Nigel Hawley, General Manager, Trane (Middle East, India and Africa), speaks of the challenges faced by the HVACR industry today, and his commitment to achieving green building goals, even as he gives us glimpses of his life.

The beginning

Nigel Hawley

I was born in a lovely, yet small town, called Bromsgrove, in Worcestershire, England, at the end of 1966, five months after Booby Moore lifted the Football World Cup for England – something that is very much on my mind at the moment!

Bromsgrove is a small market town in one of the so-called “shire” counties of central England, and was focused on farming and agriculture. I vividly remember going to the local market each week with my mother to buy local produce in the auction, and even growing and selling plants and vegetables.

I am the only son of my parents, and the third born, almost 10 years younger than my two elder sisters. Though a Christian and a Protestant, all of my schooling was at Roman Catholic schools, due to the proximity of the primary school to my home.

After enjoying this school so much, it was decided I would attend the Roman Catholic Middle and High School in the neighbouring town, which involved me taking a one-hour bus ride each day on the school bus, not dissimilar to many children today in Dubai.

Outside of school hours, I loved to play soccer. This, we – my friends and I – did all evening-long, and every day of our summer holidays in the patches of a ground close to our homes. Whilst playing in various amateur teams most of my life, sadly, that is where it ends!

At school, my aptitude in Mathematics led me to undertaking my diploma in Business Studies and Finance from my local North Worcestershire College, which I completed in 1985. After college, I decided to take a break from studying, and took up a position as a Management Trainee at the National Health Service in the UK. Whilst this was very enjoyable, I realised that to progress with my career ambitions, I needed to complete my university education. I, therefore, joined the Hull University in 1986, wherein I undertook my Honours degree in Finance. I graduated with flying colours, topping my batch and won several awards during the three years of university education. I forged some of the closest friendships during this time.

Getting initiated into the HVACR industry

Fresh after graduating from university, I joined KPMG, an international network of member firms, offering audit, tax and advisory services globally. I spent 13 very enjoyable years in, what I still consider to be, one of the very best professional services firms in the world. Most of what I use and apply every day is based on what I learnt during those 13 years.

My career with KPMG started in Audit and ended up in the consulting side of the business, focusing on risk management and corporate governance. It took me across the UK and Europe on many customer engagements, and involved various overseas assignments, including several years in the US, when I lived in New York City, which was a very special time in my life.

I finally left KPMG at the end of 2002, to explore new horizons and opportunities, as by then, I had met Valerie, (another advantage of working for KPMG), who was working as an Automotive Consultant for the Paris office, after completing her Optics Engineering degree, and we had decided we needed to live in a neutral country outside of France or England. Also, I decided it was a good time for a new experience away from KPMG.

I took the opportunity to join the EMEIA HQ of American Standard, the then holding company of Trane (along with Ideal Standard and Wabco), in Brussels, as the head of Audit for EMEIA, for all three businesses, including Trane. My previous experience at KPMG came in very useful here, enabling me to successfully manage this role. Never did I imagine that few years later, I would relocate to the Middle East.

After four and a half years, I moved to an operational role in Trane, based in Dubai as the Finance Director for the Middle East, India and Africa regions. This was in October 2006, at what turned out in hindsight, to be the twilight years of the district cooling boom!

In March 2009, I was promoted to General Manager for Middle East, India and Africa.

The road oft-taken …

I think, as far as my career is concerned, I took what is a fairly established path for a finance graduate from the UK/western Europe. We are meant to live our stories. It’s when you let go of trying to control the path, and simply live the story ahead of you – win, lose or draw – that you ensure your own success. My life so far has been a calculated one. My move to relocate or switch jobs was an obvious choice to furthering my career. What lies in store for me next has not yet been decided, but I am very confident that, with the many opportunities Ingersoll Rand has to offer around the world, challenges and experiences lie ahead.

