Al Jazeera Steel Products Co. is looking to make substantial investments to expand its product line mix, says CEO, A N Venkat
In line with its strategy to diversify its product portfolio and foray into new export markets, Al Jazeera Steel Products Co, one of the leading steel tube & structural products manufacturers in the Middle East, is looking to make substantial investments to expand its product line mix. A.N Venkat, CEO of the company said, despite the challenging market situation, prospects are bright for the company in 2020 and ahead. “As a company, we are very bullish and our fundamentals are strong,” he says. “The decision to expand our product line mix is in view of the upbeat prospects in the GCC markets. Demographically speaking, the GCC has a predominantly young population. It means the current challenging situation will not last for a long time.”
He exudes confidence that the government’s focus on economic diversification and its substantial investment in Sohar and Duqm bode well for the Sultanate’s economy and industrial development.
The company’s total production in the third quarter of 2019 stands at 299,032MT while the total sales value during the period was RO 78.04mn.
Talking about the challenges facing the company and the manufacturing sector in general in 2019, he says, “the market situation has been difficult for us, due to the slowdown in the global market. Overall steel demand in the GCC remained lukewarm especially in the UAE, Saudi Arabia and Oman. The overall economic environment worldwide, the continuing trade dispute between China and the US, Brexit, uncertainties and sharp slowdown in India also acted as a damper to the overall economic climate.”
However, he said some of the key markets in the region such as Saudi Arabia and Oman are showing some signs of improvement, holding better prospects for the coming years. “On the positive side, Saudi Arabia saw a 1.3 per cent increase in activity over the month and in future also. Saudi is expected to be a buoyant project market, as various non-oil and mega gas projects also have been announced,” he says.
Improve operational efficiency
Al Jazeera Steel Products Co has been constantly working to reduce costs and improve operational efficiency to the best extent possible to negate the margin pressures due to the slowdown in the market. The company is also in the process of implementing a companywide ERP solution to further enhance efficiencies in its operations, sales and maintenance processes and further reduce costs.
The company is also working with other steel companies in Oman with the government to reduce some of the non-customs tariffs which have been levied by some of the other GCC countries, which are adversely affecting the profitability of the company. Further, provisioning for debtors receivables in line with revised IFRS requirements have adversely impacted profitability, even though the company is pursuing with its customers to collect the same.
The company, as a corporate policy, continuously invests in human resources, and provides training to its employees in order to develop their skills at various levels. Local employment is encouraged and today it has achieved 39 per cent Omanization in its work force.
