Ayman Kanaan, general manager of Zamil Steel’s Structural Steel Division (SSD), which is based in Dammam’s second industrial estate, has been with Zamil Steel since 1988.

Graduating from King Fahd University of Petroleum & Minerals in Dhahran in 1985, he spent three years in construction projects with companies working for the Royal Commission for Jubail and Yanbu before joining Zamil Steel in 1988 in the project management department. He moved into sales and marketing in 1991 and became SSD’s general manager in 2002.
Looking at the division’s turnover over the past few years, Kanaan points out that in 2005 Structural Steel accounted for 23.9 per cent of the total turnover of Zamil Steel, rising in 2006 to 28.6 per cent. In 2007 the figure is expected to increase to 29.9 per cent.
Kanaan explains: “The demand for structural steel is very high in both Saudi Arabia and the GCC region. Our prime market is the GCC and specifically we deal with industrial, oil and gas and petrochemical projects. There is of course a big market for us here in Saudi Arabia with the presence of Saudi Aramco but we are also interested in Abu Dhabi and Qatar.”
The official estimates that the demand for structural steel in Saudi Arabia is 180,000 tonnes annually with a value of SR1.3 billion ($347 billion), while demand in the GCC region is 470,000 tonnes (SR3 billion). Growth in demand is five per cent for both. SSD reveneus in 2006 reached over half a billion riyals, representing a 33 per cent growth over 2005 and a four-fold increase over 2002 revenues.
Whilst Zamil Steel Structural Division is primarily involved in industrial projects the company is also targeting the commercial sector with high-rise and specialised projects on the radar. Some of these will be accomplished through joint ventures with international companies.
SSD has also established a process equipment factory and this is one of the most significant physical developments over the past three years. But the division has also seen a number of other significant developments, which Kanaan believes is the result of teamwork. “We have increased production capacity from 3,000 tonnes per month to 7,000 tonnes, helping fuel a dramatic increase in our profitability,” said Kanaan. “We have also introduced the Balanced Score Card performance management system and also invested heavily in high-tech machinery and engineering software.”
In addition SSD has also implemented specialised training programmes aimed at increasing knowledge awareness and efficiency.
Turning to the export market, Kanaan says that exports represent approximately 35 per cent of the total sales and that this figure is growing. The prime export market is the GCC region but the company has had a few projects in other countries such as Jordan, Egypt and Bangladesh. Kanaan is also looking at markets beyond the GCC and believes that Africa has possibilities. The process equipment factory has yet to supply products outside of Saudi Arabia but Kanaan believes that this will go hand-in-hand with the structural steel products. “Our main markets outside Saudi Arabia are Qatar and the UAE but we have also worked in Kuwait, Bahrain and Oman. We work with local agents who are our strength in these markets,” he says.
Exports accounted for 35.7 per cent of all sales in 2006 in terms of volume, against 20.13 per cent in 2005 and 9.15 per cent this year until June.
In terms of capacity expansions and innovations, SSD has installed state-of-the-art CNC beam sawing, drilling and coping lines as well as CNC plate processing for structural steel, and plate rolling of up to 150 mm for process equipment. This gives the structural steel and process equipment factories an advantage over other fabricators. In addition, the factories’ covered area in Saudi Arabia has been increased from 73,500 sq m to 282,000 sq m. In Abu Dhabi a new structural steel factory is undergoing licensing and is expected to be operational by the end of 2008.
Kanaan sees his priorities for the future as four-fold. “We need to increase sales, profitability and customer satisfaction whilst maintaining a safe and healthy working environment for our staff,” he said. “Our growth strategy revolves around the expansion of our production capacity and market share as well as the diversification of our product range.”
Kanaan will also be increasing his marketing campaigns and plans to create more alliances or joint ventures to work on specialised projects such as high-rise buildings, stadiums and airports. He is also looking to expand outside of Saudi Arabia with new satellite factories such as the one in Abu Dhabi and possibly lines in Vietnam and Egypt. Finally, he plans to establish shutdown and maintenance operations for process equipment as well as possibly other specialised areas.
Commenting on the impact of SSD on the sector, Kanaan believes that the division has helped elevate the industry to what he terms as a “distinguished level” through the use of high-tech equipment and engineering solutions. “We actually compete with international fabricators and in terms of our automation procedures and systems I believe we are ahead of the game. We are also contributing to satisfying the growing demand for structural steel and process equipment products.” In terms of market share, Kanaan believes that SSD has between 30 and 40 per cent of a difficult-to-measure market.
SSD has one of the largest production capacities in the market and has a unique commitment to both quality and delivery times. The division’s systems and procedures reflect an unrelenting professionalism which has helped it achieve some spectacular results. “If you look at the Alba line 5 project in Bahrain, we did something very different,” said Kanaan. “Here we combined fabrication and construction in a turnkey project. We are also in the final stages of the Khursaniya project for Aramco which represents the largest in the history of Zamil Steel and which is worth in excess of SR200 million.”
Kanaan sees a number of challenges which the division will have to face in the future. “One of our major issues is with the price of raw materials which has been very volatile over the past few years,” he said. “We have seen material prices go from less than $270 per tonne to $800 and this affects the business.”
 Kanaan’s management philosophy is inclusive of a combination of discussion and collective management and our philosophy revolves around people and teamwork backed by management support. “Over the past five years we have seen significant growth which I hope will continue. We want to become one of the largest structural steel fabricators on a world scale and continue to make a big contribution to Zamil Steel’s bottom line.”