Saudi Arabia Review 2017

Way ... aims to increase local workforce

Way ... aims to increase local workforce

Alderley looks to expand in Saudi Arabia and region

The new Dammam site is currently undergoing site and vendor approval, as well as refitting, with occupation expected by mid-2017. The site acquisition marks the latest stage of a relationship with Aramco which began in 1999

Last October Alderley, which specialises in the project management, engineering and manufacture of modular packages for the oil and gas industry, announced that it had acquired a new facility in Dammam’s Second Industrial City.

Matthew Way, Chief Operating Officer for UK-headquartered Alderley plc, describes the new facility, which at 9,025 sq m will be four times the size of the company’s existing metering and control systems manufacturing plant in Dammam, as both a "substantial investment" and a strategically-important move.

"Our acquisition strengthens our strategic direction in support of Saudi Aramco’s In-Kingdom Total Value Add (IKTVA) Programme and Saudi Vision 2030, increasing our supply chain capabilities and creating highly skilled and specialised working opportunities within the kingdom," he tells OGN.

"Our aim is to increase our local workforce in Dammam and focus on the things we do best - project management, engineering and manufacturing of modular packages for the oil and gas industry.

The new Dammam site is currently undergoing site and vendor approval, as well as refitting, with occupation expected by mid-2017. The site acquisition marks the latest stage of a relationship with Aramco which began in 1999. Back then, Alderley supplied the Saudi state oil giant with products out of the UK, then from Dubai in 2002 and subsequently from Dammam in 2008. To date, the company has provided through-life support services to more than 200 liquid and gas metering systems installed across the kingdom.

Way explains that Alderley’s decision to invest in upgraded capacity in Saudi Arabia was a natural step given Aramco’s IKTVA ambitions, as well as industry volatility which prompted Alderley to undertake a broader strategic review of its business.

"They [Aramco] presented a very compelling picture of the future which fuelled our desire to consider our product and service offering with an aim to expand beyond our current business," he says.

"This means expanding into more modular packages upstream and downstream of our product lines and also focusing on value-add service solutions that enable our customers to improve their oil and gas recovery through upgrades and technology advances on their install base," he says.

The COO says Aramco has been "very supportive" in helping companies like Alderley prepare for the future.

"There is a tight, rigorous process to follow to attain Aramco site approval, and another detailed process to gain product certification by means of a 9COM approval. This takes time and a lot of preparation, but we believe that Aramco will recognise our commitment to investing in the kingdom and support us in our transition to a larger facility," he says.

One of Aramco’s core objectives through IKTVA is to create highly skilled, specialised job opportunities for Saudi nationals. Way insists Alderley, which has a track record of Saudisation, inherently understands that reasoning.

"Historically we have been at Platinum status [for Saudisation]," he explains. "We are now approaching the resource plan on a number of fronts. In terms of our Saudi national graduate programs, for example, we have an individual who started recently who is currently following exactly the same development program as our UK graduates. He is spending time in all of our group businesses, with the aim of taking a key role in our Dammam operation upon completion.

"We also have in our team today experienced Saudi project managers. Another area that we are investigating is the possibility of apprenticeships to introduce trade and craft skills into the business with Saudi nationals, and at the same time providing training to improve core skills."

Way acknowledges that, against the background of its own strategic repositioning, Alderley’s customer base is changing. He notes in particular an increasing trend for end-customers to use ‘tier-one’ EPC contractors.

"This presents both challenges and opportunities. We can offer a more comprehensive engineering service and product suite to the EPCs, who may have a large scope on a given project. That said, this EPC model lends itself to a very commercially sensitive award process, resulting in extreme competition," he explains.

As well as the new Dammam facility and the enhanced engineering capabilities in support of IKTVA it will offer, regional geographical expansion is also on the cards for Alderley, says Way."The lifting of sanctions in Iran presents opportunities for our Dubai-based operation to service that market, and at the same time explore continued opportunities in Kuwait and Oman. The entire GCC is in play for Alderley, and this will primarily be led by the Dubai team, enabling our Saudi operation to focus on growth in Saudi Arabia," he concludes.

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