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 : Execution of Solutions Goals We were tasked with addressing the challenge of declining profit margins despite an increase in sales. 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 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 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. Back to Case Studies
