Marcopolis presents the Saudi Arabia Report focused on the investments, doing business, economy and other topics featuring interviews with key executives. The sectors under review in this issue are industry, real-estate, ICT, investments, banking sector, telecom sector and many more.
Alhamrani-Fuchs Petroleum Saudi Arabia (AFPSA) is highly respected for its innovative and technically superior lubricants, and related specialty products.
AFPSA was formed in 1995 as a successful joint venture uniting the lubricants marketing and production capabilities of the Alhamrani Group of Saudi Arabia, with Fuchs Petrolub SE (Fuchs), the world’s largest independent manufacturer of lubricants. Mezahem H. Basrawi, the CEO at AFPSA, & FUCHS OIL MIDDLE EAST describes the synergy behind the partnership of the Alhamrani Group with Fuchs Petroblub:
We are a joint venture between the Alhamrani family group and Fuchs Petrolub from Germany, which is the number one independent lubricant company in the world. It just specializes in lubricants; it is not like other companies that deal in the upstream of oil refining. They are specialized in the lubricants business. They carry a little over ten thousand products from car oils to grease, to the most sophisticated and specialized products through a company called Lubritech. We manufacture their products here; we are a joint venture between Saudis and Germans. We have a plant in Yanbu. We produce around 30% of the market. Sell and we Produce our Fuchs branded lubricants in domestic Saudi Market as well as exporting to 20+ countries in the MENA region. We also produce products for third party only major companies as toll blenders. We produce between 135 and 150 thousand metric tones of lubricants per year, between our production, the third parties and the exports.
Rudolf Fuchs originally founded Fuchs in 1931. Located in Manheim, Germany, it was created to develop a regional motor oil business by importing and marketing high quality Pennsylvania refinery products. With the onset of the Second World War, importation from the Pennsylvania was interrupted. Immediately after the war, the company reopened to produce and sell lubricants for retail and industrial uses. By the end of the 1940s, however, it determined to expand internationally, making its first shipment to the Middle East in 1952.
Today, Fuchs Petrolub is a group based in Germany comprising 60+ subsidiary companies operating worldwide. Twenty-seven of these companies are operating in Europe, five in the Americas, and eighteen in the combined Middle East/Africa/Asia Pacific region. AFPSA is among the latter group. These 50 companies combined operate in more than 100 countries on five continents.
Unlike many companies that seek to diversify into many different industries and segments, Fuchs focuses primarily on only one specialized product field: lubrication oils, greases, and gases.
As a result, Fuchs leads the entire industry in research and innovation. Of the more than 4,000 employees of Fuchs’ fifty companies, more than 10 percent—over 400—are engaged in research and development. This gives Fuchs a high level of innovative power that is a key driver of its business model. Fuchs engages in applied innovation and development of products directly with its customers, which allows lubricants to be developed that are adapted to customer processes, or new lubricants to be developed at the same time as new machines or systems, in partnership with the customer.
The Alhamrani Group
The Alhamrani Group
The Alhamrani Group was originally formed in 1965 as a family controlled group of companies engaging in a variety of business fields, from banking and securities, to importing automobiles, retail sales, and manufacturing. The Alhamrani Group entered the field of lubricants in 1979, and quickly rose to one of Saudi Arabia’s lubricant leading suppliers.
In 1988 AFPSA constructed a blending plant, and in 1991 completed a related grease plant in Yanbu, Saudi Arabia, for the production of lubrication oils and greases. This combined facility was—and still is—the largest manufacturing facility of its kind in the Middle East and Africa.
Once it was perceived that, if the production of these facilities were combined with the superior skills and expertise of German engineering, as well as the vast resources of Fuchs international, a synergy of outstanding quality and local supply would become available for the entire Middle East and African regions.
Since 1995, AFPSA has fully integrated the Fuchs model into all its services, bringing all the benefits of Fuchs’ experience and expertise into AFPSA’s operations, and making AFPSA’s production facilities and marketing experience available to serve the Saudi Arabian and Middle East/Africa markets.
AFPSA’s lubrication oils blending plant and grease plant at Yanbu constitute a state-of-the-art manufacturing complex producing a complete range of premium lubricants, greases and specialty products of the highest international standards.
The company’s capacity exceeds 170,000 tonnes per annum, covering 37 per cent of the overall local market, with an additional 70,000 tonnes exported to other countries in the Middle East, Asia and North Africa. The Yanbu complex is the largest of its kind across the Middle East and Africa, making AFPSA one of the largest lubricant exporters in the region.
Construction of the blending plant began in November 1987 and was completed in July 1988. In the case of the Grease Plant, construction began in August 1990, and began full-fledged production by July 1991. This state-of-the-art blending and grease plant complex is currently in the midst of capacity expansion to reach 200,000 metric tons/year once automation and facility upgrade is completed by the end of 2015
Introduction to AFPSA’s Products and Services
For almost four decades—ever since it entered the lubrication market in 1979— the Alhamrani Group has been the leading provider of lubricants nationwide. Since it partnered with Fuchs in 1995, AFPSA has merely sharpened its edge of providing technically superior products, outstanding marketing innovations, higher levels of customer satisfaction, and even greater social and environmental consciousness.