‘Traning’ for life

After my immediate family, Trane means a lot to me. My role as the head of business in Middle East, India and Africa keeps me on my toes 24/7. Whilst I do work long hours, I still manage a healthy work-life balance. And because I enjoy my job, this is not a problem.

At Trane, our philosophy is, our customer comes first. Our customer is the reason we exist. Our job is to meet his/her needs by using the expertise and knowledge we have in this business. I believe our employees are our most important resource. They provide the sole source for our ability to meet our customer’s needs.

Our values and brand promise unite us as a company, and express how we operate, how we conduct business and how we differentiate ourselves in the global marketplace. The five core values of our company are: integrity, respect, teamwork, innovation and courage.

The idea of using technology to give people relief from summer heat was a radical and unproven idea when Trane became an air conditioning pioneer in 1931. Trane fundamentally changed the concept of air conditioning large buildings in 1938 – the beginning of a long chain of innovations leading to Trane’s current CenTraVac. It’s the industry standard for large commercial air conditioning systems – the most energy-efficient system available anywhere for large buildings, and it has earned Trane the ‘Best of the Best’ Award from the US Environmental Protection Agency.

When I look around Dubai, I am very proud to see that Trane solutions are cooling many landmark buildings and installations, such as, Palm Jumeirah- Crescent & Trunk (140,000 TR), Jumeriah Beach Residence (60,000 TR), Mall of the Emirates (13,000 TR), Discovery Gardens (100,000 TR), DIFC (48,000 TR), Dubai Investment Park (50,000 TR), Dubai Healthcare City (30,000 TR), Dubai World Central (100,000 TR), and Dubai Mall – Burj Khalifa (40,000 TR).

Recently, we added one more feather to our cap by qualifying to have, probably, the highest installation in the World. On the 155th & 159th floor of the iconic Burj Khalifa is our CGAN & CCUN Scroll units. We are proud to be associated with all these projects.

Trane has always had the resources necessary to take calculated risks. However, with the addition of Trane to the Ingersoll Rand portfolio, we have even more to offer our customers.

We are now a $13 billion globaldiversified industrial company, driven by employees who are proud to offer products and solutions people use every day, to create a positive impact in their world. Driven by a 100-year-old tradition of technological innovation, we enable companies and their customers to create progress.

We provide products, services and solutions to enhance the quality and comfort in homes and buildings, transport and protect food and perishables, secure homes and commercial properties, and enhance industrial productivity and efficiency.

Coping with recession

As a company, we probably reacted too slowly to the recession, but we reacted before any of our competitors did. Today, I see what they are going through. We have continued to invest locally, even while in the midst of the recession, be it in our service business or the controls business.

All our product programmes to upgrade the refrigerant R-410A conversion, and investment in centrifugal chillers were accelerated in 2009. If accelerated during a recession, you will have the best product portfolio coming out at the end of the recession.

We have probably increased our staff by four times in Abu Dhabi. We never stopped investing in India. We have continued to hire there and we are adding more people. We are nimble and will redeploy people. So, when the recession hit us, we sent people away to India (or wherever they are from), because they chose to go and work out of India (or wherever they are from). We have not replaced them in the Dubai office.

Internationally speaking, in the last 10 years, the growth for Trane has come from Europe, Middle East, Africa and India.

I believe that service and maintenance are the keys. We, as a company, here in Dubai, are going to move to a servicecentric business model, just like in Europe. The fact is that you can’t keep selling new equipment. Soon, it will be 60% new equipment and 40% service. But the service model in the GCC is still immature. We make centrifugal chillers that will run for 25 years and beyond. They will run efficiently if they are maintained and upgraded. Here, though, they tend to knock the buildings off, even before the equipment has reached its mid-way stage.

Pitfalls of receivables

We have not had a problem with receivables. The issues are related to backlog – projects for which order has been placed. We are aware that lots of projects in Dubai got stopped. But since we hadn’t started building the equipment, there was no financial exposure. We can build a centrifugal chiller in 24 weeks. So we don’t face the risk of financial exposure.

