Oman-based Al Khoudh Steel Furniture Industrial Company (AKSF), one of the Gulf’s leading steel furniture manufacturers expects to show a modest recovery in 2017 after facing a slowdown in 2016 owing to sluggish market in the GCC region.

The company’s gross output in 2015 was close to 4,000 tonnes equivalent which took a dip of 15 per cent in 2016 due to slack market conditions, Gautam Bose, CEO and Advisor - Metafurn International FZCO, Jebel Ali, UAE told Gulf Industry.

AKSF’s sales revenues dropped in the year 2016 but with a renewed business focus on value-addition and productivity, stronger growth is expected in 2017.

“The sales turnover fell by about 20 per cent in 2016 as compared to 2015, but we expect to make up the lost ground in 2017, at least by half if not fully,” said Bose.

From developing and expanding into new markets, designing and adding new products to achieving further economies of scale, AKSF’s business focus in 2017 will be to pursue cost management through austerity, productivity and value-added services.

The company hopes to make a mark by staying at the forefront of quality and meeting stiff competition from low cost producers from Far East; changing product designs to meet market trends and developing long term business franchise with its partners’ and offering value-for-money and a solution oriented package to its customers from diverse sectors.

BROWNFIELD EXPANSION

AKSF, which has its production facilities located at the Rusayl Industrial Estate, near Muscat city in Oman, and a subsidiary in Jebel Ali Free Zone, Dubai in the UAE, manufactures furniture primarily under the brand names of Hadid and GO. The companies in the group are limited liability company (LLC) entities, with major stakeholders from Al Hinai family of Oman and a minority holding by British stakeholder.

The Dubai subsidiary is named Metafurn International FZCO and is owned by the Al Hinai family and an investor from the UK who has also been involved in technical and marketing collaboration with the company. It manufactures office and institutional storage furniture adhering to international standards, similar to what is produced in the parent facility in Muscat and markets the range under the GO brand.

AKSF recently completed a brownfield expansion at its Jebel Ali Free Zone facility with an addition of 30 per cent capacity, 5,000 sq m covered shed and installation of automatic robot controlled powder coating line which can handle new range of products in terms of sizes and finishes, creating new opportunities for company’s offerings in the market place.

The company is the sole manufacturing licensee of GO brand of office furniture made to British standards and classified as upmarket. The range is manufactured under a technical collaboration with GO Office Ltd, UK. The products are tested and certified by Fira, UK, a leading agency accepted worldwide for certification of storage furniture. Besides, the company has several distribution agreements with leading companies in the GCC, Europe and Australia.

Its manufacturing facilities primarily consist of modern CNC fabrication machines for giving shape to the products and automatic powder coating lines with robot operation for imparting the final finish to the products, before they are packed and sent to the market. The company consistently invests in machinery for access to latest technology to achieve close dimensional accuracy with good finish and adopt designs in the constantly changing market needs. The quality standards are maintained at high level with products being certified under British and Australian standards. In addition, several initiatives are undertaken by the company for environment, health and safety standards with a view to pursuing sustainability management, Bose said.

The raw material is mostly sourced from overseas countries in Europe and Asia with few items also from the GCC countries.

ENLARGING ITS RANGE

The company over the years has enlarged its product range, which is vast and wide starting from filing and storage solutions for office and institutions to beds and lockers for defense, construction and projects; banquet furniture for hospitality sector, school furniture and cabinets for health sector, seating and desks for office sector; in a myriad of colours and finishes.

Product range expansion included welded storage units such as filing cabinets, mobile pedestals and gun cabinets and ammunition storage unit, Z door locker, planter box, integrated slope top lockers, low height tambour cupboards, and others. It has also introduced a proliferation of new exciting colours such as shiny chrome, deep purple, canary yellow, graphite ripple and mauve in smooth and textured finishes. Additionally, it has also introduced three-tier bunk beds and various customised tables for offices and institutions – offering best value to customers.

According to Bose, compliance (under process) with Sedex audit towards sustainable management and EHS regulations; testing (in process) to AS 5079 standards for some of GO range items is a testimony to AKSF’s continuing focus on product quality, environment and safety.

The company said it has several government clients and private sector organisations in the GCC including the UAE, and in British Isles and Australia. It has recently supplied (directly or through associates) to Qatar Metro, Royal Oman Police, Bank of Ireland and few other prestigious projects in the GCC and Europe.

EXPORTS PUSH

According to Bose, AKSF’s exports constituted three quarter of the group sales, both in 2015 and 2016. “Exports are on the increase over the years and the major markets are the GCC, the British Isles and Australia,” said Bose.

The company faces the challenges of rising costs of input items, sluggishness in markets, stiff competition from Far East Asian and East European suppliers and retention of skilled and experienced workers.

Commenting on the current state of the steel market, Bose said: “The steel industry in the UAE and the Gulf is still emerging in its growth phase and would continue to have a consistent increase in demand for the next decade barring a few blips temporarily as currently seen due to cut backs in expenditure in the regional economy.”