India’s Bakers Circle plans $6m Dubai factory

By Eliot Beer

- Last updated on GMT

Related tags Middle east Asia North africa

India’s Bakers Circle plans $6m Dubai factory
Indian bakery firm Bakers Circle is building a US$6m plant in Dubai to expand its operations into the Middle East and Africa.

The 1,115 square-metre plant will be operational by April 2015, and will initially service an existing client of Bakers Circle, a major sandwich chain for which the firm already provides dough in South Asia. The plant will have the capacity to produce enough frozen dough for 19,000 sandwiches an hour.

Scalable capacity

Dev Lall, CEO and managing director of Bakers Circle, said the Dubai plant was being constructed with three times the capacity requirements of its launch customer, allowing the firm to service new clients in the region. In addition to frozen dough, he said the factory would also provide dessert products to the region.

We have large dessert manufacturing facilities in India – frozen desserts for quick-service restaurants like cheesecake, apple pies, chocolate mousse and things like that. We are already exporting it out to the Middle East for certain clients, from our India plant. We want to enhance that capability, and trade to smaller volume customers in that area. Currently we can only service full container-load customers out of India, and we’ve been unable to tap into those slightly smaller-volume customers​,” said Lall.

Dough production changing

One major driver to open a plant in the Middle East is the growing number of problems in transporting frozen dough across large distances, explained Lall. Thanks to increasing levels of regulation, and issues such as the ADA “yoga mat​” controversy earlier this year, bread production is being forced to change.

As these ingredients are being pulled out of bread, the shelf life is reducing. Fuel costs are increasing, shipment times are increasing – so these large plants that were built out to service 40 countries is no longer a thought process that is really viable​,” Lall said.

Instead of focusing on large factories, Bakers Circle plans to set up smaller plants which can be set up quickly to service a particular region, according to Lall. He said the Dubai plant will initially service both the GCC and Africa, but he expects to set up a dedicated factory in Africa in the future, once demand is strong enough – allowing the Dubai facility to be 100% dedicated to GCC production.

The Middle East is a very dynamic market. We have a lot of data, and we concentrated our research on our prime customer. Our customer is expected to grow to eight times its current size over the next 10 to 12 years in the region.”

“This is pretty much typical of what’s happening in the Middle East and Africa. For the Middle East, maybe it will start plateauing in four to five years, because right now there’s exponential bakery growth there – but by then Africa, which is now starting to accelerate, should start to come online​.”

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