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Wed 1 Aug 2007 12:00 AM

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Market developments

Al Habtoor-Specon is a new name in the Middle East’s MEP sector, but as md Thrasos Thrasyvoulou explains, it is based on established foundations.

In July a new firm was officially launched in the Middle East's MEP contracting sector. Behind the venture are one of the region's largest contractors and a man that is well known to many in the industry, having worked in the region for over 30 years.

Al Habtoor-Specon is the result of a collaboration between Al Habtoor Engineering Enterprises and Specialist Construction (Specon), an MEP contracting firm set up by Thrasos Thrasyvoulou. The creation of the firm stemmed from a desire by Thrasyvoulou to set up a family-owned MEP business in the Middle East and that of Al Habtoor to strengthen its operations and gain greater control over the MEP installations on its projects.

"Al Habtoor wanted to extend its operations with an MEP company," explains Thrasyvoulou. With the volumes of MEP work in the region increasing and a worldwide shortage of MEP contractors, the firm determined that to ensure quality, reliability and competitiveness throughout its projects' MEP installations it required more control over this area of work. "The bottlenecks on most of the buildings [under construction in the region] and the difficulties are not the civil works...Al Habtoor Engineering realised that unless they had an inhouse MEP division or an association [with an MEP contractor] they had a gap," he adds.

The link-up with Specon was "a lucky coincidence" explains Thrasyvoulou. He and several of the senior personnel in Specon have past experience working with Al Habtoor as MEP subcontractors, but in the initial stages of the process he was unaware of the desire to expand the firm. "I was looking for alliances to establish Specon in this area and I had three serious options: one in Qatar and two in Dubai," he explains. While considering these options Thrasyvoulou sought the advice of a colleague from Al Habtoor who, recognising the possibilities for both firms, called Al Habtoor Engineering managing partner Riad Sadik and a meeting was set up for the next morning.

Within weeks contracts were agreed and signed and from October 2005 Thrasyvoulou began operations as general manager of an MEP division of Al Habtoor. From the beginning this was set up as a partnership arrangement. The MEP division, and subsequently Al Habtoor-Specon, has its own quality assurance/quality control systems and divisions as well as its own board of directors. The strength of the new firm, states Thrasyvoulou, lies in the personnel involved directly in its formation.

"[Specon] includes many highly qualified engineers who have vast experience in this area, which is very important," he stresses. "I have been working in the region for over 30 years and have completed projects worth over US $2 billion and most of my senior people have been here between 15 and 30 years - this is the asset of the company."

This level of experience runs throughout the firm, with many of the labourers and on site staff also having worked in the region for over 20 years. "This is where we differ from other firms that are coming into the region as newcomers with no [local] experience. Specon is a new name, but we have many years' experience in the region. Most of the people I have around me here have been with me for 20 years plus."

Early developments

Thrasyvoulou has a strong background in the MEP field. He originally studied mechanical engineering at King's College London, and on completing his course he continued his studies at the university, achieving a Masters Degree with Distinction in air conditioning, refrigeration, heating and ventilation. He followed this with a three-year course covering economics, finance of industry , industrial law and scientific management.

He began his professional career in the Middle East with MEP contractor A&P Paraskevaides and Conspel Emirates. Thrasyvoulou launched the firm's mechanical and air conditioning division, beginning as manager of this division and progressing to the position of general manager.

In addition to Specon, he is a major shareholder and managing director of a number of other air conditioning and energy industry companies based in Greece and his native Cyprus. This is proving to be an asset while establishing Specon he explains: "We can use the experienced personnel from the other companies; if we have a big tender for example, a couple of engineers may fly over to help."

Al Habtoor - Specon is a "turnkey MEP services firm" explains Thrasyvoulou. "We will be undertaking all disciplines of MEP works: our trading licence includes power stations, firefighting, air conditioning and electrical systems - basically electro-mechanical, building management and control systems." The firm is headquartered in Dubai, but is already planning to expand within the region.

"We plan to open a branch in Abu Dhabi and are already involved in a tender for some buildings in the Emirate," confirms Thrasyvoulou. "In Abu Dhabi an additional specialisation [of the firm] would be to undertake substation work and transmissions lines. It is in our plans as early as next year to look at this very seriously, because in that particular sector there are a lot of projects and not very many contractors, so there is less competition and [our engineers] have a lot of experience in this field," he adds.

