Food firms seek cheaper import alternatives

Acting Director-General of Dubai Municipality Hussain Nasser Lootah, second from left, opened the exhibition

Food and beverage companies are seeking cheaper options for procuring raw materials to face the challenges posed by high commodity prices in the world market.

Exhibitors at the first Ingredients Middle East show at the Dubai International Convention and Exhibition Centre say they have received many inquiries.

Food processing units in the UAE and GCC that depend on imported food raw materials are facing high production costs as commodity prices in the global market have increased.

Companies attending the exhibition are keen to find global business partners who can help them to cut costs and a number of exhibitors are able to offer assistance.

Zhining Hu, international sales manager of China's Beijing Milky Way Trade Corporation, said the company had started exporting milk powder to the Middle East last year after the steep appreciation of the euro pushed up the cost European powder used by bakeries and other food processing operators.

"We see good potential for our milk powder in the Middle East because our price of $3,500 (Dh12,900) per tonne is $500 less than that of European milk powder.

"Last year we have exported 10,000 tonnes of powder to the Middle East. Many ice cream and diary companies are inquiring about long-term contracts."

He said before the appreciation of the euro the company could not export to the UAE and other Middle East markets because the prices were not competitive.

"Now many food processing companies here are keen to buy Chinese milk powder, which is produced according to international standards," he added. "For a company importing several hundred tonnes of milk powder per year, switching over to a much cheaper brand makes a lot of difference."

Ingredients Middle East, which continues until tomorrow, is a platform for food manufacturers planning to expand into the region.

"The Middle East's food manufacturing and processing industry is experiencing consistent growth," said Helal Almarri, director-general of the Dubai World Trade Centre.

"At a time when cost-efficient ingredients sourcing is at an all-time high, Ingredients Middle East is an essential event for food manufacturers and processors to meet leading suppliers."

Companies from the UAE as well as China, Germany, India, Lebanon and Malaysia are represented.

The exhibitors include Agus, which develops, produces and sells dairy-based raw materials for all sectors of the food industry.

Grzegorz Maczynski, director of Expansion, said: "We see this as an excellent opportunity to meet Middle East-based food manufacturers and processing firms and look forward to extending our reach into key markets."

India's Aarkay Foods, a producer and developer of natural food ingredient and supplements, is taking part in the show and plans to launch its vacuum-dried fruit and vegetable products in the Middle East.

Corporate Relations Director Abishek Kapoor said: "We look forward to building a strong presence at this year's show by offering ingredients such as fruits and vegetables in the form of pieces, flakes and powders."