There were projects where we had already supplied the equipment, but we don’t have any write-offs. We are a services business, not an equipment business. If they don’t pay, who will they go to for the service of all the equipment?

Our policy is that we expect to be treated with respect by our clients, just like we treat them with respect. I don’t like being taken advantage of. On our side, we will always honour the delivery date, technical capabilities, and operating efficiencies. In the same way, the clients have a commitment on their side, which is to pay. But fortunately, owing to very clear and open discussions, we have never actually had any difficulties with them. Yes, there are cases of slow payments. If the LOC is opened on us by the contractor, who says that he has not been paid, we will leapfrog him and straight away go to the client for our payments. We have been proactive and have chased our money. We are owed only a negligible amount in the Dubai World contract. We were owed $2 million, and we chased the money, and today, we only have $50,000 to be received.

I believe in arguing for what I intrinsically believe is right. That way, I find Dubai to be very professional when you make it be.

Greece and the double-dip effect

I don’t think the precarious position Greece finds itself in now, is going to cause a major shock for the GCC. I think the risk to the region is from the global economy. In Dubai, it is true that they made a mistake with Dubai World. And since then, they have shown an ability to manage debt. But if the world goes into a double dip, then it will impact the GCC, including Qatar. This time around, though, I don’t see a dip happening.

Western Europe is going to have a tough time. But let us not forget that the economy in western Europe is well established. With even 0.5% growth, the work will continue. UK, for instance, has an installed industry base and residential communities. It has a population of 59 million people, all packed into a small land area. So, the demand will always be there. Germany is okay, France has its protectionist regime. So, I think the powerhouses are okay.

Challenges facing the industry

The current issues, as I see them are: we need to make buildings more efficient. This can be achieved only by focusing on systems rather than on products. I also believe that ensuring focus is maintained on the long-term strategy and decisions are not made to just protect this year’s bottom line. A balance, of course, needs to be found.

Maintenance and controls is another area that needs to be focused on. Even the best equipment in the world will not perform well, if it is not controlled correctly and maintained correctly.

Maintenance, particularly in the emerging markets, is something people seem to believe is not necessary, if they are covered by a manufacturer’s warranty. This is simply not true. It’s a bit like your new car. It is all well and good if Toyota is offering you a five-year warranty, but this is of little use if you do not get the car regularly serviced. In fact, the warranty will be invalidated! Getting end-contractors and end-users to understand this is a real challenge.

Ensuring people do not get carried away by headlines, especially with Dubai, Dubai World and district cooling, is also a challenge. Certainly, we are not seeing the projects that we have seen in the past five years, but there are still many projects out there, and they all need efficient centrifugal chillers to operate effectively.

The real challenges today lie with the number of projects that have been stuck at the part-built stage. Changing plans part way through is never easy. Projects that are still on the drawing board are much easier to handle/cancel.

Another worry is, the credit markets are still tight, and until funds start moving freely again, things will not dramatically improve. This is why, the Dubai World debt restructuring is so important. It sends a very strong message to the market. Whilst mistakes were clearly made back in November 2009, when the initial standstill arrangements were announced, significant progress has been made since then, which will bode well for Dubai and the UAE in years to come.

Solutions

Service businesses can actually thrive in the midst of a global economic recession, if they address the challenges facing their customers and embrace sustainable strategies to differentiate themselves. Taking care of customers requires continuous improvement in all elements of the business. We have adapted our Quality Improvement Process to allow our company to respond to the expanding needs of our customers. We provide many and varied capabilities, all focused on the broad spectrum of customer needs. Our goal is to have our equipment; controls and automation; project management and performance contracting; services and parts businesses working together, so that the sum of value provided to our customer, by each part of our business, exceeds the value offered by the whole. The key is to offer objective advice along with world-class, energy-efficient and reliable solutions, which will be around for the life of the building.