Another region pinpointed for expansion is Qatar. "We will be looking at Doha, where we also have the advantage of Al Habtoor being fully established and at the same time I have a lot of contacts in the area after having executed major works in Qatar previously," explains Thrasyvoulou. This move, however, will only take place once the firm is fully established within the immediate market. "One thing we don't want to do is over expand," he stresses. "The understanding I have with Riad Sadek is to expand sensibly by generating a good foundation, selecting the right people, then growing quickly but sensibly.

People focus

Staff selection is something that Thrasyvoulou deemed to be among the most important aspects when establishing Al Habtoor - Specon. In addition to ensuring that the initial employee base had ample and relevant experience, the intention is to maintain this level of knowledge through continued organised training and ensuring that younger, less experienced employees learn on-the-job from their older counterparts.

"Our most valuable asset is the human resources," stresses Thrasyvoulou. "A very important philosophy of our group can be explained as a mathematical model: there are two circles - the "knowledge circle", which includes the people like our senior engineers who have 15-25 years experience; and the "learning circle", which includes engineers direct from universities who have come to the organisation to make a career," he explains. "If these two circles never meet it is a disaster; if they meet, where they meet it is a success [for the company's future]."

To ensure the ‘circles' meet, new recruits will be assigned a supervisor from the more experienced staff members. The firm is also investing in a training facility, which is currently under construction. The shortage of skilled labour within the industry is a primary reason for the firm's focus on training and the strain on resources is becoming greater. One obvious factor is the continued volume of construction work, but the recent worker amnesty law is also having an effect, states Thrasyvoulou.

"During the last couple of months specifically [one of biggest challenges] has been to locate good tradesmen, because of the worker amnesty law as well [as the amount of ongoing work]," he states. "It is very well known that people were planning, having in mind their peak requirements, that there is availability [of workers]. On an 18 month project, firms work with the peak number of staff for only six months otherwise they won't be competitive, so what they do is plan the job with 70% of their own people and during the peak period they hire subcontractors or labourers. All of a sudden there is what I consider extraordinary circumstances conditions and that 30% is disappearing," he explains. Firms must find ways to tackle the problem, such as by earlier staff recruitment Thrasyvoulou opines.

The firm is already undertaking MEP works on several projects in the region alongside Al Habtoor, but what how will future work be selected? "Always our priority is to meet the commitments of our partner, but our strategic plan is to get business from other major players in the area based on our quality, ability and our [staff's] previous experience with them. We will [seek tenders] within the amount of work that we can do reliably and with quality," explains Thrasyvoulou. "From September the strategy is to work with other companies with which personally I have a long association. We are already participating in certain nominated projects and will be involved with other major contractors in the area soon."

With staff numbers having already reached 2,500, Thrasyvoulou expects the firm to grow significantly and to double in size within a year. In preparation for this development the bulk of the operations will be relocated to new premises currently under construction in Al Quoz. "As we grow we will strengthen all departments [of the firm]. We want to be among the first three big players [in the MEP sector] if not the first - that's our goal," he concludes.

Thrasos Thrasyvoulou: up close and personal

Where are you from?

I'm from Cyprus, but I've lived [in the UAE] for approximately 30 years, originally in Sharjah then Dubai. For the first 12 years I was here permanently with the whole family, after this the base of my family moved to Cyprus due to my children's education and I spent most of my time in Dubai and the rest travelling for business.

Who's in your family?

My wife and I have two sons and a daughter. My two sons have both graduated from Cambridge University (UK) with a Masters Degree in mechanical engineering. My elder son Stelios has also studied chartered accounting and is now finance director [with Al Habtoor - Specon]. My other son runs a private lifestyle management company in London and my daughter is currently studying philosophy and mathematics at the London School of Economics.

How do you spend your free time?

I have not had much free time for the last couple of years. Usually I get up at 7am and return home at approximately 7 or 8pm, but I try to exercise for one hour in the gym every other night. Socially I have a lot of friends and business associates and we dine often - that's why I go to the gym!

Where do you spend your holidays?

Usually each year I manage to gather together all my family and friends in a specific place in Cyprus for about 15 days in August. We swim, dine, play backgammon, football and enjoy the relaxed atmosphere. I also usually spend Christmas and Easter in Cyprus. I would like to see more holiday in the future - this is a target.

Favourite project?

I especially like hotel projects because they are demanding in that the end result has to be of a better quality than an office building. And on the part of the bigger projects, perhaps airports; I've been involved in over 30 during my time working in the Middle East.

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