Supply Chain: ARJ Water Technology
, April 9th, 2014
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ARJ Water Technology’s leading men explain why H2O is as important as ever to the region and how their company’s products can make the most of it
Celebrating its 50th year in business, ARJ Holding and its water technology division can be considered something of a UAE institution. Beginning life selling pumps in a humble Dubai souk in 1964, the business served the water needs of the small villas and farms which then dotted the landscape of old Dubai.
The company has since grown in line with the wider region’s thirst for one of its scarcest resources and is now, as ARJ Water Technology, equipped with the answers to a vast range of questions wherever water is concerned.
“Our business model is very interesting,” says ARJ Holding president, Shahab Juma, “as we sell smaller pumps for villas worth around $100, but also $1mn or $2mn pumps for pumping stations that can service the whole of Dubai. We have some small showrooms across the GCC where we cater to individual customers and then we have project teams that sell to projects like Burj Khalifa.”
“We provide world-class water technology solutions that pump water, heat water, chill water, store water, filter water, treat water, move water, service water, and remove bacteria from it; that’s our whole focus,” Rory McCarthy, managing director of ARJ Water Technology adds.
“As a business we can provide a solution to the MEP industry that’s somewhat unique as we look at the water industry holistically and we look at what is changing in the market.”
This eye on adapting to future demands has led the company to look into products linked to solar and renewable energy, as well as considering the adjustment of its product offering to address the gradual depletion of the region’s water resources.
“We’re market-driven to provide products for the future. For example, one of the things that’s changing is water generation. As the water table disappears there is the need for independent water generation and for facilities that can manufacture water, so to speak. Those products have to be part of the future development of what we do as well.”
This desire to pioneer products in the region already sees ARJ Water Technology offer ultraviolet (UV), ultrafiltration, and nanofiltration systems capable of producing drinking water of the highest possible standard.
“The water you get from the municipality is quite good,” says Juma, “but once it reaches your building, you cannot really drink it. We have a solution where we can treat the water and the end-user gets water as good as a Masafi [branded bottled water].”
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“It’s about the science of water,” adds McCarthy. “We’ve been dealing with water for 50 years and, what we’re looking at much more closely now is, what are the molecules inside the water?
For example, one of our major customers is Abu Dhabi Food Control Authority and we ask ourselves how we can help them – rather than just pumping water to the farm – how do we improve the yield on that crop? We’re starting to think and plan solutions for the government to be able to help them with those kinds of ideas.”
It is such forward thinking that has seen the company supply its cutting-edge water technology to some of the UAE’s most renowned projects.
Among ARJ’s references are Burj Khalifa, Yas Formula 1 Circuit, Masdar, Atlantis and Dubai Mall’s lakes; and this UAE success is currently being extended into the wider region with orders from The Wave development in Muscat, the JW Marriott Hotel and The Avenues projects in Kuwait, and the Khumrah effluent pump station in Jeddah.
Success in the Saudi, Omani and Kuwaiti markets has allowed ARJ Water Technology’s staff to grow to around 200, with around 75 of those based in the UAE and almost 70 located in Saudi Arabia. ARJ’s presence in KSA, in particular, is something of which Juma is quite proud.
“We are one of the few companies in the industry that went to Saudi Arabia,” he says. “We are a fully-fledged 100%-owned company in Saudi Arabia. Usually it’s the other way around with Saudi companies coming to the UAE.”
Of all the GCC countries in which ARJ operates, Juma and McCarthy say the UAE water technology market is the one which is changing the most. McCarthy says that there is an increasing demand for 80 gallon water heaters as customers move away from small decentralised units to larger centralised alternatives.
Other changes noted include Abu Dhabi leading the adoption of polypropylene (PPR) pipes to replace galvanised iron (GI) pipes, an increase in the power of groundwater pumps procured as groundwater is increasingly accessed at ever greater depths, and a rise in enquiries regarding solar-related products.
Both Juma and McCarthy say that a general rise in enquiries has also occurred in recent times as the worst effects of the global financial crisis and consequent regional construction slowdown have been overcome by the industry.
According to the pair, the downturn saw a lot of other suppliers and some contractors opt for cheaper Chinese and South Asian products, which compromised quality on many projects. ARJ “resisted the temptation” to follow suit, Juma says, and “the market respects us for that.”
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The company aims to build on this hard-won reputation now that market conditions seem to be heading in the right direction. However, McCarthy says that while the business environment and attitudes have changed for the better in some regards, he and his company are still waiting to see this translated into tangible gains.
“The projects coming in now are long-term projects,” he says.
“People and developers are looking more closely at the net present value of future cash flows than they were previously, so a lot of that short-term thinking has changed. We’re interested in seeing that from contractors and that cash filter through because we’re still operating in a tight cycle.”
While ARJ Water Technology may be waiting patiently for some of the construction market’s recovery cash to trickle down to supplier level, McCarthy is keen to highlight how his company’s broad product offering can, in the coming years, save contractors some of the cash that has managed to trickle down to them.
“If an MEP contractor is buying five or six products and he is splitting them into five or six cycles of purchasing, that has a cost attached,” he says.
“We can reduce that cost by tendering all those products together in one solution. I believe that is one of the ways we can build a sustainable competitive advantage for the future.”