Advanced Metal Works FZCO — SME Case Study (UAE)

Advanced Metal Works FZCO, which is known as AMW, an innovative and manufacturing company that manufactured all types of steel and is located in Dubai Jebel Ali (Jafza). The platform offers its customers with its leading and innovative product that consists of precision sheet and plate metal. The company bears highly sophisticated products which are of high quality comparable to those of imported products. Moreover, the company has provided all the overall construction services such as laser cutting, punching, precision, finishing capabilities, bending and reverse engineering.

All the products that the company bears are from either Europe or the US. Apart from that, the company provides authentic services that no other companies in Dubai can provide, which is a state-of-the-art technology. The prestigious ISO certification of AMW is based on its Advanced Metal Works FZCO management system. AMW offers products and services to cater to a wide array of industries and segments including construction/infrastructure, oil, gas, power, and transportation across the UAE and GCC region.

Customer base includes some of the biggest names in the local and regional contracting industry. Only 10% of the overall space available (60,154 sqm) is utilized for the existing facility, thus providing ample scope for expansion.

There are many companies that produce a product on a precise, timely basis, but what makes Advanced Metal Works different from other competitors is that it always wants to satisfy its customer needs and wants. What it does is focus on creating the best top-quality product at the best competitive prices so that its customers’ needs are served and the company makes its profit and succeeds in its field.

Vision There are many companies who are competing with each other and succeeding with their competitiveness in the field of metal and what makes this company different is it has a very clear vision that fits its production ability and image, to be the market leader in delivering high precision metal and plate works by providing innovative quality custom solutions and products (AMW).

Organizational Structure

General Manager Sales Sr. Sales Manager Sales Executive Secretary

(2) Production Manager Production Engineer CNC Technician CNC Programer Punching Manager Operator (3) Bending Machine Operator (5) Laser Machine Operator Machine Operator Steel Fabricator (5) Welder (5) Forklift Operator Helper (3) Fabrication supervisor Planning coordinator Planner Safety Engineer Sales Engineer Technical Manager Procurement Manager Estimation Engineer QC/QA Engineer QC Inspector Store Supervisor Purchaser CFO HR office Admin Manager Commercial Admin Executive Finance HR Admin Production Figure 18: Advanced Metal works FZCO Company Structure (Source: Organization I Advanced Metal Works,2021) As the figure shows, the organizational structure consists of the general manager and below him, there are five different departments, one of them is the admin department, which handles all the administration requirements for the company in general and for employees. Another department is the finance department, which handles all the budget and costs, profit. The finance and accounting are combined in one department. Then comes the HR departments, which takes care of any concern related to the employees and it is the one that hires a new employee or fires them.

Then there’s the sales department, which handles all the sales requirements and orders which are received from customers and developers. Then the last department is called production, which handles the executive manager.

In this department, it takes care of the engineers’ work and follows up with the latest project and machines that the company has to get the result that the company needs and wants to develop.

The Advanced Metal Works Founder Leadership/Team The founder of AMW and the owner is Al Jomaih Investments, founded in 1936, the business group commenced operations as a small trading establishment in the town of Saudi Arabia. Within 10 years, the group moved its headquarters to Riyadh with two branch offices in Jeddah and Dammam. In subsequent years, the group assumed a leading role in the import and distribution of cars, tires, lubricants, and specialized equipment for construction and agriculture. In the process, the group formed successful partnerships with several global companies. Today, the group has transformed into one of the largest industrial conglomerates operating in KSA with investments spanning multiple sectors across the globe. Currently, the group owns business interests in automotive, industrial equipment manufacturing, trading, beverages, lubricants, power generation, communication, financial services, real estate, and steel fabrication. The leaders are Sammy Eldin and Shahwaiz Rehman, and it has around 50 employees.

