Bahrain Danish Dairy Company (BDDC), which turned 40 this year, had particularly joyous reasons to celebrate beyond the fact of the anniversary.

For the first time in several years, the company came out of the red, making a BD577,000 profit for 2003, and is well on its way to consolidating its position, something that would have been unthinkable only three years ago when the company was on the verge of collapse.
But timely infusion of government cash and management restructuring saw BDDC making the moves that would draw it out of the precipice.
 In came George Thomas as general manager, fully committed to repairing the weakened fortunes of the company and subscribing to a winning philosophy of strategising to overcome the adverse conditions. When he took over in March 2002, the company was still BD279,000 in the red.
Strategising, says Thomas, involved prudent cost cutting, improvements in the product range and relaunching of the brands with a new identity.
That endeavour not only brought healthier, tastier offerings, they instilled faith in a revitalised company and, in the long run, in the very ability of Bahraini industry to lift itself by its bootstraps.
Some 400 guests were present at the Crowne Plaza Hotel to witness the launch of the company’s new brand “Danoor” and the creation of a new brand identity under “Awal”.
“The new brand image has been designed to suit international appeal in both quality and packaging,” said board chairman Ebrahim Ali Zainal.
“BDDC has become one of the very few dairies in the region having an extensive range of products under fresh milk, fresh juices, long life milk, longlife juices and drinks, tomato paste and ice creams.”
And as the celebrations night proceeded, the company unveiled plans to expand its facilities to capitalise on performance momentum and a promising market.
The company is investing BD600,000 on several enhancements. An ice-cream extrusion machine was installed earlier this year to produce a wide variety of flavours. A Tetra Pak machine costing BD350,000 has been installed to produce 7,500 of 250 ml packs of juices and milk per hour.
“This year we expect a surge of 15 to 20 per cent, most of it coming from longlife products for milks and juices, drinks and tomato paste,” said Thomas. Indications are that the company is well on its way to that level as recent monthly sales have been very good. At the end of 2003, the company’s sales were BD7.3 million against BD5.12 million at the end of the previous year.
Longlife items accounted for 44 to 45 per cent of the total turnover. The fastest moving in that category was milk, Thomas describing its sales as “tremendous” and expressing surprise it had done so well.
On second thoughts, he cites rational reasons behind the success. “We did research and development and subjected all our products including this one to ‘continuous improvement.’
“We first began improving the quality of our milk. We modified it in terms of minerals and vitamins and put in a lot of emphasis on the mouthfeel and taste.”
So it was clear nothing happens by chance; behind every rise in the graph is that indispensable element of hard work and strategy, as Thomas suggested.
With Bahrain tiny as markets go, manufacturers on the island have to train their sights overseas. The kingdom is dwarfed by its neighbour, Saudi Arabia, but incredibly, it is not there that any substantial portion of BDDC’s exports goes. About 63 per cent of the company’s sales was accounted for by foreign markets, and overwhelmingly 90 per cent of the exports went to another relatively small market, Kuwait. The main business in Kuwait is to the region’s largest logistics and warehousing company, Public Warehousing Company (PWC) of Kuwait. The Kuwait Bahrain Dairy Company, a subsdiary of BDDC, also supplies to Tamimi Company in Kuwait shipments from the Bahrain plant.
Just across the seas is Qatar, a promising market as Thomas describes it, and he is keen to increase BDDC visibility there. For the UAE, the company is in the process of appointing an agent. With prices set to rise in the UAE, following an understanding in the industry, it would be appropriate for BDDC to have a stronger presence there. Thomas says any advantage gained from better prices would be reinvested in promoting his products and implementing proper marketing systems.
Next destination is Oman, where also BDDC is in talks to appoint an agent. That leaves Saudi Arabia, home to the big brands and high-investment companies. But Thomas is not deterred. “Competition will always be there; we can deal with that by strategising our sales,” he says with admirable confidence.
Some of that confidence comes from BDDC’s recent history. “In 2002 we went through a complete revamping of our products in terms of quality, taste and redesigning of our product range. Year 2003 was when our new brand image and design was completed. In 2004, we’re ready to go anywhere with the new international appeal we created.”
The new brand Danoor, explains the company, is a combination of two established labels – Da for Danish-quality milk and dairy products and Noor, the company’s leading brand in longlife white milk.
“The all-new Danoor milk is enhanced with extra calcium and 32 vitamins and minerals. All Danoor products are produced under strict quality control and hygiene procedure in our state-of-the art six-line Tetra Pak filling machine,” the company says.
And Awal got a new identity but also modified contents, the result of which was trendy looks, a great taste and great nutritional value. Going into the juices are Gala apples from Austria, Hawaiian pineapples and alphonso mangoes from India as well as guava from Egypt and oranges from Valencia.
BDDC imports fresh milk from a Saudi dairy farm it has partnered, while skimmed milk powder is sourced in Australia and New Zealand. One of the challenges for management is how to maintain profitability in the face of volatile raw milk prices. Skimmed milk, for example, was quoted at $1,500 to $1,600 per tonne last year and $2,300 at the beginning of June 2004.
BDDC will have to make do with imports of fresh milk as having its own dairy farm would imply considerable investment to raise groundwater quality to an acceptable level.
Among the things going for the dairy industry are rising populations and the increasing tendency to draw away from carbonated drinks in favour of more healthy liquids.
In response to the heightened awareness about nutrition and diabetes, BDDC proposes to prepare a sugar-free range of products.
For now, the company has its hands full, what with the expansions and the campaign for Danoor and Awal. It has drastically reduced its contract packing to devote more production capacity to its own labels. It still makes and fills tomato paste for Saudi Arabia’s Binzagr.