Lightning never strikes twice but copycat counterfeiters do

Many companies throughout the Gulf have their designs ripped off and never even know. One such firm was Thomas & Betts, who discovered, through a chance call, that their products had become a multi-million dollar business ... but for another company. Angela Giuffrida reports.

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By  Angela Giuffrida Published  December 17, 2005

Sales of fake building products are spiralling out of control in the Middle East, and with little legislative backup, many companies are struggling to fight the counterfeit problem. Some companies are spending as much on fighting counterfeit ers as they are on shaping and selling their brands, in addition to the huge costs entailed in pursuing fraudsters and bringing them to justice. One company with bitter experience of the problem is Thomas & Betts, which has lost an estimated US $6.9 million (£4 million) worth of business to the copycat fraudsters. The company manufactures a range of products, which includes earthing and lightning protection apparatus. Its products were being ripped off for years before the company realised what was going on, according to general manager Colin Liversage. Copies of the company’s products, made under the Furse brand name, have proliferated on several projects in the UAE. After carrying out a market investigation, Liversage estimates that $1.7 million worth of bogus Furse products have been used in building structures across the region. “We found that 10% of the products used were Furse. It was only when we started to chip away that we discovered the rest came from counterfeiters,” he said. The company tracked the source of its problems to a factory in India and has since launched legal action against three customers who knowingly bought counterfeit goods from there. “We found out the source was in India after someone accidentally sent a fax to our office in Dubai asking for our products,” added Liversage. “I then travelled to Mumbai and, under the guise of a buyer, met the man who was making the counterfeit goods. He showed me a list of the people he had supplied to, some of which were our customers. “There are some contractors who buy Furse products in good faith — they genuinely believe that they are buying the real thing. But others are buying material knowing full well it is counterfeit.” Thomas & Betts has since spent thousands of dollars trying to fight the problem, which has eaten away almost $7 million of the company’s regional profits. All of its lightning protection components carry British Standard certification and consultant engineers are encouraged to insist that contractors include certificates of origin when they submit a materials list, before approving a project. “This should form part of the submissions process. They can then ask us to inspect the certificate and the equipment on site. It’s very difficult and costly to bring counterfeiters to justice. “So the best way we can fight it is by cutting the supply chain,” said Liversage. “Although some companies are beginning to embrace the system, enforcing it throughout the entire industry is proving difficult,” he added. “People understand the need for these measures but enforcing change is the problem. One of the biggest problems with counterfeit is that the market is moving so fast that people are extremely busy, they just don’t have time to check the materials being used — if a product looks and feels the same, unless they carry out stringent tests, they will never know otherwise.” Another company feeling the brunt of the black market tactics is Cyprus-based Peta Decorating Tools. It has been operating in the Middle East for 15 years and claims it has lost 20% of its turnover on trying to tackle the counterfeiters. “There is a saying that imitation is the best form of flattery, but unfortunately this is not very comforting,” said sales director Carolos Petrou. “Every company is now forced to dedicate a proportion of its time and budget to chasing the problem. “Although the Dubai Economic Development Department does take valid complaints seriously, it can take up to six months before anything is done about it, by which time the fraudsters have caught on that you’re investigating it and then change their tactics,” he said.

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