Competition in the chemicals market

Kuwait

Mirza Aijaz Baig, CEO of Ahlia Chemicals Company, talks to The Energy Year about the Kuwaiti construction and specialty chemicals market and the company’s rationale behind its international expansion strategy. Ahlia is a Kuwait-based manufacturer of construction and specialty chemicals with an international presence.

What was the rationale behind your international expansion strategy?
We saw that the market in Kuwait, due to its geographic size, had limitations in terms of Ahlia’s targeted exponential growth. Therefore, starting in 2016, we began exploring the markets outside of the country. We were lucky enough to get our strong foothold in neighbouring Iraq. Ahlia’s products are now exported to all GCC countries, Iraq, Jordan, Lebanon, Yemen, India, Sudan, Ethiopia and Nigeria. Exports now represent 40% of our total revenue. Moreover, all the products are manufactured in accordance with ASTM [American Society for Testing and Materials], BS [British Standards], DIN [German Institute for Standardisation], UEA [United Equipment Accessories] standards, making Ahlia accepted in foreign markets. This also provides us with an edge over local manufacturers in those countries.

How competitive is the Kuwaiti market for construction chemicals?
For many decades, Ahlia’s products have been matched to the quality of the products of international companies that import chemicals into Kuwait. In terms of this quality, we offer the same gamut of products and R&D in line with multinational companies. As a result, there is an acceptance of our product offerings, and they have been successfully placed into the market. When you are such an old company and meet international standards, you have all the approvals across most of the ministries and lots of referrals. Moreover, being a local company, Ahlia has the privilege of bidding up to 10-15% higher for housing projects when compared to foreign bidders. In short, we have a very strong brand with commendable recognition, and that plays to our benefit.

How has utilised capacity evolved in recent years?
Until 2016-17, our production capacities utilisation was only up to 50%. However, we have currently reached up to 90% of our capacities. We have inaugurated our third and latest production facility at the beginning of this year and are focusing on further expansion of our bitumen-related product manufacturing facilities, as we see a lot of demand from Kuwaiti construction companies. For the forthcoming years, we’re expecting to serve more of the in-house market and grow more within Kuwait.

How important is innovation for Ahlia Chemicals Company?
New product design and development is a crucial factor for Ahlia to sustain itself as market pioneer in its field. Therefore, we have invested heavily in in-house R&D and today boast a fully equipped, state-of-the-art laboratory which helps in testing the quality of both raw materials and final products in accordance with the international standards such as ASTM, BS, DIN and UEA. Ahlia’s constant pursuit of excellence and global knowledge, coupled with an in-house R&D team, plays an instrumental role in developing new products which cater to the requirements of an evolving construction industry.
Furthermore, the company’s commitment to the environment is re-iterated by its recent qualifications as certified OHSAS [Occupational Health and Safety Assessment Series] 18001:2007 for occupational health and safety management systems and ISO [International Organization for Standardization] 14001:2015 for environmental management systems.

Can you tell us about Ahlia’s contracting business?
Ahlia, through its contracting arm ABIR, offers a complete structural waterproofing package, including the supply and installation of Pitchmastic PmB’s system, a BBA-approved [British Board of Agrement] waterproofing system meeting stringent UK and international standards. The company also specialises in the installation of anti-carbonation paints, intumescent and cementitious fireproofing works, waterproofing and damp proofing, thermal insulation, repairing and protection for reinforced concrete, protective coating works, industrial flooring and topping, and soil stabiliser and injection. ABIR, since it got reinstated during October 2015, has already signed contracts currently worth US 25 million and now targets large infrastructural projects based on its core experience and successful execution.

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