Restructuring Company for Baggage and Cargo Handling Projects on Turn Key basis in UAE
Manager:
Mr.B. L.
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Customer:
Confidential
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Role:
CFO
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Location:
United Arab Emirates
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Turnover:
50 - 70 mio. Euro
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Time frame:
10 months
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No. of employees:
470
About the Customer
A Joint Venture (JV) company for sales and turnkey installation of baggage handling and cargo systems as well as operating and maintaining them at airports in the Middle East. The managing Partner is a major industrial global player in various Electric & Electronic Products and Services.
Testimonial from Сustomer
Based on the a.m., the Joint Venture proves to be very successful until now, the Capital Contribution is repaid again and the CFO`s role has been acknowledged in such way, that directly afterwards he has been entrusted to take over the next most challenging CFO position in North Africa, representing the entire portfolio of the managing Partner.
Situation (Challenge)
The company was mainly structured to serve as Project Execution Vehicle for the managing Partner of the JV, executing Baggage and Cargo Handling Projects on Turn Key basis in the UAE.
Organisation, Staff qualification and development as well as administration was structured that way, added by the highly volatile workforce environment in the UAE, this resulted in > 30% fluctuation. The ERP system was antiquated, highly vulnerable and not supported anymore. Two Major Contracts where under execution but the companies Equity was highly negative.
Consequent Audit remarks had urgently to be addressed and the company had to be restructured to enable an overdue strategic shift of business from mainly project execution in the UAE to Plant operation and maintenance as well as regional sales & execution activities in order to address market opportunities and create a sustainable and profitable set up.
Solution (Achievement)
As the CFO, being responsible for finance, accounting, purchase, logistics, administration, information networks & security as well as commercial sales, execution & claim management and jointly for Profit and Loss, the first action was to develop, document and implement work processes for the entire company, integrating all Departments as base for clear responsibilities & auditable Workflows, which resulted in the first totally integrated ISO 9001 certification the year after.
Within this, the existing ERP system has been renewed, vastly automated and comprehensive reporting has been integrated. External and internal Audit remarks from previous Years have been addressed accordingly. Process and regulatory compliance controls have been implemented.
Introduced staff training, transparent staff development plans and intensive discussions reduced staff fluctuation, specifically at the highly specialised level to below 5% in the first year.
>The IT Landscape set up, its reliability and cost has been restructured.
All above and many more smaller measures resulted in highly motivated staff with a minor exchange, effective work processes, vastly improved reporting as well as claim management and a reduction of selling and administration cost by 10% against previous year despite steep inflation, restructuring cost and increase of activities and Volume.
In the same time, the necessary major restructuring of Staff took place in order to address the shift towards Operation and Maintenance Business, resulting in a 50 mio. Euro long term O&M Contract received in 2008. Consequently Staff has been increased from ~ 200 to nearly 500 Heads within 5 months.
Addressing the highly negative Equity of the Joint Venture with the Shareholders, convincing them with the sustainable success of the new set up and a respective business plan resulted in fresh capitalisation, hence enabled the company to successfully win major future projects on a solid basis.
At the time of hand over, the company holds several mayor contracts in the fields of baggage & cargo handling systems as well as in operations and maintenance of such facilities with a profitable yearly business volume of 50 – 70 mio. Euro and ~ 470 own staff.
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