As the old adage goes, the only constant in life is change. In business, this phrase is especially true, with the operating environment for firms shifting on a daily basis.
Vijay Kumar Somani knows these pressures first-hand as CEO of Union Cement, the first cement producer established in the United Arab Emirates.
Since 2018, when Union Cement ventured into the United Arab Emirates market, the firm has not only established a foothold in the country, but also in surrounding markets including other Gulf countries, East Africa and Bangladesh. As the expansion is taking place, Union Cement has spent the last few years working to improve its productivity and efficiency.
“For the current financial year, we have a very ambitious plan,” Somani tells The CEO Magazine. “We want to deliver close to four million tons of clinker production. We are very excited and have very ambitious targets.”
We want to also look at how we can improve our presence in domestic markets from the current level.
Somani is well aware of the very tough market found not only in the United Arab Emirates, but across the globe. By focusing on strengthening the marketing side of Union Cement, Somani hopes to best rivals and stand out in a competitive field.
“We’ve built up sales and marketing to support our branding to enter more new markets, as well as continuing R&D and investing more in efficient products,” he explains. “We will also have a different type of oil-well cement. We’ll try to see if we can enter into the larger vein and oil-well and cement market.”
The extremely volatile cost of coal and gas has created challenges for many companies as they struggle to keep costs down and retain high margins. Union Cement has worked hard over the past few years to seek out efficiencies and improve waste recovery processes, resulting in lower costs.
“Now our power costs have come down because we started tapping into waste recovery,” he says. “Somewhere between 20–24 megawatts can now be produced through green power thanks to waste recovery, which saves a lot when it comes to our power cost.”
Over the past year, Union Cement has embraced dual-fuel to effortlessly shift between coal and gas, depending on prices.
“Since coal was very heavy in cost due to the Ukraine and Russia war, we could tap into lower prices. It was a relief from that point of view to optimize the cost,” adds Somani.
Power isn’t the only area being addressed by Somani to find savings. Maintenance and repair costs are also being targeted. Proactive maintenance plans are expected to bring down the costs of repair and maintenance by at least 25 percent, giving Union Cement more room to compete with other players in the market on the cost side of the business.
Leading From the Top
Members of the board of directors at the parent company of Union Cement have always encouraged Somani and his team to focus on innovation, invest in R&D and to generally think differently.
“They know that every time we may not be able to succeed,” he says. “Sometimes there’s a failure, sometimes there is a significant cost due to the failure. This is acceptable to the parent company board, and that is the philosophy they employ. That is how we get the confidence to do things differently.”
As the shipping and logistics side of the market has now cooled, according to Somani, he is actively seeking new possible market destinations. The next step will be to look at the possibility of hiring long-term charging vessels for the company’s own coal and clinker export needs.
“We are currently in the early stages, so I am not sure which direction it will go, depending on the commercial feasibility of this approach,” he explains. “We want to also look at how we can improve our presence in domestic markets from the current level, so these are the plans we have in place for the next year at the moment.”
Credit to the team
By empowering the workforce to understand the impact their work has on the wider business, Somani believes Union Cement will thrive. Everyone in the team can directly see how their actions, either positive or negative, will shift the bottom line and lead them to work together to push the company forward.
“Once the team understands that, then you always go in the right direction, you always mitigate all the problems and resolve problems in no time,” he believes. “I have a highly qualified and highly efficient team. Breakdowns will come down, the cost of repairs will come down, the expense will be smoothly flowing. The customer will be attended in a timely manner to his satisfaction.”
Union Cement also greatly benefits from a team of local staff available in the United Arab Emirates and are working closely with the Emiratization plan put in place by the government to ensure citizens are employed by both private and public firms.
“They are really an asset for our company, and they’re well-treated and they know the factory is their second home. That also gives us confidence in their working efficiency. The company benefits and so do they,” he says.
Nobody can achieve the top without a team, and without a good team.
As a manager of people, Somani is proud of his entire team, which is delivering on all commitments in a timely manner.
“No individual can do everything, no matter if they are very powerful and very intelligent,” he says. “Nobody can achieve the top without a team, and without a good team.”