As we begin the new year and look back at the last, we sat down with our CEO, Marek Sheridan, to learn more about how 2021 was for the Group, and what we should look forward to in 2022.
How was 2021 for the BMMI Group?
We had hoped that 2021 was going to be significantly better than 2020 especially as we saw the causeway and the hospitality sector beginning to open at the end of 2020, supported by the excellent job the authorities in Bahrain had done to protect our community with sensible controls and a very pro-active vaccination campaign. As such, we had reason for some optimism, and budgeted accordingly.
However, right at the beginning of 2021, Bahrain was hit again with a global surge in positive cases and as a result the Bahrain hospitality sector effectively closed. There were also more border controls and restrictions in place all of which meant we didn’t get off to the start we were hoping for.
With increased levels of vaccinations and infection rates reducing, the market started recovering halfway through 2021 and we started seeing more visitors as the causeway opened and our businesses started to gain momentum. Unfortunately, the business community was then hit with another challenge. The world’s supply chain started to experience significant disruption with shortages of containers, ports being congested, blocked or closed, and changes in routes. Even if you could obtain containers for goods, freights charges were quadrupling or more, significantly impacting both availability and costs. Furthermore, as the year stumbled to a close, the world was hit with news of the Omicron variant, and all the uncertainty and fear that came with it.
How did the team face those challenges?
As always, the team at BMMI has shown incredible resilience and flexibility – adapting to the variables to minimise negative impacts and maximise our return. Our Crisis Committee continued to guide us through the pandemic and helped to protect our people, suppliers and customers. Battling through the first part of the year required huge energy and I am incredibly impressed with how the team at BMMI has drawn on its energy levels to constantly rise to the next challenge; to not be disheartened by the things they cannot change but to focus instead on the areas they can.
What were some of the highlights and achievements of the year?
Well, I think here are a number of things that come to mind, unfortunately I can’t name them all here.
The BMMI Shops’ team has done a phenomenal job with its Drive-Thru and in the month of June, when strict protocols were in place and everything was closed, we served a total of 70,000 cars!
When it comes to FMCG, Walkers, a newly acquired agency, recognised us for our activation of their brand and they’ve now held us up as best practice across the world for third party distribution and how to manage a brand. This along with being held up by Carrefour as a recommended distributor to work with demonstrates why we continue to attract more brands to our portfolio.
The sourcing and supply business has been fantastic, and it’s where we see strategy in action. This model is much less capital intensive and is targeted to be a significant contributor to our revenue growth in the 2022 budget. We also won a significant five-year contract with Tatweer, which activates at the start of this year and is an excellent achievement. Furthermore, we were able to retain the USAID contract in Djibouti which helps provide sustainability in that business sector.
I think our logistics team deserve a lot of credit. They have been successfully managing two facilities through diligent, tough, and hard work without expanding the team. They truly are the backbone of our organisation and they have always kept us going. On the hospitality side, McGettigan’s is one of the best preforming outlets on the island despite the strict rules we apply on social distancing and safety.
From a quality and certification perspective, we went through 16 different international external audits in 2021, and we passed every single one without a single nonconformity or serious observation! That is unheard of and truly an extraordinary example of how taking responsibility and going the extra mile pays dividends. The IMS team and the divisions being audited should really pat themselves on the back for such an achievement.
To cap it all, and while yet to be confirmed, we look to be on track to hit our Group Budget for 2021. While the 2021 budget was set significantly below pre-covid years, it still set a challenging target, therefore this would be an excellent achievement by the team given the global and regional turmoil we have experienced throughout the year.
There’s honestly a lot of things that we can be proud of both in the commercial and support service divisions, despite all the challenges we faced in 2021. The team continues to do a fantastic job!
What should we look forward to in 2022?
I do believe that our recovery will continue – yes Omicron is a threat, but Bahrain has been very proactive in managing that and we are on a booster campaign now to help protect the community; so, there’s cause for guarded optimism. However, I think the world supply chain issues will continue until at least the second quarter of 2022. That puts pressure on price because our cost of goods is going up, so that means we must be clear how we plan on managing that whilst being fair to our customers and consumers. We will also have to prepare for the doubling of VAT in Bahrain which will put further strain on consumer spending. 2022 will be difficult for our customers, and therefore we must be understanding of their situation and market our products and services as best as we possibly can, so that we stay relevant and retain their loyalty, while delivering a commercial return for our shareholders.
We have an aggressive budget for 2022 - one where we are really focused on managing cost and where we are really driving significant growth across all our business streams. I am confident that this team can deliver despite the challenges
Even though all the indicators are telling us that we are in for another difficult year, if you look at the momentum of our business in the last three months of 2021, we are surging forward and that is cause for optimism. We will look for solutions to deliver sustainable profit growth as we always have, as we proved through COVID and as we’ll prove again in 2022.
There have been some changes within the organisation that have made us leaner, fitter, stronger, and more prepared for the challenges ahead. I also feel the team has got a very clear and united view of its strategy of driving sustainable profit growth through core competency rich areas of diversification, as well as being very focused on delivering our products and services in the most cost-effective manner possible. So even with all the anticipated social, financial, and commercial challenges in 2022, I am confident we are well equipped to face the year.
Speaking of the changes in the organisation, can you tell us more about that?
I think that sometimes change can be unsettling. From leadership’s perspective, what we’re trying to establish under the guidance of the Board is to ensure that we are a Group that is in the best possible health to capture the growth and the potential of the organisation moving forward. Of course, COVID intrinsically changed things around the world, this is undeniable, and we simply must react to the new reality. The best way to prepare and to move forward is to drive sustainable growth. If we can deliver growth in a measured and appropriate way, you get to a point where the focus is around that growth rather than the cost required to generate it. I think 2022 gives us the opportunity to achieve that, but we’ve had to go through that transition in order to get there.
Through the past two difficult years, BMMI has still been strongly committed to making a difference in the community. Can you tell us more about that?
We will always continue to build upon our support of the community, especially as we evolve from a CSR orientated organisation to an Environment Social Governance (ESG) one. We have significant plans on our green agenda, and we have on-going initiatives to support our communities.
I wholeheartedly believe in the importance of making a difference, particularly when times are going to be hard for your communities. That’s where organisations like ours need to stand up and demonstrate how proactive we can be in support of those communities That support can come in a variety of manners, from initiatives for people that are less advantaged or those with difficulties, or just commercially helping entrepreneurs with their businesses to get on their feet and providing guidance.
Anything further to finish on?
I would like to express huge gratitude for what the team has delivered in 2020 and 2021 through the most difficult of circumstances. It makes me incredibly proud to lead this team and I’m looking forward to 2022 where I am sure our strategies and our team’s commitment to implementing them to the highest of standards will continue to drive our recovery from this global pandemic and all its impacts.