Elias Seraphim, CEO, Gulf Precast Concrete CO • Interview

Gulf Precast Concrete has implemented a system of continuous improvements to reduce costs and make the company more cost effective in a bid to remain resilient.

What was your organization’s response to COVID-19, and what have been the lessons learned?

The pandemic took everyone by surprise. We had a good response and immediately took action, testing all our workers in batches. Since then, they have all now been tested several times. We put in the necessary precautions and had teams going to our labor camps on a daily basis to sanitize and organized the work in such a way that we reduced the number of people working in the same area, applying social distancing in our factories and sites, and having people work from home unless they were essential onsite. We minimized the impact as much as possible while continuing to work, as in the UAE construction was considered a vital activity. I am pleased to say that today we are almost working as per normal. Although we have suffered economically due to the downturn, we have not suffered as a result of COVID-19 itself.

How would you describe the government’s response, and how did it affect your organization?

There were two types of government interventions, one of which was reducing mobility between the Emirates and labor camps and curfews preventing us from working at night, and economic packages and asking banks to be more lenient, though this did not go as far as we would have liked. For example, we have had disputes with banks to get deferment on loans, and they are still charging high interest rates. Many also refuse to provide loans. The central bank gave banks funds but did not control how it was spent and left the banks to deal with it themselves. We have suffered economically from COVID-19 in many ways. First, we lost many contracts and had an order book of AED350 million that was reduced to AED220 million. Most of these contracts that were put on hold or canceled were mostly in the residential and oil and gas sectors. Those that we still have are mostly construction projects for schools and so on. We have also not been paid for jobs that we are doing, including government contracts. We also suffered in terms of mobility, as we have many people in Dubai and a shortage in Abu Dhabi.

What measures did you take internally to mitigate some of these challenges?

We had to make redundancies and put people on unpaid leave. Instead of paying salaries every month, we are now only able to do so every two months because of cash flow. We were paying suppliers within 60 days but have now deferred to between 90 and 100 days because we do not have the cash.

Have you implemented any innovative technologies or sustainable building methods to potentially get more business?

For those projects that we are negotiating for, we have thought outside the box and have been more efficient, as everyone wants to produce more and be more efficient with better planning and better use of raw materials since the margins are lower. We need to make do with what we have. We have improved in many areas and will continue to do so. We are implementing a system of continuous improvements to reduce costs and make the company more cost effective.

How does the current situation put more importance on individual accountability, and how did this affect your organization?

With reduced costs and revenues, we were seriously considering reducing everyone’s salaries, but we instead decided to pay employees 80% of their salaries, with the remaining 20% linked to performance with KPIs. If our employees can prove themselves and demonstrate that they can help the company survive, they will earn possibly more than what was expected. We are still working on this and hope it will be effective. We seek to find the best solutions for our people and do all we can to retain them.