Now that air travelling is back all over the world, you will likely cherish the feel of boarding tickets and the sound of baggage labels being taped around your bags once again. It is more likely as well that these labels are actually manufactured in the UAE.
The UAE is indeed one of the leading manufacturers and exporters of labels in the world.
Vinesh Bhimani, the businessman who started all this, recalled that when he came to the UAE in 1988, he had but one simple idea. That is to bring baggage tags manufacturing to the country — a business potential he saw while visiting an exhibition in Japan and witnessing raw materials for aviation industry consumables as per IATA resolution. At that time, he dreamed about setting up a state-of-the-art manufacturing facility from where finished material could be dispatched across the globe for the aviation industry.
“I’m not a technical person, but when I saw that machine, I knew it could be a business opportunity. So, I bought it and hired people from India to work here in the UAE. We became the first producer of baggage tags in the Middle East, with Emirates giving us the first contract,” says Bhimani, the managing director of Kimoha Entrepreneurs.
Starting the operations from an 18 sqm office in Jebel Ali Free Zone with 10 people, the company now employs a workforce of 270 people in an area sprawling across 18,000 sqm — serving more than 40 countries, covering a wide range of sectors from food & Beverages, Retail, Cosmetics, Energy, Lubricant, Electronics.
One of the main reasons for its growth is the trade finance protection that it receives from the UAE government, says Bhimani.
Along with the company’s growth is the increased probability of non-payments. In 2021 alone, it faced payment defaults from three of its major customers that were covered and compensated by Etihad Credit Insurance.
“We are very fortunate to work with Etihad credit insurance, the UAE federal company, that helps us do business without worrying about the numerous fluctuations in the international export marketplace,” Bhimani said.
“The problem in the market is that nobody will pay in the normal timeframe. If the payment has not been received even after that period, we’ll inform Etihad Credit Insurance. We work together to find out whether this party is suffering from a severe financial issue, or they have a temporary problem. We discuss whether to continue to supply to this customer or not. And only after that do we start filing the claim, which Etihad Credit Insurance pays as per our agreement. Without these guarantees, there will be no peace of mind,” he added.
Through the help of the UAE Federal export credit company, Kimoha recorded 14 per cent revenue growth last year.
In 2021, the UAE-based manufacturer of speciality labelling, and packaging solutions registered double-digit sales growth, with production volumes returning to pre-pandemic levels.
“The biggest challenge most SMEs encounter is the shortage or difficulty in obtaining adequate financing. Banks and financial institutions are often hesitant to lend to small businesses since they are considered high risk due to their limited cash flow, low equity reserves and high dependence on receivables. Etihad Credit Insurance help these companies to obtain financing through state-backed guarantees, in line with the vision of the UAE leaders to more than double the national manufacturing capacity and export. We’re proud to have helped many UAE companies such as Kimoha achieve significant success amid the challenging economic cycles through a broad range of trade credit insurance and risk management solutions,” Massimo Falcioni, CEO of Etihad Credit Insurance, said.
Meanwhile, Haitham Al Khazaleh, Director of Risk Management at Etihad Credit Insurance, highlighted that the export credit agency puts a high priority on ensuring that SMEs — especially those that are manufacturing ‘Made in the UAE’ products and services — get the support that they need to grow and flourish in the international markets.
“We are very pleased to hear yet another success story of a ‘Made in the UAE’ brand. Our support to Kimoha is in line with our mandate to help develop the UAE’s local manufacturing industry in order to diversify the country’s economy, create jobs, attract foreign investment, improve local skill sets and export locally made products. Etihad Credit Insurance’s goal to support exporters, especially SMEs, is in line with the UAE’s strategy to drive industrial growth, as the country aims to double the industrial sector's contribution to national economic output to Dh300bn by 2031, from Dh133billion last year.”
Over the last three years, Etihad Credit Insurance has protected SMEs from insolvencies by recovering more than AED 85 million worth of non-payments and liquidating claims worth AED 7.9 million. The federal entity further backs UAE manufacturers by facilitating access to trade finance, which boosts their exports, enhances their competitiveness in international markets and reduces the cost and timeline of obtaining funds.