Forming strategic alliances is key to success in region, say experts at third AWC Summit

After a particularly challenging 2009, the regional construction industry is poised for renewed and sustained growth that will essentially be based on servicing the real needs of a progressive Middle East, rather than speculation.

This was the observation made by the panelists at the opening session of the third Arabian World Construction Summit (AWCS) that took place in Abu Dhabi, as part of the Arabian Construction Week, from May 24 to 26. ‘Growing in a Challenging Market’, was the central theme of the Summit.

According to the organisers, the Summit was designed to look at strategies to win new work and beat the slowdown in current projects.

The opening session featured two panel discussions that saw government and public sector officials, regional CEOs, as well as executives from the private sector discussing the trajectory the regional construction industry was taking in the aftermath of the global economic crisis.

Panelists included Her Excellency Fatima Obaid Al Jaber, COO of Al Jaber Group; Mustafa Sani Sener, President and CEO, TAV; Tahir Sharif, President of buildingSMART ME; Johan Beerlandt, CEO, Besix Group, Dr Faysal Alaquil, Director of Business Development and Administration Affairs, Construction Products Holding Company; Riad Kamal, Chairman of Arabtec; Samer Khoury, EVP Operations of CCC, and Dr Ali Al Zahrani, Director, Corporate Planning, General Authority of Civil Aviation, Saudi Arabia.

During the course of the discussion, Her Excellency Fatima Obaid Al Jaber said: “The impact of the real estate downturn was felt most by Dubai, but far less by Abu Dhabi and other countries in the region. 2010 is seeing the markets return to cautious optimism.”

Pointing out that one of the foremost challenges for the sector is to achieve diversity in the contracted projects undertaken, she said: “We need to think not just real estate, but also infrastructure, utilities, energy, healthcare and education. We need to expand our geographies of operation, as well. A lot of local companies can go regional and benefit mutually from common synergies.”

While Saudi Arabia was identified as the country where a bulk of the contractual opportunities were being made available, other countries such as Kuwait, Qatar, the UAE, Iraq, Algeria and Libya, too, were noted as having immense market potential due to significant governmental expenditure on various infrastructure projects.

Dr Alaquil, commenting on the Kingdom’s healthy trend, said: “Saudi Arabia is representative of the forward momentum and the opportunities that exist in the region. Not only is it the largest GCC country by population, but also, close to 50% of the Saudis are below the age of 30. The national government is committed to meeting the needs of the people and considerable investment is being made in projects in the energy, utilities, transport, healthcare and education sectors.”

Said Khoury, “In the oil and gas sphere, Iraq is expected to become a hotbed for contracting activity within the next decade. Algeria and Libya too show huge potential.”

Johan Beerlandt, COO of Besix Group, which joined hands with Arabtec in the building of the the Burj Khalifa, said: “It is vital today for construction companies to form strategic alliances with corporate peers, as this is the realistic way forward to ensure long-term growth.”

David Barwell, CEO, AECOM Middle East, who was part of the panel discussion on the first day of the conference, said: “This was an ideal opportunity to discuss a wide range of issues, including how you ensure that your business remains strong in the face of the downturn, and how we have responded to increased competition, whilst still effectively managing costs and investing for growth.”

Examining the challenges that remain in the region, the panelists concurred that the biggest concern was the ability of the financial sector to fund construction projects.

The Al Jaber Group, CPC, Unibeton/Al Fara’a Group, TEKLA, Aconex, Dynamic Staffing Services, TAV Construction, Volvo Construction Equipment and Zurich Global Energy were the key sponsors of AWCS 2010. The event was supported by MEED.