Aal Mir: Analysis of Fairtrade Policies

Aal Mir: Analysis of Fairtrade Policies Abstract: Aal Mir is one of the leading chocolate producers in the UAE. The companys marketing and logistics capabilities have proven to be exemplary for other companies. Aal Mir is one of those companies which have been undisputed for more than 30 years. Its fair trade policies attract a large number of customers towards it. The company has led to acceptance of chocolate as one of the primary snack in the region. The products produced by the company are quite popular in the region and it acts as a good source of income for the company. The people of UAE usually prefer products prepared within their country more than the products produced outside which serves to the benefit of the company and earns higher profit to the company. The company is very strict against child labor which reflects in its fair trade policies. The report prepared is a result of in depth analysis of the companys policies which are quite oriented towards fair trade of the company. The company has also played an important role in increasing awareness about some social causes. The project deals with analyzing the business of the company and its role in creating social awareness amongst the masses. The company is strictly against child labor and low wages of the employees which has resulted in a great increase in the goodwill of the company. The company has also been involved in meetings with the world health organization which is an indicator of the extent of social responsibility of the company. The various aspects of the policies of Aal Mir have been covered in the report. Children between the age of 10-15 years serve as the major part of the target population for the company and the company lays emphasis on children even in its fair trade policies. The affinity of the local people of UAE towards goods produced within the country also acts as a positive point for the company and works to the advantage of the company as has been seen in its year of establishment. The consumption of chocolate in the region has increased in the region by a growth rate of more than 10% annually over the last few years as a result of companys products and its policies. In fact the consumption of camel milk and biscuits has also gone up significantly over the last few years. The report has also emphasized on these growth factors as a result of the policies followed by the company since its establishment. Introduction: The term fair trade is referred to the concept of social justice along with continuing the business trades of a company in order to gain maximum profit from it. It was originally used in order to support social justice. In the concept of fair trade justice was defined as the strongest thought that arises through simple majority among people. The main aim of fair trade is to identify the relationship between various aspects of international trade identifying the reasons for putting constrained on the traded products. The objective of fair trade is to save the people in the region and the employees of the company from being exploited by the companies in order to maximize their profits. Aal Mir has been chosen as the company to study its fair trade policies because it has been operating business in UAE for the last thirty years and has not been a part of any controversy or dispute since it came into existence. The company has also shown good growth rate since its establishment in 1980 becoming the largest producer of chocolate in the country. The companys strategies and policies are a great combination which has led to higher profits and has also earned social goodwill for the company. The company has always served its social duties along with earning one of the highest profits in its area of trade and business. The company has been strictly against some of the social evils such as child labor and low wages of employees. Body of Report: Chocolate is the product chosen to study the fair trade policies of a company. Chocolate today has been selected as a fair trade product by fair trade organizations (Fair trade product). The organization chosen to study the fair trade policies is Aal Mir. Background of the company: Aal Mir trading company was established in Dubai in the year 1980 by two dynamic entrepreneurs who worked in partnership to make the company reach heights of success. The company was setup by Mr. Mir Motalleb Vakhshouri and Mr. Mohd. Hassan Baba Hassan and its business today is spread in varied fields and different areas of the market (Aalmir overview). Initially the company began with business focusing on the confectionery segment and then shifted to modern trade and distribution after analyzing the trend of the market and started importing food and non-food items to Dubai (Aalmir overview). Today Aal Mir Trading Co. LLC has a very impressive portfolio which consists of various brands that have been recognized internationally and enjoys the status of a leader in full fledged distribution in the region. Its logistics and marketing strategies have been appreciated over time and its marketing covers many areas of the market. (Aalmir overview) The company does import and export of all kinds of confectioneries, foods and beverages to countries like Iran, Iraq, Qatar, Kuwait, Oman ,India, Pakistan and some African countries. (Spread of Aal Mirs Business). The raw materials required for preparing chocolates are cocoa, oils and fats, improvers and adders, flavors and cereals. Cocoa serves as the main ingredient for the preparation of chocolate. The main producers of Cocoa are West African countries such as Ivory Coast and Ghana and the company also imports Cocoa from these countries which serve as a main raw material for the production of chocolate. (Areas