FAMCO rolls out aggressive Gulf region expansion

Equipment and trucks seller FAMCO has its eye on the wider GCC region

FAMCO has a case by case approach to each new market says managing director Paul Floyd.
FAMCO has a case by case approach to each new market says managing director Paul Floyd.

Heavy equipment and truck sellers FAMCO (Al-Futtaim Auto and Machinery Company) has an aggressive GCC expansion plan, and is looking to gain market share in Saudi Arabia, Oman, and Qatar says managing director Paul Floyd.

And the company is not ruling out further expansion.

The name FAMCO is well known in the Emirates, as the purveyors of Volvo Construction Equipment (CE) and Volvo Trucks, as well as brands including Merlo, Ingersoll Rand, Linde and Himoinsa. The company has five branches in the UAE.

But the company is looking to cement its presence in the wider Arabian Peninsula.

December 1 last year the company finalised a takeover of Al Rehab Equipment and Machinery in Saudi Arabia, who is the exclusive distributors of Volvo CE in the Kingdom.

And the company has start-ups in Oman and Qatar, with the first branch in Oman launched last week, while the Qatar branch – already trading – will be officially launched later this year at the Construction Week Qatar awards in September.

In Oman the company distributes brands including Ingersoll Rand, Linde, and Merlo telescopic handlers.

Floyd says that the move to markets in the wider region has been in the works for some time, and was brought on in part by the drop in construction equipment sales in 2009, when the market in Dubai “went off a cliff”.

“One of the things that the down-turn has taught us is that diversification is usually a very good thing. FAMCO has always been very diverse as a company in terms of its product range, but we’ve been UAE-centric.”

Floyd says the company made a strategic decision during the down-turn to target wider regional diversification. “It’s a much stronger business model.”

The aggressive roll-out is being led by the Al Futtaim group as a whole, and particularly in the automotive division says Floyd, of which FAMCO is a part.

In Saudi, Al Rehab has five branches, including Jeddah, Riyadh, and Dammam. This number will grow to 12 branches across the Kingdom in the next three years, says Floyd, and they’re looking to double their market share during that same period.

While the Saudi market may be ‘booming’, much of this business will be conquest.

“For sure we intend to take market share from our competitors,” he says.

The company is also looking to add value to the business by bringing the best practices and expertise built up through FAMCO’s 33-year operation in the UAE.

This includes raising service levels to its customers. Floyd says that while service in the Kingdom is “probably a bit less developed,” this is as much about the challenging geography of its vast distances as anything else, something which building a larger branch network will help FAMCO to overcome.

In Oman and Qatar FAMCO is looking to build up its stock of brands, including talking to manufacturers who may not be represented in those markets.

And there is also scope for acquiring brands where manufacturers may be dissatisfied with their current representation says Floyd.

“It is easier to work with a company we have an existing relationship with, rather than start on something new.

“But if we can’t build in certain markets with certain manufacturers then we’ll do something new instead. It’s a case by case approach in each country.”

Read the full interview with Paul Floyd in the June edition of PMV Middle East.

 

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