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Al Naboodah Group plans further global expansion

by Dennis Daniel on Mar 6, 2018

Buti Juma Al Naboodah, deputy CEOcommercial, Al Naboodah Group Enterprises.
Buti Juma Al Naboodah, deputy CEOcommercial, Al Naboodah Group Enterprises.

A 60th anniversary is a defining moment in a company’s journey, especially when it has been shared with the founding and growth of its country. In the last six decades, Al Naboodah Group has grown into one of the biggest diversified conglomerates in the UAE.

Founded in 1958 by brothers Saeed and Mohammed Al Naboodah, the Group started with trading in agricultural machines before expanding into construction, travel and real estate in its first two decades of operation.

In 1979, Swaidan Trading was established, and since then, it has become a multi-brand distributor in the commercial vehicle, heavy equipment, automotive, motorcycle and agriculture sectors. Milestones during the next four decades included an exclusive partnership with Goodyear tyres, expansion in the construction business with MEP and specialist services.

In 2016, Al Naboodah Group Enterprises (ANGE) was established to undertake the management of the company’s operating businesses.

Currently, ANGE represents a diverse portfolio of global brands through its heavy equipment and commercial vehicle divisions, such as Terex, Kaeser, Sennebogen, Sacme, Clark, Hubtex, DAF, Peugeot, Maxus, Great Wall, Ashok Leyland, VDL, Sunwin, and Goodyear.

Looking towards the future, Buti Juma Al Naboodah, one of the third generation leaders within the Group is spearheading an expansion strategy for ANGE’s commercial business beyond the UAE. Having made a mark in Oman and Saudi Arabia with its commercial vehicles, electrical, and travel businesses, and spreading its wings as far as Vietnam, the Group is exploring market entry in African and Asian countries.

In 2016, Swaidan Trading, which supplies buses to the RTA as well as a significant portion of the school market in UAE, expanded its business into Oman with the sale of 40 buses to the Oman National Transport Company. The success of ANGE’s commercial vehicle business in Oman has presented new opportunities. It is now the company’s most promising growth market, followed by Saudi Arabia. In 2018, ANGE will expand its Oman business with an agricultural division.

In Vietnam, Al Naboodah International Company is the sole importer of Harley-Davidson motorcycles. In 2017, the company added the Royal Enfield and Triumph brands to its portfolio.

“As an established player in the UAE, we cannot rest on our laurels. We see ourselves as a 60-year young company filled with pride and yet humble by accepting that there’s a lot more achieve in the future. We want to replicate our success in other markets. As ambitious as we are, we cannot enter all our target markets at once. So we rely on market research to indicate gaps in offerings and timing of entry in new markets. For example, we entered Saudi Arabia with the electrical and travel business, and Oman with commercial vehicles. We entered Vietnam as a 100% foreign owned company with motorcycle brands. In future, we’d like to expand into Africa because of its huge opportunities,” says Buti.

Reminiscing the early days of doing business in the UAE, Ajit Kumar, COO, commercial, transport, and electrical divisions, Al Naboodah Group Enterprises, points out the company’s path forward will maintain and reflect the steely resolve and ambition of its founders and build on their entrepreneurship drive.

“During the early years of the company when local industries were underdeveloped, international companies selected local partners based on their entrepreneurship qualities and pioneering abilities above their business acumen. We could only provide our long-term commitment, which later translated into trust and strong partner relationships. Those qualities helped us enter into strong business partnerships that changed the course of our company,” says Ajit.

ANGE grew with the rapid growth of the UAE economy and took investment decisions based on long-term opportunities, which the company found in industries such as agriculture, construction, power and logistics.

“We started by catering to local requirements. Every vehicle we introduced at the time was aimed at solving basic transportation problems. We also realised that there’ll always be demand for moving goods and people, which will drive the public transportation, logistics and construction industries,” says Ajit.

Initially, one of the company’s biggest challenges was to acquire the right products and talent to cater to increasing market demand. Now, it’s faced with a wave of business agility challenges with the emergence of new technologies, regulations, and customer demands.

“Factors that will affect the introduction of new vehicles and their utilisation will be regulations for higher efficiency and low emissions. Alternative energy has already taken off in some form or the other in many developed countries. With regard early adoption, it’s a question of market expectations and government regulations. As the UAE market matures, we expect new regulations on axle load, passenger capacity, minimum seating capacity and emissions, taking into account passenger comfort, safety and the environment. We’re taking all the necessary steps along with our partners to ensure that we’re staying ahead of these regulations,” says Ajit.

In 2017, the Roads and Transport Authority (RTA) launched the test run of a VDL bus compliant with Euro 6 standards. The six-month trial operation assessed the economic feasibility and environmental benefits of the bus by examining the reduction in carbon emission rate, engine efficiency, and maintenance costs.

“We’re the first company to introduce Euro 5 and Euro 6 compliant vehicles in the UAE. We expect Euro 4 emissions standards to become mainstream. There will be an initial delay in adoption due to slight increase in costs and technology upgrades required for compliance. At some point in the near future, Euro 3 will be phased out around the world and replaced with Euro 4 compliant vehicles. Every on-road vehicle that we import from this year will confirm to either Euro 4 or higher standards,” says Ajit.