Keeping life interesting

The shortage of building materials has prompted suppliers to come up with new ways of serving their clients. Hugo Berger reports.

ANALYSIS, Materials

The shortage of building materials has prompted suppliers to come up with new ways of serving their clients. Hugo Berger reports.

May you live in interesting times," is reputed to be an ancient Chinese curse.

The unprecedented scale of the GCC's building industry means that few of those associated with it would claim that their lives are uninteresting.

The Oriental pearl of wisdom seems particularly apt for the construction sector, because although professional life is fast-paced and lucrative, there are a host of pitfalls, hurdles and pressures which need to be overcome on a daily basis.

 

We are also looking into penetrating the cement market and introducing more innovative building materials.

To those in the building material supply business, on the one hand the scope of development is a giant cash-cow, while on the other it is a constant struggle to cope with the headaches of fluctuating prices and demanding contractors.

Within Dubai, numerous projects have come to a standstill as access to materials has either been reduced or dried up completely.

Shortages of cement, steel and other essential building components are holding many projects to ransom, or forcing developers to source materials from the black market.

And still the need for construction materials continues to grow.

Last year in the northern Gulf States region, which includes Saudi Arabia, Qatar and Kuwait, demand for materials reached US $9.2 billion (AED33.7 billion).

But suppliers of building materials are having to come up with fresh ideas to help the industry cope with the situation.

One of the leaders in the field is Danube Building Materials.

The company's approach to supply has proven so successful that last year it saw sales increase by 72% last year.

This year it is predicting that sales will top $272 million.

The company claims its outstanding growth has been the result of manufacturing its own materials at new factories in China and Bahrain, which mean it can meet the demand of clients.

In the UAE, Danube has undertaken a number of high-profile schemes, including supplying new Formica toilet cubicles to Dubai Mall, in addition to more than $54 million in new projects in Ras Al Khaimah, Umm Al Quwain and Dubai Techno Park.
 

Its huge growth has been maintained by expanding into other areas of building supplies, including ceiling manufacturing, steel and glass.

Rizwan Sajan, chairman, Danube says that although there are challenges in the industry, a professional firm could cope with demand.

He says: "We are very satisfied with the outcome of our efforts to strengthen our operations in the UAE while extending our clout towards international production destinations.

 

If you pulled out all the costs associated with transporting and storing materials, it will highlight what the overall expenditure is.

"Last year was remarkable for us as we have opened up a number of important ventures and gained outstanding exposure for our products with global and regional clients.

He said that through participation at the Dubai Woodshow and Big 5 exhibitions, the firm had managed to find new customers and contacts.

"Following our successful venture into new markets this year, we are also looking into penetrating the cement market and introducing more innovative building materials to our clients," he says.

The firm has recently formed partnerships with Jotun Paints and Alubond USA, to bring these high-quality products to the region.

Danube's has its own innovations, such as its new ‘fire-rated doors' which recently went on sale after obtaining quality accreditation from BM Trada, a prestigious UK-based certification body.

The firm is now targeting Saudi Arabia, Qatar and Kuwait, where demand for building materials is on the up.

Sajan says there is a huge growth potential in these countries, particularly in the areas of steel, fibreboards, aluminum, glass and timber.

He says: "Our vision as the leading supplier and one-stop shop for total building materials is to cater to the requirements of our entire customer base, from individual homeowners to contractors and developers working on megaprojects across the region.

Our strategy is to maximize our inputs in the building materials sector and further boost our market position by reinforcing our regional expansion plans.

"We also aim to further enhance our product line, thereby enabling us to reach our sales revenue targets in the coming years.

The firm, which was established in 1993, has a portfolio of over 10,000 products, ranging from MDF, plywood, veneers, ironmongery and sanitary fittings.
 

At present, the company operates from its head offices in Jafza north, which includes warehouses, logistics, kiln drying and a factory.

Danube currently maintains eight branches in the UAE, in addition to its global hubs in Oman, Bahrain, China and India.

And as the market matures, new concepts are entering the country from Europe.

 

Our strategy is to maximise our inputs in the building materials sector and further boost our market position by regional expansion.

JMH Merlin was formed in 2003 and now has an office in Jebel Ali, where it offers high quality and competitively priced materials to the building industry.

Philip Fergusson, commercial manager, JMH Merlin, says his firm was providing a new approach to supplying building materials.

He says his aim was to build up an increasingly accomplished list of products, so that the company is able to offer a one-stop shop for building.

"I come from a big distributor in the UK, and the way Western Europe runs distribution is that a whole raft of products that go into a building are available from one supplier," he says.

"Materials no longer have to get dumped on site until they are ready to be used - they can be supplied to contractors at the time that they are actually needed.

Another key issue is the distribution of cost.

"In Western Europe, transport costs go into a different part of the business. Therefore, it doesn't impact on a company's purchasing," he adds.

"But if you pulled out the associated costs with transporting and storing materials, it will highlight exactly what the overall expenditure is. A more streamlined approach to the delivery of materials, as and when required, will cut out these associated costs.

Fergusson also hopes to take advantage of the recent emphasis towards improving health and safety, which he hopes will increase demand for more secure forms of building site equipment, such as climbing towers replacing ladders.

Fergusson clearly believes there are difficulties in keeping up with demand, but through innovation these can be overcome.

So the companies which are prepared to consider new ways of supplying materials would probably agree that these ‘interesting' times are more of a blessing than a curse.

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