THE RIGHT STUFF
TBY talks to Abdullah Ibrahim Alkhorayef, CEO of Alkhorayef Commercial, on Central Asian expansion, how to survive the lean years, and finding the right distribution formula.
BIOGRAPHY
Abdullah Ibrahim Alkhorayef has a degree in finance form King Saud University and an executive MBA from King Abdulaziz University. He has been in his current position since 2015 and was previously the General Manager.How did the company begin, and how did it complement the group?
Alkhorayef Commercial is more than 60 years old and the product of Alkhorayef Conglomerates. It has developed and created what we call today the Alkhorayef Group. At the time, the company started in the agricultural sector; over the years it has organically developed and diversified into other businesses. Some diversification was due to low market growth in the agriculture sector, and some was due to distributing risks among the portfolio. As everything grew, the group was created in 2007, and the name was put aside for two and a half years. I came back with the idea of consolidating all trading business as capital goods under one umbrella called Alkhorayef Commercial, which became my mandate in early 2010, since it was under the umbrella of Alkhorayef Industries. The business model was very simple: we work with well-known brands worldwide to transfer the technology and quality of products and services and have our manufacturing branch in Riyadh, which we also represent in Saudi Arabia. This was the best approach to get economies of scale when it comes to branches, after sales services, and logistics.
How would you describe your product portfolio?
Alkhorayef Commercial has five divisions, the largest of which is agriculture. Within this division, we have well-known, worldwide brands like Volvo Penta engines and John Deere tractors, which we have been carrying for more than 30 years. Additionally, we manufacture at our facilities and are well known for our pivot system product. We have been a world player in this industry and have been manufacturing our pivot systems in Riyadh for a very long time. Over the years the name and the model have changed, so today we call it Western in most of the world, except in the US and Australia, where we call it Pierce. Most of it is manufactured in Saudi Arabia, but we do have an assembly facility in China. We also manufacture the turbine pump and gears under the license of the American companies Western Lean and Randolph. In addition, Alkhorayef manufactures high-quality steel pipes with a wide range (API). For many years, we also had the patent on perma pipe technology. Our second division is the marine division within Alkhorayef Commercial. We have Yamaha outboard engines and Volvo Penta inboard engines, in addition to diving equipment and military applications for diving. The third segment is the material handling equipment. We became a large and sophisticated assembler with a proper facility, production line, canopy production, metal sheets, and control panels and have worked the whole supply chain. Our capacity goes beyond the local market, and we are always participating in the Middle East Electricity and Power Exhibition and going with the Saudi Export Authority to promote our products. We see Kazakhstan, Azerbaijan, and the Caspian countries as potential buyers, not to mention many places in Africa.
Are there any regions you are looking to penetrate in terms of partners?
The sky is the limit. We are selling irrigation systems in the US, so there are no boundaries if we have the right distribution formula. However, we do not want official partnerships with financial obligations, but prefer to have the pure distribution model. I am working on a great opportunity in Argentina, supported by the Saudi Export Program, which we have already done in MENA, Ecuador, and Cuba.
THE RIGHT STUFF
TABLE OF CONTENTS
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