Global reach for Zamil Steel
Sunday, 1st April 2001
Steel is taking over from traditional bricks and mortar as the building material
of choice for numerous construction projects - from factories to supermarkets
and warehouses. And the world's largest exporter of pre-engineered buildings
(PEBs) operates from Dammam, in Saudi Arabia's Eastern Province.
Zamil Steel Industries (ZSI) is part of Zamil Industrial Investment Company (ZIIC), which is 60 per cent owned by A H Al-Zamil group of companies and 40 per cent by Gulf investors including the Bin Mahfouz group and Gulf Investment Bank.
ZSI is expanding its operations, aiming to see off US competition to become the largest PEB manufacturer in the world. The twin pillars of its ambitious plans are technology and the export market.
'We actively cover about 70 world markets', says ZSI senior vice-president Alex Karakas. 'The way we operate in each one depends on the country. In some we have distribution agents, in others we have offices. But since 1977, we have erected 25,000 buildings in 63 countries'.
A major development came with the decision to build plants in Egypt and Vietnam to serve ZSI's African and East Asian markets. Both the Vietnamese line, which is 10 per cent owned by Japan's Mitsui & Company, and the Egyptian line, which is wholly-owned, have capacity to produce 1.2 million tonnes a year (t/y) of pre-built steel. The Dammam plant is the world's largest, with a capacity of 3 million t/y.
'The really good markets to move into are the developing ones,' says A H Al-Zamil's finance director, Adib Al-Zamil. 'Pre-engineered steel is a vital tool in infrastructural development. That's why we started doing it here in 70's. Egypt and Vietnam are now ideal markets for us'.
However, when the plants became commercial in 1999, they faced fierce competition because of the economic collapse in the Far East and the low oil prices at home. ZSI had to focus on its core markets before it could move to pastures new. Nor has the home front been ignored. ZSI says it has a 30 per cent share of the local market and aims for 5 per cent more.
New plants have not been the only means of foreign expansion. There are 38 area offices in four continents that offer before and after sales attention to clients. 'These are the main reason for our success,' says Karakas. 'They blend business with an understanding of how the local market and culture works. As a result, we've sold at least one project to each of the 20 largest Japanese contractors'.
The forays abroad are backed by the latest technology. ZSI invest SR 1.5 million to 2 million ($400,000 - $ 530,000) each year on research and development, putting together about five or six major new products and up to a dozen product modifications a year. It also has a comprehensive computer-based library of design details in the business. This means ZSI can put together a quote for work within three to four days.
The company will go live with an enterprise resource planning (ERP) programme in August or September. 'Technological investment is important to help us become the number one PEB manufacturer', says Karakas. 'We've embarked on a ERP programme and in-house, we have the most powerful engineering programme software in the country'.