Ala’a Ghazaleh tells James Morgan why Masaha Global’s dual status as dealer and rental operator has enabled it to expand its business, despite Kuwait’s pandemic-plagued equipment market.
Governments the world over have seen their fiscal forecasts turned upside down during the past two years, and Kuwait is no exception. What’s more, as it faces what is expected to be its ninth budget deficit in a row, the Gulf country’s economic woes cannot be attributed solely to Covid-19.
Even so, things may be looking up for the Gulf state. In January, Bloomberg reported that Kuwait had forecast a narrower budget deficit for the fiscal year starting 1 April 2022, thanks to buoyant oil prices. The projected deficit of KWD 3.1 billion ($10.3 billion) would represent a reduction of 74.2 percent compared to this year’s estimate of KWD 12.1 billion ($40 billion). While improvements may be gradual, they are improvements nonetheless.
But what is the situation on the ground? How, for example, have equipment suppliers fared amid such a tumultuous market? According to Ala’a Ghazaleh, Equipment Rental Manager at Masaha Global, conditions have been as tough as one might imagine.
“We have seen numerous construction equipment companies go out of business during the past year,” he tells Plant & Equipment. Fortunately for those working at Masaha Global, their employer has managed to avoid a similar fate. While other companies are either downsizing or shutting up shop, Ghazaleh is looking to double the size of his sales team.
So, what is the secret to this success? How is it possible for one outfit to thrive while others operating in the same sector flounder? The answer is simple, according to Ghazaleh. The breadth of Masaha Global’s offering, coupled with its dual status as both rental supplier and dealer, have served to insulate the company from the effects of the pandemic.
“Most of our competitors are suffering but we are not,” he explains. “Why? Because the variety of equipment we supply gives us an advantage. Other companies tend to specialise in one or two categories whereas we can cater to all requirements.”
And Ghazaleh is not exaggerating. As the sole Kuwaiti dealer for five major manufacturers, Masaha Global sells and rents out Foton commercial vehicles, Skyboom access platforms, Weichai generators, Heli forklifts, and – its biggest brand – SANY heavy equipment.
“Most of our rental competitors have to purchase their equipment in instalments,” Ghazaleh continues. “The units in our fleet come directly from our partners, which is a huge advantage. I’m talking about spare parts availability, breakdown response times, technical support and standby equipment; our ability to react quickly and effectively is extremely important to customers.”
A decade ago, it was a commonly held opinion in the Middle East’s construction sector that Chinese manufacturers supplied cheaper but lower quality machines than their American, European, Korean and Japanese counterparts. However, with the emergence of multibillion-dollar brands such as SANY, the landscape appears to have shifted somewhat.
A major driver behind this trend, according to Ghazaleh, is SANY’s ability to implement improvements rapidly.
“During my career, I have worked with major names such as Doosan, JCB and Caterpillar,” he says. “I would agree that 10 years ago, the standard of Chinese equipment was not comparable. But believe me, those days are over. The machines that SANY manufactures today are just as good as any others on the market. By 2025, I expect SANY will have overtaken its competitors in terms of quality.”
Masaha Global also benefits from the backing of its parent organisation, Fouad Alghanim & Sons Group of Companies – one of the largest outfits of its kind in Kuwait. The multinational boasts a dizzying array of industrial interests aside from construction, including engineering, power, oil and gas, automotive, investment, trading, shipping, aviation, telecoms, hospitality, and real estate.
Thanks to the support of its parent company, Masaha Global has accumulated a fleet of more than 2,400 units since its establishment in 2016 – all of which are 2017 models or newer. And while the firm is licensed to sell the full range of its partner brands’ products, Ghazaleh estimates that upwards of 90 percent of its business comes from rental activities.
Emboldened by success in its domestic market, Masaha Global is intent on living up to its name through an ambitious programme of international expansion. “We recently established a branch in Egypt, where we will be SANY’s official dealer,” says Ghazaleh. “We will start with a fleet of 350 units, all brand-new 2022 models. We have already placed the order with SANY and we’re expecting to receive delivery within three months.”
Ghazaleh is clearly optimistic about Masaha Global’s move into Egypt, a market he describes as “absolutely booming”. However, he has not finished outlining the company’s expansion plans.
“I can tell you that, very soon, Masaha Global will also open a branch in Saudi Arabia,” he reveals. “We are growing from local to regional markets. In the next phase, we might consider Qatar in the Middle East, and Algeria, Libya or Morocco in North Africa. But for now, we are focusing on our new branches in Egypt and Saudi Arabia.”
Though encouraging to learn of a firm that has managed to weather the post-pandemic storm, it seems inevitable that Covid-19 must have had some impact on Masaha Global’s operations. While Ghazaleh concedes that market conditions are not ideal, he argues that setting realistic expectations in the short term will enable the company to capitalise in the future.
“We are offering preferable rates to remain competitive and stay in the market,” he says. “We are now hiring more sales engineers to increase our market share and cement our position. I expect this year to be similar to 2021; not up, not down, just stable. If my predictions are accurate, 2023 will be a very good year for Masaha Global.
“By setting realistic targets and working to grow our market share, I expect to be in a position to capitalise next year,” he concludes.
Judging by Ghazaleh’s track record in such a difficult market, it seems plausible that Masaha Global could soon be the only game in town.
From Oil To Soil
The fact that the oil and housing sectors are driving demand for Masaha Global’s equipment is perhaps unsurprising in a country like Kuwait, but Ghazaleh says that soil remediation – or ‘soil washing’ – is also proving to be a major source of income.
“You may be aware that a significant portion of Kuwait’s land is contaminated with oil due to the Iraqi invasion of 1990,” he explains. “The United Nations has therefore mandated that it should be cleaned and treated.”
According to Ghazaleh, the soil remediation process requires a range of tools such as excavators, wheel loaders, dump trucks, compactors and motor graders – all of which are manufactured by SANY.
“Soil remediation contracts have already been awarded to several companies, and we have been supporting them with equipment,” he tells Plant & Equipment.
