If a zombie apocalypse were to strike tomorrow, Dominic CR Myers would be prepared for it. As the CEO of Enhance Group, a leading fast-moving consumer goods (FMCG) distributor across Oman, UAE and Kuwait, and retail management solutions provider in Oman (part of the WJ Towell Group), he’ll probably have enough Dettol soap, Heinz Baked Beans and Oreo biscuits to survive a five-year siege.
He may even be able to call for help with an Ooredoo SIM card. Really, is there anything the man doesn’t sell? “Well, we are deliberately not going into commodities,” Dominic laughs.
He’s referring to the commodity market, which encompasses the trading of unprocessed raw materials and harvested or farmed goods, such as mined metals, agricultural crops and livestock.
“In commodities, it’s difficult to create a differentiation in quality for which we can charge a better margin. In FMCG, we are able to demonstrate our value to partners in our quality and speed of service, the data on consumers we can provide, as well as market intelligence. The importance of this information is less recognised in the commodities market,” he explains.
“FMCG distribution is a low margin, labour-intensive business with very little automation, so low-value bulky goods, such as those found in the commodity market, are not interesting to us.”
In the sectors Enhance has chosen to focus on, it does very well. “When I first started as CEO in 1997, we were a single company. We were doing well but not the market leader,” Dominic recalls.
But after embarking on a joint venture with Nestlé (to set up Nestlé Oman Trading) in 2003 and the acquisition of Fairtrade LLC (which distributes the Mondelez portfolio, other food and a cluster of leading non-food brands) in 2010, as well as establishing Majan Distribution Company (MDC) in 2014, “we are now the largest FMCG distributor in Oman thanks to the continuous support of our shareholders”.
On top of that, through a partnership with Oman Oil, Enhance manages more than 100 Ahlain convenience stores, located at Oman Oil petrol stations, and also owns the Noor brand of 20 neighbourhood supermarkets.
Outside of Oman, Enhance is a leading FMCG distributor in the UAE and manages three distribution companies in Kuwait. “I think the main factors contributing to the company’s success are transparency and the passion to succeed,” shares Dominic.
“I think the main factors contributing to the company’s success are transparency and the passion to succeed.”
“We operate on a three-year strategic plan, with annual budgets, so that it’s always clear to our people, partners, suppliers and customers what our goals are. And if we are aware that we haven’t performed as well as we could have, we take responsibility for it instead of blaming external factors.”
Transparency is, of course, pointless if the information shared doesn’t reach the intended receiver. “Communication is vital,” Dominic continues.
“We were one of the first distributors to present our business partners with KPI scorecards; these lead our internal reviews with financial success flowing on from that. They allow our conversations with our partners to be as data-driven as possible. It builds knowledge, awareness and confidence, and empowers people to do their jobs.”
There’s that word ‘data’ again; it seems to be a buzzword on the tip of every CEO’s tongue today. On top of market intelligence, Dominic is hoping to apply digitisation to other areas of Enhance’s operations, especially in its warehouses as well as logistics, merchandising and sales departments.
These are the areas where he believes the company will see the most savings and increase in efficiency should technology be applied. The company is currently in the process of outsourcing its back-end IT needs to a third-party provider.
“The FMCG industry is still too dependent on manual labour at the moment,” Dominic says.
Although Enhance is revving itself up for digital transformation in its back office, few of the changes will be felt by the end consumer. “Globally, there’s clearly a trend towards online grocery shopping,” Dominic admits.
“But it is relatively low penetration for the Middle Eastern market. Grocery shopping is still largely seen as a family activity.
“Our partners in retail have observed that there is some online activity, but it’s largely restricted to a few non-food categories. What we are focusing on is ensuring that our products are available on third-party websites or forums that sell to those who buy online. We are hesitant to invest in implementing our own technology in our supermarkets.”
Also unlikely to go online is the inventory at the Ahlain convenience stores Enhance manages for Oman Oil.
“Since these stores are located at Oman Oil petrol stations, it’s more about providing convenience to drivers who want to pick something up in the middle of a long journey,” Dominic explains. “I doubt such sales are going to get replaced anytime soon by online ones.”
Evidently, digitisation should not be seen as a one-size-fits-all solution. Where Enhance has experienced success with digital sales, however, is with Ooredoo phone cards.
“We have invested a lot into encouraging our telecom customers to buy electronic vouchers for their recharge requirements instead of the traditional top-up cards,” he shares.
In order to thrive, every company has to adapt to its environment. For Enhance, the main challenge has been to reconcile tough government regulations and cost increases with the need to generate a reasonable profit margin.
Regulations prevent companies from passing price increases on to consumers which, over time, has impacted gross margins across the industry. The increase in utility and employment costs with new taxation formats are making matters worse and has dealt a significant blow to Enhance and industry profit margins.
In the market environment, Enhance could not have increased prices even in the absence of government regulations anyway.
