Dubai: Despite global health and safety concerns being more prominent than ever, one unlikely company from the UAE has found a way to rise above the ashes.
That's because increased rules and regulations suit the Al Matuco Tobacco Group just fine.
"We obey everything that the World Health Organisation (WHO) give us," Al Matuco's head financial manager Sarjeevan Kumar said. "We put all the logos and picture warnings required we follow all the health and local laws to make our product."
In addition to setting regulations for the tobacco industry, the WHO released statistics that categorised around 1.1 billion people around the world — or one out of every three — adults as smokers.
However, most of the world's smokers come from low- and middle-income countries.
Kumar's role with the company for the last six years is similar to a financier-in-chief, particularly because his goal is to raise funds for the business, allocate capital for optimal use and create a plan to earn more from their profit.
So when the company experienced stagnant sales through the first quarter of 2016, Kumar had not been the least bit concerned about the future.
"From last year, our growth has improved by about 5 per cent," he said.
"We are actually going through an expansion so everything has been more satisfactory from before."
To put that into perspective, Al Matuco Tobacco Group sales were about Dh52 million in 2013, according to Kumar.
In 2014 the number rose to Dh65 million and reached about Dh75 million in 2015.
Federal law
The numbers are significant because the UAE became one of only 19 countries that reached the highest level of banning tobacco marketing, promotion and sponsorship by labelling tobacco advertising as forbidden under a federal anti-tobacco law that came into effect in January of 2014. So with so many obstacles, how has the company been able to boost its sales?
Simply put, Al Matuco expanded their reach and product to other countries.
With more than 20 distributors and large suppliers including Euroleaf, Global Tobacco and Alliance One International, the tobacco company began to concentrate on locating its most prosperous regions. "We don't sell any of our products in the UAE," Kumar said.
"So our goal is to research and look farther."
This meant focusing on their main consumers from the Commonwealth of Independent States (CIS) which include Armenia, Russia, Uzbekistan and six other countries from Eurasia and North America. But the company has sights set on further expansion.
"The new market we are creating is South Africa," Kumar said. “Because of this we had to take some stability in our prices but we've done our research and we think we will succeed there."
However, the company will have to wait until the middle of this year to see if investing in Africa had been a fruitful decision.
Founded in 1990 as part of the Matuco Group, the Al Matuco Tobacco Company started out as a trading company selling only raw tobacco.
After its initial success, the company set up their Fujairah factory in 2005 to increase production and take advantage of a UAE free zone. So from an initial production capacity of 2 billion cigarettes, the new factory has raised that figure to nearly 5.5 billion.
This number is prominent because although tobacco is manufactured locally, the plant has no natural history to the land. To get their hands on the product, Al Matuco looks south-west.
"UAE doesn't produce any tobacco," the financial manager said. "We import from Brazil because of the quality and the taste."
The Al Matuco Group has since modernised its product by expanding to 30 flavours of shisha and several styles of cigarette. The latest product, the "switch cigarette", changes to different flavours as the cigarette is being smoked. In fact, the company's most popular cigarette isn't even a true cigarette; it's electronic.
Heavily sanctioned
"It's these modern adjustments that keep Al Matuco relevant and successful in other parts of the world where tobacco is heavily sanctioned and generally frowned upon.
"We are successful in North America because we bring different types of cigarettes and products,h Kumar said.
"We have the nano product, the super-slim cigarette that is popular in North America. It depends on the research; people like different things and we support that."
But to the financial manager, it all comes down to choosing the healthiest option.
"We won't increase our nicotine to something that is more than acceptable," Kumar said. gWhen people get a taste and are health conscious they should pick the product that abides by WHO regulations.”
The writer is an intern at Gulf News.
