Market Expansion

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Al Ain Dairy: market expansion
Melodena Stephens Balakrishnan

Melodena Stephens Balakrishnan is an Associate Professor (Marketing) in the Faculty of Business and Management, University of Wollongong in Dubai, Dubai, United Arab Emirates.

hashi Kumar Menon, the chief operating officer of Al Ain Dairy was at their launch of the new product Long Life Juice in Dubai on 16 July 2010. To a room full of media and interested stakeholders, he explained the company’s upcoming six month plan. Al Ain Diary was UAE’s largest dairy company by market share but now wanted to replicate their success in dairy in both the regional market and the fruit juice market. There were challenges: increasing production capabilities; product innovation (increasing shelf life); the supply chain management (dairy especially needs to be transported at a 48C condition and there is a need for access to a steady supply of fodder); and brand building in newer markets. Shashi needs to prioritise what new products they want to move into (options include related lines like cheese); assets they need to acquire (manufacturing); and what future skills they need to develop to meet the regional challenge. There is a three to four year time frame to prioritise these objectives as the markets are still in recession. Shashi says about their vision for the future:

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We are very much a local company and would like to be seen as regional at least in the Khaleej [GCC Countries], if not beyond . . . With the introduction of long-life juice, the whole world is a market for us because these products have a shelf life of nine months and unlike fresh products we don’t have limitations on time.

Al Ain Dairy: a Government of UAE initiative
Catering to local demand Al Ain Dairy began in 1981 as the first dairy farm in the UAE. It was set up under the directives of the late H.H. Sheikh Zayed Bin Sultan Al Nayhan. At that time they had only 200 head of cattle, all imported from Australia. Al Ain Dairy’s challenge was to provide consumers with an alternative to powdered milk or recombined canned milk. A milk processing plant was commissioned the same year, and for the first time consumers in the country were able to purchase locally produced fresh pasteurised milk and yoghurt from their supermarkets. The 1990s were a period of growth (see Figure 1). In 1996, Al Ain Dairy was merged with Al Ain Poultry to form Al Ain Farms for Livestock Production with a paid up capital of AED140 million (1 USD ¼ 3:68 AED). Under the directives of the UAE President, almost 54 per cent of the shares of the newly-formed company were distributed freely to 7,600 low income UAE citizens including widows and orphans. Today they have a healthy cattle-breeding program. Over the last five generations, they have not imported a single cow. Today, Al Ain Dairy has 5,000 heads of cattle in three farms. Shashi says: ‘‘They were all bred here locally. So these cows have acclimatised to the weather and still give good yield.’’ Al Ain Dairy also has over 230 camels.

This case was written by Dr Melodena Stephens Balakrishnan at University of Wollongong in Dubai. It was prepared using company information and interviews and its intension was to provide material for class discussion through publication. The author does not intend to illustrate either effective or ineffective handling of a managerial situation. The author may have disguised certain names and other identifying information to protect confidentiality.

DOI 10.1108/20450621111097155

VOL. 1 NO. 1 2011, pp. 1-8, Q Emerald Group Publishing Limited, ISSN 2045-0621

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EMERALD EMERGING MARKETS CASE STUDIES

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Figure 1 Al Ain Dairy milestones

The company growth has been healthy: Al Ain Dairy grew in double figures by 12 per cent. This is remarkable as the rest of the world struggles with recession and the organic market prediction for growth this year was only 6 to 7 per cent, organic growth. Al Ain Dairy sources 70 per cent...
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