'We made our own supply chain': How UAE food retailers and producers adapted to absorb impact of Iran war
Turning to new trade routes and changing long-held business practices have helped UAE food producers and retailers to navigate the uncertainty caused by the Iran war . The closure of the Strait of Hormuz meant firms had to be creative to ensure minimal disruption to food supplies. For some retailers the main challenge was finding suppliers closer to home, no small ask when about 80 per cent of…
The ongoing conflict between Iran and the United States has significantly impacted the supply chain of food retailers and producers in the United Arab Emirates (UAE). With the closure of the Strait of Hormuz, firms have been forced to find new trade routes and adjust their business practices to minimize disruption in food supplies. For many retailers, the challenge lies in sourcing products closer to home, given that approximately 80% of food in the UAE is imported.
The Lulu supermarket group, with branches in all GCC countries, has had to make significant changes to its sourcing strategy. Shamin Sainulabdeen, director of private labels at Lulu Group International, noted that it is more convenient to source from local companies rather than importing essentials. To adapt, the company has started focusing on sourcing similar products from Asian markets and utilizing various modes of transport, including charter flights and ships.
United Foods, a manufacturer of essential goods like oils and ghee, has taken a different approach by placing maximum orders for raw materials in advance. This method, while still affected by global supply chain fluctuations, helps keep material prices low, benefiting consumers. Mohamad Ziad Al Najjar, senior manager at United Foods B2B, stated that they placed orders several months in advance to maintain their supply despite the ongoing war.
Al Ain Farms Group, on the other hand, has prioritized local manufacturing due to the positive reputation of UAE products. Chairman Tareq Al Hosani emphasized the importance of the "made in UAE" slogan, highlighting the value of being an international mix that leverages the UAE's heritage and international best practices.
Government support has been crucial in navigating this difficult period, according to the companies. Mohamed Al Najjar from United Foods B2B praised the government's assistance for manufacturers and traders. The theme of building resilient supply chains was a significant discussion point at Global Food Week, with an emphasis on improving efficiency using artificial intelligence.
Sumaya Al Marzooqi, official spokeswoman for Global Food Week, stated that the focus this year is to move from being agile to being ready, prioritizing readiness, future-forward thinking, and resilience.
Written by urgent.news from The National UAE's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
