Cross-border initiatives and their growing popularity

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LARGE-SCALE: there are opportunities for development in places like China, but companies there like to take the jobs on themselves.

Angela Giuffrida takes a look at two of the biggest locally-based construction companies, and their plans for overseas expansion.

One of the trends currently permeating companies in the Middle East construction market - whether they are real estate developers or contractors - is the focus towards overseas expansion.

On the one hand, the trend is a sign that some companies have reached their full potential in their home market and are seeking ways of growing their business in emerging economies and becoming an internationally-recognised brand.

It is also a reflection of what companies of a certain size and status simply have to do in order to keep the financial markets content.

Either way, overseas expansion is typical of any growing company keen to spread its risk and maintain growth, as opposed to resting on its laurels in a market in which it has already reaped a significant amount of success.

Among those companies seeking to develop internationally is two of the biggest locally-based contractors - Arabtec Construction and Al Habtoor Engineering.

Both have a significant history of work in the UAE and an exhaustive list of current projects.

There will also be no shortage of jobs for them to take on in their home markets over the coming years, yet they are targeting the international arena for longer-term stability.

Arabtec is investing in India and is working on a tower project in Karachi, Pakistan. It is also eyeing opportunities in Syria.

But for the company's chairman, Riad Kamal, the move is one which is expected of the company rather than something of choice.

"The financial markets expect us to spread our risk. If we weren't publicly-listed, then I wouldn't go overseas," he said.

Al Habtoor Engineering is planning a move overseas with its joint venture partner, Leighton Holdings. Although the company is currently focused on projects in the UAE and Qatar, it will pursue opportunities in the wider Middle East and North Africa as they arise.

The company plans to target opportunities in its core market segments: large-scale building; civil engineering and infrastructure, and oil and gas.

"We plan to expand by building upon the relationships we have built with our clients in the UAE and Qatar, and to follow them to new geographic areas," said David Savage, managing director, Al Habtoor Leighton.

"We will form joint ventures when it makes sense to do so. These may be locally-based, or with major international contractors."

One of the things contractors need to consider when making the move abroad is exactly how the overseas' markets will be infiltrated.

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