One of Saudi Arabia’s leading diversified business groups is intensifying its focus on manufacturing to expand revenues from the segment and gain greater prominence in the kingdom’s industrial sector.

The Saleh and Abdulaziz Abahsain group of companies, which has interests in fibreglass, chemicals, flow control equipment, power sector accessories, trading, construction and real estate, seeks to make manufacturing a significant part of its strategy. It is leveraging its trading experience over 60 years towards that end.

“We have made great strides to align ourselves with our strategy in the past few years with new plants set up or in the process of being constructed and several expansions planned to our existing infrastructure,” said group president Abdullah Abahsain

Manufacturing’s share
“Manufacturing accounts for 40 per cent and trading close to 60 per cent of our revenues now and we are keen to increase manufacturing revenues significantly,” added Syed Khawaja, group director.

Group revenues are said to be $1.5 billion and staff strength is approximately 3,500.

Khawaja said the group aims to maintain overall revenues and make new investments for growth. “We intend to bring new technology to the Middle East to enable us to add value for our customers,” he added.

One of the group’s active projects is the construction of a soda ash plant in Saudi Arabia. The plant, a joint venture with a US partner, will have a first-phase production capacity of 500,000 tonnes annually and be operational next year while a planned second phase will create similar capacity.

The plant will follow the Solvay process and utilise locally available salt, limestone and energy.

Meeting soda ash demand

Abahsain’s Sabci plant that makes resins

Currently, the group meets some 90 per cent of the regional demand of 350,000 tonnes per year of soda ash under a longstanding buy/resale agreement.

One of the users of soda ash continues to be Abahsain Group-owned container glass manufacturer Saudi Arabian Glass Company (Sagco) which is the region’s second largest soda ash consumer.

Sagco general manager Dr Tariq O Al-Fadl said rapid economic growth in the GCC region had boosted demand for soda ash among end-use markets such as flat glass, container glass, detergents and water treatment.

“The management of S&A Abahsain believes that the kingdom of Saudi Arabia is an ideal location for a soda ash operation given the region’s rapid demand growth, low energy costs, raw material availability, dependable labour force, attractive financing and other government incentives,” observed Dr Al-Fadl.

The Abahsain Group has emphasised the strategic value of the project saying it will limit dependence on imports and serve as a “key starting point for building an export industry that relies on local raw materials.”

Sagco, meanwhile, recently completed a major expansion that raised output capacity from 600 tonnes daily to 1,100 tonnes at its Jeddah plant. Its major customers are beverage companies, and most of the output is exported. Saleh and Abdulaziz Abahsain acquired control of Sagco in 2004 and owns 95 per cent of the company.

Bahrain production
The group’s Bahrain firm, Abahsain Fiberglass Middle East (AFG), will accomplish a doubling of capacity to 60,000 tonnes annually during the next year, said AFG director of sales and marketing Karel Verdegaal. The product is exported to New Zealand, Russia, mainland Europe, the US, Taiwan and the Middle East. “Our sales graph is rising steeply,” he commented.

The group announced recently plans to jointly build a $200 million fibreglass manufacturing facility with Chongqing Polycomp International Corporation (CPIC) of China. The plant is to come up in the Bahrain International Investment Park in Salman Industrial City that already houses Abahsain Fiberglass Middle East.

Another fibreglass-related group enterprise is Sabci Chemical Manufacturing that produces resins in Dammam for use by composite industries for the making of such items as pipes, water tanks, boats, sanitaryware and wind turbine blades, among many other products. Many of these industries look to Abahsain Group for their needs  Sabci opened in June 2008 with an output capacity of 25,000 tonnes per year following an investment of SR80 million ($21.3 million) and currently serves the GCC region.

Verdegaal says the current capacity is being utilised fully and the group has plans for a major capacity expansion to serve markets outside the GCC region.

He adds, “There’s much production in the Gulf and demand is on the rise. The strength is when you can put both products in the same basket – resins and fibreglass. We have, therefore, a one-stop shop, which is of great value for our customers.”

Omega Factory, also an Abahsain company, manufactures various types of GRP and steel poles, high masts and lighting fixtures as well as being engaged in hot-dip galvanising of steel material. The factory has plans to install new equipment, according to Verdegaal.

Flowcontrol products

The Abahsain Fiberglass ME factory in Bahrain

The company recently enhanced its cooperation with Flowserve Corporation, a leading provider of flow control products and services, with a plant for manufacturing control valves, ball valves, plug valves, butterfly valves, and electric and pneumatic actuators for the oil and gas, petrochemical, power and water industries.

Prior to opening the new plant, Abahsain Group partnered with Flowserve to manufacture BW mechanical seals and service BJ submersible motors.

At the time the joint venture agreement was signed, group president Abdullah Abahsain commented that the alliance substantially expanded coopera- tion between the two sides. With Abahsain already a local manufacturer of commodity valves, the new venture would make it a major player in the critical engineered valve
segment.

Other Industries
A group company called Abahsain-Cope Saudi Arabia manufactures cable management solutions near the Jeddah Islamic Port and employs 550 people. The group’s industrial plants include a valve manufacturing company called Abahsain Neway Industrial Company and a furniture factory.

The trading division deals with chemicals, lubricants, automotives, food stuffs, general commercial goods, welding products and heavy equipment. The services wing covers transportation, workshops and information technology.

The group has invested in a range of firms including Arabian Industrial Investment Company, Gulf Ferro Alloys Company (Sabayak), United Gulf Industries, Saudi Arabian Animal Feed Company, Dammam Laundry Company, Real Estate and Investments and Gulf Salt Company.