Lessons from the old and the new

Piping systems are a fundamental component of urban infrastructure

Alan McKeown from Hepworth PME LLC
Alan McKeown from Hepworth PME LLC
Wolfgang Ronfeldt from Georg Fischer Piping Systems
Wolfgang Ronfeldt from Georg Fischer Piping Systems
Dr Raed Al-Zubi
Dr Raed Al-Zubi

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One of the most established and experienced piping systems and fittings suppliers and manufacturers is Hepworth PME LLC, part of Corys, the holding company owned by the Abdul Ghaffar Hussein family. Corys was formed to establish various joint ventures with some of Hepworth’s principal partners.

Hepworth PME LLC has agreements with about 15 international companies, including Hepworth Building Products of the UK (owned by Wavin Holland) and Georg Fischer Piping Systems of Switzerland, representing a range of premier products.

“As a logical progression, George Fischer JV Corys was formed to manufacture high-volume items such as fittings locally in order to get away from high transportation costs. in the region. Cost pressure is a specific issue in this day and age,” comments Georg Fischer Piping Systems Dubai sales office GM Wolfgang Ronfeldt. Georg Fischer has been collaborating with Hepworth in the Middle East specifically for about 35 years, and established its own office within Hepworth PME LLC since 1999.


Hepworth PME LLC deputy GM Alan McKeown says the latest development on the manufacturing front is to target rubber seals through another joint venture, namely Corys MDS. “We obviously import a lot of rubber seals for our pipes and fittings, so the next move was to manufacture our own. We brought MDS of Germany in as a technical partner,” says McKeown.

Hepworth began manufacturing GRP and uPVC pipe locally in 1991. “In those days we started with one uPVC and one GRP extruder, and still imported all the fittings from the UK and Europe. This was because we saw ourselves as not just a pipe manufacturer, but as a total solutions provider.

” McKeown says the local manufacturing component of the operation has expanded steadily over the years, with over 20 extruders at present in total and a size range of 16 mm to 630 mm. The company has manufacturing facilities in Dubai and Qatar, and branch offices in Bahrain, Oman, Abu Dhabi, Sharjah and Al Ain.

Complete package

“We supply whatever is necessary for a complete piping systems package,” says Ronfeldt. “We do not want to deter any potential customers due to some extras we are unable to supply. This is a particular advantage of Georg Fischer, as we have a catalogue of 65 000 items, which makes us one of the biggest plastic piping component manufacturers in the world.” In addition, the company has the flexibility and expertise to be able to cater for any special requirements.

This is combined with Hepworth’s international expertise in the complete range of plastic materials. “Hepworth products cater for the drainage side, and Georg Fischer products cater for the pressure side. Hence whatever goes into and out of a building could potentially come from a single supply point. That is our overall philosophy of a total A-Z approach,” says Ronfeldt.

Commenting on the prevailing business environment, Ronfeldt says: “I see the first green shoots. I think we have passed the trough. I do not like to look at it too negatively. There are still some constraints on cash flow, that is clear, but at the end of the day there is some relaxation and there are developments going ahead.”

A key focus area at the moment for the company is infrastructure, as well as refurbishment of existing building stock, especially hotels, says McKeown. “What happened in the past is that many consultants from areas as diverse as Australia and the UK specified products they were familiar with, but which were ultimately not suited to the region. This has resulted in a potentially lucrative market,” says Ronfeldt.

“We are in the process of refurbishing 15 five-star hotels in Dubai alone right now, where we are replacing less suitable systems or cheaper products that are no longer performing accordingly after only five years. We have very much taken advantage of this situation in the midst of the economic crunch, which has meant we progressed from a new build to a refurbishment focus and did not suffer along with the downturn, as we were able to compensate nicely,” says Ronfeldt.

Application focused

Another factor to the company’s ongoing success in a difficult market is that it is “very much application focused and not just a fittings maker.” This has inevitably meant a different approach to securing business. “What we have tried to do is ascertain everything that falls under a particular project umbrella. For example, piping systems for hospitals have traditionally only covered hot and cold water, but we have identified 22 other areas where we can supply products.”

