UAE, UAE, ABU DHABI - Real Estate & Construction
CEO, Gulf Precast Concrete Co.
Elias Seraphim is one of the founders and shareholders of Gulf Precast Concrete Co. As CEO, he has been instrumental in growing the company from a modest precast yard with 10 employees to a multi-million-dollar company with six factories, 3,000 employees, and AED500 million in average annual turnover. Under his leadership, Gulf Precast has participated in many landmark and iconic Projects, such as the Sorbonne, Dubai Airport Tunnel, Dubai Mall, Presidential Palace, and Versace Hotel. Seraphim leads negotiations for major contracts and initiates innovative ideas within the company.
The pandemic took everyone by surprise. We had a good response and immediately took action, testing all our workers in batches. Since then, they have all now been tested several times. We put in the necessary precautions such as masks, gloves, and sanitizer everywhere. We had teams going to our labor camps on a daily basis to sanitize and organized the work in such a way that we reduced the number of people working in the same area, applying social distancing in our factories and sites, and having people work from home unless they were essential onsite. We minimized the impact as much as possible while continuing to work, as in the UAE construction was considered a vital activity. I am pleased to say that today we are almost working as per normal. Although we have suffered economically due to the downturn, we have not suffered as a result of COVID-19 itself.
There were two types of government interventions, one of which was reducing mobility between the Emirates and labor camps and curfews preventing us from working at night. However, these measures were critical in minimizing the effect of COVID-19. The other side was economic packages and asking banks to be more lenient, though this did not go as far as we would have liked. For example, we have had disputes with banks to get deferment on loans, and they are still charging high interest rates. Many also refuse to provide loans. The central bank gave banks funds but did not control how it was spent and left the banks to deal with it themselves. We have suffered economically from COVID-19 in many ways. First, we lost many contracts and had an order book of AED350 million that was reduced to 220 million. Most of these contracts that were put on hold or canceled were mostly in the residential and oil and gas sectors. Those that we still have are mostly construction projects for schools and so on. We were also expecting to sign contracts with Etihad Rail, which has been deferred, and ADNOC, which has been postponed for six months. We have also not been paid for jobs that we are doing, including government contracts. We also suffered in terms of mobility, as we have many people in Dubai and a shortage in Abu Dhabi. We are at the forefront of those companies that are entitled to the package the government implemented but we did not get as much as we were expecting.
We had to make redundancies and put people on unpaid leave. Instead of paying salaries every month, we are now only able to do so every two months because of cash flow. We were paying suppliers within 60 days but have now deferred to between 90 and 100 days because we do not have the cash.
For those projects that we are negotiating for, we have thought outside the box and have been more efficient, as everyone wants to produce more and be more efficient with better planning and better use of raw materials since the margins are lower. We need to make do with what we have. We have improved in many areas and will continue to do so. We are implementing a system of continuous improvements to reduce costs and make the company more cost effective.
With reduced costs and revenues, we were seriously considering reducing everyone’s salaries, but we instead decided to pay employees 80% of their salaries, with the remaining 20% linked to performance with KPIs. If our employees can prove themselves and demonstrate that they can help the company survive, they will earn possibly more than what was expected. We are still working on this and hope it will be effective. We seek to find the best solutions for our people and do all we can to retain them.
We have three very important priorities, one of which is to continue to have new projects. We have not reduced our sales team but in fact grown it, as there are now less projects, and competition is fierce. Our factories are like hungry wolves that need to be fed all the time. The second is reducing costs through better planning, innovation, thinking outside the box, and being more efficient. Number three is keeping our core business of concrete, GRC, and construction so we are trying to convince people that we are experts and they should come to us and not someone else. We have faith in the UAE, and when this pandemic is over, I am sure things will start again, and we will be there to help it rebuild. The only thing now is surviving the next six months, which will be difficult due to cashflow. If we do not overspend, things will improve, and we will survive just as we did in previous crises.
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