Heavy Hitters: Not an average Joe
CMC has been a major player in Dubai for decades. With Terex now safely under its stewardship, general manager Joe Lahoud says the company’s transformation and regional expansion is all systems go.
Joe Lahoud explains the reasons behind CMC’s restructuring
CMC has been a major player in Dubai for decades. With Terex now safely under its stewardship, general manager Joe Lahoud says the company’s transformation and regional expansion is all systems go.
Joe Lahoud begins by neatly summarising the current air of optimism in the market.
“I think the worst is over,” says the general manager at Construction Machinery Center or CMC. “You can see some activity returning to the market. Some big projects being activated and people keeping busy. But everyone has smaller expectations than before.”
He pauses then dispenses some advice for those wanting to keep their finger on the pulse of a changing market: “Just don’t read Gulf News.”
As head of CMC, Lahoud now has an enviable selection of equipment. Long-standing relationships with (among many others) Germany’s Wacker Neuson and Schwing-Stetter, and Italy’s Pramac, have recently been complemented with HC forklifts from China (“HC is our first Chinese brand, we had to do a lot of research to find a really quality one”) and global player Terex’ range of ADTs, rigid frame trucks and backhoes.
Having started in 1973 as the equipment arm of the Al-Habtoor Group, CMC celebrates its 40th year of operation in 2013. While its headquarters are next door to one of Habtoor Leighton Group’s offices, he explains that the company is now an entirely independent entity, even if it shares a chairman with the famous construction company. “We are under the private ownership of the chairman of HLG, Riad Al Sadek,” he explains.
Lahoud says that his chairman has been spending more and more time at the offices of CMC as the company continues to develop. Last month marked Lahoud’s third year in charge and you get the impression that he is only just getting started.
“I took over in February 2010 and we have been going through a major restructuring, rebuilding and re-organising exercise where the mission was to take the company from being a conventional dealer to being a regional machinery and capital equipment solution provider. We want to be a major player.”
It has spent four decades as a fixture in the UAE market, but taking Terex on board has also given it extra clout in the heavy equipment sector. In fact the company which is based at the end of the runway at Dubai International – to use a bad pun – is on the brink of taking off on international expansion.
In three years, Lahoud has transformed the way CMC conducts itself in the market. This has involved a roots up process of asking some difficult questions about how it operates and how it can catch-up and surpass other companies already embarking on regional programmes of growth.
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While much of the effort expended has been on internal changes, the first step he says was an external one, turning Construction Machinery Centre into the more upwardly mobile CMC acronym.
“The first thing I did was the re-branding,” he explains. “I don’t want people to think of us as somebody who only supplies construction machinery. We’ve diversified our portfolio into other industries and sectors such as logistics, industry, catering, airports and even agriculture. If we only concentrate on construction machinery, then when that segment goes down, we go down with it.”
When he adds that CMC is now providing lighting, he doesn’t mean temporary site lighting, he means street lighting and airport lighting: “We’ve got the exclusive deal for Hella. They are a long-standing German company who invented the headlamp. So this is a new business line for us.”
Was it hard to convince them that a company that sells construction equipment could sell lights to commercial interior designers? He laughs: “It took a year and a half.”
To manage that brand he is recruiting a dedicated product specialist. It’s illustrative of how he has re-organised the company following its reorganisation. A consultant was brought in to do a complete budgeting exercise for the company and then another was brought in to help CMC earn ISO accreditation.
“I didn’t just want a certificate on the wall. It was a vehicle to map out all the processes in the company and what processes we should have. We achieved ISO last year,” he explains. “For oil and gas companies, government organisations, you need to be certified. Yes we need it for those people, but the main purpose was for the restructuring.”
Restructuring inevitably means the loss of jobs in an organisation. Lahoud says in this case it was an organic process rather than an overnight shedding of personnel. “We had to layoff outdated people who couldn’t contribute to our set strategy, but we did it slowly. Most companies build up a culture and you have to be really careful how you tackle it. You cannot rock the boat from day one.”
He continues: “CMC was like any conventional equipment dealer in the UAE and lots of family companies. One sales person can handle all the products for the company and become untouchable. Some nationalities don’t really teach or relay information, because they are afraid if they teach you they might become dispensible.”
To tackle this culture within his own organisation he has created structue with heads for each division of its major areas of operation including: concrete machinery, material handling, construction, power and air solutions, lighting, rental. Reaching over to grab an organisational chart, it becomes clear that it is a flat structure designed to allow him to have direct access to each element of CMC.
“I can liaise and coordinate between divisions. A contractor can probably buy from each division. Now we can be more focused on making sure they do.”
The next major step for CMC is regional expansion. With the UAE and nearby markets crowded – and increasingly featuring its Dubai neighbours and competitors to the company – it is being pushed to further afield. With shelves of books that read like a geographical section of a library, it is one on Libya that stands out. Its use is practical he explains.
“We’re trying to focus on places that other people aren’t, like Libya,” he says. “In our business, distance doesn’t make a barrier. There are differences in markets, like regulations, brand loyalty or certain ways of doing things.
“However with the platform we now have, it can grow as we grow, even internationally. We have started a company in Basra for the Iraqi market. We have rights for four of our products and we’re looking for others,” he says. “Iraq, in general, is still a tough market. The new equipment market is just for the government sector. Everything is else is used. They are afraid to buy new because of the security problems. With used equipment, if someone comes at you with a gun, you won’t regret losing it. However there are opportunities with the public tenders and the oil and gas companies have requirements that aren’t as rigid as the Western Region for instance.
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“The equipment we sell is global equipment. Whatever market you are in, the dynamics are the same, whether the contractor is in the US or Iraq. The types of product we sell can go to any contractor.”
