Entrepreneurship in the Kingdom of Saudi Arabia

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Young Saudi Entrepreneurs

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Last updated: Friday, May 29, 2015 9:23 PM
Young Saudi Entrepreneurs

Fatima Muhammad
Saudi Gazette

In an attempt to address the specific needs of the deteriorating heavy industrial equipment used in utility power plants, desalination stations, and national defense in the Kingdom that have equipment dating back to the early 80s; entrepreneur Hashim Al-Zain and his partner introduced a new line of business through their DarTec Engineering Consultants which addresses that specific need by providing a reverse engineering. The process provides spare parts to any outdated machine or one that has no valid warranty.

Although this business appears to be a logical necessity for the Kingdom’s needs based on statistical analysis about spare parts at reputable companies and service providers in the Kingdom, once the business was established Al-Zain noted that all companies shied away from utilizing this service. “To our surprise, people at local utility plants, factories, and service providers had no mechanism to qualify a local startup company and only had a one-size-fits-all prequalification model, which is not suited for startup companies.” According to him this is not applicable especially since most of the clients are government or semi-government entities.

The initial phase of the business that Al-Zain refers to ‘the round pegs in the square holes’ he had to go to great lengths to demonstrate their capabilities by providing complementary demonstration orders and fabrication of spare parts at his own expense. This process lasted for two-years and charged enormous sums of money without making “a single Riyal in revenue” during the first two years.

“Part of the challenge was that companies couldn’t decide which category to place their services on, based on existing company clarifications. Such as ‘are we manufacturers? Are we Service providers? Are we engineering consultants?’ What finally worked is our relentless persistence in doing roadshows, demonstrations, participating in relative local conventions and seminars all at our own personal expense. Our efforts paid off when we received our first purchase offer after two-years of non-stop business development and pilot orders,” Al-Zain said.

Among the very first obstacles that they faced was that the company could not find anyone to fund the venture of reverse engineering when the business started. Al-Zain attributes this to their effort to “create a new service industry that hasn’t been yet classified in the Kingdom.” Even though reverse engineering around the world has been a well-established, viable business for over 30-years. Despite the fact that their business had an international partner to back-up their portfolio, yet they faced enormous challenges and resistance trying to convince Venture Capital (VC), banks and private investors in the Kingdom to invest. This lead them to self-finance the business as they had a strong belief that the business would work in the Kingdom and they were willing to take the risk and put their personal investment on the line. “Plus, it’s kind of fun to do the seemingly impossible!”

Al-Zain established his first reverse engineering office in Jeddah that enables reproducing old, obsolete, discontinued spare parts that come without warranty. The process of reverse engineering suitable for the particular needs of the spare part industry is laser and optical scanners. Laser and optical scanning is the process of digitalizing mechanical objects with no reference engineering drawings and transforms them into Computer Aided Design files (CAD) that could be used in a Computer Numeric Control (CNC) machine, lathe, mill for fabrication at existing manufacturing facilities in the Kingdom.

The reverse engineering process takes a mechanical object (e.g. engine piston), scans it, which then undergoes a special data processing technique to obtain the 3D CAD model (in any format) that could be fabricated at existing local manufacturing establishments. The process of laser and optical scanning offers a catalytic platform to existing industries (machine shops, metallurgy labs, and service providers) to enable sustainable localization of manufacturing old, obsolete, and discontinued spare parts that could not previously be manufactured locally due to missing engineering drawings.

Al-Zain noted that the changing behavior and the mindset of business-as-usual are still the most challenging factors that have hindered the development of a sustainable entrepreneurship eco-system that is seamlessly integrated into the fabric of existing businesses in the Kingdom. This challenge becomes even more pronounced for entrepreneurs and startup businesses in areas related to technology development and sustainable energy integration, added Al-Zain.

For this eco-system to see the light of day, Al-Zain believes that the government needs to intervene by empowering startup companies by offering special engagement with industry incentives so the specific industry would flourish and grow in ways that would benefit the Kingdom as a whole.

Source: http://www.saudigazette.com.sa/index.cfm?method=home.regcon&contentid=20150530245500

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