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Thu 1 Feb 2007 05:13 PM

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Engineering partnerships

The merger of engineering services firms Cansult and Maunsell in late 2006 created one of the largest consultancy firms in the Middle East. Alison Luke talks to president and CEO Jim Metcalfe about the firm’s plans for the future, the benefits of partnering and the challenges he predicts ahead.

For a man who recently had his responsibilities doubled overnight, Jim Metcalfe gives off an unexpectedly calm and assured air. Sitting in his city centre office overlooking the changing coastline of the Gulf, Metcalfe is relaxed enough in his role as president and CEO of the recently formed Cansult Maunsell to be heading off to the Abu Dhabi Golf Championships in the afternoon. So what is enabling this confidence?

Cansult Maunsell was established by the merging of Canadian-based consultancy Cansult and AECOM firm Maunsell. As well as creating one of the region's largest consulting engineering services firms, with over 1500 employees, Cansult Maunsell firm forms global group AECOM's first Middle East-based operating company. Canadian Metcalfe's relaxed manner is not without good reason: at the time of the merger he was president and CEO of Cansult and had almost three decades of experience with the firm, much of it in the Middle East.

Prior to the merger, Cansult had around 650 staff and specialised in four primary areas: transportation, infrastructure, architectural engineering and project management. It was well established in the Gulf, having operated in the region for over 40 years. With offices throughout the region, its focus was on providing engineering and project management services to government and private sectors.

"Cansult as a Canadian company has always focussed on the Middle East," explains Metcalfe. "It's worked in the Caribbean and the Far East, but its focus has been the Middle East." The firm's first large-scale job in the region - the Maqta Bridge - is sited only a few miles from Metcalfe's current office.

Metcalfe himself has long ties with the Gulf. He first moved to the region in 1973 and he has been active here ever since, working and living in various cities including Riyadh and Muscat.

He joined Cansult in 1978 and was appointed president and CEO in 1982. In 1986 he oversaw a management buy-out and Cansult became an employee-owned company. He returned to Canada at the time of the management buy-out: "I decided to go back and start some initiatives outwith the Middle East," he explains, "that's when we started an initiative in the Caribbean and Canada to grow our business."

In 2003, with the Middle East construction industry booming, Metcalfe returned to the region to run the division locally. "I enjoy working in the Arab culture," he explains. "The work is extremely challenging as a professional...in the early years in particular there weren't a lot of rules and you had to go back to the first principles of engineering and architecture - that was fun. Today it's different," he adds.

Cansult has reported continued success in the region, tripling in size over the past three years alone. With Maunsell also growing as a separate company within the booming regional market, why merge the two firms?

"About a year ago the Cansult board of directors recognised that to grow further we really needed to be part of a bigger organisation," explains Metcalfe. "We looked around with some advisors and AECOM was a company that appealed to us. One: it allowed companies to keep their own identities; two: it had a global approach to business," he adds.

"[The merger] appealed to [AECOM] because their goal was to be the number one in the Gulf...and by putting their operation Maunsell - which was also about 650-700 people - together with us we created an organisation that was double the size overnight," he explains, "so we are now one of the largest engineering companies operating in the region."

The merger was completed surprisingly quickly - taking a period of around nine months - due to the focus by both sides and the sacrificing of a lot of personal time, reports Metcalfe.

Although his title remains as it was under Cansult, Metcalfe's role has changed significantly following the merger. "In the short-term my role is putting the two companies together [in terms of] cultures and finding the best people for the right positions," he states.

A further challenge in his new position is created by the fact that he now finds himself part of an organisation with 28,000 employees worldwide and a wide internal staff skills base. "It's a great opportunity for us because we've not only got our own resources but those of the other AECOM companies that have an interest in the region and ability," states Metcalfe. "The challenge is understanding what those resources are and finding the best way to make use of them in our market," he stresses.

The types of work Cansult and Maunsell firms carried out prior to the merger varied slightly, which has enabled immediate strengthening of capabilities in some areas. Maunsell had a stronger infrastructure base, with Cansult more experienced in buildings and project management. "By putting the two together [Cansult] strengthened our infrastructure capabilities enormously...and we were able to bring our project management and building skills to their organisation," explains Metcalfe. "We've brought the clients together and brought our skills together to better serve the clients."

Cansult Maunsell will also be tapping into AECOM's capabilities to expand its core business into urban planning, high-end architecture and the power industries, reports Metcalfe. "One of our goals is to align ourselves to service the land development industry...which is a big part of this market today," he states.

Before any further expansion can take place though, more practical matters must be dealt with. Within the next few months the company will be integrating its offices. The central Abu Dhabi base will become the corporate headquarters and the firm is concluding an arrangement to merge its offices in Abu Dhabi and Dubai together within the cities. In Qatar the businesses will be run independently in the short term.