“One of the biggest challenges in Oman and the UAE – but not so much in Kuwait – is market liquidity. It affects the amount of cash our customers have to pay for the goods they receive and the speed at which they can pay for those goods,” Dominic points out.
Barred from price increases, scale has become key to the company’s growth. To put it bluntly, Enhance needs to sell more. “We have to take advantage of every opportunity. If our products can stand out in the top 200 stores of the country, which make up about 80% of the market, then we will be in a very strong position,” Dominic reveals. “However, it’s easier said than done.”
But he is not without a plan. “We need to increase efficiency. And we have sort of done that with our acquisitions in both Oman and the UAE. Bringing companies together brings consolidation to the industry. In turn, this leads to better efficiency and economies of scale in operation and distribution.”
Enhance Group currently operates nine companies – three in Oman, three in the UAE and three in Kuwait. As with any large firm, it needs to constantly streamline its operations or run the risk of inefficiency.
Dominic’s plan is to further consolidate these businesses so that they can run together like a well-oiled machine. Only then will Enhance Group consider additional investments.
Enhance hopes to achieve this by the time Expo 2020 Dubai is launched, the first-ever world expo to be held in the region. Running for approximately six months, the event is expected to attract 190 participating countries and millions of visitors from around the globe.
Participants can expect to enjoy live performances, visit exhibitions and marvel at presentations of the latest technology. “It will bring a massive increase in international visitors and a huge lift to the food services industry in the UAE.
We want to ensure that we have the capacity to take advantage of that,” says Dominic. Ultimately of course, the benefits brought about by economies of scale would benefit Enhance’s customers.
“We are aware that our top customers account for a disproportionally large share of our business. Our top two customers in Oman contribute about 35%; the top two or three customers in the UAE bring in about the same figure,” says Dominic. “When working with them, we really want to be excellent in the quality of services we provide.”
Steering a business to success is no easy feat; even the best business leaders could use a little inspiration sometimes. For Dominic, that comes from a slightly unexpected source.
“I am the Chairman of the Board of Governors at the British School Muscat,” he reveals. “In the past 10 years, the school has pursued an agenda of excellence to great success. Whether it is in exam results, facilities, employment or enrichment activities for the students, we have seen that by raising the quality of the education we provide, we’ve been able to increase the number of students we attract and significantly expand both the Primary and Senior Schools. It has become a virtuous circle. Good enrolment leads to reinvestment back into the teaching staff and facilities.
“Extrapolating that lesson into business, I believe that if we have outstanding quality in everything we do, we will attract more business. This isn’t just from our B2B partners, but also from the end consumer,” he continues.
“I believe that if we have outstanding quality in everything we do, we will attract more business.”
“By providing quality service at our retail stores, for example, we make the store an attractive environment and increase consumer engagement. This may bump up the basket size, increasing the number of items they purchase.”
Playing an integral part in providing better quality services to partners and end consumers are the employees. Dominic realises this, saying: “We want to make sure that we retain staff for long enough so that we can invest in them, train them, and give them confidence in the areas that they work in. Ultimately, it is the company that will realise the benefits of this investment, even if it takes two to three years.”
Today, 60%, or more than 1,500, of Enhance’s employees in Oman are Omani citizens. “When I first became CEO 20 years ago, Omanis made up only 20% of the organisation,” Dominic recalls.
The firm makes it a point to provide developmental opportunities for its local staff, usually choosing to promote existing employees into positions of leadership instead of recruiting from outside the company.
On the retail floor, for example, staff members have the opportunity to develop through several rungs of leadership roles, including becoming a supervisor, store manager or area manager.
“If we had a lower level of Omanisation, it would probably be more cost-effective,” Dominic admits. “But that isn’t the long-term ambition, for either ourselves or the country. There are some employees I’ve known since I first joined the business and to see them now, in senior positions, is very rewarding. We like to believe that we are adding some value to Oman and its people.”
“We like to believe that we are adding some value to Oman and its people.”
On top of development opportunities, Dominic also believes that recognition of employee contributions can go a long way towards retaining talent, hence the Values Award and Best Company Awards that the company runs for its staff.
If the result of Enhance’s employee satisfaction surveys – which steadily produce scores of above 75% – are any indication, the company’s staff policies are certainly on the right track.
As for Dominic himself, the only ‘staff benefit’ he needs is a good stash of his favourite treats. “I have some Bayara nuts that I consume if I need energy throughout the day – we are not only the distributor for the brand in Oman, we also manage the ‘souk counters’ in supermarkets.”
Bayara souk counters re-create the experience of buying nuts and spices at a market where customers pick and mix nuts and spices out of baskets instead of buying them pre-packaged. “And if I want to enjoy a bit of indulgence, usually in the afternoons, or if I need a bit of a boost, I like Bahlsen biscuits.”
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