The growth of the UAE’s food industry in parallel with a rising population and expanding infrastructure is helping Massar Solutions diversify beyond the cyclical fleet management business amid lower corporate spending in the capital, its chief executive said.
The Abu Dhabi-based transport company, previously known as Al Wathba, this year postponed plans for an initial public offering because of a deteriorating stock market outlook with the drop in crude.
The vehicle management company operates the car rental brand Payless and provides fleet management, supply chain and distribution services. It has held its own since the end of last year even as lower oil prices have affected corporate spending in the emirate, the chief executive Paul Greenwood said.
Its strategy to diversify is already paying dividends, Mr Greenwood added. The company has secured “a niche in managing the cold chain” as it capitalises on the growing food industry in the UAE.
The company last month put 90 lorry drivers who deliver for the Brasil Foods-owned Sadia brand through training on keeping food at a consistent temperature from warehouse to restaurant – the so-called cold chain. It plans to train 100 more drivers in cold-chain management.
Massar has 1,600 drivers on its books in total, an increase of 400 for this year, said Mr Greenwood.
The supply-chain side of the business is driving growth, he said. Its car rental and fleet operations have been slower as companies delay spending.
“For fleet overall, we have held on to our position at the end of last year. We have held our own. Customer retention is at 95 per cent,” said Mr Greenwood. “There has been a little bit of a contraction in the market from a delay in projects, as a result of the world oil price drop. The spending is going to be there. There is just caution at the moment.”
The slowdown has been felt most on the bussing side.
“We had a massive fleet of labour buses. That has contracted 30 per cent,” he said.
However, new locations for Payless in the next few months will help to grow his company’s market share, he said.
The Massar-owned fleet numbers 10,000 vehicles, of which 1,100 are Payless cars. There are a further 6,000 that it does not own on the fleet management side of the business.
The company signed a new contract with Etisalat last month for three years of maintenance, tracking and telematics and dispatching for the telecoms operator’s vehicles.
But the most promise this year lies in food distribution, said Mr Greenwood.
“We have strategically diversified ourselves to move across the entire value chain. That strategy is starting to show dividends,” he said.
The company will soon announce two new business wins in the fledgling home grocery deliveries segment, which has been aided by Dubai’s resilience to falling oil prices.
The company will distribute online produce for two big supermarkets chains. Mr Greenwood declined to name them but said Geant was not one of them.
Geant, a French retailer, is expanding its online grocery deliveries into Abu Dhabi from September.
Massar expects to begin deliveries across the country for its new clients in two months’ time after the conclusion of a pilot project in Dubai.
“I am confident to say we have cracked the model,” said Mr Greenwood. “And am very bullish on the way they go forward.”
The company will field about 100 vehicles over the next 18 months for grocery delivery. On average, each will be able to make 40 home deliveries per day, he said.
Massar has first-mover advantage, Mr Greenwood said, unlike in its other businesses, where its rivals include long-established players such as Avis, Hertz and Emirates Transport.
The development of the Khalifa Industrial Zone (Kizad), where Sadia’s production is based, has been a boost for Massar’s growing food distribution business, Mr Greenwood said.
“As Kizad grows we will grow with it,” he said. “Food will become an important product out of Kizad.”
Kizad plugs straight into the logistics corridor stretching from Jebel Ali and Dubai World Central through Khalifa Port and on to Abu Dhabi International Airport.
Massar is “watching this and how it is developing”, said Mr Greenwood. The company is considering setting up a hub in that zone, most likely in Kizad, with a decision expected within the next 24 to 36 months.
It has also invested in a facility in Dubai Investment Park that will double as a cold-chain warehouse and a logistics hub for cross-border operations into Saudi Arabia, Oman and Kuwait.
malrawi@thenational.ae
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Director: Kelsey Mann
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The years Ramadan fell in May
The five pillars of Islam
Milestones on the road to union
1970
October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar.
December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.
1971
March 1: Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.
July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.
July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.
August 6: The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.
August 15: Bahrain becomes independent.
September 3: Qatar becomes independent.
November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.
November 29: At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.
November 30: Despite a power sharing agreement, Tehran takes full control of Abu Musa.
November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties
December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.
December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.
December 9: UAE joins the United Nations.
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1 Tadej Pogacar (SLO) UAE Team Emirates 3:48:53
2 Alexey Lutsenko (KAZ) Astana Pro Team -
3 Adam Yates (GBR) Mitchelton-Scott -
4 David Gaudu (FRA) Groupama-FDJ 0:00:04
5 Ilnur Zakarin (RUS) CCC Team 0:00:07
General Classification:
1 Adam Yates (GBR) Mitchelton-Scott 20:35:04
2 Tadej Pogacar (SlO) UAE Team Emirates 0:01:01
3 Alexey Lutsenko (KAZ) Astana Pro Team 0:01:33
4 David Gaudu (FRA) Groupama-FDJ 0:01:48
5 Rafał Majka (POL) Bora-Hansgrohe 0:02:11
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Key figures in the life of the fort
Sheikh Dhiyab bin Isa (ruled 1761-1793) Built Qasr Al Hosn as a watchtower to guard over the only freshwater well on Abu Dhabi island.
Sheikh Shakhbut bin Dhiyab (ruled 1793-1816) Expanded the tower into a small fort and transferred his ruling place of residence from Liwa Oasis to the fort on the island.
Sheikh Tahnoon bin Shakhbut (ruled 1818-1833) Expanded Qasr Al Hosn further as Abu Dhabi grew from a small village of palm huts to a town of more than 5,000 inhabitants.
Sheikh Khalifa bin Shakhbut (ruled 1833-1845) Repaired and fortified the fort.
Sheikh Saeed bin Tahnoon (ruled 1845-1855) Turned Qasr Al Hosn into a strong two-storied structure.
Sheikh Zayed bin Khalifa (ruled 1855-1909) Expanded Qasr Al Hosn further to reflect the emirate's increasing prominence.
Sheikh Shakhbut bin Sultan (ruled 1928-1966) Renovated and enlarged Qasr Al Hosn, adding a decorative arch and two new villas.
Sheikh Zayed bin Sultan (ruled 1966-2004) Moved the royal residence to Al Manhal palace and kept his diwan at Qasr Al Hosn.
Sources: Jayanti Maitra, www.adach.ae
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Industry: Smart contact lenses, augmented/virtual reality
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Investor: Opportunity Venture (Asia)
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Sector: financial
Initial investment: undisclosed
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The five pillars of Islam
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What: Brazil v South Korea
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The specs: 2018 Peugeot 5008
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Transmission: Six-speed automatic
Power: 165hp @ 6,000rpm
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Fuel economy, combined: 5.8L / 100km