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Roundtable: Experts discuss the Middle East’s formwork sector

by James Morgan on Oct 28, 2017

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Although arguably not the most glamorous segment of the region’s construction sector, the formwork community has played a vital role in the development of the Gulf’s built environment.

From roads, bridges, and airports to malls, villa developments, and skyscrapers, GCC-based formwork professionals have helped to shape some of the most ambitious projects on the planet.

However, as is currently the case for most market segments, these are challenging times for the region’s formwork suppliers. Their products and services remain in high demand, but obstacles such as squeezed margins, low liquidity, and late payment are stymieing growth. Nevertheless, the most innovative firms are working to meet their customers’ changing requirements, pushing ahead with novel products and business practices that are allowing projects to be delivered in spite of financial constraints.

In a bid to find out how the Middle East’s formwork segment is currently performing, and what we should expect during the coming years, Construction Week invited a selection of the region’s foremost experts to participate in an industry roundtable. Panellists include Chris Jardine, managing director for the UAE at RMD Kwikform Middle East; Jim Robinson, group chief executive officer of the MFE Group of Companies; Joe Farina, general manager of Meva KHK Formwork Systems in the UAE and Oman; Paul Wallet, regional director for the Middle East and India at Trimble Buildings; and Steven Magowan Robinson, business development manager for the Middle East region at MFE Formwork Technology.

The majority of RMD Kwikform’s regional activities relate to large-scale horizontal infrastructure projects; MFE Formwork Technology’s main focusses are low- and high-rise residential developments; Meva KHK’s primary activities relate to construction projects, both vertical and horizontal; and Trimble provides building information modelling (BIM) tools that allow formwork systems to be overlaid directly onto 3D models. In short, the roundtable’s collective experience spans the entire spectrum of regional formwork activities.

When asked to comment on the current health of the market, Jardine notes that RMD Kwikform has enjoyed solid levels of UAE business of late. “Revenue is growing and we’re meeting our budgets on the back of some of the larger projects we’ve secured during the past year,” he explains. “We have supplied our Rapidshor support system for Dubai’s Al Wasl Road, which is being built by China State Construction Engineering Corporation Middle East (CSCEC ME). That contract followed on from bridges that we built at Abu Dhabi International Airport and Dubai Water Canal, also with CSCEC ME.

“In terms of building projects, we have supplied our aluminium shoring and Alshor systems for The Royal Atlantis & Residences, which is being built by Ssangyong and Besix in Dubai.”

Despite the high-profile nature of RMD Kwikform’s UAE portfolio, Jardine concedes that the local formwork segment is becoming increasingly competitive. He continues: “Contractors in the UAE seem to be picking up work with small profit margins, and I think that’s compounded by other regional markets – such as Saudi Arabia, Oman, and Kuwait – being down. This situation has created excess capacity in the formwork supply chain.

“I read somewhere that the Dubai property market has been a ‘shining light’ in the region, but I think it’s been more of a beacon, attracting regional suppliers into the market,” he adds, referring to the saturated formwork community. “Even during the last three to four years, there has been a massive increase in the number of formwork players in the UAE. When I first came here, there were three to four key players whereas, for today’s major projects, it’s not uncommon to have to compete with 15 or more companies to win work.”

MFE Formwork Technology’s Steven Robinson agrees with Jardine’s assessment, noting that – even for specialist outfits – competition is rife.

“There are now so many competitors in the market, even in our niche section [of residential developments,]” he comments. “When we’re pricing projects, we’re up against five or six aluminium formwork companies, which [wasn’t the case] in the past. But there’s really only Dubai in the UAE that is [pushing ahead with high volumes of] building work. The market is tight for us all. The days of big margins are long gone, and will probably never return.”

With this in mind, Robinson says that MFE Formwork Technology has had to adjust its approach in order to secure business, focussing on factors that, historically, have not represented priorities for its regional customers.

“We’re now focussing on the reusability of our products,” he explains. “Our formwork system can be [customised] from project to project, so we’re concentrating on that. Arabtec, for example, has a large stock of formwork, so we’re now trying to convince them – and, hopefully, we’ve already convinced them – to reuse the stock for their future projects and make savings (see ‘In focus: MFE Formwork Technology’, page 26).

“Contractors are trying to cut their overheads so that they can price to win projects. As such, we’re trying to help them to reduce their outgoings so that they can [succeed] and, in turn, give us work. This means working in a more consultative capacity than we have in the past. The sales focus has changed from quality and speed to reusability and long-term returns on investment (ROIs). That seems to be where [market requirements] have migrated over the last couple of years.”