The important thing is to size systems according to actual demand, and not on wistful dreams of population growth.

How long it will take to come out of the economic downturn is a very difficult question to answer. A lot depends on finalising the Dubai World agreements, and then it will be interesting to see what happens with Dubai Holding and the rest of Dubai Inc.

Regardless of how long it takes, Dubai will succeed. There have been many false starts in the Gulf in the past, but Dubai has now come too far along the development curve, to not survive and prosper. As to what will it take, courage and credit are the main two ingredients. The UAE has plenty of both. So, I am not too concerned.

Insider’s insight into Qatar and Saudi Arabia

Qatar, to some extent, is like a mini Dubai five years ago – many exciting projects with everybody chasing them all. To be successful, you have to carefully select which project and which developer/contractor you want to work with.

I don’t profess to be an expert on Qatar’s economy, but it is a country we have serviced from Dubai for many years. To be frank, Trane, as a company, neglected Qatar. We still don’t have a representative there. Our technicians fly in and out, and it is frustrating for our customers. They tell us, “We’d rather go to you, but you are not here.” I find Qatar a very promising market. We now believe it is of such a size and importance that, by the end of this year, we will be opening an office there – a sales office and a service team. We may increase people working in Qatar in the next 12 months. We will have in place a team of technicians to handle AHUs, FCUs, controls and some of the district cooling equipment. We are going to appoint a new distributor of unitary products for Qatar, because we see the unitary market booming there. VRFs and medium-size rooftops qualify as unitary products for us.

There has been talk about the recent ramp up in the production of shale gas in the US and how this is going to impact Qatar. I don’t think shale gas can have a negative impact on Qatar. It has all the money. But when I think of Qatar, the risk for me is, how many people want to move in and live in Qatar? How much should you build, really? Yes, Qatar has an expat population consisting of people who work in the O&G industries, and their families. But what about those who want to visit Qatar for entertainment, say? So we have to decide how much to build. The UAE is different, because it has a certain lifestyle. And Saudi Arabia has a large domestic population. So, there is a demand for housing. And Oman is a beautiful country, with mountains and wadis. In the case of Qatar, that is a risk to me.

The positives about Qatar is that, its economics is very strong, and it is willing to spend. Of course, the question arises: what can they keep spending on? If this is the case, there is a limitation to all GCC states.

When it comes to Saudi Arabia, the situation is different. It is an incredibly important and a large market for us. The market for district cooling there is immense. It offers many exciting opportunities, which we are currently working on. There, all of our business is through our long-established distributor – Dallah Trading, a subsidiary of the Dallah Group – one of the top five Trane customers the world over. But we hope to be able to announce some good news very soon. Most importantly, we now see government investing more in education and healthcare verticals. But it is difficult to do business in Saudi Arabia. What is helping us is that more and more contractors, who were in the UAE, are now going there, owing to a shortage of jobs here. This cannot hurt us, because they will recommend Trane to their customers there.

R&D and innovation

This is probably the area where we benefited most from joining Ingersoll Rand. Our R&D facilities and investment are amongst the most advanced in the industry now. Our R&D centres from the US, Europe, India and China bring together highly talented and motivated people, who, through their competencies, make the maximum use of the centre’s technology and infrastructure for the benefit of the corporation. They offer support to Ingersoll Rand divisions globally. The mission of these centres is not only to be a hub of excellence for quality and reliability, testing, technology and supporting green solutions development, but also to develop our engineering talent, in whose hands our future success depends.

In 2009, despite the world financial crisis, Trane launched more new products than it had done in the past 20 years, including a complete overhaul of its unitary portfolio to a new environmentally responsible refrigerant, R410a. On April 22, we celebrated Earth Day, and Ingersoll Rand launched our Centre for Energy Efficiency and Sustainability (CEES).

