Vehicle bodybuilders pumping up capacity in the UAE
Spurred by rising demand, bodybuilders in the UAE are investing in increasing production and R&D
Whether it’s transporting chocolates to the supermarket or aggregates from the quarry, different applications call for trucks to be adapted in different ways to the task at hand.
Enter bodybuilders, which provide that crucial link between truck OEMs and end users. From low-bed semi-trailers to transit mixers, these companies often specialise in meeting a highly diverse set of customer needs.
With increasing demand for vehicles in applications like construction, logistics and municipal services across the Middle East and Africa, bodybuilders in the UAE are looking at ramping up production and R&D capabilities, while also setting their sights on new markets.
One of the most recognisable bodybuilder names is UAE-based Gorica, headquartered in Jebel Ali.
With its presence in Dubai going back 25 years, Gorica’s expertise covers a wide range of products, including curtain-side, low-bed and refrigerated semi-trailers; tippers and transit mixers; tankers for dry-bulk; waste management and municipal vehicles; oilfield equipment and pressure vessels; and other products for various niche applications. These are manufactured in three production facilities in the Jebel Ali Industrial Area and two in Dubai Industrial City.
Gorica also has a manufacturing company in Oman, a smaller manufacturing firm in Qatar and a representative office in both Kuwait and Saudi Arabia.
While the company’s main markets are the GCC and East Africa, it also operates in the rest of the Middle East and in West and Central Africa, says Ivan Fornazaric, managing director at Gorica Industries.
Another major Middle Eastern player is Mammut Industries, specialising in trailers, semi-trailers and truck-mounted bodies. The company has a strong presence in the UAE, Qatar, Oman and Kuwait, where it established a branch over ten years ago, says Fabio Checchin, sales director at Mammut. The company currently carries out production in its factory at Techno Park in Jebel Ali.
Few companies have as long a history in trailer manufacturing as Schmitz Cargobull, which traces its origins back to 1892. The German bodybuilder, which has been active in the Middle East since the 1970s, has supplied numerous products in the region for various applications.
Currently, the company produces over 50,000 trailers and truck bodies annually at its competence centres in Germany, for segments like general cargo, refrigerated transport and the construction industry, says Fabian Bahlmann, general manager at Schmitz Cargobull Middle East.
Schmitz Cargobull is also looking at growing its regional footprint, Bahlmann says. “In addition, we are currently looking out for partnerships in selected markets [to offer] an even better overall package for our customers.”
To meet rising demand for their products, bodybuilders have been working on increasing production capacity. Gorica’s capacity has doubled from a year ago, with the addition of its new 37,000sqm facility in Dubai Industrial City, Fornazaric says. At the DIC site, the company has about 11,000sqm dedicated to the production of refrigerated semi-trailers, and it can produce 2,000 reefer bodies annually.
The company is looking forward to growing demand in the refrigerated semi-trailer segment, driven by a growing population as well as new regulations it hopes to see in the market, Fornazaric says.
Refrigerated vehicles from Europe that outlive the number of years they can be used for food transport often find their way to the UAE, imported as second-hand units. Many are scarcely road-worthy, he points out with concern.
“We hope that things will change, and of course the market is growing and the population is growing. Transportation of food is also growing.”
Bahlmann also raises concerns in the reefer industry, saying that many regional players are currently building up their production of reefers with old machinery from manufacturers in Europe.
Like Fornazaric, he too notes growing demand in the F&B and refrigerated transport industry. “That is why we offer our customers solutions that match their expectations, such as load securing options for beverage transport or ‘speed curtains’ for easier and faster handling.”
Increasing production
As it looks to increase production, Gorica Industries is investing in new machinery for its production facilities, most of which will be imported from Europe. The company is also building a new R&D building at its premises, which will be ready in another four months, Fornazaric says.
Mammut currently carries out production in its factory at Techno Park in Jebel Ali, but is looking to open a new facility for production, also in Jebel Ali.
“We hope to start working there very soon, because we have to optimise our production,” he says, noting that there isn’t enough room in the current factory, as the Mammut Group also carries out other operations there. The new factory will be entirely dedicated to Mammut Industries and is expected to open in about six months.
Enhancing production is part of a strategy to increase market share in the UAE, Qatar, Oman and Kuwait, partly to make up for dwindling sales in Iraq, he says.
Mammut is also eyeing opportunities in the African market, particularly in East Africa, as the cost of transporting trailers to other parts of Africa is simply not feasible, Checchin explains. “There’s no chance to export in South Africa, for example. Unless you are producing some specific bodies that nobody else is making, you can’t be competitive.”
However, less specialised products hardly stand a chance, given the high freight costs. “It would cost much less to ship from Italy to western Africa, than from Dubai to western Africa. An Italian bodybuilder could be much more competitive than us, even if the labour cost is much higher.”
“For the time being, we’re selling a lot of trailers in Ethiopia. We have a good relationship with customers and dealers there. Now we would also like to enter Kenya, but to be honest, it’s not easy. I don’t think we will get results very soon. There are some other countries on our radar as well.”
Ethiopia looks promising for Mammut, and the company has recently received requests for quotations there. Demand in the East African nation is largely driven by construction vehicles, such as tippers and concrete mixers.
Even as the large number of construction and infrastructure projects on the continent offer potentially lucrative prospects, Africa has been hard hit by low crude prices. Countries like Algeria and Nigeria which rely on oil for a significant proportion of their GDP have been particularly affected, Checchin says. “Africa is suffering a lot. This reflects in a lack of money to buy trucks and trailers.”
Mammut is also looking at developing its business in Europe, exploring opportunities in both Western and Eastern Europe, he adds. The company is also contemplating potential alliances with European bodybuilders.
Closer to home, the Omani and Qatari markets are rapidly growing, the latter largely driven by projects for the 2022 World Cup.
Changing load regulations in Qatar, however, are causing some uncertainty among customers, Checchin notes. While some are still buying, others prefer to adopt a wait-and-see approach.
Schmitz Cargobull also expects further legislations in terms of axle load limits, as well as the introduction of more health and safety measures for trucks and trailers on the road, Bahlmann says.
However, varying load regulations across the GCC can be a challenge, as they influence how the truck body should be built, Fornazaric notes. “The main challenges are in the design department. For example, in Saudi or in Qatar, it has to be light and strong. Over here in the UAE, where there are no load restrictions, we have to make it stronger so as to not break.”
“Because of this, we need a lot of different types of raw materials and components in stock, because each country, each market has a different spec related to axles or tyres, for example.”
Another key issue is the growing cost of production, including leasing land and building factories. It is also getting harder to recruit workforce, he adds.
“In the future, it will be important for us that we increase productivity by introducing more automation into our production and employing higher skilled people.”
Looking ahead, although there is still much demand for products for the construction industry, Fornazaric expects vehicles for logistics applications to form a bigger proportion of Gorica’s business.
Waste management vehicles are also expected to be in greater demand, particularly on account of the changing nature of the industry itself. “There is a lot of privatisation taking place. This of course differs from country to country. The second change, perhaps, will be more segregation of waste in the future. That again will require different types of vehicles. We will have to adapt to that.”