where Cocoa is produced). The range of product sold by the company consists of biscuits, wafers, cakes, chewing gum, candies and toffees, foodstuffs like oil, coffee, rice etc, gift boxes, jellies, juice and drinks, lollipops, marsh mallows, pickles and canned food, toiletries and cleaning products and snacks. Such a wide range of products marketed by the company not only reduces the rescue factor but also has led to higher levels of income for the company and has led to independence of the company from any one product for its profit (Products produced by Aal Mir). Aal Mir is amongst the top trading companies and owns many subsidiaries either partially or totally in order to smoothen its work. Some of the subsidiaries owned by Aal Mir are Sweet Garden General Trading Co LLC, Aal Mir storing Co. LLC, Tania Packaging LLC, Hassani and Aal Mir Trading Co., Aal Mir Partners Trading Company and Shamim Trading Co. LLC. (Associate Companies) Sweet Garden General Trading Co is an independent company which executes the groups strategy of enhancing its market coverage. This subsidiary was established in the year 1989 and is currently working as an independent distribution company. The company is located in Dubai. (Associate Companies) Aal Mir Storing Co LLC mainly provides storing and logistics services to the companies associated with it and the company is mainly a holding of Aal Mir Trading Company and is presently functioning in Dubai. (Associate Companies) Tania is a label brand of Aal Mir Trading Company for its food products like rice and grocery items. Apart from being a label company the company also gives support services such as repackaging. The company s situated in Dubai (Associate Companies) Hassani Aal Mir Trading Co. is another associate of Aal Mir trading company situated in Abu Dhabi. This company works operates its business in the field of consumer products and branded confectionary. The company does its work with the support of companies like Sweet Garden General Trading Co. LLC and Aal Mir Trading Co. LLC and is situated in Abu Dhabi the capital of UAE. (Associate Companies) Al Mir Partners Trading Co. LLC is another associate of Aal Mir Trading Co. LLC that has been operating within the Sultanate of Oman and trades and distributes foodstuffs and confectionaries in the region of Oman. (Associate Companies) The trading of Basmati rice in the region is done by the company under the established brand name â€Å"Shamim† which is a brand established by the company. (Associate Companies) Fair Trade Policies of Aal Mir Trading Co. LLC: Fair trade policies not only benefit the people associated with the company and the common people of the country but also benefit the company by increasing the goodwill of the company. Fair trade policies aim at benefitting the people of the country who may be associated with the company as producers of raw materials, consumers or employees of the company. These policies result in creating goodwill for the company and also sometimes attract larger number of customers to the products of the company. These policies create a thought in the minds of the customers that the company that is performing the deeds for social causes and that is has a high probability to be keep the rights of its customers preserved and will not exploit or harm them and it also creates a sense of belongingness to the organization in the minds of the minds of the consumers. The company is strictly against child labor and has a view that children are not meant to be exploited for gaining profits. This can also be seen as a marketing strategy as the main market of the company is children below 15 years of age and by being strict on child labor the company wants to give a message to its customers that it really cares for them and is willing to do any possible attempt to stop any kind of evil done on them. Moreover on part of being a chocolate company it is important to take care of the hygiene and the conditions in which the product is manufactured as unhygienic products could lead to bad health and also lead to loss of customers and reputation to the company. The companys fair trade policies are also quite visible by its attempts to increase the general awareness about all its products to the consumers it also tells the consumers the value that they hold great importance for the company and facilitates them with a feeling that they are the most precious source of revenue for the company. This policy attracts a large number of consumers towards the company and makes them interested in buying the products of the company. The company is a firm believer of globalization and is taking every possible step to implement it. This shows companies respect for international trade and its respect for personnel internationally thus helping itself to grow globally. The global presence of the company is felt by analyzing the countries to which the company currently exports its products. This policy helps the company in building international goodwill of the company. The company is also against giving low wages to its employees and is a firm believer that a person should be paid for whatever he does for the company thus giving the employees a sense of accomplishment and motivates the employees to work with dedication for the company and company as the employees feel that the company belongs to them and any benefit to the company would lead to the personal benefit of the employee. Aal Mir Trading Co. is one of those few companies which have been able to remain undisputed over the span of more than 30 years which reflects its fair trade policies. The company has pioneered in getting rid of various social issues of the world and has been praised for its steps taken worldwide. The companys meetings with the