Creative employees ‘have upper hand’
Rajhi Steel has succeeded in creating an attractive work environment for young Saudi nationals.
With the construction sector continuing to boom and many mega projects taking shape across Saudi Arabia, Rajhi Steel’s annual consumption of rebar steel has increased to more than 10 million tons, says Mahdi Al-Qahtani, CEO, Rajhi Steel.
“The market demand for rebar steel is set to maintain its rising trend in the coming years, more so with the implementation of the mega projects and in support of the overall national development plans,” Al-Qahtani told Arab News in an exclusive interview.
At this point, the market is ready to accommodate new production capacities, he said emphasizing that Rajhi Steel responded to market needs and decided to double the production of rebar steel by pumping an additional million tons.
Rajhi Steel seeks to attract Saudi youth, train and qualify them through advanced and varied programs that cover each and every management function and meets the company’s needs. This will be positively reflected on the youth and on the interest of the company, Al-Qahtani said.
“Saudization is a national duty requiring all citizens of this country to respond fully to the efforts of the government in providing decent living standards to the people of Saudi Arabia,” he stressed.
These are highlights of the interview:
We hear a lot of talk about the Saudization and localization project, is Rajhi Steel well on track in this regard and is the project fruitful from your point of view?
We must understand the beginning of the idea and the essence of the project in a country of large size and weight as the Kingdom, regionally and internationally. This country has proven to the whole world, for decades, that its economy depends not only on oil and gas revenues. It has begun experimenting revitalization of comprehensive industrial and civilized development, which necessitated seeking assistance of prominent global expertise and this was during the construction phase and the boom of the country. Now as we move forward with overall national development plans and localization, increasing the percentage of Saudization has become a national duty requiring everyone who loves this country to pursue achieving this goal, by all means, and we are for it, God willing. We, very clearly, see the development and the substantial increase in the percentage of Saudization in the private sector. This stems from the earnest and sincere desire of these companies to localize the jobs available in various fields. In a nutshell, we are talking about our children and their future. Each and every father, merchant or private sector employee seeks to secure the future of his children who are the future generations and the makers of the overall development and advancement of the country.
Many people count on the national industrial leadership. How do you as a leader see the difficulties facing Saudization in the private sector, and what are the ways to overcome such difficulties?
As I reiterate time and again, we must be aware that Saudization is a national duty and a national mega project, which cannot be completed overnight. We cannot ignore the tireless efforts that have been made at the same time. Similar to the enormous nature of any huge project and national duty, there are some challenges that cannot be ignored, and they should not deter us from continuing this long journey. It is easy to set policies, provisions and regulations for any draft resolution but, most importantly, all parties must believe in the importance of this project, whether the private sector or the young growing generation. It is obvious that the private sector has evolved considerably in creating a safe environment to attract young Saudi nationals, employ, train and develop them for the interest of both private and public entities and parties. We look forward to our young Saudi nationals taking advantage of these opportunities to secure and develop their future career for the interest of the country.
Experts establish connections between the promotion of Saudization and the education and training sectors. Any comment?
This is an important issue and a responsibility shared between the educational and cultural sectors alongside the industrial sector. But the outcome of Saudization and its benefits are clear to everyone. We most urgently need to support educational and training institutions in establishing the basics and principles of professional jobs as well as promoting industrial culture among our young people. The companies train young people for a certain period after which the impact of this training pays off for the company and the employee.
By all means, Rajhi Steel is seeking to become the preferred employer of choice. What are your plans and programs to attract and retain creative human resources?
What matters primarily is to build one team and one family, promote values and instill a culture of continuous learning, capacity building, skills and talents fine-tuning, and constantly rewarding outstanding employees because all of this is in the best interest of the company. Our human resources are our most valuable and expensive assets and our secured investment in the present and the future. Our continuous learning and training programs coupled with the exchange of expertise as well as internal meetings and celebrations held to honor staff and open days contribute to the reviving activity, boost morale and strengthen synergy and continued growth. We are one family and one team whose aim is to continue with success. Since its inception in 1984, Rajhi Steel has adopted clear plans, policies and strategies to promote the concept of Saudization and to increase job opportunities for citizens along with advancing the national economy and diversifying the sources of income, through its diversity of steel products. This is realized through Rajhi Steel’s ongoing efforts to step up production capacity, depending on qualified national employees.
Under a competitive business environment, does Rajhi Steel suffer from leakage and high turnover in human resources, especially among creative and excelling employees?
