PGPS eyes plant in long term

Pan Gulf Piping Systems (PGPS), which reported a profit surge, is expanding its warehouse in its central hub in Riyadh and has long-term plans to set up a manufacturing plant in the capital area to produce butt-weld fittings.

PGPS, a subsidiary of Pan Gulf Industrial Investments Company and an approved supplier of Saudi Aramco, had overall profit last year climbing 20 per cent over 2013 which the company attributed to a surge in sales related to Aramco projects and a rise in general construction and infrastructure projects, mainly in the Central Province, of which Riyadh is part.

As one of the premier pipe suppliers in Saudi Arabia, it offers single-window purchasing for a complete range of piping systems and related products. As well as pipes it supplies valves, fittings and flanges. It serves key industries including oil and gas, petrochemicals, engineering, power, water and construction.

The company’s current warehouse size in Riyadh is approximately 5,000 sq m. “This stockyard is used as a central hub for the kingdom. Numerous transportation vehicles stop by and we dispatch material to meet the needs of parties in the south and east and even the northern part of Saudi Arabia,” said PGPS general manager Ahmed A Al Hashash “The stockyard being important, we plan to expand it by another 10,000 sq m, bringing total working space to approximately 15,000 sq m.”

PGPS cited two reasons for its plans to begin manufacturing. “The first one,” said Al Hashash, “is the kingdom’s vision along with Aramco’s to be able to locally manufacture all piping and piping-related material through local companies without the need to import. The kingdom already has a few local Aramco-approved manufacturers for pipes and flanges, so starting our own manufacturing plant for butt-weld fittings would be part of our long-term scope, and perfectly in line with the kingdom’s and Aramco’s vision.”

The second reason is the long-term vision of Pan Gulf Industrial Investments Company, the parent organisation, to assume a greater role in manufacturing.

RIYADH ROLE
The Riyadh branch accounts for approximately 27 per cent of total sales, and carbon steel and stainless steel pipes account for 60 per cent of orders received at the branch.

Typically, PGPS’ products are used in the oil and gas industry and serve as a means for water transmission, general purpose casing, structural applications, meeting the needs of mechanical components and piling.

Commenting on how Riyadh sales were faring, the official stated: “If we were to take into consideration the previous two to three months, it’s certainly on the rise. We hope it stays that way until year’s end. We believe the main reason for the increase in sales is the numerous construction and infrastructure projects currently underway or planned for the next few years. Two of the most active players for such projects are the Ministry of Health and Ministry of Interior.”

PGPS lists several companies that have contributed significantly to Riyadh sales. They are Al Rashid Trading & Contracting Company, Fawzan Trading & Contracting, Saudi Services for Electromechanical Services, Drake & Scull and Saudi Oger.

“These clients typically use all of our material as they undertake projects as an entire package. However, if we were to specify which products they use more, then it would have to be pipes, which in their case are used for chilled water and fire-fighting applications,” said Al Hashash.

PGPS has supplied a number of major projects in the Riyadh area. It delivered pipes for chilled water and fire-fighting to the Princess Nora bint Abdelrahman University, which has 32 colleges across Riyadh; King Abdullah Financial District-Raidah Investment Company, King Saud University and the Information Technology & Communications Complex-Raidah Investment Company.

For the ongoing Riyadh Light Rail Transit (Riyadh Metro) project-ADA, the company is supplying piping strictly for piling work.

PGPS has multiple branches and stockyards across the kingdom. As well as the stockyard in Riyadh and another in Jeddah, it has two large ones in the Eastern Province plus three fully enclosed warehouses. The Riyadh branch acts as a central hub to ensure quick and prompt deliveries.

PROSPECTS
For the current year, the main focus for the Riyadh branch is projects related to construction and infrastructure, said Al Hashash. “As those two are the main segments and our main source for sales in the Central Province, all focus is there. The Eastern Province office mainly relies on the oil and gas sector.”

About prospects over the next three to four years, he remarked: “The ever-increasing rise in construction and infrastructural works in the capital does give us high hopes for consistent mega projects.”



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