Established by a leading local business house, Al Suwaidi Group, with a capital investment of SR 100 million, the Precision Forgings Factory has an annual capacity of 8,000 tons of machined flanges and pipe accessories produced as closed die forging, using carbon, stainless and alloy steel.
The plant has come up on a large plot admeasuring 30,000 sq. mts. The new factory, which has achieved distinct success in import substitution, is now poised to ensure self-sufficiency for Saudi Arabia in this product range.
In an exclusive interview with SAUDI COMMERCE, Mr. Khalid M. Al Suwaidi, Managing Director of Precision Forgings, said that the company is equipped with the latest technology to meet the top international quality control standards, especially in oil and gas sectors, which are now the most dynamic growth areas in Saudi Arabia & the GCC countries. He added that the company's commitment to quality is discernable from its strident achievements so far not only in sales at home and abroad, but also its success in securing ISO 9001: 2000 accreditation. The company has also received AD 2000 Merkblatt WO & PED/97/23/EC & API 6A Certifications.
The company, he said, has already completed the purchase registration formalities with top oil and petrochemical companies, having received the permanent approvals of Saudi Aramco, SABIC and Qatar Petroleum.
Speaking about the latest technology and machinery installed, Mr. Al Suwaidi drew attention to the high-caliber induction heaters, mechanical forging presses, continuous heat treatment furnace and the 5-station CNC machining line comprising modules for turning and drilling. A SAUDI COMMERCE representative, who was taken round the factory and shown its operations, was impressed with the plant's hi-tech production processes, impeccable quality control and testing procedures, as well as the ERP systems covering all modules.
While the domestic market dominated by oil, gas and petrochemicals remains its major attraction, the company has explored export market opportunities with excellent results.
Besides other GCC countries, the company has established long-term contracts for exporting to UK, France and the US. General Manager, Mr. G.B. Iyer, said that in view of the sellers' market in steel all around the globe, forgings are in good demand abroad. However, he said that the major thrust of the company's marketing is at home, where there is a big potential demand, especially in view of the new natural gas joint venture projects under way.
Mr. Iyer said the company exercises effective control of the production process to assure the buyers total customer satisfaction for a given application or service condition. He explained this exercise involves five strategic components, which are as follows:
Computer controlled and monitored material heating facility for assuring total compliance to the specified requirement of the applicable international standard for both the raw material and the finished product.
Tooling design and manufacturing to ensure continuous repeatability of the product quality without any undue dependence upon manual input.
Systematic validation of all the processes for establishing their capability for all the input parameters and corresponding output characteristics, against the specified norms of the applicable international standard; with a firm targeted objective of maintaining the fallout level of 0.0017% for nonconformities.
Continuous monitoring of the product quality by the production personnel followed by a sampling audit for demonstrating the statistical stability of the processes and validity of sampling plans.
Continuous reviewing of the processes for identifying opportunities for further improvements for maintaining cost effective manufacturing competency for satisfying customers expectations of receiving high quality product at most competitive cost.
Mr. Al Suwaidi pointed out that the company has given top priority to the cause of Saudization and this has helped to create a competent cadre of Saudi technical hands in the production department.
He explained: "Proper attention is given at the recruitment stage itself to select qualified Saudi youngsters with the right attitude for the technical work and for this purpose the company seeks the help of the leading technical institutes in Dammam, Jubail and Yanbu". In the second stage when they start working, these youngsters, he said, are given special in-plant training and those who perform well are recognized for their effort "with a star performer rating to provide Fast Track Training for taking up greater responsibilities commensurate with promotion."
Mr. Hani Nassir Al Hamood, H.R. & Administration Manager, outlined the various steps taken by the company to implement the Saudization policy.
Special schemes, he said, are in place for their training, performance appraisal and promotion. He said that, based on systematic monitoring of their performance, new skill development opportunities are given to them, coupled coupled with due rewards, promotion and other incentives.
Saudis account for 16 percent of the labor force as of now. He said that their share is expected to go up to 25 percent next year and 35 percent by 2006.
The company management appears to be satisfied with the performance of the Saudi technical hands who are already working with the company.
Its experience probably disproves the general impression that the Saudi youth prefers administrative types of jobs and are hesitant to get into the shop-floor work, involving great deal of manual & repetitive work under exacting conditions.
The Al Suwaidi Group, which has promoted this project, has emerged as a diversified business house over the last 40 years of its existence. Mr. Mohammed Salem Al Suwaidi is the Chairman of Al Suwaidi Holding Co. Mr. Jassim Al Suwaidi its Vice-Chairman and President. Its construction services wing is recognized as one of the top three contractors by Saudi Aramco and SABIC.
The other companies in the group are: Al Suwaidi Industrial Services Co. Ltd. (SIS), Al Suwaidi Trading & Development (STD), Al Suwaidi Equipment & Transport Co. Ltd. (SET), Al Suwaidi Real Estate Enterprises Co. Ltd.(SRE), Al Suwaidi Services Co. Ltd. (SSC), Information Management Technologies Co. Ltd. (IMT), and Intermediate Chemicals Company (ICC).
The combined annul turnover of these companies exceeds SR 400 million. (Contact: Precision Forgings, P.O. Box 704, Al Khobar 31952, Tel.: +966- 3- 8123800, Fax: +966-3-8123088, E-mail: pff@alsuwaidi.com.sa; web: www.precisionforgings.com)
Dr. P K Pillai
© Saudi Commerce and Economic Review 2004
