Encouraged by the double-digit growth in business over the past four years, Al Rashed Building Materials (BMD) is forging ahead with confidence towards its vision of being the market leader in the building materials trading sector in the region.

“2006 was the best year ever while 2007 is looking tremendous – and this is just the beginning,” says Ali Al Dhakeel, general manager of BMD, who aims to triple the company’s 2006 turnover over the next few years.
“We are growing faster than the market and reclaiming lost market share. In the wood and steel sectors, we currently have seven per cent of the market share and are aiming at 10 per cent plus,” he adds.
Al Khobar-headquartered BMD is the founding business of the Rashed Al Rashed & Sons Group (RAR) – one of the leading, broadly diversified groups in Saudi Arabia, which recently celebrated its 57th anniversary. The pioneer in construction materials supplies in the kingdom serves solely as a stockist of key building materials, leaving the manufacturing activities to its sister companies in the group.
The company supplies rebar – which is its major product – commercial steel and timber.
It has its own complete infrastructure support including well-maintained large warehouses, yards, showrooms, and branch offices all over the kingdom.
“Our business has been built solely on the quality and reliability of our products, a consistent pricing policy and high standards of service. Our success is built on understanding the needs of our customers and meeting them with quality products,” says Al Dhakeel.
Al Dhakeel also attributes the company’s success to the independence it enjoys within the group. “The management philosophy of the owners allows us to work with freedom. A major factor that accounts for our success is that we do not have to purchase from our sister companies – and we carry only 10 per cent of associate companies’ products,” says Al Dhakeel. “We are independent but our success is thanks also to the support of the group.”
With a view to taking its vision closer to fruition, the company is looking at expanding its already extensive network of branch offices, which currently total 33. By 2008, BMD is looking to open another eight branches in the kingdom and is keen to expand this network even further.
“We intend to expand our network by five to seven branches every year,” says Majed Al Sulayim, assistant general manager.
BMD’s network covers all the regions and the market is split into five areas to cover it efficiently – Eastern Province, Central, Western, Northern and Southern. Outside the kingdom, it has offices in Qatar and the UAE.
BMD has been prompt at meeting the needs of the market and an indication of this is the fact that the company is looking at introducing new ranges of steel products, particularly industrial steel. It is also adding value to its product range through launching cut and bend as well as stretching facilities.
The soaring costs of construction materials has been the bane of contractors throughout the region’s construction industry. To this end, BMD ensures that it supplies at the prices that were agreed upon.
“With what is going on worldwide, we cannot protect against spiralling costs, which are subject to market forces. However, where we have agreed a contract, we will maintain that agreement even in the event those prices rise,” Dhakeel says.
In certain instances, the company has also helped meet the shortage in the market through efficient planning.
Dhakeel comments: “BMD has also played a part in helping the market. For example, in 2003, we imported huge quantities of rebar, which helped resolve a severe market shortage, thanks to the strong financial backing from our group.”
While steel forms the core category in its product portfolio, BMD also offers a range of timber products.

Steel
“Our steel products can be categorised into two main groups – commercial and rebar – and a third group which is pipes. Within the commercial group, BMD offers structural steel and sheets, which account for 20 to 22 per cent of our sales and are key to BMD holding one of the biggest shares in the market,” says Sulayim.
“Rebar accounts for a major proportion of our sales turnover and is sourced within the kingdom from Hadeed,” he adds.
BMD offers a wide range of commercial steel high-quality steel beams and merchant bars such as IPEAA, IPE, HEA, HEB, WF beams, angle, square, flat and plain bars. These products are mainly imported from Japan, Korea, Taiwan, Poland, Belgium, Hungary, France, Czech Republic, South Africa, Turkey, Russia and Ukraine.
Its steel conforms to international standards like ASTM, JIS, DIN and BS and caters to the increasingly diverse demands of the domestic and international markets.
BMD also provides a broad range of cold and hot-rolled, hot dip galvanised and electro-galvanised coils/sheets; chequered steel, galvanised iron (GI) pre painted corrugated, aluminium and stainless steel sheets; galvanised grating panels, and special steels. These products are supplied to a wide range of industries, including construction, household appliances and steel fabrication.
These coils and sheets are imported mainly from Japan, Korea Taiwan, Indonesia, South Africa, Italy, Hungary, Spain Romania, Russia, Ukraine, Egypt, and India.
BMD is one of the major distributors in the kingdom for Hadeed’s flat products and premium-quality deformed bars, conforming to international standards. It also caters to epoxy-coated deformed bars.
In addition, the firm offers both mild steel black and galvanised pipes, which are certified to international standards and distributes pipes and tubes produced by the major mills in Saudi Arabia and other GCC countries.
To further strengthen its steel portfolio, BMD is planning to introduce more specialised steel products and is expecting substantial growth in this sector over the next three years.
Structural steel is sourced from Ukraine, China, Egypt as well as Japan and Thailand, while pipe products are sourced locally.
BMD’s timber portfolio comprises whitewood and hardwood. The white wood used in construction is sourced from Romania, Chile, Sweden and Austria, while the hardwood – primarily used in carpentry – comes from Africa and America as well as some from Europe.

