What EGA’s Local Seals Agreements Reveal About Supplier Approval

Procurement leader Najm Alawadhi explains the case for buying closer to the plant. Two agreements in Abu Dhabi show how that strategy can help develop suppliers, while leaving individual technical approvals and orders as separate decisions.

A seal is a small part of an industrial machine. Its availability can matter when that machine is waiting for maintenance. A procurement team deciding whether to source a seal locally has several things to establish. The supplier needs to make the item to the relevant requirements, deliver it when the plant needs it and support later orders. A local facility can make some of that easier. The evidence still has to establish what the facility can do for the particular item.

In a 2021 interview published by Emirates Global Aluminium, Najm Alawadhi, then director of procurement materials and services and warehouse management, described a reason for developing UAE suppliers. Local production, he said, could reduce transport costs and the amount of stock the buyer needed to carry. He also said EGA favoured local sourcing where it was commercially competitive. In November 2024 EGA announced agreements with Santoo Sealing and Rolon Seals to support expansion of their newly established UAE facilities. Alawadhi publicly recorded his participation at the signing event. That connects a named procurement practitioner to the public case without assigning him a private vote, technical sign-off or contract decision. EGA’s interview with Najm Alawadhi, EGA’s agreement announcement, Alawadhi’s account of the event

Start with the maintenance problem

Alawadhi came to procurement from an engineering role, according to EGA’s interview. He explained that the materials he had worked with in the plant were part of what drew him into purchasing. His experience later covered different kinds of materials, warehousing and logistics. That background helps explain why the buying decision can start with what happens at the machine. The team needs to know which part is needed, how it is identified and what work stops if it cannot be obtained.

EGA’s November announcement says it had worked with both suppliers to establish Abu Dhabi manufacturing facilities to meet demand for mechanical materials and spare parts. Its 2024 sustainability report records the agreements and the earlier work to establish the facilities. Santoo separately describes a purpose-built KEZAD facility producing industrial sealing components and doing machining and hydraulic workshop work. Those records corroborate the supplier’s local capability and the relationship described by EGA. They give no approved item list, order quantities, inspection results or evidence that a particular part was installed. EGA’s 2024 sustainability report, Santoo’s description of its Abu Dhabi facility

An Abu Dhabi Investment Office reel promotes Make it in the Emirates as a meeting point for manufacturers and investors.

The reel concerns a separate event. It illustrates how companies can meet in the industrial ecosystem. The agreement record is what establishes the named suppliers and EGA’s stated rationale. For a buyer, an introduction or a visit can help identify a capability that is worth testing. It remains a different milestone from qualifying a part for use or confirming an order.

Establish what the approval applies to

A procurement manager can begin with the scope of the decision. A business may be able to sell one kind of item while lacking the facilities to make another. A site can be suitable for a particular process while another workshop under the same owner uses different equipment. A buyer reviewing a specific seal can identify the product family, manufacturing location and intended service before asking what evidence demonstrates capability. That avoids using a company-level description to answer a product-level question.

EGA’s public supplier page describes onboarding and document submission. Its Responsible Sourcing Standard sets expectations for suppliers and says EGA or a party it appoints may request assistance and access for audits on notice. It also describes ongoing assessment. Those are published features of EGA’s supplier relationship. The documents do not disclose which audits or checks were used for Santoo or Rolon, or the basis on which any item was accepted. EGA’s supplier page, EGA’s Responsible Sourcing Standard

An illustrative technical review might start with a drawing revision, material specification, manufacturing process and intended operating conditions. Then identify what record will accompany a delivered item. A buyer could ask how a production batch is identified and how the supplier will communicate a material change. If a sample is reviewed, preserve the version and the factory that produced it. A later delivery should be traceable to the basis on which that sample was accepted. These are examples of the evidence a buyer might request, independent of what happened in EGA’s private process.

It is also useful to define what happens when the supplier requests a change. A new manufacturing step or substitute material may improve availability but change the basis of the earlier review. The buyer can distinguish a change that needs technical assessment from an administrative update. Record who can accept each type and when the change takes effect. That keeps the original decision usable when the buyer comes back to it after several orders.

