Al-Futtaim Industrial Equipment companies (FAMCO, CV & SELECT AUTO) are some of the biggest names in the distribution channels of the Region, but the company has become much bigger than you may realise. As part of the Al Futtaim conglomerate, the firm’s powerful influence in the commercial vehicles and equipment scene has placed it at the centre of the country’s ambition to be greener and smarter on its roads and its construction sites. 1,000 people in Qatar alone. This isn’t just a company that is going places, it is already there.
It is able to lean into some of the world’s leading OEMs such as Volvo Trucks, Buses & Construction Equipment, Toyota & Linde Material Handling Equipment and HINO Trucks to bring their technology and expertise into a vast variety of sectors. The company is also growing regionally, establishing itself in some of the biggest players in the region in markets such as Saudi Arabia and Qatar. To give you a sense of its size, the company currently employs close to a 1,000 people in the region.
This isn’t just a company that is going places, it is already there. After receiving multiple prestigious awards at this year’s T&FME Awards, including Best Dealer of the year, Ramez Hamdan, Managing Director of Industrial Equipment, sat down with T&FME last month and in a wide-ranging interview and spoke about his talented team and the hunger that is driving the firm onto further growth.
Thank you for your time Ramez. Can take us through some of your 2022 highlights?
2022 was a phenomenal year and the team outperformed their initial targets, across all divisions from Volvo trucks, Volvo construction equipment, Volvo buses, Linde Material Handling, Yanmar Marine, Eicher, Hino Trucks, and our Toyota Material Handling business especially witnessed outstanding results.
We have a highly diversified product portfolio, providing total solutions to a wide customer base, operating across all essential industries, including but not limited to: Logistics, Manufacturing, Contracting, Marine Services, F&B, Water Management and others. Through expert analysis of market demand and dynamics we are able to tailor solutions which cater to industry specific applications, through a full-value chain solution.
Can you talk a little bit about your current market share in the performance of the company and what are your plans for success this year?
In the UAE, in terms of material handling equipment we command 50 percent market share, split between c.44 percent with Toyota Material Handling and c.5 percent with Linde. In the Japanese Trucks segment, our market share percentage is north of 40 percent with HINO trucks.
Construction equipment is picking up. We’re coming in at second with Volvo Construction Equipment, and we expect further growth over the next three years. We have captured a quarter of the European Truck Segment with Volvo Trucks, and greater growth is anticipated, with strategic large fleet deals and the power of up-time telematics. In the Marine engines segment, Yanmar is our flagship product line and is the segment leader.
Volvo trucks has already witnessed a magnificent start to the year securing large fleet accounts in Abu Dhabi and Fujairah, operations in the logistics and cement manufacturing industries.
Our success is fundamentally calculated by our skill in providing quality in a competitive market, to which-end we strive to ensure our customers receive great value and enhanced productivity for their businesses, with our world-class products and services, support by a dedicated team of industry experts. We are as well working on expanding our brand portfolio to capture and fulfill demand across all price points in the market.
What would you say is the perception and the strength of the brand compared to some of the other competitors that you have?
We have worked tirelessly to build credibility and trust in our business and brands, and we live up to this promise by providing best in class service and support levels, and that’s how we stay ahead.
Support is key and that’s why we provide service support around, the clock, 24/7, across the seven emirates. Keeping our vehicles and equipment running flawlessly and to their full potential, is how we ensure our customers maximie their revenue and profit.
Our growing market share is a testament to the continued trust in the quality products we repre-sent, top-rate service and support levels, and our dedicated team who champion our customer-centered approach.
Two years ago, the light and medium vehicle demand was moving towards FMCG and logistics. Is this still the case?
This market is definitely still growing. You can see the tourism and the real estate numbers in Dubai are still exceptionally high. More people and more residents are coming, so the demand on the F&B sector is therefore higher. There is higher demand for warehousing and transportation in FMCG and logistics segments. We expect steady growth in the years to come.
Dubai is the hub of this region and beyond. After COVID, there has been deep focus on food security and we have been working with a number of our international FMCG customers and exploring automation for their warehouses to achieve greater efficiency and cost optimisation.
There’s obviously been a concerned on operation and fuel costs since COVID – has this changed the buying habits of your customers?
Not really, the products we sell are very high on fuel efficiency and with best-in-class total cost of ownership, whether it’s the HINO on light duty and medium-duty or Volvo trucks in Medium and Heavy Duty – which feature the latest technology and engines that maximise fuel efficiency and lower CO2 emissions. While sustainability and green mobility are something we genuinely, total cost of ownership remains one of the unique selling points as 33 percent of operating fleet costs is from fuel.