Timber
BMD offers the full range of hardwood and softwood in most dimensions. The hardwood species include Red Oak, White Ash, Cherry, Walnut, Maple, Beech, Burmese and African Teak, Mahogany, Wawa, Meranti and Swedish Red Wood. These products are mainly used in the furniture industry, joinery works and architectural interiors where a high degree of dimensional stability, durability, strength and elegance are required. Imports of hardwood come from the US, Canada, Romania, Russia, Sweden, Finland, Ghana, Ivory Coast, Cameroon, Burma, Malaysia and Indonesia.
The various kinds of whitewood species imported by the company are Spruce, Pine and Fir, which come from Romania, Austria, Chile, Sweden, Canada, Russia and New Zealand. These products are mainly used in the construction and industrial sectors.
BMD also supplies a premium range of wood-based panel products, made to the highest quality standards. These include ordinary plywood, blockboard and secondary processed products such as film-faced plywood, fancy plywood/blockboard, melamine/polyester/paper overlay plywood/blockboard. The company also caters to the market’s requirements for top-quality plain and decorative MDF/chipboard and hard boards.
BMD’s purchasing strategy covers the entire world to ensure that the company maintains options in sourcing materials. Currently, the company is looking at deals from South American countries such as Chile and Argentina.
Prior to procuring materials, BMD has always conducted extensive research to obtain the best materials and intends to maintain this practice, bearing in mind customer preferences and behaviour.
“We are committed to developing new resources as well as widening and deepening our customer base,” he remarks.
“While there needs to be a balance between quality and pricing, the company tries to ensure that it covers all segments,” says Dhakeel.
In addition, BMD offers specific sourcing services for customers, on a contractual basis.
While the company deals primarily in commodity products that do not require any specialised warehouses or treatment, it, however, maintains certain standards in its warehouses especially for wood products, which can be affected by exposure to the environment.
The pioneer construction materials supplier has its own complete infrastructure support including well-maintained large warehouses, yards, showrooms, and branch offices all over the kingdom.
At any given time, BMD has three to five months’ stock – valued at over SR350 million ($93.3 million) – depending on movement and sourcing. The company has an ongoing action plan to ensure availability at all times.
Although it caters primarily to the retail market, BMD has supplied directly to a number of large projects ranging in value from $8 million to $10 million range that the company has supplied to.
Major projects include: Grand Mosque in Makkah, where BMD was the major supplier of rebar and wood, also the Faisaliah and Kingdom Centre, in Riyadh and Aramco’s Kharasnia project in Jubail.
In addition, the company has also completed a few other projects that include Qatar’s Islamic Museum, as well as Doha’s Al Raeem Tower and Golden Tower; the Al Jamrat Bridge and the King Abdul Aziz Wakeef project in Makkah; a cement factory in Riyadh and the Kharasnia project in Jubail.
Recently completed projects include Qatar’s Islamic Museum, Al Raeem Tower and Golden Tower; the Al Jamrat Bridge and the King Abdul Aziz Wakeef project in Makkah; a cement factory in Riyadh and the Kharasnia project in Jubail.
“We are currently a major supplier to the New Doha International Airport project in Qatar and are also supplying 50 to 60 per cent of the steel and wood materials required for the new towers in Dubai. We are now securing a growing number of projects in the UAE.”
One of BMD’s largest customers is the Bin Ladin Group, which is currently engaged in a number of projects in the kingdom including the Bait Al Abraj development.
“Customer service and after-sales support is conducted primarily through the company’s direct sales channels,” says Al Sulayim. “Sales agents are customer service agents and the support is in the form of close liaison and activities such as checking material on site.”
Its multinational sales team consists of 75 to 80 dedicated and experienced workers who as well as Saudis include Egyptians, Jordanians, Syrians, Indians and Palestinians as well as some Yemenis.
BMD has a total staff strength of 612 arcoss Saudi Arabia and the rest of the Gulf.
“One of our key drivers is the management of staff through the goals or objectives approach. We are fully decentralised and through a process of empowerment and profit sharing, we keep employees positive. Profit sharing is key as it gives the employee a feeling of ownership,” says Dhakeel.
Saudisation has gone from seven per cent to 27 per cent in six years based on an original figure 387 employees. We believe in Saudis and are looking for quality staff.