Leveraging change

New incumbent Lever garnered extensive building services or MEP experience at contractor/developer Taylor Woodrow in the UK, where he was instrumental in instituting a policy of collaborative partnership. Lever says such an approach is in line with DSI’s own strategic goals, and the MEP sector in the UAE in general, “where there are developments here that are on a par with the quality and complexity of those that I worked on in Europe. Therefore we have a great opportunity to implement best practice in the MEP sector here that takes into account the best of both worlds.”

The MEP sector in the UAE is currently in an ideal position to look at nurturing a best-practice culture, adds Lever. “The UK is definitely the more challenging business environment at present, and is really down compared to a year ago. In comparison, the sector over here is far more stable, and there are still opportunities available. Our challenge at present is to take advantage of these opportunities, and to formulate an all-encompassing growth strategy to take us forward.”

Indeed, DSI has been adapting and responding to changing market conditions since it was established originally in Abu Dhabi in 1966 and in Dubai in 1974. “DSI has been here a long time, and throughout its history has changed quite regularly as to how it conducts its business, and improving, adding to its core strengths in recent years in the form of civils and infrastructure, water and power (IWP).

“Our growth has paralleled that of Dubai. Over the years, of course, we have seen phenomenal growth here. It is certainly my opinion that Dubai has led the whole region in terms of development. This year alone we have seen the completion of the Burj Dubai, and we are looking forward to seeing that in all its glory, and the launch of the Dubai Metro.

Pride
“I think it is when we look at these kinds of projects in the region that we can all feel extremely proud to be in a sector that is leading the world in many ways. That is where we intend to take ourselves as a business: as leading the region and beyond in MEP,” asserts Lever. This is no ideal boast either, as “DSI has some of the best engineers and people on-site I have seen anywhere. We are well-respected as a brand, and as a superior MEP engineering company that delivers quality projects on a cost-efficient and on-time basis, moving forward with our successful clients.”

Lever says “there is no doubt that the financial constraints in the market in the past year or so have hit the majority of businesses. In my mind, companies with a strong financial underpinning have continued to grow, and can look forward to a healthy future.” In this regard, DSI’s successful IPO came to fruition with excellent timing, and was soon oversubscribed.

“We realised a large amount of capital that has allowed us to invest in growth. This has helped us move through this recent period relatively unaffected, and enabled us to continue growing.” However, despite its ongoing success, DSI has always adopted a considered and measured approach to its own future. Lever says it is continually assessing its own strengths and opportunities, including taking a long hard look at its main business stream itself, namely the MEP sector itself.

Constraints
“MEP was traditionally a core business, but this is changing. It currently represents over 50% of our turnover, and the civils and IWP business streams sharing the balance. We see the balance shifting to take into account the large number of infrastructure projects out there. The focus of the MEP sector itself has moved from residential and commercial to hospitals, schools and airports, for example. This presents an opportunity to engage our company’s entire engineering and construction capability, to which we are very well suited. “If we were to just stay in MEP, perhaps as a business we would be more constrained than we would really want to be. What we need to do is look at business streams to complement MEP and help it grow. Hence IWP was started, and is extremely successful, delivering some of the largest district cooling plants in the region. We have gained some excellent experience in that field to date,” says Lever.

“Most businesses have realised in the past year or so that infrastructure is still a very positive market to be involved with. Hence our focus on civils as a natural expansion of our business, which will allow us to approach projects on a total turnkey basis. You have to ask yourself where the big spend is at the moment in terms of engineering services, and that is clearly civils. There is also big spend in power, oil, gas and petchem, so we are starting to put our tentacles out, expanding our scale to cover many of these markets.”

Coupled with this focus on complementary business streams to unleash new synergies is a focused regional expansion plan. In Dubai itself, DSI is expected to sustain its turnover on a comparable level in 2010, but it is anticipated that the market will only begin to push out green shoots in 2011. “However, we are starting to see things become more optimistic for Dubai,” notes Lever.

“For us, the region has a lot of opportunity, so we are looking at expanding across the entire region.” Lever says the main focal points for this regional growth at present are Abu Dhabi and Saudi Arabia. In the latter, the company is executing a major MEP JV project for the King Abdullah University of Science and Technology (KAUST), the first LEED-certified project in Saudi history and the largest LEED Platinum project in the world. “This has been a great opportunity for us to get our foot in the door, to demonstrate our capability, to be able to transfer our skills into that market and to help our business grow,” comments Lever.

South East Asia
Another important foothold, this time into the potentially lucrative South East Asian market, is DSI’s involvement as the main MEP contractor for luxury property developer Raimon Land on The River, Bangkok’s most exclusive riverside condominium development. Commencing in 2008, and scheduled for completion in 2012, the project comprises a 72- and 42-floor twin residential towers, together with a five-storey podium, comprising a total of 105 000 square metres of sellable floor area and a total of 851 units. “This project is particularly exciting for us because it is such a high-profile showcase,” says Lever, adding that DSI has established an office in Thailand as a result.
The company is also exploring opportunities as far field as Libya, Egypt, Jordan and Kuwait. “All this represents a logical extension of our business, as we like to develop along with our successful clients as they themselves expand, as this minimises the risk for all involved,” explains Lever. The advantage of this approach is that the bulk of DSI’s work is in the form of repeat business from existing clients. “It is such strategic relationships that ensure our continued growth,” says Lever.

Coming back to the issue of collaborative partnerships, Lever says an exciting development at DSI is a new focus on optimising its supply chain and engaging with local manufacturers and specialist fabricators. “One is only as good as his supply chain. If your suppliers fail, you fail. I think companies tend to forget this, and treat the supply chain with some disdain as a result. That is not the best way to take a business forward. But by working with suppliers and understanding their needs, you will be able to deliver a better project overall.”

Associated challenges are looking at the overall spend, analysing those areas where this is highest, determining what level of technical support is required by the supply chain, relooking at the selection process for suppliers, and monitoring their performance and implementing continuous improvement programmes. “A problem to date is that the focus has always been on the lowest price and not necessarily taking account of the lifecycle costs, technical support and quality necessary to meet our clients requirements; we are looking at those suppliers who are willing and able to meet tough commercial challenges whilst adding value and continuously improving in the industry along with us,” says Lever.

Quality is a particular focus, especially in the light of the trend towards sustainable solutions. Lever says this is a particular area where the MEP sector can enhance the construction industry as a whole. “Our continuing efforts in this regard are important for the region and the world. We need to engage with our clients and help them with their projects by looking at the design and seeing if any alternative solution might cut costs and boost performance.
“As we move from speculative developments, the focus is changing to how much it is going to cost to run, operate and maintain a particular project over a certain number of years, as opposed to just considering the initial development cost; at DSI we are well-placed to assist our clients in arriving at the most appropriate solutions,” concludes Lever.