Leveraging change

Charles Lever, MEP director, Drake & Scull International PJSC (DSI)

“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.

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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.