Khalid Aziz Shah, MD of Raqam International tells Packaging MEA Editor Ben Daniel how the company competes with bigger competitors, and why difficulties in Saudi business affected them less than others
Benjamin Daniel (BD): Can you give us a brief profile about Raqam International? Also, please briefly share your background and what made you start Raqam.
Khalid (K): I came to Saudi Arabia from Pakistan in 1994. We were dealers for Intermac USA. I had no idea about the market here, but I had some computer-related business in Pakistan and as it was in the same field, I took up this job. By 1996 I had a fair idea about the market, studied the people and then we started a company called Aldosary Establishment which grew to become a big name in the bar-coding equipment market. I ran this company until 2001. We focused mainly on warehousing solutions, equipment, ribbons, and so on. Soon, we noticed saturation in the bar-coding market. Bar-code systems were selling in supermarkets for 20-50 riyals, so we quit. We diverted our efforts to the label printing and converting industry and started Raqam International.
We saw growth in this field and won gold at the DIPA Awards in 2009 for the best flexo label print. In 2010 we started operations in Canada.
BD: What are the challenges in this market?
K: Brand owners do not strive to introduce anything new. Instead, they follow others with minimal product changes at a very low cost. Brand owners with good products have not been able to promote their products due to sub-standard labels.
BD: Saudi has witnessed a turbulent phase in recent years and every business suffered. How did Raqam cope?
K: Our business is a cash business. All our purchases are on a cash or transfer basis. We do not take loans. Businesses who rely on banks are the ones who are affected. Cash flow in our accounts is Raqam International’s money. Secondly, every business is subject to boom or recession. A wise businessman will have a strong financial backup.
BD: How does Raqam compete with someone who has a wide web who can do bigger volumes with a faster turnaround?
K: Most label jobs do not fit into the wide web option, as they demand more volume. We can do smaller volumes in much faster times, and also more competitively. There’s no need to fight, because there is room for more opportunities. Hence, I say that Raqam International in an innovative company. We are trying to introduce something different within narrow web. Nobody can compete with us. If we have 20-30 customers, that should suffice. The packaging industry is vast. In Riyadh alone there are millions of customers.
BD: Let’s talk about your recent investments. You have upgraded some of your machines, you have bought a Nilpeter machine. What made you go for FA6? Why Nilpeter?
K: We already have four Nilpeter machines besides the three new ones. They are high quality and very reliable, and one engineer can look after them all. The new FA6 was ordered primarily
for snake webs. I call it snake web because the tube material is like a snake. Controlling it isn’t easy. This is the first time we will be doing tubes. One will be sent to our new facility in Pakistan. This is our first experience with the lamination tube. It’s the same in Canada and Pakistan; there is nobody doing lamination tubes. In Dubai, there is one company doing lamination tubes. We will also be doing extruded tubes here. We will be doing something different.
BD: What other machines for conversions and inspection?
K: I love Prati. Two of their machines are on the way to Riyadh. We have six Prati machines on our floor and two more are expected. It is always better to stick to machines that give you peace of mind.
BD: I want you to give a message to the brand owners and to those who are not printing with you and are readers of our magazine. Why should they choose you as a label printer rather than your competitors?
K: Other companies have good setups. I will not say that Raqam International is number one. But we are not here to sell just the labels. One mistake brand owners make is they pay millions to
agencies for logo and label designs, when labels are not their business. Every day I receive new designs. When you are doing something new, involve me, and with my ideas you may be able to sell double.