After enjoying unprecedented success in Zambia throughout its first four years of operation, Flame Group has spent the subsequent six diversifying, innovating and expanding as it looks to cement its status as one of the country’s leading market players.
TAKING PRIDE IN PROJECTS
Incepted in the country in 2006, the aim of the Group of Companies was to replicate its reputed Egyptian operations to a relatively traditional and slow-moving market; a plan which came to fruition far quicker than the organisation, and its Chief Executive Officer (CEO), Mohamed Salama could have anticipated.
“The opportunity in Zambia arose from the idea that we could transfer skills capacity from Egyptian artisans to local labour here, and in 2006 we completed our first building, Finsbury Park,” he recalls. “Before then, everyone was building to very traditional brick and mortar methods without much concept of aesthetics or new building materials that were available internationally.
“We saw this as an advantage in setting up a construction company in Zambia, and after one project, everyone was really amazed by the quality of our workmanship.”
Placing concerted emphasis on the design and build approach in the early days, Flame’s reputation quickly grew in the country; being earmarked for 13 new contracts by the time it had finished its first project.
The double-edged sword of success even became too much by 2010 as demand exceeded resources, but following a subsequent stabilisation since 2012, the Company can now look back at an initial nine years of operations which has seen the business rise from zero to $180 million in turnover, while looking forward to a sustainable future in the region.
DIVERSIFICATION
Following the two-year difficulty in catching up with its own success, the market issues faced by Flame in more recent years present a different array of challenges in regards to staying innovative and ahead of the industry curve.
Within six months of introducing new processes and materials to the Zambian market, competitors had followed suit, while a Chinese influx into the construction domain further challenged the attainment of projects.
Salama explains: “We could not remain or rely on being a main contractor because the work coming in began to reduce a bit. So what we did is diversified.”
This diversification occurred across four main areas, the first of which being a more streamlined target market for its construction works, and an enhanced focus on more niche and upper-level projects.
“Second to that was the development of our contractor support unit,” the CEO adds. “We are now happy for another contractor to take a main contract, and for us to then support them by supplying certain materials or by doing certain work under them as a sub-contractor.”
Having been very successful in the market, this method has been the opening to numerous lucrative business partnerships – including with global construction giant, Lafarge – which has subsequently set the tone for the third arm of Flame’s diversification plan.
“We have become an agency for international brands – mostly European – looking to sell their products into Africa,” Salama continues. “Some people in Africa are ignorant to Europe and European products because they are afraid of the cost, but we have shown that the products are actually more cost effective in the long run, so we have created awareness for contractors by being an agent for companies like paint manufacturer, Caparol DAW in Germany.
“We want to continue to merge with manufacturers and suppliers moving forward and see our power coming through there.”
The final diversification has further encouraged faith and trust among significant industry relationships in the region, by boasting specialised machinery within its still-thriving construction activities.
“We have two or three pieces of machinery here in Zambia where we are the only people in Africa who have them or who operate them, which is good for us in the market when people see us using the most advanced technologies,” the CEO affirms.
SETTING THE PACE
Adapting and reacting to industry challenges has had to become an attribute engrained into Flame’s continuous improvement strategy, having initially faced issues surrounding logistics and shipping within a landlocked nation, and, more pressingly, skills shortages.
Cultural, health and political constraints stunted the development of artisans in Zambia in the 1990s and early 2000s, leaving companies like Flame to resurrect the personnel infrastructure themselves, as Salama notes: “In 2006, when I started Flame it was one of the weapons I had intended to use to penetrate this market, in building the capacity of local artisans or local labour by using hands-on training programmes on the sites.
“This has proven to be tremendously successful, bringing in an Egyptian artisan to build capacity with the locals, train them and be the pace-setter for their growth in line with our quality control standards.”
Once again suffering as a consequence of its own innovation, Flame has since had to face retention challenges with competitors also making the most of the Company’s labour initiatives but, once again, the Group has reacted through the introduction of the Flame Centre for Excellence.
The installation of academic education into its labour force, to complement the core industry skills development, has often been repaid by enhanced loyalty, while more niche training has also been introduced through its agency arm; teaching people the benefits of specialised products so they can then market them to the wider Zambian sector.
TAKING PRIDE IN PROJECTS
All of these peripheral considerations and adherences culminate in what have been Flame Construction’s biggest achievements to date, in the form of the projects themselves.
With the partnerships, contracts, materials, personnel and supply chain strategies in place, the turnkey offering that the Company is able to provide has been epitomised by builds such as the Radisson Blu Hotel.
“Secondly, we also built the Robert Makasa University for the government in the north of the country,” Salama adds. “When we started this project, there was absolutely nothing in that area, but now that the project is complete, we have trained more than 2,000 people and have changed the economy of the area completely, from extreme poverty, no supplies and not even a filling station, to today where the government has declared it the capital of Muchinga Province and construction is taking place almost everywhere.”
The complete structural, architectural and mechanical engineering of the Nkana Mall is further evidence of Flame’s expertise; this time adopting a continental integration approach by engineering all facets of the three-storey building in Egypt before transporting them for erection in Zambia.
“We take great pride in all of these completed projects as well as current existing projects we’re working on,” the CEO says. “We are adding an extension and putting four hostels up for a university in Lusaka which will be completed by the end of the year, while we’re also working with Alstom Grid on two electrical substations and are co-tendering with an Indian company for the construction of a Methanol plant in the south of Zambia.
“These construction projects will not only fulfil our revenue targets for 2015 but also for the first two quarters of 2016.”
HIGH STANDARDS
Flame’s success is all the more impressive given the ongoing imbalance within the industry and country at large, which places even more pressure on the Company to find differentiators on which to leverage.
Salama says: “Quality delivery, honesty, customer satisfaction and the building of relationships are what set us apart, as well as the promise that, after we have completed a project, we will be with you for the next three years to maintain or replace anything at no cost.”
The use of European materials further compounds this successfully alternative approach to construction works in Zambia, as well as the diversification that has been achieved through the introduction of its contractor support unit and agency business.
In regards to the latter, the Company now aims to expand its influence as a trading commodity in Zambia, while also looking to Zimbabwe as a way to kick-start its international progression.
Salama concludes: “Other than that, our goal is to minimise the amount of labour we have in the construction company but to train the employees we do have to very high standards, as well as rewarding them very well also.
“In the long-term, we will look to complete our new development projects arm which revolves around build-for-rent and build-for-sale projects. Substantial land has been acquired already and it is another way that we can diversify in the future.”
