FOURTH INDUSTRIAL REVOLUTION

Saudi Arabia 2018-19 | INDUSTRY | VIP INTERVIEW

TBY talks to Tameem Al Shebel, CEO of Saudi Mechanical Industries (SMI), on industrial localization, water management, and ambitions for the near future.

How does SMi fit in the industrial localization focus, and what is your primary expertise here?

I strongly believe that SMi resembles what a manufacturer should look like. The accumulative knowledge obtained throw-out the years by JVs and Technical Partnerships, the arsenal of state of the art facilities and capabilities (spread over 118,000sqm. in Riyadh & Dammam) and most importantly the amazing talents that run the organization on all levels, all of these factors makes SMi fit perfectly to play a major role in the industrial localization efforts in the kingdom driven by the 2030 vision. In regard to our expertise, SMi is a fully integrated manufacturer, and that means a lot! To handle the whole manufacturing journey under one roof, where we can insure applying the highest quality control and inspection at all stages to obtain our clients' full satisfaction all the time, is what we do best. When you are dealing with sophisticated organizations locally and internationally, such as Saudi Aramco, National Pump Company USA, Saudi Electricity Company, or Almarai, you need to be at the top of your game, or you simply will be replaced. We have been investing in the diversity of our production lines. We consider ourselves the “Metal Repurposes" of choice, as we can create out of most types of alloys with high class engineered products and components that are used in many vital sectors, including but not limited to, Oil & Gas, Agricultural, Water applications, Automotive, Firefighting and Valves. And with all the hype on Local Content, we can significantly help international companies seeking to operate in the kingdom with their requirements.

How have you worked on development of the technical capabilities?

SMi was founded as a result of a technical partnership back in the early 80s with National Pump Company located in Arizona USA, which leaded us to a success story that we still live and will only continue and thrive. This success story mandated us to follow the same path, SMi is now a licensed manufacturer for Johnson Gear USA, Rovatti Pompe from Italy, Arflu Valves from Spain. Therefore, SMi today is known for the high level of quality throughout the whole manufacturing cycle , in addition to the wealth of advanced machines that enables us to meet their requirements on time, all the time. We continued to build on that, and the more agreements we sign, the more we add to our expertise, such as getting into more metallurgies in order to serve the new industries that we sign agreements with.

What is your involvement in the water management industry?

Water Management have been our bread and butter as we have been in this industry for over 30 years. We are one of 20 manufacturers in the world and the only one in the region that manufactures UL-listed and FM-approved products. Our focus moving forward will be pumps for firefighting as well as the existing needs and demands for water solutions in the country and the region.

How do you envision further regional and global expansion?

Saudi market is the largest in the region in terms of current and future forecasted demands. After the launching of the Kingdom's 2030 vision, we witnessed a great deal of attention and interest from well-known international players in various sectors toward the opportunities that the kingdom has to offer. Most of the players that we had negotiations with always talk about the MENA region, in general. Saudi Arabia is working to enhance its competitiveness as a manufacturer as well as logistics and using existing demand to support creating more opportunities for local manufacturers. Most of the agreements we have signed (and the currently in negotiating to sign) are to cover the MENA region, and we expect more of that to come into the Saudi market.

Is your scrap metal sourced on the global commodity market or is there a local supply chain?

As a matter of fact we rely on both, especially if the local supply chain is available and reliable, as there is a local structure for scrap metal market. For copper, for example, Saudi Arabia is a net exporter and SMi is the largest buyer of copper in Saudi Arabia. There are more opportunities in metal in Saudi Arabia and the country is a net exporter for most of metals. Around 98% of our metal is locally sourced while the other 2% comprises virgin metals imported from refineries.

Is there a great level of graduates specializing in engineering for your industry and do you actively get involved in training and development?

According to the latest reports from the Saudi Ministry of Education, thousands of Saudi engineers join the task force every year, and we do our best to recruit the right talents that can live and embrace our vision and values at SMi. As part of our CSR activities we do meet with the universities and technical colleges to discuss their curricula and share with them what the new trends in the field are. We also invite students from engineering colleagues to visit our facilities, where we offer them a tour and a full day workshop covering different areas of production and the new technologies and their applications that are used in SMi. The output of local universities has been excellent, as Saudi engineers represent over 50% of our engineering workforce at SMi. Internally, we have a rotation program that gives the employee the right focus they need for our industry. Human capital is a major concern for us, and that is what we are building on in SMi. Everyone can invest in equipment; however, human resources, training, and development are a major priority for us, as we spend most of our time on developing and improving them.

How do you envision further expansion in Saudi, with regards to the availability of manufacturing facilities?

We absolutely need more land in the industrial areas to accompany the high demand we are encountering in the kingdom. The Saudi Industrial Property Authority (MODON) have been doing a great job so far, and are working on initiatives that should help solving this problem, one of which is to encourage manufacturers to develop new facilities in smaller cities, where space is not an issue. Though we need more land, we shall wait for MODON initiatives and evaluate them accordingly. Aside from MODON, the Royal Commissions and Aramco have also offered to provide land for industrial expansion. Currently, we have factories in Dammam and Riyadh, although Jizan and Medina also have excellent local human capital, people still come to Riyadh and Dammam to work. Currently, we are working on a land plot close to Dammam to develop something with Aramco and we hope that more spaces will be available in the near future.

What are your expectations and ambitions for the company in the coming years?

At SMi we live by our vision, which is to become “Your Manufacturing Partner." With the hyperactive mode that the industrial sector in Saudi Arabia is going through, which luckily is taking place at the same time as the fourth industrial revolution, we can only expect positive outcomes, as we are witnessing the governmental efforts and support toward the sector and local manufacturers, not to mention the increased number of inquiries from international companies that we have been receiving lately. Therefore, accommodating foreign investments targeting the Saudi market in different industries is our target. And to be able to accommodate this anticipated demand, we are expecting an increase in our technical and human capabilities to be able to diversify and serve other industries where future demand is expected to generate from, in addition to the ones that we already serve at the moment.