Komatsu and ALJHE’s assault on the Saudi market has been given its official launch, CMME looks at what could be in store for contractors
Saudi Arabia with its budget of anything between $1 trillion to $3 trillion, depending on which financial analyst you subscribe to, is by far the most inviting construction market in the Middle East.
Komatsu has an installed base of thousands of machines already proving themselves on the roads, sites and plants of Saudi Arabia. However, while Komatsu’s machines have made a huge contribution to the Saudi market over several decades, the famous Japanese marque’s presence is about to experience a massive boost.
Last year, Komatsu was brought into a joint-venture between Abdul Latif Jameel Group – a name synonymous with the ubiquitous Japanese brand Toyota in Saudi – and Sumitomo.
Their JV, Abdul Latif Jameel Heavy Equipment, paves the way for a fresh start in the Kingdom for the famous yellow machines and it has already begun to establish a substantial foothold in the Saudi market. Last month it made its formal entry into the market with the great and good of the Saudi industry gathered in Riyadh.
Describing its achievements and progress in that first 12 months as mere preparation for the launch does it a disservice as ALJHE has expended considerable effort to build its presence in the Saudi market place.
Indeed, in impressive time it has established a string of facilities in all major cities in the Kingdom through a growing network of regional hubs. Now up and running ALJHE is sprinting with the Komatsu line and has rapidly stocked and equipped its 4S facilities in Riyadh, Jeddah, Dammam and Abha with a sizeable parts inventory, service vehicles and of course equipment. Investment continues and further purpose-built facilities are expected to come on-stream in the next two years.
Mohammed Arif Chishti, the managing director at ALJHE, explains that the Group’s entry into heavy equipment is a natural fit for the ALJ.
“ALJ was a name that was missing from the very buoyant construction segment,” he says. “Recent investment into the heavy equipment sector is aligned to Abdul Latif Jameel’s commitment to advancing the development of the region. By providing world-class construction and allied equipment coupled with top-quality guest support standards, as well as Sharia-compliant financing, we are doing more than just supplying products.”
With a large number of new and older equipment in the market, it is essential to be able to deliver service and support across the Kingdom.
“Traveling time is thus significant. With the aim of providing fast responses to our ‘guests’,” said Chishti. “Four custom-designed facilities are also under construction. These new facilities will open to guests during 2015 and are designed with the most modern concepts; with specific attention to relation between core functions (sales, service and parts). Speed of parts supply is critical to equipment up-time, hence we have provided for adequately-sized parts warehouses with each facility.”
ALJHE’s operation may have only commenced but Komatsu’s broad product line-up provides it with the opportunity to be a significant player in many business segments such as general construction, the cement and mining industries, road building, oil and gas, public authority projects, and water and sanitation. It has already supplied to a number of key projects and is playing a major role in the further development of Saudi Arabia. At the heart of ALJHE’s approach to market is the placement of the customer at the centre of its business.
Speaking at the official launch ceremony at the Ritz Carlton Hotel in Riyadh, Chishti pledged ALJHE’s commitment to the Saudi market, its industry and its young people. His words were received by the Japanese Ambassador Jiro Kodera, senior Saudi government officials and representatives of many of the leading companies in the Kingdom’s construction and industrial sector.
“Guest care is central to our business,” he told them. “We endeavour to become our guests’ preferred partners, supporting them through the life of their equipment. Our scope includes initial consultancy advice on the type of products they should buy or rent, proposing financing solutions, service agreements, onsite repairs operator training, technical training, immediate availability of parts and more.”
ALJHE employs 200 associates with more than 75% being in the area of aftersales – parts, service and guest support, Chishti explained.
Chishti added: “Our guest support standards ensure best in class up-time, thereby providing optimum utilisation of the equipment. We will be able to provide employment opportunities for the local youths too.”
As a recent visit of Saudi’s Crown Prince Salman Bin Abdulaziz Crown to Japan, where he was greeted by the royal family, demonstrates, the links between Saudi Arabia and Japan run far deeper than may at first seem obvious.
ALJHE has taken its inspiration from its Pacific Ocean partners, adopting the Kaizen-style concept of continuous improvement across all areas of its business. Kaizen, which is Japanese for ‘improvement’ or ‘change for the best’, is a philosophy that focuses on the continuous improvement of processes.
Seen in industries as diverse as manufacturing, engineering, and business management, ALJHE says it is seeking to instigate its own programme for changes. It is focusing on delivering the best experience to “guests – from the quality of Komatsu products to the top-quality guest support standards”.
With the large population of Komatsu equipment already operating in the country, ALJHE has an opportunity to support a ready-made collection of customers, who have high expectations of their Komatsu machines.
Much of the work in the lead-up to this moment has been focused on building up capacity and developing its structure to ensure that it is positioned to approach both new and returning Komatsu customers alike with a fresh approach to supporting them. March’s official launch was a chance to make these intentions clear to the market.
“ALJHE is a dynamic organisation and is focused towards building its reputation as a key force in the equipment segment of Saudi Arabia,” explained Chishti. “This will be done through our core brand – Komatsu. Saudi Arabia’s economy is buoyant and indicators show that this will be the case for the foreseeable future.”