Zamil to spin off steel and air con into LLCs
Damman giant to build on sales hike with restructure of two divisions
Zamil Industrial Investment Company is restructuring its steel and air conditioning units to become limited liability companies to capitalize on the demand for the product lines.
An independent consultancy made the recommendation on the back of a wider analysis of the company’s organisational structure. The companies will be fully owned by Zamil Industrial and it has stated that “legal formalities to convert the branches to LLCs will be managed in the upcoming period”.
The company stated yesterday to the Saudi bourse, the Tadawul, that this best-practice initiative: “is amongst several development programs that the board and executive team review on a regular basis in conjunction with the company vision and mission statements”.
Damman-based Zamil Industrial is part of Zamil Group and is comprised of four business segments: Zamil Steel – which includes pre-fabricated steel buildings and structured steel products - Zamil Air Conditioners, Zamil Glass Industries and Aranian Fibreglass Insulation. The company also produces transmission towers, aerated concrete products and mirrors.
In July, Zamil Steel began production testing on a second galvanizing plant in Damman that will potentially increase production capacity from 50,000 tonnes to 75,000 tonnes per year.
The company posted a 5.1% rise in profits for the first six months of 2010, at SR118 million against the equivalent period last year, with the second quarter profits hitting SR63million, up 5.3% compared with April-June 2009. The company cited higher production levels and sales volumes as reasons for the increase in revenues, though a dip in price for steel internationally accounted for the decline in sales value, which fell 12.4%.
Zamil Industrial is part of Zamil Group, which includes Zamil Pipes, an ISO 9001:2008 limited liability company, founded in 2007. It is Saudi Arabia’s first processor and end-finisher of oil countries tubular goods used as casings under one roof and in April launched another processing facility in Dammam Second Industrial City, primarily to serve Saudi Aramco and other major oil companies.
In April, Zamil Group was named most influential supplier to the GCC construction industry in Construction Week regional analysis.