Middle Eastern promise

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.From his office in the oil-rich Kingdom of Saudi Arabia, Ahmed El Hoshan heads the largest OP company across the entire Gulf region. His company, Hoshanco, was founded in 1964 and today, more than 40 years later, he retains an iron grip-like hold on the office products market across the Middle East.

 

In this interview with OPI, he describes how he next plans to be the first company to become a key OP distributor in Sub-Saharan Africa, with Mauritania the first step in the process.
Currently, Hoshan Pan Gulf employs 450 people across the Middle East and North and East Africa. The company boasts a grand role: "To understand the work of the manufacturers, to communicate the promise of their brands, and to work closely with the resellers to deliver the product and service to the end users."

 

Ahmed prides himself on his ability to remain a reliable distributor, supplier and, most of all, employer. From his head office in the Saudi Arabian capital Riyadh, Ahmed operates his diverse business interests, which are a permanent fixture in the table of the kingdom’s 100 wealthiest companies.

 

ATLAS is Hoshan Pan Gulf’s manufacturing company, engaged in the production of ballpoint pens under licence from Staedtler, as well as files. In addition, affiliate Hoshan Graphic Arts is involved in the sale and service of printing packaging and postal, banking and security systems and supplies, as well as printing paper.

 

As well as maintaining his position at the top of the regions office products industry, Ahmed also runs a property company and a global investment venture. Here he tells more of his company’s dominance in the region and explains his approach to expanding his already-massive OP empire.

 

OPI: You’ve been in business since 1964, what would you describe as the real milestones in your company’s development?
Ahmed El Hoshan: Due to the difference in custom duties between Saudi Arabia and some Arabian Gulf states in the past, we were forced to expand our activities there to protect our Saudi market. This was initially our motive behind the move to Dubai. We later found great advantage to use the Jebel Ali Free Zone facilities to branch out in the Gulf and build our warehouses for re-export. I think that was our most important milestone for going regional.
OPI: What have been the most valuable lessons you’ve learnt in business over that time?
AH: To stick to quality products with the influx of imitation and poor-quality products from the Far East. Many companies in Eastern Europe, the Middle East and Africa are attracted by cheap prices.
OPI: How would you describe the condition of the office products market in the Co-operation Council for the Arab States of the Gulf (GCC) currently?
AH: With the great liquidity in the GCC due to high oil prices, we see an increase in demand from governments and the private sectors. Also the population growth, which is one of the highest in the world, means that the market for stationery and school items is constantly growing at two-digit rates.
OPI: What opportunities are there in the GCC for office product dealers and manufacturers?
AH: If we take Saudi Arabia out of the other GCC markets due to the fact that the Saudi market is well established and hard to penetrate, I see big opportunities for retail chains. But not manufacturing due to competition from low-cost countries.
OPI: If a company wishes to break into the Gulf region market, would it need to seek a partner or a sponsor – such as yourselves?
AH: In most cases you need a partner or sponsor. In others you don’t. But beside the legal requirements, you need a thorough study of the markets you intend to operate in and the choice of sponsor or partner, which should be reputable but not necessarily from the trade.
OPI: What are the main differences in the market across the Middle East from, say, the European or US market?
AH: In the past the Gulf area, due to the English influence in the Gulf, was following British standards in areas such as paper size. Saudi Arabia in the Western areas was the same but in the east, due to American oil companies’ demand, it followed the American standards. Of course now the dominance is more European.
The dramatic changes in all these areas are the mass-market outlets that are gradually eating up the small fish. Most have stationery sections but there are no significant Staples types. Of course, in addition to office supplies, wholesalers, copy centres, the market is more or less the same as in Europe.
OPI: What are the main areas of potential opportunity for your company (such as back-to-school or office furniture), and why?
AH: With more sophistication and the growth of income in part of the population I see an opportunity in high-end products, better-looking exercise books, files, school bags, pens, etc. along with desk utensils and gifts related to the office. Another potential opportunity for growth for us is to strengthen our presence in our new branches in North and East Africa for our stationery basket, which consists of first-class brands like Staedtler, UNI, Pentel, Maped and our private-label products. By the way, we are the largest manufacturer of box files in the area and are manufacturing the Staedtler 430 stick pens under licence in Saudi Arabia.
OPI: There has been terrific expansion witnessed in hotspot areas such as Dubai and Doha, do you feel this is sustainable?
AH: I do not see why not, but in both areas one should carefully choose the locations and not fall into the rent traps and work for the landlord.
OPI: Is the region’s business economy hampered by bureaucracy or is it supported?
AH: Neither in my opinion. Surprisingly, corruption is non-existent when it comes to establishing new businesses if the legal requisites are fulfilled.
OPI: How do you see the Gulf region market developing over the next five years?
AH: The market will surely expand due to the huge investments in infrastructures and development and the great opportunities available. I am rather optimistic and don’t share the opinion of some who believe that the Iraq, Iran and Lebanon problems will have an impact on the GCC. They may, but for a short time if ever.
OPI: What share of the office products market do you own in the Gulf region?
AH: Let me say, we have a major share in the market when talking about our stationery business.
OPI: What are the achievements of the past 43 years that you are particularly proud of?
AH: I am proud of our name as a major player in the area, definitely, and the improvement of this sector in all the markets we work in, and for sure we are proud of our global partners and the mutual trust we have built together over the years. Of course, I should mention that our turnover of employees is the lowest in the trade and this gives me confidence and loyalty in our people – they let me take my wife on holiday in peace.