By Construction Week Staff Writer
CW talks to industry experts to find out what you should do in.
CW talks to industry experts to find out what you should do in.
1. Explore new territories
While Dubai may still be suffering and the situation in the rest of the UAE is not looking quite as rosy as it was 18 months ago, there are still plenty of opportunities. According to a recent report from Deloitte Middle East, entitled ‘The GCC Powers of Construction 2009', Qatar, Saudi Arabia and Abu Dhabi are demonstrating the strongest potential regionally.
"The publication's release comes at a time when many countries in the Gulf found that their high ambitions for real estate and construction were challenged due to the impact of the global financial crisis," comments Deloitte UAE audit partner and construction industry leader Cynthia Corby.
"We have brought together expertise from Deloitte as well as key regional players such as Arabtec and Construction Products Holding Company (CPC) to give valuable insight into the impact of the crisis on the construction sector in the region, as well as prospects for future growth and demand. The overriding message is one of many opportunities still to be found."
2. Focus on your staff
During boom times, it was all most companies could do to keep employing enough workers to meet ever-increasing demand. With a slowdown also comes the opportunity to focus on employees, HR and training.
"At Halcrow, we've had to change our mindset. At one point, we would have built a trench around the office if we could have, as we had more business than we could cope with. Now it's different - developing business, relationship building. We have to have extra focus on clients," comments Halcrow regional HR director Rhyan Anderson.
"You don't simply stop training and developing, however," Anderson adds.
"We've seen before that if you stop graduate recruitment, you don't feel the negative effects now, but in five years' time. We have to develop our staff with different skill sets; at Halcrow, we're developing our ‘A-Team' - growing our own, as we already know whether they're a ‘Halcrow man/woman' or not."
3. Grab some time in the spotlight
For obvious reasons, as the belt tightens during a tough economic climate, the budgets for certain departments are seen as unnecessary luxuries. Marketing is usually the first; however, the marketplace in full of giant brands who took their place at the top of the pile by spending wisely and bravely during poor economies and, therefore, increased their market share.
"Restructure your business and focus your marketing plans, so that you can last, and grow, through the recession. This means for some, becoming extremely creative in their marketing approach," explains Landscape Success Systems president Jeffrey Scott.
"A down time is the perfect time to grow market share, by increasing your public exposure, through advertising, public relations, networking, events, etc. Now is the time that forward-thinking companies will grow share of mind and market share."
4. Have you considered off-site construction?
Initially viewed as a quirk or fad, off-site construction is here to stay and, with a huge amount of benefits - not the least of which are time and money savings - it could be the great innovation in construction in the next decade.
Off-site, pre-cast, pods...are you involved?
"High-rises and hotels are perfect, but they're also ideal for big villa developments if the villas are based on a repeated template. In villas, the developer might choose a heavier wall, such as concrete, while lighter steel pods make high-rises and hotels much easier," says Unipods sales and marketing director Mike Usher.
"If you're physically building bathrooms and kitchens on-site, it leads to so much waste - both direct and indirect," adds Othmar Wutscher, CEO of Al Rajhi Holding.
"Then there's the quality control element - on-site simply can't compare. Kitchens and bathrooms require so much interaction between all the professionals, no two constructed on-site will ever be the same."The quality of pods is always identical and exactly on spec."
5. Infrastructure projects are still going strong
Throughout a generally gloomy year, manufacturers of general construction equipment have actually seen sales rise in their road building range. Chinese conglomerate LiuGong is best known in this region for a long-established line up of wheel loaders, but according to the general manager Huang Zhaohua, it has been the firm's line-up of vibratory drum rollers that have seen the largest increase in sales over the last year.
"This type of equipment has seen a 30% rise in sales over the last year, against a downturn of 30% in the market generally."
Major road building contracts are currently being offered in the UAE, Qatar and Saudi Arabia, with a number also being tendered in Oman. 6. Think health and education
While giant city and island projects are less fashionable than knitwear and residential demand has bottomed out, there is still a huge need across the whole region for education and health facilities.