Has there been any requirement for bodies that are more aerodynamic, anything that helps lower costs?
Aluminum and modern design are the new solutions for vehicle bodies; for improved aerodynamics and fuel efficiency, we work closely with our customers to determine the best option for their requirement. Different material grade for truck and bus bodies come at different costs and we work within our customer’s budgets to provide them with the best solution from our world-leading partners in the super-structure industry.
A lot of companies in your busiest segments have moved into the digital space. Have you seen a change in the way buyers want to purchase or interact with FAMCO?
This goes back to the nature and complexity of our business. With passenger cars, you can go online choose the basic, the medium or premium models… but with a truck, it’s different seeing the customization. In material handling and warehousing, one small change of spec, can buy you a very different machine, and we’re talking about expensive equipment for specific applications, where our engineers would work with our customer closely to provide precise specifications.
Even on the trucks, you need to see the specs and work with your customers on the ground and on-site – sometimes could be a crane required for fitment, as an example. Waste Management and construction equipment requirements are even more sensitive and complex.
For us, the digital footprint we have established helps our customers in as-built premium used vehicles and equipment, to facilitate their search, selection and purchase journey.
I guess a large degree of your business is repeat customers who value sort of the advisory service that you can provide on?
Precisely, we always say we are the true business partners with our customers. We have a team of industry experts experts, in sales and after sales that treat the customer’s business as their very own, that’s why we work very closely with our customers and plan ahead together to ensure they reach their maximum potential with our products and services.
We’ve seen on the construction side of things that there’s a lot of willingness to enter the digital space. From your kind of point of view, what does the digital space look like?
All our products are available online. Catalogs are available online. Our used website, which was recently launched, is available online, so you can see stock availability and the product range, but the procurement or the purchase of the product needs to be handled face-to-face.
From a digital technology point of view, what we’re offering currently to customers are insights, reports and analysis to look at driver behavior and the fuel consumption. We consult customers on construction sites on the machines’ inflow and outflow, so they can use them in the best operational way on site to consume less fuel and experience fewer breakdowns. This helps the customer to work more efficiently.
We recently set-up the first uptime centre in the Middle East with Volvo, where we have a team that monitors the performance of the trucks and equipment on site. If there is about to be a breakdown we alert our customer, to inform them that the driver or operator is either speeding or is heavily using the brakes. It there is a technical error we dispatch a team to act preemptively. This is something the customers really appreciate. You don’t wait for the failure you proactively rectify it.
Obviously earlier in the year, His Highness declared the Year of Sustainability. How important do you think sustainability will be going forward to your operation?
By 2030, 30% of the fleet in the UAE should be a green and by 2050, 100% of Fleet should be electric. As an automotive group, we have started the journey to electric and hybrid 10 years back by supplying hybrids to Dubai Taxi and other organizations. We started testing hydrogen in the market with Toyota Cars almost two years ago. In terms of trucks, we started testing HINO’s hybrid five years ago and with Volvo trucks we will very soon be launching a fully electric truck before the end of the year.
For the last two years we have been testing electric buses with Volvo. We have just see the RTA release a new tender asking for 20% of the tender to be electric. We have been acting as consultants with the authorities to help them get the latest technology from all over the world; testing across all brands because you need to make it fit the operation first and the environment second.
You need to test the batteries particularly in summer to ensure you have enough power, to run the AC and measure the range of the trucks, but I strongly believe going forward that this is going to be a key decision especially on small trucks.
Are you seeing any customers show leadership in sustainability?
We can see from lot of customers, they want to be pioneers and want to be the first to get the electric trucks. They want to be front runners in this segment. They’re not doing this only because of cost or price, they’re doing something for the planet and the future.
We see it especially with International and multinational companies, they have these initiatives from within the companies. We see a lot of companies want to be the first.
When it comes to switching to fossil fuels alternatives which segments will lead the way in the UAE?
We need to start somewhere and light and medium are already in the city through last mile delivery, and this where you can build links to infrastructure. You need to have the infrastructure bill built for the electric or hybrid truck and vehicles. We have started seeing the infrastructure in the malls and the residential areas and some public areas driven by the country’s vision.
Cross border and long-haul delivery are still not there yet because that that needs different type of infrastructure, but I can see in the coming two to three years, more light duty electric trucks, and vans will be able to be on the road 100%.
Finally, as a business leader, what advice can you give our readers who leading their own operations?
It’s all about service for us. Listening to the customer feedback, appreciating it, whatever it is, treat it with the same smile and appreciate the feedback. You always need to be close to the customer.