AMW’s Response to COVID-19 As the whole economy and market is affected by the pandemic during 2020 and all businesses were shut down and stopped for that period, especially when lockdown started. Everyone switched to work virtually and within the rules of the government regarding the capacity of employees to ensure their safety. Based on our discussion, AMW explained to me how it dealt with that situation as the safety of employees is the first

priority. AMW took the following steps

¡ Signed new contracts at better payment terms and secured a high percentage of advance payments from clients for raw material procurement and resource mobilization.

¡ Efficient working capital and liquidity management.

¡ Effective resource management (workforce and on-site project work).

¡ Decreased extra workforce, wherever required.

¡ Less dependency on sub-contracting work.

¡ Worked with financially strong clients (with no record of default).

¡ Ensured a safe and healthy environment for all employees.

¡ It manufactures all types of steel, including aluminum and stainless.

¡ All types of heavy lights to heavy cable trays.

¡ It fabrics light steel for metro and tram projects.

¡ It processes services like laser cutting, bending, and punching.

¡ It serves clients by manufacturing certain products like laptops for companies.

¡ It manufactures storage systems for warehouses, offices and libraries.

¡ The company is an expert on manufacturing shelves and cabinets, which it uses for telecom and cable management accessories.

¡ It offers high quality lintels and wall ties.

¡ It manufactures stained steel firefighting cabinets, elevators, as well as custom made equipment.

Enclosure / Cabinets Figure 19: A look at Advanced MetalWorks products Fire Fighting Cabinets Marine Grade Stainless Steel Cable Racking & Storage Systems Cable Trays and Cable Ladders Figues 20-22: Product examples of Advanced Metal Works (Source: Product I Advanced Metal Works,2021)

AMW was conceived and designed as a flexible manufacturing facility and not as a standard manufacturing unit. The plant and machinery can cater to different metals [steel sheets (HR, CR, GI, Stainless Steel, Aluminum, Copper, etc.)], different grades of metals with varying thicknesses (2 mm to 25 mm). It is a manufacturing system in which there is enough operational flexibility that allows the system to react in case of changes, whether predicted or unpredicted.

Due to its flexible manufacturing system, the production facility is capable of executing service/process-oriented orders, product-oriented manufacturing requirements, as well as project-oriented contracts. Although AMW has presence across all three business models, the company is more focused on projects due to high margins.

Process Oriented ¡ Orders are mainly based on the processing requirements like punching, laser cutting, etc.

Suppliers operate as subcontractors.

¡ High-end machinery operating at higher speeds can deliver fast and precision work.

¡ Rates are fixed and variance from competition will be difficult to justify. AMW, with high-end machinery, cannot command a premium to balance higher overheads.

Product Oriented ¡ Orders are for certain products like cable ladders, cable trays, enclosures, etc.

¡ Its focus is to be a specialist provider for certain products that can gain market share.

¡ Margins are moderate for these kinds of orders as there is intense competition.

¡ Orders include the entire package of sheet metal and fabrication requirements of the awarded project.

¡ Value of orders will be high and can significantly impact top line revenues.

¡ May need to delegate work to subcontractors in case of higher capacity requirements wherein control becomes an issue.

Being a relatively new player in the local/regional market, the important objective was to establish the company’s brand among the end users and hence, there was a need for a strong sales and marketing team. The marketing team focused on expanding the company’s reach and conducted the prequalification process with all the key end users in the region, which is the most important criteria for any project bidding. There is also a small R&D team to ensure that a client’s product and customization needs could be addressed for more business opportunities. The sales and marketing team has established the brand in the market with activities like direct marketing, participation in trade expo/fairs, arranging site visits for prospective clients, etc.

Sales and marketing at AMW also has

¡ A strong client network including government entities, blue chip N’NCs and local corporates (RTA, DEWA, ADNOC etc.), consultants in the target sectors/industries. As the fabrication industry ecosystem includes many stakeholders (purchase influencers), it is critical to establish business relationships with these stakeholders, especially in larger projects.