This means working proactively with clients to help overcome problems and find solutions for potential problem areas, as well as introducing plastic piping into areas reserved formerly for metal systems, for example. “This approach has been very well received by government ministries and consultants,” says Ronfeldt. “We are approaching our business a little bit more intelligently, from a total solutions perspective, rather than just selling elbow-to-elbow components.”

“There is no getting away from the fact that business in Dubai has shrunk dramatically. A lot of our business was in new build. We have had to take the blinkers off to a certain extent in order to see what else we can do,” says McKeown. This new approach has been helped by the fact that plastic piping systems have come a long way, and are constantly making inroads into sectors dominated previously by ductile iron and copper.

“We also have a local raw material supplier in Borouge. The supply chain is right and the pricing is right, which is why more and more consultants are opting for plastic piping systems. Copper is still a widespread material, which will boost the future refurbishment market,” says Ronfeldt. Of course, quality materials is also closely aligned to quality workmanship.

“The reason why some hotels have had to replace piping systems after not even two years is not necessarily because they used copper, but has also been due to poor installation and cheap materials. Quality is our foremost focus. Hepworth is the first company outside the UK to obtain Kitemark Certification,” says McKeown.

Ronfeldt says that quality has been a focus even during the downturn, as this will “help us a lot after the crunch to maintain our level of business and clients.” In terms of opportunities and challenges, Ronfeldt says closer ties need to be forged between developers, contractors and owners so as to address the total cost of ownership, which includes maintenance. “A problem here is that contractors are only liable for a year, whereas in Europe it is for a minimum of five years. This ensures contractors take care of what they are building and how they execute it.

The fact that the plastic pipe systems market is still quite buoyant is indicated by the appearance of the newest player. This is the new joint venture between the UK-based Radius Systems and the Senaat Group of Abu Dhabi, which will have a manufacturing facility in that emirate.

Premier partner

Dr Raed Al-Zubi, CEO of the RadiuSenaat JV, explains that Radius Systems has a 40-year history as a premier partner and supplier of the utility sector in the UK. “That know-how is being transposed to a local context,” he says. Senaat is a private investment company interested in downstream plastics manufacturing operations. “The group has positioned itself as a premier investor in downstream plastics in not only Abu Dhabi, but the UAE and the region,” says Dr Al-Zubi.

The new venture will serve the local and wider GCC market. “It will be a hub in terms of products and services. We will welcome expansion plans if they happen. It depends on the marketplace, but we feel optimistic that at least we are at the right place at the right time in Abu Dhabi.”

Dr Al-Zubi says the Abu Dhabi 2030 Vision was a major positive factor in the decision by Radius Systems to enter into the JV. “When Radius Systems was researching the expansion of its international presence, the Abu Dhabi 2030 Vision was a major factor. It is an honour and a privilege to be able to contribute to this initiative, and to see Abu Dhabi develop into a regional, as well as a global leader.”

He says the JV is “a kind of meeting of minds”, with Radius Systems looking to expand globally, and Senaat with its strong background in plastics. “They are both passionate about the sector, so coming together was a natural process that made perfect sense. Senaat has other JVs in compounding and master batching, so there are synergies we can take advantage of.” Radius Systems CEO Stuart Godfrey concurs: “We were looking for a professional partnership to expand our international operations. The fit with Senaat was perfect.”

Dr Al-Zubi explains further that the JV “has been established to serve the utility, infrastructure and telecommunication sectors through its products, technical know-how and field installation and site services.” The initial plan is to introduce high-performance plastic pipes and fitting systems for “the key growth areas” of potable and non-potable water, gas and telecoms, in a range of sizes.

“We will start with the more commodity-based products, but will be able to cover all market segments. Our competitive advantages will be a reflection of those of Radius Systems. What we shall be bringing to this region is the cultivation of a long history of delivering innovative, cost-effective and reliable products and services.