Compare landed cost with the cost of waiting

Alawadhi’s case for local manufacturing included transport and inventory. EGA’s chief executive, Abdulnasser Bin Kalban, reiterated the commercial competitiveness condition in the 2024 announcement. Those statements explain why the buyer might support domestic production. They give no before-and-after measurement of lead time or inventory for the two suppliers. A procurement manager can use that rationale to define which figures would show that the arrangement helped.

Suppose an illustrative UAE plant uses 20 units of a spare part per month. One offer costs AED 300 per unit delivered and takes eight weeks to replenish. Another costs AED 330 per unit delivered and takes two weeks. If the plant uses four weeks as a planning month, expected demand during replenishment falls from 40 units to 10 under the second offer. The unit cost increases by AED 600 a month at that usage rate. The question is what the plant gains in reduced exposure to delays, lower stock requirements or easier correction of an order. These figures are hypothetical. They do not show EGA’s prices, inventory settings or supplier performance.

Compare the offer against the plant’s real alternative. The relevant benchmark may be the supplier that currently meets the specification, with its own transport, minimum order and delivery pattern. A cheaper item that needs a larger purchase can leave more capital tied up in the warehouse. A more expensive item that arrives sooner can still be a poor choice if the buyer has to hold the same reserve for other reasons. Put the order size, replenishment assumptions and inventory consequences in the same comparison. That makes it possible to explain the decision to both the maintenance team and the people responsible for working capital.

The result also depends on how predictable the shorter lead time is. A supplier may deliver routine orders quickly while having little room to respond to an unexpected surge. It may rely on a material that has its own long replenishment time. Ask for the distribution of delivery times, recent evidence of on-time orders and a plan for shortages. A plant trying to reduce the amount of stock it holds should distinguish average lead time from the tail of late deliveries it actually has to cover.

Keep the supplier decision usable after the first delivery

A buying decision has more value if the people receiving the goods can apply it later. The purchasing record can show which supplier and manufacturing site were assessed. The goods receipt can link the shipment to the right item and revision. A maintenance team can report what happened in use. Those records answer different questions. If a delivery arrives late but the part meets its specification, the corrective action differs from the one required when an item is timely but cannot be used.

Keep rejected deliveries in that record too. Excluding them from the lead-time measure can make the supplier look faster precisely when the plant had to wait for usable stock. Where the evidence allows it, show the time to receipt and the time to acceptance separately.

Local capacity can also serve more than one purpose. A buyer may want a dependable source for routine replenishment and an alternative for emergencies. The same vendor may be able to do one job well and still need a different arrangement for the other. An initial order can help establish whether the supplier and buyer can handle the expected volume and communicate exceptions. It should have a defined acceptance process, a review date and a clear way to raise problems. Otherwise the organisation can end up with a series of urgent purchases that never produces a reliable supply history.

For suppliers, the useful follow-up after an industrial event is to clarify what evidence would allow the buyer to make the next decision. An introduction may lead to a request to demonstrate a process. A facility review may lead to assessment of particular items. A commercial discussion can be held while a technical question remains open. If both sides name the scope, owner and next milestone, the supplier can tell whether it is developing a capability with the customer, waiting on an approval or preparing to deliver against an order.

A procurement leader can ask the same question when reviewing the relationship later. Compare the results against the case that justified pursuing the supplier. If the aim was to shorten replenishment, look at the actual times between a request and usable stock. If it was to make an additional source available, check whether the plant can place an order with that source and receive the intended item without relying on the original supply route. If the aim was to reduce inventory, check what the warehouse changed and whether the service level held. A single successful order may support one step in that case. Evidence from repeated orders establishes much more about whether the change can be sustained.

Alawadhi’s public account explains why EGA might work with suppliers to build production closer to its operations. The agreements with Santoo and Rolon document a decision to support local manufacturing capacity. For an operating team, the next decision has a narrower question. Can a particular supplier deliver a specified item reliably enough for the plant to plan around it? A record of the item, the approval basis and actual deliveries is what allows the buyer to answer.