New initiatives in cost-cutting, production expansion and marketing are set to make Bahrain’s Awal Dairy Company, formerly Bahrain Danish Dairy Company, more competitive in domestic and international markets.

The company expects to turn the corner this year after two difficult years, one marked by big surges in raw material and freight prices and another by fallout from the controversy over Danish magazine cartoons that were offensive to Muslims.
Both 2004-2005 and 2005-2006 were loss-making (the company counts the financial year from October 1 to September 30), but Awal has reported strong sales in the first half of 2006-2007 to put the company on track to turn the corner.
Awal’s product range covers longlife milk and juices, fresh milk products, fresh juices and ice creams as well as tomato paste. The company has announced it will soon launch thick cream and is considering the feasibility of introducing mint-flavoured buttermilk as a companion item to its conventional buttermilk. It will also push strongly to promote its sugar-free low-fat ice cream in local and international markets. 
 The company has launched a premium range in the ice cream line and re-launched several products for children. Awal’s longlife milk, tomato paste and drinks are packed under the Noor brand, while fresh milk, juices and thick cream are branded under Awal. Its ice cream is marketed exclusively under the Fabion brand.
The company expects this year to be a good one. General manager George Thomas said it could see total sales exceeding BD9 million ($23.8 million). “We’re optimistic. We have done quite well in the first half with a turnover of BD5.1 million, compared with BD3.5 million in the corresponding period of the previous year,” he said. The company could produce better results in the second half considering it has still six months of summer to go through when sales are traditionally higher than at other times.
The current performance and upbeat mood is a far cry from 2005-2006.  The company was coming out of a dismal year (turnover BD8.3 million) marked by high raw material and freight costs when the controversy over the cartoons erupted and led to a boycott that sent sales into a tailspin. Thomas said it would have been a lot worse for the company had it not received support from Bahraini groups including clerics who exhorted people to buy its products. Another key development was the change of name to Awal Dairy Company, which presented a more accurate image considering there were no Danish investments in the company. As a result of both local community support and the name change, sales picked up hugely in the last four or five months. Eventually, Awal reported a total turnover of BD8.7 million. The recovery was also aided by headway made in the Kuwait market in the final months of the year through the efforts of Awal’s 100 per cent subsidiary, the Kuwait Bahrain Dairy Company.
Recovery will be intensified with the company having received approval for drilling a bore well, a development that will cut costs substantially. Awal has also taken delivery of cooling water equipment which will enable it to expand production whenever it thinks fit. Awal’s fastest-selling products are longlife milk and juices and ice creams, the former contributing 65 per cent of last year’s turnover while ice cream’s share is put at 12 per cent.  “We had a 100 per cent growth in longlife products over the past four years. Our one-litre Noor brand full-cream milk and the children’s juice packs have a unique share in the local market,” said Thomas.
“The growth in longlife has happened despite our prices sometimes being higher than the competition, and our growth rate is one of the fastest for any Gulf state,” he commented.
“We’ve focused on quality, putting in much effort to improve  taste, the mouth feel and the wholesome quality of the product.  We have presented a better image through rebranding in the past few years and we have achieved greater visibility in the market through the installation of chillers in outlets.”
Commenting on progress in ice creams, Thomas said: “We have doubled turnover in the last four years. We have a little over 50 per cent of the market share in Bahrain for impulse ice creams (sticks and cups).”
The sales boost was helped on by promotions. Awal is working on its newest children’s promotion that offers several Playstation 3 as prizes to be won.  Ice cream Lollies will sport new labels from April 2007 and the company has estimated it can sell 10 million sticks over a five-month period against the usual sales of 12 million for the whole year.
The company launched last year family packs in strawberry, vanilla, chocolate and mango and recently introduced a premium products range for butterscotch, coconut and chocochips.
Packaging design for the ice cream was done inhouse by a team headed by marketing manager Samad Al Khaja who is the driving force for new ideas.
Awal has made good progress in private labeling. Saudi Arabia’s Azizia Panda chain and Kuwait’s Sultan’s Group, co-pack ice cream and longlife products under the Panda and Sultan’s brands respectively. Awal’s tomato paste is also packed for Binzagr Co, Najdiyah and Sultan’s under their brands. 
 The company claims both domestic sales and exports are growing.  Some 40 per cent of the turnover is attributed to exports, with Kuwait accounting for an overwhelmingly large share. Small consignments go to Saudi Arabia, a market Awal sees as promising and is seeking to penetrate. Jordan too is the latest focus. An agreement was signed recently for selling 250 ml packs of juices, longlife milk and flavoured milk into Iraq through the Hashemite kingdom.
Strengthening the presence in Saudi Arabia, entering the Qatari market and going to other markets should not be a problem, now that the company’s capability to expand production has been enhanced with the purchase of new cooling water equipment. Its marketing pitch got an additional edge with the award of the HACCP and ISO 9001:2000 certifications. The company is now working on the ISO 22,000 accolade for the food Quality management system.
Thomas, who became famous in the Gulf for lifting the company out of  protracted losses in the early years of the new millennium soon after taking over as general manager, believes the special attention it has paid to quality and the finer details in production and processing have helped expand the appeal of Awal’s products. One example he cites is the ice cream cones, which retain their fresh, crispy and crunchy feel when filled while many ice cream makers opt for locally made cones that go limp and soggy as the customer tucks in. Awal’s cones come all the way from Norway.
Awal’s new coconut flavour ice cream has also come in for praise for more than the usual quantity of fresh coconut strands enmeshed in the cream.
Thomas attributes any achievements to teamwork and the support Awal has received from the company’s board. “The team goes to work with the same vision and everyone is focused on the same mission. As a small company, we have plenty of challenges – in marketing, production and cash flow. But thankfully the board has been behind us wholeheartedly. Our own employees have been a most hardworking lot,” he says. The official is also grateful to the support the banking sector has extended the company, particularly Bahrain Development Bank which provided a timely term loan.
As many as 62 per cent of the workforce is Bahraini, a level it has been able to retain despite staff increases. Staff is trained locally and abroad, and specialists are brought in from time to time to keep workers abreast of the latest trends relevant to their duties. Awal was among a few companies to receive an award from the Ministry of Labour’s Specific Council for Vocational Training for imparting the best training.