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How A Steel Contractor Left Its Competitors Behind

We helped a major steel fabrication contractor improve their profit margins significantly.

Sectors : Manufacturing Real Estate and Construction
Services : , ,

How A Steel Contractor Left Its Competitors Behind 1
Goals

Goals

We were tasked with addressing the challenge of declining profit margins despite an increase in sales.

Situation

Situation

Our client is a major steel fabrication contractor. Despite satisfactory revenues, the profit margins were not up to expectations and management was at a loss trying to identify the reasons.

Analysis

Analysis

  • The contractor had made a substantial investment in acquiring assets valued at AED 19.5 Million.
  • They were producing products and delivering services that had low profit margins and required basic technical know-how. Smaller fabricators who had less overheads and who made lesser capital investments were able to compete with them.
  • The company was catering for the residential and corporate segments in disproportionate percentages.
  • They dedicated substantial parts of their resources (time, personnel and technically-advanced machineries) to the products that yielded low-profit margins.
Actions

Actions

  • We assisted the client to target the more lucrative market niches where demand and margins were higher because those segments had more complex technical requirements, which only a few other fabricators can meet.
  • We assisted them in networking with more contractors and end-users throughout the UAE.
  • Our advisors freed their production capacity and usage of their resources so they could bid for more valuable projects.
  • Created differentiation elements that highlighted the company's technical skills in a motivational and interesting way, which encouraged procurement managers and buyers to prefer this company over others.
  • Revamped their pre-qualification documentation and vendor registration procedures in a way to keep prospects up-to-date with their latest achievements.
  • Increased online presence by posting ads on key and relevant tender portals and sites that were of interest to targeted procurement and project managers.
  • Encouraged the management to participate in key regional exhibitions.