The Writing On The Wall

Starting in 2010 with a seed capital of $13,600 from a partitioned office in Abu Dhabi, Pencil Office Supplies has grown to become a leading purveyor and supplier of leading stationery brands. Logistics News Middle East meets Noble Ninan Mani, the company’s founder and MD

In 2010, at the height of the global recession, a young, steely-nerved entrepreneur, set out to venture into the stationery business, much against the wishes of his parents and well-meaning friends. With an investment of $13,600 and with a tough resolve, Noble Ninan Mani went on to establish Pencil Office Supplies (Pencil).

Over five years on, there is no turning back and the company has since expanded and now has offices and warehouses in Mina Zayed, Abu Dhabi and Dubai Investment Park, in total spanning over 20,000 sqft. and an employee headcount that has now reached 35 and growing.

According to Noble, the company’s first order came in even before the licensing of the company was complete. Since then there is no looking back and Pencil has since built a strong customer base. Presently, the company represents various international brands and has also launched OPM (Original Product Manufacturer) brand ‘Enpitsu’. As Noble says: “The market response has always been phenomenal and we are just getting started.”

Initially as a startup, the company always dealt with suppliers on cash. Ironically, this was when other stationery companies and stores were pushing for credit from their suppliers especially due to the tough market situations. The good side to this was Pencil Office Supplies was able to attract suppliers to work with them and this enabled it to build trust and goodwill for the company.

“This continued for over a year and by then we had to get creative and limit business to the amount of orders we could execute by procuring goods on cash,” reminisces Noble. “The demand for capital was high and we had to frequently raise capital to keep going; however in the coming years it all started paying off. Our suppliers started approaching us offering credit. Our reputation as a good paymaster had spread and today maintaining it is among our top priorities going forward,” he adds.

Noble’s  focus now is to be able to build a company that is innovative and can adapt to the changing market conditions.

“In any industry, creating a sustainable business in a fast paced environment is always a challenge. The challenges are even higher when you try to scale the business fast. Although we are a brick and mortar business, Pencil is run similar to a technology start-up company. We try to identify challenges and anticipate problems before it happens find a solution and continue with our plans,” he notes.

Pencil Office Supplies nurtures ambitious growth plans and its aim is to become the one-stop-shop for all stationery and office supply needs.

In 2014, the company entered into the wholesale market. For growth, Noble has a well-chalked out strategy: “The market now has various verticals and being present in each of these, especially in the UAE, is of high importance to the company. Being based in the UAE has various geographical advantages, which we hope to benefit from,” he observes. In the near future Pencil Office Supplies is looking to venture into other GCC markets and also ensure its products reach the CIS and African markets. In tandem, it is also looking to venture into international markets.

“Currently Pencil Office Supplies has over 350 SKUs (stock-keeping units) and we are continually in the process of adding new products. We are also in discussions with various international brands to represent them in the local market.

“Stationery companies in other countries cover everything that is needed for an office including basic supplies like tea, coffee, milk, tissue boxes to furniture and equipment. It is always more convenient for an organisation to deal with a single supplier who can cater to all their needs. This saves time, increases efficiency and value for money as well,” remarks Noble.

Diversification

The company has been launching a new product every alternate month under the Enpitsu brand, which is Japanese for pencil, and the brand which took Pencil into the wholesale market.

“Quality has always been our main focus and launching Enpitsu has helped us ensure the high quality of the products delivered to our customer. It also helped us to ensure stock availability.  Being direct importers helped us pass the benefit of price to our customers,” he affirms.

“The stationery market is highly unregulated and unorganised. There is hardly any standardisation in term of quality or pricing,” he rues. Noble confirms that the company will foray in the e-commerce arena and will soon be launching its online shopping portal through which consumers can be sure they are getting quality genuine products and value for money they spend.

Presently, the two largest stationery companies in the GCC and the region are not UAE-based and with Pencil Office Supplies, Noble hopes to change this.

“With hundreds of small stationery companies and suppliers in the market trying to survive the fast-changing market conditions, competition is fiercer than ever. This has lowered the margins and with increased cost of operations, many companies will be forced to exit,” he complains. At Pencil, Noble points out that he has taken the appropriate steps to minimise any negative fallout as a result of volatile market conditions.

The stationery entrepreneur

Business has been a personal passion for Noble, who always wanted to turn entrepreneur, from the very beginning.

“Getting it right is a learning process. Every type of sector is unique and is always interesting for someone like me. Stationery has been my stepping-stone; but I am constantly on the look out to see what else might interest me,” he confesses.

Logistics is an area which most companies never give its deserved importance. “At Pencil, we aim to grow our logistics infrastructure beyond what we can sell. With this there was always pressure on sales to do more. We keep adding people and vehicles to our logistics department every quarter. This also avoids a bottleneck situation, which normally happens with increases in orders, and also ensures better service for our clients with timely delivery of goods. To improve the logistics we follow a highly documented process which we keep improvising based on our client requirements and overall growth plans,” he explains.

“We had chosen one of the biggest warehouses we had seen. The warehouse looked too big initially and I still remember echoes as we spoke. Today we are running short of space and are considering new warehousing to support our growth plans,” he adds.

Typically large stationery companies deals with tens of thousands of products. Stock management has been one of the biggest challenges, which have restricted many other companies when scaling growth. Noble says that a major portion of the time in most cases for Pencil was spent to develop procedures both manual and system-based for best-in-industry stock management practices. “If stock management systems are not perfected, it would always be a hindrance in growth.  These procedures are to be constantly reviewed and improvised,” he cautions.

In Noble’s estimation, the traditional stationery market has reached saturation point in the region. “Stationery was an easy business to start and owing to this we have hundreds of stationery companies, stores and depots today.  In the beginning it was easier to classify stationery companies as a wholesaler, retailer or an office supplier. At present due to increase in the number of stationers everyone is trying to get a share whatever sector they can,” he laments.

Noble notes that going forward, as evident in every other, the retailer or office supplier segment would be taken over by the wholesale companies. This is already happening. He predicts that the number of stationery outlets will drastically reduce with larger companies directly getting their products to the end users.

As a result, Noble is also considering the possibility of manufacturing products locally and does not rule out the possibility of establishing a joint venture or partnership to establish a manufacturing facility. “You never know! We are looking at our portfolio and it could be a reality sometime in the future,” he predicts.