Christopher Adams

The Business Herald’s markets and banking reporter.

Steel firm puts Mideast in frame

Opening a Dubai facility helps software and machinery company satisfy construction clients' need for speed.

Henry Haddad says trying to service Middle Eastern markets from Auckland proved ineffective.
Henry Haddad says trying to service Middle Eastern markets from Auckland proved ineffective.

Establishing a base in the United Arab Emirates has allowed steel framing company Framecad to ramp up its Middle East expansion.

Auckland-based Framecad - whose framing system has been used to build everything from portacabins for migrant workers in the Gulf to military barracks in Afghanistan - opened its Dubai facility in 2008.

It is located in the Jebel Ali Free Zone, an industrial area where foreign companies can establish wholly-owned operations without the usual UAE requirement of securing a local business partner.

Framecad's business across the Middle East, Africa and Europe is serviced from Dubai.

"If you want to go into the [Middle Eastern] market you've got to go the whole way," said Henry Haddad, Framecad's Dubai-based regional client manager. "Too many New Zealand companies can step in and step out and only want to invest a little bit. It's not the market to be in if you want to do that."

He said trying to service Middle Eastern markets from Auckland had proven ineffective.

"You miss out on opportunities due to the time difference. In terms of sales and access and serviceability to the market we saw great potential in moving here and being in the same time zone."

Framecad supplies software and machinery used by its customers to manufacture steel framing to the required specifications on a construction site.

Haddad said the speed the system provided - plus its cost-effectiveness versus other building materials such as concrete and timber - had proven popular in the Middle East.

"We have clients in Saudi Arabia doing 10 45sq m portacabins a day."

Haddad said a shortage of residential housing in the UAE and Saudi Arabia had provided a big opportunity for Framecad.

Commodore Contracting, an Abu Dhabi-based construction firm, had built 492 villas in the UAE emirate of Al Ain using the New Zealand-developed system, he said.

Haddad said Framecad had also managed to crack Saudi Arabia's residential housing market. Its technology is being used to construct 38 villas in Al Khobar.

Framecad's system has also been used to build portacabins for oil workers in Iraq.

"The whole Middle East market is about speed," Haddad said. "Everything they want yesterday."

A few kilometres across the desert from Framecad's facility, in another area of the free zone, is Pultron's manufacturing plant. The Gisborne-based company makes glass reinforced fibreglass used in the construction sector.

The firm's key product in the Middle East, MateenBar, is used for reinforcing concrete structures, such as sewerage plants and ports, and offers benefits over more traditional materials made from steel that rust easily in the Gulf's highly corrosive environment.

Pultron's products have been used in more than 70 projects across the region, including infrastructure developments such as the Lusail expressway in Qatar, Oman's Muscat Airport and the Coastal Marine Port in the UAE's Sharjah.

Pultron's general manager in Dubai, Rob Fordyce, said the scale of infrastructure projects in the Gulf was "just huge" and offered Pultron a lot of scope for growing its business in the region.

Fordyce said Pultron was expanding the capacity of its Dubai manufacturing facility.

He said retaining 100 per cent ownership of the facility was an advantage of being located in the free zone. Fordyce said he hoped New Zealand's free trade agreement with Gulf Co-operation Council countries, which was concluded in 2009 but is yet to be ratified, would do away with a 5 per cent duty.

Fonterra recently opened a new warehouse in the zone and roofing manufacturer Tilcor also operates a facility there.

Khalid Al Marzooqi, a senior manager for the Jebel Ali Free Zone, said another four Kiwi companies were expected to set up operations in the zone this year.

Framecad

• Based in Auckland.
• Provides software and machinery that can be used to produce light-gauge steel and framing to specification on a building site.
• Opened its Middle East office, in Dubai, in 2008.

Focus on the Middle East

This week the Business Herald looks at doing business in the Middle East. Christopher Adams has been in Dubai and Egypt talking to people about their work. He travelled with assistance from NZTE and BurgerFuel.

- NZ Herald

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