CEES is a dedicated global group of leaders, focused on advocating and bringing to the market, energyefficient innovation and technologies for commercial buildings and transport, homes and select industrial applications. The CEES was created to increase the pace of environmentally sustainable innovation and to create a roadmap for businesses and organisations worldwide, to incorporate energy efficiency and environmentally focused processes into their daily operations.

This philosophy is close to my heart, as I had already introduced a number of small, but important, energy-saving initiatives in our offices around the region. Whilst reliability and energy efficiency runs through the company’s DNA, the flagship product remains our EarthWise Centrifugal chiller, which has picked numerous awards.

Focusing on ‘green’ products

Demand for environmentally responsible buildings is growing, as people realise it is not about cost, but a wise investment. Green buildings are designed with energy efficiency, indoor air quality (IAQ) and sustainable materials in mind.

The right HVAC system is critical to green buildings. As a leading global supplier of HVAC systems and services, with more than 650 LEED Accredited Professionals (APs), I think Trane can help clients achieve their green building goals.

Seeing that more and more businesses recognise the importance of building green, Trane actively supports the green building councils around the world, including in the UAE and in the US, and conferences such as Greenbuild and the Green Building Congress. We are advancing building technologies and solutions that accelerate the design and construction of green communities. We are a founding member of the Emirates Green Building Council.

How I wish to contribute to the growth and prosperity of the region

Personally, I would like to ensure when I eventually leave Dubai that I can put my hand on my heart and ensure it is a greener and more environmentally responsible place to live in.

I hope that district cooling plants are sized according to actual loads, rather than some fanciful dream, and that they use the most energy-efficient systems – something sadly, that has not always happened in the past. My hope also is that they are maintained and operating at the peak efficiency for which they were designed.

The world is my mentor

I try to learn from everyone I meet and work with. I am not a great believer in modelling myself on certain successful individuals. I believe we can all learn from everyone around us. Having said this, I must add that I am a great fan of good public orators. And although there are many, I believe Winston Churchill is out there with the best of them. He is one of the great leaders of recent times, and what I like most about him is his self-confidence and humour. Of his hundreds of wonderful quotes, I particularly like his response when confronted in the House of Commons by a certain lady MP, who was offended by one of his statements, and was prompted to say, “If I was your wife, I would poison your afternoon tea.” To which, Churchill instantly responded, “My good lady, if you were my wife, I would gladly drink it!”

My family

I’m English and aged 43. I’m married to Valerie, who hails from Gueret, on the Massif Central in France. We have three children – Chloe- Marie, aged nine, Eliott, aged seven and Charlotte-Alexine, aged five.

Chloe-Marie and Eliott were born in England, and Charlotte in Belgium, where we moved to in 2003, three months after Eliott’s birth. The children swim, dance, follow football and gymnastic courses. Valerie has to do most of the driving and organising. I am exhausted just listening to them at the end of the day!

As our children spent most of their early years in Flanders, the Dutch-speaking part of Belgium, they also attend local after-school Dutch classes. This is another challenge for them – being the only non-native Dutch children in the class. Being a stoic Englishman, I tell them this is ‘character building’. But I have to admit, I am very impressed by their resolve.

Life in Dubai

Both Valerie and I grew up in the countryside, in France and England, respectively, and therefore, have a great love for the outdoors and Nature. In Dubai, that draws us to the desert, and to Oman, in particular. It really is a wonderful country. We have just returned from a two-day trip, exploring the peak of Jabal Akhdar. At 2,090 metres, it is wonderfully cool at this time of year!

In the past four years, we have spent many wonderful days racing along next to dolphins, swimming with giant turtles, watching the turtles come ashore and lay their eggs, exploring Whabi Sands and following in Sir Wilfred Thesiger’s footsteps – exploring the Liwa Oasis, the Forgotten Quarter and Salalah. All these places are a lot different from what we find at home. This has added greatly to the richness of our experiences here in Dubai.