world health organization act as a firm confirmation to the steps taken by the company in order to reduce social evils and exploitation of labor worldwide. Appendices: Opposition to child labor. Maintenance of Hygienic conditions during production. Attempts to Increase general awareness among the consumers. Respect for international trade and personnel. Opposition of low wages. Results of Policies implemented by Aal Mir Trading Company: As a result of the fair trade policies implemented by the company there are various figures that support its success. In the last few years the annual growth rate of chocolate consumption in the region has been around 10% which directly reflects the increase in profit of the company as it is the leading producer of chocolates in the region. Today more than 25% of the people in the region consider chocolate as a main snack which is far greater than the ratio of 2.5% which existed 15 years ago. The results are even visible in the biscuit industry which is one of the areas of business of the company has witnessed a growth of around 17% in the last few years. Is the company adapting to fair trade policies only as a marketing tool? The main motive behind any company is to earn maximum possible profit within the laws of the region in which they operate. The motive of Aal Mir Trading Co. is also to earn maximum profit from its business but the policies implemented by the company in order to gain this profit are quite noble and are based on social welfare. Although seeing from a point of view we may find that these policies are helping the company to gain higher profits but seeing the level at which the company is performing it is not a necessity for the company to work for social causes as the people already are aware of the brand and the products produced by the company. In its thirty years of working the company has been able to make a good reputation in the market and has made good profits over the last few years. In the initial stages of the working of the company it could be made out the company might have gained larger profits based on the basis of the policies that it had implemented and in the initial sta ges this could have been seen as a policy to take the people of the region into confidence but since the company is in existence for over 30 years the company today does not need to take the consumers into confidence as the company already has enough customers that are confident about the working of the company and have faith in the products of the company but at this stage the steps might be interpreted as a measure to maintain the goodwill of the company and keep the people assured of the policies of the company. Another important fact that must be kept in mind while analyzing this aspect is that in order to follow such fair trade policies the company still has to put in extra cost which might just go wasted as the company already has a huge customer base and activities of social good now has a minimal effect in increasing the customer base of the company. Hence on analyzing the trade policies it is found that although the company may be earning a higher profit based on response o f users on these policies but the credit of doing such activities must not be taken away from the company that is putting an effort for the community as the company is fulfilling its social requirements hence we can say that Aal Mirs adaptation to fair trade policies is not just a marketing policy but it is an attempt by the company to improve the society which in turn is giving higher profits to the company. Conclusion: After going through the policies of the company and the profits that it is earning and also after examining the impact of these policies on the company as well as the people of the region various conclusions can be made out which have been stated in this paragraph. The company has developed into a leading producer of chocolates as a result of its trade policies and has also earned the stature of an extremely ethical company that fulfills its social responsibilities. This sense of responsibility of the company towards the society is a result of the companys fair trade policies. The companys contributions have also been highly recognized by the society and even bigger organizations like the world health organization. The company has earned its spot at the top and is expected to stay there as the companys policies as well as quality and cost of products are bound to attract a large number of consumers towards the company. Hence it can be concluded from the above report that the good pol icies of the company that includes the fare trade policy have helped the company to establish a customer base and then its products and marketing strategies have helped it to affix the companys position at the top amongst all the companies of the region thus resulting in the current scenario where the company is at the top of the market and is still developing its position. Works Cited Aalmir overview. (n.d.). Retrieved 5 4, 2010, from http://www.aalmir.com/AboutUs.aspx?id=1 Areas where Cocoa is produced. (n.d.). Retrieved 5 4, 2010, from http://www.zawya.com/story.cfm/sidZAWYA20090203034717/UAE%20chocolate%20makers%20see%20red%20as%20cocoa%20prices%20soar Associate Companies. (n.d.). Retrieved 5 5, 2010, from http://www.aalmir.com/AboutUs.aspx?id=3 Fair trade definition. (n.d.). Retrieved 5 4, 2010, from http://www.fairtradecoffee.org/articles/ft-definition.shtml Fair trade product. (n.d.). Retrieved 5 4, 2010, from http://www.globalexchange.org/campaigns/fairtrade/cocoa/ Products produced by Aal Mir . (n.d.). Retrieved 5 4, 2010, from http://www.aalmir.com/Products.aspx?id=2000 Spread of Aal Mirs Business. (n.d.). Retrieved 5 4, 2010, from http://www.made-in-china.com/traderoom/ismaeili