The CEO of AFPSA states the company’s philosophy this way:
There are a lot of good companies, but there are very few great companies. To be a great company is not easy, but it is not impossible. Great companies are those that are rounded on all four pillars from the environment of HR to the production side, to marketing and market responsibility and of course financially. We look at all of these pillars as equally important.
“We are rather strong in specialty products for manufacturing facilities and the industrial sector. We are also strong in multi-grade motor engine oils both gasoline and diesel.” – Mezahem H. Basrawi, CEO of AFPSA
Alhamrani-Fuchs Petroleum Saudi Arabia Ltd provides a full range of the highest quality lubricants, greases and other specialty products, offering more than 10,000 lubricants for everyday use as well as specialty products, which are used in automobiles, motorcycles, racing cars, buses, railways, and all other forms of passenger transportation; trucks and bulk transport, shipping and marine engines and equipment; and for all types of machinery in construction, mining, agriculture, power generation, steel, food processing, and petrochemical industries.
All of AFPSA’s products are available at all leading distributors, and through AFPSA’s extensive supply network in the Kingdom of Saudi Arabia and across the MENA region.
AFPSA not only sells products, but also offers an array of extensive services to its customers and clients. These include a sophisticated analysis program for AFPSA’s industrial customers for monitoring purposes; one-stop quick lube stations for automobile owners; educational programs and symposia; environmental and social programs for the public; and many other communal activities.
In addition, to stay ahead in the market and firmly stand as the benchmark for the industry, AFPSA is constantly working to develop new and improved customer services and methods of operation. Our research centers are constantly incorporating new and innovative solutions to support our unified goal of consistently delivering nothing but the best, as the CEO of AFPSA explains:
Our industrial customers don’t really look at the price of the lubricants they buy as much as they want to see the long-term costs and how much they can cut down on these long-term costs.
Part of our innovation is to go to them with certain tools to show how much they can optimize their oil consumption rather than just doing it the old fashioned way of checking after a month or so and when the oil is too thick, just throwing it away. There are tools now that will save 30% of the oil at least 25% of the time.
When you multiply that for an industrial complex, you will find a lot of savings can be made. Thus our innovation comes from the tools that we use in helping industries optimise their costs and efficiency.
Cent Analysis Program
Cent is a carefully crafted and highly sophisticated program that provides conditional monitoring services in regards to industrial plants’ oil and lubrication consumption and utilization. The system provides maintenance managers with detailed reports that give clear indications to the statuses of selected parts or items of the plant itself, using oil as a means of collecting data and in diagnosis. For every item monitored, information is collected and stored in a comprehensive database that allows essential information, maintenance history and working environment to be reviewed whenever required. This system and the database as a whole is shared and followed by other Fuchs affiliates worldwide.
Based on sophisticated laboratory and computer technology, the CENT report will highlight potential problems at very early stages. Maintenance planning decisions can then be made objectively, quickly and efficiently with the risks of failure considerably reduced and potentially eliminated.
Equipment that may benefit from CENT includes engines, gear units, compressors, turbines, hydraulic systems, machine tools, transmissions, pumps and lubrication systems.
AFPSA will also analyze industrial plants and their equipment to make recommendations in regards to lubricant use. This is based on the cumulative results of the data collected.
Seminars and Training for Customers and Clients
Seminars and training are organized in efforts to better inform the clients of the correct uses of lubricants, increasing the clientele’s knowledge and capabilities within their own respective industries.
AFPSA holds periodic symposia to provide both general and specialized information on product developments, usage, and testing. Specialists from the Fuchs research department in Germany are invited to deliver presentations regarding grease, lubricants, and equipment.
Training Programs for Maintenance Personnel
AFPSA has developed carefully crafted training that covers upgrading lubricants, extended drain interval, optimizing stock, in-service oil analysis, understanding oil analysis and many other aspects of lubricant usage.
Safety and Environment
AFPSA is known for its safety record of accomplishment. Alhamrani-Fuchs Petroleum puts the prime importance on the safety of the personnel, on both the local and international levels. Matters concerning storage, handling, used oil collection and used oil disposal are among the many processes that are meticulously monitored.
As a service to customers, and to develop ever-higher standards, AFPSA regularly arranges for experts from around the world to visit Saudi Arabia in order to keep abreast of new developments in the industry and the worldwide lubrication market.
