Alghanim Catering Discusses Potential of Catering Industry in Kuwait

Interview with Badder Al-Ghanim, CEO (Board Member) of Alghanim Catering (Al-Awama Group)

How much potential is there in the Kuwaiti catering market?

For now, there is a good amount of potential. Government contracts are the cornerstone of all catering companies that deal in Kuwait and want to generate large amounts of revenue. Government contracts now and what we have seen over the past several decades are quite consistent in terms of catering. Most catering contracts are for three years, they get retendered, and you have multiple contracts. If you have a good pricing team and you know what you are doing, you can win a few contracts and sustain your business. In the private industry, the potential is quite good now because there are many projects that the Kuwait government is initiating within KOC and infrastructure, leading to many contractors and staff that need life support. We anticipate the potential for the next five to eight years to be very strong.

How long has Alghanim Catering been in the market? What is an overview of your services?

We started operations in 1992, and have been running for 25 years. We grew from a small catering business. We used to only do private camps. We did one private camp and we slowly grew. Now, we provide a combination of government contracts, private camps, and full life support for clients, which includes housing, laundry, catering, housekeeping, as well as occasional transportation.

What clients do you work with?

With the private clients, I cannot say because of confidentiality issues. With the government, it is transparent. Most companies know who won contracts. We have been lucky enough over the past few years to deal with the Ministry of Defence, the National Guard, the Ministry of Interior, the Ministry of Social Affairs, and Kuwait University. We have had a bit of luck in that sense.

We are lucky enough to have a good core group of people in management that have been with us for fifteen or more years.

There are countless catering companies here in Kuwait. Apart from being established in 1992, providing you with a certain footprint in the industry, how do you differentiate yourself from other competitors?

Concerning government contracts, differentiating yourself is somewhat difficult. The government has prequalified specific companies that match specific criteria. When you look at the list of companies that are qualified for government contracts, you will see a short list, and all of these companies, although different, tend to have similar operations because we all meet the criteria that the government requires. With the government, you submit a tender and that is your price. If you are the cheapest, you win, if you are not you do not win. When you look at private contracts, that is when the real competition comes in. The private it is back and forth negotiation. You have a company coming in trying to offer a better service or a better price. That is where differentiating yourself really comes into play. When you talk about the catering business, it comes down to how good your chefs are and how good your management team is. Within the management team, you always have the executive chef who is the one creating menus and meals for other companies to consume. If you win a contract, but your meals are not up to standard, they pull it from you and give it to somebody else in the private sector. We differentiate by putting effort into recruiting the right people and having menus and raw material that we think are up to a specific standard. We are lucky enough to have a good core group of people in management that have been with us for fifteen or more years. They consider this company not as a company, but as a home. We see them consistently go above and beyond, and that is very good for us.

What is it like to do business in Kuwait now? You began your business in the last century and you have had to do certain things in terms of restructuring internally. Is there also a generational transformation?

This has nothing to do with catering specifically, but it has to do with any family business. When you come in as a new generation and you begin to slowly take over the day to day management of a business, on paper, you may look at the business and see that it is doing fine, the numbers are good, you are very happy, and it is sustaining the family. But when you actually take over, you see that the numbers are only half the story. At the end of the day, you work in order to generate a profit, but it needs to be efficient. Growing up, many things have changed. We went from a time where computers were rare, where there were no cell phones, up to a point where everything we do now is automated and the internet plays a big role. It is difficult moving things from an old way, from this pencil and paper system where you have a room full of files, to pushing it towards a more modern, automated system that is more efficient and saves you time. A task such as updating residencies for all of your staff used to take an HR staff three days, and now it can be done in only three hours.
But it is still surprising how long it takes. I came in thinking I could do this in six months and everything will be up to date and automated. It is not even close. Now, it has been six years and we are still going slowly, taking bit by bit. You make one section happy, it takes them six months to say they like the system, then you can move to the next division and the next and the next after that. It has taken much longer than I expected, but it is progressing.

What divisions are part of your group?

Under Al-Awama General Trading, we have several companies that operate. Alghanim Catering Services offers full life support. The Universal American School is one of the oldest American schools here in Kuwait. Universal Projects is our electromechanical branch. ProCom is our software branch where we do ERP systems for SAP. We have a media business called Everything Kuwait which was started a few years ago, and is being run by my brother, Jasem. They do online media advertising for firms in Kuwait, such as Facebook, Instagram, and event management. It is a nice mix of things that we have going on.

Are you present in the international scene?

In Kuwait, there is an agency kind of setup where most companies that want to operate in Kuwait usually have an agent. This can be seen with consumer products, such as Unilever, which has an agent in Kuwait and imports. We do not do that. We have international companies that we represent in Kuwait that are international contractors or international consultants. This is what my brother does most of the time. He is much better than I am at dealing with time differences, phone calls, managing, and organizing multiple international requests. I am better on a day to day ground level.

Are these companies from the region?

They are UK based companies, US based companies, and companies from Singapore and China. We represent them, but we do not have a business where we import consumer products. We represent companies that operate in other fields, such as consultancy. For instance, we represent WS Atkins here in Kuwait. They were responsible for the Kuwait Master Plan, the design for the Kuwait Metro, and several other projects here in Kuwait from a consultancy point of view.

How do these companies approach you?

It is us approaching them. It is years of building relationships, a great deal of travel, it is going to them and knocking on their doors to tell them about the potential of Kuwait. Now, it is much easier. People know Kuwait and people know about the amount that is being spent here, so they actively want to come here. It is a matter of getting your foot through the door and convincing them you are the right partner. When my father was negotiating with Atkins, there were several other companies in Kuwait that were competing with us to represent them in the region. For whatever reason, they saw that we were the right partners and they asked us to represent them.

What is your vision for Alghanim Catering in the medium term? In three years’ time, what would you like the company to have achieved?

If you look at the company four years ago, and you look at it today, as far as revenue growth, it has been quite a shift. Internally, as a family, we had a strategy that we wanted to implement in order to reach the level we are today in top line sales. Most people would say, in five years I want to be generating five times more revenue. That is not a realistic achievement. I would like three years from now to have all our internal processes up to date. For me, that is more important than anything else. Generating business is always great, but if I am generating business and my internal processes are only allowing me x percentage of profit because we are extremely inefficient, it is useless. I need to have ten contracts in order to generate this. If I can reach a point where I can only have five contracts and still generate the same amount of revenue because I am much more efficient, that is exactly the growth potential we have in the company. Putting in those processes will allow us to sustain the business.

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