Gulf Construction Online - Afico commissions advanced insulation unit in Dammam

Regional News

D’souza ... new investment to help serve markets better.

Afico commissions advanced insulation unit in Dammam

01 July 2013

THIRTY-TWO years after establishing its thermal and acoustic insulation manufacturing facility in Dammam’s First Industrial City, Arabian Fiberglass Insulation Company (Afico) has just commissioned its new state-of-the-art plant in Dammam Second Industrial City. The new 24,000-tonnes-per-year (tpy) facility will scale up its combined capacity to 37,000 tpy.

Built at a cost of SR190 million ($50.67 million), the facility adds new strategic dimensions for the ambitious company, Afico’s general manager Neville D’souza said.

“This investment is part of our growth strategy and will equip us to provide end-to-end solutions to the market segments which we plan to cater to. This global standard facility is a result of the vision of our chairman Abdulla Al Zamil and confirms the importance of insulation products in the business sector portfolio,” he said.

“The strategic decision to set up the new plant was taken in 2009, at the height of the global recession, as we always believed that insulation market had a bright future. In 2013 we see a lot of construction spend especially in Saudi Arabia and Qatar, so we feel the decision is vindicated,” D’souza continued.

Afico is now a member of Gulf Insulation Group, a sector business of Zamil Industrial Investment Company and a 51:49 joint venture with Owens Corning of the US, a Fortune 500 company and pioneer of glassfibre technology.

The new plant is automated and can produce fine fibres which will provide end-users with exceptional thermal and acoustic resistance properties. “The plant blends international technology with local knowhow, a very compelling value proposition for clients across the region,” D’souza explained. “With additional capacity now being available, we are well placed to explore new segments of business beyond heating, ventilation and air-conditioning (HVAC). New products will be launched shortly in the existing markets especially in the building and architectural segment.”

“The market is competitive,” D’souza admitted, “but we never compromise on quality. Afico is marketed as a superior brand with service to match at a premium price. And the ‘Made in Saudi Arabia’ tagline is an incredibly powerful selling point for us in the local market which, with the scale and number of new projects underway, is a real market game changer,” he added.

In addition, a new building code in Saudi Arabia mandating the use of insulation in all commercial and large-scale construction housing developments such as Saudi Arabian National Guard (SANG) projects will provide considerable impetus and fresh growth to the insulation sector.

The new facility has boosted Afico’s capacity to 37,000 tpy.

Overall, D’souza estimated the Saudi mineral fibre insulation market to be worth some SR300 million ($79.9 million) in 2013, of which Afico caters for approximately SR130 million ($34.66 million) worth with its glass wool products.

“Our order book looks good – business in the first five months has been at a higher level than 2012 and the future project pipeline also looks very positive,” he said.

Currently, 67 per cent of Afico’s existing output is sold in Saudi Arabia, with major clients including ETA Star, Saudi Binladin Group and Saudi Oger. D’souza said the new plant’s additional capacity will add impetus to an export drive which could ultimately see domestic and export sales split 50:50, with North Africa, Vietnam, India, Sri Lanka and Egypt as target markets, particularly in the booming PEB (pre-engineering buildings) segment.

With its increased capacity, Afico hopes to build on its impressive project portfolio which includes Riyadh’s King Abdullah Financial District, the King Abdullah Petroleum Studies and Research Centre (Kapsarc) project (also in the Saudi capital), Abu Dhabi’s Yas Mall, Doha’s new international airport, Bahrain’s Four Seasons hotel, and new international airports in Muscat and Salalah, Oman.

“Afico has changed the face of insulation,” D’souza insisted. “Glassfibre is as an inorganic product which is fire safe, and is specified by consultants and architects as the first choice of material,” he added.

He is proud of the company’s sustainability credentials which mean up to 80 per cent of the glass used in the factory is recycled. Afico boards are rated by SGS to have a minimum 71 per cent recycled glass content (dry weight basis).

“With the new green building codes movement, this is an important competitive advantage,” he said.

Afico’s new capacity and product lines will draw upon a comprehensive network of distributors stretching across Saudi Arabia, UAE, Qatar, Oman, Bahrain Kuwait, Lebanon, Egypt, Jordan, India, Pakistan, Hong Kong and supported by dedicated Afico sales offices in Dammam, Riyadh, Jeddah, Dubai, Qatar and Beirut.

“Most of our channel partners have been with the business for the last 30 years, and most of our business comes through them. As we grow in 2013, our distributors will grow with us, and we will add new distributors for the PEB and building segment,” D’souza stated.

The future, undoubtedly, looks bright for this joint venture between Zamil Industrial Investment Company/Gulf Insulation Group (51 per cent) and Owens Corning (49 per cent). ISO 9001, ISO 14001 and Ohsas 18001-certified and with a total headcount of approximately 200 – almost a third of whom are Saudi – D’souza said the company will continue to prioritise the pursuit of indigenous knowledge and skills, as well as build on a safety record which recently topped 247 days since a recordable injury.

“Saudiisation is in full flow across the Zamil Group and this is a top priority for our chairman and board members,” he explained.

With the recently-commissioned new manufacturing capabilities, Afico’s landscape certainly looks well defined.