Eyes on the West
Sheikh Fahad suggests western KSA is ready for new technology
Sheikh Fahad, Executive Vice President of Zahid Tractor suggests western KSA is ready for new technology and radical development.
Of course there are shops lining the streets of downtown Jeddah, but mostly these are fulfilling a specific need or function. For example, the main drag through town has a great number of car and parts dealers, interspersed with hardware stores and, somewhat bizarrely, about a dozen shops that stock French-style chandeliers.
Giant light fittings aside, there aren’t that many ‘lifestyle’ shops on the streets – stores that might be fun to visit, such as you might find in a mall, but there is one exception.
On the side of a busy street, small boys and their fathers press their noses up against the window of the shop, which is full of branded caps, sportswear, toys and other related paraphernalia.
Interestingly, this shop doesn’t print the brand of some major football team, or even a self-congratulatory ‘swoosh’ or diagonal stripes. Instead, it sells stuff with the brand of an industrial machinery manufacturer all over it – and the masses can’t get enough.
Sound unlikely? Not when you realize that the brand in question is Caterpillar, surely the most recognised marque of heavy equipment in the world.
So, it will come as no surprise that the family name most associated with Cat is nearly as well known as the brand itself. Zahid Tractor has been the sole dealer of the famous yellow machinery in the Kingdom for over forty years and is one of only two Cat dealers across the whole GCC.
As you might expect, this makes the Zahid family a pretty big name in the Gulf, and none is bigger than Sheikh Fahad Y. Zahid, the executive vice president of the company.
The group has sold Cat machinery through good times and bad – from the near collapse of the Peoria factory in the early 1980s, through to the boom times of the mid 2000s.
Today of course, the machines are highly sophisticated, with complex electronics allowing the machines in most cases to be operated with just a pair of joysticks, rather that the banks of levers and pedals of old.
Saudi Arabia has generally been regarded as a price-sensitive country, but Sheikh Fahad believes that this is no longer the case: “When the electronic and laser guided systems were first fitted in the equipment about ten years ago, [Caterpillar] was really looking at the western hemisphere and maybe one or two far eastern countries for application.”
“But the Saudi contractor today is a very sophisticated contractor and he also is on a time frame” he stressed.
“He wants to get the job done in time, make his money and then move on to another project. We were able to successfully demonstrate to the Saudi contractors how this new technology can assist him and make him more efficient providing him better quality, and that they don’t need the very top-notch operators who are hard to find and to keep. We were able to introduce this new technology in Saudi Arabia.”
We noted that we’d seen a lot of very old machines working around the country, a point which Zahid conceded: “Of course you do have these traditional contractors who like to ‘fly the plane by the seat of their pants’ and they would like to feel the gradient as they are working with the machine!”
Expanding on this he added: “Competitors are, of course, very competitive, but they are not involved in the cut-throat pricing war as they used to be in the past. They have a healthy margin, they know that their profit is in the project, so they finish the project, deliver it on time and make money – rather than the old days they used to come in and squeeze the dealers and manufacturers and at the end of the day it was a loss-loss situation for everybody. They weren’t getting the value.”
KSA, and her Western Region in particular have been fascinating contractors for some time now, as it seems that when the downturn really began to bite, the Kingdom announced a number of new projects.
In actual fact, the downturn hit private developers in much the same way as everywhere else, but the oft-written about, and much needed boost in public spending to improve the roads, sea ports and to build a railway network around the area.
Sheikh Fahad believes that the bulk of the work will come from one direction: “The Western region has had its unfortunate share of flooding recently, and again it is a unique place vis-à-vis the central and eastern regions by having the mountains to our east and the Red Sea to the west, and a refinery to the south of us.”
“But our direction is heading in one direction, which is north west. Over the years, as the population has increased tremendously, they [the people] have been trying to spread to areas that they can afford, whether they went to areas that they shouldn’t have [because of a flooding risk] or today are considered danger areas, I think the latest announced government plan in the master plan in Jeddah and the Western region is going to eradicate a lot of the problems that has caused these problems to take place.”
Clearly, this will create demand for firms such as Zahid Tractor, a point which Sheikh Zahid is quick to point out: “We see a phenomenal opportunity over the next three to five years minimum, as all the dams will be built and relocation in certain areas of villages that were built in dangerous areas and basically face lifting areas of Jeddah to meet the requirements of the cities growing population.” Who knows, the next generation of Caterpillar machines could yet be used to build more of the ever so popular Cat apparel shops.
Demand in western KSA
There is a huge scope for construction machinery across the Western Region. With almost a quater of the population living in delicately named ‘uinplanned settlements’ the plan is to rip these out, dam areas prone to plooding and embark on a massive construction programme, bringing the area into the modern age.