At the beginning, we must look at these issues from a global perspective, in the sense that we are in a competitive business environment, governed and controlled by a number of variables. Talented and creative employees have the upper hand and major role in this matter together with what the companies offer, including incentives, salaries, training programs, adequate compensations and suitable working environment. We at Rajhi Steel are resolved in this issue and we do not suffer from such leakage and turnover. We have the minimum rates of turnover. In fact, in light of the fierce competition witnessed by the industrial sector, in an effort to attract talented people, we look at this matter from a positively different perspective. The Kingdom is a promising investment environment in the region and an attractive work environment as evidenced by industry and economy experts. So, any employee who departs a national company and works for another, serves the country, and will be a source of pride for the company that he departed.
Establishing private projects is fascinating the youth but it has its controls, requirements and economic feasibility so that the young people will not get frustrated at the beginning of the road. What do you say from your personal experience?
The concept of small and medium enterprises (SMEs) must be promoted. Such enterprises are the bases of a true economic advancement in many countries now. Hence, I encourage and wish good luck for every young man who wants to create his own project as long as the determination and the will exist. He should then ensure the completion of feasibility studies, wisely and carefully, especially since the Saudi market is still fertile and grows and expand at a remarkable pace.
The issue of environmental safety and cleanliness of the operational processes, and the need to maintain human health is being raised from time to time. Rajhi Steel is known to have a strategy and comprehensive programs for this purpose. What’s your take on this?
This is an important question related to a commitment we made within Rajhi Steel, ever since the founding of the company and since the start-up of the first plant. We recognize that good environmental practices will, inevitably, be channelled to the interest and benefit of everyone, including our employees, customers, society, country and our planet. We assume responsibility to reduce this impact and promote safe environmental practices in all respects based on our daily businesses or strategic initiatives over the long term. Preserving the environment is at the core of Rajhi Steel business. When talking about the environment, Rajhi Steel is entirely keen on improving operational processes and employing the latest international scientific technologies to ensure high-quality products and performance without the slightest impact of the fingerprint of our manufacturing operations on the manufacturing environment in the company’s plants and employees alike. The company invested more than SR100 million on environmental protection programs, including the development of fumes and dust pulling system from electric arc furnace and recycling them safely. This is besides an advanced water treatment project and reuse of water in plants facilities, prevention of pollutants and reduction of emission by applying stringent rules in line with the local and global environmental legislations.
What about sustainability within the thought of Rajhi Steel?
As regards sustainability, I can confirm that Rajhi Steel products are characterized by high quality, robust and durability, making them sustainable and recyclable products. Given the magnitude of challenges facing customers, whether they relate to the growing needs of steel products, or to assuring highest level of quality, performance and responsibility toward mega projects, as well as the need to use materials of high value, it has become imperative for Rajhi Steel to find the best iron ore and scrap.
We would like to know from you as an industry leader your vision for the global steel market and how does a foreign investor look at the Kingdom in relation to the manufacture of steel, supply and investment processes?
It is my privilege and pride that the economic environment and the promising investment in the Kingdom, which are reinforced by the efforts of Custodian of the Two Holy Mosques King Abdullah and his government, are translated into comprehensive plans for development and manufacturing. These are the mega projects that made Saudi Arabia the focus of attention of both investors and suppliers of steel and other resources construction for what evolution of major structural projects seen by the Kingdom in all industrial and commercial, health sectors, and others. Consumption of the Saudi market from steel rebar has reached more than 10 million tons per year and is expected to increase proportionally during the next five years by 10 percent, and this in itself is an indication of the sustainability of growth.
The early beginnings of Rajhi Steel Company and its present status is a success story and a model experience in the Kingdom. Would you give us an idea of the history of the company and its future plans?
Rajhi Steel history goes back to more than three decades. The company started business operations in 1984 as an individual establishment and a plant for the production of pipes by Sheikh Mohammed bin Abdulaziz Al-Rajhi, with a production capacity of 1,000 tons. Over time, the number of the company’s plants increased to four in Riyadh and Jeddah, which produce nearly 3 million tons annually, of which Riyadh’s share is 750,000 tons. Rajhi Steel owns a plant in Riyadh for the production of commercial steel with production capacity of 180,000 tons of commercial steel, namely specialized black pipes, galvanized and steel sheets.
The year 2007 saw the go-live of steel melting mill and the production of steel billets, the feedstock for rebar steel rolling mills, which used to be imported from abroad. Total imports of steel billets amount to almost two million tons.