Olayan, Cummins new joint venture a ‘perfect platform’ to train young Saudis

 A partnership between Olayan and Cummins Inc. aims to create new job opportunities and training for Saudis “to build a dynamic workforce”.
This was disclosed at a signing ceremony held at Olayan headquarters on Sunday.

This year, Olayan Group and Cummins Inc. will reach 60 years into their partnership. Now joining forces to form a 50:50 joint venture under one umbrella, Olayan Financing Company’s CEO Lubna Olayan and Cummins Chairman and CEO Tom Linebarger announced the formation of Cummins Arabia that will distribute across Saudi Arabia, UAE, and Kuwait.

“We view our new joint venture as a natural evolution of the close working relationship that has existed between us and Cummins for more than 60 years.” said Lubna Olayan. “We began distributing Cummins products in Saudi Arabia in 1956, and have always viewed ourselves as operating in a real spirit of partnership. This new company will further enhance our product offerings and services in the region, and is truly a win-win proposition for Cummins, for us and for our customers,” she added.

“Cummins is pleased to partner with Olayan, which is a highly respected leader in the global distribution business ” said Linebarger. “Olayan brings years of Middle East experience, and this partnership provides opportunities for our companies to grow and expand in this region while enhancing the service and support we provide to customers. Cummins will continue to look for new ways to build global partnerships that drive growth and success for our company, our partners and our customers,” he noted.

When asked how does the venture play a role in Saudization particularly in recruiting Saudis and training them, executive vice president of Olayan Financing Company Mohammed Al-Shaikh said “we’re going to increase the employment and the engagement of Saudi men and women. The joint venture is going to provide a perfect platform to attract, train, and retain young Saudis with the aim to bridge the gap between the skills required in the market and the skills we’re going to help them to have and develop.”

“We’re currently developing plans to not just develop Saudis in Saudi Arabia but around the world in different Cummins entities so that we’re building a pipeline,” managing director of Cummins Rachid Ouenniche told Saudi Gazette. “We’re looking at Saudis who are in US universities and we can get them to work first at Cummins in Europe or North America then come to Saudi Arabia. These are the future leaders of this organization as we grow.”

He added that increasing female representation in the workplace is a main objective. Cummins recently launched an internship program that has quickly gained wide attention that includes mentorship, projects that add value to the business, and promoting future leaders. Today, already twenty women from five universities who started in the internship program have been hired.

“With the expansion of the joint venture, that number is going to grow,” he said. “We are able to get the best students out there. The likelihood of those being future leaders is very high. We see those women as the future managers and future leaders of Cummins Arabia.”

Cummins Inc. designs, manufactures, and distributes engines, filtration, and power generation products and operates in numerous markets, including electricity, energy, trucking, mining, defense, and marine. In trucking alone, Cummins holds around a 60% market share in the US and they aim to replicate such numbers in Saudi Arabia.

Olayan seeks to expand their territory in potential large markets in the region. Furthermore, Cummins operates large power stations that build whole turnkey projects for powerhouses and other businesses.

When asked about the long-term vision of Cummins Arabia, Ouenniche said “today, we’re number one or number two in different segments of the market. Our vision is to be consistently number 1 in all markets where we operate. We believe it’s within our reach, within the next few years, if we have the best people out there. The standards that we set for work ethics are very high, and that will allow us to do that.”

“One of the objectives of Cummins Arabia is increasing the contribution of the non-oil sector into the overall economy of Saudi Arabia,” said Al-Shaikh. “This has been a strategic objective of our government. We see an opportunity to increase the collaboration between the private sector and the government.”

On competing in the market, Al-Shaikh said Olayan and Cummins have been dedicated to bringing value to the customer. “We work closely with our customers, identify their needs, and we have capabilities that our competitors don’t. That’s why we’ve been able to be the main contractors for some of the biggest companies in Saudi Arabia who contracted us to build their own power stations. It’s not only about selling engines but how we package it, provide the service, build the power station.”

Ouenniche further said “we believe that the joint venture has an advantage over the independent distribution structure. Cummins has that direct access to the factory that the distributor may not have. That provides an edge for us because we’re able to support the products from inception. We’re involved in product development, manufacturing, then supporting the after sales process of those products throughout their life cycle.”