Giants of the Middle East

Without high-quality construction equipment, the megaprojects that have been successfully undertaken since the turn of the century simply wouldn’t have been possible.

Even so, it’s important to remember that the Middle East depends on people as much as it does plant, machinery, or vehicles. It’s not only bulldozers and excavators that have shaped the local landscape; dealers and distributors have left their own indelible mark.

These are the people who ensure that when demand arises, there is equipment available to get the job done.

Together, OEMs and contractors have achieved great things in this region, but they have been standing on the shoulders of giants. Local intermediaries have played a crucial role in enabling big projects to get off the ground. PMV has been speaking with some of these Middle Eastern behemoths to find out what it takes to supply this challenging market.

Rapid response
Bakheet’s Sheikh Mohammed Alrifai tells PMV that when it comes to after-sales support, quicker is most definitely better

Established in 1973 in Madinah, KSA, Bakheet started life as a supplier of concrete, road, and maintenance equipment. The company proceeded to grow its operations throughout the 1970s, opening new branches in, Riyadh, and Dammam.

Today, the firm supplies a diverse range of construction equipment across Saudi Arabia, representing brands such as Kobelco, Link-Belt, Hamm, and Kaisar.

In order to ensure that its customers have access to the highest quality products, the company has made a conscious decision to align itself with premium manufacturers headquartered in the European, North American, and Japanese markets.

However, the provision of equipment is only part of a supplier’s job, as Bakheet’s executive manager and board member Sheikh Mohammed Alrifai told PMV.

“Bakheet’s vision is dependent on a good infrastructure,” he explained. “We have five major branches spread across the country and five parts outlets. Our branch network covers the whole Kingdom; we can reach any site in Saudi Arabia within five hours.”

The supplier has achieved this rapid-response capability by implementing an after-sales support system that diverts technicians to specific jobs depending on their proximity to the customer in question. Once a job is complete, an automated message is sent to Bakheet’s quality assurance personnel so that they can contact the customer and obtain feedback as to the level of service delivered.

“The results of this feedback are then reviewed, filtered, and analysed to ensure that the process is working as it should,” said Alrifai. “What’s more, we coordinate our workshops in conjunction with manufacturers so that the service provided is optimised from both sides.”
Whilst a dealer relies on its partnered brands to assist with the provision of product support, manufacturers, in turn, depend on their partners’ region-specific expertise to ensure that their equipment meets local requirements.

“The demands placed upon construction machinery vary from country to country, according to geographical and environmental factors, and customers’ perceptions,” Alrifai explained. “That’s why we have to relay our customers’ needs back to manufacturers. We also inform our partners of any competitive advantages that we have identified in the products of other manufacturers.

“For example, we recently noticed that most of our competitors’ excavators were equipped with six-cylinder engines,” he continued. “We informed our partner and we now have a four-cylinder engine capable of producing the same output power as its six-cylinder counterparts.”

It is also vital for companies such as Bakheet to act as effective representatives for their partnered brands within local markets. After all, the better the regional reputation enjoyed by a manufacturer, the more likely it is that the connected dealer will increase its sales revenue.

“At Bakheet, we believe that we should act as an extension of the manufacturer, introducing products according to our partners’ guidelines,” Alrifai concluded.

“This commitment serves to increase our trustworthiness amongst local customers. The same philosophy also applies to servicing. We frequently send our technicians on training courses conducted by the manufacturers to ensure that they are equipped to meet our partners’ standards.”

Treasure Hunter
Al Shirawi Enterprises’ Thani Al Shirawi offers some tips for dealers looking to add new lines to their product portfolios

Al Shirawi Enterprises (ASE) began operating more than 30 years ago when it became the UAE dealer for Scania. The Swedish trucks remained the mainstay of ASE’s business for more than a decade until incumbent executive director Thani Al Shirawi joined the firm.

From the outset, Al Shirawi had a clear vision of the direction in which he wanted to take ASE. Whilst commercial vehicles were to remain an important part of the company’s product portfolio, he wanted to make inroads into the lucrative construction equipment market.

“I began by analysing the market, checking out both competitors and customers,” Al Shirawi explained.

“80% of local customers were in the construction business, whereas only 20% worked in logistics. Moreover, when I studied my competitors, I found that some had actually succeeded in becoming one-stop shops for their clients. That is when I decided to shop around for manufacturers operating in the fields of construction and materials handling.”

When Al Shirawi joined the ASE team in the mid-1990s, he faced a major challenge. Whilst the company was well established in the haulage industry, it would have to play catch-up in order to compete effectively within other sectors. Unsurprisingly, identifying prospective partners that were both strong and available proved to be a significant hurdle.

“Actually, it was mission impossible,” Al Shirawi told PMV. “When I started shopping, I was already 15 to 20 years behind the competition. The vast majority of reputable companies from Europe, the United States, and even Japan, already enjoyed strong representation in the Middle East. Most of the manufacturers I looked into were performing rather well in the region, so I had to search for hidden gems.”

The most fruitful relationships between manufacturers and distributors are the ones that persist. As such, short-term thinking at the beginning of Al Shirawi’s new business relationships would have benefitted neither party.

“It’s about long-term stability,” he explained. “The brands with whom we partner must share our views. Some companies come to the Middle East thinking that money here grows on trees. They see the beautiful cars on the roads and the high towers, and they expect that we all have oil wells in our back gardens. At ASE, we make sure that our business partners do not have such misconceptions.”

Indeed, ASE succeeded in securing a host of reputable names from the fields of construction and materials handling, partnering with Case CE, Manitou, and STILL. Even so, with a combined market experience of more than 320 years, it’s difficult to think of such OEMs as ‘undiscovered’. As Al Shirawi explained, hidden gems can appear in a variety of forms.

“European, North American, and Japanese manufacturers often employ different strategies in different global regions,” he said.

“Case, for example, did not make the decision to become a global brand until the 1990s. They began their campaign in the region with another Dubai-based firm. When I came along in the mid-1990s, I discovered that this company hadn’t been performing. That’s when I realised that Case was a hidden gem: a manufacturer with a long heritage that had been previously absent from the local market, and that was looking for a new partner.”

In terms of the future, Al Shirawi is very happy with how the UAE market is progressing.
“There is a positive breeze in the region at present,” he concluded.

“I think the next two to three years will be good years for the industry. Because of the equipment we sell, existing projects don’t really benefit ASE. However, there are major transport and infrastructure initiatives on the horizon. That’s when I start to get excited; when new projects are announced.”

Turn up the volume
Al Areedh’s Ashraf Taleb explains why KSA equipment suppliers must have the numbers to back up their operations

Saudi Arabia’s construction industry is the largest in the GCC region, not only economically, but also in terms of its geographical scale. Any company looking to supply equipment across a territory that occupies more than two-million square kilometres, better be sure that it has the numbers to back up its commitments.

Al Areedh is acutely aware of this fact. With more than 35 years’ experience operating in the KSA market, the firm provides construction equipment and operators to all corners of the Kingdom. The provision of Sany mobile cranes comprises the backbone of Al Areedh’s business, as general manager Ashraf Taleb explained.

“At present, we have more than 800 Sany mobile crane units that are being used all over Saudi Arabia,” he told PMV. “In total, we employ approximately 2,000 people, including equipment operators and technicians.”

Whilst Al Areedh itself has a long heritage in the KSA construction market, the supplier’s relationship with Sany is relatively young. Since partnering with the Chinese OEM in 2011, the firm has invested quickly and on a large scale.

“When we first travelled to China to visit the Sany factory, we were impressed with what we saw,” said Taleb. “Shortly afterwards, the manufacturer parted company with its existing KSA representative and approached us. We negotiated a deal, and have been the exclusive supplier of Sany mobile cranes in Saudi Arabia ever since.”

Taleb and his colleagues decided to partner with Sany partly because of the company’s willingness to tailor its products to the KSA market.

“Construction equipment in the Middle East must be equipped to deal with challenging environmental conditions, especially when it comes to extreme heat,” he explained.
“Fortunately, therefore, on the occasions when we have identified potential improvements, Sany has adapted its cranes extremely quickly.

“Sany also has its own team based here in Saudi Arabia,” Taleb concluded. “In addition to Al Areedh technicians, our customers have access to staff members from the OEM itself.”

Grow with the FLOW
Ayman Ahmed explains why Jaidah Group’s Heavy Equipment Division is looking to expand in line with the Qatari market

Jaidah Group has been a fixture of Middle East’s construction sector since the 1980s, and the Jaidah family itself has been trading in the region for more than half a century. These are exciting times for the dealer as it prepares to expand operations in line with expected growth in its native Qatar.

“At present, we are focused on satisfying the huge demand being driven by the expansion of Qatar’s construction market and the upcoming 2022 FIFA World Cup,” said general manager of Jaidah’s Heavy Equipment Division Ayman Ahmed.

“As such, we are constantly on the look-out for the best partners. Jaidah is committed to securing quality products with excellent levels of support from their producers. Our customers rely on us to be a strong dealer, so we in turn must partner with strong manufacturers.”

In order to cope with growing demand in the Qatari market, Ahmed and his colleagues plan to extend Jaidah Heavy Equipment’s servicing operations by 20% to 25% over the coming year. The dealer also intends to build two new facilities and expand one of its existing workshops during the course of the next three years.

“We have plans to build a new Isuzu workshop,” he told PMV. “We will also be expanding one of our existing workshops and building a new heavy equipment showroom in Doha’s Industrial Area.”

Jaidah’s Heavy Equipment Division is the authorised dealer for a range of manufacturers in Qatar, including Isuzu, Komatsu, Link-Belt, and UD Trucks. The firm also became the exclusive Qatari representative for both the Bobcat and Sakai brands at the turn of the year.

As Ahmed explained, Jaidah is committed to expanding its after-sales support operations in line with its product portfolio.

“To cope with expansion, we need to increase the number of technicians and service vehicles that we have in the field,” he concluded. “In terms of numbers, we are looking to grow both our staff members and service vehicles by 20% to 25% over the next year. The aim is to reach out to all of our customers, wherever they may be.”

Power Players
Last month, the region’s power industry gathered in Dubai for Middle East Electricity: a three-day event that received around 50,000 visitors in total. PMV caught up with two of the GCC’s biggest suppliers to find out how they are working with their partnered genset manufacturers to bring power to end users across the Middle East.

The perfect package
FAMCO and Himoinsa join together to introduce a new logistics-friendly generator, ‘The Cube’, to the Middle East

In conjunction with Spanish genset manufacturer Himoinsa, FAMCO used Middle East Electricity to launch ‘The Cube’ to the region. The new portable power source occupies a 10-foot container, meaning that two generators can be transported in a single twenty-foot equivalent unit (TEU).

FAMCO is Himoinsa’s authorised distributor in the UAE, Saudi Arabia, Qatar, and Oman. Senior management personnel from both firms manned a joint stand throughout the three-day event. As Terry McGuire, general manager of FAMCO’s Power & Industrial Products Division explained, it is vital that distributors and manufacturers present a strong image to the market.

“It’s important to show people that we are serious about the power generation industry,” he told PMV. “Customers can see the strength of the relationship between Himoinsa and FAMCO. We are all here together on the one stand; it’s a united front.”

Despite the important role played by gensets, their work is usually performed behind the scenes. For this reason, FAMCO and Himoinsa are working in tandem to increase awareness of these unsung heroes.

“This year, the Middle East is expected to invest around $250bn in power,” said McGuire. “Himoinsa and FAMCO are definitely a growing part of this industry. What’s more, in terms of after-sales support, FAMCO is able to supply parts and servicing quickly, and provide proactive maintenance.”

Lifelong Friendship
Staff members from Al-Bahar and Caterpillar discuss the merits of long-term collaboration in the Middle East

As Caterpillar’s authorised dealer in the UAE, Bahrain, Kuwait, Oman, and Qatar, Al-Bahar is responsible for the product support and servicing of the US-headquartered manufacturer’s construction equipment and power systems across the region.

Fortunately, the dealer has had plenty of time to get to grips with the diverse range of products offered by Caterpillar; the two companies have been working together in the Middle East for more than half a century.

“We are basically the customer, as far as Caterpillar is concerned,” explained Al-Bahar branch manager ‘Murali’ Muralidhar. “They design and improve their products in line with regional requirements based on the feedback that we provide.”

Of course, in addition to relaying the requirements of end users across the Middle East back to Caterpillar’s product design team, Al-Bahar must also support these customers on the ground. To this end, the supplier has built an extensive technical network to cater to the ever-changing needs of the region’s power market.

“Each of our depots has more than $9m worth of spare parts, and we have a large workshop that has received five-star accreditation from Caterpillar,” said Muralidhar. “Moreover, we have 180 technicians ready to serve customers across the Gulf. That’s what sets Al-Bahar apart; other manufacturers do not have access to these kinds of facilities.”

The importance of the firms’ long history together was echoed by Caterpillar’s Lenaik Andrieux – general manager with responsibility for the manufacturer’s Electric Power Division – who had flown to Dubai from Geneva.

“The Gulf is a very important region for Caterpillar historically,” he explained. “Al-Bahar signed as a dealer for Caterpillar in 1959. This is a longstanding relationship that reflects the business that we have always had in this part of the world.

“I think that the UAE is a great gateway to the Middle East and Africa, but also globally,” Andrieux added. “It acts as a valuable channel both to and from Asia, depending on your perspective. This is a pivotal location for Caterpillar in terms of the genset market.”

Brand Ambassadors
Al Wasit Machinery’s Ninan George tells PMV why regional dealers must carry the flag for their partnered manufacturers

Established in 1985, Al Wasit Machinery is the flagship division of UAE-headquartered Al Wasit Group. The company, which started out selling used equipment to the local construction sector, now supplies a diverse range of new and second-hand machinery from branches in the UAE, Oman, Iran, and Saudi Arabia.

“Customer requirements vary from place to place, depending on a number of factors such as the working environment, geographical conditions, and local government regulations,” said Ninan George, marketing manager at Al-Wasit Machinery. “It is therefore essential that these factors are taken into consideration when offering products to different market segments.

“Also, customer requirements keep changing, as do the types of project commonly undertaken in different regions,” he added. “Such trends can only be correctly judged and interpreted by the local intermediaries. Al Wasit works closely with its manufacturers, advising them on changing demands and trends so that the right products are supplied to end users.”

Al Wasit represents a number of well-established construction equipment manufacturers across the region, including Hyundai, Zoomlion, Gehl, and Menegotti. As George explained, in order to maintain effective working relationships with OEMs of this calibre, it is vital for dealers in the Middle East to keep their partners’ promises in the long term.

“Manufacturers expect local dealers to maintain the integrity of their brands,” he told PMV. “In order to achieve this, dealers must constantly work to meet customer expectations. Al Wasit works closely with its principals to offer local customers quality products, and to provide prompt product support services throughout the lives of these products.”

The regional goodwill that Al Wasit has cultivated on behalf of its partnered brands should stand the dealer in good stead as the Middle East’s construction market gathers pace.

“With major new projects on the horizon, the construction industry in this region is expected to experience a rapid revival during the coming years,” concluded George. “This will present new challenges for equipment suppliers, in terms of delivery times and product support. However, Al Wasit is prepared to take up these challenges.”

Meet the Range masters
GENAVCO’s Isam Abu Nabah outlines some of the factors that must be considered before a dealer can grow its portfolio

GENAVCO’s product portfolio is extensive. The UAE dealer divides its offerings into four divisions: Isuzu Vehicles, BP Lubricants, Spare Parts, and Heavy Equipment. A plethora of products fall within each of these branches.

The firm’s Heavy Equipment division is responsible for the UAE distribution and after-sales support of brands such as Shantui, JLG, Powerscreen, Hamm, Vögele, and many others. With additional products, however, comes extra responsibility.

“Our main criteria are brand quality and price competitiveness,” said GENAVCO president Isam Abu Nabah. “However, the manufacturer’s after-sales support is also an important factor. The brand should be well perceived and trusted.

“A comprehensive feasibility study is initiated for every prospective candidate, and a comparative report will be conducted,” he continued. “We have to take into account elements such as our own perspective, actual market demand, and the activities of our existing competitors.”

PMV’s full interview with Nebah, in which the GENAVCO president explains why it is important for dealers to hold frequent meetings with both partnered manufacturers and local contractors, can be found on page 20.