Riyadh - Mubasher: Acting CEO of Saudi Al Hassan Ghazi Ibrahim Shaker Co, Mohammad Ibrahim Abunayyan, said he is still confident his company will maintain growth in 2021.
In an interview with Mubasher, Abunayyan said Shaker Group has taken serious steps to achieve sustainable profitability during 2020 and is now enjoying a strong position to see more growth.
“We succeeded in directing sales to alternative distribution channels during the Covid-19 pandemic. With the easing of precautionary measures and the gradual return to the normal economic activity, we saw an improvement in performance and sales in general,” Abunayyan continued.
How did the strategic transformation programme aid the company’s financial performance?
The strategic transformation programme is the key pillar in Shaker Group’s strategy to achieve sustainable profitability and value to shareholders, Abunayyan noted.
So far, we realised strong results reflecting the hard work of the senior management team and the company’s employees. The programme created a growth prospect through cutting costs, managing current debts, determining growth tracks, and lowering inventory levels. This helped in more accurately defining the supply and demand scene domestically in Saudi Arabia and abroad.
What are some of the most pressing challenges the group has faced lately?
The coronavirus pandemic is still putting major pressures on regional markets, and the kingdom is no exception. Our company’s supply chain experienced disruption as we rely on a geographically-diversified portfolio that includes Asian, European, and North American markets, not to mention our dependence on strong ties with suppliers to figure out workable solutions.
Besides, the hike in the value-added tax (VAT) played a role in our pricing strategy. We overcame this through working with distributors and launching seasonal promotional offers to grow sales.
The group logged positive third-quarter results on lower operating costs; do you think it will maintain the positive performance by the end of the year?
The group has taken significant steps to build sustainable profitability during last year’s second and third quarters, and the company now enjoys a strong and suitable position to see more growth.
Despite the continuous economic fluctuations, I’m still confident the group will maintain healthy growth during 2021.
How does the company strengthen its sales channels?
The company continues to invest in and develop its sales channels. In 2019, we launched our own e-commerce platform, a step that fostered our position during the curfew period, which was imposed to contain the fast-spreading coronavirus.
Moreover, the company deliberately works with its distributors across the kingdom to ensure that our products are available to customers and we are keen to make our after-sales services the best in their category.
In addition, we took vital steps to develop our business in energy-efficient products with the aim to further diversify our income sources.
How does the company plan to capitalise on the available opportunities in the Kingdom?
The group intends to build a broad portfolio of international brands for household appliances while benefitting from sales and distribution channels that will better serve customers.
Some of the available opportunities include the air conditioner initiative from the Saudi Energy Efficiency Center (SEEC), among others aimed at developing the Saudi housing strategy and private-sector support initiatives.
Additionally, we will use our market share from the Multi V Air Conditioners products to submit bids for projects in 2021. Furthermore, the state-owned National Energy Services Company (NESCO) provides attractive investment opportunities.
Could you give us a glimpse on the Saudi economy in light of the VAT tripling?
The kingdom’s economy witnessed many fluctuations during 2020 due to the global health crisis and low oil prices. Several reforms were launched as a crisis response, yet despite all odds, market stability was relatively back and we began seeing some recovery signs.
The rise in VAT from 5% to 15% affected consumer spending to an extent, yet we saw consumers rushing to buy goods before the hike decision has become effective. That helped increase the company’s sales during the second quarter (Q2) of 2020.
Listed on the Saudi Stock Exchange (Tadawul), Shaker Group is the exclusive importer and distributor of several international brands and is the sole agent of LG Air Conditioners in Saudi Arabia.
(Contributed by: Thabet Shehata – Translated by: Amal A. Wahaab)