Strong demand in Saudi Arabia and other GCC states has prompted Zamil Steel’s Towers and Galvanising (T&G) division to raise production capacity and consolidate its presence in those markets, says vice president Saleh Al Zamil.

“We aim to become a market leader in this region and supply our quality product all over the world. Our growth strategy is to increase our market share and revenue by increasing production capacity,” Al Zamil asserts while giving an overview of the division’s performance over the past few years.
New production facilities at Ras Al Khaimah (UAE), which are nearing completion, will add 12,000 tonnes per year to the existing annual capacity of 55,000 tonnes.
“In Saudi Arabia, because of Government’s massive investments in the power sector and a relatively vibrant telecom sector, demand for towers is enormous, escalating at 6 per cent annually. In GCC countries other than the kingdom, 5 per cent annual growth is anticipated” says Al Zamil.
Among the significant developments of the last three years was raising annual capacity from 35,000 tonnes in 2004 to 55,000 tonnes. T&G also ventured into new markets in the developing countries of North Africa.
“We are utilising the synergy benefits of our sales area offices located in major cities around the world,” says Al Zamil.
The share of exports in total sales has risen appreciably, rising from 41 per cent in 2005 to 47 per cent last year and expectations are that the figure will touch 55 per cent in 2007.
The capacity surge and increased export share have seen revenues expanding dramatically by 64 per cent in 2006 compared to the previous year. The division’s revenues accounted for 25 per cent of the total turnover of Zamil Steel in 2006, an improvement over the 19 per cent it registered in 2005.
T&G has made a strong impact on the utilities sector in the region. Overseas, its products have penetrated far and wide.
“We are continuing to contribute to the electrical utilities sector of Saudi Arabia and other GCC countries. Also, we have sold power transmission line towers from Mexico to Australia - all the continents,” says Al Zamil.
“We are playing major role in the expansion of the telecom network spread all over Saudi Arabia by supplying telecom towers to Saudi Telecom Company (STC), Mobily (Etisalat) and MTC.”
Several commendable aspects in the division’s offerings helped make it successful in all markets. Al Zamil says the advantages it highlights in its marketing campaigns are engineering capabilities in the design of cost-efficient towers; defect-free products resulting in easy and faster assembly at job sites and the fact that galvanised steel towers are virtually maintenance-free for a long time.
The division’s progress has come in the face of some special challenges including instability in raw material prices, the absence of a price-escalation formula in contracts and competition from other countries where prices are very low.
To counter those challenges, the division is continually reinventing cost-reduction methods and finding new and more economical sourcing for raw materials, says Al Zamil.