A turnaround in the fortunes of Al Khoudh Steel Furniture Industrial Company has raised great confidence among management. And factors including growing markets, logistic advantages and its own wide product range have led the company to characterise prospects for the near term as satisfactory.
Al Khoudh, one of the Middle East’s most prominent steel furniture companies, made profits in 2002 and showed a growth in sales after a period of losses till 2001. General manager Gautam Bose described the move to profitable times as “remarkable” and cited new management policies which ushered in a team of qualified and experienced professionals who focused on customer requirements and global competition.
“The signals for 2003 are encouraging in view of the growth in the construction sector in the Gulf states as well as the development of new markets by the company,” said Bose. Its turnover in 2001 and 2002 was in excess of $7 million. The 2001 production figure of 250,000 units is set to expand to 300,000 by the end of this year.
The company’s products fall in two broad categories - sheet metal furniture and tubular furniture. Sheet metal items including filing cabinets, cupboards and lockers have largely an office clientele, while demand for its tubular products including beds, tables, chairs and pedestal desks comes mainly from the hospitality, school, defence, camping and health sectors with offices also going in for that kind of furniture.
Al Khoudh was established in 1985 as a limited liability company and promoted by Said al Hinai and Saif Al Hinai, each having a 50 per cent share. The Al Hinai family has had a long association with the furniture business, having set up a plant for manufacturing soft furniture under the brand Raha and Muscat’s largest retail showroom, Fahmy Furniture.
Al Khoudh’s state-of-the-art computerised fabrication facilities and a modern powder coating line have bestowed a degree of sophistication in its manufacturing operations. Almost all the raw material including steel sheets, pipes, angles, strips, link meshes and powder are imported mainly from Europe and Asia, and a large part of the company’s products are tailor-made keeping in mind the special needs of the end user.
The company is accredited with the ISO 9001 certification for quality management systems. Its design facilities and tool shop are well equipped to generate and validate new designs and prototypes.
Over the years markets across the GCC and several beyond the region have become acquainted with Al Khoudh’s Hadid and Metafurn brands, which enjoy a reputation for quality, durability and user-friendly design parameters. Metafurn, specialising in banquet furniture, was introduced in 1997 for the hospitality industry. A third brand named Go covers furniture manufactured in accordance with British standards and meets the top-end requirements of the general market, particularly European countries.
Al Khoudh has supplied to prestigious organisations including government departments involved in the areas of health, defence, interior security, postal services, transport and education. In Europe too it has gained several government clients, particularly for Go furniture.
“Since industry statistics are not available in a concise manner, it is estimated that our market share in Oman within the defined product range would be in excess of 33 per cent while it would be less than 10 per cent in the GCC region,” said Bose.
“Focus on quality and delivery commitments has helped us achieve almost two-thirds of our turnover from the export markets,” he said. “Getting into fiercely competitive global markets with low-cost suppliers from Europe has boosted the company’s ability and image in the overseas markets over the past few years.”
Participation in trade fairs and exhibitions in several venues also generated a reasonable awareness about and interest in the company’s range of products among prospective customers, the official added. The company has a fully owned subsidiary sales and distribution office in Dubai to meet the requirements of the UAE.
Al Khoudh is the recipient of the 2002 Excellence Award granted by the Omani government for the category of small and medium enterprises. It was also the winner of a trophy presented by His Majesty Sultan Qaboos for excellence in industry for two consecutive years in 1991 and 1992.
Right now, the company is not considering expansion. “As the company is in the process of stabilisation after the turnaround, the present focus is on consolidation with improvements through change and innovation,” said Bose.
“The challenge for a medium-sized company like Al Khoudh is to stay competitive in the global scenario in view of low economies of scale, limited bargaining power, volatile steel prices and limited financial leverages. However, our prospects are satisfactory in the near term due to our increasing market size, logistic advantages, the wide range of our products and our quality-oriented approach which should help us remain a preferred supplier to our valued client base.”
