Abdulla Al Zamil, chief operating officer for Zamil Industrial, sees the last six-seven years of Zamil Steel’s development as having been excellent in terms of growth.

“When we went public in February 2002 our impetus was to raise enough funds to grow our current business and that of course included Zamil Steel, “said Al Zamil. “This helped us expand both locally and internationally and as a result we now have added Vietnam, Egypt, China, India and Ras Al Khaimah geographically as well as new product lines.”
Al Zamil believes that the group has done well although he does feel that India represents an opportunity which could have been catered to a little sooner. “I do wish that we had gone to India a couple of years earlier as we would have been established by now,” said Al Zamil.
“Our growth strategy has revolved around the energy markets but also in those regions we can create demand for Pre-Engineered Buildings (PEBs). These include Africa, Southeast Asia, South America and Russia,” said Al Zamil.
According to Al Zamil, Zamil Steel has benefited from the parent company in a number of ways. “Zamil Industrial’s main support to Zamil Steel has come in the form of finance which has allowed Zamil Steel to meet its growth ambitions,” he said. “However four years ago, we introduced our shared services model which allowed our specialised units to benefit from sharing common functions. These include human resources, administration, finance, corporate communications, legal affairs, IT and business development.”
The shared services model was not created to save money, according to Al Zamil, but to take advantage of the group’s critical mass to drive more services to the SBUs. “Zamil Industrial has over 7,400 employees and by creating a common platform on, for example, IT, we have been able to serve our internal customers better,” said Al Zamil. “We have now expanded the concept internationally so that our Indian operation now supports the IT function whilst our business development team is able to look at business opportunities and acquisitions world-wide, bringing into play financial, business and technical resources.”
Al Zamil is keen to right what he regards as a misconception about Zamil Steel. “Zamil Steel is primarily an engineering company, not a manufacturing company,” he said. “As we expand internationally, we must first meet the building codes and engineering requirements of a particular country, and what we offer is engineering and software capability. The fabrication plant is a second priority.”
But for the future there is a clear objective for Zamil Steel and that is to be the leader in PEBs within the next five years. “Our target is to conquer emerging and developing markets such as South America and Russia as well as expand in growth markets such as Vietnam where we are already establishing a second facility close to Ho Chi Minh City,” said Al Zamil. “Our latest plant in Ras Al Khaimah is aimed at supporting the Gulf boom which I believe will continue for the next five years. Whilst Saudi Arabia continues to offer the best incentives in terms of land and financing, the bottleneck is labour.”
Al Zamil also faces challenges in connecting the growing number of facilities and is relying on having the right human resources in the right place to help integrate the operations. The diversity of the business geographically also requires some in-house functions such as roaming maintenance teams to be based in Dammam.
In terms of business alliances, Al Zamil acknowledges that in the early years Zamil Steel was able to maintain its leadership based on the simplicity of its fabrication jobs. Today the company’s core competence has to be developed into complex structures such as shopping malls, desalination plants etc and the addition of the company’s process equipment facilities has helped Zamil Steel expand horizontally. Joint ventures such as Canam Asia have helped Zamil Steel develop into product areas previously unavailable in the region. The company’s Ras Al Khaimah facility is also an example of the company’s co-operation with regional authorities which has helped the company to establish itself elsewhere in the Gulf, as well as attracting other industries into the emirate.
Zamil Steel is also beginning to manufacture machinery for its own uses. “The Arab world is classically an importer of industrial machinery but we are now beginning to manufacture our own machinery to suit our needs,” said Al Zamil. “This could lead into related business areas. In fact we keep running into related industries which could utilise Zamil Steel’s expertise and allow us to expand horizontally into areas which are new to the region. This could either be through joint ventures or home-grown.”
Looking at international expansion, Al Zamil believes that it takes between three and five years before the company will establish a plant. “We first set up with sales representation and currently we are looking at Eastern Europe seriously,” said Al Zamil. “We have established offices in Poland and Hungary; moreover, we already have offices in Romania, Greece, Spain, Belgium and Athens.”
Al Zamil is always conscious of the fact that all of Zamil Steel’s growth could not have happened without the Saudi government’s support and incentive programmes. “The Saudi Government has had a well thought out strategy since the early 1970s and GCC countries have also been very supportive by specifying GCC products,” he said. “In fact you come to appreciate Saudi’s support for local industry when you expand elsewhere.”
Al Zamil is proud of his staff and believes that they are his key asset. “Most of our management is home-grown and we always encourage Saudis to become middle managers and move up. Training of our current staff is important and retention can be a problem as Zamil staff are sought after by other companies,” said Al Zamil. “We always look for the ACE factor in staff – attitude, character and enthusiasm – everything else can be taught.”
The Zamil family’s involvement with Zamil Steel continues but as Zamil Industrial has grown, the management of some of the company is not in the hands of a Zamil family member. “This represents our move away from a family-owned enterprise to a publicly owned and managed company,” said Al Zamil. “We encourage both Saudi and non-Saudi staff to aspire to reach the top positions.”