Trading partner

Pointing to the expanse of dustry construction bustle visible from his second-floor office window, Khlat says this is because practically every major project in Dubai has contained at least one producted represented by his company.

This is no idle boast. From its humble beginnings in 1988 as a partnership between several electro-mechanical engineers, FJTCO today represents a slew of world-class, top-quality brands.

“I come from an electro-mechanical background, and joined the company as a partner in 1993. My immediate aim was to nudge the business into the trading environment, as contracting was relatively cutthroat at that stage, with a minimal profit margin. In those days we focused mainly on electrical controls, specifically on the interface panels between building management systems and electrical switchgear,” explains Khlat.

“In terms of servicing the MEP market, our strength has been built on our air-con and plumbing ranges, in addition to electrical switchgear and associated controls. We also focus on boilers, solar systems, cooling towers and heat extractors, for example.” Khlat reveals that the company has a specific strategy of bringing new products onto the local market. A particular case in point was its introduction of pre-insulated HVAC ducting in 2002 to 2003.

Local input

“This was initially more expensive than the traditional galvanised iron product, but through local input we targeted pricing aggressively, and today have 50% to 60% local market share. This product was revolutionary for its time. We knew we had to get to grips with the benefits and the know-how in order to get it accepted widely by contractors. We took the time to train our technicians properly and educate the market as to the associated benefits, and are reaping the rewards of this strong approach.”

How does FJTCO go about identifying leading-edge brands, and what particular products are suitable for the local market? “We attend a lot of exhibitions where the latest technology is showcased, which gives us a heads-up in terms of what is happening on the global market. However, what is important is interpreting these latest developments in terms of the specific local requirements, and what is happening in Dubai at this precise moment in time. The products we focus on must be well-known brands with global exposure, and be backed up by extensive knowledge and expertise. Hence we tend to concentrate on the premium players who have invested a considerable amount in extending their depth and range in terms of ongoing research and development,” says Khlat.

He adds that FJTCO prefers to engage proactively with the original equipment manufacturers it represents. “This is an exciting, dynamic business and trading environment. We do not focus on off-the-shelf, commodity-type products, but emphasise ongoing development and flexibility. It is only possible to cultivate such a relationship with manufacturers who are able to understand the dynamics of the market. This helps to position us at the forefront, and places us in the best position to be able to respond to its specific needs, as well as to set new trends and benchmarks.”

Global leaders

What this means, in a nutshell, is that FJTCO is “proud to be associated with people who understand the industry, and not only tell you about the price. By associating with global leaders, we grow the entire industry.”

Jassim explains that the company deals directly with contractors, as opposed to having a network of distribution outlets.

“We have a good relationship with both designers and contractors. Specifiers will base their designs on your products if they understand how these can give them the leading edge. This, in turn, places a responsibility on us to ensure that contractors are supplied with the most cost-competitive, high-quality products available.”

Khlat explains that this drive has pushed FJTCO in a number of different directions. “We add a lot of local value in order to sustain our business. Our aim is not only to be a trader, but to differentiate ourselves as a complete service provider. We manufacture or semi-manufacture up to 65% of our products, which places us in a totally different dimension.”

The company is able to supply the smallest pump to the largest boiler that may be required. “We have a comprehensive range due to being associated with large manufacturers.”

In terms of the latest trends impacting on the industry, Khlat says energy conservation is finally moving beyond being a statement of intent to a practical, implementable reality.

“We are at the beginning stages, and there is still a lot that has to be done, like DEWA shifting to night loading to conserve electricity. Another major change has been in the area of building design, where energy management has become a major issue. This places a huge onus on us as the supplier to ensure that adequate and appropriate equipment is installed. Another question is how large systems behave over time. Thus monitoring and measurement are becoming equally critical, in addition to design issues such as better insulation and improved air tightness, or ensuring that air-con systems are not noisy and annoying.”

Optimising technology

Interestingly, Khlat is convinced that the solution to the current financial constraints, combined with the need to go green, does not necessarily mean looking to new technologies as a universal panacea.

“There is a problem in that the financial situation could impact on the drive for quality. We need to make the best use of existing technology and optimise its capacity. This means we must not use cookie-cutter solutions for buildings with diverse requirements. Now a more conscious and considered approach to adapting different buildings.”

Khlat says Dubai has long been a challenging environment for all players. “There was a time when the industry looked at building a hundred floors as a major achievement. Now we have an entire city, which poses the challenge of thinking bigger and wider. This adds to the necessity for all buildings in the urban fabric to be designed efficiently, as well as to operate optimally. In this regard, more regulation is obviously needed.”

“We are only at the beginning of this long road. Both the municipality and the government have to take the next critical steps. Stating your intentions is one thing, but these then have to be applied. The end result is that being green must not only be a requirement, but a stipulation. This will obviate the trend of over-specifying tender requirements in the interests of redundancy, for example,” comments Khlat.

New phase

He says that Dubai has for a long time provided a unique opportunity for all players to be involved in some of the world’s most iconic projects, in the world’s most dynamic and potentially lucrative construction industry.

“We are now entering a new phase, where the concept of ‘normalcy’ is being redefined. Only time will tell exactly what ‘normal’ will turn out to be.”

One consequence of this changing emphasis is that the time from the initial idea to the final execution of a project has become considerably shorter.

“This is mainly due to cash flows drying up and impacting on the entire project pipeline. I think we are going to undergo four to five years of immense pressure, where contractors will be required to be ultra-competitive and manage their resources stringently. There will be no more extras or perceived ‘fluffy’ things.”

Contractors will also have an opportunity to think about projects more carefully, instead of trying to rush them to market as fast as possible. But Khlat warns that this does not constitute a ‘breathing space’ for the industry per se.

“We now have to adapt to a new reality. The goalposts are shifting. We cannot relax and be any less aggressive in our approach, as there are still considerable opportunities to be reaped, especially in terms of infrastructure development. This presents a whole different area of growth and diversification.”

Momentum

This new momentum has had a different impact on FJTCO, which has chosen this period of uncertainty and downturn to focus on consolidation and regional expansion.

Khlat sees this as a logical strategy to deal with the exigencies of the current market. “Now is the time to look abroad, when the pace is slackening off here.”

“Other areas are calling, and we are now in a position to be able to respond to their needs. Our aim is to increase awareness of our brands outside of Dubai.

“This does not necessarily mean we plan to expand while the rest of the market is contracting, as now is not the time to be overly adventurous.

“However, we cannot be gloomy and pessimistic indefinitely either. There must still be excitement in what we do. We need to mobilise, energise and motivate. We must never say it was just another boring old day at the office.

“Hence we have a responsibility to galvanise the industry with the latest trends and technology. This ensures respectability. And recognition means a lot in this industry.”

Khlat is hesitant to prognosticate on the short-term future, as he insists he is no economic strategist, but merely a crystal-ball gazer like everyone else. “We need to confront the problems of the industry in a transparent fashion.

“Now we are more experienced and are slowly putting guidelines into place. There have been problems, yes, but no collapse. Will we emerge any the wiser, and how long will it take? No one knows.”