Tips to beat the recession

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Maintaining operations during the latest global recession is a challenging task. fmME investigates how it’s possible to achieve success during an economic downturn.

How do you survive a recession? Several of the region’s FM firms appear to have the answers; not only surviving, but thriving during the past year. While headlines worldwide have highlighted redundancies, cancelled construction projects and collapsing firms, for some there has been positive news.

Major contract wins during 2009 have allowed firms to gain market share, expand geographically and grow their product portfolios. So who have been the winners over the last year, and how have they achieved this success? One firm that has demonstrated significant growth during 2009, and particular success in winning new business, is EMCOR Facilities Service Group (EFSG). By Q3 2009, EFSG had secured over AED750 million in new contracts—a 125% increase over 2008. The firm predicts that this figure will increase to more than AED1 billion by the end of 2009 if it achieves the further contract wins it expects in Q4.

One of EFSG’s largest contract wins also signified a regional expansion for the firm into Saudi Arabia. Here a ten-year contract for the full facilities management of King Abdullah University of Science and Technology (KAUST) was won by EMCOR Facilities Services Kingdom of Saudi Arabia (EFS KSA) for an undisclosed sum.

“This is the largest single contract awarded to EFS in 09,” reports EFS KSA general manager John Kelly Quinn. “KAUST is also EFSG’s first contract in KSA, and it was a massive project to undertake,” he adds. Despite the complexity and scale of the project, however, the firm began work in the Kingdom within a very short time-scale, which was one of the primary factors in it winning the contract. “Our experience and resource levels meant we were able to mobilise the contract within eight weeks from inception,” explains Quinn.

A second factor in the firm’s success was that it offers integrated FM services and systems based on internationally-recognised standards. By providing this service using experienced and knowledgeable local personnel, the firm was able to satisfy several of the client requirements.

Another firm that has taken steps to expand into the Saudi Arabian market this year is Able Facilities Management. In 2009, Able won the facilities management contract for the 34-storey residential and retail development, Time Place Tower in Dubai Marina. “This project is our main key to enter the Saudi market with the Saudi-owned property developer Abraj,” explains Able FM facilities manager Nasr Saliba. Key strategies in winning the contract against strong market competition included minimising project costs by obtaining the most competitive subcontractor rates possible, plus providing a 24/7 helpdesk and permanent resident technicians.

One of the main challenges facing FM firms entering the Saudi market is lack of knowledge of the industry. “FM is a relatively new concept to the Kingdom, which can be challenging at times,” states Quinn. In order to overcome this factor, EFS has been conducting ongoing education and training programmes and workshops to increase the understanding of all parties involved in the KAUST project.

The firm has also developed a ‘lessons learnt’ diary and presentation concerning KAUST to relay to staff for any future projects. Another issue with the Saudi market is reportedly the ability to recruit qualified international staff, the Kingdom often being seen as a less attractive prospect for expatriate staff. One way to overcome this challenge is to recruit and train nationals.

EFS is one firm investigating such plans on a larger scale. “We hope to create a FM Training Academy and Direct Service Provider Model to integrate and engage local talent, communities and companies for a prosperous and sustainable FM future in the Kingdom and around the Middle East,” explains Quinn. “Our target is for 70% of our employees in the region to be nationals by Q4 of 2015,” he reports.

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Within the UAE, despite the general downturn in the construction sector in cities such as Dubai, several large FM contracts have been awarded in 2009. Among the winners of these are Imdaad and Etisalat Facilities Management, who have won major contracts in Dubai and Sharjah respectively.

Imdaad recently won a two-year contract valued at more than AED10 million to provide FM services to three tower projects in Dubai. The firm has also won contracts for Jumeirah Golf Estates and several Dubai Real Estate Corporation (DREC) developments.

On the tower projects, Imdaad will represent the client in matters such as liaison with public departments, collection of service charges and tenant communications. “Our role is that of a true total FM service provider, not merely a hard or soft services contractor,” explains Imdaad CEO Jamal Abdullah Lootah.

Part of the firm’s winning strategy was to tailor its services to individual client needs. Lootah attributes the firm’s wide range of services as key to its continuing success during the recession.

With options including MEP, pest control, camp management and infrastructure maintenance, Imdaad has been able to target sectors according to available work. “Such a range allows Imdaad to provide an holistic FM approach,” explains Lootah. “Imdaad client profiles vary greatly, thus we have not been affected by the slowdown in construction or tightening spend by developers,” he adds. In fact, Imdaad experienced strong growth between 2007 and 2009, and this growth was unaffected by the recession, reports Lootah: “We have continued to win jobs and are continuously increasing our workforce,” he states.

Imdaad’s latest contract wins signify a market move by the firm outside Dubai World projects. Its short- and medium-term strategies include expanding further within Dubai, the UAE and the GCC in general. “There is a huge growth potential within the FM sector across the region,” stresses Lootah.

“Tapping these opportunities and expanding our clientele base is a priority.”

For Etisalat Facilities Management (EFM), the signing in July 2009 of a five-year contract to provide FM services to Sharjah International Airport was a major milestone for the relatively young firm. The contract win followed the completion of an in-depth study to establish how the quality and efficiency of the airport could be improved. A Memorandum of Understanding had previously been signed between EFM and Sharjah Airport Authority.

Under the contract, EFM will provide a dedicated team of 84 staff for the airport, which will work in three shifts. Its staff numbers will be increased to 100 once the defect liability period of the airport expansion ends, in order to cope with the expanded scope of works.

EFM will also use the latest technologies to manage its operations on the project, which was another factor in its contract success. For example, FM software Maximo and personal digital assistants (PDAs) will be utilised to monitor key performance indicators related to service level agreements and staff productivity.

With many other contract wins recorded by the region’s fm firms throughout the year it appears that the opportunities for growth remain.