The region’s leading aluminium extrusions profile maker plans to focus on developing new customers in the GCC market and penetrate other markets such as Africa
Bahrain Aluminium Extrusion Company (Balexco), one of the major suppliers of high quality aluminium extrusion products, is aiming to penetrate new markets outside the GCC region as a strategic initiative in the coming years.
The region’s leading aluminium extrusions profile maker has said that it is bullish on its future plans that include exploring the Middle East and North Africa (Mena) region and developing business relations with key traders and other clients of the region.
“The focus is on developing new customers in the existing GCC market and working to penetrate other markets such as Africa,” Balexco chief executive officer Jassim M Seyadi told Gulf Industry.
Additionally, the company plans to garner a sizeable market share by focusing on promoting thermal break system profiles in addition to the regular architectural/ industrial profiles.
“The development of new opportunities for thermal break profiles and extension of the Balexco system through innovative marketing is an example of the forward thinking approach of the company to promote innovative products,” he added.
The company which has a longstanding presence in the Bahrain market, already enjoys a significant market penetration in the GCC and is constantly employing new strategies to improve its widespread presence in the region.
“We generate almost 75 per cent of our revenue from the export market,” asserted Seyadi. Within the GCC, Saudi Arabia accounts for 50 per cent of its total sales followed by Bahrain with 30 per cent and 20 per cent from the rest of the GCC countries.
To achieve higher customer satisfaction level and to serve them more professionally, the company has opened full-fledged branch offices in Saudi Arabia and the UAE, the two top markets of GCC from where it gets the bulk of the orders.
Balexco profiles have also been doing exceptionally well in Kuwait market where it has business relations with some of the top traders. Further, having been approved as a supplier for Public Authority for Housing Welfare will further boost the sales figures of Balexco systems in the export market, he hoped.
In Bahrain, Balexco is specified in Ministry of Housing and Balexco Architectural System and is used for their projects.
“We have three biggest traders directly associated with us from the beginning and Balexco enjoys a dominant position in the highly competitive Bahrain market with a market share of nearly 70 per cent. We are quite bullish and upbeat for the short and long term prospect of the market,” he said.
Some of the recent major projects, the company has been involved with are: the Ice Mall in Riyadh and Radisson Blue Hotel in Makkah, Saud Arabia; East Hidd Housing Project and Private Public Participation (PPP) in Bahrain.
Since its inception in Bahrain in 1977, Balexco has been instrumental and a pioneer in the growth of downstream aluminium industry in the kingdom. The company is among the oldest aluminium extruders in the Gulf and continues to offer contractors quality products.
“We work in close coordination with developers and fabricators who are well versed with Balexco system profiles and are specified by architectural consultants for various government and private projects,” said Seyadi.
Balexco provides its aluminium profiles in three surface finishes namely mill finish, anodised and powder coated finish. As in 2015, in the current year too, 55 per cent of the sales came from mill finish, 35 per cent from powder coating and 10 per cent from anodized product segments.
Listing its top-selling products from its profile of offerings, Seyadi said Balexco system profiles account for 25 per cent, commercial profiles (65 per cent), kitchen profiles 10 per cent.
The company’s overall production for the year 2016 was around 23,000 tonnes per annum and it is working closely with its sister company Middle East Technical Company, for product supply.
In 2017, the company plans to make significant investments in its powder coating production by installing a new vertical powder line and new horizontal powder booth. Both of these are state-of-the-art machinery and represent the best available technology in the area, he added.
Balexco has four modern extrusion press lines available for production of a range of high quality extruded products. In addition to the extrusion presses, it has a powder coating and anodizing facility available with annual capacities of around 5,500 tonnes and 3,500 tonnes respectively.
During the last two years, the company embarked on a varied expansion and modernisation plan aimed to place the company in a stronger position to meet the future demand and challenging market situation. In 2015, the company finalised a major revamp of three of the extrusion presses to enable operating to full capacity. Additional significant investment has been made in the installation of infrared die heating oven to enable rapid and reliable heating of dies for extrusion.
In terms of sales revenue, the company is expected to post lower revenues of BD 23.38 million by the end of year 2016 as against the reported revenues of BD 30.41 million in 2015. The tonnage forecasted for 2016 is 20,000 tonnes as against 21,847 tonnes in 2015.
Admitting that the sharp decline in oil prices and the consequent measures taken by the government to decrease spending had a severe negative impact on the company’s markets and sales, Seyadi said: “Lower oil prices have adversely impacted the market demand of the profiles due to slow down in the construction activities in the GCC countries.”
“Additionally there is a liquidity crunch, especially in Saudi Arabia market due to declining oil revenues for the government, which is also an adverse impact,” he added.
Despite the challenges the industry is currently fraught with, Seyadi is optimistic about the future growth of the sector and sees strong demand worldwide for aluminium extruded products as well as Balexco’s products.
“The near and medium term is viewed with enthusiasm by the company for continuous growth opportunities in the GCC and other markets. At the same time, Balexco will work to meet the challenges faced from the competition in the region to stay ahead of the competitors through its long established position in the aluminium extrusion market,” Seyadi said.
The company sees major prospects in the areas of industrial and transport applications, particularly in certain segments of automobile industry and says that it is ideally placed to service the demand for aluminium extruded products in these segments.