Midhat M. Abu Ghazhaleh
CEO Abu Ghazhaleh Trading Co. (ABCO) LLC
Being a recognized retailer in UAE, how do you find the scenario for foreign investments in the retail segment currently in UAE?
The main challenges facing retailers in UAE is availability of good retail locations and soaring rent rates. Foreign investment always targets industries and sectors where yields are higher than 10 percent. So, if the retail industry will be able to generate high yields then surely we will start to see increased foreign investments into retail sector.
Do you find the government support in UAE for foreign retail operations adequate? Please elaborate.
Yes. The government supports foreign retail operations, since it supports overseas brands with flexible custom formalities and low import custom duty (which now stands at 4%).
By 2016, UAE is set to become the world's leading high-end textile and garment "re export centre". Do you agree? Please specify, especially re export centre.
Yes, I agree. UAE has been playing a major hub for re export since it has excellent storage and logistical facilities. UAE's location is conveniently located as a crossroad point between East and West, and that is playing a major role in creating an efficient supply chain cycle.
What do you think is the advantage of UAE textile industry as compared to the textile industry of South Asia and Southeast Asia? Is it the high level of automation used in the textile industries of UAE?
UAE has great investments in innovation and in adopting latest technologies to boost production which gives leverage verses SEA, where investors have been re directing their investments into heavy industries and real estate.
I would like to quote an earlier statement of yours - "Most of the clothes brands in the UAE work under a franchise structure or joint venture with a local partner. However, the trend is changing slowly as home-grown fashion brands are emerging to compete with international peers." Are the local brands able to compete with international brands in the local market?
I feel that local brands are already competing with foreign brands, but not on all price point levels where some of the price slabs are not being covered strongly. In the coming years definitely forces of change will bring great changes to the retail sector and more local brands will go international.
Consumer spending is high in UAE, isn't it? What do you say as compared to other markets?
Disposable consumer spending in UAE is high in some sectors while lower in others. We have to dissect the products and categories where spending is relatively high such as in perfumes/cosmetics, fashion, travel, electronics, hospitality as compared to Russia, MENA and African nations. Compared to EU countries, we will find that some of the sectors in UAE have higher spending such as electronics, perfumes/cosmetics.
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