WOODEN BAKERY HEADS TO QATAR, EYES U.S. MARKET
For almost half a century Wooden Bakery has been baking bread for the Lebanese and regional markets. Now, the bakery chain has major expansion plans in the Levant, Arab Gulf and even the United States. BIM POS sits down with Wooden Bakery’s CEO-owner Ghassan Bou Habib to find out more.
So, what’s happening in Qatar?
We’re in the process of building a factory, which is expected to open in the first quarter of 2018. The business plan is basically to cover the market by opening five retail shops and creating a distribution line to supply retailers, like supermarkets and mini markets. We’ll also be supplying hotels and restaurants.
Tell us more… The factory occupies a 5000 m2 plot and will be able to supply up to 10 retail shops with freshly baked items. It will be able to supply the Qatari market for up to seven years; after that, we’ll have to expand again. So basically, the Qatari expansion plan is in two stages.
And the investment?
Including the shops, it’s around USD $15 million. It’s big, but if we do as well as we’ve done in other places, we can gain a 30 percent return on investment, so it’s pretty good. We’re dealing with a very low-risk business; it’s about bread and everybody needs bread. We have a good name and a good system behind the name, and good people behind the system, this includes the franchises, equipment, delivery system, the operation’s team, and so on. Together, we are solid. We’re certified by DQS, a German group that provides assessments and certifications of management systems and processes. I think with all this behind us, the investment is solid.
How do you see the Qatari market?
I think it’s good; we’re excited to open soon. There aren’t really any great bakery setups, so we’ll be first ones and can do some good business there, more so because of the sanctions that Saudi Arabia and the UAE have put in place against Qatar.
Are you going it alone?
No. We’ve teamed up with local partner and master franchisor Essam Al Abed, who will have a hands-on role.
So, do you envisage any major challenges?
I really don’t see any major hurdles to jump over. The Qatari government is honest and modest and have helped us a lot to start up a business. I’m really impressed by the way they’ve treated us. Their systems are really fast and efficient; we still need to see how they work. We aren’t too sure about the quality of flour we will get there, but we have guidelines and systems on how we approve the flour, so we are working on it. But it’s all been a great experience so far.
And the competition?
There really isn’t any in Qatar. They don’t have bakeries as such since they’ve always relied on the UAE and the KSA to supply them. The ones that do have tend to be old style ones, like forns.
Back to the home front, what’s happening there?
We’re very busy here in Lebanon, planning three new factories. First, we’ve bought land next to our head office in Antelias and will build a new factory and relocate our offices into the new space. We will still keep the existing factory, but because production rates are almost saturated, we’ll also be building a new factory in Chekka, in the North. We already have a distribution line there but need a production plant too. There will also be new factories in the Bekaa and in the South.
That sounds costly
It is of course. Minus the cost of the land, investment will reach around USD $10 million.
Will there be any more retail outlets?
We are rolling out four more in 2018, to add to the 55 retail outlets that we already have across Lebanon.
What about Jordan or Syria?
We did have an opportunity in Jordan, but it didn’t work out with the partners we were talking to. But there is a good market there. Syria is a good market and we are in talks with people there now, so in a couple of years we will probably be active there.
You’re active in the KSA market, aren’t you?
Yes we are. It’s is a big market for us; we already have a factory there and six franchises. We are planning to build a new 30,000 m2 factory to meet demand and supply supermarkets, restaurants, hotels, etc. We’re expecting the new factory to be operational in a year’s time.
And finally, what about international markets?
We have our sights set on Chicago in the States. We already undertook a feasibility study and it looks promising, there’s great potential. Chicago is one of the best places to start up; the taxes are less [than other areas in the U.S.], the population is big. Historically, many concepts have started there and went on to be successful. We also have solid people on the ground there that could help us to start.