ADOPTING a business model based on the concept of a total welding solutions provider, Allalloy Dynaweld has emerged as a significant player in the welding industry within a mere one year. The company was founded by a group of like-minded managers, who had more than 10 years' experience and a working relationship with one another in the welding field.
Allalloy started operations in January 2008 and now has about 20 employees, and still counting.
The people behind it wanted a people's company where everyone can achieve the fruits of success together. All employees have had at least five years of working experience with one another in a previous company, so they are able to gel rather well.
Because the employees are close-knit, Allalloy follows a flat organisational structure. Most employees hold multiple responsibilities, and they must be involved in sales so that they do not lose touch with the market. They get out of the office and head for the yards to meet customers. This gives the company flexibility and efficiency in serving customers, yet maintaining low costs of operations.
They are primarily supported by a welding engineer, welding consultant and a technical service team. This personal touch has given the company an edge over bigger and more established welding companies.
'We do not just quote the price of products when we get enquiries, we would personally go down to a yard even before an enquiry is made, see if we can improve their welding processes, introduce our products to them,' says Victor Khaw, general manager of Allalloy. 'Through this, we can value add to our clients.'
Allalloy specialises in high-end welding products and welding applications, focusing on the oil and gas sector. Mr Khaw says that the company 'focuses on processes rather than products'. 'We try not to compete head on, bigger companies can slash prices of their products and we will definitely lose out. We try to be different, so we change their welding processes to improve their productivity.'
Another key strength of the business is its strong partnership with principals. Air Liquide Welding, for example, is the biggest gas company in Europe, and its welding division is one of the biggest too. Sandvik, meanwhile, has one of the biggest stainless steel mills in Europe and is at the forefront of the world's stainless steel technology.
Allalloy imports welding products from Sandvik, among other principals, and is the European company's sole authorised distributor in Singapore. Some 95 per cent of Allalloy's turnover comes from sole authorised dealing.
Even though the company started out in a difficult year, when the recession set in months after they opened for business, Mr Khaw tells BT that sales and profits exceeded expectations. 'It was relatively easy to start, because of the low fixed asset costs. The main costs we had were rental, manpower and product inventory costs. Grants from Spring Singapore helped us.'
It was challenging for the first three months though, as the stocks, which are mainly from Europe had yet to arrive. The company sourced locally during that period to tide over.
Now, the company owns a subsidiary in Malaysia that was set up within 10 months of operations.
Allalloy also actively helps customers save costs during the downturn.
'We are the only one promoting Oerlikon's High Deposition Seamless Flux Cored Submerged Arc Wires and Flux Cored Arc Welding Wires, manufactured by Air Liquide Welding. These wires will increase our customers' welding productivity by 25-30 per cent without the need to upgrade their existing equipment. Nowadays, cost cutting is a key word and we believe that these wires will be readily accepted by our customers,' Mr Khaw explains.
A strong order book till the first half of 2010 places the company in good stead to weather the downturn. Allalloy expects turnover to grow 2.5 times this year, and 50 per cent more in 2010. Looking ahead, it plans to expand to countries within the region in the next couple of months.
On cutting costs, Mr Khaw says that keeping costs at its minimum is already part of company culture. 'From Day One, we outsourced many of our auxiliary needs, allowing us to keep our fixed assets and overheads low.'
Allalloy believes that customers want the lowest-cost methods and not the lowest-priced products. Mr Khaw says: 'We firmly believe in changing the playing field instead of engaging in a price war with our competitors. We will continue to come up with innovative ideas to improve our clients' welding productivity. Our success is dependent on the success of our customers.'
Customers include Keppel Fels, McDermott, Labroy Offshore and Swiber Offshore.
