Founder and owner for ACE Cranes Mr Gunasheel Udupi explains how his company has sustained growth despite global economic turbulence "Business is not about today, it is about tomorrow," says Mr Gunasheel Udupi, founder and managing director of the UAE based overhead crane manufacturing company ACE Cranes & Group. This philosophy has underpinned the creation and growth of one of the region’s most successful lifting companies thanks to his long term view and thorough, careful approach. From just three people and 2000 square feet of space in 2002, the firm now has over 340 staff and major manufacturing facilities in Sharjah and Ras Al Khaimah.
"I started the business with just 40,000 Euros in credit," he says noting that both, customers and suppliers are equally important to run a reliable business especially when you are in the capital equipment sector. Only one bank was open and available on the day that he needed to undertake his first major transaction. "I stood in the queue and transferred the money and I am still with that company who give us our lines of credit today. When you commit to someone and if you manage that they will definitely be coming back," he says.
The approach to banking, where he also chooses to operate with minimal levels of debt, mirrors his approach to his business. "Most of my customers become personal contacts. We do a lot of networking and take the time to get to know our customers," he says. At the same time noting that he is very firm on payment terms. "Even now I have a very strict policy with the payment department that no payment should go overdue by more than 2 days. Otherwise you lose a respected supplier. We have a very rational and safe approach."
This approach includes supporting the equipment sold for the life of the cranes and is one of the reasons he decided to set up his own firm, after almost 20 years working for crane companies in India and the Middle East. "I was always doing more than I was supposed to do," he says, the mechanical engineer that he is by training emerging as he discusses his love of technical challenges. "So my friends and colleagues convinced me to open a company."
At this time Udupi was living in the UAE and he initially partnered with UK based Street Crane to supply the electromechanical components, but as the numbers and the business started to grow the firm sought a new partner. "In 2004 we started working with ABUS from Germany. They had good products and the costs of spare parts and standardisation and how they support the equipment and so on was excellent. In 2005 they agreed to make us an agent. We have grown sales for ABUS from a very minor amount to a significant size, which made us responsible for whole Middle East. ABUS like us because, we also carry same philosophy as them, ethical and keeping your commitments and be simple."
At the same time ACE Cranes branched out to open a new 3500 m2 yard in Ajman, an emirate located approximately 35 km north of the bustling city of Dubai. At a time when Dubai was struggling to service its growth Udupi made the sensible decision to set up his facility in a cheaper, less congested location. "After a year or two we had around 60 to 70 people," he says.
Having the yard enabled ACE Cranes to start manufacturing and fabricating its own crane infrastructure using locally sourced steel. "By the time we had 50 cranes in our hand we started making crane girders," he says. "We started growing our infrastructure because I wanted to be able to do everything in house for two reasons: one costing and the other is that the quality management is much better when you have your own team doing the job. They will make the same mistake only once. These guys get trained in production and understand exactly what needs to be done. Our people are skilled and qualified." We also bring in many young engineers, so that we can train them on job, to our needs and make them learn stuff which will be remembered for future." Udupi says "The new generation engineers are missing something which can’t be taught in colleges"
Supporting the equipment over the long term is also a vital aspect of ACE Cranes work. "Cranes are capital equipment and we have to support them for the next 20 years," says Udupi explaining that this is one of the reasons that ACE and ABUS are a good fit. "ABUS wanted their products to be well supported. This was more important to them than the financial aspects. After working with us for a few years they asked us to handle the whole of the Middle East for them as they knew that we were professional and we did things right."
By 2009 the company had outgrown its Ajman base and so Udupi took the decision to open an 11,000m2 facility in neighbouring Sharjah at the Hamriyah Free Zone. The much bigger facility meant that the company could make larger girders giving the firm the ability to take on bigger, more complex projects. "Customers tend to come to us with special jobs, special fabrication requirements," he says. Using locally sourced steel Udupi says the volatile raw material prices are not an issue. "We buy the steel from job to job, we don’t stock it as a commodity so when we quote the price we take the costing into account."
At the same time he says that the low oil price and the two previous recessions that the company has experienced including that following the 2008 financial crisis which hit the region hard, have actually seen the company maintain its growth. "During the last two recessions we had big order backlogs to deliver. Our growth during the recessions enabled us to become stronger. Recession time is probably the best time to build your infrastructure including your knowledge centre. It is like buying shares when the markets and prices are down. The same equipment is 20-30% cheaper."
For ACE Cranes this meant expanding the offices, investing in new machinery, updating its yard and developing and upgrading its in house custom built ERP software as well as branching out into new areas such as its acoustic enclosures and bund wall tanks. These chambers are designed to absorb sound and have many industrial applications. The units which vary from 20ft, 40ft to tailored large sizes to accommodate 4 Mega Watt Generator, are manufactured in a 48,000m2 facility in Ras Al Khaimah which opened in 2012. Udupi’s brother Prasanna runs this side of the business. Udupi has also diversified into tourism opening the Upasana Retreat in Karnataka, India. "About 5 years ago I started a small resort in the mountains and this is my passion. Working for so long on cranes and engineering projects I wanted to connect with activity that took me to a different world," he says nothing that a key feature of the resort is that it supporting nearby school by providing shortfall of teachers and some social activities to make tourists participation in understanding the "pleasure of giving " and understand what City dwellers miss from Nature. I want people to do trekking in nature, read books and play with your kids rather than watching TV. That’s why there are no TV in rooms!" he says.
But Udupi still has many plans for his overhead lifting business with Saudi Arabia being a key market on his agenda. Having worked in the country before starting his business Udupi is convinced of the potential in the market, however he is realistic about the challenges, like finding skilled manpower and visa processing time. Since the group formed a company in the Kingdom in 2012 they have been servicing it mainly from the UAE. Udupi says "In two years’ time I’m dreaming of having 20,000 m2 facility with at least 120 people working staff and 3 spare parts /service centres In Kingdom. With such facility we can impress and provide support that they expect from us."
Today the business is split around the Gulf countries with 40-50% located in the UAE, the rest in Saudi and agents in Qatar, Kuwait and Oman bringing in projects too. Key clients include Dubai Aluminium, Alstom, GE, Emirates Aluminium, and Ministry for Electricity and Water in Kuwait, Qatar Petroleum, Siemens, Kahramaa, Drydocks World, Veolia and many more. Industrial manufacturing dominates demand but warehousing, power stations and other industrial users are also seeking out ACE Cranes for projects. And for Udupi the more difficult the project is the better. "The more complex a project is then the more we can show our ability. We work for that kind of project and that makes us different." In some cases this means working with Italian manufacturer Michielotto who supply heavy duty special purpose cranes which are completely custom made like Aluminium smelters, Cast house and Steel Mills.
