Case study: Afras

Afras is an international operation with additional divisions in Abu Dhabi, Oman, Iraq and the USA. It sells its pipes and tubes to a wide range of clients, including Petroleum Development Oman, various refineries throughout the GCC and global EPC contractors.

The company originally started out in Oman in 1990 and R.Nandakumar, now the major shareholder and Managing Director; came on board in early 1994.

"When I joined Afras, we were in a completely different line of business. Over the subsequent years, we moved increasingly into the oil and gas industry and now our operation is exclusively geared to that sector."

Banking relationship

Afras opened its JAFZA office in 2001 and, at the time, as a start up business, was in need of both financial solutions and backing. Mr Nandakumar arranged to see the HSBC, initially as a prospective personal customer, and that was the start of a close and supportive professional relationship.

"We were just starting out so we had little to offer really, but the HSBC backed us, followed up on their proposals and now, several years down the line, we have really taken off. You could say HSBC built this company up in some respects."

Indeed, over the past four years, Afras has grown to 20 times its original size and has diversified further, moving into the supply of electrical bulk and water treatment solutions. Afras has gained additional business with the opening of its General Trade Division, catering to the needs of US Army contractors.

Factoring advantages

For Mr Nandakumar, one of the key benefits that he has gained from HSBC has been its factoring facility. HSBC offered this flexible loan service to Afras in May 2004 and the MD feels that this has been a real driving force for his company.

"Factoring, without any question, took this company on to the next level. It is a superb product and the fact that HSBC offered it to us was vital to our growth. It has helped us move from being a small business to a medium sized one.

"Factoring gave us liquidity when we needed it. This year we hope to open a division in India and we are also looking at other parts of the world.

"The Business Banking team has the expertise to look at a proposal and they make very quick decisions. Some banks can take weeks getting back to you. HSBC really care about smaller operations and don't just focus on the big boys: they have a good balance I think."