The firm’s Riyadh office will be headed by Naseem Azam, who formerly worked at Abbar & Zainy Cold Stores. The company is also opening an India office in New Delhi as part of its international expansion.
Valleyfresh currently distributes fresh fruit and vegetables from around the world to the Middle East, through partners including Mohammed Sharbatly in Saudi Arabia and Abuseedo in Dubai. Valleyfresh export director Doug Hammonds said these relationships would not change with the opening of the firm’s new regional office.
‘A lot of business to be done’
“The primary reason for having Naseem there for us, is that from his days at Abbar & Zainy he’s able to tap into that secondary tier of fruit and vegetable handlers that really don’t deal directly. That’s quite a big market in that area, there’s a lot of business to be done,” said Hammonds.
Azam said: “Valleyfresh is aiming to supply fresh fruit and vegetables to wholesale markets, where the majority of customers speak Arabic and have had very limited access to international markets for import goods… Our office in Saudi Arabia will give us an opportunity to supply key retailers. We also want to start van sales to supply small shops, which generate good gross profit margins.”
But Hammonds said there are risks in doing business with smaller operations, particularly in being able to obtain credit insurance. He said Valleyfresh needs hands-on staff who can assess businesses’ credit-worthiness, and this would be a major part of Azam’s role in the future.
“We feel the tightening of credit in the Middle East is going to take effect over the next few years—there will be company failures, and it will be difficult to get credit insurance. So having someone there is very high on our agenda,” said Hammonds.
New product potential
He also said there was potential to expand the range of products Valleyfresh exports to the Middle East, within reason. Currently the firm’s main lines to the Middle East include Australian grapes, Chilean grapes and apples, and South African citrus fruit, among others.
“Having somebody there will give us an opportunity to look at product lines we maybe haven’t been able to be involved in, or haven’t understood there’s a market for. There will be some of that—it won’t be a major field, I don’t think,” said Hammonds.
“We have a large strawberry operation out of New Zealand, for instance, where we’ve been packing strawberries—so that’s an airfreight, perishable line of products, suited to a different range of importers and handlers,” he added, suggesting this might not be viable at scale in the Middle East market.