Plant auction: Under the hammer

20 November 2003
On the morning of 6 October, Mohammed Saad al-Shalawi had his eyes glued to the display sets in the VIP room of Ritchie Bros Auctioneers (RBA) in Jebel Ali. The general manager of Saudi Arabia's Al-Hataby General Contracting had driven overnight from Al-Khobar to attend a three-day construction equipment auction. 'The excitement is very high. I buy a lot of equipment and regularly attend auctions [of RBA]. If the price is right, I just pick up everything,' he says.

Finding a bargain is what drives the likes of Al-Shawali to travel more than 1,000 kilometres. The array of equipment on offer is also a major attraction.

'We have auctions in Oman, but they are small,' said first-time visitor Abdullah al-Robhki of Oman-based Abraj Bahla Trading & Contracting. 'This is a global event.'

Over 600 people were registered to bid at the auction, which generated total sales of more than $26 million. 'We had sellers from all over the world sending trucks and equipment,' said RBA regional manager Stephen Branch. '[Prospective] buyers from 41 countries had registered to bid for over 2,500 items. Buyers from outside the UAE made up more than 62 per cent of the equipment purchases.' About 10 per cent of the purchases were made through e-bidding.

The single largest buyer, from Pakistan, purchased equipment worth over $2.3 million for the construction of a township on the outskirts of Lahore.

RBA has come a long way since it held its first auction at Jebel Ali in 1997. With the exception of 1999, when the region-wide construction recession saw sales dip, the Canada-based firm has seen its business grow rapidly. This year, the three RBA auctions in Dubai for used and new equipment have netted more than $83 million. And with a fourth planned in mid-December, the figure is set to top $100 million. '[Construction] equipment moves in line with economic progress,' Branch said. 'Auction is a 12-month economy.'

With oil prices continuing to remain high, demand for construction equipment is set to grow. While the UAE and Saudi Arabia will remain the biggest markets, Iraq is re-emerging after an extended absence. 'If the security aspect is tackled, we will rush in,' says Al-Shalawi. 'We are businessmen and we will chase where the money is. There is a big market in Baghdad and Basra.'

Al-Shalawi is not alone in casting his sights north. 'A lot of equipment is still lying around in Jebel Ali port. Some vessels loaded with steel plates, angle and crow bars did set sail for Basra, but they were turned back,' says Peter Muniz of Dubai-based Polaris Shipping & Transport.

Ashok Dutta n

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