Globalisation is the lifeline in the future and we have to embrace the concept. If you do not grow you will automatically become smaller,'' says the senior vice-president of Zamil Air Conditioners (ZAC), Abdulla Al Zamil.

Al Zamil, who has steered the company which belongs to the Al Zamil Group, for the last 13 years into a globally-recognised air conditioners manufacturer, has a clear vision about what route the company has to take in the future.

"It is export which is now a major focus for the company," he says. "Previously, export was a contribution but today it is a big part of the business."

The company is now embarking on a very expensive worldwide branding exercise which aims to position Zamil products amongst the world leaders. Al Zamil believes that this aggressive approach will be successful.

"I regard our company as a big player and therefore we are looking for acquisitions," he says.

ZAC is currently the Middle East's number one air-conditioning manufacturer in terms of market share and production capacity.

Despite the fact that the company does not have an international brand, it has been able to position itself strongly and according to Al Zamil, now needs to expand overseas.

"We are currently undertaking brand positioning in several countries and are also aggressively pursuing the acquisition side," he says. "It is costing a lot of money but I believe it will pay off."

Established in 1975 under licence from Friedrich, ZAC is today one of the major successes of the Zamil Group. Since 1985, the company has operated totally independent of Friedrich with all aspects under Zamil management.

"Since 1985 everything from conceptualisation to sales and distribution has been under our control and the company has grown by over three times," says Al Zamil.

"Originally we produced 40 units per day but today we are manufacturing 1,200 window units and a total range of air-conditioning products from mini-splits to huge commercial applications."

The commercial application products range from 75 tonnes to 400 tonnes.

The ZAC facility in Dammam is simply huge. First started on an 8,000 sq m lot, the factory now sprawls over a 100,000 sq m site making it the biggest in the Kingdom. The company employs 2,000 staff in Dammam and a further 150 in Austria, where it has a unit.

Al Zamil, who holds a BSc in Industrial Engineering from the University of Washington in Seattle and an MBA in finance from King Fahad University of Petroleum and Minerals (KFUPM), has seen the company through some exciting stages of development including its spin off as part of the Zamil Industrial Investment Company (ZIIC), a joint stock company.

ZIIC, which also includes Zamil Steel and Zamil Glass, was formed in 1998 and all three companies are performing well, says Zamil.

"The globalisation aspects gained momentum from the time of the flotation and Zamil Steel has already built two plants, one in Vietnam and the other in Egypt," he says. "We were the first to launch a joint stock company in the Kingdom and this gave us the ability to expand."

Today, ZAC products are exported all over the world and can be found under Zamil brand names as well as Cooline.

"Our export efforts include a joint venture with GE," says Al Zamil. "In fact we are the only GE air-conditioning joint venture in the world since the company closed the Kentucky factory in 1982."

According to Al Zamil some 30 per cent of the total production is on an OEM basis and Zamil's air conditioners are exported to 34 countries around the world.

"Some markets such as the US, Europe and Australia represent a real challenge," says Al Zamil.

In February 1999, the company made its first international acquisition in the form of Climatic factory in Austria which is a 50,000 sq m facility manufacturing specialised air-conditioning equipment. "This facility complements our line, producing air-conditioning systems for more specialised areas such as hospitals."

"We do have plans to expand," says Al Zamil, "We are currently considering two further acquisitions, one in the Middle East and one in Europe, and are in the process of conducting our due diligence."

On the export side, ZAC is targeting the European countries where Al Zamil believes that purchasing power is more important than the weather.

The company has its own offices in the US which was established two years ago. "We set up our offices 18-24 months before we enter the market and utilise these offices to study the market, clientele and product requirements including necessary certification legalisation," says Al Zamil. "Then we establish a distribution network and operate from our own depots."

Apart from the US, ZAC has offices in Tunisia, Austria and Dubai, which looks after Iran and the CIS countries. However the US remains the largest market after Japan. "In the United States competition is very tough for what is the second largest market after Japan," says Al Zamil. "We did well in 1999 with huge increases but we believe that the year 2000 will be more normal and provide us with a useful measure."

Australia, according to Al Zamil is a complementary seasonal market making for a useful fit.

In Europe, Al Zamil sees major challenges due to environmental regulations, "We have been forced to develop products that do not utilise HCFC and these will be launched in 2001," says Al Zamil. "The company will concentrate on air-conditioning product only so that we do not lose focus.''

Al Zamil believes that there are a lot of positive aspects which support non-oil industries in the Kingdom.

"Saudi Arabia is very well positioned with big local demand unlike a number of other Arab countries," says Al Zamil. "Local consumers favour locally-manufactured products and this has been helpful especially with Saudi Aramco."

Giving examples, he says, ZAC supplied air-conditioning equipment to Aramco's Shaybah project where temperatures of up to 67 degree C are encountered. The company also provided 24,000 tonne of air-conditioning to the Prophet's Mosque in Madinah which according to Al Zamil, has been working without problems for the last 10 years.

Al Zamil believes that the one connecting strand through all divisions of the group is technology.

"We have to be players in the new world order which embraces technology and the Internet.The Internet will make a huge difference to aspects such as distribution," he says.

ZAC is already looking at direct selling on the Internet and is expecting to introduce e-commerce facilities, enabling customers to buy on line by the middle of the year.

ZAC has won a number of awards including the Prince Mohammed bin Fahad Al Saud Export and Safety awards and the Saudisation award from the Chamber of Commerce. The company recently won an IT award from Arabian Computer News.