Bulk Oil Storage Tanks
AFPSA offers flexible pricing to the industrial clients. The company loans bulk oil storage tanks, allowing the industrial customers to benefit from price reductions for bulk purchases, reduce downtime, insure supplies when needed, increase equipment availability, and reduce maintenance costs. This is a type of rental service offered to facilitate clients’ business needs and further develop positive, supportive, two-way relationships.
“We are in a very fast changing market; I can almost think it will not be faster than it is now. It is so fast that by the time you invent something, it is already obsolete! It is becoming quite challanging.” – Mezahem H. Basrawi, CEO of AFPSA
To lead in lubricant innovations is the vision of the management of AFPSA. The company continues to take its shape in forms of technical seminars on lubricants and modernization of its manufacturing facilities. This quest is the vision of making AFPSA a leader in the trend of lubricants engineering in Saudi Arabia and the MENA region.
AFPSA’s state-of-the-art production facilities (certified by ISO 9001:2008) are constantly working at developing new products to meet our customers’ needs, as well as new and improved methods of operation.
AFPSA’s research centers are constantly incorporating new and innovative ways of improving internal systems, while simultaneously developing more effective, efficient and flexible solutions to support the goal of consistently delivering satisfaction to the customer.
Examples of innovations: AFPSA was the first lubricants company in Saudi Arabia to:
Deliver products at the customer’s doorstep
Extend professional technical service to customers
Start bulk supplies to large customers
Introduce the environmentally friendly biodegradable “Planto” range of lubricants
Open One Stop car care centers around Saudi Arabia
Offer oil condition monitoring program to its industrial customers
a state-of-the-art, fully automatic, one litre plastic bottle filling line was inducted to cater to the growing demand of AFPSA’s Super GT brand;
BaaN (ERP solution) implemented to improve corporate governance and increase accounting transparency, which delivers faster, more accurate and comprehensive financial information for both internal and external needs. It operates in a business-to-business environment to provide access to its customers and suppliers in viewing their status on the internet;
One Stop Service Centers
One of AFPSA’s most popular innovations is its one-of-a-kind “Fuchs One-Stop” car care that delivers fully-faceted car care services in pleasant premises. Services include oil change (using Fuchs GT, which is the company’s flagship product), tire change, wheel alignment and rotation, and other minor, under-chassis mechanical work. For all Nissan owners, three of the stations are providers of ‘Authorized Nissan Express Service Centers.’
The first AFPSA Car Care Center opened in 1998, and today there are 45 quick-lube outlets, with 11 additional outlets projected to be operational within this year as part of a 5-year ambitious expansion project.
Environmental and Social Consciousness
AFPSA prides itself over its achievements in social and environmental responsibilities, not to mention its efforts regarding corporate-citizen credentials. AFPSA is more than simply environmentally aware; it is environmentally conscious, something that requires proactive efforts.
The Lubricant plant in Yanbu was the first in the Middle East and Africa to be awarded the “environmentally friendly” ISO:14001:2004 certification. This is a particularly outstanding accomplishment. As Mezahem H. Basrawi explains, "Grease and lube are associated with environmental pollution issues and to receive an award in this category is a tough job." Again, on June 10, 2000, the Royal Commission for Jubail and Yanbu awarded the Environmental Prize to AFPSA Yanbu for being the “Most Environmentally Friendly Secondary Industry.”
It was through its different social and environmental initiatives that Fuchs Yanbu was able to achieve such honors and today wears these awards proudly with aims of repeated achievements for the future.
AFPSA’s social consciousness is demonstrated by the road-safety and other social-welfare programs. AFPSA’s road-safety advertisements won the prestigious “Silver Sword” Awards in 2000. Press advertising, tree-planting and beach cleaning initiatives are a few of the many different activities undertaken as part of the AFPSA’s promise of better social and environmental consciousness.
Making valuable contributions to environmental preservation across Saudi Arabia, Fuchs is also the world leader in the research and development of environmentally friendly, rapidly biodegradable lubricants.
Driver Education Program
CEO Mezahem H. Basrawi, describes AFPSA’s plans for driver safety education:
“We are also planning to educate drivers on safe driving. Unfortunately in some parts of the world, driving is being taken for granted and I think we would be very instrumental in educating generations. We don’t want to start with drivers that are already on the road. We have a program that we would like to take to the schools as we believe in building generations. We would like to reach children from the 6th grade. We want to offer education through entertainment which in the US they call edutainment! If we can do that massively and frequently enough, I think we will be instrumental in building up a new generation with the idea of what driving is all about. Telling people to use their seatbelts is just not enough, people need to know why and they need to be aware of the consequences.”
Beach Cleaning Program
CEO Mezahem H. Basrawi, describes AFPSA’s beach cleaning program:
“We also did a beach cleaning program about 2 years ago and we continued to do it in following years. We had school children from 4th grade to 6th grade help clean the beach in the Yanbu area, it was a very successful program and the kids liked it because it was also like a fun picnic for them; we gave out a lot of gifts and they enjoyed themselves.”