Alaa for Industry (AFI) traversed the same road that many Saudi companies took on their way to greatness - beginning with trading and contracting, then diversifying to encompass manufacturing as well.

The company that Ibrahim Ali Al Rashoodi established in 1984, and which he still owns, was initially wholly engaged in contracting and in the supply and servicing of hydraulic systems for the transportation industry. In time, the company's activities spilled over into specialised fields, becoming a producer of industrial goods and a supplier to a Gulf market that was ever on the move.

Alaa's core activities - hydraulic products and services - have moved into the big time. Other manufacturing companies are also seeing a surge in business. General exports have climbed 40 per cent in two years, among the fastest in Saudi Arabia. "In the future, a considerable part of the overall business will be attributed to the export market," predicts Alaa sales and marketing manager Jolly Joseph. Exports now comprise 20 per cent of the sales turnover. The GCC market, especially, is on a transformational stage. A uniform customs duty across the GCC region and the march towards a single currency by 2007 are good indications towards a borderless, deregulated market place. Trade and commerce are bound to make a big leap in the years to come. Saudi Arabia with a huge domestic market is sure to enhance its competitive advantage through economies of scale. More and more GCC customers are shopping in Saudi Arabia for better prices and services. Says Joseph: "Innovation, quality and service are key elements that have become the driving force of AFI. As an expert in the field of engineering. AFI is constantly developing new solutions for a wide range of industrial applications."

Doing particularly well are such hydraulic components as cylinders, seals, power packs and pumps and motors. As much as 75 per cent of the production of hydraulic components feed Saudi Arabia's relatively large market, but Joseph says overseas demand is beckoning, and the company is preparing to go as much of the way as possible on the domestic and export fronts.

The hydraulic products are manufactured at the modern Alaa Industrial Equipment Factory in Dammam. The range includes hydraulic systems, power packs, hard chrome plating, hose assemblies, cylinders, seals and gaskets. Thanks to the expertise, the company has the capability to carry out hydraulic projects for such industrial powerhouses as Sabic and Aramco.

Another facility - Alaa-AES Mechanical Seal Factory, a joint venture with AES, UK, - has been attracting greater attention in overseas markets. Exports are now restricted to a few countries including Qatar, Kuwait, Bahrain, Jordan and Pakistan, but prospects are bright for widening the club of foreign buyers.

The group is in for more manufacturing and potentially greater exports with the setting up of the new Alaa Rubber Factory for coating rubber and polyurethane rollers and moulding elastomers through a technology-transfer agreement with Mitex, Germany. Alaa Rubber factory with state-of-the-art technology in the industry is ready for production in a few weeks.

In a significant move, Alaa recently opened an export division headed by Bart de Jong to deal exclusively with overseas inquiries and distribution. "The company is seeking to push the export frontiers further afield to cover the former Soviet Union. We're now identifying parties to serve as distributors and agents for AFI products and services," says Joseph.

In line with the heightened interest in exports, Alaa has put in place a 3,600 sq m warehouse at the Custom Exempted Export Zone in Bahrain to be used as a hub to facilitate exports to all over the Middle East.

"This warehouse, in effect, gives an opportunity for our loyal customers to store production parts at a minimal charge while taking cost advantage through elimination of double taxation (import duties) and the hassle of logistics," comments Joseph.

A group company Alaa International for Trading and Services is busy with industrial equipment, foundation equipment, transport equipment and hydraulic, pneumatic and instrumentation products. Represented are brands such as Asco Joucomatic, Geho for dewatering pumps, Hyva for tipping cylinders, Denison hydraulics, Vickers, Aeroquip, Internorman filters and Lincoln lubrication systems.

Another company, Alaa International Contracting, is engaged in the installation and commissioning of boilers, weighing and packaging systems and materials and bulk handling equipment as well as the installation of overhead cranes, bolting services and shutdown services. International industry leaders including Zeppelin, Haver and Bocker, Mollen and Hedley Purvis have chosen AFI to become their partner in Saudi Arabia.

Alaa Chemical Supply, yet another company within the Alaa fold, supplies processing chemicals, water treatment chemicals, lubricants, additives, absorbents, cleaning compounds, chrome plating chemicals, catalysts, abrasives and refractors for a number of industries including petrochemical.

A key component in Alaa's successful commercial operations has been the high priority it has given to communications.

"A fully integrated ERP programme conducts the business processes efficiently and effectively. Such investment in state-of-the-art cutting-edge computer technology interconnects all our branches but also reduces our transaction costs and time savings - a saving that we are glad to transfer to our customers," says Joseph.

"A well integrated supply chain management system enables AFI to source and deliver products for the industrial sector. Online inventory management, a cataloguing system for online procurements, third-party warehousing and a bonded area for customer-specific parts management with yearly purchase agreements are some of the few activities we provide to our valued customers."

Afi has export branches in Qatar, Kuwait, Bahrain and USA that are supported by the customs-exempt warehouse in Bahrain and the technical expertise in Saudi Arabia.

"Technology has always been our active partner! In a connected economy, the pervasive nature of the Internet is redefining the marketplaces. We, at AFI, see this as an opportunity to extend our products and services to new and wider market segments," says Joseph. "A focused approach towards the local market while thinking globally has been our philosophy since inception." AFI has been an ISO9002-certified organisation since 1997.

An AFI corporate mission statement says: "AFI aims to be the leader, supplying quality engineered products and services by continually improving its relationship with our customers, employees and suppliers, promoting a healthy and safe environment and providing our products and services with honesty and a smile, at market prices."

AFI now counts more than 450 staff actively involved in refineries, the downstream petrochemical sector and support industry, transport and logistics and power generation, among other fields. A network of local and overseas branches helps keep officials in touch with requirements. AFI's branches in Saudi Arabia are in Dammam, Jubail and Khodariya (Eastern Province), Riyadh, Hofuf, Burayda and Qassim (Central Province), Jeddah, Yanbu and Abha (Western Province).