Full Steam Ahead

MD Dawood Bin Ozair
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“At the moment we are very keen to enter Bahrain and Saudi Arabia, as these regions are developing and there is a lot of potential. The group has already taken the step to enter Saudi Arabia, so for us to do so will not be difficult, once we have identified the market parameters. So we are looking at this very seriously.

“The other area which has future potential for us is Abu Dhabi. We are already conducting business there, but it is growing in a big way. Thus it will be easy for us to escalate our presence and extend our market reach there much further. We already have very good customers onboard,” says Ozair. He adds that Abu Dhabi’s successful bid to host the global headquarters of the International Renewable Energy Agency (IRENA) has focused the spotlight firmly on Masdar City.

“This project is now the prime project for everybody. Everyone will thus make sure this project is completed on time.” Another mega-project in Abu Dhabi that Al-Futtaim Engineering is playing a major role in is the new US$100 million aluminium smelter at the Khalifa Port and Industrial Zone, a joint development by the Abu Dhabi Basic Industries Corporation (ADBIC) and Midal Cables, an aluminium rod and electrical conductor manufacturer in Bahrain.

In Dubai itself, Al-Futtaim Engineering has played a leading role in the flagship Dubai Metro project, being responsible for all the MEP works at the Rashidiya, Al Ras and Jebel Ali train depots. “Our area of responsibility encompassed the car parks around these areas, the complete electro-mechanical works, and of course all the scaffolding and building products at all the stations and depots.”

Ozair comments that the deadline of 09/09/09 is “very tight, but achievable”, with all contractors committed to achieving this date. “The Dubai Metro project has been very challenging from the MEP side, as we had to propose all the initial specifications based on our own experience,” in line with the stringent requirements of the JT Metro JV, which comprises an international team of Turkish and Japanese contractors and consultants.

REGIONAL MILESTONE

“The Dubai Metro is the first of its kind in the region, let alone the Emirates, so there was no model to follow, as with a shopping mall, for example. In addition there were complicating factors such as underground stations and tracks, which posed specific MEP and cooling-system challenges,” says Ozair.

Looking to the future, Ozair reveals that the company has a solid order book taking it well up to 2010, mainly due to it securing work outside Dubai. “Thus we are very hopeful about the future. A major criterion of a company’s progress is recruitment, and our workforce has been expanding from 2007 until today. We have not been as adversely affected as other companies have been, and are still growing.

“There is no signal within our business that the market is slowing down. Our recruitment has not stopped either because business has continued.” Indeed, Ozair says that in 2008 “it was impossible to recruit skilled professionals from traditional markets like India, Sri Lanka, the Philippines and even the UK.

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“We ended up recruiting engineers from Turkey. Today the manpower availability is not such an issue, though I am not saying it is better for the people themselves. The problem has been exacerbated by the near total collapse of some of the major players, which has flooded the market with literally thousands.”

In terms of other challenges facing the company, Ozair points to the perennial issue of payment. “This is a major challenges faced by everyone in the market. However, it can be dealt with by careful planning, discussion and negotiation with customers. Yes, this problem is likely to persist, as liquidity is an issue in the market. That situation has not been created by our customers, but the banks whose lending has been constrained by the global crisis.

“For example, we had a significant project lined up from a reputable developer. But he could not secure a facility from his bank, so was struggling to finance the project, and ended up leveraging his own limited resource base. It was not planned that way, and hence he is now struggling, through no fault of his own. He was dependent on a financial system that encountered major problems, and was hence a victim of the market,” argues Ozair.

STABILISING MARKET

Contrary to the bad press accrued by many developers due to the cancellation of high-profile projects, Ozair says this is often the last resort, as it is not in the interests of either the developers or the market. “Projects on the ground and those on the drawing board should be allowed to proceed; I think that is what will stabilise the market and give people renewed confidence.

“I think it is already changing; I can see the liquidity seeping back. The government’s efforts to prop up the banks are starting to filter through to businesses. I feel there is a certain amount of improvement. You can see a little bit of renewed liveliness in the market compared to what it used to be.” Though he is optimistic, Ozair is prudent enough to add a measure of caution to his prognosis for recovery.

“Optimism is something you have to be very careful of, as in ending up with what you wish for. I am sure we will not return to the prior boom period for some time to come in Dubai, and indeed I think we should not even aspire to this, as it was not a natural situation. We have learnt our lesson,” concludes Ozair. This prudent approach bodes well for the future of Al-Futtaim Engineering and Dubai.