Capacity

The manufacturing capacity will be in line with the different phases and expected demand, adds Dr Al-Zubi. In terms of establishing a local manufacturing presence, he says RadiuSenaat has embarked upon the process of obtaining the requisite approvals from the various authorities.

“The process in that regard has started. In terms of timeline, our goal is to do that in the shortest possible time. I cannot give dates when we will be operational, but our strategy is an aggressive one, and it will be as soon as possible. In terms of size, RadiuSenaat has been created to become a leading player and service provider for high-density polyethylene plastic piping systems.”

Dr Al-Zubi says the mooted capacity of the manufacturing facility “will be in a manner that will allow us to consistently support the local and GCC market with quality and innovative products and services. Our strategy is multi-phased, and a smart one. We did not start the JV to be conservative or cautious. We believe in the value our products and services will bring to the local market and the region in terms of future growth.”

This has inherent benefits for the local supply chain. “The expectation is that the impact will be positive in terms of allowing us to procure at more cost-effective structures and lead times. The UAE and GCC are becoming more and more the centre for polyolefin raw material, with many production expansion plans completed and/or underway. They are positioning themselves to be the global player in this field. This, we believe, will have a direct and positive impact on our supply chain and logistic costs.

“So yes, being local will help in terms of significantly reducing lead times,” says Dr Al-Zubi. “Being in Abu Dhabi, we have the privilege of having Borouge so close by, which will be an added advantage.”

“We will, from day one, be aligned with international standards and specifications. It is in the process of starting the qualification process for the products it will produce locally. With the support of Radius Systems, we will be establishing a dedicated in-house testing facility to be equipped with the latest testing technology.”

Manufacturing hub

The new manufacturing hub will also be a boon for local employment and skills development. “I think the job opportunities will be good, and will be at the level that the business requires to deliver cost-effective products and services. The numbers will be slowly populated as we progress through the different growth phases.”

In terms of training, Dr Al-Zubi says: “We already offer certified training for welders.” Radius Systems is the agent for McElroy butt fusion welding machines from the US. “It also has its RadiusPlus programmes for on- and off-site services. Internally, training is central to the development of Radius Systems. That culture of investing in our most precious asset, which is our people, will continue.”

How does the Middle East compare technically with established markets like the UK and Europe? “The answer is it fares very well. In fact, the experience of the past couple of years, independent of the downturn, demonstrates that this part of the world is now a technical leader with regard to our market segments,” says Dr Al-Zubi.

“I do not believe what we have witnessed in terms of mega projects, and the complexity that comes with implementing them, could have been achieved without having a strong technical foundation, as well as being accepting of new products and applications. As far as trends are concerned, we are seeing the evolution of piping systems to a more multi-layer format than the standard commodity-based, one-layer structure.

This allows for a more focused design that results in higher physical properties, as well as more productivity, reliability and safety during site installation.” An example is the Profuse system from Radius Systems for gas and water networks.

“In general, what we are witnessing today is an increase in plastic polyethylene raw materials performance and capability to withstand higher design requirements. This effort is being led by the resin suppliers, in partnership with plastic converters and manufacturers, and we see it continuing. This explains the increasing penetration of polyethylene piping systems into more traditional steel and fiberglass markets,” says Dr Al-Zubi.

Commenting on the impact of the global financial crisis, he says: “It is no secret that the overall business environment has witnessed a downturn. However, what this slowdown brings is an opportunity for the market to refocus itself on the need to have quality suppliers that understand how to bring their solutions in a reliable and cost-effective manner. The market will redefine and reposition itself to the emerging new realities – or, more accurately – to the new level of business that has come out of the downturn.

“We believe the downturn is a temporary condition. The governments of the UAE and those of the region are still committed to improving the quality of life of their citizens, and to take their place on the world stage. One outcome of this is a continuation in investing in the infrastructure of their respective countries for many years to come. We want to be part of that, and that’s what excites us about the future,” concludes Dr Al-Zubi.
 

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