¡ Proven experience in business development in targeted projects, products, and geographies.

¡ Pre-qualification and registration experience with contractors, consultants, and projects.

Some companies AMW deals with are below (Figure 23) Semi government Developer Contractor During COVID-19 Emaar properties AL Shafar General Contracting Video Marketing Damac Group Arabtec Holding Make the company website easy to access and helpful

The following are challenges in the contracting industry

¡ Cost overruns due to completion delays.

¡ Indefinite delay or default on progressive payments and retention money from main contractors resulting in cash flow issues.

¡ Advance payment and performance guarantee requirements.

¡ Risk of encashment of guarantees.

¡ Upfront cash requirement for raw material procurement and resource mobilization.

¡ Dependence on hired labor for erection, installation, fabrication work, and associated cost (overtime, accommodation, transportation).

¡ Continuous requirement for subcontracting (powder coating, painting, sandblasting and galvanizing) and equipment hiring for site works.

¡ ISO Certification is a certificate to meet international standards for product and services and after the company gets it, AMW starts receiving a contract with big companies and deals with high quality suppliers’ companies so it gains more profit.

¡ Product approval becomes smoother.

¡ Registration with consultants, engineering firms, etc.

¡ Registration with government departments and entities. For example, before any work or any project, it has to get approval from the civil defense, Dewa, Enoc and Damac.

¡ Expansion of plant and machinery.

¡ Addition of design capabilities, meaning before any project or any work, it needs to draw the design for the project.

¡ Executed projects in Oman, Qatar, KSA other than UAE.

¡ Registration with government entities, project consultants, engineering firms, regulatory authorities across UAE.

¡ Securing project work from main contractors.

¡ Pricing and bidding for contracts.

¡ Hiring and retaining qualified and experienced teams.

¡ Offering products and services for niche markets.

¡ Securing product approvals.

¡ Marketing and business development as a new firm.

It is important to note that despite a challenging overall economic situation, tough market conditions, limited financial and operational resources, and liquidity issues affecting the contracting value chain for the last two years, AMW: l) established itself as one of the leading players in the market; 2) executed number of niche- oriented projects for niche clients; 3) became one of the top companies to offer integration of steel and cladding works; 4) hired a technically strong and qualified team;

• created AMW’s brand; and 6) showed y-o-y increase

in revenues, order book, and number of clients.

¡ As the market is really bad and is going down nowadays, the company should prepare for the coming 2021 expo and see demand during that time.

¡ My recommendation to AMW is to increase its marketing so that it’s more known and that would happen by participating in trade events and making advertisements on malls or a billboard, or on the street, which would allow people to recognize the company.

AMW Prepare for Expo 2020 Participation in Trade events Put billboards on the street Increase from their Marketing strategy Figure 24: Recommendations for AMW

¡ First of all, I learned how to be more confident in myself and I saw that when I started interviewing the director and asking him questions.

¡ I learned that a good case study is when we understand everything about the case that we are working on and do it on your way.

¡ This case study increases my ability to think and analyze situations.

¡ I learned how the company deals with its business to reach goals and succeed.

¡ Despite all the difficulties and challenges that it faced during this pandemic, the company still fights to prove itself in the market.

¡ I learned that all companies hide a lot of information that they do not want to share, and they will answer in another way like their financial situation and operation strategy.

In conclusion, as per the discussion that I did with AMW, the conclusion I obtained is that AMW serves many sectors in the UAE and the sectors that it serves are power sectors, construction for buildings, oil and gas and transportation. It delivers products and services with the most advanced technology in the region and a professional team works to drive the product to the consumer with high standards and to satisfy their needs.

As I saw, AMW is a company that takes care of clients by making sure to design every single part as the customer needs in order to gain the trust and relationship between the client and the team. AMW is planning to expand and open more factories in the Arabian Gulf region such as Saudi Arabia and Qatar in order to be more known and grow in these fields and to ensure high international standards with accurate precision.