A strong chemicals marketJuly 29, 2020
Abdullah Al Sanea, deputy managing director of Al Sanea Chemical Products, talks to The Energy Year about how the company has ramped up its sanitiser production in response to the Covid-19 crisis and its plans for building resilience through diversifying. Al Sanea Chemical Products is a chemical manufacturing, trading and supply company.
Kuwait has established a system of special permits during the Covid-19 pandemic for essential industries. Have you been granted these?
We have. In Kuwait, they have asked us to work at maximum capacity, which is 24 hours a day. We are doing everything possible to continue to do business. Our company is a chemicals company. One part of our chemicals business is the local production of sanitisers and disinfectants. Of course, in this pandemic there is a huge demand for those products.
The raw material is ethanol and isopropyl alcohol. These are difficult to get in many countries around the world, because they have stopped exporting it, as it’s required in the hospitals in their area. Therefore, the government here in Kuwait asked us to work 24 hours and produce the maximum amount possible. So, we were granted special permits to continue production.
This is a very interesting time for you. Tell us how the demand for your products has changed in the last few months.
Everyone is buying sanitiser in huge quantities, which perhaps is not rational, but this is driven by fear. So, we are trying to manage things properly to make everyone happy. We distribute our products among all who require them, hospitals and individuals alike.
Are you only serving the Kuwaiti market, or are you able to send products to the rest of the region?
We are not allowed to send any ethanol-based sanitiser or disinfectant outside of Kuwait at this time. However, we do receive huge orders, which are enough for us to work for two or three more years. Even in Kuwait, it’s a huge quantity to supply. Every day, I come to the office and find a line of people outside waiting to buy sanitiser. It’s become like food and water in Kuwait. We want to make these products available to every individual in the country at the same price, so we haven’t increased the price.
It looks like your products are going to be in demand for the foreseeable future. This is a new market reality.
Yes, I also witnessed the H1N1 virus about 10 years ago. People also went crazy for sanitisers and disinfectants for a limited time. I hope people continue to have an awareness about using sanitiser, because it’s good for protecting oneself from viruses.
Have you had to increase the workforce to be able to meet the increasing demand? What did you have to do to cope with this new reality?
The situation was very difficult in the beginning because we were short on raw materials and bottles. We couldn’t supply all the demand. This was the first time I have been in this situation, where sales were easy but we couldn’t supply the demand. However, we worked here with our team to increase capacity and shifts.
For protection, we have shifted employees from other divisions only to handle this. We also contacted countries such as China, India and England for supplies. Our research and development team did an excellent job developing other formulas based on the raw materials we had because the major raw material, ethanol, is difficult to get now. It’s more expensive than oil or gold. So, we have developed something as effective as ethanol and helped others to do this as well.
Overall, the situation is not better than before, because our business is global and based on chemicals for fuel companies. This is done in huge quantities and now we only sell small bottles, which you can only do a limited number of. However, I’m very happy because while many companies in this pandemic are not doing anything at all, we are doing something helpful.
It’s clearly an opportunity for you to grow your business. Do you also see an opportunity to take over competitors or expand your operations in similar areas of activities?
Yes, it’s a great opportunity. We have supplied a lot of places here in Kuwait, like the chamber of ministries, oil companies, hospitals and every essential market in Kuwait. It’s good that we stay in business with those market areas. After they try our products, they believe in the company and our product quality, and will continue to do business with us.
The government has also been very happy with us. It’s an essential part of each country to support the local manufacturer. When they realised they couldn’t import products from another country, they trusted us to do it. We supply all hospitals and critical areas with disinfectants and sanitisers. This will open even more opportunities for us.
What has been the biggest challenge for you in this period?
The biggest concern for us is the health of our people. It’s more important to us than doing business or making a profit. Our peoples’ health is number one. We have tried to manage this in the best way possible. We have locked down our premises. No one goes in or out. For the supply areas, we arranged for shift work so our staff can adequately sleep and rest. We try to provide everything possible to ease their work life. They are also happy to stay in a safe place, do the work and get their salaries.
We are trying to do our part in society. The other challenges are business challenges, like sourcing raw materials. You cannot imagine how many parties we had to negotiate with for supply. Even something simple like getting a company to provide a label for us has become difficult in this pandemic. However, we have overcome most of the challenges and are producing successfully now.
Do you think the restriction on exports out of Kuwait could be lifted anytime soon? Would you be able to sell your products at least to the GCC region?
I think so, because initially when the Covid-19 situation happened, everyone made reactionary decisions that were very strict. Nothing was to be exported. Now, it’s slowly becoming more relaxed as the products are already in the market. We have huge containers of raw materials now. I think the market is flooded with disinfectant and sanitiser, so they might be able to lift the restriction soon. It depends on how long the Covid-19 situation lasts.
Do you feel the government has provided good support to the private sector and has sent the right signals through this crisis?
Yes, I think the government has done well supporting the private sector. The minister and the head of the industrial authority visited us here in the company and tried to make sure that everything was available for us. they are doing all they can in this area, which can only be something good for the future.
We’ve been explaining to them in the past that this is an important sector and they need to invest more in these industries. They need to give land and ease the bureaucracy. They didn’t believe us before, but now after they witnessed this situation, they believe that this is an important sector they need to support, and they have during this crisis. They even told us we could use Army planes to bring raw material from Europe or China immediately. This is a great help. We feel like we are working with the government as a team now. They are helping us to help our people.
Do you expect the way you organise your company, deal with employees and clients, and produce to be affected in the long term?
Yes, I think things will definitely change after this pandemic. The way our employees work will change a lot. In our management office, we have only three people out of 25 right now. The remainder are working from home and it doesn’t affect business too much. In the future, we might have to reduce our staff.
It looks like Kuwait might emerge well out of the crisis as the rate of infection is low, the public debt level is extremely low, the reserves are strong and the petrochemicals industry could benefit in the post-pandemic world. Do you foresee such benefits for the country ?
Yes, I hope so. The economy of Kuwait is 96% based on oil exports, which are still going on. The only thing that affects it is the price on the international market, but we still have business.
So, I think we are still in a good situation, but we need to diversify and reduce this 96% to a lower number. We have to invest more in industries and other areas to emerge out of this pandemic in good shape. We have a plastic company, which makes bigger 200-litre drum containers. Currently with this pandemic, because of the shortage of the bottles and containers, we have already sourced a lot of suppliers to buy machines and produce the small bottles of disinfectant and sanitisers.