An established name in the Qatar market, Nehmeh Group is not one to rest upon its laurels, with a focus on innovation and quality. PMV Middle East editor Stian Overdahl speaks with Nehmeh Group managing director Emil Nehme about staying on top of the Qatari market.
With the original company founded in 1953 by Antoine Nehme (1930-2010), Nehmeh Group has a longstanding presence in the Qatari market. From humble beginnings as an electrical workshop for the automotive sector, it is now a leading integrated manufacturing and trading company. Next year they will celebrate their 60th anniversary.
The company’s portfolio includes portable air compressor, high-rated power generators, concrete mixers, mobile light towers, vibratory rollers, hydraulic breakers and rammers, to name but a few. Brands in their constuction division include Makita, Chicago Pneumatic, Ramset, Forza Power Generation, and the diverse product range is serving them well.
Around 2006 Nehmeh Group began to place a greater emphasis on quality. Emil Nehme, managing director of Nehmeh Group, says that while they had always worked with high quality brands, in 2006 a strategic decision was made by the company to focus purely on premium products. The decision came in part due to the size of the Qatari market relative to other countries in the GCC such as Saudi Arabia and Dubai.
“Anytime you want to fight with prices, it’s a lose-lose game, because there will always be somebody cheaper than you,” explains Nehme.
“Working in a country like Qatar – relatively small in area and population – you are at a disadvantage when you want to fight on prices, because the countries around us, Saudi Arabia and Dubai, import much greater quantities, so they will always have an advantage.”
To move away from competing on price, Nehme says that they focused firstly on quality, and secondly the aftersales services. He is frank, saying that the shift to first-tier products cost them some customers. But by the same token they’ve won over new ones, especially international companies that first came to Qatar in 2005-6, who want products with recognisable quality labeling.
The company aims to be number one in each market segment it operates in, says Nehme. But this isn’t just out of competitiveness, rather out of necessity.
“In Qatar you cannot be number two in the market. If you are number two, your volume will not allow you to survive in the long term, so you always have to look to be number one.
“Normally when we introduce a new product, of course we are number 100, and we give ourselves two years. Within two years we have to be at least number two, by the third year we have to be number one.
“Most of the products we have been working with for more than three years, we are number one in the market, or we have just disregarded them altogether. Because financially it’s not feasible to support the product without a certain volume,” he says.
To be recognised as leader, a company must also be recognised for quality says Nehme, which creates pressure to be number one, otherwise there will not be the required volume to support the aftersales.
“Parts will fail – there is no product that will not fail. You have to be prepared, to have the right trained people to look after it, you have to do preventative maintenance. All of that is a lot of resources.” As a diversified trading company, Nehmeh Group’s products are able to span the shifting phases of construction in Qatar. Currently the main demand is for products used in infrastructure development.
“We are everywhere, and we are very flexible. We can direct our sales team for infrastructure, at the same time keep working with the others for later stages, keep working with consultants, but focus more on infrastructure, because this is where the business is right now.”
While Nehmeh’s product range is large, it is not random says Nehme.“You won’t find any products that aren’t interrelated directly to one another. We would like to be recognised as a solution provider, and we listen to customers all the time, we understand their needs.
If we bring a product and it suits very well with another product, we bring them together.
“We want our customers to fell well-served by us, so we keep adding products, but within a certain range.”
The company also works to actively win over customers, and this involves working with all aspects of projects.
“If you want to win a customer, you cannot only work on one front. Quality is one front, but we also have to work with consultants, and convince them of the benefits of our products. It’s a war on different fronts, where we work with the consultants, the procurement officers, and with the site officers.”
The company is looking to launch a rental business place by the beginning of next year, a
long-term aspiration put on hold by the GFC. They also have a recently established presence in Bahrain, where they are hoping for business to pick up after ‘difficult years’ of 2011 and 2012.
“Capital, as they say, is a coward, so wherever there is trouble capital flees away. But the main issues in Bahrain are being resolved, and we can see a it improving on a daily basis.”
Nehme is passionate about the value that high quality goods bring to the end user. But it isn’t mere enthusiasm: the company has an array of measures to clearly quantify the benefits to customers.
“Working with high end products means less problems and therefore better utilisation of the machines and tools for the end users – so in the long run they’re cheaper.” It’s a similar story with accessories and consumerables. Nehme says the company will test lower price products – such as drill bits – in order to establish for clients the difference in quality, and therefore the actual price.
“With [the cheaper] drill bit you can drill say ten holes, with our product you can drill 15. Paying 10% more but getting 50% extra, this is what you have to show the customers.”
Other times they will leave machines and tools with customers, and ask them to use them for a number of days or even weeks.
Live demonstrations are also common, and Nehme says his sales staff has a high degree technical knowledge of the products.
The concentration on premium products has been well worth it, and their approach is well suited to the current Qatari market says Nehme, with many contractors also of a strategic mindset, looking at projects conceivably stretching out over at least the next ten years.
“More people are thinking long term now, especially with the projects.” says Nehme.
“People are not just building a tower, it is bridges, infrastructure, stadia, and these projects tend to take a long time to be achieved. So buyers are looking for quality products.”
Nehmeh Group has a lengthy service in Qatar, and Nehme says they would not jeapordise the name for anything.
“The name creates trust, it creates comfort, with whoever wants to work with us. Being in this country as a family for 60 years, it’s equivalent to being in Europe for 200 years, it’s a long time,” he says.
“But we do not rely only on the name. It’s a lot of culture with the staff, to build this, because as a managing director, I am not seeing customers on a daily basis, so the staff have to feel the same way I feel.”
Leading by example
Nehmeh Group prides itself on being an innovative company, as well as focusing on the environment.
“You have to always be innovative, you have to always think different,” says Nehme. The introduction of anti-vibration technology (AVT) is one example, which reduces the amount of vibration on the labour. Normally more expensive, he says they have worked with the Japanese supplier to reduce the price difference.
“Most of the big products which we are selling now which create vibrations to the body have a system with anti-vibration. We don’t only look at the environment, which is very important, we also look at the people there.”
To improve customer experience, they have created a service that uses SMS to inform customers where the product they left at the service centre is, and includes the quotation level, pricing level, when it will be ready. The customer can then log in and follow up immediately.
“We also have mobile services that go to site, and they can invoice on the site with wireless technology. Today we don’t have any of our competitors doing this.”
Recently Nehme completed his EMBA with Qatar Foundation and HEC Paris. “I thought I would never go back to school. I was so happy finish my undergraduate studies, I burnt all my books.”
But he says he felt it was important. “I am always curious, and I want our company to be the best. As a leader of this company I wanted to be ahead of things. Having graduated 22 years ago from a US university was great at that time, but today every five years you have refresh your information because it becomes obsolete, like everything else.
We think of mobile phones and IT becoming obsolete, even information becomes obsolete. Whatever you learned five years ago it has no place today. And I was a good role model for my kids.”
