COMING off a strong year in 2019, the team at Dscaff Engineering Sdn Bhd was expecting the good streak to continue into 2020.
Of course, things didn’t quite pan out as expected this year.
Still, director Chris Hillier notes that the scaffolding and construction equipment solutions company is not doing too badly, thanks to the resilience they have built up over the years and the pivots they have made along the way.
Dscaff is still getting some decent jobs and remains profitable.
Its early investment in software technology and compliance enabled it to effectively implement comprehensive Covid-19 procedures for office and worksites, allowing workers to get back to work on critical projects in the early part of the movement control order.
It also introduced the Dscaff Approved Partners Program to support smaller scaffolding contractors by providing them with scaffolding materials at competitive rates.
“Our business is very capex-heavy because we have to buy scaffolding. It’s hard to sustain that and banks are not very friendly for this industry.
“So we tell the smaller guys to just rent from us so that they don’t have to invest in assets and to just focus on managing their jobs. We only charge them when they start charging their clients.
“So we can be like a big brother in the scaffolding industry. It’s better for us to work with everybody than to try and grab everything for ourselves, ” says Hillier.
Group managing director Sunderaj Nagalingam adds that this helps them remain in the market even if they aren’t the ones completing the jobs or getting the contracts.
Up the game
The company has evolved substantially from when Hillier and Sunderaj founded the firm in 2012. Up till 2017, about 90% of its business came from the trading of scaffolding materials. It then started providing contracting services in 2018, which, today, accounts for about 75% of its revenue. Trading only makes up about 10%.
That, says Sunderaj, is a big shift.
But steps have been taken to further expand the company’s offerings. It no longer wants to just be known as a scaffolding company.
“We are positioning Dscaff as an industrial services provider. We do other scopes as well like insulation, mechanical and fabrication. So we are able to tap the same customer base because we are basically able to offer them more services, ” he says.
Its aim in the next couple of years is to provide the entire spectrum of industrial services and be the indisputable numero uno in the field.
To do that, they have had to do a lot of things differently, which took up a lot of time and money.
For instance, Dscaff started digitising its scaffolding inspection through the development of its “Tag-it” software, which allows them to monitor the location and status of every scaffolding structure in a project in real time.
This eliminates many of the administrative functions that come with the inspection process.
Hillier explains that a lot of manual manpower is usually used up for paperwork in a project and automating this process would help reduce mistakes, overheads and collection cycles.
Additionally, the data can be easily shared with their clients, which creates better transparency in the industry – an unusual feat as the industry is not particularly known for being transparent. This brings a certain professionalism to the industry.
“We try to invest as much as we can where we can improve using IT. We are a brick and mortar business but we want to do this differently. We want to see how we can analyse data in terms of winning jobs, calculating efficiency, number of trucks and so on.
“And all that comes down to us being able to quote our clients more precisely. And we can see better profits because we can manage it better. So I think Internet of Things and Industry Revolution 4.0 is the way to go.
“We are trying to lead that kind of change in the industry. Otherwise, it’s never going to happen. Since we have our own projects, we can use that opportunity to implement it, ” says Sunderaj.
Dscaff has also invested into other products and services to boost its capabilities in other industries apart from the oil and gas and construction sectors which it mainly serves at the moment.
It is the exclusive distributor for Janson Bridging’s modular steel bridges and has developed a range of dry mix building products under SuperBuilders. The latter would enable it to grow in the buildings industry and, possibly, in ports, too.
The idea here is to diversify into areas where there is a gap for Dscaff to fill to even out the risks of its revenue streams.
“So by having the whole spectrum of industrial services, we won’t have so much of this fluctuation in revenue when major projects are completed. There will always be overlapping work.
“But this is not a one-day, or even a one-year, effort. We’ve got to start somewhere, and maybe over the next one to two years, we’ll start having multiple revenue streams. That’s our target, ” says Sunderaj.
Gearing for the boom
All things said, optimism is riding high as the year comes to a close. Hillier is expecting a good year next year as jobs that were held back would pick up again on top of those that were already planned for 2021. While uncertainty remains, there are jobs to be had.
“There is work out there, you just got to go and work and see what you can tailor to the customer’s requirement. You’ve got to work much more closely with the clients. They’ve got a certain budget and workflow. Understand their problems and tailor to their needs.
“This is what others can’t do. A lot of people don’t want to know their clients and the problems they face. But we are paying more attention to that, ” he says.
Sunderaj also notes that a lot of oil and gas plants are due for scheduled maintenance next year and when that happens, it’s “like Christmas time for us. It’s all scaffolding and everybody needs access”.
Even with its large amount of gear, they will probably need to invest in more next year.
And given that they are expanding their scope of services, the company would be able to better solidify their position as an industrial services provider in the oil and gas sector.
“Some of our project managers in the scaffolding are also well-versed with insulation works. And insulation goes together with scaffolding. So now our clients are asking us for both. So these are part of our industrial jobs that we are trying to increase our presence in.
“The reason we can do all these is because we have a very strong network of leaders and these leaders have good command of a talent pool. When you know the right people, they know how to get the next level of right people to go and bid for a job, ” he says.
It is important to prove oneself upon securing a job as clients tend to stick to the same services provider.
And Dscaff has built a rather good rap in the industry
“That is something that surprises us because we are so buried in the day to day work and we are so pleasantly surprised that people are looking for us and they want to meet us and work with us. So we are starting to find that people know us, ” says Hillier.
The recognition is a boost for the company as it also works towards building a secondary market. With the bulk of its work in Malaysia, they are hoping to diversify into other markets like Indonesia, where there is enormous growth potential, and Australia, where jobs are also slowly picking up.
Dscaff had previously completed work in both countries and has garnered a reputation there.
“And that’s something our competitors can’t do. Because they don’t have overseas networks and they can’t pre-qualify. We meet the standards and have all the certifications needed.
“That’s where we have paid upfront with all the R&D and qualification works we’ve done over the years, ” he says.
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