Andrew Yeghnazar, vice president, international business development & sales, Rath Gibson
What portion of your business is in the Middle East?
I would say the Middle East and SE Asia accounts for about 20% of our international business. That is a portion that we see increasing. Three years ago it was relatively insignificant, so it has really been built up in the last three years. Despite the global downturn last year it’s still stood strong at roughly 20%.
Are you looking to expand in this region?
We have a presence in Bahrain for the Middle East and a presence in India for SE Asia. One of the things we have been talking about is a localised distribution centre. We haven’t moved forward with that yet but we are looking at it. We haven’t put a timeline on that yet but we are thinking around 12-18 months. A lot of that depends on where the service companies and partners we have here, what they feel is needed. If we get a heads up and they feel the market is moving in a certain direction then we would support that.
Another way we are looking to expand is to ensure we are registered as a preferred vendor to the major companies in the region. We started this initiative a while back now and have started to develop a solid list of AAA customers that we are registered with and trust we will be able to serve their tubing needs on both current and future projects.
What have been your impressions of the region?
You just need to look around the places we visited Dubai, Abu Dhabi and Doha and you see amazing development, awesome construction coupled by tremendous vision. I acknowledge there are some challenges we still need to face here around financing, but long term and sustainable growth is a significant part of the answer.
And that is no different to our challenges and needs. We strive for sustainable and profitable growth as a business – and many times that has to come from creative and innovative developments – and there is no reason it always has to be invented somewhere else – why not right here.
What are your hopes for next 12 months in this region?
Doubling sales isn’t too difficult is it? Everyone is focused on China and India, but if you look at the Middle East, I believe it offers a significant growth opportunity. What is interesting is that even in places like Saudi Arabia has power issues and you still get power shortages, so there are issues there. So what we are trying to do is tap into the region and provide solutions in the ground.
And that is what our office in the Middle East does. I’m interested in creating profitable sustainable growth. What we need to be doing is not looking to make a quick buck. We sell our tubes into a cross section of markets and everyone in those markets wants to see a sustainable model. If it’s not sustainable then it becomes difficult to provide support.
What important lessons were learnt from last year?
We are restructuring the company. In a sense we are positioning for further growth internationally and our investment bankers are seeing the international side of the business as the major growth area moving forwards, and the Middle East plays a key role in that. Then you have other area like South America, SE Asia and these are all areas where we want to invest. The key becomes how we can find strategic alliances and bolt on acquisitions, if that makes sense then we will go after them as well.
I think strategic alliances are good more in the Middle East and that is something we are looking towards. The oil and gas sector would be one where this makes a lot of sense.
