Case Study: Al Badawi General Trading

Al Badawi is a broking and clearing member of the Dubai Gold and Commodities Exchange and traces its origins to Singapore. The firm opened its Dubai business in 1989 and has scrap yards in the Al Awir area of Dubai and Sharjah. Anil Kejriwal, Al Badawi's Director, has seen significant growth in the company since he helped set it up.

'Our main area of business is non-ferrous metals. We buy our scrap here in the UAE, then we clean it up and process it to internationally recognised standards. We then export it to markets all over the world including India, China, the Far East and Europe.

'We also have other strands to our business. We export household utensils to other Gulf countries and Africa, while we also have a small shop here in Deira. We are members of the DGCX and we are hoping that trading in metal futures will become an increasingly big part of our activities.'

Aiming to trade

Indeed, G Sathyamoorty joined the company recently with the express purpose of building up Al Badawi's involvement in the one year old commodity exchange.

'At the moment we are focusing on trading in gold and silver for clients who are mostly based in India, but my hope is that the DGCX will soon develop a diverse range of metal futures contracts. Once that happens our cross-commodity hedging business will really take off and I can see us being major players in the UAE. I am looking forward to the likes of copper, aluminium and zinc being traded at the DGCX in the near future.'

Getting bigger with the HSBC

For Mr Kejriwal, the prospect of more business via its membership of the DGCX will be another step on a path of rapid growth and he acknowledges that the HSBC has been a big factor in its expansion. Al Badawi had used the HSBC for many years at its Singapore base and so maintaining that continuity when opening a venture in Dubai made sense.

'When we started out, after getting our licences in 1990, we had just ten employees. We now boast a workforce of 115 people and this year our turnover is likely to surpass $55 million, more than double its level in 2003.

'I must recognise the key support we have received from the HSBC along the way. As our revenue has increased, so has the limit on the sales credit line we receive from them. Two years ago it was less than a million dirhams, now it is five million dirhams. The HSBC has looked at our growth and backed us.'

No limits, no problem

The HSBC also provides Al Badawi with an additional 180 day, no cash limit Letter of Credit and this, coupled with the bank's international reputation, has further boosted the firm's trading.

'Our clients in India all recognise the HSBC and we have never had any Indian banks raise any issues about a Letter of Credit from them. Whenever I approach the HSBC about increasing our limits, I have every faith they will do this for us. Of course, having had a long-standing relationships helps in this, as does our solid track record which adds to our creditability. We are happy to undertake all our banking requirements with them.'