#Logistics#Warehousing#Middle East

Majaal warehouse Co

|Jun 3|magazine13 min read

Majaal Warehouse Co. is looking forward to an exciting growth phase in its relatively short history, as the company has struck upon a business plan to expand upon its early success.

The winning formula means the organisation has been able to progress without the burden of unnecessary capital expenditure, and now the prospect of having a presence in other Gulf countries such as Saudi Arabia and Oman is a distinct possibility.

Fully owned by First Bahrain, an innovative investment company, Majaal Warehouse Co. started as an organisation less than a decade ago when strategic land was acquired to development a warehousing project. The intention was to plug a gap in the current market and cater towards small and medium-sized enterprises.

Amin Al Arrayed, Managing Director at Majaal, said: “We were embarking on a strategic development and the idea that came to us was to essentially focus on the industrial centres in Bahrain, and remedy a supply gap in the market.

“There were two key reasons for this; firstly the government was spending a large sum to develop the Salman Industrial City in Hidd with a close proximity to all major air, sea and land transport links. But central to this was the new Khalifa Bin Salman Port. The old trading port was due for closure and everything would be shifted to this new port. We pre-empted the move, secured key land and as a result our warehousing project continues to serve SME’s very well to this day.”

Situated at the Bahrain Investment Wharf (BIW), the 60,000 square metre multi-purpose facility is now at full capacity with around 30 tenants who use the warehouse for anything from storage, documentation filing and cold-store to light manufacturing, printing, and wood production.

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In addition to this some tenants have packaging and distribution operations ongoing at the warehouse. There is easy access for trucks and Majaal offers a variety of service for tenants such as 24/7 security, state-of-the-art IT, Forklift, shelving and racking procurement as well as an array of other business services.

Company evolution

Recently the company came to a crossroads in its development as a result of being at full occupancy at the BIW site. It could either build more facilities or start to develop its project more as a franchise concept, and the organisation took the latter option.

Al Arrayed said: “Majaal now offers services to lease, develop and operate warehouses for third parties. We’re leveraging our experience and success in our own project and are now offering turnkey solutions for clients as a third party agent.

“We have successfully partnered with another landowner and investment company called Al Mazaya Holdings, we are developing and operating warehouses on their behalf; adding another 22,000 square metres on our portfolio of warehouses under management. We will act as facilities and leasing managers on their recently completed $20 million industrial site.

“We’ve been able to add a new revenue stream on top of the rental income with the service income. It has allowed us to expand without the heavy capital expenditure that comes with land acquisition.

“We think it’s a very prudent way of expanding across the GCC. This is how we envision growing our brand and undertaking projects outside of Bahrain.”

Effectively growing by a third in size as a result of contracts signed is something that would not be possible at the same speed if Majaal were to acquire and build on its own land. Al Arrayed sees the firm’s chosen method as a very scalable and successful business model which he hopes will allow it to gain an international presence.

As part of the wider remit, Majaal took part in the Gulf Industrial Fair in Bahrain and this provided the opportunity to not only announce it had signed with Al Mazaya but that it is eager to take on other such mandates.

Al Arrayed added: “We have actively marketed and introduced ourselves to industrial landowners from further afield. Our business model allows us to get into other markets without significant equity risks and that’s always been a consideration when looking at Saudi, Oman and other countries in the GCC. We have already registered Majaal as a trademark in these territories. We are able to be more flexible going forward and can expand with ease; we are in a prime position at the moment.”

Technology and future objectives

Majaal has the potential to go far beyond its current value if the prospect of future contracts are taken into consideration. Technology has become a key tool in the business and leveraging the correct systems to the company’s advantage is another standout feature.

AL Arrayed concluded: “I truly believe we can go from a $50m company to doubling size over a relatively short period of time thanks to the processes we have in place. We have invested quite heavily in IT platforms, such as customer relationship management (CRM) systems, that allow us to manage 50, 500 or even 5,000 tenants and their requirements, messages and payments.

“Having an automated system that alerts you on overdue issues is invaluable and keeps us on top of everything. Tech is a differentiator in our line of business and there’s no way we could manage tenants properly in Saudi and Oman if we didn’t have that automated system.

“Clearly management and reporting on profitability and potential savings need to be taken at a macro level and the ability to break down data will be critical as we expand across the GCC. The staff are the faces behind the success of Majaal though, and we are confident our core staff and the outsourced services will continue to be delivered to a high standard.”

Majaal hopes that within the next two years it has a presence in another country in the GCC, a landmark achievement in the company’s history, on its way to becoming a regional player.

It is clear to see from the success of the Bahrain model, Majaal will continue to be busy with savvy landowners for many years to come.


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