"Our second goal is to create a Cansult Maunsell presence up and down the Gulf and selectively in the region, we are looking in Egypt for example," explains Metcalfe. "It's pretty easy to grow in this market right now; my goal is to grow [the business] at least 10-15% each year." This growth rate will be targetting from two angles. "Our goal is organic growth; AECOM's goal is growth by acquisition as well as organic growth, and we are openly looking for acquisitions in this region," Metcalfe confirms.

Metcalfe is confident about the future growth of the firm and the industry in general. "The whole building industry is going through a fairly dramatic shift worldwide. It's the only time in my career that the whole world is in an economic growth and this is a very intense market," he stresses. The unprecedented growth and relative infancy of the Middle East's construction market will also mean considerable changes in the next few years for all involved in the sector predicts Metcalfe. "We're seeing the role of the consulting engineer, contractor, owner and financier changing very fast," he states. "We're seeing a dramatic shift towards more of a partnering relationship between all of the players.

"The consultant used to be kind of the policeman between the owner and the contractor and that's definitely changing...we're trying to adapt ourselves to that and we'd like to be leaders in that [field]," Metcalfe adds.

"All of us [in the construction industry] spend a lot of time documenting things to protect ourselves incase of a dispute, but what we'd like to do is see a system that allows all of the players to spend 90% of their time finding the best solution for the project as opposed to 30% of their time documenting things for their protection," he stresses.

This type of partnering approach is now relatively common in Europe and Metcalfe believes that the change will benefit all involved in a project. "If you move away from the adversarial positions that we all find ourselves in to a partnering relationship we think that the client will achieve dramatic savings in their projects and all of us will be under a lot less stress," Metcalfe adds.

"Everyone wants the project tomorrow; everybody wants it for what they would have paid for it a year ago; yet everything costs more, and people are unhappy about budgets and unhappy about schedules," he stresses. "If we can focus on delivering the projects better and cheaper, then we think that we'll be a leader in the industry. We're close [to partnering] in a couple of situations, it's around the corner for us," he confirms.

In addition to its aim to become a one-stop-shop for the land development industry and continuing a focus on major government projects, the firm will be aiming to grow its MEP business. The majority of its work in this sector is currently in building services, however it has singled out district cooling as an important growth sector. "We have an initiative internally to bring all our expertise together on district cooling. We are doing plant and pipework design now and trying to grow [the business]," confirms Metcalfe. The firm is currently designing the district cooling system for the above ground stations of the Dubai Metro project.

With the market booming Cansult Maunsell, in line with most other firms, is finding getting work the easy part of the business. "Finding work is not a challenge," he confirms. "Sometimes payment can be a challenge but there's enough good work around now that you can chose your clients and can minimise that risk," Metcalfe states. "I used to say [payment] was a challenge in this part of the world...I think it's an issue in the whole industry, but as a company we're better off here than in other areas of the world and it's because we can choose our clients." Much of the firm's work is achieved without tendering. "70% of our work today by direct award," states Metcalfe.

Metcalfe believes that the size of AECOM's global network will help Cansult Maunsell grow in the market and win further work. "A lot of clients want to know that there is a big operation behind you for insurance issues or ability to bring in resources issues," he states. "Clients today in this part of the world are looking to secure their resource base, so we're finding that having AECOM behind us has increased our work," he confirms.

The transition period for the merger began on 1 October; full integration is due to complete by summer 2007.

Jim Metcalfe: Up Close and Personal

MEP: Where are you from?

I was born in Montana, United States, but I’m a Canadian – I grew up in Toronto and was educated at the University of Toronto, studying a degree in Civil engineering back in 1966. I now live in Abu Dhabi.

MEP: Who’s in your family?

[My wife and I] have a big family; between us we have six children, five of whom are married, so that means that we have 11 children. And we have seven grandchildren who are spread between here and the United States of America and Canada.

MEP: How do you spend your free time?

I play golf – I own clubs is what I say! Actually my game has taken a back seat because of the merger, but I’ll get back to it.

[My wife and I] go to visit family and we host family here a lot. We’re also fairly active in a couple of professional charitable activities; between that, work, friends and bridge, the days are gone!

We’re blessed with a pretty wide circle of friends – our friends are an important part of our life. I’m quite active in the Canadian Business Council and my wife and I are supporters of the Future Centre in Abu Dhabi.

MEP: Where do you like to holiday?

We travel a lot – we were in Thailand last month and Indonesia and Europe last summer. We’re off to Zanzibar in a couple of months and [later in the year] we’re planning to tour northern Europe and go back to Canada. We like the Tropics and we areas where people are different and interesting and we can see different things.

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Hitesh Doshi 13 years ago

I and my family, Wish u Best luck for our company . Also i am proud to work in your orgainization .