality.