he Company’s operations in the Middle East are all set to shift gears. The UAE branch office recently moved to a much bigger office-cum-warehouse set-up. Today, within a time frame of two-and-a-half years, we have shifted into a 6,000 square feet office-cum-warehouse space with a 12-member team, which is set to grow to 14 members by the end of this financial year. We also have a showroom in place at a prime location in Dubai. In another important development, we have also established a support office in Saudi Arabia. The fact that we have been able to carry out all this development in a different country/region, in the international arena, is immensely satisfying.
The operations have not just grown in size, but also in terms of numbers. The branch turnover has doubled every year for two consecutive years, and we hope to repeat a similar feat this financial year. The turnover in the region prior to the opening of the office was around Rs. 280 lakhs and today we are poised to cross at least Rs. 2,000 lakhs in this financial year. Besides strengthening the marketing network by appointing new channel partners, we have also been working on the market, on the end customers. We have bagged some prestigious orders such as the National Guards in Kuwait, Royal Guards in Saudi Arabia, Halliburton Group in Dubai, Olayan Tibet and Britten — Saudi Arabia, among others.
Saudi Arabia is pumping billions of riyals into infrastructure development. With good schooling and college education now being a focus area, the network of educational institutions is expanding. A host of projects have been announced in Kuwait. The Kuwait Oil Company (KOC) has ambitious growth plans, now that Saddam Hussain is no longer a threat. Qatar, which is hosting the Asian Games in 2006, is growing at an amazing pace, from the development of the airport to the construction of the sports city and hotels (around 50 four-star or five-star hotels are coming up in Qatar). There is major development in the banking sector too.
Dubai being the commercial and trading hub for the region, is drawing a lot of interest from companies across the globe. Take the case of the free-trade zones: the Jebel Ali free zone, which is the oldest of the lot, has close to 3,000 companies. The entire stretch of existing land is completely consumed and hence they are coming up with a huge extension. The SAIF zone (where we operate from) has crossed 1,500 companies. There is also the Dubai Airport free zone, the Internet City and Media City, along with the other free zones in Fujairah and Ajman. Pressure on trade has created a demand for warehousing. Third party logistics companies are expanding, trying to create more storage space and taking up more and more warehouses.
The mobilisation of the armed forces in the region is yet another trigger, which is fuelling the activity levels, as the setting up of defence bases and keeping them running needs lots of utilities and supplies.
Iraq and Afghanistan
Having a set-up in the UAE gives us much easier access to the north African region, as buyers in countries such as Sudan, Algeria, Egypt and Libya can relate well with Dubai, due to its proximity, and also because these are Arabic speaking nations. Moreover, a lot of traders from countries in and around the GCC, especially from north and central Africa, and the CIS keep visiting Dubai to source goods and benefit from the high volumes.
One has to overcome all these hurdles to bag the orders, but the matter does not end there. It is equally important to meet the quality and delivery commitments, and measure up to the fit-‘n’-finish expectations of the customers (who will always compare us with other suppliers). It is only after meeting these expectations that one can expect repeat business.
We have now moved to a warehouse set-up and are on the threshold of taking off as a trading branch. We are in the process of building capability to stock, bill and trade from this office. The plan is to get started with stocks of our shelving/racking components, a few forklift trucks and spares for the forklifts. Stocks of products from other divisions like locks and Security will be made available in stages. Additionally, we will also have a service centre for our forklift trucks. Thus we will be able to offer after-sales backup for our forklift trucks, a major USP for a forklift manufacturer, which will go a long way in building customer confidence.
The Saudi Chapter
After a long process of over six months we have finally been able to set up our office in Saudi Arabia. Tajuddin has had to carry out a lot of groundwork to get this through, with the able support of Percy Fouzdar, Vice President (Corporate Affairs) and Company Secretary. Tajuddin is presently in Saudi Arabia working on the final formalities, subsequent to which both he and Mahmud Ul Haque, Assistant Manager (Storage Solutions Group), would be in a position to shift to Saudi Arabia on a Resident visa. We are the first Indian company to set up an office in Saudi Arabia through this route. This is yet another step forward towards the internationalisation of Godrej & Boyce Mfg. Co. Ltd.