UK firm Stride Treglown, recognised for its portfolio of public sector buildings, for example, has just opened an office in Abu Dhabi. "We reviewed a number of global locations for our first step into the international market, and after a couple of adventures in the Caribbean and Europe, we determined that the UAE provided the greatest opportunity for us," explains the firm's Richard Philipson.
Kuwait has announced plans to build eight new hospitals worth an estimated US $3,1bn; Abu Dhabi will construct 18 schools in 2010, and, over the past year, more than 200 schools have been renovated in Jordan, with 300 more to come.
7. Transparency is still key
When troubles first hit the industry, everyone involved in the industry jumped on the transparency bandwagon and, should things improve in 2010, it's important that those calls are not swept under the carpet. An honest, interoperable, transparent industry is a successful industry.
"As we find ourselves in this challenging economic climate, I, among others, have talked about the need for greater transparency, financial reforms, increased support by governments and adopting a ‘time to act' approach," says Damac chairman Hussain Sajwani.
8. Quality counts
The only thing as certain as the fact that 2009 was a terrible year for the industry is the fact that the economy will improve. And the most savvy companies are now making sure they're ready to be fastest out the blocks when it does. One way of doing that is gaining a reputation for quality.
"With a few building collapses over the past three months, the quality of construction has become a big issue for the DMA. Such happenings cause a lot of damage to the construction sector and real estate market.
Who would want to invest here when the quality of construction is suspect?" asks Abu Dhabi DMA's Matthew Plumbridge.
"In the next two or three years, I'm sure we'll see a massive increase in the number of dedicated refurbishment companies, as the corners being cut start to come apart - refurbishing is expensive and labour intensive," adds Al Rajhi's Wutscher.
"We can compromise a little in price at the moment, but we can never afford to compromise on quality."
9. Time to take BIM seriously
Simply put, it doesn't matter where your place in the building process is, the quicker and better you understand Building Information Modelling, the more profitable your business will become.
"You simply get better bids with BIM, as you can accurately demonstrate the complexity of projects. The scope is better defined and it gives you an accurate tonnage right from the time of bids - all at the touch of a button," says Thornton Tomasetti principal Kyle Krall.
"The more people who are involved in the process, the greater the chance of introducing mistakes, which have cost implications, as you have to spend more time reproducing project information manually. Then work has to be redone, material is wasted, or material is missing at the last minute. Changes or modifications have to be effected on-site," adds Ruggero Valsecchi, export sales manager for Progman Oy.
"BIM means time, energy and cost savings are inherent because you already have all the information in your model, and do not need to recalibrate manually."
10. Work smarter, not harder
Don't just put your head down and keep doing the same thing. A new year is a great time to reassess and ensure that your business is maximised and optimised. Could you benefit from using the latest technology, for example?
"In most industries, technology has played a major role in helping to manage and control business processes and risk. Unfortunately, for many years the construction industry has proven an exception to the rule; a fact that is surprising when you consider that many construction projects actually cost more than the total annual turnover of most medium to large sized companies," says Causeway COO Paul Madeira.
Or are you throwing money away on PMV?
"Auction prices are, if not lower, at least avoiding the middle-man's cut. It is a cash-quick settlement business and provides immediate availability to fill an immediate need," states Keith Lupton, general manager World Wide Auctioneers.
"If you have a project that will last two to three years, why buy new equipment that has a guarantee for ten years, but will have its biggest depreciation value [over this initial period]? Why not buy second-hand?" reasons Tom Cornell, managing director Europe, Iron Planet. So, make sure your assets and resources are all working for you.
Well, after spending almost 30 years in the Middle East, I have learned a golden lesson.. develop your Middle East business when the chips are down.. 2010 is the right time to dig deep and dig wide in the area. Haluk-Luke Savas MBA FCIM MBIFM ICIOB affCIBSE email@example.com